Kangaroo Plans Hit Setback

LONDON,
December 3: The Competition Commission has provisionally ruled against Kangaroo, a
joint-venture on-demand service from BBC Worldwide, ITV and Channel 4, arguing
that it
would restrict competition in the British VOD market.

"We
are concerned that the loss of rivalry between BBC Worldwide, ITV and Channel
4, who are normally regarded as close competitors, could restrict existing and
future competition for video-on-demand," said Peter Freeman, the chairman
of the Competition Commission.

The
Competition Commission has published a consultation outlining potential
remedies to address the issue. The first option proposed is to the scrap the
joint venture. Other remedies include re-evaluating how to control the way
content is offered to other providers and making "material
modifications" to the structure of Kangaroo.

The
Kangaroo partners said in a joint statement: "We will continue to make the
case for a service that will be both in vast majority free and non-exclusive,
and of great benefit and value to British consumers.

"These
suggested remedies are not an exhaustive list. They represent possible options
that the commission has identified as a starting point for discussion. The
shareholders remain committed to engaging with the commission and will continue
to work towards launching the service next year. Today's announcement
represents the provisional findings from the Competition Commission, at the
mid-point in this process. We welcome the commission's recognition that 'UKVoD
[Project Kangaroo] clearly has much to offer.' We look forward to the dialogue
on these and other potential remedies with the commission over the coming
weeks."

The
Competition Commission will hold further hearings with interested parties,
which have until December 16 to submit their views on the possible remedies.
The commission is set to publish its overall findings by December 24.

—By
Kristin Brzoznowski