Project Kangaroo blocked by Competition Commission

In a surprise decision, the Competition Commission (CC) has blocked the launch of the proposed video on demand (VOD) venture between the BBC, ITV and Channel 4 with the working name of Project Kangaroo.

The reasoning behind the decision was quite simple, as explained (pdf) by Peter Freeman, CC Chairman and Chairman of the inquiry group:

Without this venture, BBC Worldwide, ITV and Channel 4 would be close competitors of each other. We thought that viewers would benefit from better VOD services if the parties—possibly in conjunction with other new and/or already established providers of VOD—competed with each other.

While many commentators had expected the CC to raise concerns about Project Kangaroo, most thought that the broadcasters would find compromises in order to overcome them.

The full CC report is available on their website. And there's extensive coverage and discussion on Media Guardian, including this commentary from Emily Bell criticising the CC decision.

What is likely to happen next is that one of these "nascent services" such as Hulu, the US-owned distribution network for high value video content, will become the platform of choice for UK broadcasters. If this happens advertising pounds will be returned, a la Google, to an organisation which has US shareholders and no interest in reinvesting in UK programmes.