Up until the early 90's, work in digital watermarking of multimedia works was limited to university research labs.  The first successful commercial venture that I'm aware of was Digimarc, founded in 1995 by Geoffrey Rhoads.  The basis for the business was a novel digital watermarking technology for which Mr. Rhoads had just filed for patent protection.  Digimarc was developing still image watermarking products for the professional photographer to protect against theft.  Around the same time, interest in watermarking had spread to industry research labs including NEC, IBM, and Philips.  The big push came from the Motion Picture industry.  The industry consortium responsible for establishing the DVD standard selected CSS encryption for DVD content and included a watermarking "hook" in the CSS license.  Looking ahead to DVD recording, the license required all licensees to implement watermark detectors in their DVD players at some time in the future when the consortium selected an appropriate watermarking technology.  The idea was to prevent normal DVD players from being able to play pirated DVD content.

This spawned a frenzy of activity, as many companies tried to develop the appropriate watermarking technology that would become part of the DVD standard.  This frenzy extended to university campuses and the research field grew quickly.  Many startup companies were formed, marketing their technologies to professional still image photographers.   Other companies developed watermarks for audio.  The big companies involved in the DVD competition, targeted video.  These companies included NEC, IBM, Sony, Hitachi, Pioneer, Philips, and others.

Most of the small start-ups disappeared.  Turns out, professional photographers don't really have a problem with piracy - at least not one that needs a technical solution.  There was some consolidation in the audio watermarking field with Verance emerging and still around.  Of the large companies in the field, Philips was the sole hold out, all others abandoning their efforts shortly after it became evident that inter-company politics would prevent any watermark from being adopted for DVD.  Verance was successful in getting its audio watermark into AACS, the copy protection system used by Blu-ray Disc.  And Digimarc, although they no longer sell shrink-wrapped watermarking products to consumers, maintain a small watermarking-as-a-service business, provide watermarking technology to government clients, and maintain a significant patent licensing business.  If they can't make money selling watermarking products, they will make money licensing their patents to other folks who won't make money selling watermarking products.

While most of the big companies were exiting the field, Thomson entered it in 2005 by purchasing two small watermarking startups, MediaSec in Germany and NextAmp in France. The last holdout of the big boys from the DVD days was Philips and in late 2008 they spun out their content protection business as Civolution.  That left Thomson, which held on until July of this year when they sold their watermarking business to Civolution.

So, what is next?  The initial excitement around digital watermarking was as an anti-piracy technology.  There were a number of problems with this.  Most importantly, the piracy problem is deep and cannot be solved by technology alone.  Since the industry was singularly focused on the piracy problem and their interest in watermarking was only as a tool to solve that problem, interest quickly waned.  However, I believe that the focus on piracy overwhelmed other potentially exciting applications.  Civolution appears to be broadening their scope, looking at use of watermarking and fingerprinting to manage content and to create new revenue streams.  Verance is also pushing content management applications of their audio watermarking.  In 2000, Digimarc started looking at the use of watermarking to create a bridge between the printed page and internet, a theme they continue to press.  Now that some of the hype has died down, there's room for creative new applications of a magical technology.