CBC turns to America Online for
[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
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
The CBC defended its arrangement with an American as opposed to a
"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
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
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
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
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
CBC reports to Parliament through the minister of heritage. The
minister is the representative for CBC's sole shareholder, the
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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