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Kangaroo has lost its bounce: UK VoD suffers

The Competition Commission has ruled that online TV joint venture between the BBC, ITV and Channel 4 is must not continue. So where does that leave video on demand in the UK?

You could argue that Kangaroo, the online video-on-demand joint venture between ITV, Channel 4 and BBC Worldwide was never going to make it out of the marsupial pouch. A fairly obvious hint was the departure of Ashley Highfield, who joined Microsoft last year. But now it's official: the Competition Commission has ruled that the project must not continue.

The justification for this decision is that the UK's three biggest broadcasters joining forces would stifle competition. The Competition Commission found that Kangaroo "would be too much of a threat to competition in this developing market and has to be stopped". It added that "UK viewers particularly value programmes produced and originally shown in the UK and do not regard other content as a good substitute". It also realised that "BBC Worldwide, ITV and Channel 4 together control the vast majority of this material".

In effect, the Competition Commission is saying that because Sky, Virgin and Channel 5 don't actually produce as much unique content, and don't have an archive, they can't compete. Well, so what? Sky's contribution to TV in the UK amounts to importing US shows and buying up the rights to sport, so no one can watch them without an expensive Sky subscription. Why should we care if it can't compete? And besides, it can and does offer a VoD service of its own, Sky Player.

So, with Kangaroo hamstrung, here's what we're likely to be stuck with:

Option A: Broadcasters will each create their own custom application to distribute their archive content. Each will require that each the user has a different piece of software installed on their PC. It will be a confusing mess, and computers across the nation will collapse under the weight of several different applications. ISPs will also struggle -- because each app will likely be P2P-based, and each will use its own chunk of upstream bandwidth, the networks will grind to a halt.

Option B: Broadcasters will flock to iTunes to sell and distribute their content. Meaning there is still one, proprietary application that not everyone can use. And that you have to have an Apple product to get any real benefit from. Linux users will be shut out and there won't be any hope that non-Apple mobile phones will ever see this content.

Option C: No one bothers with streaming video, and the Competition Commission will have essentially shut down VoD in the UK. Which it will consider to be a resounding success, because at least there's no competition.

None of those options seems to benefit the conusmer. 

What if Kangaroo had been allowed to continue? Potentially it could have become a platform for all broadcasters. In the same way Freeview and freesat offer platforms to provide content to users, Kangaroo could have been an online distribution platform for VoD. Of course, such a deal might ultimately have resulted in foreign content creators such as NBC Universal and Sony Television selling their content direct to consumers, which would dampen Sky's parade slightly.

We'd welcome your thoughts about this development, use the comments section below to tell us what you think.

Image credit: t3rmin4t0r, via Flickr under a CC by-attribution licence. You may re-use this image under the same terms as the original.