BT: Kangaroo will distort competition

BT Vision

• Increase image
• View all images

BT has warned that the creation of the industry joint venture Project Kangaroo will distort competition in the video-on-demand market.

In its submission to the Competition Commission's inquiry into the proposed VoD platform, BT said there was "a very real likelihood" that because BBC Worldwide, ITV and Channel 4 control most UK-produced TV content, they would be able "very materially" to reduce competition.

Its submission echoes concerns outlined by Virgin Media in its evidence to the Commission.

BT also raised concerns over the broadcasters' ability to cross-promote their services on their linear TV channels and their ability to command an increasing proportion of advertising revenues.

BT added: "The 'tipping' in favour of the Kangaroo service raises a number of potential competition concerns, including, first, very real concerns regarding the reduced incentives of the Kangaroo parties to supply their content to competing retail providers on terms that will enable the latter to compete effectively at the retail level.

"Second, the extent to which the Kangaroo service may be in a position to obtain third party content on materially more favourable terms than those available to its retail competitors, leading to distortions of competition at the retail level."

BT's own on-demand service BT Vision has attracted more than 280,000 subscribers since its launch at the end of 2006.

The Competition Commission is due to rule on the competition issues surrounding Project Kangaroo early next year. If cleared, the broadcasters plan to launch the service, which was initially scheduled for launch this autumn, soon after.