The system sounds similar to VideoCrypt. The French system delays lines. VideoCrypt worked by rotating each display line by a number derived from a PRNG. To decode the line the hardware had to buffer the line into a small piece of fast (for 1980s) RAM, and then using a number derived from the key would send the line to the TV starting at that offset and at the end wrapping around to the beginning.
I know all this because in my first job we did a bit of experimentation to see if it would be possible to reconstruct the encrypted images without the key, and in fact it was quite easy because images are very highly correlated from one line to the next, so you just had to rotate each line through each of the 256 combinations and compare it to the previous line, and pick the one with the least difference. Although our system was far too slow to decode a live feed (this would be early 90s), and had some other problems.
I didn't explain this very well - the Wikipedia page has a better explanation:
I know all this because in my first job we did a bit of experimentation to see if it would be possible to reconstruct the encrypted images without the key, and in fact it was quite easy because images are very highly correlated from one line to the next, so you just had to rotate each line through each of the 256 combinations and compare it to the previous line, and pick the one with the least difference. Although our system was far too slow to decode a live feed (this would be early 90s), and had some other problems.
I didn't explain this very well - the Wikipedia page has a better explanation:
https://en.wikipedia.org/wiki/VideoCrypt