"Watermarking is the permanent alteration of a piece of content to include information that is machine recoverable but imperceptible to human faculties."
The concept of “watermarking” is certainly not new. Originally it referred to the imprinting of indelible marks on paper as a means of authenticating documents and preventing piracy. This basic concept – the addition of an indelible mark to a piece of content to verify authenticity – has been carried forward into the information age with the development of electronic watermarking technologies to protect, track, and monetize a variety of digital content, including audio and video material. In an interesting historical footnote, the first "modern" patent related to watermarking was actually granted to actress Heddy Lamar in 1942.
Since then, the application of Digital Signal Processing (DSP) methodologies to the problem of watermarking in the information age has yielded amazing advances in the areas of imperceptibility and robustness. Modern watermark technology must be demonstrated to be believed.
Watermarking is sometimes confused with fingerprinting. Fingerprinting reduces (or hashes) a known piece of content into a mathematical value (or fingerprint) that is unique to that piece of content. Each piece of content that is to be identified “in the wild” must be pre-fingerprinted and the fingerprint placed in a database for lookups later on. In practical applications, the major difference between watermarking and fingerprinting as a content identification technology is that multiple instances of a given piece of content can be individually watermarked, but will still fingerprint out to the same piece of content.