Talks to buy broadband TV technology from Project Kangaroo exited by Orange

With rumours that prices were too high, mobile phone operator, Orange have dropped out of talks with ITV, Channel 4 and BBC Worldwide to buy Project Kangaroo’s broadband TV technology, the blocked video-on-demand service.

A recent statement was issued from Orange’s parent company, France Telecom saying “We can confirm that we are not pursuing our interest in the catch-up TV service Kangaroo. After in-depth due diligence, we concluded that it was unlikely that an outcome which benefited France Telecom’s Orange operations would be met.”

In the nascent UK VoD market Kangaroo was considered to be too much of a threat to competition and as such was blocked from being launched by the Competition Commission. In the bidding for this technology there appears to be only one other unknown company that has shown an interest.

According to a source that was close to the shareholders of Kangaroo, who advised that very little progress had been made over the last six weeks with the sales and two bidders had even been put off by the multi-million pound price tag, and this price tag attached to the asset has led to the potential deal being put under considerable strain.

He said “There were two major bidders but the technology is not cheap. It would be a multi- million pound deal, which isn’t the most tempting prospect in the current market.”

The development of the technology has been said to have had around £20 million invested in it by partners of Project Kangaroo and the Kangaroo player and built-in user experience tools underpins the technology that is for sale.

The technology would most likely have been used by Orange to strengthen its European Orange TV broadband service, especially its new French projects, if the company had agreed to the deal. There have been several delays in a UK launch of the Orange TV service that is currently being explored.

It is understood that all three of the parties have been in talks with the US-only online VoD service that is backed by NBC Universal, News Corp and Disney, regarding the provision of content to a version of the platform in the UK, since Kangaroo’s demise.