Kangaroo bounced out of court

February 6, 2009 on 12:06 pm | In blog | No Comments

The BBC, ITV and Channel 4 all have an on-line presence, notably the iPlayer. For some time now they’ve been collaborating on a Video on Demand project called Kangaroo whereby their content is made available from one jointly run location.

Yesterday the Competition Commission stopped the project in its tracks as in their view Kangaroo would present too much of a threat to competition for independent VOD suppliers. There had been an interim report published in December, which expressed concerns about this, but in the opinion of the Competition Commission had not been sufficiently addressed.

“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,” said Peter Freeman, Chairman of the Commission.

“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.”

Freeman added that without Kangaroo, and therefore by having to run their own individual VOD services, the three broadcasters will have to compete for viewers’ attention and that viewers will be better served as a result.

“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.”

In a joint statement, the three broadcasters 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.”

The issues raised are complex. The BBC is funded by the license fee, ITV and Channel 4 are commercial companies. Are the latter riding on the relatively safe income of the former? Do license fee payers want their annual fees to subsidise these commercial companies? Would this pooling of resources also provide more original UK programming, rather than just distribution of content? Would independent producers also be able to also contribute and distribute content? 

We’re less certain that we agree with the ruling though. All three protagonists are already online, so what difference would it make if their content was centralised? It would for sure be a bit more convenient for the consumers, if the model was a la iPlayer, free to download or stream.

Wouldn’t it be great if either the iPlayer or something like Kangaroo was open to independent producers of content, such as podcasters, this becoming the UK’s equivalent of iTunes? In a separate document I recently read, this has indeed been mooted, but only as a marginal bullet point. In my view this idea should take centre stage – what do you think?

Somehow I don’t think we’ve heard the last of Kangaroo… and one thing is for sure… more and more content is becoming available on line and the disintermediation of the internet means that with canny marketing and quality content, independent producers such as members of UKPA have a fighting chance.

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