A German music download service is allowing customers to download unencrypted MP3 files, instead relying on embedded watermarks to discourage copying.
The music store sells MP3 files which can be played on almost any digital music player, but adds a unique tag to each download using watermark technology from Germany's renowned Fraunhofer Institute for Integrated Circuits, which helped create the MP3 audio compression algorithm.
The watermark technology makes slight changes to the data in sound files, such as a higher volume intensity in a tiny part of a song, that are undetectable by even the best trained ears, according to Fraunhofer researchers. However, if unauthorized copies of a download turn up on, for example, peer-to-peer file sharing networks, the watermark allows Akuma to identify the purchaser of a file and take action against them.
This is a novel approach. It doesn't prevent the copying upfront, but helps in going after infringing users, and seems to me that it would probably be just as effective a deterrent.
(via Cote)