ARCHIVED - Broadcasting Public Notice CRTC 2002-41

Broadcasting Public Notice CRTC 2002-41

Ottawa, 8 August 2002

Introductory statement to Decisions CRTC 2002-224 to 2002-228: Applications for new radio stations to serve Winnipeg

This public notice provides an overview and information about the Winnipeg radio market that relates to Decisions CRTC 2002-224 to 2002-228 in which the Commission licenses five new radio stations to serve Winnipeg. The Commission considered seven competing applications to provide new Winnipeg radio stations at the 4 February 2002 public hearing.

The applications

1.

At the 4 February 2002 public hearing, the Commission considered seven applications for new FM stations to serve Winnipeg. Three applicants were competitive on a technical basis since they each proposed to operate at 99.1 MHz (channel 256C) with an effective radiated power of 100,000 watts. The four remaining applicants proposed to use different frequencies. The applications may be summarized as follows:

Applications to operate at 99.1 Mhz

2.

Global Communications Limited (Global) proposed a new commercial FM station that would offer a smooth jazz format. Global currently operates Winnipeg television station CKND-TV.

3.

Corus Radio Company (Corus) proposed a new commercial FM station that would offer a mix of oldies and soft adult contemporary music. Corus currently operates CJOB and CJKR-FM in Winnipeg.

4.

Rogers Broadcasting Limited (Rogers) proposed to convert its existing commercial AM station CKY to an FM station. The FM station would offer a format that Rogers described as "classic rock hits." In addition to CKY, Rogers currently operates Winnipeg radio station CITI-FM.

Applications for other frequencies

5.

CKVN Radiolink Systems Inc. (Radiolink) proposed to establish a new commercial FM station that would offer a nostalgia format featuring adult standards and easy listening music from the 1920's to the 1970's. The station would operate at 100.7 MHz (channel 264A) with an effective radiated power of 1,300 watts. Radiolink currently holds no Winnipeg radio licences but has periodically operated 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.

6.

N.I.B 95.5 Cable FM Inc. (NIB) proposed to establish a new commercial FM station that would offer a format based on pop, rock and dance music complemented by jazz and blues. The station would operate at 107.9 MHz (channel 300A) with an effective radiated power of 200 watts. If the application were successful, NIB indicated that it would surrender its current licence for instructional campus station CJAE-FM in Winnipeg.

7.

HIS Broadcasting Inc. (HIS) proposed to establish a new commercial FM station that would offer Christian music targeted to youth. The station would operate at 107.1 MHz (channel 296A) with an effective radiated power of 920 watts. The applicant indicated that it was essentially proposing to relaunch CFEQ-FM, a new FM station that the Commission licensed in New Christian music FM radio station, Decision CRTC 99-467, 18 October 1999. The licence was subsequently revoked, at the request of the licensee at that time, in Revocation, Decision CRTC 2001-35, 1 February 2001.

8.

Red River College Radio, on behalf of a not-for-profit organization to be incorporated (Red River), proposed to establish an instructional campus radio station affiliated with Red River College. The station would operate at 92.9 MHz (channel 225A) with an effective radiated power of 201 watts.

Evaluating the applications

9.

In its assessment of the applications, the Commission took into account four main factors that it has identified as being relevant to the evaluation of competing applications for new commercial radio services. While their relative importance varies 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

10.

These factors are addressed in the individual decisions for each of the applications for new commercial radio stations. The Commission also took into account the particular circumstances of the Winnipeg radio market, which are described below.

The Winnipeg radio market

Current stations

11.

Excluding the stations licensed today, Winnipeg is served by eleven commercial radio stations that are owned by six licensees. Rogers owns CKY, which offers an oldies format, and CITI-FM, featuring a classic rock format. Corus owns CJOB, which broadcasts a news talk format, and CJKR-FM, which features mainstream rock. Standard Radio Inc. operates CKMM-FM, offering a contemporary hit radio/rhythm format, and CFQX-FM, which provides a country format. CHUM Limited operates CFST, which offers a sports talk format, CHIQ-FM, featuring an adult contemporary hit radio format, and CFWM-FM which programs adult contemporary music. CKJS Limited operates ethnic station CKJS. Christian Radio Manitoba Ltd. operates CHVN-FM, which broadcasts Christian music.

12.

In addition, the CBC operates four local radio stations; two English-language stations and two French-language stations. CBW offers the CBC's Radio One service, and CBW-FM offers Radio Two. CKSB provides programming from La Première Chaîne, and CKSB-FM broadcasts programming from La Chaîne culturelle.

13.

Winnipeg is also served by five not-for-profit stations. Native Communications Inc. operates Type B Native station CICY-FM. Radio Communautaire du Manitoba inc. operates French-language community station CKXL-FM in St. Boniface. There are also three campus stations in Winnipeg. NIB operates instructional campus station CJAE-FM. The University of Manitoba Students' Union operates community-based campus station CJUM-FM, and The Winnipeg Campus/Community Radio Society Inc. operates community-based campus station CKUW-FM, which is associated with the University of Winnipeg.

Other media

14.

In addition to the radio stations set out above, Winnipeg is currently served by the private television stations CKND-TV, CKY-TV and CHMI-TV which are owned respectively by Global Television Network, CTV Inc. and Craig Broadcast Systems Inc. In addition, in Proposed religious television station for Winnipeg, Decision CRTC 2002-229, 8 August 2002, the Commission licensed Trinity Television Inc. to provide a new private religious television station.

15.

The CBC also operates two Winnipeg television stations, including English-language station CBWT-TV and French-language station CBWFT-TV.

16.

There are two daily newspapers in Winnipeg. The Winnipeg Free Press is owned by a division of FP Canadian Newspapers Limited Partnership, and the Winnipeg Sun is owned by Sun Media Corp.

Economic state of the Winnipeg radio market

17.

In the key areas of growth of advertising revenues and profit before interest and taxes (PBIT), the Winnipeg market has lagged behind the national average. Average radio advertising revenues for Winnipeg radio stations grew by only 4% in 2001, and 2% in 2002. While the PBIT margin for Winnipeg radio has grown consistently since 1996, this has been achieved with low revenue growth and, at 12% in 2001, was below the Canadian average PBIT margin of 16%.

18.

The Conference Board of Canada² is projecting annual Gross Domestic Product (GDP) and retail sales growth of 2.9% and 4.9% respectively over the next five years for Winnipeg. Overall, this is comparable to the GDP and retail sales growth achieved over the previous five years³.

19.

In Fall 2001, the Bureau of Broadcast Measurement (BBM) reported that 93% of radio tuning in the Winnipeg market was to local radio stations.

Applicants' views on the ability of the Winnipeg radio market to sustain additional stations

20.

During the hearing, Rogers, Corus and Global, the three applicants for the 99.1 MHz full power Class C frequency, were asked to assess the Winnipeg radio market, and to indicate whether they considered that the market could sustain more than one new commercial radio station.

21.

Rogers noted that, although market revenues had increased, the increase had not been at the same rate as in other markets. It also predicted that radio revenue would decline for at least a year. Rogers indicated that if a new station other than the one it proposed were introduced, it might have to modify its format if the additional station were competitive with a Rogers station in terms of format or target audience.

22.

Corus expressed the view that the Winnipeg radio market was very strong, indicating that its first quarter sales were up by 20% percent. It further indicated that, since the events of September 11^th, Corus' radio sales had actually increased by 11%. Corus was not concerned about the possibility of licensing more than one station, stating that "radio is such a powerful medium that it can best serve the marketplace when there are more voices."

23.

Global submitted that, for the last four months of 2001, Winnipeg radio advertising revenues increased by 13%. It took the position that the market could support a new station that did not duplicate the format of existing stations and, perhaps, the AM to FM conversion proposed by Rogers. It did not believe that licensing the applicants for lower power stations would have any impact on its business plan.

The Commission's determinations regarding the Winnipeg market's ability to sustain new stations

24.

The Commission considers that the Winnipeg market is capable of sustaining additional radio stations. However, since the growth of advertising revenues and the average per station profitability for Winnipeg stations is lower than the national average, the Commission considers that licenses should be granted to those new stations that are not likely to compete directly with existing commercial stations owned by other licensees. This approach is reflected in the summary of today's decisions listed below.

Summary of the Commission's decisions

25.

After considering the competing applications for new radio stations at the 4 February 2002 Public Hearing, the Commission has rendered decisions which may be summarized as follows:

26.

In Applications for commercial radio stations to serve Winnipeg, Decision CRTC 2002-224, 8 August 2002, the Commission approved the application by Global for a new commercial FM station at 99.1 MHz that will offer a smooth jazz format. It also approved, in part, an application by Rogers to convert its existing AM station CKY to an FM station that will offer a classic rock hits format. Although its application for a new FM station has been approved, Rogers must propose another frequency for the station that is acceptable both to the Commission and to the Department of Industry. The Commission denied the competing application by Corus.

27.

In Application for a Nostalgia station to serve Winnipeg, Decision CRTC 2002-225, 8 August 2002, the Commission has approved the application by Radiolink for a new commercial FM station at 100.7 MHz that will offer a nostalgia format.

28.

In Application for a youth-oriented Christian FM station to serve Winnipeg, Decision CRTC 2002-226, 8 August 2002, the Commission has approved the application by HIS for a new commercial FM station at 107.1 MHz that will broadcast Christian music.

29.

In Application for a new instructional campus station to serve Winnipeg, Decision CRTC 2002-227, 8 August 2002, the Commission has approved the application by Red River for a new not-for-profit instructional campus station at 92.9 MHz.

30.

In Application for a new commercial FM station in Winnipeg, Decision CRTC 2002-228, 8 August 2002, the Commission has denied the application by NIB for a new commercial FM station. It has, however, amended the licence for NIB's existing campus instructional station CJAE-FM by changing the authorized frequency from 92.9 MHz to 107.9 MHz and increasing the authorized effective radiated power from 13 watts to 200 watts.

31.

The Commission notes that two of the three new commercial stations licensed today proposed special interest formats that will not compete directly with the formats now offered by stations currently operating in the market. These formats are the smooth jazz format proposed by Global and the nostalgia format proposed by Radiolink.

32.

While the new FM station proposed by Rogers will program a mainstream format based on classic rock hits, it will replace Rogers' AM station CKY, which programs oldies. CKY will therefore no longer compete for revenues in the market. Further, the format of the new FM station would likely have the greatest impact on Rogers' other FM station CITI-FM, which offers a classic rock format.

33.

HIS proposed a Christian format targeted to young people. Although CHVN-FM already provides Christian music to Winnipeg listeners, the Commission notes that the programming of the station operated by HIS will target an audience that is younger than that of CHVN-FM. The Commission further notes that CHVN-FM submitted a letter expressing full support for the HIS proposal if HIS targeted a younger audience with its programming and the station's effective radiated power did not exceed 1,000 watts. The Commission notes that HIS confirmed that it would offer programming designed for youth, and that the station would operate with an effective radiated power of 920 watts.

34.

The new station licensed to Red River is a not-for-profit instructional campus station that will operate with an effective radiated power of only 201 watts and has projected very low advertising revenues.

35.

While CJAE-FM will operate on a different frequency with an increase in power, it will remain an instructional campus station rather than becoming a commercial station. The Commission considers that the stations that will be licensed as a result of the decisions announced today will add to the diversity of radio voices in Winnipeg. They will also increase competition for listeners and advertisers in the Winnipeg radio market, yet will not, in the Commission's view, have an undue negative impact on the viability of the existing Winnipeg commercial radio stations.

Secretary General

This document is available in alternate format upon request and may also be examined at the following Internet site: http://www.crtc.gc.ca