Al Jazeera – Case Analysis History and Current Growth Al Jazeera was set up in the mid 1990’s by Sheikh Hamad bin Khalifa Al Thani. During this time the BBC was attempting to set up an independent News cannel in the Middle East, basing them selves in Saudi Arabia. They were unable to do this due to the Saudi government not allowing the BBC full editorial freedom. This resulted in them abandoning their plans. The Emir of Qatar saw the opportunity to set up the first independent news channel in the area not influenced by the government. It was set up in 1996 with an initial investment of $150 million.
Al Jazeera means ‘the island’ in Arabic. They also managed to recruit many of the staff that had been working for the BBC in Saudi Arabia. For the early part of its existence it was solely an Arabic current affairs channel. In the early 2000’s it began to expand it’s programming. In 2003 they launched Al Jazeera sports, which is an Arabic language sports channel. In 2005 they expanded again with Al Jazeera Mobasher, which is a live unedited political events channel, and Al Jazeera Children’s channel. 2006 brought about the companies first venture into the international market with the release of Al Jazeera English.
It has since become their most successful channel in their portfolio, available in 140 million homes compared to just 50 million homes that the Arabic version is available in. They continued their expansion in 2009 with the Al Jazeera documentary channel, showing Arabic documentaries. They released their most recent channel in 2009, Baraem which is another children’s channel aimed at pre school channel aged between 3 and 6. Although he Middle East is made up of several different countries with differing cultures, there are similarities linking them, which have led to the growing success of Al Jazeera.
The Middle East in general has a very large under 25 population. The Yemen, Oman, Saudi Arabia, Jordan, Morocco and Egypt are thought to have over 50% of its population in this age group. As well as this, fast rising GDPs in this area during this time led to the forming of a very large middle class. Broadband access across the area is thought to be as low as 10% however there has been an increase in mobile network creation and usage. This it the main way people in the area get access to web content. The most significant trend that has led to Al Jazeera’s success is the widespread of illiteracy still in many Arabic countries.
This results in the success of written media like newspapers being very low with most people preferring to get access to news through the television. Although according to Synovates European Media and Marketing study in 2008 top earning Arabs preferred CNN for English language news. Within the top 13% of earners CNN has 21% of the potential viewership. Al Jazeera’s English channel is ranked third with jus 9%. Due too Al Jazeera’s unique selling point in the Middle East of not being under editorial control by one government or regime has led to it regularly criticising Monarchs and leaders in the area.
This in turn has led to Al Jazeera Arabic being banned in every country in the Middle East at one time or another apart from Israel. Since its inception one constant has been that Al Jazeera has always been considered a reliable source of news. Strengths and Weaknesses SWOT Analysis Strengths – The biggest strength that Al Jazeera has is that is a name synonymous with independent unrestricted broadcasting in the Middle East. The major reason Al Jazeera found so much success had a lot to do with the wars in Iraq and Afghanistan which bean shortly after its inception.
It was the news channel, which had access to all the videos being put out by Osama Bin Laden. Something which up until recently was unheard of. The other major strength is funding, having the Qatari Royal family behind them means there is almost no limit to the amount that can be invested in expansion as can be seen from how quickly the company grew over its first 15 years of activity. Weaknesses – The major weaknesses of Al Jazeera are a backlash from its strengths. Although perceived by most as not being afraid to show the truth.
Some reporting, especially the war in Iraq was considered anti American especially in the USA. It is views like this, which are held by many Americans that could potentially harm its attempts to crack the US market with its English channel. The other main one in this case is the name, in the west especially there is still some hostility to anything sounds or looks Muslim as it often is automatically linked with terrorism. Opportunities – There are two big opportunities for the company moving forward. The first is to crack the US market, which until now has been troublesome.
There has been no major cable network willing to take on Al Jazeera due to its reputation for controversy. The company views Canada as the best way for them to enter the market as on the whole it is considered a more liberal thinking country. The other major problem is that currently US news dedicate just 8% of their total time to foreign issues which means as of now the demand is not high enough for Al Jazeera to reach the kind of success it is seeking. The other area is to increase the companies’ presence in social media, more and more under 25’s are using the internet and mobile apps to access news.
It is imperative that Al Jazeera keeps up with the times and follows suit. Threats – The biggest threat to the Arabic platform is Al Hurra and Al Arabiya. Al Arabiya is Saudi based and considered to be more moderate than Al Jazeera, since its inception in 2003 it has managed to gain a good market share. Al Hurra was created by the Bush administration with a view to directly compete with AL Jazeera and counter its reporting on the Iraq war. It is yet to gain any real success in the market. More recently the BBC has launched an Arabic channel and this could prove to be the biggest competition moving forward.
As for the English Channel there is a lot fiercer conversation. The BBC and CNN are the too biggest within this area and it will be a challenge for Al Jazeera to compete in its current state. Away from possibly a bigger threat is the rise in internet based new, something which was not an issue back in 1996. External Environment Porter’s Five Forces Potential Entrants – The Rolling News channel market is constantly being flooded with new competition, as it is very easy to enter at every level be it local or worldwide.
It will however take time for them to be regarded as a trustworthy reliable news channel but once this is established it is easy for them to become a threat to a company like Al Jazeera. A downside to Al Jazeera being the first independent news channel in the Middle East is tat they have trodden the path first meaning it will now be easier for new companies to enter the market with a similar product whilst encountering less problems. Supplier’s Power –As they were the first independent news company in the Middle East, for a long time Al Jazeera had a large amount of supplier power in the beginning.
However as the number of competitors has increased, their hold on the market has decreased. They have built a reputation of honesty and with that controversy; Viewers are willing to watch the channel for this controversy. Al Jazeera still receives large amounts of funding from Qatar, meaning they do not require as much advertising to help funding. This results in more airtime for news and less for commercials. Buyer’s Power – Success in the TV news industry is measured in the viewers, so in this sense the ‘buyers’ have a large amount of power.
For this reason it is imperative that Al Jazeera keep delivering a high quality product that always feels cutting edge. Otherwise it they can quickly and easily find their viewership going elsewhere. Substitutes – The Middle East is slowly gaining more and more freedom of speech. As this increases so will potential substitutes to Al Jazeera. Viewers of Al Jazeera now have a lot more options than back in 1996, there is radio, social media, Internet sources newspapers and also other TV channels. Industry Competitors – CNN is the market leader in the Middle East having 21% of the total audience. Following them, the BBC has 15.
6% and then Al Jazeera English is at 9%. 2009 there marked the arrival of several Arabic news competitors such as Al Arabiya, Al Hurra, and BBC Arabic. For Al Jazeera English, Al Jazeera is competing with CCTV-9, Channel News Asia, Deutsche Welle, Euro News, France 24, Nile TV, and Russia Today. This amount of competition means Al Jazeera needs to try even harder to be innovative and creative to keep the current viewers and potentially gain more. Expansion Strategy The 6 P’s Product- The main product is the Arabic channel; since it first began operating until today it is considered unique in the way it reports news.
Its key feature is that it shows raw footage without shying away from things deemed too graphic by other channels. It is also unique in the region as it is independent and prides itself on this fact. The English version has a similar selling point but faces much more competition from more established brands such as the BBC. Place- currently it is mainly available via television. However the company has been making steps towards more web based media. This will help with gaining more younger viewers and also in cracking the North American market.
The company currently reports that 11 million of its online traffic comes from North America alone. This is a sign of a potential change in the mind-set of people in the region to the company. Pricing Strategy – The Company is still very reliant on the Emir of Qatar’s money. This allows them to not need as much advertising money as many other news channels. It also gains a lot of revenue from its sport subscription channel. Promotion- the main area where this is a problem is in the west where the company has found it very difficult to increase viewership or even enter into the market themselves.
They have recently embarked on a large Facebook campaign and it was through this that they managed to gain so much extra web traffic from North America. People- With regards to staff they are making every effort to have a high profile on screen team having contracted award-winning anchors from rival channels such as David Frost and Riz Khan Process- One thing Al Jazeera has done since its very beginning is provide a high quality product this goes from recruiting the BBC staff when it first launched to the money it has put in to expanding the product line over the years.
They spare no expense in attempting to provide the customer with the best quality news possible. Analyse Looking at all the information available it is quite likely that Al Jazeera will continue to be the major force in news in the Arabic area with the likelihood being an increase in channels and content. They are still unique n this area. The same cannot be said for their position in the west where there is much greater competition.
Going forward, if they want to continue to be successful they will need to invest heavily in all forms of online media as this is the best way they can reach as many people as possible. Recommendations First and foremost the company needs to completely change the image of its English version if it is to ever be truly successful in the west and more specifically the USA. I would suggest changing the English Channels name to the translation, ‘the island’. Also change every aspect of the set and presentation so it has no visual link with the Arabic version.
They would not have to change the format or the presenters. They could still stay true to their roots with regards to coverage. However they would no longer be perceived as being ‘terrorist friendly’. Secondly it is imperative that the company improves its web-based presence moving forward. This includes all aspects of social media as well as their own website. Over the next 20 years this will be the way in which people consume news. It also enables them to reach a much larger audience than they have currently.
