Why American Cable Systems Won't Carry the Al Jazeera Network

The current issue of The Hollywood Reporter magazine explores why the English version of the Arab-owned network has seen a rise in U.S. Interest, but not in carriers.

The following article appears in the current issue of The Hollywood Reporter magazine, on newsstands now.

After five weeks of reporting on revolts around the Arab world, Al Jazeera finds itself at the center of a new uprising — and this time, it’s fueled by American interest.

Once maligned (“a mouthpiece of al Qaeda” and “inexcusably biased,” former Secretary of Defense Donald Rumsfeld said), the Qatar-based news channel is enjoying positive press and more demand from inside the U.S. than at any other point in its rocky history. It prides itself on layered, in-depth coverage of global events stretching from the favelas of Brazil to the rubble of Haiti, and it has offered some of the most comprehensive, round-the-clock coverage of the disastrous earthquake and tsunami in Japan thanks to reporting teams stationed in the region before the disaster struck.

When AJE launched in 2006, few really expected this experiment out of the Gulf to work — after all, it was born in a region where media is largely a tool of the government, so what could it possibly know about competing against other global network-news giants? It kicked off by hiring veteran journalists from the West, including David Frost and Dave Marash, and broadcasting from dedicated new bureaus in London and Washington. Today, AJE gathers news from 70 bureaus around the world (compared with CNN’s 33 foreign bureaus) with 400 reporters, and it is available in 100 countries and 255 million households. Secretary of State Hillary Clinton recently held up Al Jazeera as a paragon of objective journalism, asserting that the network provides “real news,” in contrast to its would-be cable news competitors. “It is real news instead of a million commercials and … arguments between talking heads and the kind of stuff that we do on our news,” she said as she stood before the Senate Foreign Relations Committee in March. “Like it or hate it, it is really effective.” But the network remains shut out in America — including areas with large Arab populations such as Los Angeles, New York and Detroit — largely because cable operators have no interest in carrying it.

The station has managed to secure carriage in only three U.S. markets: Washington, Burlington, Vt., and northwest Ohio. (Several major operators including Comcast, DISH Network and DirecTV reversed earlier plans to carry the channel in 2007.) It streams content on a dedicated YouTube channel, its own website and a smattering of other satellite and Internet channels. And in the wake of the uprisings in Egypt, streaming player Roku added it to its Newscaster channel.

Cable and satellite providers in the U.S. have received more than 40,000 e-mails from customers urging they carry Al Jazeera English, according to AJE managing director Al Anstey. The network’s website traffic shot up 2,500 percent in the wake of the ongoing revolts, with half of that originating in the U.S.

Al Jazeera’s 24/7 coverage of the uprisings, coupled with its stream of reporters on scene, also proved invaluable to U.S. news networks. Fox News and MSNBC used Al Jazeera’s feed and referenced its reports after American news teams bailed out amid the chaos. “Al Jazeera almost has an element of political correctness now,” analyst Matthew Harrigan of Wunderlich Securities says. “There’s a sense they’re fostering democracy in the Middle East.”

All of which must be gratifying for the journalists and executives at “English,” as the staff has dubbed the network. But if AJE is in better position than ever before to land a significant carriage deal, then its spring awakening comes as the cable news market might have peaked. After more than a dozen years of audience growth, all three of the top U.S. cable news networks — Fox News, MSNBC and CNN — have experienced audience erosion, according to the Pew Research Center’s Project for Excellence in Journalism.

“It was a real blow to AJE when they couldn’t get their foot in the door when they launched,” television news analyst Andrew Tyndall says. “Now the irony is that the great heyday of making money off a cable news operation is over.”

Viewership for CNN, Fox News and MSNBC was down 13.7 percent in aggregate during 2010 for a sharper decline than in any other sector, according to PEJ’s annual State of the News Media report. And for the first time in the dozen years since PEJ began monitoring cable news networks, every channel was down (spikes such as the current ones for Japan coverage are fleeting). CNN, with its well-publicized primetime woes, was off the most in 2010: 37 percent, to 564,000 viewers. Fox News, the No. 1 cable news network, declined 11 percent, and MSNBC — which finished 2010 ahead of CNN — was down 5 percent. Any objective measure of AJE’s ratings potential must be weighed against what might be a downward trend in cable news.

But Al Jazeera English also offers the possibility of a highly targeted niche audience. The network does not specifically target Arab-Americans; it is presented in English, after all. But with more than 4 million Americans identifying themselves as of Arab descent, according to the nonprofit American-Arab Anti-Discrimination Committee, AJE has a measure of built-in brand recognition.

“A very targeted audience attracts advertisers,” PEJ deputy director Amy Mitchell says. “The argument there is, yes, their potential audience is small, but it’s very targeted so you know what kinds of ads you want to place.”

According to the U.S. Census Bureau’s American Community Survey, median income in Arab-American households is 19 percent higher than the national average, and Arab-Americans with postgraduate degrees earn nearly double the national average.

And Al Jazeera’s executives are determined to capitalize on the recent groundswell. Anstey described recent meetings with executives at Comcast, Time Warner Cable and Cablevision as “very positive.”

“I do believe it’s a question of when, not if, we strike a deal,” he says. “We discussed the fact that AJE is increasingly being described by people in the United States as a journal of reference.”

But unless you’re Oprah Winfrey, it’s difficult to maneuver onto increasingly crowded cable and satellite systems at a time when companies are scrutinizing ratings for niche channels in an effort to reduce costs. “Even if the cable operator doesn’t have to pay, he’s indirectly paying in the sense that he’s providing real estate, and real estate has value,” says Jon Swallen, senior vp research at Kantar Media. “And all that he’s going to recoup is local ad revenue. So you’ve got to assume that a cable operator is looking at this and saying, ‘What’s the revenue potential to me for giving up this slice of real estate?’ ”

The availability of video-on-demand channels that don’t suck up precious linear bandwidth also is a complicating factor. “The idea is, ‘Why should we launch a channel when we can throw some content on VOD?’ ” says Derek Baine, senior analyst at SNL Kagan. For AJE in particular, he adds, the move could be even more difficult because it is an anomaly in the broadcast world: “I could see more of a shared channel block; Comcast has done that in the past so they don’t have to pick up the whole channel.”

Of the three companies that carry Al Jazeera English, one is municipally owned and one is a nonprofit, and none pays a fee to carry the network. Burlington Telecom reaches about 3,000 subscribers; Washington-based MHz Networks, which reaches nearly 5 million households, is a noncommercial broadcaster that specializes in international and educational programming; and Buckeye CableSystem serves 150,000 subs in northwest Ohio.

In the argument for AJE, public service eclipses dollars and cents. Executives stress that the network offers coverage in a part of the world where bottom-line-conscious Western news organizations long ago shuttered bureaus. The Arab network doesn’t have to rely on advertising or carriage fees for its revenue. It’s funded by Qatar Media Corp., an operation subsidized by the state and chaired by Qatar’s emir, Sheikh Hamad bin Khalifa Al Thani. Anstey says despite being funded by the rulers of an Arabian emirate, the network maintains a balanced journalistic approach, even when covering Qatar.

When the network launched in 1996 out of Doha with dedicated bureaus in Kuala Lumpur, London and Washington, Al Jazeera was based on the BBC model: straightforward newscasts cultivated through hard-nosed reporting. But even then, it didn’t always strike a balance between unbiased news and a viewpoint sympathetic to Arab causes.

The network was criticized in the U.S. for an alleged anti-Israel bias and derided in the Middle East as so anti-establishment that it influenced news rather than reporting it. Al Jazeera also caught flack from the Bush administration for reporting, in a very graphic manner, on civilian deaths in Fallujah following the American-led invasion of Iraq.

And while Al Jazeera has received public support in high places, it’s courting controversy-averse U.S. cable and satellite carriers as the country is mired in a public debate about Islam and radicalization. In December, Houston radio station KPFT drew protests from the community when it began airing an AJE-produced news hour. “The anti-Muslim, anti-Arab hysteria is beyond comprehension,” says Ibrahim Hooper, spokesman for the Council on American-Islamic Relations, a Washington-based Muslim advocacy group. “It’s distorting our national dialogue. It’s distorting our nation’s interests and image around the world. But it seems to be gaining traction. So of course [companies] want to avoid the hassles of having a bunch of people e-mail them and call them and protest outside their building.” Even the reliably progressive enclave of Burlington has not been immune to flare-ups. In 2007, Burlington Telecom threatened to dump AJE over what management described as persistent viewer complaints. A series of public forums produced a lopsided majority in favor of keeping the channel, and in 2008 it reached a new deal with the city-owned cable carrier.

Still, many believe it’s only a matter of time before wider distribution comes. “The Gulf Region has become a tourist destination, a stopover travel hub and a media center,” Tyndall says. “Really the Las Vegas and the Singapore of the Middle East — Al Jazeera is part and parcel of that push. It’s establishing itself as a modern face of the Arab world. People around the world know about that. The U.S. is really the last to discover it.