A major creator of digital pay-TV solutions for the secure delivery of entertainment and information to television set-top boxes, NDS, is launching a revolutionary new encryption system to outflank TV fraudsters.

The News Corp majority owned company claims the 'secure video processor' (SVP) will tackle movie piracy – which costs the industry $3.5 billion (€2.86bn; £1.96bn) per annum – by reducing the illegal reproduction of pay-TV material.

SVP is a joint venture between NDS, who already produce pay-TV encryption systems valued at $20 billion a year, the Franco-Italian semi-conductor company STMicroelectronics, and Thomson Multi-Media, who produce set-top boxes.

NDS hopes the new technology will become the industry standard, and both America's DirecTV and Britain's Sky Broadcasting – both allied to News Corp – are apparently considering its introduction.

SVP differs from existing technology as it encrypts the programming content, as opposed to the distribution devices, rendering content viewing impossible on unauthorised devices.

NDS chief executive, Abe Peled, addressed a Dutch television conference last Friday at which he outlined the benefits of SVP technology.

Prior to the conference, Mr Peled delivered a stark warning: ''We are really staring into the abyss as an industry if we cannot establish a framework within which content distribution is secure.''

Data sourced from: Financial Times; additional content by WARC staff