Way back in November last year, the BBC, ITV, and Channel 4 jointly announced their plans for an online video on demand venture strangely titled Kangaroo, with all three broadcasters taking an equal third share in the service.
Kangaroo is, or at least was meant to be launching in August of this year, but that launch may now be delayed quite substantially after having been referred to the Competition Commission by the Office of Fair Trading.
The OFT issued a statement yesterday concerning the decision to refer the plans to the Competition Commission, which according to The Telegraph has been done for a number of different reasons.
OFT Statement
The OFT said:
“[There are concerns that] the concentration of these important and competing libraries of UK TV programming may give market power to the joint venture, enabling it to charge higher prices in syndicating content to wholesale customers, and potentially raise download-to-rent and download-to-own prices paid by VOD consumers, or limit the range of ways in which viewers can watch the parties’ content on demand.”
In essence, the OFT are concerned that if Kangaroo launches and proves popular, that the company could then start increasing prices to both other companies, and consumers. Which the people behind Kangaroo have claimed is a stupid idea.
Michael Grade Dismisses Claims
Michael Grade, the executive chairman of ITV has claimed in response that this enforced delay could allow non-UK companies such as Google and Apple to get a head start on UK companies, and all without having to deal with this kind of regulation.
It’s a fair point as Kangaroo now faces up to 24 weeks of scrutiny from the Competition Commission, with December 12th being set as the date for all evidence and issues to be collected and considered.
BSkyB and Virgin Media Complaints
The OFT referral is thought to have been made after complaints were registered by rival UK broadcasters BSkyB and Virgin Media. We’ve already heard from BSkyB chairman James Murdoch about his concerns over the massively popular BBC iPlayer.
Kangaroo is intended to be the British version of Hulu, with programming offered online for free in exchange for the viewing of adverts. There will also be the option to buy content which can then be downloaded to your computer.
Worth The Wait?
When and if the Kangaroo project does get the go-ahead, the BBC plan on keeping the iPlayer in existence for its own programmes, and ITV will keep content on its website. Channel 4 however will be getting rid of 4OD to totally concentrate on Kangaroo.
Kangaroo has a lot of promise and this delay is unfortunate if not necessary to appease the fears of rival broadcasters. As long as it does eventually arrive, and fulfils its promise, I can wait a little bit longer.
