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<nettime> Re:Terror in Tune Town. Watermarks

Monday, August 14, 2000

Watermarks a part of `secure digital music initiative'

BY JON HEALEY San Jose Mercury News

If you hold your birth certificate up to the light, chances are you'll see
a watermark -- a hidden, indelible image that makes the document nearly
impossible to duplicate. 

Now, as online file-swapping services like Napster Inc. fuel the
duplication of songs on a massive scale, the music industry is looking at
a new generation of watermarks for protection. These hidden bits of
digital code wouldn't prevent song files from being copied, but they could
help labels and artists keep track of their works as they propagate across
the Internet. 

The watermarked songs also could give consumers more than they're getting
today from MP3 files, the common and easily duplicated format for songs
downloaded from the Net. That added value, watermark developers say, is
critical to winning over consumers. 

``If the watermark is perceived as a tool for tracking pirates,'' said
Ahmed Tewfik, chief executive of Cognicity Inc., ``that software will
never get installed.''

The flip side for consumers is that watermarked files may not work with
their favorite jukebox software, at least not without some additional
downloading. And they may not work at all on the current crop of portable
music players. 

There wouldn't be much need for audio watermarks if the digital songs on
CDs were secured with electronic locks. But there are no such locks, at
least not yet, so songs can easily be ``ripped'' off of a CD, compressed
into MP3s and shipped freely over the Internet's global pipelines. 

Napster of Redwood City has helped generate tens of millions of MP3s by
enabling consumers to find and copy them off of other consumers' personal
computers. A group of record labels and music publishers is trying to sue
Napster into oblivion -- a preliminary ruling that would have crippled
Napster is being reviewed by the 9th U.S. Circuit Court of Appeals -- but
Napster is just one of many ways for consumers to copy MP3s over the

Some Napster proponents argue that the company has helped the music
industry by boosting CD sales, but the major labels scoff at that notion.
They believe that consumers should pay for the music they download, not
just the CDs they buy, and they don't want to lose their cut of the
digital action. 

To date, the labels' response to MP3s has been ``secure'' downloadable
files that cannot be played without an electronic key. Compared with the
point-and-click simplicity and breathtaking selection offered by Napster,
however, the labels' secure downloads are unwieldy and sparse. 

Watermarks could become an element of secure downloads, or they could
serve as a more user-friendly alternative to the labels' current approach.
They're also a piece of the ``secure digital music initiative'' that the
labels and consumer-electronics companies have been formulating for a year
and a half, although the initiative has yet to be formally adopted. 

The marks themselves are bits of data embedded into a song file in a way
that's designed to be inaudible and virtually indelible. A variety of
techniques are used to mask the presence of the watermarks, such as hiding
them in a noisy passage of a song. 

Cognicity is one of a handful of companies developing technology to add
watermarks to digital music files. Others include Verance Corp.,
AudioTrack Corp., Blue Spike Inc. and Liquid Audio Inc. of Redwood City. 

Using customized jukebox software, Cognicity can add a watermark to an MP3
or other music file as it's being copied over the Internet. That watermark
would serve two purposes, Tewfik said. It would trigger extra features
within the jukebox, providing a ``much, much richer'' listening
experience, he said, and it would help the labels track the popularity of
individual songs. 

If consumers gave their permission, Tewfik said, the Cognicity software
could monitor what music they played on their PCs and recommend other
songs or merchandise they might like. Such scrutiny might strike some
consumers as an invasion of privacy, but Tewfik emphasized that ``you
decide exactly what you want to do with that information.''

One thing consumers couldn't control unless they remove the Cognicity
software is the record it creates of their file-swapping habits. The
Cognicity Web site notes that tracks shared over the Internet ``will have
an embedded audit trail that points back to the original transaction.'' In
other words, people making unauthorized copies can be traced. 

The point -- as the company puts it on its Web site -- is to deter honest
people from doing dishonest things. ``Users will be less likely to abuse
tracks if they know that their fingerprints are in the music,'' the site

AudioTrack's approach puts much more emphasis on rewarding consumers, but
the basic goal is the same: helping record companies and artists follow
their digital music files as they spread across the Net. 

When consumers play a song file with an AudioTrack watermark, a button
pops up on their computer screen. Clicking on the button connects them to
an AudioTrack database, where their computer follows the instructions left
by the band or its record label. 

For example, they could wind up at a Web site with a music video, chat
room or concert dates. The result, said CEO Stuart Rosove, is to let the
labels and artists communicate directly with music fans -- something
that's hard to do in the anonymous world of CD sales. 

Fans may like their anonymity, though. The system won't collect any
personally identifiable information unless it's volunteered, Rosove said,
although it can automatically detect the fan's ZIP code. 

Artists and labels can use the system to promote the sale of downloadable
songs, CDs, concert tickets and the like, as well as raising revenues by
selling ads on the Web sites they direct their fans to. But Rosove said
the system was not designed to force people to pay for songs in order to
hear them, adding, ``We believe in enabling, not disabling.''

Added Ron Sobel, AudioTrack's president and a former entertainment lawyer
and songwriters' representative, ``None of my clients . . .  have ever
wanted to restrict their art. They just want to be compensated.''

Verance is making watermarks that can be embedded into the master
recordings of songs, appearing first on CDs and then in the digital copies
made from them. It uses customized software on the consumer's PC to read
the watermarks, telling record labels which of their tracks were
downloaded and how many copies were made. 

This approach could enable ``a legitimate type of Napster-like business,''
spokesman Greg Hampton said. At some point Napster is going to have to
start charging someone for its service, whether it be advertisers or
users, and trackable watermarks could help divvy up the royalty payments
appropriately to the labels or artists who own the copyrights, he said. 

Users would benefit, Hampton added, because only legitimate, undamaged
song files would be watermarked. And lesser-known bands with small,
scattered followings could benefit because the tracking would be better
able to detect small numbers of downloads than traditional sampling

``It's really dependent upon the Napsters of the world and the record
labels to determine if this is something that's worthwhile to implement,''
Hampton said.  Today, he added, Napster and similar file-sharing systems
don't believe they have to pay royalties, so they don't want to add

Meanwhile, the record labels are at the other extreme, trying to shut
Napster down. ``Hopefully,'' Hampton said, ``we'll end up with something
in the middle.''

Napster may already be headed in that direction. Last month, Liquid Audio
CEO Gerry Kearby said that Napster had licensed his company's watermarking
technology for research and development, although Napster officials
insisted that they hadn't committed to using any Liquid Audio products. 

Contact Jon Healey at or (877) 727-5005. 

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