The tasks of both data hiding sub-disciplines: steganography (covert communication) and digital watermarking (intellectual property protection and digital multimedia authentication) fall traditionally within the application area of cryptography. Cryptographic approaches can make communication channels unreadable by third-parties. They can guarantee the integrity and the origin of encrypted digital media as well as their readability only by a chosen recipient (for an overview of cryptography refer to [1], ch. 1). They are based on solid theoretical mathematical foundations [2]. Examples include the Secure Socket Layer (SSL) communication to bank web portals or Digital Rights Management (DRM) technologies ([3], ch. 1, [4]) for the protection of intellectual property.

With regard to multimedia content, data hiding can offer specialized solutions, which have the following distinct technological and legal advantages over general cryptographic approaches:

• Flexibility: data hiding methods can be designed to withstand common transformations of the digital medium such as different levels of lossy compression, cropping, scaling, rotation, etc. This is especially important for digital watermarking because the protected intellectual property often undergoes such intentional or unintentional changes. DRM schemes do not allow any transformations of the protected content and thus restrict unnecessarily the legal usage of the multimedia content.

• Transparency: data hiding technologies are generally transparent to the end user. These technologies are detectable only by specialized software developed specifically for this purpose. Cryptographic approaches, on the other hand, are easily detectable by the end user.

• Self-sufficiency: as data hiding methods embed their information into the multimedia stream, any transmission of signatures, cryptographic hashes, etc. is not necessary.

• Reliability: the steganographic or digital watermarking information becomes part of the multimedia itself and (without knowledge of the methods in use) cannot be removed by third parties without destroying a significant part of the multimedia content. Cryptographic information, on the other hand, is easy to remove from multimedia once the multimedia has been decrypted.

• Absence of legal regulations: both steganography and digital watermarking are not burdened by legal regulations applicable to traditional cryptography [5].

References:
[1] W. Stallings, Cryptography and Network Security Principles and Practices, 4th ed.: Prentice Hall, 2005.
[2] W. Mao, Modern Cryptography: Theory and Practice, 1st ed.: Prentice Hall, 2003.
[3] W. Zeng, H. Yu, and C. Lin, Multimedia security technologies for digital rights management, 1st ed.: Elsevier, 2006.
[4] M. Peinado, F. Petitcolas, and D. Kirovski, "Digital rights management for digital cinema," Multimedia Systems, vol. 9, no. 3, September 2003.
[5] Electronic Privacy Information Center. Cryptography Policy. URL: http://www.epic.org/crypto/ (accessed May 9, 2009).