September 2007

More Music Watermarking Shenanigans.
Haven't we been down this road before?
Article By Steven R. Rochlin
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  On February 9th, 2001, Enjoy the Music.com announced the very first watermarked commercial music release within our Industry News section. Country music record label Fahrenheit Entertainment announced their first copy-protected CD release that reached stores on March 20^th by Charley Pride's Tribute to Jim Reeves. The watermark encryption was developed by Phoenix-based SunnComm, who claimed that this watermarking makes it impossible to digitally copy CDs and DVDs. Well, we all know how that turned out.

Now let us go back to July of 2000, within our Industry News page, where Studio Sterling Sound became the first independent audio mastering facility to license IBM's EMMS (Electronic Media Management System) technology. EMMS is a digital rights management package capable of watermarking data for copyright owner's protection (among other things).

So then in November of 2000 within our Industry News page we have EMusic identifying and send 600 names to Napster that should be banned from using Napster's service due to downloading Emusic's copyrighted material. This was only the very beginning as around 20,000 more names were submitted to Napster for membership revocation. EMusic's watermarked files were actively tracking offending files and those who download them.

Forwarding to April 2001, we reported that Princeton professor Edward Felten decided to not present his scientific paper detailing various methods of cracking digital watermarks. Then in June 2001 we posted that the Recording Industry Association of America (RIAA) has been accused of blocking a scientific paper from being presented by Professor Felten concerning removing digital copyright protection, now the RIAA wants to know how others will be able to block music from illegally appearing on Internet services such as Napster due to new "Fingerprinting" technology for their approval. In other words, the RIAA wanted to know about other protection technology so that they might decide to approve of it. Sadly, under clause 6.1 titled "No Obligations" the RIAA paper states "RIAA and IFPI (International Federation of the Phonographic Industry) reserve the right to cancel this RfI (Request for information) at any time for any reason, to select none, one, many or all responses for further analysis."

So taking us to July of 2001 within Enjoy the Music.com Industry news page we have the RIAA at it again by denying sending a threatening letter to Professor Edward Felten from releasing his paper concerning how to defeat various music protection schemes. Felton filed a lawsuit against the RIAA.

Why Bring Up Old News?

Because it was announced only hours ago (as of this writing) that Universal Music Group (WMG) will insert watermarks within the DRM-free music files they plan on distributing through Amazon.com, Rhapsody and other online music sites. Low and behold we now have Microsoft announcing their licensing of audio watermarking technology. Microsoft claims they developed this through their own research division called Activated Content. And those curious as to what happened to online music site Liquid Audio. Well, when the Dot Bomb fell and in June 2002 Liquid Audio reported revenue of a paltry $135,000 for the first quarter while amassing a loss of $4.9 million. Who should step in when Liquid Audio was on the ropes hoping anyone would buy them you ask? You guessed it! Microsoft bought up the rights to Liquid Audio's approximately 20 patents for $7 million. So Microsoft now owned both foreign and domestic patents, including DRM and ways to send securely transfer content to portable devices and digital watermarking (plus a few other tidbits).

Welcome To Repeating History

They say if you forget the past you are doomed to repeat it. The funny thing is, the past is only six years ago as Enjoy the Music.com posted how Professor Edward Felten bowed to threats by the music industry. Now why would a Princeton professor, a very knowledgeable and highly respected man in his own right, be threatened by the music industry? Because Mr. Felten had scientific papers detailing various methods of cracking digital watermarks. While some were reluctant to post his papers, Enjoy the Music.com went right ahead and published them in June 2001.

While in some ways we are repeating history with watermarking, we are also seeing a new way to implement it! It was very recently announced that Activated Content, which developed the industry's first comprehensive and practical watermarking solution for encoding identifiable, robust, inaudible and unique codes into digital audio, has licensed this technology to enhance the industry's watermarking efforts. And i quote Microsoft's press release:

Microsoft audio watermarking technology consists of digital audio software tools that will allow Activated Content to insert nonsecure data into and extract it from audio files, tools that the company can use to offer additional services to the users of the audio file.

Of course the Activated Content division had their own press release, and i quote:

Technologies such as watermarking that rely on information in the medium itself have an additional extremely pivotal characteristic – they survive the transfer between the virtual and physical world and back again. If a piece of content is marked for a specific non-digital distribution channel, such as a terrestrial broadcast station in Omaha, and is then recaptured digitally for end user consumption, the entire chain of information leading up to the terrestrial broadcast is still there. Again, this allows for extremely targeted advertising.

As of yet, there hasn't been much development of Ad Supported Content business models in the analog to digital space, which makes this area a very big opportunity.

Clearly, watermarking has a number of characteristics that make it an ideal technology for enabling a variety of ad supported business models.

So what are these solutions? It has been speculated that these DRM-free yet watermarked files can trigger advertisements to pop up via active content. This basically boils down to music being delivered for free to consumers, yet at the same time listeners would have to deal with various targeted advertisements. As for exactly how they plan to have said advertisements delivered, as there are many scenarios to the equation, is not yet defined. Some music players have no color screen so obviously a video advertisement (commercial) is out. An audio-only advertisement could be implemented, but how could non-Internet enabled devices deliver such content unless it is preloaded into the music player? Would a load of commercials also be stored within a music player, and if removed then disable the music? So as i said, the possibilities and variables are many. As of this writing no, i will not discuss the audible effects of watermarking files though obviously some change the pure music file must be done.

On another note, it appears iTunes is facing stiff competition as RealNetwork's DRM-free Rhapsody service has formed a strategic alliance with MTV, Verizon and Vodafone. Meanwhile the world's largest retailer, Walmart, is also now offering DRM-free music titles from major record labels such as EMI Music and Universal. As for cost and encoding rate, Walmart is offering DRM-free mp3  files at 256 kbps for 94 cents per track or under $10 per album.

The plot is indeed thickening as now YouTube announced testing a "viewer friendly" advertising format with mini-commercials. So perhaps online downloading of music will be free to consumers and paid for by inserting advertising, as we experience today with television and AM/FM radio.

To Conclude...

Today we have WMG threatening to use watermarking on the non-DRM music files and the world goes round and round. Of course musicians and the music industry deserve to be paid for their copyrighted content. Of this there is no debate. What is of concern is how the industry plans to protect their content. With history as a guide there is, quite frankly, no way to completely and fully protect their content once it gets out in the open. Perhaps it is time to find a new way to achieve revenue from their 'property' and delivering advertisements is one viable option. Subscription-based content delivery is another, as would be to start charging terrestrial radio stations fees for paying music. Am still astonished that while XM Radio and Sirius have to pay for their content, AM/FM stations have been able to play music for free for many decades. My vote goes to lossless compression with zero watermarks for a subscription fee. Ever since my truly amazing woman got us XM radio i have been hooked with no commercials... when not enjoying my personal digital music player.

So what have we learned from all this? WMG plans to release non-DRM music with watermarks. You can also see that no matter what a company may try, if someone desires removing a watermark from a file there will be a way. And so the industry is hoping to find new ways to receive payment for their copyrighted material. Watermarking and DRM have not worked, so why continue on the same path? Besides, audiophiles do not desire lossy compressed music, so how about streaming lossless compressed music via subscription? This is nothing new, as Enjoy the Music.com covered this topic over and over again (click here). We are seeing the birth and growing pains of delivering music to consumers, with copyright holders/musicians getting the payment they rightfully deserve. Perhaps vinyl was not such a bad format after all, though in these modern times people demand much more flexibility from their music delivery system. Of course in the end what really matters is that we all....

Enjoy the Music [Dead or Alive You Spin Me Around (Like a Record) right now],

Steven R. Rochlin

 "...You spin me right round, baby right round
Like a record, baby right round round round
You spin me right round, baby right round
Like a record, baby right round round round..."