When executives for broadcaster Al Jazeera first planned a new 24-hour English language channel, the idea was to offer viewers an alternative to CNN (TWX), the BBC, and other Western news outlets. They hired such heavyweight talent as veteran TV host Sir David Frost to lend cachet. What they didn't prepare for was the cold shoulder they would receive in the U.S.
Just two months before its scheduled launch, Al Jazeera International still has no distributors in the important U.S. market, despite talks over the past year with nearly all the big players, from Comcast (CMCSA) to Time Warner (TWX) to DirecTV (DTV).
It's not just the controversial nature of Al Jazeera that gives distributors pause, say some cable executives privately. Whether it's a convenient cloak for them or not, they say it also makes little economic sense for them to pay a fee for yet another channel in the overly fragmented 400-channel TV universe. Satellite service EchoStar Communications Corp. (DISH), the lone distributor in the U.S. of the Arabic-language Al Jazeera, is the only company expressing any interest so far. "We would be willing to consider carriage," EchoStar spokeswoman Kathie Gonzalez told BusinessWeek in an e-mail. She declined to comment on the status of talks.
No matter how daunting its prospects, the new channel has the enthusiastic backing of Qatar's ruling Al-Thani family. Tiny Qatar has the world's third-largest natural gas reserves and fast-accumulating foreign assets, now estimated at $30 billion. Unlike Western broadcasters facing constant financial pressure, the Qataris are willing to fund the new outlet indefinitely, executives say. But it will share some resources with the Arabic channel, with 48 million viewers.
The American snub hasn't dissuaded the Qataris from giving the new channel the money to lure such on-air personalities as Veronica Pedrosa, a CNN Asia anchor, Dave Marash, a correspondent for ABC's (DIS) Nightline, and Rageh Omaar, the BBC's former Baghdad reporter. The attraction? Explains Frost: "I try to be where the new frontiers are if I can find them, and obviously Al Jazeera is very much the new frontier at the moment."
Few experts expect the channel to draw a mass audience. "There is a small core of news junkies in America who will be interested," says Richard Wald, the Fred Friendly Professor at Columbia University's Graduate School of Journalism. But to have a significant impact, he says, Al Jazeera will have to offer more than just Middle East expertise. Frost says he'll be featuring topical political interviews but lightening the lineup with guests such as Paul McCartney and David Beckham.
As tough as it has been in the U.S., Al Jazeera execs say they are not willing to compromise to ink a deal. Commercial director Lindsey Oliver says cable operators are in a position to drive a hard bargain, including forcing new channels to agree to skip streaming over the Internet to reduce competition. But that's not a pact worth making, she says.
Besides, Oliver contends, initial numbers in the U.S. are not crucial to Al Jazeera International, adding the channel's target is a global English-speaking audience, not just an American one. Oliver figures that the channel will have 40 million households locked up by launch time, thanks to deals with Britain's British Sky Broadcasting Group PLC (BSY), as well as distributors in India, Australia, France, and Germany. But without the U.S., Al Jazeera may not be pushing all of the frontiers Sir David had in mind.
By Stanley Reed