VOD platform deemed to be anti-competitive

LONDON — Competition concerns have blocked the creation of an online video-on-demand service, Project Kangaroo, backed by BBC Worldwide, ITV and Channel 4.

U.K. regulator the Competition Commission has ruled that Kangaroo would be “too much of a threat” in the emerging British VOD market.

It also stated that auds would benefit more from the protagonists continuing to compete with one another and others in the market than going ahead with Kangaroo.

Competition Commission chairman Peter Freeman, who led the inquiry, said: “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.

“The evidence we saw showed that U.K. viewers particularly value programs produced and originally shown in the U.K. and do not regard other content as a good substitute.

“BBC Worldwide, ITV and C4 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 VOD services to U.K. viewers.

“We thought the joint venture parties would have an interest in doing so, in order to make Project Kangaroo a success.”

The decision is a victory for U.K. pay TV providers, Virgin Media and BSkyB, and online service, Joost, which all campaigned against Kangaroo.

In a statement, the three shareholders said: “We are disappointed by the decision to prohibit this joint venture.

“While this is an unwelcome finding for the shareholders, the real losers from this decision are British consumers.

“This is a disproportionate remedy and a missed opportunity in the further development of British broadcasting.”

The decision to cancel Kangaroo will lead to the loss of up to 50 jobs. It is believed that those involved in the project have spent around £25 million (£36 million) in staff costs on the abortive venture.

The BBC and ITV, along with British Telecom, are partners in another online joint venture, Project Canvas, which aims to bring Internet-based services to people’s domestic TV sets via a new Freeview set-top box.

With Kangaroo dead and buried, there will be even more urgency to get Canvas up and running.

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