Protecting audio and video for playback on consumer equipment (non-PC environment) creates problems, since these consumer devices cannot handle encrypted contents. The only possibility then is to introduce various degradations to the media in an attempt to hinder PC-based copying while still allowing playback on consumer equipment.
As much consumer equipment is computer-based nowadays, playability is degraded on some platforms. Furthermore, PC-based copying programs can skip/repair the media degradations. All in all only the drawbacks of copy-protection remain. In fact a "repaired" pirate copy can exhibit significantly improved long-term stability compared to the impaired original.
Watermarking is a much better solution here. Each and every delivery is slightly and unnoticably modified. Items can be freely copied but will always have the hidden signature pointing back to the originator. The watermarked items can be used without restriction and will work on any platform or consumer player.
As part of this solution it is important to have valid identification of all customers. The knowledge that files can be traced back to the purchaser will make users limit copying to only trusted persons. This is basically what publishers wish to allow. They are hurt mainly by distribution to unknown persons and mass distribution made possible by this.
While individual watermarking will prevent normal users from distributing files, mass distribution cannot be totally stopped. A customer can identify himself with a stolen credit card, and then it will have no consequences to him that the pirated files can be traced back to the credit card used.
Individual watermarking must be integrated in the production process. For a webstore this means that individual modifications to the purchased files are performed on-the-fly on the web server.
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