Watchdog vetoes video-on-demand plan

The Competition Commission said today that it has decided to block plans for a video on demand (VOD) joint venture between ITV, BBC Worldwide and Channel 4.

The service, called Project Kangaroo, had been expected to launch last autumn with thousands of hours of TV.

But the Office of Fair Trading referred the venture to the Commission amid concerns that it could give the partners involved too much muscle over prices for their own content.

Plans for the service had included it containing some free and some paid-for programmes, launching online and eventually on TV sets.

The Commission looked at possible remedies and concluded that none proposed could remove the threat to competition in the VOD market.

Peter Freeman, Commission chairman and chairman of the inquiry group, 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 case is essentially about the control of UK-originated TV content.

"VOD is an exciting and fast-moving development in TV, which makes programmes previously broadcast available to viewers at a time of their choice.

"The evidence we saw showed that UK viewers particularly value programmes produced and originally shown in the UK and do not regard other content as a good substitute.

"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 VOD services to UK viewers."

He said the inquiry thought the joint venture parties would have an interest in doing this, in order to make Project Kangaroo a success.

He continued: "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."

A statement from the BBC said: "We are disappointed by today's decision that prevents the partners taking Kangaroo forward.

"However, we remain absolutely committed to delivering distinctive quality BBC programmes online and will continue to drive innovation through our successful iPlayer platform."





A joint statement was released by BBC Worldwide, ITV plc and Channel 4, saying the decision was a "missed opportunity" and the real losers were British consumers.

It 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."

Michael Grade, chairman and chief executive of ITV, spoke of the broadcaster's surprise at the move.

He said: "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 focused on our online growth.

"We will provide a further update on our online plans with our full-year results on 4 March."

Suggested Topics
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Media

Ashdown Group: Lead Web Developer (ASP.NET, C#) - City of London

£45000 - £50000 per annum + Excellent benefits: Ashdown Group: Lead Web Develo...

Recruitment Genius: External Relations Executive

£33000 per annum: Recruitment Genius: An External Relations Executive is requi...

Recruitment Genius: Senior Digital Project Manager

Negotiable: Recruitment Genius: This established Digital Agency based in East ...

Guru Careers: Sales Director / Business Development Manager

£35 - 45K + COMMISSION (NEG): Guru Careers: A Sales Director / Business Develo...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee