> It is modifying what the artist intended you to hear in a destructive way. It is destroying the original performances.
also applies to lossy encoding.
The whole point of audio watermarking is that it survives lossy compression. Inaudibility is merely a secondary concern.
This is an adversarial relationship, and one that the audio watermarking is doomed to lose. By and large, lossy codecs succeed in transparency, and therefore as an inevitable consequence, watermarking fails at it. After decades of development, lossy codecs are just too good - there's nowhere left to hide information.
(It's also worth noting that the consumer benefits from the quality tradeoff that compression makes, in the form of decreased storage and bandwidth. They don't benefit from the audio watermarking at all.)