MARCH 12, 2002
The pay-TV wars get nasty
CANAL PLUS - which holds the digital TV rights for Formula 1 in a variety of countries - has launched a $1bn lawsuit against Rupert Murdoch's News Corporation claiming that a News Corp subsidiary stole technology in an effort to undermine Canal Plus's digital TV business. The company is claiming that News Corp has broken the RICO anti-racketeering laws in addition to copyright infringement.
Canal Plus alleges that NDS employed specialist Israeli engineers to break codes used for Canal Plus smart cards in 1999 and then put the security codes on the Internet, opening the way for counterfeiters to produce fake Canal Plus cards. NDS has rejected the allegations. Canal Plus says that in order to avoid further piracy it will issue new smart cards to its 6m subscribers.
News Corp's BSkyB boasts 5.7m subscribers.
Piracy has been a serious problem for pay-TV operators and there is considerable pressure in the industry for pay-TV companies to start producing returns on the investment which was needed.
These issues may not seem of much importance to F1 fans but the pressure on pay-TV companies could mean that they will not be as willing to reinvest in buying rights to sports in the future - and that could mean a major reduction in income for the F1 companies - and the teams.
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