Project Kangaroo bounces back (sort of)

14 Mar 2018  |  Raymond Snoddy 
Project Kangaroo bounces back (sort of)

Nine years ago a joint online venture between ITV, Channel 4 and BBC Worldwide was killed off in a wretched and arrogant decision, writes Raymond Snoddy - but now, a joey of sorts has been born...

Communications regulator Ofcom has just used the “K” word.

It’s been a long time - so long in fact that most people have probably forgotten what the “K” stood for and what a lost opportunity for the UK television industry it represented.

It was 10 years ago that Project Kangaroo was set up as an online TV venture between ITV, Channel 4 and BBC Worldwide, initially under Ashley Highfield, now running Johnston Press.

It was long before Amazon, Google, Facebook, YouTube and even Netflix got into their stride in the online television sphere.

It was imaginative, forward-looking, though maybe, fatally, a bit ahead of its time.

We will now never know what might have been because it was strangled soon after birth by the UK's finest regulators - the Office of Fair Trading and the Competition Commission.

Both regulators no longer exist and given their performance on Project Kangaroo it is probably just as well.

People who have to go back to regulators are rarely rude about them and at the time Michael Grade of ITV merely expressed through gritted teeth his “disappointment.”

The current chairman of ITV, Peter Bazalgette, noted in conversation in recent days that “the Kangaroo verdict was a complete misreading of where the industry was going - a terrible decision.”

It is not a case of being wise after the event. It was seen at the time as a quite unnecessary closing of the door on British enterprise that dynamited for many years a possible route to the future.

It was a narrow, legalistic, UK centric decision that failed to see the unprecedented forces that were starting to gather, or have the slightest idea about what it would all mean.

For the Competition Commission Project Kangaroo - it never lived long enough to have anything but a working title - represented too much competition in the nascent UK video-on-demand business.

As Peter Freeman, chairman of the Commission, and a lawyer and regulatory specialist, put it at the time: “After detailed and careful consideration, 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.”

It was stopped all right and 50 people lost their jobs and three quality broadcasters were stopped in their tracks in the name of perfect future competition rather than real enterprise now.

No programme-makers did step forward to fill the removal of Project Kangaroo in this nascent market, other than perhaps the fact that Sky was given a free run, until it, in turn, was dwarfed by the tech giants of Silicon Valley.

Project Kangaroo might have struggled initially but could equally have established a base in the UK from where it might have taken a bound into international markets. We will never know because, of course, it had to be stopped.

What we do know, is that nine years after that wretched, and really quite arrogant decision, a joey of sorts has finally been born.

The game has largely gone in the UK but BBC Worldwide and ITV have combined to launch the online subscription service BritBox in the US which last month was expanded to Canada.

At this early stage it’s got a perfectly respectable 250,000 subscribers but it’s still a little sad to think about what might have been.

You don’t expect regulators to be rude about other regulators, even dead regulators.

And Ofcom, when it mentioned the “K” word, merely noted factually that the project had been rejected by the competition authorities out of a concern that it would weaken the position of other players in the market.

“Since then the market dynamics have changed significantly,” Ofcom notes with careful understatement.

“The competition framework would need to take account of these developments were a similar proposal to be put forward today. Part of the broader context would be the importance of preserving public service broadcasting alongside a consideration of market impacts,” Ofcom argues.

Absolutely.

Perhaps Project Kangaroo should be given a posthumous reprieve just for the record.

Rolling forward to the present day and Sharon White, chief executive of Ofcom, had a lot of sensible things to say at last week’s Enders/Deloitte conference in aid of the new big word in broadcasting - Collaboration.

Far from being anti-competitive, Collaboration is now seen as the best, and probably the last best chance, to preserve much of what we currently enjoy from public service broadcasters.

As White noted, viewing habits have changed with eight in ten adults using catch-up TV to ‘binge watch’ box sets, children watching a third less television than a decade ago, and British teenagers recognise the name YouTube better than the BBC.

To counter such threats, White argued, the UK’s PSBs may increasingly need to join forces to increase their bargaining power - the very thing they once tried to do and were condemned for.

“Increasingly they will need to collaborate to compete. We will take account of that need when assessing competition in market,” said White who added that they may also have to partner with the tech giants.

“By working with the likes of Facebook, YouTube, Netflix, Amazon and Apple, PSBs can benefit from these companies’ immense global reach. They may look to share expertise in technology, marketing and programme-making, in return for investment or prominence on digital platforms,” the Ofcom chief executive argued.

Changed times.

But if regulation in the wrong hands can cause mayhem, governments and politicians can also cause great damage - with the best of intentions.

We can now celebrate, and even bestow a little praise, because of the fact that the Government has not privatised Channel 4 and neither has it bundled it all up and sent it off to Birmingham or Coventry.

A reasonable deal has been done which will see Channel 4 keep its London headquarters and continue to house 500 of its 850 staff there, while creating a new “national” HQ outside London and three new creative hubs in the nations and regions.

How very sensible a compromise.

Any other outcome would have had the whiff of a Kangaroo court about it.

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OwenJenkinson, Marketing Director, Freeview on 21 Mar 2018
“Thanks for a great article. Perhaps there is a brand that represents aggregation of the best free-to-air content be that live, catch up or deeper into the annals of PSB archives already in existence. It's used almost daily in 19 million UK homes. It boasted the fastest growing connected TV service last year. And is well-known, well-understood and well-liked by customers - albeit primarily for its role in aggregating linear TV. Had another (Lord|) Alan Sugar fronted TV service not come into existence, perhaps this brand could have delivered what Kangaroo promised to be. And perhaps it still could. With Channel 4, ITV and BBC sitting on our board, surely that should be achievable. Oh, and it's Freeview by the way.”
TobyBeresford, CEO, rise.global on 14 Mar 2018
“Great article Ray. What a complete lack of vision.

While the OFCOM comment about trying to work with the (now) monopoly platforms seems naive at best, the real travesty is that the UK and UK media has systematically failed to invest sufficiently in digital platform challengers that even have a hope of competing with the big tech social networks. While Ello, Peach, Diaspora and Vero all look a lot like failed social network wannabes - at least they tried! To have not tried at all is a gross oversight and leaves British culture facing a future forever punctured by algorithmic design decisions taken by west coast Americans.”

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