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CBC turns to America Online for 
Web ads 

[PoliticsWatch updated 5:15 p.m. July 5, 2007]

CBC.ca has had an exclusive, non-competed advertising deal with AOL Canada since 2005.

OTTAWA  — The Canadian Broadcasting Corporation (CBC) has a little known, exclusive advertising deal with a wholly owned subsidiary of U.S. Internet giant America Online. 

Since August 2005, advertisers who want to buy ad space on CBC.ca, the public broadcaster's web site, are directed to AOL Canada. 

The CBC refuses to disclose any financial details about their arrangement with AOL. All that can be confirmed is that it is a revenue sharing arrangement, with AOL receiving a percentage of CBC's online ad revenues. The exact percentage AOL receives and how much money the deal has brought in for the CBC is not known. 

"We have an arrangement with AOL," a CBC spokesperson told PoliticsWatch. "They act as sort of an ad rep for us. The Web stuff is kind of a niche product and they have expertise there so we're happy to have their assistance."

The CBC did not request bids for advertising partners nor was this requirement publicly competed. The CBC simply approached AOL Canada on its own, a spokesman confirmed to PoliticsWatch. 

CBC.ca entered the revenue sharing arrangement with AOL because of limited resources, the public broadcaster claims. In 2006, the CBC received over $1 billion in federal funding through direct parliamentary appropriations. 

CBC.ca is listed as one of AOL's properties on AOL's advertising page.

On AOL Canada's web site, CBC.ca is listed under the category "properties." 



The CBC defended its arrangement with an American as opposed to a Canadian corporation.

"The fact that it's a wholly owned subsidiary from a corporate point of view it's an American firm, but we're comfortable with their expertise."

CBC also has a pre-existing licensing agreement with AOL.ca to provide content for the America Online news portal.

CBC's ad deal with AOL Canada isn't widely known nor is it widely promoted. In fact, it is not mentioned in any of the CBC's reports to Parliament. Even some MPs who have been studying the CBC were unaware of the deal.

Conservative MP Chris Warkentin, who sits on the Commons heritage committee conducting the CBC study, told PoliticsWatch he looks forward to asking CBC executives about the deal with AOL in the fall. 

NDP MP Charlie Angus, who is a strong supporter of the CBC, said the arrangement with AOL was "surprising" to him. "It should be done through CBC.ca. I can't see why they can't do their own (advertising)," Angus told PoliticsWatch. 

While the heritage committee has been examining the CBC's role in a changing technological landscape since March, MPs admit that not much attention has been paid to the online side of the broadcaster. 

Although CBC Radio is commercial-free, CBC's web site includes advertising. The presence of ads on CBC.ca is in contrast to other public broadcasters, such as the UK's British Broadcasting Corporation (BBC) site and Australia's Australian Broadcasting Corporation (ABC) site. Neither of these public broadcasters' sites include online ads.

The CBC took a corporate decision when it launched CBC.ca nearly a decade ago that its online activities would be revenue generating. 

It is unknown how the public broadcaster's decision to go commercial online with the assistance of AOL will impact private companies in Canada competing for scarce Web advertising dollars. Further, it is unclear how the AOL-CBC deal impacts the production of Canadian content online and the plurality and diversity of voices available to Canadians on the Web.

In its 2005-2006 annual report, the CBC states outright that its goal for CBC.ca is to be "the most popular news and media Web site." It boasts about having larger audience numbers than other online competitors, including domestic rivals CTV, The Globe and Mail, CanWest and Global, as well as international rivals the New York Times and CNN.

"Generate more advertising revenues for re-investment in programming" is stated as an objective for CBC.ca in the broadcaster's annual report.  "The approach was successful; revenue targets were exceeded," the annual report concludes. 

Concerned about the availability of Canadian content, CBC recently asked the CRTC to block the CHUM Ltd/CTVglobemedia merger. If the CRTC didn't block the merger, CBC wanted 37 per cent of the amount paid into a  "benefits fund" for independent Canadian producers. 

CBC told PoliticsWatch money from the AOL advertising revenue sharing arrangement does not go into any similar fund. Instead the network uses the revenues to offset the cost of CBC's productions on all platforms. 

As leader of the Conservative party, Stephen Harper said in a November 2004 address to the Canadian Association of Broadcasters that CBC had become too commercial and was competing too much with private broadcasters. 

"Along the same lines, we would seek to reduce CBC’s dependence on advertising revenue and its competition with the private sector for these valuable dollars," Harper said. 

However, grassroots conservatives are beginning to reflect frustration with the Harper government's inaction on the CBC since coming to power in 2006. In fact, when the federal government introduced the accountability act it kept in a provision that kept CBC and other Crown Corporations exempt from lobbying rules, something that private industry says gives CBC an unfair advantage. 

Heritage Minister Bev Oda's office was unaware of the CBC's advertising deal with AOL. 

"Since they're arm's length from the government ...  we don't have any comment," a spokesperson for Minister Oda told PoliticsWatch. 

CBC reports to Parliament through the minister of heritage. The minister is the representative for CBC's sole shareholder, the Canadian taxpayer. 

CBC and Radio Canada's main broadcasting licenses expire on August 31, 2007, but were extended an additional year by the CRTC to allow for a review of television policy. In addition, Minister Oda is expected to launch a mandate review after the heritage committee completes its study of the CBC.

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