Apparatus and method for digital content distribution using watermarking

A digital content distributor provides a way to prevent digital content from being used by unauthorized users by transforming digital content based on transform information and embedding the transform information and watermark signal into the digital content when the digital content is distributed through a communication network. The digital content distributor includes a signal transforming unit, a watermark embedding unit, a watermark extracting unit and the inverse-transforming unit. At a distributing end, the signal transforming unit transforms a digital content signal by using the transform information and the watermark embedding unit embeds the transform information and the watermark signal into the transformed digital content signal. At a receiving end, the watermark extracting unit extracts the watermark signal and the transform information from the received digital content signal and the inverse-transforming unit restores the digital content signal by inverse-transforming the received digital content signal by using the extracted transform information.