This isn't simply altering the tiemcode like something like SCMS system from the CD Audio days
[link to en.wikipedia.org]

Nor is it just adding metadata to the container.

This is actually changing the structure of the sine wave slightly so as to make it sonically "different". The software can then detect this different audio and determine where it originated from.

Something similar was done to pre-screen videos of movies. Where the movie industry would give copies of movies to movie reviewers before the movie was released. Well it turned out these people were a big source of the torrent copies. So they started giving each reviewer a slightly different copy that would have little visual queues throughout the movie. They were undetectable to most people. The software could then use the various patterns to create a "serial number" of that particular video and thus they could tell which movie reviewer released it to torrents.

The thing about getting busted for piracy is that people get busted for the way in which they acquire it, not the actual media itself. So if yo are willing to spend a little bit of money there are ways to legitametly acquire media, and then copy it for yourself.

Stuff like Netflix, Redbox & Spotify. You just have to be willing to pay a little bit of money, like a compromise. Its the idiots that download stuff non-chalantly from the internet that get caught. Because you have no idea who your downloading from or who's listening.