“They can be perceptible or imperceptible.”

Or a combination of both: a visible mark of ownership, and hidden details or link for the licensing information when the text is displayed as an image, or in an appendix to the file, when the text is reflowable (just as the copyright and colophon are printed on specific pages).

As for the privacy and tracking issues, in the terms mentionned in Wired, they do not seem to be very different from the statistics and tracking possibility social networks impose on their users (or credit card payments). Regulation, third party management of identity and self discipline could provide an acceptable mix.

And bibliophiles do appreciate numbered editions…

For tracking purposes, we watermarked all of the eMusic files and then hired a piracy watchdog service to monitor and report back to us if any of our titles appeared on the major filesharing networks. We tracked a mix of popular titles, including some that were not available through eMusic. Because piracy is already a fact of life in the digital world, what we were interested in finding out was not whether piracy exists, but rather whether there is any correlation between DRM-free distribution and an increased incidence of piracy.

The results: we have not yet found a single instance of the eMusic watermarked titles being distributed illegally. We did find many copies of audiobook files available for free, but they did not originate from the eMusic test, but rather from copied CDs or from files whose DRM was hacked. It is worth noting that these results are entirely consistent with what the music industry has found in the last six months. After conducting their own tests with Amazon, Walmart.com and others, the major labels have reached the conclusion that MP3 distribution does not in itself lead to increased piracy, they are now moving their entire catalogs to this approach.

The text of the Random House letter is here in PDF format. BoingBoing reported on the story here.

Alain Pierrot: The example given by Bill McCoy is similar to a “bookplate” and “bookplate” was one of the terms included in the list of suggestions given near the end of my article. Yet I think that the umbrella term watermark is appropriate. A watermark on a digital picture is usually deliberately perceptible, and it gives ownership or licensing information. This is somewhat similar to a bookplate. Watermarks can contain creator, author, licensing, transaction and other data. They can be perceptible or imperceptible.

Logan Kennelly: It is plausible that some publishers would be more comfortable with the term “social DRM” because it contains the embedded acronym DRM and that provides consolation to them. Yet there are instances of knowledgeable publishers such as Random House cited above that are using watermarks instead of DRM and are also properly using the term watermark.

Lastly I should note that there is opposition to watermarks too. An article at Wired ”DRM Is Dead, But Watermarks Rise From Its Ashes” mentions privacy and tracking concerns.

We, as customers, do not wish to accept the arbitrary and very limiting restrictions being pushed by the publishers. Our response to their fear can’t be a simple “no, don’t do that”, however. We need an idea we can market, and social DRM is the marketing label. It maintains the association with a protective technology (because it is), thus getting the foot in the door for discussing the merits.

From a consumer perspective, it is watermarking. However, labels implying a weak, non-restrictive approach aren’t going to change the industry. Teleread feels like a community of e-book enthusiasts with a target audience of the book publishers, and I think it should continue to fill that niche.

I have been consistently (I hope…) trying to differentiate Digital Rights Management (DRM) — as expression and management of rights — from Technical Protection Measures (TPM), without any success. So I’m afraid ‘DRM’ is now too deeply associated with TPMs to be of any avail, even qualified with the positive adjective ’social’ — which will probably be considered as positive only as long as the 2.0 buzz works…

Now, watermarking is not the only solution to fulfill the kind of rights indications: the stamp Bill McCoy considers is in fact a kind of ‘ex-libris’ (or ‘bookplate’, according to the American Heritage Dictionary).

And one can also hide a “digital watermark” using ’steganography’…

Your five points go right to the heart of the matter.