Project Kangaroo has remodelled its plans for an IPTV catch-up service in order to appease the Competition Commission (CC).
The project was set up to provide archived footage of BBC, ITV and Channel 4 content online through the same player.
However, the CC knocked back the proposals, saying that the venture would detract from the healthy competition in the on-demand sector.
Now Project Kangaroo says it will sell on-demand content from ITV and Channel Four to independent online video providers.
In a statement published in the Guardian, Project Kangaroo outlined: "Each partner would independently set the business model and price at which its UK TV content is offered to consumers.
"Each party would therefore determine whether each item of content was pay or free, download-to-rent and/or download-to-own and/or subscription and the relevant price."
The CC had ruled earlier in the month that the rivalry between the terrestrial broadcasters in the video-on-demand market could be diminished by the proposed project - a final report will be heard on February 8th, 2008.