UK video on demand project raises competition concerns

Britain's Competition Commission (CC) has provisionally ruled that a video on demand (VOD) joint venture by the British Broadcasting Corporation (BBC), ITV plc and Channel 4 would restrict competition.

"The CC has concluded that the (UKVOD) joint venture is likely to result in a substantial lessening of competition in the supply of UK TV VOD content at the wholesale and retail levels," it said in a statement yesterday.

The CC, which has the power to block the deal, said it did not, however, expect the joint venture to lead to a substantial restriction of competition in online advertising or content acquisition.

The web-based UKVOD venture allows viewers to access recently aired programmes as well as archive content. The joint venture partners expect the majority of content to be free and funded by advertising, but customers will be charged for some content.

As well as providing a retail service to customers, UKVOD plans to license its services to other VOD services wholesale.

"We are concerned that a loss of rivalry between BBC Worldwide, ITV and C4, who 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 CC chairman Peter Freeman.