UK’s Kangaroo VOD Service Killed By Regulators; An Opportunity For Hulu?

The UK’s proposed big “Kangaroo” VOD JV, stuck in regulatory limbo since announcing its intention to launch in 2007, has now been killed for good by a ruling from Britain’s antitrust agency that says it “would be too much of a threat to competition in this developing market and has to be stopped”.

A little like Hulu, BBC Worldwide, ITV (LSE: ITV) and Channel 4 wanted to pool their archive TV shows on a single consumer platform, making money from sales of ads against free, streamed shows and from download-to-own income. But, after after a 10-month antitrust scrutiny, the commission concluded the trio, which already controls the majority of UK public service TV, would have too much power to hike wholesale prices for their own shows to rival VOD services like Joost and BT’s Vision IPTV platform. Curiously, it even rejected the trio’s offer to wholesale shows to rivals – a remedy it had proposed in order to win clearance.

This ruling will go down like a ton of bricks in Britain with everyone except rival VOD operators. The Kangaroo JV issued a statement: “The real losers from this decision are British consumers. This is a disproportionate remedy and a missed opportunity in the further development of British broadcasting.” The venture has 50 staff, a central London office, has been in development largely throughout this process, in anticipation of winning the green light, and last month appointed Publicis’ Fallon agency to sell ads on its site.

This may open the door to Hulu’s entry in to the UK. Often seen as an equivalent service to that across the Atlantic, the NBC/News Corp (NYSE: NWS) JV was understood to be awaiting today’s verdict in order to ascertain what rights it may be able to obtain to UK TV shows for its own VOD offering. understands earlier discussions had also taken place on the possibility of Hulu providing Kangaroo’s technology platform, but Kangaroo, using knowledge gleaned from the BBC’s successful iPlayer rollout, went on to develop its own system. The irony, however, of one JV swooping in and picking up the pieces of a JV blocked on antitrust grounds, would not be lost on the Kangaroo shareholders. More detail on paidContent:UK…