Britain’s three most popular broadcasters will launch a joint television-over-internet service next year, in an attempt to create an “iTunes for television” that aims to compete with YouTube for online audiences.

ITV, Channel 4 and the BBC’s for-profit division are each planning to take a one-third stake in the venture, which will make available programmes from Jewel in the Crown to internet on demand.

Commercial in intent, the service will accommodate advertising both within and around clips and, according to Michael Grade, ITV’s executive chairman, “the deal is structured so that we each benefit from content being viewed”, implying that some advertising revenue would be shared.

BBC content on the service – currently dubbed Kangaroo – will be partly paid for by advertising, as the Corporation begins to introduce controversial plans to generate profits from advertising on its commercial websites. At the same time, both ITV and Channel 4 will earn some income every time a viewer clicks on to EastEnders or Strictly Come Dancing.

The only exception will be BBC programmes released in the previous seven days. These will be excluded from the Kangaroo website, and instead be released on the separate BBC’s iPlayer service – but there will be links to it from the Kangaroo site.

John Smith, the chief executive of BBC Worldwide, the commercial division of the BBC, said that the tie-up represented an “historic agreement between the UK’s largest broadcasters” and added that the idea behind the service was to help the three to “take control of their own destiny” rather than see their programmes distributed via YouTube.

The Kangaroo service will be launched in the middle of 2008, under a brand name yet to be decided. It will support both free, advertising-funded and pay-per-view programmes – and the idea is that a single website and a single form of download software will make watching television over the internet more popular with viewers.

Despite the rapid rise of broadband video, watching entire television programmes via computer remains in its infancy. Channel 4 was the first broadcaster in the UK to transmit the bulk of its programming online at the end of last year. Since then 60 million programmes have been downloaded by about 50,000 people.

However, the battle is important because more and more people will start to link their computers to their televisions and improvements in technology will result in higher-quality pictures – and an alternative way to deliver programmes as well as cable and satellite technologies.

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