"...Watch out -- recording industry executives are about to start running for cover. All of the Secure Digital Music Initiative's watermarks -- its much ballyhooed music protection scheme -- have been broken. A spokesperson for SDMI has denied the reports, but according to three off-the-record sources, the results of the Hack SDMI contest are in and not one single watermark resisted attack.
The hacking contest, which invited the general Net population to break the recording industry's watermarking system and win $10,000, ended Sunday; this week, SDMI members are meeting in Los Angeles to discuss the results. Although a core group of participants (including members of the Recording Industry Association of America) who coordinated the testing process are aware of the contest results, the larger SDMI consortium has yet to be informed.
The key issue is whether the breaks are meaningful or not -- in other words, could any hacker repeat the breaks, and is the quality of the music preserved even when the watermark is scrubbed out? According to one insider, all these hacks were, in fact, technically "solid.".."