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Competition Commission halts Project Kangaroo

TV-on-demand service poses "too much of a threat to competition"

The Competition Commission has rejected plans for the TV-on-demand service Project Kangaroo as it won't benefit viewers.

The commission said the joint venture between the BBC, ITV and Channel4 posed "too much of a threat to competition" and "has to be stopped".

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First announced in November 2007, Project Kangaroo was billed as a 'one-stop shop' for video content online and was expected to offer users more than 10,000 hours of TV, with around 90 percent available for free and the rest available for rent or purchase. However, the Commission began investigating the service, after rivals including Sky and Virgin Media raised concerns.

Chairman of the commission Peter Freeman told BBC Radio 5 Live: "The three joint venture partners are the largest TV companies in this country and you would normally expect them to compete with each other on a thing like this. We're not against the exciting invention - that's great - but there are lots of other people who can offer it. All we're saying is that we don't think these three people should do it together".

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"While this is an unwelcome finding for the shareholders, 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," said the three broadcasters in a statement.

The decision should come as no surprise. The Competition Commission announced its provisional findings of the investigation into the project in December and said then, it thought the service wasn't competitive.

"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," Freeman said at the time.

See also: Project Kangaroo will cost ITV and Channel 4 £30m

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