Kangaroo web TV faces six-month delay

 

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By Barry Collins

Posted on 30 Jun 2008 at 17:10

The Office of Fair Trading (OFT) has referred Project Kangaroo - the forthcoming net TV service from BBC Worldwide, ITV and Channel 4 - to the Competition Commission.

The decision could potentially delay the launch of the service, with the Competition Commission now having the best part of six months to decide whether the service will harm consumer choice.

The OFT says it's concerned about the potential harm the service could do to rivals, not least because "BBCW and ITV are each contributing the two single largest archives of popular British TV." It claims Kangaroo could charge higher prices to wholesale buyers of the archive, potentially raising the price for viewers.

ITV chairman Michael Grade has issued a scathing attack on the OFT. "This venture has been delayed by a reference to the Competition Commission, at the very same time that non-UK companies like Google and Apple are free to build market dominating positions online in the UK without so much as a regulatory murmur," he claims.

"The UK's three biggest public service broadcasters together invest £2.5 billion per annum in original UK production, representing over 90% of the total spend, as the recent Ofcom report highlighted," he adds. "As digital distribution gathers pace, we want to make our content available for free to online users in the most accessible way through Kangaroo."

The OFT says Kangaroo failed to provide enough information for it to make a reasonable judgement on its market impact. "in this case a lack of evidence meant that the OFT could not make a robust judgment as to whether the joint venture's future pricing (and non-price offer) would, in fact, be constrained by competition from other sources," it claims in a statement.

"As such, it is appropriate to refer this joint venture to the CC for further evaluation. In order to avoid reference, the parties did offer remedies, but they were of limited scope, which the OFT did not consider sufficient to resolve the above concerns in a clear-cut fashion."