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Competition Comission Rules Kangaroo Anti-Competitive


Competition Comission Rules Kangaroo Anti-Competitive

It seems the Project Kangaroo March launch isn't going to be taking place after all. After a review, published yesterday, the Competition Commission (CC) has (provisionally) concluded "that the joint venture is likely to result in a substantial lessening of competition (SLC) in the supply of UK TV VOD content at the wholesale and retail levels." Or, in plainer English, that Kangaroo, as currently envisioned, will not be allowed to operate.

The CC's conclusion is that UKVOD, the joint venture between BBC Worldwide, ITV and Channel 4, which is pioneering Project Kangaroo, while having many points in its favour, would not be in the best interest of the viewing public.

The CC's Chairman (also chairman of this particular enquiry group) commented:

"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 BBCW, ITV and C4C, 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.

Of course there are already several other well-established providers of various types of VOD services. However, 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. "

Which is a long quote, but worth reading in full; so go back and do so if you just skipped that text and shame on you. I'm in two minds as to whether I agree with the CC or not. On one hand, I concede that the monopoly on content that Kangaroo could exercise could be of detriment to third part rivals but conversely, I can't help but think: so what? Protecting potential competition for competitions sake seems pointless. There are enough rival VOD providers out there to ensure pricing of Kangaroo content remains reasonable, even if it is only available in one place. The service UKVOD is proposing is too tempting to want to see Kangaroo fail to launch at all.

The CC is now accepting feedback on this preliminary report, before publishing its final decision on the 8th of February. Whether we'll see a different Kangaroo to that originally envisioned, or no Kangaroo we'll just have to wait and see now.


Competition Commission Project Kangaroo Provisional Findings (PDF).

Go to comments

Matt G Baish

December 4, 2008, 4:50 pm

"Any reduction in access to content would be likely to impact unfavourably on viewers."

What like only being able to see premiership games on Sky/Setanta?

Matt G Baish

December 4, 2008, 4:52 pm

Sky has a lot to answer for. Competition in the media used to about (quality of) content. Now it is as much (if not more) about delivery - hence we can now access 100s of channels of absolute garbage conveniently delivered to us in a plethora of different ways.



December 4, 2008, 5:59 pm

Due to the credit crunch, and people now asking what our Tax is paying for, do you think the CC & ASA etc, are flexing there muscles to show the public they actually do something?. Like Matt mentioned, why the CC didn't see SKY & Premiership football in the same way, or why allowing Apple/O2 to have complete control on selling the I-Phone, baffles me.

The thing is if big companies didn't get together, things like BlueRay DVD etc wouldn't even exist, so for me a joint venture on VOD would be better. It would be nice to go to one website for VOD, than 4 different ones with different interfaces etc. Some things companies banging there head together is a good thing, not a bad thing. The CC can always jump in later if the public end been worse off, after all that is meant to be there job.


December 4, 2008, 6:28 pm

I can't agree with the CC on this one, BBC iPlayer is great, 4 On Demand is great, though I'm not sure about the ITV one since I never watch ITV but I'm sure it ain't that bad. Having to use all of them to access content is really annoying having different download managers and I'd hoped Kangaroo would fix that by having all content in one place. Competition is good, but I think Kangaroo would self regulate itself, as people aren't going to pay much for VOD and expect most of it for free.


December 4, 2008, 8:05 pm

So let me get this straight... the CC have effectively stopped competition in VOD services. The ONLY way forward is not for every channel/network to have it's own VOD service. That's completely backwards way of thinking in this day and age and not very useful for the consumer. Progress comes from different services springing up which offer multiple networks... like hulu in the US. As far as I can tell Kangaroo was aiming for a similar service.

They are clearly idiots because they don't seem to understand they do NOT exist to stifle innovation and stop services before they have even started, they are there to push them in the right direction when they get out of line.

Why aren't they digging at apple for itunes and non apple hardware.. also apple's fixed prices on all music. What are they doing about Microsoft's control on XBLA games and downloads price fixing. They force publishers to sell at prices they determine... how is that legal??


December 4, 2008, 10:15 pm

@ Jopey

Every now and then a watchdog will make a lot of noise and fuss over 1 issue to try and trick people into thinking they do a good job. I'm not saying we don't need industry regulation (even though a capitalistic industry does a pretty good job of self regulation), just that very few of the current industry watchdogs do a consistently good job.

BTW, I was highly amused while watching the new iPhone ads, remember the watchdog who banned the ads for misrepresentation? (Rightly so, but there are 100's of other adverts just as bad as Apples) Apple has now added the line 'sequence has steps removed and is sped up' in the small text, which made me giggle a little :)


December 5, 2008, 5:34 am

The CC would undoubtedly have considered the views of Community based media: some of whom are particularly vocal about Kangaroo effectively stopping them from making people aware of the video content they produce.

It's a good argument but not one I agree with and I don't think it's against the public interest to block Kangaroo from launching: based on the comments so far it's very much in the public interest for it to launch.

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