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Fri January 4, 2013
With Current TV Purchase, Al Jazeera Buys Opportunity For New Viewers
Originally published on Mon January 7, 2013 2:44 pm
ROBERT SIEGEL, HOST:
Now, evidence that size really doesn't matter - that is, size of audience. Al Gore sold the cable channel he started, Current TV, to al-Jazeera for $500 million. How many eyeballs does the Qatari-owned news channel get for that money? Well, here's some context. Here are some TV audience numbers. When NBC came in first among the broadcast networks for viewers last week, Neilson estimated they had 7.3 million viewers.
CBS was second with 6.6 million. Among cable channels, the numbers are lower. ESPN was tops that week with 3.5 million viewers. In 25th place, Comedy Central averaged 855,000. So how many viewers watch Current TV in a week? Well, joining us is New York Times media reporter Brian Stelter, who writes the Media Decoder blog.
Brian, what is Current's estimated audience?
BRIAN STELTER: About 40,000 viewers a night.
SIEGEL: 40,000 viewers a night. How does that rank among cable channels?
STELTER: It's so far down the list, it's almost hard to find. Of about 96 cable channels that are publicly rated by the Neilson Company, which is really the only way to get the ratings, 93 of them have higher ratings than Current.
SIEGEL: I gather the Fox Soccer Channel comes in behind. Well, having worked in some local radio stations, I don't look down my nose at small audience numbers, but $500 million for 40,000 households. I mean, you can drive around in a sound truck and reach more people than that. What does al-Jazeera get for all that money?
STELTER: Well, what al-Jazeera is buying is not audience, per se. It's buying the opportunity to get an audience in the future. It's, I guess, providing access to that audience.
SIEGEL: You mean, because Current has space on local cable franchises?
STELTER: Right. It's buying access into the home, although not at all a guarantee that anyone will watch. But for al-Jazeera, that's a big win because for years now it's been trying to figure out how to enter American living rooms and distributors like Direct TV and Comcast and Time Warner Cable have mostly resisted those efforts. So, by buying Current TV, it's found a way in.
SIEGEL: Now, by buying Current, has al-Jazeera bought a guaranteed spot on all those cable systems reaching all those millions of households or could my local cable system decide that Channel 107, where Current is currently sitting largely unseen, would be better used by the Peruvian Chicken Channel?
STELTER: Which would be must-see TV, I'm sure. There are these stringed cable television contracts that govern carry-ance of channels. In most of these cases, the Current TV contracts are still in force so for a couple more years, at least, companies like Comcast and Direct TV will continue to carry it when it becomes al-Jazeera.
But one of the biggest distributors in the country, Time Warner Cable, said, no, it's dropping Current because it had the right to do so when the channel changed owners. And we'll see in the future whether Time Warner Cable decides to pick up this new al-Jazeera Americanized network or not.
SIEGEL: Now, we're talking about the English language, global al-Jazeera that's available in some parts of this country. Is that what's going to be on the channels they're getting by buying Current or are they going to create a new bigger English language service?
STELTER: It seems it'll be a mixture of both. It'll have quite a number of newscasts from Doha, Qatar, where its headquarters are, but it'll also add a lot of newscasts from New York and the rest of the United States. It wants to be an Americanized version of al-Jazeera, maybe because it believes that'll put it into closer competition with the CNNs of the world and the BBCs of the world.
SIEGEL: Are there comps here - that is, can we tell if $500 million squares with any recent sales of cable channels?
STELTER: Some of the recent sales have been private, so we don't know what the comps are. However, the number isn't as crazy as it might sound at first blush because Current was making about $100 million in revenue every year. It had really good contracts with cable operators. It was getting about 10 or 12 cents per subscriber per month. Even though most of those subscribers were never watching the channel, they were still getting a dime per person.
And that added up to a lot of revenue for Current.
SIEGEL: Brian, thank you for talking with us about it.
STELTER: Thank you.
SIEGEL: That's media reporter Brian Stelter of the New York Times. Transcript provided by NPR, Copyright National Public Radio.