U.K. regulator blocks Project Kangaroo

Joint venture VOD platform nixed

LONDON -- Britain's leading broadcasters have reacted with dismay after antitrust regulator the Competition Commission blocked their plans to launch a joint venture VOD platform, dubbed Project Kangaroo.

The partnership between ITV, Channel 4 and BBC Worldwide was first announced two years ago, but has now been rejected because it poses "too great a threat to competition" in the nascent U.K. on-demand market, the regulator said.

Kangaroo would have allowed viewers free access to download and watch programs from the three main broadcasters via a single service. Currently viewers have to go to each broadcaster's own on-demand platform.

"After detailed and careful consideration, we have decided that this joint venture would be too much of a threat to competition in this developing market and has to be stopped," Competition Commission chairman Peter Freeman said.

"BBC Worldwide, ITV and Channel 4 together control the vast majority of (U.K.-originated) material, which puts them in a very strong position as wholesalers of TV content to restrict competition from other current and future providers of video-on-demand services to U.K. viewers," the report said, suggesting instead that the individual broadcasters should have to compete with each other for viewers and advertising.

In a joint statement the broadcasters said the decision meant that viewers would lose out.

"We are disappointed by the decision to prohibit this joint venture. While this is an unwelcome finding for the shareholders, the real losers from this decision are British consumers," ITV, Channel 4 and BBC Worldwide said. "This is a disproportionate remedy and a missed opportunity in the further development of British broadcasting."