The Competition Commission is having concerns over the alliance between BBC Worldwide, ITV and Channel4 who are behind Project Kangaroo. The project is about the broadcasters working together to provide a paid for video on demand service once content has been removed from their various catch-up TV services.
The Competition Commission is involved since it is carrying out an investigation to ensure the alliance will not be too dominant to the extent that other commercial services would not be able to compete.
"The Competition Commission (CC) has provisionally concluded that the proposed video on demand (VOD) joint venture between the BBC through BBC Worldwide Limited (BBCW), ITV plc (ITV) and Channel Four Television Corporation (C4)—UKVOD, also known as ‘Project Kangaroo’—will restrict competition in the supply of VOD services in the UK."Extract from Competition Commission press release
These findings are only preliminary, the commission has until February 2009 to publish its full findings, at which time it could recommend prohibition of the project, or simply a number of measures to ensure other services such as iTunes are not unfairly locked out of offering UK TV content.
The concern centres around the simple fact that since the broadcasters will already have been involved in rights discussions from the time a show was first conceived of, it is possible that terms could be built in that mean content is withheld from rivals even when they are willing to pay for it.
The fragile nature of physical media distribution has been highlighted with Woolworths going into administration along with their Entertainment UK arm. This part of Woolworths' was responsible for around 40% of CD's sold by Asda, WHSmith and Zavvi and has lead to Zavvi cancelling online orders. In light of this, the reduced costs of online distribution of content and the fact that unsold stock does not waste warehouse space will be looking more attractive to retailers.
The biggest danger for rights holders, is that if content is too expensive or difficult to get hold of in a format they want, people will simply revert to the myriad of free places that they can get material.