The
BBC, ITV and Channel 4 are facing opposition to their plan to launch a
joint online television service, codenamed Kangaroo, from media groups
concerned about its potential to stifle competition.
The Office of Fair Trading (OFT) has asked for views on whether Kangaroo
could damage competition in the nascent video on-demand market.
It will then decide whether to refer the proposed service to the
Competition Commission or demand safeguards to ensure it does not damage
competitors.
BSkyB and Virgin Media, who have their own on-demand platforms, have
told OFT that the merger "raises concerns".
BSkyB wants to ensure that all the content carried on Kangaroo is also
available to its video on-demand service. Graham McWilliam, group
corporate affairs director at BSkyB, said: The shareholders of
Kangaroo must not be allowed to leverage their unique position in
television, built on public subsidy, into the on-demand space.
The fiercest criticism has come from Joost, the London-based web TV site
founded by the entrepreneurs who made millions selling their internet
phone service, Skype, to eBay. Chief executive Mike Volpi said the BBC,
ITV and Channel 4 had so far failed to supply programmes to his service:
We have asked many times. In the case of the commercial players
negotiations have broken down over price. In the case of the BBC it's
just been a flat-out no.
Volpi said: When you have a situation where so much good content ends
up being potentially exclusive through a single distribution channel, it
makes it very difficult for any player outside of those three to be
competitive in the UK market.
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