Independent TV and film producers have told the Competition Commission’s investigation in to the proposed Kangaroo VOD service that the JV will mean “a significant dampening of this competition in the UK market for VOD services”.

The Producers Alliance for Cinema and Television’s (PACT) submission argues the BBC/C4/ITV (LSE: ITV) service could “push up the prices” they charge BT (NYSE: BT) Vision and Virgin Media (NSDQ: VMED) for VOD programming.

PACT’s is one of eight submissions made by entertainment companies. DVD rental service Lovefilm’s backer Arts Alliance Media also argued Kangaroo “has a publicly funded advantage over normal operators” and will “punish the consumer by limiting the opportunity of competition”; CEO Howard Kiedaisch said: “The situation is best compared to iTunes’ dominance of the music download business, which leaves the music houses with no serious alternatives.”

Google/YouTube and Disney (NYSE: DIS) said Kangaroo posed no competition. The Institute of Practitioners in Advertising (IPA) said it “appreciates” Kangaroo (its advertisers may get inventory) but “understands” the “cartel” argument and concluded Kangaroo would be anti-competitive if it exploited its power. National Grid Wireless echoed the view, while an anonymous contributor said online licensing rates from the JV trio were already too high.

So the critical inquiry in to whether Kangaroo can proceed as planned has heard largely negative feedback from the industry. PACT’s submission is most influential, since the umbrella body in 2006 agreed with the BBC the terms of the seven-day catch-up license that underpinned iPlayer and other UK VOD services. There is hope - PACT brokered that with Ashley Highfield, now CEO of Kangaroo, which is set to be ruled on in November.

• Kangaroo Faces Further Competition Delays, Isn’t Fully Planned
• OFT Refers Kangaroo To Competition Commission, Launch Delayed By Up To Six Months
• BBC Negotiates With Producers For ‘A World Beyond DRM’