Conor Dignam on Broadcasting

Kangaroo leaps into TV download, but Apple packs the bigger punch
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The Independent Online

A new browser-based service is due to launch soon in the United States. It's called Hula, and it's a joint venture between News Corporation (owner of the Fox network) and the US network NBC.

Hula aims to be a new video-on-demand destination, where fans of shows created by both companies can come and download them. So if you want to download The Simpsons, 24, Heroes or Prison Break, you can go to Hula and get either free streamed shows supported by advertising, or pay for shows or series that you can download to keep.

The two media companies have put aside their rivalry to break what they see as the stranglehold of iTunes on the TV download market and combat Apple's desire to be the gatekeeper to this content, and to set the retail prices for their shows.

NBC and Apple fell out in very public fashion, with the broadcaster insisting that it wanted to offer different price packages rather than the $1.99 per episode price Apple applies to all new TV shows. The broadcasters decided that enough was enough and they couldn't risk iTunes commoditising the download television market in the same way it had music downloads.

Sound familiar? It should, as last week plans for the launch of Project Kangaroo bounced into the headlines, with ITV, Channel 4 and BBC Worldwide announcing a joint venture with a very similar purpose to its US counterpart. (The fact that Five has not been invited to join Kangaroo looks like a pretty clear snub and demonstrates the other broadcasters' belief that the fifth terrestrial channel has little to bring to the party in the way of rights ownership and content.)

Between them, ITV, C4 and BBC Worldwide want to secure control and influence over the way millions of people, now and in the future, will access their shows online. In their view, they either get into this space in a meaningful way or risk leaving the field open to iTunes to control the download market for TV in the same way it has music.

Kangaroo (it will have a new brand-name by the time it is launched in mid-2008) will bring together about 10,000 hours of content from the three broadcasters, who will be putting both new and archive content on the service. The exception will be the BBC's most recently shown programmes for the previous seven days, which will be available free of charge or advertising on the BBC's own iPlayer.

Details of how the three partners will divide up revenue haven't been released and probably won't be, but the collaboration makes sense for those involved. For a start, it gives the three scale that none of them could hope for alone, and will allow for a marketing campaign that tells British TV viewers that they can get all their favourite programmes online from the same place. The concept already dubbed "Freeview 2.0" has appeal for all the partners.

They will need to get the independent production community onside; it has rights to shows such as The X Factor (TalkbackThames) or Spooks (Kudos). But, for the indies, supporting Kangaroo will make sense as long as they get a fair share of revenues, because they have a common cause with the broadcasters in protecting the value of content in the download age.

The motive for Kangaroo is control and cash, and the fear of losing both to Apple's iPod. It is two years since Disney did the first major download deal with Apple for episodes of Desperate Housewives and Lost. Today, eight out of every 10 legal TV downloads in the US market go through iTunes, with about 100 million US shows sold through Apple's ubiquitous device.

That is potentially very bad news for British broadcasters, as BBC Worldwide's chief John Smith made clear last week when he said: "What Apple did for music was fantastic for the consumer, but disastrous for the holders of rights music. We did not want that to happen to us."

So will Kangaroo pack the required punch in this battle of digital distribution? Downloading for TV is still in its early days, but the appetite is growing. Channel 4 has seen some 60 million downloads by about 50,000 people since it launched its on-demand service. Sky's service, Sky Anytime, has had about three million downloads.

Broadcasters believe that once the interface between PC and TV is firmly in place, the web browser will allow viewers to move their chosen show from desktop to living-room TV screen at the click of a mouse. Some suggest that 20 per cent of all television viewing could be done via downloads by 2010.

In the meantime, Kangaroo has one massive drawback it is only a browser. Apple's success is driven by the billions of iPods it has sold and the willingness of iPod users to pay for content (both music and video) to listen to and watch on those devices. For all the tough talking about countering Apple's dominance, a browser can't compete yet with the iPod. Unless Kangaroo is hiding a surprise in its pouch.

Conor Dignam is publishing director of Broadcast magazine