BBC’s sat feed puts Chernin in orbit

News prexy slams plan to unscramble digital feed

CANNES — News Corp. prexy-chief operating officer Peter Chernin has lashed out at the decision of U.K. pubcaster the BBC to unencrypt its digital satellite feed.

Chernin, in Cannes to accept the 2003 Mipcom personality of the year award, claimed the move puts valuable film copyrights at risk to piracy and illegal reception since the satellite feed technically spills over to viewers in France and Holland.

“I don’t think the BBC has the right to uplink its signal unencrypted…we’re not happy at all,” Chernin told a Saturday press briefing. Chernin’s frustrations were echoed by studio execs at Universal and Paramount.

BBC director general Greg Dyke decided not to renew the £85 million ($141 million) five-year agreement it had with News Corp.’s BSkyB, which carried its channels scrambled, when that deal ended May 30 (Daily Variety, March 13).

The BBC argues that the new digital satellite Astra 2D has a more focused footprint and there is therefore less spillover in Europe and thus no need to scramble the signal. Astra 2D’s footprint reaches a total 7.19 million homes in Europe, 6.2 million of them in the U.K.

Chernin said Fox could opt to sue the BBC for conflict of its single territory license, seek an injunction or simply stop selling to them.

Latter course of action is unrealistic given the weight of the BBC as a major buyer, while the European Union is considered unlikely to weigh in on the side of Hollywood in any legal dispute.

Disney, which earlier this month concluded a massive deal for TV and film product with the BBC, said it was confident that its contract protects it from the prospect that the free feed might impede potential sales to other territories. Sources say the BBC would compensate against any potential financial losses Disney could incur. (Disney also announced plans to launch a terrestrial general entertainment channel on the Beeb’s Freeview DTT platform.)

Inevitably, Chernin was quizzed on the prospect of James Murdoch’s ascension to the helm of BSkyB. “We’re happy to go through the process (of searching for a CEO candidate),” Chernin said. “James is a remarkably talented executive. I don’t think there is anybody in the pay TV industry that has had the success he’s had over the last three years.

“We believe James is the best person to do this job. … He either has or will be applying for the job.”

As for prospects in the U.S. with its pending takeover of DirecTV, Chernin said News Corp. would focus on reducing the satcaster’s churn rates of 18% to the 10% annual rate that Sky enjoys. In addition, there will be a major focus on bringing in new technology, PVRs and other applications that will “enhance the customer’s experience.”

(Reuters contributed to this report.)

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