Further to my previous blog on MP3s being watermarked (go here), according to Digital Music News Sony and Universal are already watermarking the MP3s albeit only with indicators as to the retailer.  for the full story go to Digital Music News here.

The Wired article – DRM Is Dead, But Watermarks Rise From Its Ashes describes how record labels have seen the sense to drop DRM and are now looking to use Watermarking to try and establish that copyrighted material  is transferring between the machines on the Internet. The article goes to present some rather Orwellian possibilities such as demanding that ISPs scan files that pass through their servers for the watermarks and use such transfers to potentially prosecute people.  Whilst I accept that IPR (Intellectual Property Rights) need to be protected, some of the suggestions may seem sensible on the surface, are actually deeply flawed.

A watermark in digital terms is a discreetly placed bit pattern in a file.  Given simple probability, sooner or later I will have a file which will appear to have a watermark.  Given that probability, does my ISP have a right to automatically start interfering with that file?  Next as storage costs drop, and the amount of data people have increases the adoption of net based backup services will accelerate rapidly.  So if I backup my legitimately purchased music files to such a service, but the service is then compromised and my files find their way to peer-to-peer sites – how do you defend yourself from being accused of illegally sharing material?  A far fetched argument, not really we hear of websites being attacked and people’s credit card details being traded in shadier parts of the net, merely the 21st Century version of the pick pocket.  Or even simpler does my ISP have the right (or the music industry for that matter) to prevent my transferring my music between computers using the web?

There is also an interesting undertone in the article which suggests that despite the dropping of DRM that the music industry is still failing to embrace technology and exploit it and acting the victim. The reality is that, since music was recorded it has been copied – go back to the days of printed music – and people would hand copy charts; with the arrival of the cassette – people taped albums and radio broadcasts (why else do DJs have to talk over intros & outros). Yes MP3s and the net allow more to be stolen more quickly but it also gives unrivalled access to greater numbers of new ears and potential buyers.  Of course the argument against this is that the amount stolen is far greater than possible returns and profits reflect this, but the RIAA’s  own figures (here) show that CDs are dropping in price by 5 – 10%  per annum in real terms, so when you compare headline figures year on year they’re bound to drop.