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Joost, which is already frustrated at its failure to get any content from BBC, ITV (LSE: ITV) and C4, has told the Competition Commission that the broadcasters’ Kangaroo JV will only “exacerbate” the problem. As we noted last week, several VOD operators are concerned the JV may hike prices charges for content to rival distributors. In its submission to the commission’s inquiry on the yet-to-launch VOD platform, Joost, which also lobbied the OFT’s initial inquiry, acknowledged that “(our) business has (already) suffered as a result” of its inability to get public service content in the UK as it has done in Sweden…
“(Our) inability to obtain content from the joint venture’s parents on reasonable commercial terms is a key issue limiting (our) ability to compete in the UK. While the parties may argue that they stand to gain more financially through a non-exclusive distribution model, the lack of any licensing deals to date with Joost, despite numerous approaches, weakens their position on this issue.”
Joost called on the commission to block the bundling together of the Kangaroo distribution arm with its wholesale content sale operation. And it’s worried about Kangaroo’s ability to discount advertising rates for ad packages bought across TV and online. Time Warner (NYSE: TWX), however, said Kangaroo would have a “positive effect“.
Another interesting note emerging from the commission today… inquiry group member Peter Jones and CC staffer Rachel Merelie both hold shares in BT (NYSE: BT), whose Vision VOD service has been cited as a possible loser in the Kangaroo roll-out. But the CC said this will not prejudice the inquiry.