Watermarking to replace DRM?:
Watermarking has been in the news twice in the past week. First, Wired's Eliot Van Buskirk revealed that Universal will insert watermarks in the DRM-free files it's distributing through Rhapsody, Amazon.com and other online stores.
Then, Wednesday, Microsoft announced that it's licensing audio watermarking technology developed by its research division to a company called Activated Content. (Microsoft Research used to be devoted entirely to building technology that would later be incorporated into Microsoft products, but a couple of years ago it began to license technology through its IP Ventures program.)
So what's watermarking? It's the insertion of extra data into an audio stream that can help identify where that audio came from. It's not enough to attach data to a digital audio file--users can just burn that file to a CD and then re-rip it, changing the file format and stripping off all the data associated with the original file. (This is also the classic way users get around DRM.) Instead, the data is inserted into the audio track itself. It's inaudible to human ears, but detectible by various other tools.
In the case of Universal, the watermarking data won't identify each individual file--a method that would allow the company to trace pirated files back to their first purchaser. Instead, it will only identify the particular song. Eventually, Universal will look at popular file-trading networks, and see which of the DRM-free songs released through its experimental program ended up on these networks. Universal can then use this data to help decide whether the risk of piracy outweighs the increased sales from DRM-free MP3 files, segmenting this decision by particular markets. For example, it might find that new Top 40 singles are more likely to find their way onto file-trading networks than classic rock from the 1970s.
(Read Original Article - Via News.blog: Media (CNET News.com).)