A system and method for distributing auxiliary data embedded in video data includes a content source that embeds the auxiliary data into the video data. The content source then encodes the video data together with the auxiliary data to create a distribution multiplex including compressed video data. A decoder receives and decompresses the distribution multiplex to reproduce the video data with the auxiliary data embedded. A television or other device then detects and extracts the auxiliary data from the video data. The television or other device processes the auxiliary data to support a variety of possible interactive applications including displaying a synchronized widget on a display of the television.