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Public Notice
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Ottawa, 10 August 1988
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Public Notice CRTC 1988-135
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NewCap Broadcasting Limited
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Representations Concerning the Change in Format of CFDR Dartmouth from "Music of Your Life" to "Contemporary Hit Radio"
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On 10 June 1987, the Commission approved applications by Newfoundland Capital Corporation Limited for authority to acquire the assets of CFDR and CFRQ-FM Dartmouth, Nova Scotia, and for licences to continue the operation of these undertakings (Decision CRTC 87-391). There were no opposing interventions filed in connection with that application. In Decision CRTC 87-860 dated 28 October 1987, the assets were subsequently transferred and new licences issued to NewCap Broadcasting Limited (NewCap), a subsidiary of Newfoundland Capital Corporation Limited.
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Although no specific changes to the musical orientation of either station were proposed at that time of the original asset transaction, the applicant had indicated plans "to ensure that the stations are fully serving their audiences' needs" by canvassing both current listeners and a "broad segment of the potential listening public in the service area". The applicant also stated: "If the preliminary survey should indicate that we should take a closer look, we would need to do so and make whatever changes are necessary".
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Not long after, in September 1987, the Commission received the first of many complaints from area listeners concerning changes that had been introduced by NewCap to the musical orientation of CFDR. Subsequently, in a letter to the Commission dated 23 November 1987, NewCap confirmed that it had changed the musical format of CFDR from "Music of Your Life" to "Contemporary Hit Radio".
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Sydney Public Hearing
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In light of the numerous representations it had received concerning the change in format, the Commission called NewCap to appear at a Public Hearing on 15 March 1988 in Sydney, "to review the reasons which have prompted the change". In all, letters and petitions representing the views of more than 850 area residents were received by the Commission and placed on CFDR's public examination file for that hearing.
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Although a number of individuals expressed approval of the change, more than 87% were opposed. Many of those who submitted comments described themselves as faithfull CFDR listeners who regarded the station as a familiar local institution and its on-air personalities as old friends.
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The view was repeatedly expressed that the change in CFDR's musical direction drastically reduced the level of musical diversity in the Halifax/Dartmouth market, and that radio listeners were left with little or no access to the type of easy listening music that had consistently formed a large component of the programming available on CFDR before the format change. A frequently-expressed concern was that there had been no effort on the part of NewCap to inform listeners of its intentions.
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As for the matter of why no advance publicity had been given in respect of the format change, Mr. Pat Kiely, CFDR's general manager, stated:
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The only purpose it could have served would have been [to in form listeners of what] was taking place on a daily basis as we moved the music to a more contemporary sound, over a period of about two and a half to three weeks.
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In response to questioning at the 1988 hearing, NewCap rejected any suggestion that it had already reached a decision to change the format of CFDR at the time the transfer of assets application was heard in March of 1987. It claimed, however, that a continuing downward trend in listenership as reflected in the BBM ratings for the spring of 1987, particularly among those in the 25-to-54 age group, and declining station revenues, made it clear that some change was necessary.
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According to NewCap, its choice of a new format was made only after a careful assessment of advice received from three independent experts, including the results of a comprehensive market survey. Mr. Kiely made the following comment in this regard:
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The decision to go to contemporary hit radio meant taking a risk of losing a loyal CFDR audience. No business makes a change of that nature without the conviction and determination that such a change is necessary; in this case, necessary to strengthen CFDR and ensure its financial viability.
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A second spokesperson for the station's owners, Mr. David Thompson, offered the following response to a question concerning NewCap's perception of its responsibility to CFDR listeners:
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I suppose in hindsight we could easily have the finger pointed to us and say you moved too quickly. The type of formating we were moving to predicated, according to what we were told, that we had to move that way. I know the intensity with which the community felt for this station and the music.... But as business people, we have a responsibility to our shareholders also to ensure that we have a viable entity.
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Conclusion
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Commission requirements specify that changes to the musical orientation of an FM station must be made within the requirements of a condition of licence which binds the licensee to its Promise of Performance. However, adherence to the Promise of Performance is not a condition of licence for AM licensees, and they are at liberty to alter the musical format of their stations as they see fit and, presumably, in response to the demands of the market.
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At the same time, market forces act to promote musical diversity on both the AM and the FM band by encouraging broadcasters serving communities in which the Commission has licensed a number of radio undertakings to fill specific niches of the program spectrum, thereby ensuring that the widest possible range of musical and spoken word programming is made available to listeners.
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Nevertheless, the freedom that AM broadcasters have to alter their musical formats does not relieve them of their responsibility to be sensitive to the audiences they serve and to show them appropriate consideration. In the present case, the Commission has concluded that NewCap, by its decision to change the musical direction of CFDR without informing listeners of its decision or its reasons, has demonstrated an unfortunate lack of sensitivity and consideration in its treatment of the station's faithful audience in the Halifax/Dartmouth area, as demonstrated by the complaints filed with the Commission.
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In reaching this conclusion, the Commission has taken note of the fact that at least one of the broadcast consultants hired by NewCap had cautioned against any such radical move to a contemporary hit radio format, and had recommended that care be taken to explore all possibilities.
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The Commission notes Newcap's claim that, while it had been well aware of the station's popularity with older listeners, it was most concerned by the audience erosion it saw occuring among younger listeners. Nevertheless, in the Commission's view, the unprecedented public reaction to the format change must be recognized by CFDR's owners and senior management. Moreover, the Commission considers that the results of the Spring 1988 BBM survey, which places CFDR's audience share at barely a third the size it had been one year earlier, before the introduction of the contemporary hit radio format, reflect negative listener response, at least in the short term, to the change in musical format.
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Despite all of the foregoing, the Commission is convinced that NewCap's actions, and the public response they have provoked, essentially constitute an infrequent occurrence. It further notes that it has been the experience of broadcasters who have made such sudden significant changes in musical format that have resulted in the elimination of a distinct program service in a specific market, particularly when a considerable body of listeners have considered themselves to have been disenfranchised, to reassess whether the change that has been made has been of benefit to the station.
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The Commission considers that the concerns raised in response to these rare sudden changes do not present sufficient grounds for the Commission to reconsider its policy whereby AM licensees are permitted to change musical direction without prior CRTC approval. Rather, and on balance, the Commission remains of the view that the public interest is better served by a regulatory framework which leaves AM licensees free to change musical format as they assess how they may best serve their market. Although, as in the present instance, this may lead in some circumstances to listener dissatisfaction, the Commission's experience has been that this approach is still the best means of ensuring diversified AM radio service.
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As a means of ensuring program diversity within markets, the Commission will continue to monitor the formats of AM stations and reminds AM licensees of their accountability to the public whenever substantial changes are proposed in the service provided.
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Fernand Bélisle Secretary General
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