Ancient disease fells Kangaroo

Michael Hedges February 5, 2009

It stalks all lands, respecting no species. It targets the large and healthy, wounding but not killing. Part viral, part psychological and, seemingly, part political it lies, in wait, in the soil. There is no escape.

The UK Competition Commission decided (February 4) that Project Kangaroo, the nascent video-on-demand (VOD) joint venture of the BBC, ITV and UK Channel 4, couldn’t exist. It would be anti-competitive and deprive, by virtue of scale, others the possibility of market entry.

Infracaninalitis is an ancient disease, origins traced deep in nature. It spreads human to human purely by thought. Contact is not necessary for transmission; indeed, those out of touch are most likely to propagate the disease. Infracaninalitis is the hysterical hobbling of the strong and innovative in favor of the weak, old or, sometimes, politically expedient. Literally, it is the dementia of cheering for the underdog.

Project Kangaroo planned to launch a VOD service, largely free, offering BBC, ITV and Channel 4 television programs on-line. It was seen as the natural successor to the BBC’s iPlayer, competitor to YouTube and potentially wildly popular among television consumers looking to ‘catch-up’ on shows they’ve missed. The BBC would participate through its commercial arm BBC Worldwide and provide archived oldies-but-goodies. Revenues would come from aggregated advertising, cycled back into UK television production. ET VOILA!, as we say in French; everybody wins.

“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,” said Competition Commission chairman Peter Freeman in a statement. “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 if the parties competed with each other.”

"And we're not against the exciting invention - that's great - but there are lots of other people who can offer it,” said Mr. Freeman. The ‘others’ would include News Corporation, owner of Sky, and Virgin Media. Both indicated their displeasure with the joint venture. The displeasure of News Corporation chairman Rupert Murdoch chills to the bone, feverish, susceptible politicians. Infracaninalitis can appear to mask symptoms of extinction.

Anti-trust authorities seem to be infracaninalitis carriers. On the EU level, DG Competition chased Microsoft for years with baited breath hoping to unbundled it from consumers…and failing. Clever Google is also a continuing target, throwing cash at the virus, still running faster. In fairness, Competition Neelie Kroes seems to make more pleasure, with more success, at prosecuting State aid abusers.

The venture partners may have invested £25 million on Project Kangaroo, employing about 50 shared or free-lance staff. An ad agency had been selected to design creative for the eventual launch. “The real losers in this decision are British consumers,” said the partners in a joint statement.

ITV chairman Michael Grade, like many others, expressed surprise at the Competition Commission decision. “We believed that the Kangaroo joint venture, competing in a crowded online world against dominant global brands, was an attractive UK consumer proposition, free at the point of use,” he mused after the fact. The venture partners indicated they would not appeal the decision.

One, perhaps, unintended consequence of the Competition Commission decision casts doubt on Communication Minister Stephen Carter’s tacit endorsement of a tie-up between debt laden Channel 4 and BBC Worldwide. That idea would take money from the BBC’s commercial arm to feed the hopelessly unprofitable alternative public service television broadcaster. Infracaninalitis runs rampant.