BT Has ‘Serious Concerns’ On Kangaroo; JV ‘Would Reduce Competition’

BT’s (NYSE: BT) Vision IPTV platform has added its “serious competition concerns” to those already given about Project Kangaroo to the Competition Commission by others including Joost, Lovefilm, independent TV producers and an advertising body.

In its August submission to the commission’s ongoing inquiry – released today – BT, whose Vision also offers VOD, says the JV would “reduce competition, to the detriment of consumers”. It’s the same concern already given by most of the complainants: the risks that BBCWW, ITV (LSE: ITV) and C4 will hold rivals to ransom on VOD rates and that it itself could win more favourable rates from producers.

BT Vision argues that, because rival VOD providers offer more American content than British, “the Kangaroo VOD service would not face adequate competitive constraints from …operators such as Joost and Babelgum, who do not appear to focus on UK content” – an argument that may sound more like a justification for Kangaroo than anything else, even though Joost argues Kangaroo consortium already won’t give it rights to their programmes.

The industry-wide concern over what TV producers said would be Kangaroo’s “cartel” has become so overwhelming, it’s hard to imagine the commission will let it through without demanding some changes to the proposal. The JV has already rejected the “cartel” concerns, but we understand certain things are moving and the consortium may backtrack on its earlier intention to hold exclusive rights on shows.

BT urged the commission to disregard Lovefilm’s earlier submission because DVD rental cannot be considered VOD. After a slow start, Vision reported 282,000 customers at June 30, having added 68,000 in the previous three months. It’s considering its own bid for soccer rights despite already offering both Setanta and Sky Sports, said.