Maybe I don't understand something?
John Doe, random employee working for Universal Studios leaks an advance copy of "The Revenge of the Avengers: The Revengers Strike Back" to their contact XPirateSepirothX for 250$ (or for free because they really want to get back at their boss for laughing at them).
XPirateSephirothX passes on the watermarked movie to their friendly neighbourhood reencoder IAmBecomeDeath who notices the watermark strips it, and reencodes the movie for general consumption.
The pirating public receives an unwatermarked copy and cannot claim any prize. IAmBecomeDeath, XPirateSephirothX and John Doe have no incentive to claim the prize because they will implicate themselves in copyright violation.
Are they implying the watermark is impossible to remove? That seems unlikely to me as pirates can be quite enterprising (and there may be some money on the line for them as well), so I'd expect them to reverse engineer the process and figure out how to strip it. Heck, this company is even offering an application that checks if the watermark is present or not which should at least give the pirates a measurement on whether their watermark removal method worked (on at least some version of the watermark detection logic).
Or maybe the plan is to play a constant game of cat and mouse, Custos will continually switch up their methods for watermarking and so the pirates will never be sure if they caught and successfully stripped the latest and greatest version of the watermark, preventing some piracy through uncaught watermarks and some piracy through fear?