Virgin Media likely to challenge new video-on-demand service

It appears increasingly likely that cable broadband supplier Virgin Media will take legal action in a bid to stop a new video-on-demand service in its tracks, while also issuing a formal complaint to media regulator Ofcom. Project Canvas is a collaboration between BT, Talk Talk, Channel 4, Arqiva and ITV and is backed by the BBC. Channel 5 was also onboard initially, but has since dropped out of the project due to budget limitations in advance of being sold.

Virgin Media, along with Sky, has stated that Project Canvas is bad for competition and, more importantly for consumers, it fears that demands on the broadband infrastructure will be too excessive. Virgin Media is also said to be unhappy about the way they see the on-demand idea working, using a system that may effectively be locked-down, and which cannot be tailored to suit rival companies using it. This is unlike Freeview which can be altered to fit in with branding requirements for the likes of Virgin Media and Sky.

Project Canvas has already successfully navigated its way past a series of potential obstacles, and only last month the Office of Fair Trading stated the on-demand service will not need to be investigated further. Mobile provider Orange is now rumoured to be adding its own weight to the Project Canvas team, which would bolster the impact of the service, and help bring video-on-demand to both Freeview and Freesat. Previously, Orange had looked into buying the technology for Project Kangaroo, another now defunct broadband TV concept, so clearly it has the desire to enter this evolving marketplace.