BBC, ITV CH4 Project Ruled Anti-Competitive
Governing Body See-Saws on Proposed VOD "Kangaroo" Project
Feb 5, 2009 Christopher Wilson
The unprecedented project, which would have brought together the UK's most comprehensive repertory of TV programmes, was scuppered after the Competition Commission ruled that the VOD (Video-on-Demand) proposal would not be in the best interests of the consumer. Those party to the project – initially named Kangaroo, but latterly SeeSaw – hoped to stream on one website programmes and VOD content from their respective schedules, with advertising and tie-ins enabling the streams to be distributed free-of-charge to UK users.
Kangaroo "Too Much of a Threat"
The Competition Commission, however, considered the prospect anti-competitive, citing the effective monopoly the three enjoy in the UK market. Peter Freeman, the Commission’s chairman, stated that the regulating body’s principal concern was that the combined market share of the three would pose “too much of a threat” to other online media outlets. At present, website portals such as YouTube and iTunes can use the three’s content for a fee, but it was feared the Kangaroo project would mean the broadcast triumvirate – responsible for 90% of the UK programming – would thenceforth keep their content to themselves.
The ruling angered the three broadcasters, who had believed the Commission would green-light the project – albeit after a number of minor changes. However, the project’s being dismissed out of hand angered and shocked the Kangaroo team in equal measure.. In a joint press release they asserted that the ruling in fact ran counter to its ostensible intention and would act to limit customer’s access to online content: “’[T]he real losers from this decision are the British consumers. This is a disproportionate remedy and a missed opportunity in the further development of British broadcasting,” they said.
TV Advertising Budgets Dry-Up
The ruling is a particular blow for cash-strapped Channel4 and ITV. Unlike the BBC, the pair are funded principally by advertising revenues, a stream of income that is expected to dry-up in a parsimonious 2009. They hoped that a bigger online presence – in the shape of Kangaroo – would enable them to levy additional revenue in the range of £150 million in the project’s first three years. This now looks unlikely with the competition body suggesting that the British consumer is best served when the three were "close competitors" not partners.
BBC, ITV & Channel4: Projects in the Pipeline
While the Competition Commission might have scuppered this latest joint broadcaster bid, a thinning of advertising budgets means that the three are expected to find other means of collaboration in the near future. Indeed, the BBC and ITV have plans to cut costs by sharing local news facilities, while the Channel4 is believed to be soliciting a merger with BBC’s commercial arm, BBC Worldwide. Without the partnership it is thought Channel4 will meet its demise within five years.
Kangaroo Project is a No-Go
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