A technique for embedding data in scrambled MPEG video is described. The embedding technique is applied to the video sequence jointly with the video scrambling algorithm. The scrambling operation together with the data embedding process are performed prior to MPEG encoding, and the scrambled and data-embedded video is MPEG-2 encoded with a minimal increase in the MPEG bitrate. The applied technique uses premanipulation of the block scrambling parameters to generate interblock differentials to embed the data bits. Embedded data has sufficient robustness to resist the MPEG encoding attack. The data channel capability of the system arises due to the scrambling process and is not available when the video is not scrambled. The data embedding scrambler precedes input of any MPEG-2 compliant encoder. The technique is totally independent of the MPEG level, profile and parameters, and is applicable to all MPEG-2 based broadcast schemes including ATSC and DVB-S/C/T.