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Channel coding with side information (CCSI) provides a powerful framework for constructing data embedding codes. As a result, there has been a considerable amount of work done in trying to apply these CCSI codes to the field of image and video watermarking. The CCSI codes that exist in the literature (see Chou, J. et al., 1999; Kesal, M. et al., 2000; Eggers, J. et al., 2001), however, are relatively far from theoretical bounds. Furthermore, these codes, by themselves, are not well-suited for dealing with geometrical distortions which often appear in watermarking attacks. We propose a CCSI code that is closer to the theoretical bounds (within 2.0 dB) than the codes that exist in the literature. In addition, we show how this code construction can be combined with a synchronization code to deal with geometrical distortions.