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Information-theoretic analysis of watermarking

An information-theoretic analysis of watermarking is presented in this paper. We formulate watermarking as a communication problem with side information at the encoder and decoder and determine the hiding capacity, which upper-bounds the rates of reliable transmission and quantifies the fundamental tradeoff between three quantities: the achievable watermarking rates and the allowed distortion levels for the information hider and the attacker. The hiding capacity is the value of a game between the information hider and the attacker. The optimal attack strategy is the solution of a particular rate-distortion problem, and the optimal hiding strategy is the solution to a channel coding problem. For several important problems, the hiding capacity is the same whether or not the decoder knows the host data set. It is also shown that existing watermarking systems in the literature operate far below capacity.