The report, Competition Commission - Project 'Kangaroo': 'Video-on-demand' joint venture between BBC Worldwide Limited, Channel 4 Television Corporation and ITV PLC: Final report can now be read online.
Peter Freeman, CC Chairman and Chairman of the inquiry group, said:
"After detailed and careful consideration, we have decided that this joint venture would be too much of a threat to competition in this developing market and has to be stopped.
The case is essentially about the control of UK-originated TV content. VOD is an exciting and fast-moving development in TV, which makes programmes previously broadcast available to viewers at a time of their choice. The evidence we saw showed that UK viewers particularly value programmes produced and originally shown in the UK and do not regard other content as a good substitute.
BBC Worldwide, ITV and Channel 4 together control the vast majority of this material, which puts them in a very strong position as wholesalers of TV content to restrict competition from other current and future providers of VOD services to UK viewers. We thought the joint venture parties would have an interest in doing so, in order to make Project Kangaroo a success.
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.
We considered very carefully a combination of measures aimed at removing the wholesaling activities of the joint venture and safeguarding commercially sensitive information, but we were not persuaded that these measures would overcome the risk that membership of this joint venture would influence the parties' commercial decisions, particularly in relation to the wholesaling of VOD content.
We looked closely at the possible benefits to viewers which this joint venture might bring. We found that these and other benefits could come just as well from other projects that were less damaging to competition. We expect these alternatives to be much more likely to develop in the light of our decision. We are aware of the various important proposals coming from Ofcom and the Digital Britain project regarding the future of public sector broadcasting and the position of the three companies involved in this joint venture. None of the proposals is specific or imminent. Our job has been to examine a specific proposal for a particular new and developing market. The effects on compe-tition of other, future proposals for public service broadcasters have yet to be examined."