Katich admitted he was ball watching when he should have been watching his opening partner in the memorable mix-up that had Watson run out for 93 on day one of the first Test against Pakistan at the MCG.
Watson had to go because Katich landed his foot over the crease a split second before his partner when both were at the same end when the stumps were broken at the other.
Katich, who also missed out on a century when he fell for 98 soon afterwards, said after he glided a ball to backward point he lost track of where Watson was.
"I heard absolutely nothing. With (almost) 60,000 people yelling and screaming I didn't hear a thing," he told the Nine Network on Sunday.
"I was guilty of watching the ball when I probably should have been watching where Watto (Watson) was. There probably was (a run in it) because obviously Watto got down the other end. I came down the wicket a fair bit but unfortunately didn't hear a thing and we both got stranded at the same end," he said.
Katich said he did not blame Watson for not wanting to walk because he had again been denied his maiden Test hundred, after scores of 89 and 96 in his previous two Tests.
Katich has fallen short of a century every match this summer, as he made 92 in the first Test against the West Indies in Brisbane, 80 in Adelaide and 99 in Perth.