Project Kangaroo has been deemed to be restrictive of competition for video-on-demand by the UK Competition Commission. In the past few weeks Project Kangaroo has undergone several set-backs and developmental blocks. From uproar by competitors, to the resulting investigation by the Commission, to the resignation of Ashley Highfield the project has been riddled with obstacles.
The initial findings of the UK Competition Commission concluded that Project Kangaroo would restrict competition in the on-demand market for the UK. The project is a joint venture between the BBC, ITV, and Channel 4-so it is not difficult to believe that a union would essentially monopolize on-demand viewing.
According to C21Media.net the commission summarized its provisional report to state that a green light for Project Kangaroo would cause a significant drop in competition in the UK. Here is a summary of their statements given by Competition Commission chairman Peter Freeman:
“We are concerned that a loss of rivalry between BBCWW, ITV and C4, 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.
The evidence that we have seen tells us that domestic content is key to being able to offer strong competition to UKVOD’s proposed service. The parties control most of that content, putting them in a powerful position in relation to competitors and viewers. We think that it would be difficult to obtain content from third parties to match UKVOD’s offer in scale or attractiveness.
In this situation, UKVOD would have the ability and incentive to impose unfavourable terms when licensing domestic content to rival VOD providers. At the extreme, UKVOD might withhold content from its rivals altogether. Any reduction in access to content would be likely to impact unfavourably on viewers.”
The Kangaroo team now must regroup and discuss possible ways of refining and remodeling Project Kangaroo so that it does not pose the kind of threat the Commission is suggesting it will.
According to C21Media.net the “remedies” could be as follows:
“putting in place controls over the way Kangaroo offers content to other providers and ‘material modifications’ to the terms of the joint venture, potentially limiting the scope of its activities or the terms of exclusivity between the partners and their parent companies…Kangaroo could be restricted in the way it shares catch-up programming from ITV.com and Channel4.com, for example, as is the plan with the BBC iPlayer. Other options include handing all VoD rights back to independent producers at the end of the catch-up window, rather than having them reside with the broadcasters.”
Should the Kangaroo team not invent and follow some immediate changes the project might face prohibition-which would essentially mean Project Kangaroo is not allowed to be launched at all.
Given the less than favourable results from the Commission the Project team is optimistic. Their reaction was positive, as they suggested Kangaroo has a lot to offer to users and will be a beneficial product once up and running. They have gone back to the drawing room to work-out ways in which to get the go-ahead.
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January 26th, 2009 at 7:58 pm
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April 8th, 2009 at 11:24 am
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