After announcing its intention to acquire Current TV, Al Jazeera is struggling to retain distribution rights in the US. The deal is worth USD 500 million and key to Al Jazeera’s growth in the US cable market.
The Qatar-sponsored network plans to replace Current TV in more than 40 million homes with its own news network, tentatively dubbed Al Jazeera America. However, the success of this new network would be largely determined by the level of distribution. Industry experts believe that pay-TV operators would seek more favorable terms from Al Jazeera as both Current TV and Al Jazeera channel do not enjoy massive following in the US. It is believed that Current TV has been able to survive the highly competitive environment because of the connections of its co-founder, former Vice President Al Gore.
After announcement of the deal, Time Warner Cable initially stated that it would terminate its contract with Current TV. As a result, the new Al Jazeera America may not feature on the nation’s second largest cable provider with 12 million subscribers. Even though Al Jazeera has been trying to enter the lucrative US cable market for a long time now, it is viewed unfavorably by American audiences because of its political stance.
Current TV is currently in a deal with Dish Network Corp, DirecTV and Comcast Corp for the next few years. These cable providers have a large customer base of around 23 million, 20 million and 14 million subscribers, respectively. These distributors also own a stake in Current TV and may review their agreements with the network and renegotiate terms with Al Jazeera. In particular, Dish has a history of blacking out channels as it also recently blocked four AMC Networks channels.
According to a statement by Al Jazeera representative, the channel will also benefit from an estimated 9 million subscribers from the distribution of Verizon’s FiOS and AT&T U-verse.