The Fraunhofer Institute plans to demonstrate a new 'tracking' MP3 codec at Germany's 'digital solutions conference' CeBIT next month.
Fraunhofer's MP3 is, of course, the most popular file format for digital music among music fans. However major record companies are unwilling to make their music available in the format via legitimate download platforms because they cannot control what consumers do with the track once it is on their PC. They opt, instead, for digital rights managed codecs from Apple, Microsoft, Real and others.
The new MP3 codec includes a 'watermarking system' similar to that used by record companies on some of the promotional CDs sent to journalists and DJs. The system means that tracks carry digital information about the first person to own them - meaning that if that person allows the tracks to enter P2P networks then a record label can identify the source of the music file being shared.
It is thought Fraunhofer hopes that record labels might adopt the watermarked MP3 instead of other DRM systems, although some insiders say that that is unlikely because watermarking does not offer the same controls as other DRMs, and needs considerable policing to be effective.