Analysis For the two-and-a-half years since its launch, Al Jazeera English seemed to have done everything right.
Al Jazeera US cable deal signals new era
For the two-and-a-half years since its launch, Al Jazeera English seemed to have done everything right. It had a huge reporting operation in the US, including a Washington bureau of 150 staff, and most of its web traffic coming from American addresses. But the channel could not break into the country's lucrative cable market. In fact, unless they happened to be one of a few thousand cable subscribers in Burlington, Vermont or Toledo, Ohio, Americans could not see Al Jazeera English on television at all. With a wealth of funds from the Qatar government and an international news gathering network that rivalled the scope of BBC or CNN, most observers chalked up the channel's lack of success to political wariness about the brand. After all, the administration of the former president George W Bush accused its Arabic-language sister station of having an anti-American slant to its reporting. Many analysts, and even some Al Jazeera English executives, predicted that success would only come with a change of US leadership. This month, they seem to have been proved right. On July 1, just six months after Barack Obama entered the White House, Al Jazeera English entered its first major US television market. It was no coincidence that it did so through a network servicing Washington, where Mr Obama lives. While not yet the coast-to-coast cable deal that Al Jazeera English desires, its distribution on MHz Networks - a non-profit broadcaster with 10 channels of international programming that reaches about 5 million people in the Washington area - is still a major step forward for the Gulf-based company. It is also a part of a cultural shift in America towards greater curiosity about the rest of the world that could be good for other international news players such as France 24 and Russia Today, according to Frederick Thomas, the chief executive of MHz Networks. "I think people got to the point that they realised we need to know more of what's going on the world," Mr Thomas says. "You can argue cause and effect. Maybe the Obama administration created it, or maybe the Obama administration benefited from that sense." Marwan Bishara, the senior political analyst at Al Jazeera English and host of the monthly programme Empire, agrees that the change of government was a major factor, but far from the only one, in creating the right commercial environment for the channel's entry. "To break into the cable market over the last three years took a combination of hard work, public relations and lobbying on the part of Al Jazeera," he says. The channel hired Brown Lloyd James, a public relations firm with offices in New York, Washington and London that also handles PR for the Telegraph group, while making a series of content-sharing deals with other news organisations such as The Independent newspaper. But it made its biggest incursion into the US market through its channel on YouTube, which receives 60 per cent of its traffic from the US. Its innovative use of other new media such as Twitter and Facebook have also helped it capture web users. "The patterns of watching television have changed over the last five years," Mr Bishara says. "No longer is the family sitting around the living room the predominant pattern of watching television. "So being part of the new media was helpful, because the type of people we tend to attract around the world, and no less in the US, is that generation between 19 and 45 who are technology savvy." But television, especially in the affluent, 300 million-strong market of the US, is where the real advertising dollars are today. Phil Lawrie, the director of global distribution for Al Jazeera, says breaking into the US market has been very hard for international channels to achieve, even without Al Jazeera's political baggage. " Not just Al Jazeera English, but any international news channels have historically found it difficult to catch the eye of the cable executive that might need to demonstrate a hard-core return on investment numbers," he says. "When you are an international news channel against an MTV channel, it's a hard call." Mr Lawrie points to BBC World News, which struggled for years to get into the US market. In the end, it had to launch BBC America, which focused much more on entertainment to cater for the market, he says. Colin Lawrence, the commercial director of BBC World News questions that view. "Clearly, with a 200-channel universe and the limited available capacity that brings, not to mention the numerous US news channels, the United States is a particularly tough market," Mr Lawrence says. "But the idea of the BBC struggling to penetrate the US doesn't really ring true." Mr Thomas says that "cable operators tend to look at something that's 'foreign' and say 'show me the audience that wants to watch that'." MHz, a division of Commonwealth Public Broadcasting Corporation, exists in part to counter that attitude. Its 10 channels include Russia Today and France 24, which it broadcasts more for educational reasons than commercial ones. Mr Thomas says MHz does have broadcasting expenses it needs to recoup, therefore "we share revenues with our programmers". Mr Lawrie says advertising sales will continue to be handled in Doha by Qatar Media, an agency with close ties to Al Jazeera. "They've always handled all the on-air advertising inventory historically. The US deployment doesn't change the way we work." Many critics have noted that Al Jazeera has very little advertising apart from a few state-owned companies such as Qatar Petroleum, but Mr Lawrie says advertising has never been the driving force of Al Jazeera English. "When you compare it to other international news channels, yes, there isn't an immense amount of inventory being sold," he says. "But it has increased, if you would compare it to the situation two years ago.
"With Al Jazeera English, as with all the Al Jazeera channels, the initial priority wasn't a commercial one. It was about getting Al Jazeera English out there in a format and a language that a much wider audience would relate to and understand." That strategy seems to have worked, as the audience has recently grown from 100 million to more than 150 million households worldwide, Mr Lawrie says. The channel is hoping to continue by looking to the East. Al Jazeera English has had its application for a licence to broadcast on Indian cable channels lodged with the Indian government for several years, but now that the election has passed there are signs that it is moving up the list. "I'm hopeful that the government there will grant us our landing licence by the start of the year," Mr Lawrie says. "That will enable us to be carried on Indian cable operators." In the meantime, Al Jazeera will look for revenue in licensing agreements for its content and its four pay-TV sport channels, which will become eight by the end of the summer, he says. The company has the exclusive Middle East broadcasting rights to several valuable football leagues, including the Spanish league, the Italian league and the UEFA Champions League, which led it to raise its annual subscription price to US$75 (Dh275) from $40 at the start of the month. With 1.7 million subscribers, the revenue generated could exceed the $100 million that analysts estimate Al Jazeera English's owners invest in the channel each year. Al Jazeera English is hoping to use its foothold in Washington and recent syndication deals with the US broadcasters Link TV, PBS and Free Speech TV, for broader distribution. "Hopefully, the carriage in the Washington area will be a test," Mr Bishara says. "In a sense, this is the place where politics and policy meet, so when Al Jazeera will be viewed in Washington, the cable networks in the US will conclude that it's worth it to carry Al Jazeera, because it is a serious network with an alternative perspective to other networks in the US, and is capable of providing new insights to what's going on around the world." There are still obstacles for the channel to overcome, even in the Obama era. Mr Obama's decision to give his first international interview to Al Arabiya, Al Jazeera's Saudi-owned rival in Arabic-language news, was a snub to the older, more watched Al Jazeera. But Mr Bishara believes it just proves Washington changes much more slowly than its administrations. "Even Obama himself said he was humbled by the modesty of the president's role and weight in Washington," he says. "In a sense, you are going to change a president, but you are not going to change an entire attitude overnight. "All of those around him realised that during the interview, Al Arabiya would be less controversial." Since then, things have changed, and being on the air in the capital has not hurt, Mr Bishara says. "I think Al Jazeera will be able to get the next interview with Obama," he says. "That was made clear to our people." email@example.com