Sky chief executive John Fellet says piracy has become the network's biggest competitor and points the finger at the "newspaper industry".

Fellet, in the company's annual report, said media outlets were taking clips from "the best parts" of Sky sport content and placing them on their websites without permission.

Fair Dealing provisions in the Copyright Act allow news outlets to use a copyrighted work in the context of reporting current events.

However, Fellet argues the newspaper industry takes highlight clips of sporting events "and puts them online within minutes of them happening, almost always with ads (for which they receive revenue) wrapped around them".


"This is tantamount to Sky starting a 24-hour news channel and instead of hiring reporters or paying for the use of a news service, merely clipping articles out of the newspapers without paying anything for copyright and having presenters read them out," Fellet said.

Fellet said the news outlets go much further and their conduct is a "planned and regular exploitation of our content".

"After months of attempted negotiations with the news media, who we believe are violating our copyright, we were left with no alternative than to go to court for a legal remedy," Fellet said.

The court action follows an unsuccessful injunction against Fairfax for use of Olympic Games footage and a failed Press Council complaint on the reporting of the wrangle over video from the Rio event.

Shayne Currie, managing editor of NZME, which publishes the New Zealand Herald and, said Fellet's attempts to blame the news media for Sky's financial performance were misguided.

"The Copyright Act expressly states the fair-use coverage of news events is not an infringement of copyright.

"The news media is perfectly entitled to use video clips to report sports news, and it is wrong for Sky to refer to this legitimate news reporting as 'piracy'."

In November last year, TVNZ chief executive Kevin Kenrick said the legal proceedings were the latest attempt from the Sky corporate box "to dictate what is newsworthy and how sports news should be covered in New Zealand".

"As a sports content rights holder ourselves, we understand and wholeheartedly support rights holders being able to generate a return on their investment. What we don't support is rights holders restricting New Zealanders' access to legitimate news stories in a timely manner. New Zealand's copyright law permits the 'fair use' of footage to report on current events. There's a big difference between short duration video clips being used for news coverage and illegal live streaming of entire matches," Kenrick said at the time.

Fellet alleged that, following the court action, media companies "spent a lot of effort running every negative article they can find on Sky, some of which, sadly, are justified but many are not".

Currie said: "John's comments relating to biased reporting from news media outlets are also unfounded. In October 2016 the Press Council dismissed a complaint made by Sky about the New Zealand Herald's reporting and coverage of Sky issues."