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I don't think the word "watermark" is the correct term for this. I would think in order to watermark each video with a unique "username", you would have to re-encode it each time.
From what I'm told, the fingerprint works differently and can somehow be attached/embedded as the member is downloading the video. This won't be a 100% indicator that the person that downloaded the video uploaded it but it's pretty damn close and can at least allow you to get rid of undesirable customers.
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