NEW YORK — Al-Jazeera’s announced plans to establish a new U.S. cable news channel via the purchase of Current TV isn’t even 48 hours old and already it finds itself in a vicious battle to retain distribution rights.
Al-Jazeera’s acquisition of Current TV is basically a pay-for-distribution play. The Qatar-backed network plans to replace Current TV in the more than 40 million homes where it is distributed with its own news network, tentatively dubbed Al-Jazeera America. The new network’s success is predicated on maintaining, if not increasing, that level of distribution.
One person with knowledge of cable TV deals said pay-TV operators will definitely seek more favorable terms from Al-Jazeera since, “no one wanted to carry Current TV and they want to carry an Al-Jazeera channel even less.”
For instance, upon learning of deal, which closed on Wednesday, Time Warner Cable immediately said that it would terminate its contract with Current TV, meaning its customers would not be seeing the new network to be named Al-Jazeera America.
On Thursday, however, the company, which ranks as the nation’s second largest cable provider with 12 million subscribers, walked back from that stance a bit.
“We are keeping an open mind, and as the service develops, we will evaluate whether it makes sense, for our customers, to launch the network,” Time Warner Cable said in a statement.
Al-Jazeera has been trying to break into the U.S. cable market for years, but the network has so far failed to gain significant distribution largely for political reasons. The Pan-Arab network had been viewed by many as being anti-American, particularly at the height of the U.S. War in Iraq.
Current TV generated an average nightly audience of just 42,000 viewers, steeply below ratings for Fox News, CNN and MSNBC, all of which are “fully distributed,” meaning they reach more than 90 percent of the 100 million pay-TV households in the United States.
Indeed, part of the reason why Current TV has lasted seven years amid an environment in which low-rated, independently owned networks of its ilk are being dropped by pay-TV distributors is because of the influence wielded by its co-founder, former Vice President Al Gore.
Though Gore will remain an adviser, Al-Jazeera America will be negotiating new distribution deals largely without his influence.
Sources said that perhaps the only way for Al Jazeera to prevent being dropped and ensure distribution is to take a page from Rupert Murdoch, who 15 years ago, paid operators to carry Fox News after it was created instead of asking them to pay him. With Qatar’s financial resources, it reportedly paid a rich $500 million for Current TV, that could be a viable short-term solution.