"..The music industry-led Secure Digital Music Initiative (SDMI) yesterday announced its chosen copyright protection technology for phase one of its hardware specification. And the winner is (rips open gold envelope): Aris Technologies for its 1998 album, MusiCode.
Aris' watermarking system will now be built into emerging SDMI-compliant devices, such as digital music players from Philips and Matsushita, and future versions of Diamond Multimedia's Rio. It will also ultimately be used to stamp official SDMI-compliant digital music files.
During the SDMI's Phase I period, players will essentially play any music track downloaded to them, including those encoded in the MP3 format.
However, when Phase II begins, and neither the SDMI nor the broader music industry has said when this will take place, players will need to be upgraded in order to play tracks using the Phase II watermark. Upgraded players will still play old MP3s, Phase I SDMI-compliant tracks and whatever other formats the manufacturer chooses to support, but pirated Phase I and Phase II tracks will be rejected..."