Studios doubt BBC's satellite security

Studios do not want their films shown in countries without rights

The BBC's decision to free itself from BSkyB's signal encryption service - at a saving of £85m - has run into problems with major Hollywood studios.

Negotiations over buying the rights to some blockbuster movies have had to be put on hold while the implications of the change in how the BBC is transmitted on digital satellite is discussed.

The studios, including Warner Bros and Universal, fear that because the BBC now broadcasts on digital satellite "in the clear", meaning programme signals are no longer scrambled, films and programmes could be picked up across Europe.

Lawyers have been called into to negotiate whether the US studios can be satisfied its movies will be seen only by UK audiences.

Before the BBC's contract with BSkyB ended in May, the satellite company "scrambled" BBC programme so they could not be picked up in Europe, where it may not own the rights to broadcasts.

At the same time, it switched satellite, which it said would be more targeted at the UK so encryption was unnecessary.

A BBC spokesman confirmed that contractual negotiations were under way as both sides tried to work out the effects of the changes.

"We are in discussions with the studios about the implications, and that while some negotiations are on hold, it is not true to say we are not moving forward on others," said the spokesman.

But the BBC denied reports that the dispute spelled the end of plans to show Harry Potter and the Philosopher's Stone "at Christmas", saying it was never its intention to screen it during the festive period.