Regulator bans UK video-on-demand service

February 4, 2009 The United Kingdom's Competition Commission has decided not to allow a video-on-demand (VOD) service backed by the country's major broadcasters.

Kangaroo would have provided BBC, ITV and Channel 4 (C4) television programmes for download and streaming to UK internet users from a single interface. At present, each broadcaster has its own system. The Commission said that free-to-view Kangaroo would prevent other VOD providers entering the market because the three broadcasters control the vast majority of original programming in the UK.

Commission chairman Peter Freeman said "Without this venture, BBC Worldwide [the BBC's commercial arm], ITV and Channel 4 would be close competitors of each other. We thought that viewers would benefit from better VOD services if the parties... competed with each other".

The Kangaroo consortium issued a statement saying that "the real losers from this decision are British consumers. This is a disproportionate remedy and a missed opportunity in the further development of British broadcasting". Michael Grade, executive chairman at ITV plc, told The Guardian "We are surprised by this decision because we believed that the Kangaroo joint venture, competing in a crowded online world against dominant global brands, was an attractive UK consumer proposition, free at the point of use".

The Times says that Kangaroo had been expected to gain approval, albeit with provisos including BBC and C4 programmes being made available elsewhere.

The broadcasters already have their own existing internet download or streaming services with different funding models. The BBC iPlayer is free to use and carries no advertising; C4's 4oD charges 99p to rent a programme for 48 hours; and the ITV Player is supported by advertising.