Kangaroo rejected by Competition Commission

Partners in Project Kangaroo have reacted with dismay to the Competition Commission’s decision to block the online VOD venture. In a statement the Commission said it was keeping to its initial findings that the joint venture is likely to result in a substantial lessening of competition in the supply of UK TV VOD content at the wholesale and retail levels.

A joint statement issued by BBC Worldwide, ITV plc and Channel 4 expressed disappointment, saying the real losers would be 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 plc, said despite the setback the company had proved its UK content was attractive enough to stand on its own. “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.”

The Competition Commission’s position was that UK viewers do not see other content as a substitute for programmes made in the UK. It believes approval would have given Kangaroo the incentive to restrict competition from other providers of VOD services.

“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,” explained Peter Freeman, CC Chairman and Chairman of the inquiry group.

A series of submissions from potential competitors including Virgin Media, Joost and Babelgum argued against the project that in its short lifespan had worked its way through three chief executives.