In 2004, we approached Warner and EMI about using watermarking for rVibe as a means to protect content while permitting interoperability of file types. In principle they did not have a problem with watermarks, they just felt that there was not enough control. They suggested that if we also built a bot to scour p2p networks and report back on illegal files found that originated from our systems, that they might consider using it. Then they decided not to at all.
Now, reports are coming in that watermarking is back and might be making in-roads.
Some times it does not actually pay to be ahead of the curve.