Project Kangaroo, the next-generation web TV service being planned by the BBC, ITV and Channel 4 has been blocked from launching by the Competition Commission.
The joint venture between the three broadcasters was announced over 20 months ago and was set to launch late last year, but was delayed in the summer by the Competition Commission.
It’s now been prevented from going ahead and the reason given for blocking the project was that it would give too much control of the video on demand market to three players, which wouldn’t be good for the public in the long run.
Peter Freeman, who headed up the inquiry, concluded:
“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. We thought the joint venture parties would have an interest in doing so, in order to make Project Kangaroo a success.
“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.
“We considered very carefully a combination of measures aimed at removing the wholesaling activities of the joint venture and safeguarding commercially sensitive information, but we were not persuaded that these measures would overcome the risk that membership of this joint venture would influence the parties’ commercial decisions, particularly in relation to the wholesaling of VOD content.”
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