Marsupial mishap 

3 December 2008 tbs.pm/985

Project Kangaroo punctured by Competition Commission

Competition Commission statement (PDF file)

Project Kangaroo is (or perhaps was, given the stance that now seems to be all too clear) an attempt to provide a “one-stop shop” for video-on-demand content from the major broadcasters, and by doing so has brought the wrath of those who ideologically believe that this sort of thing shouldn’t really be permitted to happen.

The BBC’s iPlayer had established an early and dominant lead in internet-based, video-on demand provision, so the biggest losers from Kangaroo’s failure (if/when it happens) will be the other broadcasters that are involved in the project and were banking on its success to further promote their programming.

Indeed ITV was campaigning hard for the Kangaroo proposal to be accepted, so Michael Grade is likely to be the person that is most disappointed by the Competition Commission ruling even though there is still some scope for a more limited service to be implemented at some point.

Kangaroo’s potential for failure was strongly highlighted when Ashley Highfield quickly hopped over to Microsoft just a few weeks after joining Kangaroo as its director; either Microsoft made him an offer he couldn’t refuse or he noticed that something was distinctly wrong with the whole venture which in turn caused him to quickly jump ship.

The real issue with Kangaroo lies less with rival video-on-demand services (setting up such a service is non-trivial and requires the cooperation of major broadcasters), but perhaps relates more to the independent production sector, since the balance of power has been shifting slowly but steadily towards independent producers in recent years.

Kangaroo would have tilted the odds back towards the established broadcasters as well as perhaps upsetting BSkyB (if they didn’t want to join) along with American broadcasters (ditto – witness the somewhat belated inclusion of the US-originated Hulu service), so these reasons alone meant that Kangaroo’s acceptance was always going to be tricky.

As an aside, Peter Freeman’s comments on how a monopoly can impose unfavourable terms in relation to licensing content to third parties might also cause some discomfort within BSkyB, especially given the recent ruling that effectively forces them to share some of their premium content with rival services.

And if BSkyB can monopolise various specific elements of television content, what’s to stop Kangaroo being permitted to equally monopolise other elements under similar terms? It’s clear that the goalposts on what is actively considered to be a ‘monopoly’ can be shifted depending on the viewpoint being employed.

What superficially seems to have been dodged is the fact that the major broadcasters control much of their content anyway, so Project Kangaroo could potentially end up being irrelevant as to whether or not they choose to share their content with others (as a consequence) along with the price being charged.

Indeed it’s possible to balance the arguments for or against Kangaroo in either direction depending on who you feel holds the most credibility, and in this case the fact that there are already major rival video-on-demand services in existence seems to have been played down in relation to the judgement, although the full report may help to clarify this.

For example, certain programmes would never be made available via Project Kangaroo so viewers would still have to visit other websites to obtain them, therefore Kangaroo is likely to be just a substitute for the existing BBC/ITV/Channel 4 video websites as opposed to sucking demand from other sources such as iTunes.

All things considered, it’s unlikely that Kangaroo will ever be approved in a sensible form under the current circumstances since any compromises imposed (if they can think of any practical ones, that is) may render the service almost useless compared to established sources such as the iPlayer and iTunes.