Video on demand venture, Project Kangaroo, has been blocked by the Competition Commission.

The Competition Commission (CC) has blocked Project Kangaroo – a joint video on demand (VOD) venture between the BBC, Channel 4 and ITV – because it would pose too much of a threat to the competition.

The venture would create a single website that the three broadcasters could upload previously transmitted content onto, similar to their existing sites – BBC’s iPlayer, ITV Catch-up, and C4 OD (on demand).

Peter Freeman, CC’s Chairman, explained the reason for the block: “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.

“Without this venture, BBC Worldwide, ITV and Channel 4 would be close competitors of each other. We thought that viewers would benefit from better VOD services if the parties – possibly in conjunction with other new and/or already established providers of VOD – competed with each other.”

Michael Grade, Chairman and Chief Executive of ITV was surprised by the decision, which he believed would be of benefit to the UK consumer, however was optimistic for future ventures: “In the two years since the idea for Kangaroo was born, the success of ITV.com has proved that our UK content is attractive enough to stand on its own and we remain focused on our online growth”.

In a joint statement, BBC Worldwide, ITV plc and Channel 4 said: “We are disappointed by the decision to prohibit this joint venture. While this is an unwelcome finding for the shareholders, the real losers from this decision are British consumers. This is a disproportionate remedy and a missed opportunity in the further development of British broadcasting.”

To read the CC’s full report, click here.