Kangaroo poised to shake off competition shackles

The future of Kangaroo was thrown into doubt yesterday (3 December) when the Competition Commission (CC) said the service would need material changes to avoid distorting competition in the UK's video-on-demand market.

But Broadcast understands the Kangaroo team is prepared to accept at least one of the CC's suggested remedies and that it expects the project to get the go-ahead on 8 February, when the CC makes its final decision.

Kangaroo estimates it will then take around a month to win approval from the broadcasters' boards and is gearing up for a spring launch.

The CC has given all interested parties, including opponents to Kangaroo such as BSkyB and Virgin Media, until 16 December to respond to its initial findings.

This week it spelt out several remedies to its concerns, including making all Kangaroo content available to new or existing VoD providers, such as other broadcasters or iTunes, at a fair price.

Other remedies include limiting Kangaroo to older archive material and sending viewers who want recent catch-up content to ITV and C4's existing sites. The BBC already plans to use Kangaroo in this way, sending viewers to BBC iPlayer for catch-up.

The CC could also limit Kangaroo's ability to wholesale its archive or catch-up content as a whole, forcing each broadcaster to strike individual deals for programmes.

Another suggestion is that independent producers retain all VoD rights after a catch-up window to sell as they choose.

A CC spokesman said blocking the creation of Kangaroo would only be considered as a last resort. He added: “I don't think anyone would be dumb enough not to recognise this project would have enormous benefits to customers; the issue is whether those benefits are outweighed by not having a competitive relationship between the three major terrestrial channels.”

The Kangaroo team is expected to meet after the CC publishes its full 100-page report into the initial phase of its inquiry on 5 December.

Kangaroo said in a statement: “We welcome the Commission's recognition that ‘[Project Kangaroo clearly has much to offer'. We will continue to make the case for the service.”

Kangaroo at a glance

30-day catch-up content and 10,000+ hours of archive.
Content is either ad-supported, or paid-for, either to watch or own.
More than 90% of content viewed will be free to consumers.
Where applicable, VoD rights to remain subject to terms of trade.
BBC iPlayer, itv.com and channel4.com to continue offering streaming and catch-up.
Kangaroo likely to buy up rights to third-party content.
All parties to continue to compete independently for VoD. rights.

The board Acting CEO Rod Henwood and CFO Christine Mullin; Ben McOwen Wilson and Max Graesser, ITV; David Moody and Claude London, BBCW; Jon Gisby and Sarah Rose, C4
Supporters Google, Walt Disney Company
Qualified supporters Pact, National Grid Wireless, Radio Centre, Institute of Practitioners in Advertising
Opponents BSkyB, Virgin Media, Tiscali TV, BT Vision, Arts Alliance Media, Joost

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