> the losses from the discovery that he was applying stenography would exceed the ongoing loss from piracy.
A very likely correct conclusion, and there an additionally logical error with the assumption that privacy would disappear if they used it. Just because the copyright owner can sue whoever distributed the first copy doesn't mean piracy would stop after that. In order to get any effect at all, they would have to tell every customer about it, and the effect would likely not be 100%. It only take one person who upload the song to make it a permanent resident in torrent swarms.
If someone were to use this, the profit calculation is 1: Can winning lawsuits cover the costs, 2: Can informing (accusing) all your customers be worth the decreased rate of uploads. If neither of those 2 sound attractive to your business model, then spending money/reputation on personalized watermarks is completely pointless.
(edit) additionally, lets look at a typical scenario. Let say a file is being spread unlawfully and you track down it to customer 40#. The customer is a hardcore fan, studying for a music degree, and has no idea how the song "got out" when confronted. Customer 40# is against piracy, as can be seen by the major library of lawfully bought copies. However, they are also a member of a small fangroup, and did share the song with its 10-20 members. The customer was sure that everyone in that place would never think of uploading it to a public place. The question then becomes, do you continue with the lawsuit and put this student, this great fan in debt for the rest of their life?
That's certainly the right thinking for consumers. In my client's case it was B2B in the entertainment industry where licensing fees were per-day and substantial, so there are no poor students involved. Sorry for being vague as I don't want to link to him here without his permission.
I think he might have made the wrong decision in his case, as adding leak penalties to his contracts would have made his users more careful with his files. Since he was in turn licensing some rights from other parties, leaks in the past had caused him some legal trouble and he didn't want to have that happen again. His solution was to add DRM, but it didn't close the analog hole so there's still the potential for leaks. (I haven't talked to him in a few years so I'm not sure if things have improved.)
A very likely correct conclusion, and there an additionally logical error with the assumption that privacy would disappear if they used it. Just because the copyright owner can sue whoever distributed the first copy doesn't mean piracy would stop after that. In order to get any effect at all, they would have to tell every customer about it, and the effect would likely not be 100%. It only take one person who upload the song to make it a permanent resident in torrent swarms.
If someone were to use this, the profit calculation is 1: Can winning lawsuits cover the costs, 2: Can informing (accusing) all your customers be worth the decreased rate of uploads. If neither of those 2 sound attractive to your business model, then spending money/reputation on personalized watermarks is completely pointless.
(edit) additionally, lets look at a typical scenario. Let say a file is being spread unlawfully and you track down it to customer 40#. The customer is a hardcore fan, studying for a music degree, and has no idea how the song "got out" when confronted. Customer 40# is against piracy, as can be seen by the major library of lawfully bought copies. However, they are also a member of a small fangroup, and did share the song with its 10-20 members. The customer was sure that everyone in that place would never think of uploading it to a public place. The question then becomes, do you continue with the lawsuit and put this student, this great fan in debt for the rest of their life?