The International Herald Tribune reports on an experiment done by Random House, a distributor of audio books. They released digitally watermarked books and then monitored file sharing networks for these books. It turned out that pirated copies were often made from physical CDs.
“Our feeling is that DRM (Digital Rights Management, another word for copy protection) is not actually doing anything to prevent piracy.” a spokesperson for Random House was quoted.
A study that was done years ago by a consultancy I worked for concluded that revenue assurance for digital products could not be done reliably by technical means, but has to be done in the business model. In other words, make it easy and affordable to buy legal copies.
Nevertheless, digital books may represent a different market than megahit music. E-books tend to be marketed to people by publishers, popular music is more likely to be shared by friends.