ARCHIVED - Broadcasting Decision CRTC 2002-225

Broadcasting Decision CRTC 2002-225

Ottawa, 8 August 2002

CKVN Radiolink System Inc.
Winnipeg, Manitoba

Application 2000-1959-8
Public Hearing at Winnipeg, Manitoba
4 February 2002

Application for a nostalgia radio station to serve Winnipeg

The Commission approves the application by CKVN Radiolink System Inc. (Radiolink), for a new commercial FM radio station at Winnipeg. This is one of five new Winnipeg radio stations approved in Decisions CRTC 2002-224 to 2002-228 issued today.

The Commission's overall approach to radio applications considered at the 4 February 2002 Public Hearing in Winnipeg is set out in Introductory statement to Decisions CRTC 2002-224 to 2002-228: Applications for new radio stations to serve Winnipeg, Public Notice CRTC 2002-41, 8 août 2002.

The application

1.

At the 4 February 2002 public hearing in Winnipeg, the Commission considered an application by CKVN Radiolink System Inc. (Radiolink) for a new commercial FM radio station to serve Winnipeg, to be operated in the specialty programming format. The applicant proposed to operate the new station at 100.7 MHz (channel 264A) with an effective radiated power of 1,300 watts.

2.

The proposed station would offer a nostalgia format comprised of adult standards and easy listening music drawn from the 1920's to the 1970's. The applicant indicated that the station would fill the programming niche created in the Winnipeg market when CJOB discontinued its nostalgia format and CFST changed format from adult standards to sports talk.

3.

Radiolink currently holds no Winnipeg radio licences but has operated various radio undertakings pursuant to Exemption order respecting low-power radio: limited duration special event facilitating undertakings set out in the appendix to Final revisions to certain exemption orders, Public Notice CRTC 2000-10, 24 January 2000.

Interventions

4.

The Commission acknowledges and has considered the numerous interventions in support of this proposal. The interveners considered the station proposed by Radiolink would provide a type of music not currently available to radio listeners in Winnipeg, and that it would be greatly appreciated by older listeners.

5.

Some interveners made reference to the special events stations that Radiolink has operated and considered that a full-time station offering this type of music would be attractive to Winnipeg listeners. For example, the Secretary Treasurer of the XII Manitoba Dragoons Veterans Association stated:

I am in touch with many Veterans who tell me that the music played on CKVN is the greatest thing for recalling old memories of bygone days. These men have served their country and I think anything to brighten up their day is worthwhile.

6.

The Commission further notes that no interventions were received in opposition to the application.

The Commission's analysis and conclusions

7.

In its assessment of applications for new commercial radio stations, the Commission takes into account four main factors, or bases of comparison, that it has identified as being relevant. While their relative importance will vary depending on the specific circumstances of the market concerned, the four factors are as follows:

. The diversity of news voices in the community
. The quality of the application
. The impact of a new entrant on existing stations
. The competitive state of the market¹

Diversity of editorial voices

8.

In Introductory statement to Decisions CRTC 2002-224 to 2002-228: Applications for new radio stations to serve Winnipeg, Public Notice CRTC 2002-41, 8 August 2002, the Commission listed the radio, television and daily newspapers serving Winnipeg. Not counting the radio stations licensed today, this list includes eleven commercial radio stations owned by six licensees, five not-for-profit radio stations owned by five licensees as well as four CBC radio stations. Winnipeg is further served by three private television stations owned by three licensees, as well as by two CBC television stations. A new private religious television station has been approved in Proposed religious station for Winnipeg, Decision CRTC 2002-229, 8 August 2002. Winnipeg is also served by two local daily newspapers owned by two different parties.

9.

In light of the above, the Commission considers that the Winnipeg market is served by a variety of news voices, and notes that Radiolink will provide an additional news voice to a market that is already well served in this respect.

Quality of the application

10.

The Commission applies four main criteria when assessing the quality of applications for new radio stations. These criteria are:

. The applicant's local programming proposals and plans for providing reflection of the local community
. Canadian content commitments
. Commitments in support of the development of Canadian talent
. The quality of the applicant's business plan, including the proposed format²

Local programming plans

11.

The applicant stated that it would offer a full-service station, with all programming produced locally and all regular and special feature programming hosted by live on-air talent. It stated that its news department would consist of a news director and three reporters, and that it would provide a minimum of 3 hours and 30 minutes of news programming each week.

12.

In addition to news programming, Radiolink proposed to offer a number of spoken word programs including features and specials aimed specifically at a target audience over the age of 45. The features would include information dealing with issues such as health, medicine, finance, lifestyle and retirement. Radiolink also indicated that it planned to feature a highly experienced broadcasting team of on-air and programming talent that would regularly offer anecdotes, personal insights as well as locally relevant information such as traffic, weather, community and special events information.

13.

Radiolink also proposed to institute an Advisory Council for the station, to be composed of prominent Canadians. The Council would assist station management in assessing the station's performance and offering insights into emerging issues of relevance to its proposed audience. The Advisory Council would meet twice each year.

14.

The Commission finds that the applicant has presented a satisfactory plan to reflect the Winnipeg market and the needs of the audience it proposes to serve.

Canadian content commitments

15.

In light of its proposal to offer a format based on older music, the applicant requested that it be allowed to abide by conditions of licence setting the levels of Canadian content at levels lower than those required of stations that program more modern music.

16.

Specifically, the licensee proposed that, during program periods in which all of the music played was composed prior to 1956, the level of Canadian content would be at least 2%. During program periods when music composed before 1956 made up 90% of the music played, the minimum level of Canadian content would be 10%. The applicant submitted that the lower levels of Canadian content proposed for program periods devoted largely or entirely to music composed before 1956 reflected policies that had been established by the Commission for radio stations that programmed older music.

17.

The applicant also indicated that, although it would program levels of category 2 Canadian music of less than 35% during broadcast weeks in which instrumental selections made up more than 35% of all category 2 selections played, the levels of Canadian music programmed would meet the requirements set out in the Radio Regulations, 1986, (the Radio Regulations) for stations broadcasting significant levels of instrumental music.

18.

With respect to the portion of its programming that would offer music from category 3 - special interest music, the applicant committed to ensure that, on a weekly basis, at least 10% of all selections drawn from category 3 would be devoted to Canadian selections, as required by the Radio Regulations.

19.

The applicant further indicated that, in order to ensure the accuracy of Canadian content calculations, it had purchased a number of music publications and that it would have a date-coded music library.

20.

The Commission recognized the limited availability of Canadian selections in some styles of music composed before 1956 in Changes to the content requirements for Canadian music on radio, Public Notice CRTC 1993-5, 29 January 1993. In that Notice, the Commission stated that it would

. be prepared to give favourable consideration to applications by the licensees of networks or stations for amendments to their conditions of licence where:

. in those periods of category 2 music consisting exclusively of music composed before 1956, the Canadian content level is not less than 2% on a weekly basis;

. in those periods of category 2 music consisting of 90% or more, but not exclusively, of music composed before 1956, the Canadian content level is not less than 10% on a weekly basis.

21.

The Commission further notes that section 2.2(6) of the Radio Regulations allows a reduction in the level of Canadian music in category 2 from the generally required level of 35% when a station programs levels of instrumental music of 35% or more. Section 2.2(6) states:

An A.M. or F.M. licensee may, in a broadcast week, reduce the percentage of its Canadian musical selections from content category 2 referred to in subsection (7) to (9) to

(a) not less than 20% if, in that broadcast week, the licensee devotes 35% or more but less than 50% of all its musical selections to instrumental selections; and

(b) not less than 15% if, in that broadcast week, the licensee devotes 50% or more of all its musical selections to instrumental selections.

22.

With respect to selections from category 3 - special interest music, section 2.2(3) of the Radio Regulations states:

Except as otherwise provided under a licensee's condition of licence, an A.M. or F.M. licensee licensed to operate a station other than a community station or campus station shall, in a broadcast week, devote 10% or more of its musical selections from content category 3 to Canadian selections and schedule them in a reasonable manner throughout each broadcast day.

23.

The Commission concludes that the applicant's plans are consistent with its usual treatment of stations broadcasting significant levels of music composed before 1956 and instrumental music. It considers it appropriate to impose the licensee's proposed Canadian content levels for program periods comprised of music composed before 1956 as a condition of licence. The condition is set out in the appendix to this decision.

Canadian talent development (CTD)

24.

The Canadian Association of Broadcasters (CAB) has developed a model for financial support for the development of Canadian talent based on the size of various markets in Canadian cities. Radiolink indicated that, if licensed, it would not participate in that plan. Instead, the licensee proposed to devote a minimum of $77,000 over a seven-year licence term to several initiatives meant to foster the development of Canadian talent.

25.

Radiolink proposed to direct all of the first year's expenditure, and a portion of each subsequent year's allocation, to the Foundation to Assist Canadian Talent on Record (FACTOR). It also planned an annual Talent Search, with both cash awards and recording studio time to be awarded to annual winners. In addition, expenditures would be made to support touring and travel for performers at station-sponsored events. Radiolink indicated that no portion of its CTD allocation would be devoted to the salary of its Station Promotions and Canadian Talent Co-ordinator, a station staff position.

26.

The Commission finds that the applicant's commitment to the support of Canadian talent development initiatives would be significant and appropriate for the Winnipeg market. It considers it appropriate to impose these commitments as a condition of licence, as set out in the appendix to this decision.

Business plan

27.

Radiolink proposed to operate in the Specialty format, limiting category 2 music to no more than 60% of the music played during each broadcast week. The remainder of the music to be broadcast would be drawn from category 3. The applicant described the music as a mix of easy listening pop and rock, country, jazz and blues, world and some religious music.

28.

The applicant's business plan indicated that its proposed service would garner a tuning share of approximately 6% to 6.5%, and that it would become profitable in its second year of operation, based on projected advertising revenues of $681,000 in its first year of operation and $929,000 in the second. Radiolink expressed its confidence in its ability to launch and operate a new commercial radio station, stating that "CKVN has served its dedicated local audience and market for six years in the form of a limited duration special event station. It has been successful, despite being restricted in both broadcast duration, and an effective radiated power of only 14 watts ERP."

29.

With respect to the applicant's business plan and proposed format, the Commission is satisfied that Radiolink has demonstrated that there is a demand for nostalgia music in Winnipeg and that the applicant has the resources to launch and operate such a station. The Commission has imposed the licensee's commitments to operate in the specialty format and to limit Category 2 music to no more that 60% of the music broadcast each week as conditions of licence. These conditions are set out in the appendix to this decision.

Impact on existing stations

30.

As part of its application, Radiolink submitted a market study it commissioned to assess listener demand and format availability. According to the study, approximately 64% of the audience for the proposed station would come from four existing radio stations, namely CJOB (26%), CKY (13%), CFST (13%), and CBC Radio One (12%). The study further indicated that an additional 16% of the new station's audience would be drawn equally from Winnipeg radio station CFWM-FM and CBC Radio Two.

31.

Radiolink interpreted its study results to mean that, while some listeners would be attracted to the new station from existing stations, the single largest audience for the new station would be drawn from individuals who currently have no preferred radio station, or who have given up listening to the radio because no existing station meets their needs.

32.

The Commission finds that, while Radiolink would be a new entrant to the Winnipeg market, its modest financial projections and proposed niche format would expand programming choice in the market and serve a segment of the population that is not well-served by existing stations without having an undue negative impact on existing Winnipeg commercial radio stations.

Competitive state of the market

33.

The competitive state of a market, as a factor in the Commission's consideration of applications proposing new commercial radio stations, is generally most relevant where the applicant is the licensee of an existing station in that market. In such cases, the Commission's concern is that its licensing actions not create an undue competitive imbalance in the market. The Commission notes that, in this case, the applicant would be a new player and would therefore serve to increase competition in the radio market.

Conclusion

34.

For all of the reasons noted above, the Commission concludes that implementation of the Radiolink proposal would add programming diversity to the Winnipeg market, and would not have an undue negative financial impact on existing Winnipeg commercial radio stations. It also finds that Radiolink's proposals are consistent with the Commission's regulations and policies for commercial FM radio stations. It therefore approves the application by Radiolink, for a new radio station in Winnipeg on the frequency 100.7 MHz (channel 264A) with an effective radiated power of 1,300 watts.

Issuance of the licence

35.

The Commission will issue a licence to CKVN Radiolink System Inc. with a licence term beginning 1 September 2002 and expiring 31 August 2009 subject to paragraphs 36 to 38 below and to the conditions specified in the appendix to this decision and in New licence form for commercial radio stations, Public Notice CRTC 1999-137, 24 August 1999.

36.

The Department of Industry (the Department) has advised the Commission that, while this application is conditionally technically acceptable, it will only issue a broadcasting certificate when it has determined that the proposed technical parameters will not create any unacceptable interference with aeronautical NAV/COM services.

37.

The Commission reminds the licensee that, pursuant to section 22(1) of the Broadcasting Act, no licence may be be issued until the Department notifies the Commission that its technical requirements have been met, and that a broadcasting certificate will be issued.

38.

Furthermore, the licence for this undertaking will only be issued once the licensee has informed the Commission in writing that it is prepared to commence operations. The undertaking must be operational at the earliest possible date and in any event no later than 24 months from the date of this decision, unless a request for an extension of time is approved by the Commission before 8 August 2004. In order to ensure that such a request is processed in a timely manner, it should be submitted at least 60 days before this date.

Employment equity

39.

In accordance with Implementation of an employment equity policy, Public Notice CRTC 1992-59, 1 September 1992, the Commission encourages the licensee to consider employment equity issues in its hiring practices and in all other aspects of its management of human resources.

Secretary General

This decision is to be appended to the licence. It is available in alternative format upon request, and may also be examined at the following Internet site: www.crtc.gc.ca

Appendix to Broadcasting Decision CRTC 2002-225

Conditions of licence for the new FM station to serve Winnipeg licensed to CKVN Radiolink System Inc.

The licence will be subject to the following conditions of licence as well as to those set out in New licence form for commercial radio stations, Public Notice CRTC 1999-137, 24 August 1999.

(a) in those periods of category 2 music consisting exclusively of music composed before 1956, devote a weekly average of 2% or more of its musical selections from content category 2 broadcast during those periods to Canadian selections broadcast in their entirety. The licensee shall identify those programming periods and the dates of composition of the music selections broadcast during those periods when requested by the Commission.

(b) in those periods of category 2 music consisting of 90% or more but not exclusively, of music composed before 1956, devote a weekly average of 10% or more of its musical selections from content category 2 broadcast during those periods to Canadian selections broadcast in their entirety. The licensee shall identify those programming periods and the dates of composition of the music selections broadcast during those periods when requested by the Commission.

 

For purposes of this condition, the terms "broadcast week," "content category" and "musical selection" shall have the meaning set out in section 2 of the Radio Regulations, 1986.

Broadcast year

Direct expenditure

Year 1

$8,000

Year 2

$9,000

Year 3

$10,000

Year 4

$11,000

Year 5

$12,000

Year 6

$13,000

Year 7

$14,000

· $1,000 to FACTOR

· $6,000 in studio time to the winner of the annual talent search. (This amount will increase by $333 in each subsequent year of the licence term.)

· $1,000 in cash awards to talent search winners. (This amount will increase by $333 in each subsequent year of the licence term.)

· $1,000 to underwrite tour and travel support for talent to appear at a station-sponsored event. (This amount will increase by $333 in each subsequent year of the licence term.)