With UK’s Project Kangaroo Stalled, Viewers Turn To Piracy

Will the kangaroo ever jump? That’s the question observers of the UK’s online media market are asking these days, where the BBC and the public broadcasters ITV and Channel 4 are planing to jointly launch a Hulu-like, video-on-demand web site code-named Project Kangaroo. The site was scheduled to go live this January, but has been held up by regulators looking into claims that the joint venture would stifle competition. A final verdict by the UK’s Competition Commission is expected to be cast any day now.

As is to be expected, Project Kangaroo does not have the support of media giants like Sky and Virgin, nor of online video startups like Joost and Babelgum, but it’s unclear how much the competition is really going to gain if the project fails. A new study reveals that the lack of video-on-demand options in the UK has, to a large degree, benefited torrent sites and less-than-legal YouTube clones. The “VOD State of Play” study, which was published today by Essential Research, concludes that 24 percent of the UK’s online video consumers get their TV fix from torrents and similar sources.

Hulu users tend to forget the sorry state of online and even offline TV in the rest of the world. U.S. shows only reach the tube months after their stateside release date, and many countries lack any significant legal online TV offerings.

The BBC’s iPlayer is a notable exception, but even the often-praised and hugely popular streaming platform has its downsides. It doesn’t offer any access to non-BBC content, and it only allows viewers to watch shows broadcast in the last seven days. This means you’re out of luck if you want to catch up on a show that you got hooked on halfway through its season.

In a bid to close this gap, the BBC and its smaller public broadcasting competitors ITV and Channel 4 jointly announced Project Kangaroo at the end of 2007. Many details of the joint venture are still unknown, but recent public filings reveal this much: The site is supposed to offer a combination of streams and downloads of content from all three broadcasters. Shows from the last 30 days are supposed to be available for free on an ad-supported basis, and Project Kangaroo recently teamed up with a UK-based ad agency to sell its inventory.

The original plan was to offer older content as downloads on a rental or purchase basis, both of which will presumably involve some type of DRM. However, a more recent filing (PDF) already reveals a significant move towards an ad-supported, Hulu-like model, stating that “the majority of VOD content available…will be free and advertisement supported.”

Project Kangaroo is also planing on syndicating its content on other sites and platforms, and that’s where it gets hairy. Technically, this could just mean that shows can be embedded on third-party web sites, a function that’s popular with Hulu content.

However, competitors seems to be particularly worried that the three broadcasters could use Project Kangaroo as a one-stop-shop for licensing their content online, making it impossible to get individual deals and in turn controlling the UK’s entire online TV market. The Competition Commission seems to agree, warning in a preliminary report that Project Kangaroo could result in a “substantial lessening of competition.”

It could also result in less piracy, if you believe the numbers from Essential Research. The company interviewed a couple hundred British online and offline TV viewers, and it found that people are generally turned off by fragmented catalogs, DRM and high prices for downloads.

Yet most people would be willing to watch ads to get online TV content for free. Of course, one should take these findings with a grain of salt. Essential Research counts the BBC, Channel 4 and ITV among its clients, and the three broadcasters’ quest to launch Project Kangaroo definitely get a boost from these findings.

However, even an eventual launch of the site wouldn’t solve every problem; 42 percent of the people that admitted to using torrents said that they get shows that are “not scheduled in the UK,” as the report’s summary reads. In other words: Folks all over the world just love to get their 24 episodes as quickly as U.S. TV viewers do, and it’s really up to Jack Bauer Fox to make this happen.