The Competition Commission has concluded that the UKVOD project known as Project Kangaroo is likely to restrict competition within video on demand services in the UK.
The Commission is proposing that Kangaroo be forced to offer its content to third parties. An alternative remedy would be to change the terms of the joint venture, limiting ITV and Channel 4 catch-up content to their own sites rather than making it a part of the Kangaroo offer, as is already planned for the BBC iPlayer.
In its provisional findings the Commission says that Kangaroo, a joint venture between BBC Worldwide, ITV plc and Channel 4, would result in a “lessening of competition in the supply of UK TV VOD content at the wholesale and retail levels”. However, the Commission goes onto say that it does not expect the joint venture would distort the market in online advertising or content acquisition.
“Video on Demand is a relatively new and rapidly expanding medium and UKVOD clearly has much to offer. However, we are concerned that a loss of rivalry between BBC Worldwide, ITV and Channel 4, who are normally regarded as close competitors, could restrict existing and future competition for VOD. Whatever benefits viewers would gain from this rivalry would clearly be lost,” said Peter Freeman, CC Chairman and Chairman of the inquiry group. He said while there were already several other well-established providers in the market, UK domestic content was key to a VOD proposition, and it would be difficult for third parties to match UKVOD in scale or attractiveness.
