This is a potentially important development in the area of pre-release piracy prevention, which some insiders believe accounts for the majority of piracy of music (and other types of content) by big-name artists. Pre-release music piracy is not only committed by record label and mastering lab employees, but also by recipients of music before it is publicly released, such as radio stations and music critics.

Activated Content's ActivatedAudio Watermarking Suite uses audio watermarking technology to aid in distribution of content to those recipients. It inserts the identities of both the content and the recipient into each audio file before distributing it. This technique is often called "fingerprinting" because it "leaves a fingerprint" of the recipient on the content. Activated Content's existing customers include Universal Music and SonyBMG.

Audible Magic is one of several vendors of so-called acoustic fingerprinting technology, others being Philips Labs, Gracenote, and Relatable. Audible Magic has gotten significant traction recently, through deals such as those with iMesh and PlayLouder MSP to incorporate its technology into those companies' file-sharing networks. Audible Magic's meaning of "fingerprinting" refers not to leaving users' fingerprints but to detecting the "fingerprint" of a piece of music. The technology analyzes the actual bits of a music file, computes a "fingerprint" (a number), and compares it with a database of known fingerprints to determine the music's identity.

Despite the confusion in terms and similarity in the two technologies' objectives, they are different and complementary. The advantage of acoustic fingerprinting, a la Audible Magic, is that no changes need to be made in the way content is produced or distributed to use it. The disadvantage is that the only piece of information that acoustic fingerprinting can determine about a file is the music's identity -- with accuracy that is not quite perfect. Watermark-based fingerprinting, on the other hand, can convey other pieces of information (mainly identifiers that serve as indexes into external databases, because watermarks can only carry small amounts of data), but it requires that watermarks be inserted as part of the production process, and audio purists may complain that watermark insertion affects the quality of the audio signal.

The technologies of Audible Magic and Activated Content overlap, but the combination of the two is synergistic. Audible Magic's CopySense can monitor P2P networks for copyrighted material. For files that are not watermarked, it can identify music with "good enough" accuracy; and for watermarked files, it can identify them with complete accuracy as well as identify the people who put them up on the P2P networks. The result of this technology integration will be a potent set of tools that address a music industry problem that is well worth solving.

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