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Originally Posted by pdurrant
I do not see how watermarking is Digital Rights Management. It's purely a tracking device. Perhaps you could explain further.
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DRM as a generic term is about how to protect the owner's rights over a piece of intellectual property. The only limiting aspect of the term is the fact that we are talking about "digital" rights - as opposed to all the other rights that exist. DRM, like most security systems, can exist in many forms. There are preventative measures - for example making background checks before permitting access. There are active measures - for example monitoring, and perhaps actively limiting, a persons use of the property. And there are retrospective measures, common examples are audit-trails and security logs of various forms.
The still most common form of DRM over ebooks attempts active management. Watermarking is a passive form of rights management, I assume it is intended to be used in retrospective analysis. ... But who knows? maybe they'll use the information gained from watermarking to implement preventative DRM, refusing sales to those whose previous purchases have been found where they shouldn't. If watermarking takes off it could even be combined with new forms of active DRM that check for the watermark, and perhaps even check online whether you have rights to the copy (note that these days so many readers are effectively always on with no way for the owner to know what the device is telling the other end).
Compare watermarking to those invisible marking pens that people can use to mark goods for identification AFTER they've been stolen. Like a burglar alarm those pens are about managing what happens with regard to theft, alarms can be both preventive and active, the invisible pens are very much retrospective. Both relate to managing your rights over the goods you own.