Abstract: A system and method for managing distribution of digital audio content employs vector encoding of audio content representing segments of the audio waveform. High frequency vectors are discriminated by their amplitude increment per short traversal times exceeding a predetermined level, and are flagged in the audio data file. A distributor or host ID code is embedded in the audio data file designating the authorized source or host environment for playback of the audio data file. A vector-decoding-enabled player associated with the authorized host is allowed to playback the audio data file with full quality and an unlimited number of times. If the audio data file is copied or downloaded to a new host environment, then the player associated with the new host will detect that the host ID code embedded in the audio data file does not match the new host, and will playback only the low frequency vectors of the audio data file and only for a limited number of times.