USVO's MediaEscort software runs on Fox's streaming video servers; it embeds SmartMark transactional watermarks in each frame of the video content as it streams, so that if any streams are captured and distributed without authorization, Fox can determine the source of the leak.  USVO's deal with Fox is the company's first announced deal with a major Hollywood studio; it had been working with Fox since late 2006 but the studio would not permit its name to be publicized until this week. 

The small, Connecticut-based USVO has been plugging away with its watermarking solution for several years; this announcement is a breakthrough for the company as well as further evidence that watermarking is on the rise for video.  It seems that USVO is finding itself in the same pre-release content protection niche as a few other companies, including Interoute, MSI, and Activated Content -- where the number of recipients is small and thus the forensic value of the watermark is higher. 

Like other watermarking vendors, USVO's ultimate intent is to get its technology integrated into consumer devices -- as companies like Cinea and Thomson have done, mainly in the set-top box market.  This seems like a giant leap from limited B-to-B pre-release distribution, but with more interesting applications for watermarks being designed, the momentum is building.