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Can Project Kangaroo bounce back?
The Kangaroo project, the long awaited web video service, has experienced delay after delay and now it seems to have run across its biggest problem yet. Ed Waller takes a look.
Some web projects roll out smoothly, seamlessly going from conception to build. Some, however, don't have such luck. Project Kangaroo, conceived as a web video service nearly two years ago but still yet to launch, falls into the latter category.
It all seemed like such a good idea at the time. It was early 2007 and online video was beginning to boom. Apple was already shifting millions of TV episodes through iTunes, YouTube had been snapped up by Google and excitement was building around the idea of selling TV episodes and films online, everyone having learned the lessons of the music download debacle.
In the UK, Channel 4 had recently launched its 4oD service, while over at the BBC only a few regulatory hurdles remained in the way of a debut for the corporation's long-awaited iPlayer. Surely the time was right for a commercial web video service that sold TV shows from the BBC, ITV and Channel 4 as digital downloads? Thus Project Kangaroo was born.
Things were going well for its first few months of development. Kangaroo even managed to lure away Ashley Highfield, the BBC's long-serving director of future media and technology, to become its CEO in April this year.
Then in June disaster struck. The Office of Fair Trading (OFT) decided to refer what was now a joint venture between the BBC, ITV and Channel 4 to the Competition Commission, "at the very same time that non-UK companies like Google and Apple are free to build market-dominating positions online in the UK without so much as a regulatory murmur," ITV chief Michael Grade complained at the time.
August was also a bad month for Kangaroo. It began with the revolving door spinning after the exit of one of the BBC executives who planned the whole thing, Douglas Glen. By the first of the month he was off to head digital strategy at Andrew Lloyd Webber's Really Useful Group, having been instrumental in the inception of Kangaroo.
Just a few days later, Kangaroo was hit again, after the Competition Commission pushed back the deadline for its investigation. It originally intended to report back on its findings by December 14 but said it had to been forced to draw out the approval process due to a lack of relevant information from the joint venture's partners.
As if that wasn't enough, the trade association for independent TV producers ganged up with digital distribution firm Arts Alliance Media to voice grave concerns over the planned, perhaps cursed, on-demand service. They warned that the proposed service could lead to a "significant dampening" of competition on the UK video-on-demand sector.
Then online video service Joost waded in, arguing that the Kangaroo venture would make it harder for rivals (like itself) to secure UK terrestrial TV programmes. Joost claimed that its business "has [already] suffered as a result of its inability to get public service content in the UK." Talk about kicking a man while he's down. But Black August wasn't yet over. ITV's director on the Kangaroo board, Patrick Egeux, then quit to join European cable company Chellomedia.
Perhaps Kangaroo execs were too punched out to even notice that one of the service's perceived rivals for the VoD market, Google and its YouTube video-sharing site, said it didn't expect Kangaroo to have any negative impact on competition or customers at all. "We hope that the joint venture would be willing to partner with us," said the search giant.
Then came perhaps the killer blow. In November, Kangaroo's CEO Ashley Highfield quit to join Microsoft. Talk about rats leaving sinking ships was hard to avoid.
And now, after months of delays, numerous complaints to the regulator from rivals and executives jumping ship to other companies, Project Kangaroo has been deemed "anti-competitive" by the Competition Commission. The commission said in a summary of its provisional report earlier this month that Kangaroo would likely result in "a substantial lessening of competition" in the supply of online video-on-demand content in the UK at both wholesale and retail levels.
"We are concerned that a loss of rivalry between the BBC, ITV and C4, which are normally regarded as close competitors, could restrict existing and future competition for VoD. Whatever benefits viewers would gain from this rivalry would clearly be lost," said commission chairman Peter Freeman.
Kangaroo executives now have to go back to the drawing board to appease the Commission and its regulatory concerns. Unlike its antipodean cousins, this British species of Kangaroo is having a bit of trouble getting off the ground.
