|
Decision
|
|
Ottawa, 29 February 1988
|
|
Decision CRTC 88-129
|
|
Rock 95 Broadcasting (Barrie-Orillia) Ltd., representing a company to be incorporated Barrie, Ontario - 871010500
|
|
Jerry Chomyn, representing a company to be incorporated Barrie, Ontario - 871006300
|
|
Kempenfelt Broadcasting Corporation Barrie, Ontario - 871001400
|
|
Generation Broadcasting Inc. Barrie, Ontario - 871002200
|
|
Playland Broadcasting Limited, representing a company to be incorporated Barrie, Ontario - 871007100
|
|
Barrie Broadcasting - a division of Kawartha Broadcasting Co. Ltd. Barrie, Ontario - 862945300
|
|
At a Public Hearing in Toronto on 7 December 1987, the Commission considered the six applications noted above for a new FM station at Barrie. The Commission, for the reasons set out in this decision, approves the application by Rock 95 Broadcasting (Barrie-Orillia) Ltd., representing a company to be incorporated (Rock 95, the applicant) for a broadcasting licence for an English-language FM radio station to serve Barrie, on the frequency 95.7 MHz (channel 239B) with an effective radiated power of 50,000 watts. The Commission will issue a licence expiring 31 August 1991, subject to the conditions specified in this decision and in the licence to be issued.
|
|
This authority will only be effective and the licence will only be issued at such time as the Commission receives documentation establishing that the company has been incorporated in accordance with the application in all material respects.
|
|
The other five competing applications are accordingly denied.
|
|
Background
|
In Decision CRTC 86-701 dated 31 July 1986, the Commission denied two earlier applications competing for an FM licence to serve Barrie. In that decision, the Commission stated that while there was a significant share of the Simcoe County audience (50%) tuned to out-of-market stations, which demonstrated "a demand among Barrie and area residents for greater diversity in local radio broadcasting services", it was not satisfied that the proposals then before it would have contributed to such diversity.
|
|
Accordingly, the Commission stated that it would be prepared to consider other applications for the provision of FM service to the Barrie area that would provide an attractive alternative to existing services. The current proposals were submitted in response to a call for applications issued by the Commission in Public Notice CRTC 1987-10 dated 9 January 1987. All six applications were predicated on use of the last Class B frequency allotment in the region and are thus technically mutually exclusive. In several instances, and to varying degrees, the applications are also competing in terms of the particular audiences they seek to attract with their proposed music formats.
|
|
Two of the applicants, Rock 95 and Generation Broadcasting Inc., both proposed Group II formats (70% or more Pop or Rock-Harder). Two other applicants, Jerry Chomyn representing a company to be incorporated (Chomyn) and Playland Broadcasting Limited representing a company to be incorporated, proposed to operate in the Group I (70% or more Pop or Rock-Softer) format. Kempenfelt Broadcasting Corporation proposed a Group IV format featuring a blend of music (60% Pop and Rock-Softer; 40% Pop and Rock-Harder), while the sixth applicant, Barrie Broadcasting, presented plans for an FM station operating in a Group III format (70% or more country and country-oriented music).
|
|
The Market
|
|
According to the Financial Post's Canadian Markets, Simcoe County has a year-round population of 240,000. The cities of Barrie and Orillia account for approximately 40% of the total population, with the remainder living in rural areas and in smaller communities such as Midland and Collingwood.
|
|
The county is currently served by five commercial radio stations, two of which (CHAY-FM and CKBB) are located in Barrie. The other stations are: CFOR Orillia, CKMP Midland and CKCB Collingwood. CHAY-FM operates in the Group I "easy listening" format and appeals to a predominantly older audience. The four AM stations all operate in adult contemporary formats most popular with listeners over the age of 25.
|
|
In assessing the capacity of the Simcoe County market to accommodate a new commercial FM service, the Commission has examined a variety of indicators, including the level of retail business activity in this market, the amount of advertising revenues currently being extracted by local stations, the financial performance of these stations, and the share of hours tuned by area listeners to out-of-market stations.
|
|
Based on the evidence, the Commission is satisfied that the market should support the operation of a second commercial FM station. In the Commission's opinion, this finding is also supported by the fact that two of the current applications involve participation by local broadcasters: Barrie Broadcasting is the licensee of CKBB, while Mr. V. Dittmer, the present owner of CHAY-FM, is a prospective 40% equity holder in the Chomyn application. Both applicants have expressed the view that there is a significant level of untapped radio revenue in the market. Although Barrie Broadcasting argued that these untapped revenues would only be sufficient to support a joint FM station, the Commission notes that the amount of first-year revenues projected by that applicant is only slightly less than the amount projected by Rock 95. The Commission notes further in this regard that all five of the commercial radio stations in Simcoe County are currently operating at a profit.
|
|
As noted earlier in this decision, a distinctive feature of radio listening in Simcoe County is the very large proportion of listeners tuned to non-local stations. According to figures submitted by various of the applicants, the percentage of hours tuned to out-of-market stations now stands at more than 60%. The figures further reveal that out-of-market tuning is most pronounced among listeners under the age of 35. Applicant surveys indicate that more than 75% of the hours tuned by listeners in this age group is to non-local stations. More than one third of this listening is to out-of-market stations featuring hit or rock-oriented music. By way of comparison, the next largest share (approximately 9%) is captured by out-of-market country music stations.
|
|
In the Commission's view, the evidence submitted by the applicants, both in their written applications and at the hearing, supports the conclusion that the musical preferences of large segments of the radio audience in Simcoe County are still not being met by existing local stations, and that the largest such segment consists of younger listeners whose greatest preference is for hit and rock-oriented music.
|
|
Decision
|
|
After a careful review of all the applications, the Commission has determined that the Group II format chosen by Rock 95, together with this applicant's well-conceived and well-integrated plans for news and other spoken word programming geared specifically to younger Simcoe County listeners, best responds to the needs and interests of these listeners.
|
|
Rock 95 is owned by six individuals, three of whom are local residents and hold more than 60% of the voting shares. Mr. D. Bingley, the proposed President and General Manager of the company to be incorporated, will take up residence in the area, thereby increasing local ownership to a level of approximately 80%. None of the shareholders have any other involvement in broadcasting.
|
|
The Commission notes that Rock 95 intends to lease rather than purchase the station facilities outright. According to the application, establishment costs and the cash requirements for operating the station during the first two years will be met through shareholder investments of $320,000 and a documented bank loan of $400,000, with back-up financing in the area of $358,000 available should revenue projections not be met or should expenses be greater than expected. At the hearing, the applicant assured the Commission that shareholders are firmly committed to inject up to $600,000 in additional funds in the event that back-up funding is required over and above the amount of $358,000 noted above.
|
|
Based on these assurances, and on the applicant's revenue and expense projections, the Commission is satisfied with the availability and adequacy of the required financing.
|
|
Moreover, the effort and thoroughness evident in the preparation of this application and in Rock 95's presentation and responses to questions at the hearing demonstrated the applicant's sound understanding of the Simcoe County market and the audience it intends to serve within that market, and a good knowledge of the FM policy.
|
|
The Commission is satisfied that implementation of the applicant's programming proposals will contribute significantly to the diversity of radio services in the area, and that the new service should be able to attract a large local audience without unduly disrupting either the audience or the revenue base of existing local stations.
|
|
Among the programs proposed by the applicant is a weekday half-hour public affairs magazine program featuring news and information on topics relevant to the interests of younger listeners (Barrie/Orillia Today), an hour-long program focusing on social issues and other matters of concern to teenagers and young adults to be broadcast on a weekly basis (Rock'n a Hard Place), and an hour-long program which will be produced by students of Centennial College under the guidance of the station's program director and broadcast each week (College Show).
|
|
The applicant has also proposed a weekly program, one hour in length, which will be produced by and for the various Ojibway bands living in the area, under the guidance of station program staff (The Native Show).
|
|
The Commission notes that the applicant's commitments to foreground (12.3%) and combined foreground/ mosaic programming (35%) exceed the Commission's minimum requirements for independent FM licensees.
|
|
Of all the applicants, Rock 95 has promised the largest out-of-pocket expenditures for the development of Canadian musical talent. Rock 95's commitments in this area include an annual contribution of $4,500 to FACTOR/CTL. The applicant indicated at the hearing that this contribution will increase as station revenues grow. Other direct expenditures for the support of Canadian talent include $15,600 annually to cover performance fees and other costs associated with the production of "Rock 95 Live", a monthly live-to-tape concert featuring professional and semi-professional bands appearing at clubs in the Barrie/Orillia area. Moreover, Rock 95 will sponsor twice-yearly "Battle of the Bands" contests. The contests will be limited to Canadian groups that do not have recording contracts and will be supported by an annual budget of $9,500. The Commission will follow the implementation of these initiatives with interest.
|
|
It is a condition of this licence that construction of the undertaking be completed and that it be in operation within twelve months of the date of this decision or such further period as the Commission may, upon receipt of a request for extension before the expiry of the said twelve months, deem appropriate under the circumstances.
|
|
It is further a condition of licence that Rock 95 adhere to the CAB self-regulatory guidelines on sex-role stereotyping, as amended from time to time and approved by the Commission.
|
|
The Commission acknowledges the many interventions submitted in connection with the six applications for an alternative FM service in Barrie.
|
|
Fernand Bélisle
Secretary General
|
|
|