Kangaroo threatens UK pay-TV, warns Tiscali

The UK’s entire pay-TV market could “fall apart” if the proposed on-demand joint-venture Kangaroo goes ahead, warned somewhat alarmist Tiscali TV in the latest submission to the Competition Commission.

Tiscali, which used to be HomeChoice and has been up for sale since the beginning of the year, said that if the joint-venture between BBC Worldwide, ITV and Channel 4 was allowed to launch “there will be less need for consumers to use other TV platforms such as Tiscali, BT Vision, Sky and Virgin Media.”

“The public service broadcasters will take advantage of their brand power (and public funding, in the case of the BBC) to challenge the future of the UK pay-TV market,” Tiscali’s submission continued.

“With fewer subscribers and difficulty in securing valuable content, pay-TV platforms may not be able to continue to carry channels such as Discovery, National Geographic or Living and the business model for much of the UK’s present pay-TV and platform markets may begin to fall apart.”

Tiscali, which pioneered IPTV in the UK but has struggled to expand beyond its 50,000 or so subscribers, even accused the public broadcasters of “joining forces to dictate the future of content distribution and set-top box technology.”

Tiscali described Kangaroo as “a uniquely strong distribution mechanism through which the UK’s public service broadcasters will extend their hold over the country’s pay-TV industry,” despite pay-TV being dominated by BSKyB and Virgin Media in the UK.

The launch of Kangaroo would certainly impact Tiscali TV’s business and sale prospects and this perhaps explains the company’s dire warnings about the project. BT Vision and others in the video-on-demand space have also expressed similar concerns.

Nevertheless, there are signs that the UK terrestrials are getting somewhat fed up having to support on-demand platforms with all the content they produce. Over the weekend, ITV exec chairman Michael Grade described YouTube as a “parasite” living off other people’s programmes.