Among media of international broadcasting, Al Jazeera America will be a victory for pay TV, defeat for internet video streaming.

Posted: 06 Jan 2013   Print   Send a link
Wall Street Journal, 3 Jan 2012, John Jannarone and Keach Hagey: "Al Jazeera used the Web to build a following in America, which it hopes to exploit on cable television through Wednesday's purchase of Current TV. But to keep cable operators happy, Al Jazeera may have to make a difficult bargain: Giving up on the Web. The Qatar government-backed television news operation, which acquired Current TV for a few hundred million dollars from investors including Al Gore, said Thursday that it will at least temporarily stop streaming online Al Jazeera English, its global English-language news service, in about 90 days. That's when it plans to replace Current TV's programming with Al Jazeera English. ... And it is unclear whether the original English service will reappear online: the spokesman said Thursday a decision about that was dependent on negotiations with cable operators. The network's decision to pull its service off the Web is at the behest of cable and satellite operators. It reflects a broader conflict between pay television and online streaming that other TV channels face. Because cable and satellite operators pay networks to carry their programming, the operators don't want the programming appearing for free online. Aside from older series available through services like Netflix, most cable programming is available online only to people who subscribe to cable TV. "We'd love to be able to do both" cable and Internet distribution, 'but the deals with distributors prevent it,' the Al Jazeera spokesman said. 'The economics are better on cable.'"

It will be interesting to see what the outcome of this will be. Will the Al Jazeera English stream be unavailable worldwide? Or geoblocked only in the United States? Will Americans eventually have streaming access to Al Jazeera English but not to the programs specific to Al Jazeera America?

Access to pay TV (cable, DTH, IPTV, fiber) channels limits the number of internation al channels that can be players in international broadcasting. However, as "cord cutting" becomes more popular, many viewers are starting to use OTT (over-the-top) services such as Netflix and Hulu to download individual programs. They are no longer bound to appointment viewing on 24-hour channels. International broadcasters such as VOA, which do not have 24/7 channels, can now make individual programs available through free apps. This will be a game-changer in international broadcasting.

Washington Post, 5 Jan 2013, Dominic Basulto: "At a time when many Americans are cutting their cable TV cord, foreign media outlets seem to have figured out a better mix of social media, live streaming and citizen journalism to keep visitors coming back again and again. ... This new competitive threat from abroad could be a good thing, if it forces U.S. cable TV news operators to re-think how to create, distribute and package video content for the YouTube generation. As a result, here’s one more item to place on your Out/In list for 2013. Out: cable TV talking heads sitting behind desks. In: curated news and views from intrepid journalists of the world."

The Hollywood Reporter, 4 Jan 2013, Paul Bond: "Al Jazeera America, the yet-to-launch network that will replace Current TV, might have to drop its license fee to zero in order to encourage a meaningful number of U.S. cable operators to carry it, according to a study released Friday from a research analyst at SNL Kagan. ... 'With the evaporation of 9 million Time Warner Cable subs and the license fees that go with it, this brings the channel closer to breakeven,' Derek Baine of SNL Kagan wrote in a research note released Friday. 'We think Al Jazeera may have to drop the license fee to zero to gain widespread support for carrying the channel in the U.S., a move that would certainly imperil its economic model, which relies upon license fees for 80 percent of the network’s revenue,' Baine wrote. 'But maybe this is the only way for Al Jazeera America to gain a solid foothold in the U.S.'"

Seeking Alpha, 6 Jan 2013, Felix Salmon: "CNN International [is] a cash cow which almost nobody watches unless they're in some far-flung hotel room. It doesn't matter what the viewership is or what the ad revenue is. The important thing is that TV providers around the world all feel compelled to offer it. ... While cable companies know they have to have Fox News (because it gets good ratings), and CNN (because it's CNN), they need to be persuaded to buy Current TV, and they have no particular desire at all to have Al Jazeera. Foreign stations are, well, foreign: even the BBC has had real difficulty making serious inroads on the distribution front. ... Al Jazeera isn't in this business for profit: this is more about projecting soft power into the world, demonstrating that the Arab countries can produce valuable, first-rate, uncensored journalism. For the prize of two Cézannes, Al Jazeera is buying the Arab world a significant measure of credibility in the single most important country on the planet. Or it's attempting to, anyway. Al Jazeera probably won't be able to persuade most of the cable companies to pay 12 cents per subscriber per month. It doesn't care much about that; it would happily take the slots on offer even if they generated no revenue at all. Indeed, it might even pay the cable companies, in the first instance, if it needs to do so in order to keep its potential viewership high. The important thing is that America is given the opportunity to discover what Al Jazeera is capable of. Then, if and when it starts getting traction, it will be Al Jazeera America which will have the upper hand in any future negotiations. Because there's something very special about high-quality news, and the cable companies know it."

See previous post about same subject.

MediaDailyNews, 18 Dec 2012, Wayne Friedman: "The worldwide pay TV market keeps growing in terms of subscribers, increasing 6% this year over 2012, with pay TV customer growth slowing down a bit next year. Some 47 million subscribers were added this year, to reach a total of 864 million subscribers, according to ABI Research. Next year, the company estimates a 5% rise, or 43 million to 907 million subscribers. IPTV (Internet-Protocol TV) services will grow at a faster pace -- 11% of 9 million subscribers to 79.3 million in 2013, with much of this coming from the Asia-Pacific region. By itself, China will add more than 3 million. Cable will continue to have the biggest market share this year at 66.2%, but will decline slightly to 65.4% next year. ... Overall revenue is projected to keep growing. ABI Research says the worldwide pay-TV market is expected to reach $236 billion in revenue by the end of the year, up from the $223 billion mark from last year. Pay TV revenue will continue to climb -- estimated to reach $281 billion by 2017."