Reel Word

 A digital watermark is a small amount of data that is embedded in a known manner into digital video, audio, image, text, or other file type.  The mark is embedded in a manner that allows it to be detected, read, or extracted later when the file is accessed.  The more successful watermark technologies embed watermarks that are undetectable to most humans, yet can be still be detected by a digital processor after the file in which is resides has been manipulated and distorted to a point just short of being rendered useless for its original use.  The data in the watermark can be an instruction to do or to not do something.  If a watermark detector is present when the digital file is played or accessed, then the detector will read those instructions and pass the instructions on to the device it resides in.  If a watermark detector is not present when the digital file is played or accessed, then the watermark goes unnoticed.  It effects nothing.  The file is treated as if the watermark is not there at all.

Tools like watermarks and DRM have been demonized in part because they were deployed to trigger restrictions without offering a clear consumer benefit that outweighed the impact of those restrictions.  They were implemented as an antipiracy tool and in some cases also as a means to limit the way the content could be used.  Without a counteracting benefit, all consumers saw was a restriction to be counterbalanced by their own self-selected and self-administered desired benefits; which most often was the ability to move, copy, remix, and share the content.  With that purely negative consumer proposition that the content provider offered, the paying audience had no incentive to not remove the DRM or prevent the watermark application from working properly. 

But the same watermark technology that can trigger an application to not do something can also trigger an application to do something.  A watermark can trigger access to bonus material, admission to an online community, delivery of a discount coupon, and any number of value-added activities that a consumer might want.  If these benefits are valued by the consumer and are regularly updated, then for a measurable number of people the desire to access those benefits will outweigh the desire to disable the same watermark technology because it is triggering other, undesired actions.  If the balance is struck effectively, the audience will seek out the content with the watermark along with the devices that respond to the watermark, helping the value-add content sources and devices attract and retain an audience for traditional and additional monetization opportunities.

Up until recently, watermark technology vendors have been marketing their technology primarily to the antipiracy market because they thought that market was where the revenue opportunities were.  But more recently the broader view of watermark technology described above has begun to be pitched by a number of the leading vendors  and associations .  As content companies explore this value-balancing approach to content management, I predict that the revenue potential of legitimately distributed content will increase, and the battle over content protection will retreat from the forefront of the debate over the future of digital content, fair use, etc. and slide into the background noise of an emerging marketplace.