Content is distributed via a network. Hierarchical watermarks are embedded in the content to prevent unauthorized copying of the content. In particular, a first digital watermark is embedded by a content source prior to distributing content to an intermediary distributor. The first watermark identifies the content source and the distributor. Clients that request copies of the content from the distributor receive copies that have a second digital watermark embedded. The second digital watermark identifies the distributor and the client. This approach alleviates the burden placed on the content source to embed watermarks to each copy of the content that is distributed to clients.