Project Kangaroo dead in its tracks

 

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By Stuart Turton

Posted on 4 Feb 2009 at 09:12

Project Kangaroo, the proposed video-on-demand joint venture between the BBC, Channel 4 and ITV, has been blocked by the Competition Commission.

The Competition Commission issued an interim report back in December claiming the service would "lessen competition" and offering a number of potential remedies, including a suggestion that the partners be forced to offer content to rivals.

However, the Commission has now deemed that even its earlier remedies didn't go far enough.

"After detailed and careful consideration, we have decided that this joint venture would be too much of a threat to competition in this developing market and has to be stopped," says Peter Freeman, chairman of the Competition Commission.

"BBC Worldwide, ITV and Channel 4 together control the vast majority of this material, which puts them in a very strong position as wholesalers of TV content to restrict competition from other current and future providers of video-on-demand services to UK viewers," he continues.

"Without this venture, BBC Worldwide, ITV and Channel 4 would be close competitors of each other. We thought that viewers would benefit from better VOD services if the parties, possibly in conjunction with other new and/or already established providers of VOD, competed with each other."

Michael Grade, chief executive of ITV claimed he was surprised by the decision.

"We are surprised by this decision because we believed that the Kangaroo joint venture, competing in a crowded online world against dominant global brands, was an attractive UK consumer proposition, free at the point of use.

However, in the two years since the idea for Kangaroo was born, the success of ITV.com has proved that our UK content is attractive enough to stand on its own and we remain focussed on our online growth."