February 4, 2009 / 7:58 AM / 11 years ago

UK competition body blocks on-demand TV project

LONDON, Feb 4 (Reuters) - Britain’s Competition Commission has decided to block a proposed online video-on-demand joint venture between the BBC, Channel 4 and ITV (ITV.L), saying it needed to be stopped or it would become too powerful.

The joint venture had been labelled Project Kangaroo.

The Commission said the three broadcasters controlled the vast majority of programmes produced and originally shown in Britain and could prevent other providers of video-on-demand services from developing and competing.

“We thought the joint venture parties would have an interest in doing so, in order to make Project Kangaroo a success,” said Peter Freeman, Commission chairman and chairman of the inquiry group.

“Without this venture, BBC Worldwide [BBC.UL], 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.”

BBC Worldwide, the commercial arm of the BBC, Channel 4 and ITV said they were very disappointed by the decision.

“While this is an unwelcome finding for the shareholders, the real losers from this decision are British consumers,” they said in a joint statement.

“This is a disproportionate remedy and a missed opportunity in the further development of British broadcasting.” (Reporting by Kate Holton, editing by Will Waterman)

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