Kangaroo hit by competition inquiry

The UK’s Office of Fair Trading (OFT) has referred Kangaroo, the proposed video-on-demand joint venture from BBC Worldwide, ITV and Channel 4, to the nation’s competition authorities.

The OFT said today that it had taken the decision due to concern over the impact the combination of the UK’s biggest TV libraries would have on the rest of the market, with Kangaroo controlling syndication to third parties.

“Concerns arise because the concentration of these important and competing libraries of UK TV programming may give market power to the joint venture,” said the OFT.

This is said might enable Kangaroo “to charge higher prices in syndicating content to wholesale customers, and potentially raise DTR (download-to-rent) and DTO (download-to-own) prices paid by VoD consumers, or limit the range of ways in which viewers can watch the parties’ content on demand.”

The UK’s Competition Commission will now consider the implications and has until December 12 to publish its findings. The inquiry means it is unlikely that Kangaroo will launch this year, as BBCWW, ITV and C4 had hoped.

‘VoD is a new and fast-growing consumer sector, and we should judge the issues on evidence, rather than speculate about consumer behaviour,” said OFT senior director of mergers Simon Pritchard.

The move will be welcomed by parties that have already raised concern about Kangaroo, such as production companies FremantleMedia, Endemol and IMG, which have held talks on the matter.

The delay will also give overseas players such as NBC Universal-News Corp joint venture Hulu, which has already expressed an interest in moving into Europe, more time to establish a roadmap for doing so.