Kangaroo: "We won't pose a threat"

Project Kangaroo, the joint venture between ITV, Channel 4 and BBC Worldwide to provide an online video on-demand service, will not pose a threat to competition, the project has said in its submission to the Competition Commission's inquiry.

In 73 page rebuttal of competitors claims, Kangaroo insists it will not reduce competition in the nascent market for online video. Most of Kangaroo's content will be free to view and supported by advertising, which it hopes will deflect criticism that its dominance could affect pricing. Its members will compete with each other to sell advertising against their own content, and also compete to acquire online rights from production companies.

Kangaroo hopes this will deflect calls from Pact, the association of independent producers, to open its entire library to rival services. The submission also forecast that more than 90 per cent of content that can be paid for to own, as opposed to viewed online for free, will be available elsewhere.

The shareholders emphasise that their share of viewing in traditional television "is no guide to their positions in (VOD) markets, because of competition from the likes of Microsoft, Apple, Lovefilm, Virgin Media and Sky". It said many of these services could be subsidised and offered free to consumers as add-ons to more profitable bundles, whereas Kangaroo had to stand alone.

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