Content is water-marked by adding very small (unnoticeable) changes that could store something like a rsa based certificate to identify a given audiotrack.

Originally I thought they’d use it to track down the source of an illegal download. It sounds illogical to me because it’s hard to keep watermarks when format is changed (mp3, ogg and others really do mess up slight unnoticeable differences because otherwise they wouldn’t compress as good). And when someone has got two versions of the same audiotrack one can compare them and find out how something is watermarked.

Maybe the scheme of the industry isn’t that stupid, but the other way around (and a lot more evil). Maybe just sue everyone who hasn’t got a watermark on their movies or mp3.

Luckily a Fair Use bill was passed which they say (haven’t checked) allows fair-use conversion of format of media.