Thought the reign of the RIAA was approaching its last days as the major labels decided to phase out DRM? Think again, as Wired unveils what the industry has up their sleeve yet: digital watermarking.

According to the Wired article, Sony and Universal's DRM-free music already contains anonymous watermarks - how long it's going to stay anonymous is only a matter of time. If watermarking works as the industry heavy-weights hope, each song may be embedded with a watermark that can be used to track the original source of songs bouncing across p2p networks, giving them more "hard" evidence when it comes to pushing lawsuits and influencing policy regarding copyright infringement.

Microsoft, not to be left out of the fray, recently won a patent for stealthy audio watermarking. The patent describes a digital watermark that is embedded inside the audio signal designed to be supposedly impossible to remove.

Invasion of privacy? Maybe. Until the exact implementation of watermarking is known, our guess is as good as anybody's, but it would hardly be a surprise if this is a major issue. Another domain affected might be digital/online radio - as songs taken from those sources would be relatively "anonymous," radio providers might be licensed music with new conditions such as requiring overlays into other songs or only partial airtime of songs.

If watermarking does have any foreseeable pros, it's probably a bit slicker than having voice-overs for pre-release review CDs to prevent early leaking of music. But that's probably where the pros end and the cons kick in.

[via Techmeme]