Even if no one managed to originally hack the AACs copy protection, one type of HD piracy growing rapidly is the distribution of home made recordings from per-per-view and video-on-demand high definition programming.  In an aim to make it easier catch the offenders, Philips Electronics and Cinea Inc. have developed watermarking systems where programming is watermarked prior to being viewed on the subscriber's TV.  The watermark is designed to be transparent to the user, but robust enough to survive multiple copies, including a camcorder made copy directly from the TV.  Should a copy get leaked out, the digital fingerprint could be obtained, which would allow the broadcast provider to identify the culprit subscriber.

Philips' system "VTrack" adds the watermark to the picture before being output from the cable set-top box or being viewed on a cable-ready TV.  Cinea's system inserts the watermark before it leaves the cable / video-on-demand provider.  Both systems can be made to work with standard definition and high definition signals and will be demonstrated at the upcoming Las Vegas National Association of Broadcasters show. 

It is unclear at this time if the watermark systems need consumers to get new set-top boxes or if it could be implemented via an over-the-air set-top box firmware update.  However, if this is something that can be done via an update sent out by the operator, it would certainly mean that consumers trying to record content from TV and especially a VOD service would need to think twice of giving away a copy.  Up until now, watermarking has mainly been limited to academy screeners to make it easier to track leaked copies.

Thanks to DamnedIfIknow for letting us know about this news.