ARCHIVED - Transcript - Hamilton, Ontario 2001-12-04
This page has been archived on the Web
Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.
Providing Content in Canada's Official Languages
Please note that the Official Languages Act requires that government publications be available in both official languages.
In order to meet some of the requirements under this Act, the Commission's transcripts will therefore be bilingual as to their covers, the listing of CRTC members and staff attending the hearings, and the table of contents.
However, the aforementioned publication is the recorded verbatim transcript and, as such, is transcribed in either of the official languages, depending on the language spoken by the participant at the hearing.
CANADIAN RADIO-TELEVISION AND
CONSEIL DE LA RADIODIFFUSION
ET DES TELECOMMUNICATIONS CANADIENNES
Public Hearing/Audience publique
Call for applications for a broadcasting licence to carry on a television programming undertaking to serve all or any one of Toronto, Hamilton and Kitchener, Ontario/Appel de demandes de licence de radiodiffusion visant l'exploitation d'une entreprise de programmation de télévision pour desservir chacune des villes Toronto, Hamilton et Kitchener (Ontario) ou l'une d'entre elles
HELD AT: TENUE A:
Hamilton Convention Centre Centre de conférence
Hamilton, Ontario Hamilton, Ontario
December 4, 2001 4 décembre 2001
A. Wylie Chairperson/Président
M. Wilson Commissioner/Conseiller
B. Cram Commissioner/Conseiller
J. Pennefather Commissioner/Conseiller
S. Langford Commissioner/Conseiller
_ _ _
D. Rhéaume Legal Counsel/
M. Amodeo Hearing Leader/Chef
P. Cussons Hearing Manager/Gérant
In order to meet the requirements of the Official Languages Act, transcripts of proceedings before the Commission will be bilingual as to their covers, the listing of the CRTC members and staff attending the public hearings, and the Table of Contents.
However, the aforementioned publication is the recorded verbatim transcript and, as such, is taped and transcribed in either of the official languages, depending on the language spoken by the participant at the public hearing.
Afin de rencontrer les exigences de la Loi sur les langues officielles, les procès-verbaux pour le Conseil seront bilingues en ce qui a trait à la page couverture, la liste des membres et du personnel du CRTC participant à l'audience publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu textuel des délibérations et, en tant que tel, est enregistrée et transcrite dans l'une ou l'autre des deux langues officielles, compte tenu de la langue utilisée par le participant à l'audience publique.
Canadian Radio-television and Telecommunications Commission
Conseil de la radiodiffusion et des télécommunications canadiennes
Public Hearing/Audience publique
Index of Proceedings/Index de la séance
Presentation by Alliance Atlantis 939-964
Communications Inc./Présentation par
Alliance Atlantis Communications Inc.
Questions from the Panel/ 965-1291
Questions du Panel
Questions from Mr. Rheaume/ 1292-1333
Questions de M. Rheaume
Presentation by Craig Broadcast Systems Inc./ 1334-1364
Présentation par Craig Broadcast Systems Inc.
Questions from the Panel/ 1365-1746
Questions du Panel
Questions from Mr. Rhéaume/ 1747-1751
Questions de M. Rheaume
Closing remarks by Craig Broadcast Systems Inc./ 1752-1756
Remarques de clôture par Craig Broadcast Systems Inc.
Closing remarks by Ms. A. Wylie/ 1752-1756
Remarques de clôture par Mme A. Wylie
--- Upon commencing at 0900/L'audience débute à 0900
939 THE CHAIRPERSON: Good morning and welcome back. Mr. Secretary, please.
940 MR. CUSSONS: Thank you, Madam Chair. First application today is by Alliance Atlantis Broadcasting Incorporated for a licence to operate in an English language television station in Toronto with rebroadcasting transmitters in Hamilton and London/Kitchener. The new station would operate on channel 52 with an effective radiated power of 414,000 watts. The rebroadcasting transmitters would operate on channel 46 with an effective radiated power of 3400 Watts for Hamilton and on channel 39 with an effective radiated power of 227,000 watts for London/Kitchener. The station would air a minimum of 41 and a half hours of local programming per week; it would establish five news bureau to reflect the communities of greater Toronto area. Mr. MacMillan, welcome.
PRESENTATION BY/PAR MR. MACMILLAN,
ALLIANCE ATLANTIS COMMUNICATIONS INC.:
941 MR. MACMILLAN: Thank you. Good morning, Madam Chair, Commissioners, Mr. Secretary, Commission staff. It's a great pleasure to be here today. We have been looking forward to this for a long time.
942 Before we begin our formal remarks, I would like to introduce the panel who is here today. My name is Mike MacMillan. To my left is ‑‑ to my right is Phyllis Yaffe. As you know, Phyllis is an experienced broadcaster who has launched numerous television channels in the past decade. To my left is Mark Rubinstein, the broadcast president and chief operating officer. Mark joined our company in April of this year. Mark has extensive television experience both in conventional and specialty broadcasting, having been general hanger of CHUM television for many years. Next to my right is Norm Bolen, executive vice‑president of all programming at Alliance Atlantis Broadcasting. Norm has had an distinguished career in journalism and conventional broadcasting. Before joining us to launch History Television, Norm worked at the CBC for 20 years in local and national television news and current affairs programming in Saskatoon, Regina, Montreal and Toronto. And Norm was the turn-around artist sent to reopen the CBC's local Windsor station before becoming head of the CBC network TV current affairs. To complete the front panel, sitting next to Norm is Cindy Witten, broadcast vice‑president in charge of program at History Television. Before joining us in 1998, Cindy worked for 11 years at CBC news and current affairs. On the back panel starting from your right, is Brad Alles, senior vice-president responsible for sales and promotion. Brad heads our sales team at Alliance Atlantis. Next to Brad is Rita Middleton, broadcast senior vice‑president in charge of finance and corporate development. Rita has both specialty and cable experience. Continuing to Rita's right is Rita Cugini, broadcast vice president in charge of business development. before joining Alliance Atlantis, Rita worked at CFMT. Next to Rita is Frank Pulumbarit, broadcast vice-president for interactive programming. Frank joined us from Sony's interactive group. To complete the back panel, there is Harvey Rogers, broadcast senior vice‑president in charge of operations and engineering. Harvey has 31 years experience in conventional and specialty TV operations.
943 On the side panel starting from your right is Doug Barrett, our counsel; David Brethauer, from Insight, our division of The Media Company, who conducted our economic and ad market research. Next is Jane Armstrong of Environics, who conducted our consumer research. Ed Bagdonowicz, of Imagineering, who conducted other technical research. And next, Donna Bevelander broadcast vice-president in charge of all programming operations. Donna has extensive experience in local and national conventional TV, having worked at the CBC for 12 years, most recently as executive director of all regional and network television operations.
944 Finally, I would like to note for the Commission some of the other members of the Alliance Atlantis team here today sitting in the audience: Heather Conway, Doug Davis, Janet Eastwood, David O'Brien, Claude Galipeau, Steve Ward, Doug Smith and Laura Michalchyshyn.
945 Madam Chair, Commissioners, our appearance today is a culmination of a series of strategic decisions taken over the past eight years about the future of our company as a broadcaster. Alliance Atlantis knows television. We know how to create, how to package, how to promote it, how to distribute it. We know TV programming. We run some of the best known specialty channels in Canada. We want to bring the same boldness, creativity and skill to conventional television. Conventional television is not for the faint of heart. It is not for the inexperienced. Only realists need apply. Every penny is earned by gaining the audience share and audience loyalty. You earn it through great content and we know content. Our whole company is focused on providing viewers programming that is second to none. We're confident that our application is realistic, it's credible. We are here to build one for the ages. We are confident of our drive, our energy, our vitality and our ability to make GTTV the freshest voice to appear in the Toronto media marketplace in decades.
946 This licence is a natural evolution for us as a broadcaster. For the past eight years, we have successfully pursued a steady and measured growth strategy in the broadcast sector. Let me recap some of our key moves in this regard. We went public in 1993 particularly to assure that we had the long-term financial strength to make a success of Life Network and every other broadcast initiative that would follow. We merged Alliance and Atlantis in 1998, primarily to combine our specialty broadcast channels together, in order to gain enough scale and infrastructure to compete effectively as a broadcaster. We have launched English and French, analog and digital specialty channels and now have interests in 17 channels. We have grown our broadcast team, recruiting hundreds of talented employees. This Toronto-based broadcast team is now the largest employee group in our company.
947 Succeeding in conventional broadcasting, in conventional television, is part of our own bigger picture. We're ready for it, and so is the GTA. Phyllis?
948 MS. YAFFE: Thank you, Michael. Commissioners, the GTA is one of the most diverse communities on the planet, and yet it hasn't had a new television editorial choice in almost 30 years. We're here because we want to change that. And research shows audiences want a change, too. According to our survey, three in four GTA residents believe they would benefit from a station that better reflects the cultural diversity of the GTA. And this support rises to almost nine in 10 when they hear about GTTV's "bigger picture" approach. While the last three decades in the GTA have seen a massive influx of new and diverse inhabitants, consolidation in the industry has ironically resulted in fewer editorial choices. Furthermore, the greatest growth in the entire GTA has been taking place outside of what has traditionally been considered the city's core. In fact, 90 percent of the population growth in the GTA in the last 30 years has been outside the former City of Toronto. Our application is designed to give this huge group of people in our community a voice. We're calling this in voice greater Toronto television, "GTTV: the Bigger Picture". And I want to focus a bit on that bigger picture because it is one of the keys to our programming philosophy.
949 The philosophy is built on five ways of bringing viewers the bigger picture. Canadian dramas and documentaries in the peak of prime time at least five nights a week, backed up by the financial commitment to make them succeed. Local reflection in all day parts. News‑gathering bureaus located in the communities we serve; an eclectic mix of programming from around the world, and showcasing diversity throughout the schedule in every genre.
950 Highway 401 used to be the northern boundary of the area. Now it is Lake Simcoe, and beyond. People who work in the GTA commute to their jobs from all over southwestern Ontario. Local governments have amalgamated. The population cares deeply about what happens in downtown Toronto, but they care just as deeply about the bigger picture, what happens in their own downtowns, in Richmond Hill, Markham, Brampton, Milton and more, and the population is not being fully served. We aim to change that.
951 Let me give more detail in just one element of our programming philosophy. In addition to our headquarters in mid-town Toronto on Bloor Street, we plan to open five neighbourhood bureaus, one in each of Halton, Peel and Durham, and two in York. We will bring the time-honoured technique of international news-gathering to the local level. Our approach will be both high tech and high touch. The technology in these bureaus will allow us to gather and disseminate news across the whole of the GTA quickly and efficiently. We will use this technology to capture, edit, disseminate, invite comment and discussion on news and current events and issues simultaneously all over the GTA. We will find and invite diverse opinion and community leaders to participate. In the bigger picture, you will see faces who have rarely, if ever, been seen on TV.
952 Our programmers examine use news and current affairs programming on television available in the GTA, and found that Toronto stories were featured almost three times more often than stories from the rest of the GTA, yet Toronto's population is now smaller than the rest of the GTA. The bureaus will give us high touch in the community. We know people feel more comfortable in engaging with people who understand their neighbourhood. Just as effective politicians maintain active constituency offices right in their ridings, we want viewers to see and feel that we are part of their community and we want them to talk to us on their own turf. "High tech", "high touch": each strengthens the other, and brings the bigger picture to life. We know the audience wants to see the bigger picture and we know the market can sustain it. Mark?
953 MR. RUBINSTEIN: Thank you, Phyllis. Commissioners, we understand well the important economic questions that we must address as part of our GTTV application. And there is one overriding theme at the core of these issues, and that is can the Toronto television marketplace sustain the licensing of our proposed television service without undue negative impact on existing broadcasters? Our application answers this question with a resounding yes.
954 We know the following to be true: First, there is strong advertiser demand by both local and national advertisers for the kind of local station proposed by Alliance Atlantis, with particular focus on reaching GTA viewers. Second, there is abundant opportunity in the Toronto television mark to bring local advertisers back to conventional television, a medium that today is either unaffordable or unavailable to many advertisers. Third, licensing GTTV will repatriate to the Toronto market a portion of tuning and advertising revenues now generated by Buffalo-based border stations. Indeed, it's the void in affordable television advertising inventory that has allowed U.S. border stations to find a lucrative revenue opportunity here. Fourth, we have a demonstrated track record in attracting new advertisers to the medium of television, an art that we are convinced can be applied to GTTV. This not only benefits GTTV, but will inject new life into the category of conventional television. Fifth, the operational synergies that we bring to GTTV enable our station to put forward a sound and realistic business model.
955 These synergies ensure that maximum benefits flow to the Canadian broadcasting system, namely more dollars spent on programming and less on bricks and mortar. We have carefully analyzed the Toronto advertising market. Total advertising revenues for Toronto/Hamilton is the largest in Canada, almost 500 million dollars. To put this in context, this is greater than total advertising revenues generated by the entire Canadian specialty TV universe in the year 2000.
956 The Toronto/Hamilton market has experienced healthy growth. Key economic indicators for the GTA augur well for this region's ongoing financial vitality. Toronto is projected to maintain strong population growth, high labour force participation rates, strong per capita income levels and massive retail sales levels, in the short, the medium, and the long term. Our business plan assumed conservative estimates of projected future growth in Toronto conventional television advertising. This ensures that GTTV can sustain the natural economic cycle of the TV business, indeed of any business, and not be dependent upon unrealistic or greater than average growth in any particular year.
957 This hearing is taking place against the backdrop of tremendous consolidation in the Canadian media sector. Looking at the landscape today, we see English language conventional television reduced in Toronto to three Toronto-based broadcast groups. The strong, well diversified solidly financed operations. These various conglomerates have various combinations of companies and FM and AM radio station chains, specialty and conventional television services, local and national newspapers as well as Internet services. Each of these conventional broadcast groups are sufficiently well diversified, and thus the licensing of GTTV would not cause undue financial impact to these large media companies. Increasing the diversity of competitors for advertising revenues will stimulate the market place. By licensing GTTV to Alliance Atlantis, the Commission would be unleashing all of our company's energy, creativity and television expertise to the benefit of the market. Advertisers wanted diversity in the market and so do viewers. We know this is true because we succeeded in specialty broadcasting by bringing it to them. Licensing GTTV will result in enormous benefits to both viewers and advertisers and will significantly increase the diversity of media voices in the GTA. Phyllis?
958 MS. YAFFE: Thank you, Mark. Encouraging new voices is a fundamental tenet of the Broadcasting Act. With our bigger picture philosophy we bring a new voice to the table. In television, knowing the right balance of programming is a critical success factor. To be profitable, to gain and hold audiences requires skilled and experienced programmers. Our schedule is realistic and rooted in television experience. We promise eight hours of priority programming in peak prime time per week. We know audiences are drawn to innovative dramas, entertainment magazines and documentaries. We know we can deliver these programs in prime time with prime time audience levels. We will schedule at least one hour of Canada dramas or documentaries in the peak of prime time at least five nights a week. To do so, we will work with independent producers. We plan to leverage the relationships we have built over the years in commissioning work for our channels with at least 75 percent of priority programming as measured by both dollars and hours to come from independent producers. Creating a successful brand by building a prime time audience is why we plan to spend 25.4 million dollars on priority programming over the first licence term. And we are promising to spend at least 42 percent of the previous year's regulated revenues on Canadian programming expenditures starting in year two, ensuring that Canadian content is well funded throughout the broadcast day.
959 Alliance Atlantis has a major entertainment presence in the region. GTTV will help us better cross promote local talent in the arts and entertainment scene and we will do that on our show, "GTA Scene". But the programming picture is bigger than that, it's national and it's international. We are uniquely placed to program a station for Toronto's diverse tastes. We are one of the foremost buyers and programmers of non-U.S. foreign content in the broadcasting system. Canadian viewers have international taste and we know this from our programming experience. And now for a brief glimpse of GTTV.
Video presentation/Présentation video
960 MR. MACMILLAN: Commissioners, we believe audiences and advertisers are demanding a new service for the GTA and the facts support that belief. We believe we can deliver what audiences and advertisers want, because on every important measure our track record proves it. In the past, Alliance Atlantis has made promises that have raised the bar over historic expectations and we have delivered on all those promises.
961 To conclude, we deliver great content. We deliver a professional team, with deep and broad conventional television experience. We deliver a fresh unique philosophy. We deliver a new editorial choice. We seek the opportunity to again deliver on the promise, to become part of the bigger picture of conventional television.
962 This ends the formal part of our presentation we welcome your questions.
963 THE CHAIRPERSON: Thank you, Mr. MacMillan. Commissioner Langford?
964 MR. LANGFORD: Good morning and welcome to Reach for the Top. Perhaps we should start with a few short snappers just to get you used to it. I thought that our chair was too easy on yesterday's group warming them with
conditions of licence, so I thought I would jump right into them.
QUESTIONS FROM THE PANEL/Questions du Panel:
965 You have made some commitments with regard to closed captioning. Are you willing to accept those commitments as a condition of licence?
966 MS. YAFFE: Yes, we are.
967 MR. LANGFORD: Good. It's easy. You have made some commitments with regard to visually impaired - enhancement? What's it called? DV -- I never remember.
968 MS. YAFFE: Descriptive video.
969 MR. LANGFORD: There are too many acronyms in this business. Are you willing to make those commitments as conditions of licence?
970 MS. YAFFE: Yes, we are.
971 MR. LANGFORD: That's two down. The lawyers are smiling. You know you're in trouble. Let's talk about the bigger picture. And I think where I want to start is with your product. Because it seems to me that we could talk all day about whether Toronto is big enough, vibrant enough for another television station. But it seems really that perhaps what the real question is, do they want your product? Because they may be the most vibrant and fast growing economy on earth, but if you are selling broccoli flavoured ice-cream, I don't think they're going to buy.
972 So your product, as I understand it, and let me see if I've got this right, is distinguished from other conventional television -- conventional television is there -- mostly by your local news bureaus, your local news concept, and then different sort of prime time programming, distinguished by a little bit less U.S. probably, different form foreign, coming from Australia, as you said, and England and different places.
973 And then I guess what distinguishes you then is the commitment to eight hours of priority programming which in strict theory, because you are not a large broadcaster, you don't have to do, but in a sense that doesn't distinguish you really; it puts you in with the others so we will get to had a in a moment. So what I want to know is why you fastened on this when, as I read your own study on viewer demands, though everyone is interested in a little local news it doesn't jump out at me -- and I am not a statistician so I am sure you have people here that can take me through it -- but that doesn't jump out at me as the most popular type of programming you could offer, the safest bet. So why did you fasten on that as sort of the cornerstone?
974 MS. YAFFE: You are right in describing the services having a different point of view in terms of its programming philosophy. Our first concern was certainly to look at the market, make sure we were filling a need because as you know, this is a business, as Michael said, not for the faint of heart. Audience is what it's about so we certainly didn't naively or cavalierly decide on the programming philosophy; we spent a lot of time thinking about that.
975 The bureaus and the local content are a fundamental, we think, of a conventional station, that will create a place for itself in the marketplace. There has not been a new conventional station in our marketplace for 30 years, so to compete with very well-entrenched, very well-established broadcasters in that part of the schedule, one really has to come up with something different that will draw them away from broadcasting they have become used to and give them a chance to see something different. So we clearly had to decide we had something different to offer. I am going ask Jane Armstrong to talk a little bit about how our research led us there.
976 But I think other thing we want to say about it is we really asked ourselves if, to focus today to give you a sense of what we thought our responsibilities as a conventional broadcaster would be, is to serve that local content issue, that local content concern differently, with something new and vibrant, that would change the dynamics of conventional television in Toronto. And we did actually find that it was an appealing element when we did our research. Our general research led us to believe there was interest in a new station, but when we did get into the details of the bureaus of the regional GTA approach, we actually increased people's interest in watching the station substantially. Let me just ask Jane to just tell you that little bit of facts that tells you how we grew acceptance of the idea by describing it. Jane?
977 MS. ARMSTRONG: Good morning, Madam Chair. We did some research in July among the 1,001 residents in the GTA and about half of the sample were from the 416 region, and the other half were from the 905 region. Right at the beginning of our survey, we asked people whether they liked the idea of a new local station and we told them at that point that the local station would cover things that were of interest to people in both the 416 and the 905 region. And right off the top we found that 76 percent said they would likely watch such a show. From my point of view that's a pretty good number.
978 But then as we carried on the survey, we talked about the issues that were important and we asked them whether they thought it was important to have a physical presence in their neighbourhood; whether there should be more attention paid to the issues that were relevant to their neighbourhood; whether they thought the cultural diversity of the whole GTA should be reflected more so than it is now. And at the end of the survey when we asked the same demand question that we asked at the beginning, we then found that interest in watching the station rose a full 10 percent: 86 percent then told us they would likely watch such a station.
979 MR. LANGFORD: And yet to use your own survey, I am looking at the copy I was provided and I am looking at page 8 -- I assume those are your page numbers; I am not quite sure. I see that if I am reading this correctly, 84 percent of the people questioned say they are very or somewhat satisfied with their local television, that's currently available. So that seems to me to be a pretty happy gang. And I am not quite sure why then you would focus on -- nothing against local news, by the way I am simply trying to understand the focus of this programming -- why you would focus so heavily on local news and local reflection when I look at your second question, satisfaction with local news and current affairs programming there is a 75 percent very or somewhat satisfied level but an overall 75 happy level. It doesn't strike me as the natural place to go searching for a market niche. But probably you can explain why you -- why you went down that road.
980 MS. ARMSTRONG: You are right that when we asked people whether they were steady with the current offerings we did get a majority saying they were satisfied. The thing that I would point out though is that in terms of both satisfaction with local television in general and satisfaction with news and current affairs programming, the satisfaction is what I would call lukewarm rather than enthusiastic because the bulk of the responses are in that somewhat satisfied category. You know we are all Canadians and we all like to be nice and friendly, and we might overstate our satisfaction somewhat. So my interpretation of this is that there is room for a new offering based on the somewhat lukewarm satisfaction levels.
981 MR. LANGFORD: When you do these surveys, do you -- do you come up with a program -- format an idea, do you do some focus groups and come up with something like you have come up here and then survey people as to how they like it or do you survey people and find out what they want, and design a program for them?
982 MS. YAFFE: It's actually a combination of both. Of course we have a view of what we think we could bring to the system that would be different, and we find that sort of a fundamental in entering the conventional broadcasting system. If we felt we couldn't add diversity of voice or a different programming philosophy we would really have to ask ourselves why. You know. Clearly you need to be able to say to yourself and to the -- to the people who will write the cheque for this business that we think because we're going to bring a different kind of programming we will gain an audience. So that's part of how you begin the process, part of how we always begin this process. But it also has to come back from the audience itself. If we had tested idea of local bureaus, local content if we had asked people outside of downtown Toronto felt well represented on television and found that there was an overwhelming and not changing view, if we described our programming philosophy, I think we would have been daunted by that information. So I think it's a combination of both. I think we really believe that local, of course, is one of the underpinnings of the conventional broadcast system, but also that the kind of local programming we're suggesting is just not available on television.
983 We mentioned that we looked at the programming that's there right now. We just you know, watched lots and lots of local television in Toronto for a while and found that you really didn't see that broad range of stories from outside of downtown Toronto, probably three to one of the stories actually came from the centre of the city. Clearly, you know, the seat of government is there, and business is there in many ways, but that doesn't reflect the reality of the GTA anymore. Many big, large firms are here in Brampton or Hamilton or wherever. We obviously know about Nortel, we know about lots of other major corporations that stretch throughout the GTA and their stories have to be told with, I guess one of the ways you could tell one of those stories is, how does it impact the community they are in? So we think there are really good reasons for focusing on a bigger picture - not, I should point out, not to the detriment of the Toronto stories because clearly they are important to any coverage of Toronto and its environs. But as a balance adding something new to the system we think this is really a missing element.
984 MR. LANGFORD: Well, I hope you're right. It seems to me that news is where news happens and you may be out in Halton waiting for it while it's happening in downtown Toronto, but that's an obstacle you will have to deal with if you are successful here. And we will talk about news more, I promise.
985 but getting back to the survey, and I am looking for ways to understand this. of course when I get the survey it's done, so I approach it in a different way. I don't have a product in mind; I pick up the survey and I look at it. Here is what I see, Ms. Armstrong, if I can give you a real layman's approach. I look at a survey, I look at page 8 where it really seems to be begin it, if I am correct. And it says that 84 percent again are satisfied and 75 percent are satisfied with their news and their current affairs. And then when I go to page 9, you ask people what their preferences are in programming, what type of programs do you like to watch. Is that a fair assessment? And then they say movies, sports, education/information, documentaries, comedy and news. Finally we get to news. That's not that far down, but it's still down there. So I guess why wouldn't you be tempted to do movies and sports, just taking it from someone who picks this up cold when he reads it, why would you -- it seems to me you don't do sports, and I assume you do some movies.
986 MS. YAFFE: I will just jump in and talk about our programming, and Jane can reflect on the comments of the survey. Of course we do have movies in the schedule, and we do know that movies are a major part of television viewing and we're obviously in the movie business we know it very well and we do realize it's an important function, or could be an important audience gatherer in our schedule and we have put movies into the schedule.
987 On the sports side, I think there is a large number of places for people all across Canada to watch sports. there are very few local or even local or even -- or certainly regional or national sporting events that aren't already on television, some would say too much. But there are lots and lots of places to watch sports, and it didn't seem to us to be an effective use of our resources. That was from the programming side, but -- and when you go through that list of priorities, I think it's the only one we didn't put into the schedule, the others are all quite -- obviously in the schedule. But Jane, did you want to add to that?
988 MS. ARMSTRONG: Sure. When we asked the question right at the beginning of the survey, what kind of -- what if anything would you like to see on this new station what is we call top of mind kind of question we asked people what just blurt out what they thought they would like to see, the so we get a top of mind response the first thing that comes into their mind and we collect that and then record it so the first thing that people blurted out were movies and then sports and so on. The thing though that I would like to point out is that after that when we go on and ask some more questions, questions like do you agree or disagree that there is not enough attention paid to current affairs and local news programming in your area, well, then we get very solid numbers saying that they -- they agree that not enough attention it paid and in fact in [Outerville], we get about 73 percent saying they don't think enough local news is -- is happening in their area. So we have other indications in the research that point to people's appetite for news and current affairs programming.
989 MR. LANGFORD: And yet if I go to page 12 -- and I am not in any way again I repeat this for the last time I think I will say -- but I am not in any way trying to lure you into the sports business here, but I am trying to understand why you lured yourself into the direction you lured, you went. If you look on page 12, you ask people would they watch local television stations more often if interesting programs were available. And 88 percent say they would. And -- but if we come back to what they think is interesting, I guess, or am I making the wrong connection, it's movies, sports, education/information again. So the question I am asking you is do you have any right to -- you know, you can show all dogs and cats all the time, I suppose. You have any right to do what you want. But why, if you know that 88 percent, which seems a very strong response, would watch more television, more of your television if it were the type of programming they want, isn't it high risk to move down? Wouldn't a safer plan be to do what's called -- shall I call conventional conventional, but just do it better?
990 MS. YAFFE: I guess we think this is a better approach, we really do believe -- when you said documentaries and information, I think that information can easily be about your local area or nationally or internationally. We certainly don't you know, I think we think it's a strength of the application and of our programming philosophy that we have been able to -- to -- we -- reveal an area where people do feel there is a of lack of content on television. But we don't -- we have come before you with a plan that we think really does talk about conventional television, the strength of conventional television. We certainly believe there is room for lots of drama, lots of come did I, lots of entertainment programming. We very much know the audience wants to be entertained. That's what we try to do all the time in television in every way. I think we found a balance.
991 Just to say one other thing about local, for us local is not just news. Obviously we talked about 18 hours a week of non-news local programming. Again, that's the kind of programming that lets you understand your neighbourhood; lets you understand the city you live in or the area you live in, reflects more of the diversity of the GTA and can be and has been incredibly entertaining. For us for instance we think that a -- an element that is missing in Toronto television just generally is somebody somewhere just taking a good look at and laughing at Toronto. We're very smug, we're very world class, we're very sure of ourselves. And yet This Hour Has 22 Minutes has made us all laugh about Canadian politicians endlessly and our political structure and the country we live in and a lot about Toronto. We find in that show the most successful is that stuff that really resonates with people which is the local, about our politicians, you know, the last person in the news who is -- who has been incredibly funny and we think that satirical approach to just local contest is missing on television. I think that could be enormously entertaining and combine that reflection of where we live with a different style that really does entertain the audience. We certainly don't intend to not entertain them.
992 MR. LANGFORD: Let's look at some of those shows. The schedule that I have that you have provided is -- does cover all the hours but it's not terribly informative. You have the GTA morning news and I understand what that is at least somewhat from reading the thing, and we will come back to it but then we use such all-embracing terms as, from 9:00 to 9:30, "Canadian acquired" and 9:30 to 10:00, "Canadian-acquired" and most of the afternoon "Canadian acquired," can you give us a little more idea of what type of shows "Canadian acquired" would be?
993 MS. YAFFE: I am going pass that over to Norm Bolen, who is the senior vice-president of programming for Alliance Atlantis Broadcasting.
994 MR. BOLEN: We would be looking at a range of programming. For instance you would have fitness programming which is very successful in the morning and people want to do yoga or fitness, things like that. There are various kinds of programs that you could bring in. Basically programs, practical programs that people use and acquire -- there is a vast library of those kinds of programs available. Everything from a cooking show to a lifestyle magazine to fitness as I mentioned. Those kinds of programs. And if possible as well to be successful in drama on occasion in daytime and drama either from Canadian sources, foreign sources, including non-U.S. sources.
995 MR. LANGFORD: Okay. So I don't mean to sound flippant but we're going get fit from 9:00 to 9:30 and then we're going to lifestyle: we are going to decorate our houses or we're going to garden perhaps from 9:30 to 10:00. And then we're going cook up a lovely dinner from 10:00 to 11:00. Then we're going to have a bunch of news from the neighbourhoods, and we will get to that as I said. Then we go to American acquired in the afternoon. So would that be soap operas?
996 MR. BOLEN: There would be some soap opera in there, yes, and there could be other kinds of lifestyle programming; could be talk shows.
997 MR. LANGFORD: American talk shows -- in these two American sections?
998 MR. BOLEN: Yes.
999 MS. YAFFE: But just to sort of go back to that schedule, just so we can focus a little bit on the GTA calling show, which is if you have on your schedule between 11:00 and 12:00, that's a significant and new show that we think will really give people a chance to talk to each other. I guess the balance that is important is we need to remember that daytime television is lightly watched. It's watched by people general by doing other things. It's a combination of information and entertainment programming throughout conventional television generally. And it really does attract -- and there are children at home, it's a mixed combination of audiences. One keeps the tone light and informative and entertaining and I think that's what that programming mix would usually do.
1000 MR. LANGFORD: Okay. So we might have some children's shows in the afternoon as well, or --?
1001 MS. YAFFE: We might choose to add some children's shows. They are had a not specifically in the schedule, but we might.
1002 MR. LANGFORD: It's just that I am trying to get -- you know the words "Canadian-acquired" are comforting from a patriotic point of view, but in the sense of understanding precisely what one is going to see, they're not very clear. I appreciate you can't have a -- all your programs purchased in anticipation of getting a licence. When you say "Canadian-acquired," do we -- are you speaking about shows that would be acquired particularly for GT, will they be exclusive to GT, or might they be shows that could be seen in other places as well?
1003 MS. YAFFE: Acquired I guess just generally means we would have not commissioned and they would not be original to the -- to this service, they would have, could have been seen other places. I think we would try to keep as much of it exclusive as we possibly can. Again to go back to that notion that this is a business where drawing an audience every minute counts. So we certainly believe that the more programming we can have that's exclusive to the service, the more effective we will be at that. It -- it would really be a combination of acquiring programs that have been on both conventional and specialty television throughout the country.
1004 MR. LANGFORD: When you talk as you did in your opening presentation and in your application and your supplementary briefs, you that talk about making program or having programming, having made original programming, where would that come in on this schedule?
1005 MS. YAFFE: --
1006 MR. LANGFORD: Other than the news which is clear on the schedule where that is, but under the headings of "Canadian-acquired" where might we find the type of programming that you are going to purchase the original programming?
1007 MS. YAFFE: Well, original programming would be commissioned for the -- for both in the priority programming categories which you would see in the heart of prime time as well as throughout the schedule. So I will just ask Norm to tell you a few of the examples programming we would commission for the station.
1008 MR. BOLEN: Well, we are showing our daily entertainment magazine, GTA scene, which is a priority local program, which is every evening at 7:00 o'clock, including weekends. That's original programming. And it's commissioned by -- commissioned from an independent production house. As well, we are doing a -- we have committed to do 26 hours of original documentary programming. That programming would be commissioned from independent producers and those would be documentaries that would, to some extent, when appropriate reflect the reality of the GTA whether it be history or other types of documentaries.
1009 We would also do drama. We have committed to 26 episodes of original drama in our schedule, Canadian.
1010 MR. LANGFORD: I assume that the drama -- I shouldn't assume anything. When would the drama play? What time of day do you anticipate putting these 26 original episodes?
1011 MR. BOLEN: That shows right now Wednesday night at 8:30, I believe. Or it could be Thursday at 8:30. It's a question of scheduling. Or 9:30, sorry.
1012 MS. YAFFE: But that Canadian drama I guess, we really -- we think it would be a signature show for the station so we would certainly put it in the heart of prime time. It would -- it is of course a priority program, drama is, but in this case we would be commissioning an original drama for service with a fairly limited territory, a stand-alone station in this area, but we believe that there are ways. And we have got great experience in our broadcast group of coming up with innovative different approaches to producing drama that allow you to commission original drama for this kind of station. That's a very unusual thing to do, but it's a very -- we think good programming choice both for the audience and also for of course the producers because it -- it allows us to enter that world of drama which has always been elusive in Canadian broadcasting: how to do Canadian drama that competes in the marketplace and I think we have found interesting different ways to do that.
1013 MR. LANGFORD: And that would be separate from the eight hours of priority programming?
1014 MS. YAFFE: No, that drama is one element of our priority programming.
1015 MR. LANGFORD: Could you give me some idea of what the budget would be for that type of 26-episode programming?
1016 MR. BOLEN: You're probably looking at a budget of around -- we're not talking about high end, big budget drama so you're looking at roughly three million dollars would be the -- three to three and a half million dollars for the total series. And we have been doing drama, Canadian drama for those kinds of budgets.
1017 MR. LANGFORD: Okay. You only commit to it, and we are grateful for all commitments so I don't want to sound like I am being a greedy boots here. But your commitment is for year one. What sort of plans do you anticipate after that?
1018 MS. YAFFE: I guess what we committed to is we hope to commission it in year one and try as best we could to have it on the air as soon as possible, but it would be a permanent fixture in the programming schedule and we're happy to commit to that level of drama for the entire -- original drama, commissioned for the station -- for the entire term of the licence, each year.
1019 MR. LANGFORD: Make a note of that, counsel. So you would agree to that has a condition of licence.
1020 MS. YAFFE: Yes, yes.
1021 MR. LANGFORD: Thank you. I wasn't even going to ask. No, I was. That would be produced independently or in-house?
1022 MS. YAFFE: No, I think this would be produced independently. Our commitment and when we're speaking of commitment on the priority programming of course as you mentioned we did go to the eight hours of priority programming which typically wouldn't apply to our service, but we believe is a commitment we can live up to and we think will work with our viewers and we also have committed that 75 percent of all the priority programming would be produced by independent producers.
1023 MR. LANGFORD: I wanted to digress down that path for a minute. It made me wonder -- I know there is this 75 percent magic formula, but it isn't set absolutely in statutory stone or anything like that. Your strength is the production of programming. Why wouldn't you lean on that strength a little more, why wouldn't you bring more in-house and be sure? It's such a huge investment?
1024 MS. YAFFE: Well, I think what we looked at was particularly in the -- in the renewal of the licences of CTV and CanWest that that was a condition that the Commission felt comfortable with just in -- because of the integration of broadcaster/producers, which of course all three of us are. And we felt it gave some assurance both to the production community and the Commission that this is a service that we believe can and should support the independent production sector.
1025 But I do think you have a very good point. One of our very strong strengths we bring to this application or any application is the track record of Alliance Atlantis as Canada's successful, very successful production company. And clearly we think we will use those skills in production. We have not committed all of our programming to independent producers but we felt it was the assurance that gave the balance in the system that we think is appropriate. But by no means do we want to suggest that our talent as content providers would be ignored in the servicing, it really is one of the unique things that we can bring to this process.
1026 MR. LANGFORD: Since this is one your kick at the cat, are you -- are you prepared to commit to that as a condition of licence or, because you are such a successful production house, would you prefer to have that kind of flexibility, to fall back on your own strength?
1027 MS. YAFFE: I think we feel comfortable making that commitment. I think we feel that we can work with the independent sector. I think we do that in our broadcasting enterprises right now and we have found tremendous talent out there. I think it's important to know that of course Alliance Atlantis is proud of its track record but if CFTPA were here would remind you that there are 350 or so producers out there all capable of producing quality programming, we are one of those, but we are not the only one. I, we feel quite comfortable with that commitment.
1028 MR. LANGFORD: Thank you very much. Nice to see people are still in touch with their roots I suppose.
1029 MS. YAFFE: That's right.
MR. LANGFORD: And remember what it was like. I was hoping other people would make such commitments.
1030 Let's move on then to a little more of your programming commitments, again, trying to get a sense of the -- of the product that you are seeking a licence for that you think that will appeal to the people that Ms. Armstrong has so carefully studied for you.
1031 You use the word "original" in some places. I am just looking here through some of the notes on the application. And you don't use it in others. And I am just a little confused in my own mind as to what you think of original. I am flipping around here trying to find my reference to it. Maybe we can do it even without me finding it, but if memory serves me right, you would have eight hours of priority programming but the word original isn't used there.
1032 MS. YAFFE: No.
1033 MR. LANGFORD: But it is used in your 26-hour commitment and it is used in your 41 and a half-hour commitment for local. I am not trying to be picky but I just wondered if there is something I should know about the fact that it's not there in the eight-hour priority. Does that -- something to this -- an aspect to this characteristic I am not aware of?
1034 MS. YAFFE: No, I think we -- we do have a -- you know, a plan for how to get to those eight hours, we certainly -- of course conventional television one of the rules of thumb is one tends to repeat programming at least once a season, so there is often 26 episodes repeated twice will give you the 52-week run. When we looked at the simple math, because that's all I'm capable of, we got to eight hours of 52 weeks will give you 416 hours of priority programming. And we have in our plan budgeted and are happy to, if necessary, commit to, but you know, our plan suggests that 176 of those 416 hours of priority programming would be original: that is, commissioned for the service, never seen on television before. And that would then encompass all of the priority programming categories.
1035 MR. LANGFORD: So the word original is not supposed to be there.
1036 MS. YAFFE: Not in the overriding eight-hour commitment. But as a subset we do have a -- we have estimated and we feel comfortable with about half of it being original production.
1037 MR. LANGFORD: But you do use the word original if my memory is correct in the 41 and a half hours of local programming?
1038 MS. YAFFE: Yes, absolutely.
1039 MR. LANGFORD: Okay. But if I go to the schedule and it may be my confusion if it is I apologize in advance. But I see that some of the programs, of the local programs, and we can move to those if you like, but are repeated. So how does that work?
1040 MS. YAFFE: Right. And Norm pointed that out to me; you are correct. I guess what I mean in that case is sort of a subset of that -- all of our local programming would not be acquired from other places. It may repeat in the schedule but it is all originally commissioned for the service and it would, including some repeats, get us to 41 and a half hours a week.
1041 MR. LANGFORD: So just I am sure, the 41 and a half hours include -- how do I phrase this, if there weren't repeats, would it be 41 and a half hours?
1042 MS. YAFFE: No, but it would be slightly less.
1043 MR. BOLEN: It would be five hours less.
1044 MR. LANGFORD: Five hours less. Okay, thank you.
1045 So let's look then at some of the -- of local programming and the local news. How did you come to this notion of the five local bureaus for news? Where did that come from?
1046 MS. YAFFE: Well, I guess when we asked ourselves how we answer that had question of local reflection best, and really who we reflect the whole community on the station, we realized that we were talking about a population that is double the population of the Maritime provinces and the same as all of the prairie provinces combined. And we asked ourselves, how would one really reflect all of that with a central bureau? Trucks going out to cover stories locked in traffic gridlock across the GTA. And we thought that applying that successful and well-received approach that international newsgathering uses of having bureaus across the GTA physically would allow us to do a better job of covering that whole large area but also large population.
1047 And Norm has reminded us that on television we started to see pictures from China when the CBC opened a bureau in China. And if you are in a region you tend to have more chance of covering the stories with your bureaus. But the bureaus perform many functions, not just a newsgathering function. However we thought it would give us that opportunity to be there and cover those stories.
1048 MR. LANGFORD: Let's deal with the news and get to the other functions I will call them secondary. The problem I would think about having a bureau in China is even when there wasn't news it would be costing you so much the temptation to create a little overwhelming. And I wonder if you wouldn't fall into a similar trap with this type of situation which you know, intuitively seems wonderful, because you're reaching out to people and you are there in their neighbourhoods as your video aptly demonstrated. But if there is nothing happening in Halton today and nothing tomorrow, and you are paying them to sit around and play Parcheesi or whatever reporters play when they're not covering the news, might you be tempted to tell them to go out and find something quick like because even though there may be you know, mass chaos in centretown, you need something from your Halton bureau? And how are you going deal with that?
1049 MS. YAFFE: I am going to ask Norm to answer that, but rest assured we have no intention of creating the news but reporting it. But as well as we will get to, I am sure, we do see those people performing more than a single function. Norm?
1050 MR. BOLEN: Just to give you a quick example from my many years as an assignment editor, it was my job every day to come up with all those stories and there are hard news things that just happen that you go and chase. We know about those kinds of things.
1051 There are a lot of stories that are different. For instance let me give you an example. The booming economy in the car industry right now in southern Ontario because of low interest rates. You have a choice when you -- that's a story you definitely wanted to cover. You have a choice you can go to a downtown car dealership and focus in on people downtown or you can out in Ajax where I happen to be from, and looking for a car right now, deal with the issue there, talk to the people there. It's a question of emphasis. It's a question of where you go to get the stories that are common to the whole GTA, whether it's downtown or outside.
1052 MR. LANGFORD: I've got a low mileage 1988 Volkswagen Fox I can give you a heck of a deal on, so we should talk after this. So let's just look at the function of these, because I gather they are going to be multi-function, these people out in the bureaus, as all of them will. Sometimes I guess they will be doing -- I don't want to put words in your mouth, but sometimes they'll be producing softer stories, the -- sort of the wither-the-car market for perhaps your morning show where you've got more time, but inevitably you're going to have to put together the GTA news at noon and the GTA news at 6:30 and the GTA news at 11:00, and news is news. And if there is a mass murder in the middle of Toronto, heaven forbid, it's certainly got to run somewhere above the price of cars in Markham. How will you break that down? Will you simply in the end be forced to just do the news or will you try in some way to section your news shows up so that we always get a little bit even if it's way down below the fold from these different bureaus?
1053 MR. BOLEN: Well, as Phyllis has said before, we don't intend to ignore news that happens in the City of Toronto, and certainly we would do that. But I think it's really a matters of emphasis, you know, do you go out and look at news -- let's look at this other question, what are your sources of news? There is a lot of news I think that goes uncovered, it doesn't -- the stories aren't done. And by having a presence in those other parts of the city or GTA, we are likely to come up with a lot more stories that just go undone right now.
1054 MS. YAFFE: Just to add to that, our view of course is that there would be head line news, you know, that begins the news each -- at each step down the day or throughout the day and you know, we don't want to suggest that we would ignore breaking news stories to the benefit of you know, people outside doing different things in different parts of city.
1055 I think we are just really are talking about the fact that with the change in the size, the complexity of the city, the different kinds of stories that do happen there, we tend now to be honest to hear about crime in outlying reaches of GTA but we don't hear any other stories. It's very rare that you cover businesses that are doing well or badly or interest -- or events that are a fundamental interest, just on the political level outside of the GTA, and you know, other kinds of stories. So if that is not being covered I think we have the opportunity to tell a slightly different stories not to the detriment obviously of major stories that are both you know, regional and provincial, I guess.
1056 MR. LANGFORD: What will these bureaus look like? You speak of a store front but what will be inside of them, how will they be equipped? What kind of personnel will be there?
1057 MS. YAFFE: I'm going to ask Donna Bevelander who is our operations manager of programming to tell you a little bit of what those bureaus would look like.
1058 MS. BEVELANDER: Thank you. I can tell you a little bit about the staffing of them and then I would like to pass on to Harvey Rogers on the equipment side, if that's okay. The -- the bureaus are key components to both our news-gathering system and our community outreach system and they basically serve four main functions for us. The first function is a presence in the community and an accessible to the community to come in and tell us their issues and their stories and emerging concerns. The second function is a home base for our journalistic teams and the teams are multiskilled, video journalists who can shoot, write, edit, report and file the story. That's the ideal. We are aware that sometimes that mix has to change and that we may have a very strong shooter/editor, and have to complement that person with a strong writer, reporter or any combination thereof.
1059 It also serves as a field base for journalists that we would dispatch to the region if there was a large story coming out of that area. It acts as a headquarters for our community outreach initiatives. In each region we will have a community liasion coordinator whose role it is to actively pursue relationships with educational institutions, cultural organizations, business associations and other community groups to get a tap into what their emerging concerns are, what their events are, what their issues are, and really what their stories are. The fourth function of course is a technical function. Each of these bureaus will have a mini studio in which we can conduct interviews, double enders, bring in columnists to file directly to the main news room in mid-town Toronto, bring in local experts and citizen opinions. We can edit in each of these bureaus and we can file the stories. If you like now maybe --
1060 MR. LANGFORD: Just before we go to Mr. Rogers neighbourhood, I would like to find out from you, just to be clear, the multiskilled person, the ideal would be someone who could shoot with sound, who could interview, who could write a script, edit a script, edit -- edit the tape as well? Or would you have an -- edit the tape as well? They don't have to be there to listen to the walk-ins as well, do they?
1061 MS. BEVELANDER: That is all possible with the technology that Harvey can tell you about. The difficulty you know, and I acknowledge the difficulty of getting someone that can do all of that. And that's why I qualified it by saying we found it at CBC in Windsor and in the region specifically where we were using what we used to call hybrid jobs, that certain people had great skills, and call them video journalists and they could do certain things and not others and others could complement them. Both individuals would be called a video journalist. You can advertise for that and try to recruit for that but you must always try and supplement one's weaknesses with the other's strength.
1062 MR. LANGFORD: So we would ideally have this -- this incredibly skilled person would be one person there but perhaps two.
1063 MS. BEVELANDER: I'm sorry, absolutely. I'm sorry I should have made that clear. There are at least two video journalists in each of the bureaus.
1064 MR. LANGFORD: Two video journalists. Even if one is tremendously skilled there still would be at least two?
1065 MS. BEVELANDER: Yes, and one community liaison coordinator. And we also hope to build in some structured internship program so we will have interns -- because it's a normal thing that we do you now, we have interns all the time -- who can fulfil a number of functions, hopefully not just reception and filing but also chase producing, research, things like that.
1066 MR. LANGFORD: So a community liaison, two journalists and a researcher, so whatever, whatever sort of a dog's body, I suppose. And I assume that these people would then be moveable if something huge were happening in Halton you could -- oh, wait for this one, you could "peel" off somebody from York.
1067 MS. BEVELANDER: Yes, that's correct. They each have a vehicle, an equipped vehicle as well.
1068 MR. LANGFORD: Okay, Mr. Rogers.
1069 MR. ROGERS: Thank you, Commissioner, and welcome to my neighbourhood now. The news service will make use of all the newest and latest, greatest broadcast technology. We really have developed a web of interconnectivity between the bureaus and our central hub newsroom that provide an efficient and economical way of covering the vast area. As we said before, we are applying international news gathering principles for local news coverage. Our systems, our computer systems, will allow the editors reporters to actually have a set top editing system right before them. They will be able to move raw footage, edit the news stories, do voiceovers, send finished stories anywhere within our distribution network, and be able to add sound, graphics, titling and of course closed captioning.
1070 Now the way this works is that each bureau is equipped with a single camera, hand-held camera to go outside and vans to travel around all of the different regions. The portable editing systems that Donna mentioned are able to move into the vans and therefore give us onsite live coverage as well as edited coverage from that particular site.
1071 But at the heart of the facilities are a digital stories and clip management system. It's really a central server. All the computers feedback to this server. This allows to us through our fibralink and intranet to move the footage around different bureaus. So all the editors, all the reporters can work on the same story if they wish, and then it guess out through the central newsroom.
1072 To supplement all of this, there is post-production facilities back at headquarters and finally there is a satellite truck and microwave truck to complement anything within our coverage area.
1073 MR. LANGFORD: Let's start at the end, the satellite truck and microwave truck would be one, not in each bureau.
1074 MR. ROGERS: There will be two vehicles available to all of the coverage area.
1075 MR. LANGFORD: So if needed they could be dispatched to Peel, to York or whatever.
1076 MR. ROGERS: That is correct, yes.
1077 MR. LANGFORD: Can you dump feed, whatever the term is, raw footage back to -- back to your main facilities at Church and what did you say? Bloor? Could you do that if there weren't time to edit and have editors standing by there?
1078 MR. ROGERS: Correct, but there is two ways of doing it. At the satellite truck we would have the van as our portable editing system in so once you shot live or feed the live into the editor, make a finished story, satellite it back or microwave it back to the head news department and then send it out. So effectively the audience sees a live, on-the-spot coverage.
1079 MR. LANGFORD: If you have the leisure of time and you can get back to the Halton bureau, I was thinking of poor David Halton. He's now got a bureau named after him. But you get back to the Halton bureau and you are editing there, is it a two-way process so that if you need some library footage of something and you have it at Bloor and Church it can be -- it can be sent over there via your network?
1080 MR. ROGERS: That is correct. The use of the Intranet allows us to send the footage or the finished story up and down the system. So any resources that are actually in any one of the bureaus or back at central can be available totally within our ring of communication.
1081 MR. LANGFORD: Thank you for that. Now, to get back to what the news would look like, and I do appreciate that you are not going to strain to -- you know to fit in, a fit for this and a fit for that and you do have this huge slot of three hours in the morning where certainly there is room, what would the actual -- take your 6:30 news, I guess that would be your major newscast of the day, would it? Or would the 11:00? Maybe I should ask that question. What is going to be your major newscast of the day?
1082 MR. BOLEN: I am going to have Cindy speak to that.
1083 MS. WITTEN: Morning. Our main news would be the 6:30 news, it would be the record of the day, that day in the GTA. It would include local, national and international news, the focus being on local, but obviously the news of the day will dictate in what order the stories will play and what importance they will -- you know, the -- the expanded coverage of each story would depend on its importance.
1084 We will have a specialist that will file each day in the 6:30 news and they will be responding specifically to concerns and issues of our viewers. An example might be somebody who writes in our consumer watchdog and says they have had a problem with a car mechanic, can you check it out for me.
1085 Our columnists will comment on news of the day, we will have a columnist each night with some sort of witty comment on something that's happened that day. We will do business news, sports, weather -- weather will be done by our viewers, young and old from every walk of life will go out in the area and have our forecasters in the areas and the cafes and schools. And we will update the news at the bottom of the hour -- I should say at the top of the hours, five minutes to the hour, because we believe that we have a lot of commuters in our audience so if they miss the top of the program they will still get their head news.
1086 MR. LANGFORD: We will start with the major news stories as you said. How do you intend to collect your national and international news?
1087 MR. BOLEN: We will enter into sharing arrangements with the suppliers in the marketplace, this is quite a common practice in news and is possible it acquire news footage and information.
1088 MR. LANGFORD: So -- well --
1089 MR. BOLEN: Would you like more detail?
1090 MR. LANGFORD: Footage is one thing, but reports are another. Yeah, I would like a little more detail.
1091 MR. BOLEN: Well it's a matter of acquiring footage from sources like CBC for instance, and national, or CTV, from Reuters internationally, from CNN. There is a lot of -- for instance you have got broadcast news, information on your computers that you -- to write the stories you can basically to do voiceovers. It is possible also to can get freelancers in the field on big stories to do stories for you. This is something I'm very familiar with, having done it for many, many years, It's commonly done by all news organizations. There is a infrastructure out in right now.
1092 MR. LANGFORD: You have to be sure of it. So do you enter into contract arrangement so you know you're going to get something from the Middle East if it's breaking, you know you get something from London if there is a breaking story?
1093 MR. BOLEN: Yes, we do. It's a professional news organization we're establishing and it does these things.
1094 MR. LANGFORD: So you go from national, international, international, national, depending what's leading the story, but the heavy emphasis would be local. And do your studies, and I don't know if we're going back to Ms. Armstrong on this again, but you have got a good team, you can direct it where you like. Do your studies indicate that the appetite for local is so strong that even in the type of atmosphere we are in today with terorrist-inspired wars, stock markets stumbling hither and yon, that people will turn away from Tom Brokaw and all the other 6:30 gurus to come for their get of what's happening in Halton/Peel?
1095 MS. YAFFE: I think you raise a very good point, there are many, many sources out there today for national and international news. And the function of a local news hour is to complement that. So we of course feel the responsibility to take seriously the major international and national stories of the day, we actually see the function of this news as adding a component of news that would just complement what we see on national newscasts. You know, typically in conventional stations after, you know, a national evening newscast one would move to the local news where people in the city are happy to stay up that extra half hour and find out what you know, I have seen what happened internationally tell me what happened locally today. So I think it's balance. I don't think we think we're going to you know, draw people away from their primary international news source to come to GTTV but we definitely think we can show them an alternative for their local coverage, which is where our dollars and our priority is, not to ignore the fact that we have some responsibility to raise those national issues. And I think that's a fairly common practice in local news today.
1096 MR. LANGFORD: We will get to the dollars but to stick with the content again, I want to stress that what I am trying to estimate here is your success chances we certainly like our licensees to succeed in Canada. But I am -- I must say I have a little difficulty with the concept, and that may just be me, but it seems to me that you, by going -- let me back up.
1097 If you are going to show the World Trade Center blowing up, to take a very obvious news story, you are going to be guaranteed that everybody is going to look at it -- be horrified, but they're going to look at it. So it may be true that CBS and ABC and NBC and CTV and Global all have pretty well have the same pictures on but the risks of not having it on are perhaps too high if you're bringing news. You have chosen, it seems to me, what might be characterized as well, it could be characterized as an extremely clever niche marketing plan, but it also could be characterized as relatively risky because you are turning your back at the very time that people are almost preconditioned now to be looking for their television news hit. You are turning your back by design on a lot of big stories. You will cover some but you just wouldn't have time to cover them all because you are going to turn to this local format.
1098 Now, bear with me for a minute, this is a long commentary question but here's what makes it doubly risky, from what I see here this morning. You are not only turning to a local format, but often a chopped-up local format or a divided local format so that some of it is local, local that sounds almost "loco", but it is very narrowly focused. It's not GT in fact, it's a part of GT. So if I live in Richmond Hill and I turn on the television wanting my news hit of the day, I am not only getting less of the big national/international, but I may be getting in fact Oshawa, when I don't really have any interest in Oshawa unless the General Motors plant is closing or something like that. But I live in Richmond Hill. Is that not a relatively high risk strategy?
1099 MS. YAFFE: Well, I suppose we look at it in a slightly different way. First of all I think if you are turning on the television for those large national /international stories you tend not to wait for the local nest news to do that, that's not what you expect from local news. You come to local news --and I think a lot of people do this, I am sure we all have had experiences -- to see the people you know, to see the community you know, to hear about your own neighbourhood, that's why you come to local news, it does perform a different function. And I think that we believe of course that those five bureaus give us an opportunity to truly reflect the diversity of the GTA, but they don't impose a discipline on that that says, you know, this is an investment that has to return a story every day or we have failed at -- you know in our strategy. What it really has to do is it is make sure we don't miss the stories that are important not just to that community, but to communities that are intertwined. We have a great example of this that Cindy can tell. We have all heard many times as we practice, but we think you would love to hear it, but we --
1100 MR. LANGFORD: You practiced?
1101 MS. YAFFE: Yes, yes, we did. But you know, we think that there is a -- there are a lot of stories that cross those boundaries. I don't know where Halton starts or stops and I don't know where Durham starts or stops. I just know that there is a gigantic area out there and those are very different neighbourhoods from the one I live in and I think we share a lot of things with those people in the those regions those parts of the GTA I think we are all concerned about the big stories and we're all concerned about taxes and the provincial government and what happens to the Hummingbird Centre and that sort of thing. And we spend a lot of time if you look for antiques you look for antiques all over the GTA and further afield. And those parts of the city are interesting to us because that's what we do. So I think there is more of a community of interest that we're trying to get at and that's what local news should be doing. And I also think people go there to see the people they know. And I think you won't see that on the national news. It's an alternative. It isn't the same.
1102 MR. LANGFORD: But is this -- is the story, would a typical story be taxes are up and here is some reaction from our five bureaus, which would give you a very interesting and different perspective, there is no doubt about it, and certainly put less mileage on your vans. Or is the story something like there is a big story in Richmond Hill today and here it is. Or is it both?
1103 MS. YAFFE: I guess it's both.
1104 MR. LANGFORD: Because it seems to me that the second one, though it's great for Richmond Hill, is a bit exclusionary for perhaps the others. Or am I splitting hairs?
1105 MS. YAFFE: Yeah, think it's defining it too narrowly. Obviously if it had no interest to even a portion of the people in Richmond Hill it wouldn't be of much value to the news system. But that's the editorial choice you make every single day when you send out the reporters, when you commission those people to go out and gather the news. You ask yourself what are the important stories? What is our responsibility to cover and what can we add to the difference on conventional local news today? And I think that's -- you know, local news is a very important financial element inside a conventional station it can be very profitable if it's done well. We certainly don't intend to do it badly and lose the audience because we focused too narrowly. That's self-defeating we obviously want to build an approach that people say I wonder if they're covering something in our neighbourhood today. I'm going to watch, and I had my cousin in Richmond Hill telling me about this story last week and there it is. And that is interesting. It's not necessarily exclusionary coverage that wouldn't interest other people. I will let, if it's all right with you, Commissioner, let Cindy tell you that story because it does actually show you a little bit how we think those stories interact and would bring all of the elements of fast-breaking, important news but also different approaches to the -- to the bureau.
1106 MS. WITTEN: I think there are a number of stories that resonate across the GTA. One example is in Oakville there is a youth centre that's been okayed for two years and they have been trying to find a neighbourhood that's willing to take it. I think that that is an issue for a lot of people up there. A place -- I say up there. Everywhere. Gathering spots for young people. I think another story that resonates is traffic. And my much practiced routine is a story: a ramp opened recently from the 403 to the 407. The 407 is a toll highway. And the 403 of course is free is what happens at that ramp is all the traffic has to merge down into two lanes to stay on the free highway. So gridlock has occurred there; traffic stops every morning. So the way we might treat this for say the morning news would be to have our reporter live on the scene with a clear view of the stopped traffic behind her she would be interviewing a commuter who is seeing her commute time double. Then the host might interview the owner of a trucking company who is live in our Peel bureau who would say this is costing him big money every day. Then we go to the Halton bureau to the OPP to a constable who is saying that his officers are spending an inordinate amount of time investigating accidents and how it's affecting the flow of traffic across the GTA. Then we could go via our microwave to Queen's Park and do an accountability interview with the transportation minister. So I think it's an example how journalists and our technology in the areas covers a story that's of importance to people right across the greater Toronto area.
1107 MR. LANGFORD: That's interesting, thank you. If you think you had to practice for this morning you will have to practice a lot to put that together, but it will be interesting. Are you going to use the same bureaus for what you call local non-news? Would that come from the same bureaus or would that be another team?
1108 MS. YAFFE: No, I think would function as offering both kinds of programming from that bureau.
1109 MR. LANGFORD: That brings me to the number of hours that we are filling because the one thing about your wonderfully generous commitment to the local news is you have to then go out and do it. I guess I am trying to get an idea of how big a team you need and how big a team you have bargained for. You've got news and you have got non-news which I suppose features everything from farmers markets to whatever, antiques as you said or whatever like that, car sales. So you have got to do three hours in the morning, GTA Calling is phone-in but I presume that would use some of the same facilities, or would it not? Is that just a straight phone-in show?
1110 MR. BOLEN: The approach we take is to wherever possible, find synergies among all the different resources. We have about 125 people in our plan for local in-house production. That would be to cover our news programming our neighbourhoods programming, and scrum in making our making our weekend programs. They would -- they would -- the individual programs like neighbourhood, for instance, also have a small dedicated editorial team and their job is to make sure that neighbourhood is the best possible program it can be every day. But they tap into all the common resources: the bureaus; when there isn't a news story happening in Halton maybe the people are working on a feature. When a news story is happening in Halton, they're not, somebody else is working on the feature. But each new program also has its own editorial leadership. You would have a daytime news staff, you have and evening news staff, it's a very common model but everybody taps into all the resources, the -- the archives library, the satellite truck, the microwave truck, the bureaus the central headquarters. I wanted to mention, there are a lot of resources at the central headquarters. Really only 15 of our permanent staff are in the bureaus, there is 105 in the central headquarters so there are a lot of resources pooled.
1111 MR LAGNFORD: Is that where the 650-year-old man is?
1112 MS. YAFFE: Well, we wondered whether you would think that but actually that is a composite of many of the people on our team. We actually got very old counting that, but that's a composite of all our experience in conventional television.
1113 MR. LANGFORD: I won't explain that, I will leave that for future readers of the transcripts. So to just quickly wrap up on the news here, if I can, I am trying to get a sense here of the usage of these bureaus and the 105 people and just how -- how much resources or teams I mean you don't have to go down to person hours, but I am trying to get a general sense of the kind of resources you have committed to doing what appears to me to be three hours in the morning, news at noon, maybe GTA new neighbourhoods as well, I would think that would be the same resources, news at 6:30, well neighbourhoods would be a repeat so that's not a problem and then GTA news at 11:00. To say nothing of GTA scene, I guess is that seven days a week, the scene? I'm not sure about that one. Anyway, there is a lot of GTA news and non-news and I am just trying to get an idea, we've got about 15 people out in the bureaus, what else have we got committed to this?
1114 MS. YAFFE: Well, overall, I think our local -- our news budget is somewhere around eight million dollars a year, is it not? So it's a significant part of our operation. And it is an element that we feel very -- is very important to that local reflection, that we think conventional television has a responsibility to perform. It's a significant part of our budget; it's also a significant part of our schedule and we think we have matched resources to the type of programming we have. Yes, there are 15 or so people in the bureaus, but there is a strong element of creating a new voice of news in the centre of the city.
1115 MR. LANGFORD: With such a huge commitment the greater Toronto area, why is it that you applied for the rebroadcasts outside of Toronto area? I can't imagine what the interest levels in Kitchener or Hamilton would be, well maybe Hamilton for some.
1116 MS. YAFFE: Well, you know, I think that it again goes to that question of are where are the borders and where does Toronto start and stop. I thought it was interesting driving here. You might have noticed that the city never stops you never really leave urban areas as you drive all the way from the centre of downtown Toronto and here, and much further and that interrelationship of interests is very long across the GTA and its environment, you know, neighbouring areas further west. We sort of looked, we asked ourselves where are those communities of interest? Where do people's lives intersect in the GTA. We looked at our own staff, we have about 600 employees today at Alliance Atlantis who work every day at the corner of Yonge and Bloor, and they come as from as far afield as Rita Middleton who I promised to embarrass by saying that she lives in Grimsby, Ontario which is another half hour west of Hamilton, and yet she works in our office every day quite nicely, thank you, and commutes back and forth and shares her daytime interests and her evening interests with the centre of the city and all it offers and a life that we all admire out here in a very rural part of southern Ontario. That -- there is no border any more between people's lives, their work life, their -- and their downtown -- their use of the downtown of Toronto and its facilities. So we don't think that there is a natural border that stops at Toronto, that GTA kind of emphasis. And -- and you know, we know that people throughout southwestern Ontario received all of the conventional Toronto stations today. And watch it in some -- at some periods and enjoy it, obviously at some periods, not -- it isn't you know, it would seem unnatural to us to be able to actually create a border and say those -- those people, many of whom work and live in downtown Toronto or sell to people who live and work in Toronto and the GTA, would not have access to the service so we sort of looked at it and thought we are really no clear distinctions in those lines as we move through southwestern Ontario.
1117 MR. LANGFORD: Yet one of your criticisms in your application -- not veiled at all never mind thinly veiled, about what happened to the CITY-TV experiment is that it's become a little too much Queen Street, it's become too much central Toronto oriented. Thus I guess you're grateful for this, leaving your five bureaus open for you to change the model and improve on it and reflect as you said in your opening statement, the changing face of this -- this part of the world and the 90 percent growth rate outside of the city as you said in your statement. Why not go the full nine yards and put a bureau in Kitchener and put a bureau in Hamilton and do what you say you are doing for your area completely.
1118 MS. YAFFE: Right. Well, I guess one answer to that and from my point of view, that really does change the focus of what we're trying to do. I guess we believe that there are a local stations with local commitments to local content, particularly the new CH commitments that were made recently that really do serve those local communities very, very well. That's what they're there to do. And to add to that perhaps to add local content and compete for local advertising seemed to us to be overreaching what we thought was useful to the balance in the system.
1119 MR. LANGFORD: There are a million or more viewers are added to your possible viewer list with these people.
1120 MS. YAFFE: Right.
1121 MR. LANGFORD: Well you may just -- I am surprised when I see the strength of your commitment to -- to making sure that local truly is local. I kept flipping through the pages waiting for when would we get to Kitchener and Hamilton and I didn't find anything. And it surprised me but I don't know, perhaps you did studies on this and thought that wasn't the way to go, but it seems to me if you're talking about traffic, they have traffic here too. If you're talking about taxes, taxes move in Kitchener. If you're talking about antique hunting there is probably better antique hunting in Kitchener there can't be an attic left in Toronto with an antique in it, but perhaps there is.
1122 I found listening to you today, listening to the story, listening to the tenor of what you are trying to do, I find it more surprising, quite frankly. I'm not trying to push you; you make your own programming decisions, clearly. But I did find it very surprising that you would want to have, you know, access to these million or more people and yet not offer them that and your criticism of -- of the CITY-TV model is that they haven't -- they haven't been born again and they haven't done what you're doing in Toronto. I did find that rather strange.
1123 MS. YAFFE: Well, I will ask Mr. Rubinstein to add to this if he wishes, but I want to say that we think there is more room for conventional local television in the GTA. We're not here to criticize others. Our job is, when we looked at it we thought there was missing content that would add to the -- to the diversity of voice in the area. And we believe that the approach we will take not just to local programming, but to programming in general, would be of great interest to people who go as far west as -- as Kitchener or Waterloo, and further. Mark?
1124 MR. LANGFORD: Before we get to Mark I will retract the word criticisms and substitute the word assessment. But it was a pointed assessment, I will say.
1125 MR. RUBINSTEIN: Commissioner, I think Phyllis said it well insofar as we do see a balance in the system of viewing the stations in the greater southwestern Ontario area. We have taken the view and studied those areas, Kitchener, London, we think they are well served by the local stations there. They happen to be single-station markets who are entirely reliant upon through their local programming service, local advertising. A number of the stations that are located in Toronto whose signals have been extended into that region have been extended also on the proviso that there is not local programming attached to it so therefore no local advertising. So it all comes back in a healthy balance, it's consistent with how really conventional television is structured today in southwestern Ontario so I think if anything our application is consistent with that approach as opposed to trying to break the mold and potentially put more pressure more local programming fragmentation to the local stations in that region.
1126 MR. LANGFORD: Okay. I want to -- I think we will take a break pretty soon and give everybody a chance to, whether they have asked the questions or answered them and after the break I want to speak about synergies which you speak of eloquently in your application papers. I want to talk a little bit obviously about revenues and your advertising strategy and how that might play out.
1127 But there is one focus thing, perhaps we could just do in a few minutes before we go and then we can have the break. And that is your relationship is APTN, which you speak of, glowingly but still in general terms. I wonder if you could flesh out for us precisely what your plan is with the aboriginal people's television network.
1128 MS. YAFFE: Well, it is, as you said, a general statement. We have had conversations with them and it is a part of the very multicultural city that needs reflecting on local news. Of course APTN is available through cable and satellite, but not on the conventional services in -- in the greater Toronto area. We see it as an important element. It's almost a lost community and I mean you know, we tried to -- in our conversations we talked about where the aboriginal community lives in Toronto or the GTA and, to be honest, we found that we couldn't identify a part of Toronto where we could say well that's that community. We can for our cultural groups. You can't for the aboriginal community. There are 60,000 aboriginal people who live in the greater Toronto area and we think it's a important group to reflect, as we do other cultural groups, so we would like to work on bringing some of those stories to our viewers and it's really I think one of the missing cultural forces in the GTA that I know in other cities is well reported and often in -- you know, becomes a focus of parts of the news, but I would venture to guess that it's probably one of the least reported cultural groups in the GTA.
1129 MR. LANGFORD: How do you contemplate this relationship working? Would you be replaying APTN programs or will you be working with them to create brand new programs or both? That's what I didn't get a sense of. And where might these programs be going, would they be local news, local non-news reflective of areas of your schedule or might you be setting aside some other part?
1130 MS. YAFFE: I will ask Norm.
1131 MR. BOLEN: We have had discussions with the APTN programming director and we haven't got very far with those discussions but we have agreed in principle we will work together. They have some resources in the GTA area we have editorial resources. What we have agreed is when they do a story that will be of interest to you our audience we would insert it into our news or local programs and if we do a story that would be of interest to their audience about their community we would provide that material to them. So it's kind of a free exchange of footage and stories and information it's an editorial relationship.
1132 MR. LANGFORD: Okay. Anybody else want to add anything that? At this point then we are -- you are at the exploratory stage, nobody has lawyers typing anything up.
1133 MS. YAFFE: Not yet.
1134 MR. LANGFORD: Thank you very much I think we will take a break now so everybody it have a little rest. And how long, Madam Chair?
1135 THE CHAIRPERSON: We will take a 15-minute break.
--- Recess taken at 1015/Suspension à 1015
--- On resuming at 10:38 a.m.
1136 THE CHAIRPERSON: Order please. Commissioner Langford?
1137 MR. LANGFORD: Thank you very much. Show time folks, take your seats. I do have a question, I will skip back to that. We talked about some repeats of shows but I am not sure on the actual 20 -- how many hours of it is actual news if there are any repeats, for example one of the staff members kindly provided me is you could for example take your GTA news at 11:00 and play it again at 6:00 in the morning. That type of a strategy, because perhaps different people would be watching. Are there any repeats in those news programs?
1138 MS. YAFFE: We haven't planned on that, no.
1139 MR. LANGFORD: Maybe not a bad idea. Does that cover your question, Donald? Thank you. Okay.
1140 I would like to move then to the notion of synergies which you speak of at length and eloquently and I think with justifiable pride in your capacity in that area. But I want to be clear on how it will work so maybe I will take the biggest number I could find in your -- in all the numbers. And I think it was 12,000 hours original programming you would add to the GTA over a seven-year period. And then you do say at another point that some of this programming might be played again, given a second window, I think is the term these days, on one of your specialty channels and the opposite route might occur. So I don't wanted to sound mean spirited, but how are we counting original when we deal with those kinds of synergies?
1141 MS. YAFFE: Those 12,000 hours I am pretty sure I am right, but Ms. Middleton will correct me if I am wrong are all original new hours commissioned by GTTV that would not have been on any other television service, that what's the 12,000 means. Those are brand new hours to the system, they will premiere on GTTV.
1142 MR. LANGFORD: Is it possible to take me kind of roughly how -- through the math to get to that number or is that just asking too much would we have to get out the abacus and the accountant to do it.
1143 MS. YAFFE: We do bring the accountant with us so that's easy, we could take you through that, we could wing it, if you like it may be better if we just take a moment and just do one page that sort of gets you to the 12,000, we would be happy to bring that back.
1144 MR. LANGFORD: So you would provide us with that later perhaps tomorrow or whatever.
1145 MS. YAFFE: Yes.
1146 MR. LANGFORD: That would be very helpful because it's a huge number and as you demonstrated this morning by taking 26 episodes and repeating them and multiplying, the numbers do move very quickly but you have to know where to start your arithmetic and it is difficult it find out how you got there.
1147 MS. YAFFE: We would be happy to do that.
1148 MR. LANGFORD: So this would be new and original. Then you do move back and forth you do speak fluently about the depth of your library but what's the movement going to be back and forth tell me about the synergies from a process point of view, how it will actually work?
1149 MS. YAFFE: Well on the programming side I guess as always of course broadcasters are driven by audience and programming to the audience. In this case clearly it is you know, it life and death so the first issue would be for us would be what programming strategies can we come up that will give us the largest audience possible. And I guess from our point view that means often original programming that people haven't seen we know that's probably the single most tested reason for people watching, being drawn to programming is it's new and it's different. So GTTV does intend to commission a large number of original hours throughout its life as we have just spoken about.
1150 Some of those hours that would be available to the viewers in the GTA would have, we think, appeal to Canadians throughout the system and if appropriate, might find a second window on one of our or perhaps other people's specialty services if that were appropriate. But from a synergistic point of view, for instance we commissioned a documentary on the history of the waterfront of Toronto which actually is an interest subject since we have watched that waterfront change dramatically over the years, we might decide that that was an appropriate program to find a way on to History Television, so we might bring it to a larger Canadian audience by showing it on one of our specialties.
1151 So that's one of the ways of building in the synergies from coming from the specialty business and moving to conventional business.
1152 MR. LANGFORD: When you do this, let's take your example, a documentary on the waterfront. Assume an hour, a half hour, what?
1153 MS. YAFFE: Either.
1154 MR. LANGFORD: So we have a half hour documentary on the evolution of the waterfront in Toronto. You would commission that from XYZ production house.
1155 MS. YAFFE: We could; we could make it ourselves, we could commission it, either way.
1156 MR. LANGFORD: Let's take the first scenario so we can kill two birds with one stone. Suppose you do commission this as 75 percent you do outside. How would it work? You've got three stations here, at stake here, so I guess you're -- you are the experts, I really want some guidance on this. You're - you're commissioning it to be shown in Toronto, in Hamilton and in Kitchener. I guess you would want to cover history just in case it's a runaway success. How many showings do you get when you buy a program like that?
1157 MS. YAFFE: To be very clear of course there is only one program signal being delivered from GTTV and it would expand to cover a larger area, but we would be buying it for conventional television and we could, if we were to negotiate with the producer, fair market value for its second wind on specialties we could buy a national specialty licence as well for that program. And generally conventional television would buy two or three, maximum four plays of an original program over a very short period of time, maybe a year or two.
1158 Specialty of course is in the business of showing programming many more times and it would typically buy up to 15 plays over a period of probably three years. Conventional television and specialty share programming quite common now and you have, I am sure, seen this happen when you watch television that the coming and going of programming from specialty to conventional and back and forth is quite a common technique, it works here and it works in the United States. We do it often now with some of our specialty programming that does wind up on conventional television that does end up on other people's stations.
1159 And sometimes that licence would actually allow the conventional broadcaster if we were to premiere it on one of our stations to actually show the program in the same week as we show it or a year later or it could be two years later once our licence lapses. All of those techniques are tried and experimented with and I guess the answer is what works with the audience so would we would probably do a combination of all of those.
1160 MR. LANGFORD: Just take me through this, if you don't mind. Typically you would buy a licence period of a year? The copyright would stay with the producer, but you would buy a year, perhaps two years?
1161 MS. YAFFE: Yes, the copyright would stay with the producer. Our licence is generally for two years.
1162 MR. LANGFORD: It would be for, as you said -- one play on conventional and then a second window, a second play on a national specialty?
1163 MS. YAFFE: Well, there would be two licences that would join together to help finance the program. So the first one, if it was commissioned by GTTV, would be a licence for conventional television, tends to be for a two-year period, usually has three or four plays allowed to the conventional broadcaster but that's all. A second licence might be acquired by a specialty service, one of ours, I hope, that would either be run at the same time as that conventional licence or follow it. And in case if it followed the first two years might be exclusively to GTTV and then might be a second window that would be -- whose licence period might be three years if for which there may be many more plays, like 15 plays for the third fourth and fifth years of the life of the program. Or it actually could be in the same time period, it could be that we would -- the specialty would be so anxious to play the show that it would step up and add to its licence fee to actually be part of earlier window with the conventional station.
1164 MR. LANGFORD: But the -- to be very clear on it, the rebroadcasts in Kitchener and Hamilton don't count then as a replay, you get that for the same -- the same price, I will call it.
1165 MS. YAFFE: Well I guess we would typically be buying conventional television rights for that product, for the conventional signal would be included in those rights.
1166 MR. LANGFORD: Thank you for that, that's very interesting. Do you have any idea or is it just too vague to give us some notion of what these rights typically cost for different genres that a half an hour of drama, one of your 26 half-hours of drama for you to do it outside and perhaps if you settled on some sort of -- I am winging it a bit here, I am afraid to say, so be patient -- so if you settled on something like a historic drama which might play on your History network, what type of fees would you -- would you be putting out?
1167 MS. YAFFE: Well, a historical drama is you have hit on an incredibly expensive enterprise because it takes enormous production costs to actually be authentic and do one of those and it's not likely we would do it for History Television but some of the other expensive and effective documentaries on history would be in the $250,000 budget range and we would typically provide 25 percent of that as our licence fee that would be for the specialty channel. Conventional television tends to obviously produce even more high-budget programming and again one needs to have at least two -- 25 percent of the budget in order to help finance the program. I think when it -- you know, one of the things we think we have pioneered in, is effective ways of producing high quality programming at not the million, million and a half dollar range because GTTV would have to live in that -- in that container as well. So we would, particularly on our drama, we think we could create 26 episodes of an original drama, somewhere in the range of three million dollars over that whole 26 episodes which comes out to be you know, just a hundred thousand, 150,000 I guess an episode. And typically the network would provide about 25 percent. There would be second or third windows for that drama of course. You know, one of the conditions of licence of Showcase itself is that it run all Canadian drama in second window so we know there is at least one appetite for it, but the good news about specialty is there are many new appetites for Canadian content, particularly in the digital world.
1168 MR. LANGFORD: Now, I know from reviewing your corporate make-up of Atlantic Alliance it is a creature with many personalities, many heads and many hats. So I am going to just call it Atlantis Alliance just for the sake of -- sorry, Alliance Atlantis.
1169 MS. YAFFE: Because Mr. MacMillan will do that if you don't.
1170 MR. LANGFORD: When I have Barbara Cram beside me, I have no need of Mr. MacMillan.
1171 MS. YAFFE: I see.
1172 MR. LANGFORD: All right. I will try again.
You would think I have the name right at this point. Alliance Atlantis. The devil is in the detail. Okay. Let's assume then we are taking your second example, the 26 episodes you are commissioning, episode at a value of I guess would be put on it of $150,000 each, you would pay under your GT hat 25 percent of that. Would you then pay under your Showcase hat another 25 percent?
1173 MS. YAFFE: Showcase, because it would be buying the second window, has a range of prices it would pay and has the opportunity to watch how the show performs before it might actually be buying it. Often we are buying finished product that's run somewhere and we have the advantage of watching it perform. It might not be that high, it might be less.
1174 MR. LANGFORD: But how low could it go?
1175 MS. YAFFE: There is a range, these are half hours I think we would probably be in about the 10, $15,000 a half our range at this point, second window.
1176 MR. LANGFORD: Ten to 15 percent or 10 to 15 thousand?
1177 MS. YAFFE: Ten to 15,000, somewhere around.
1178 MR. LANGFORD: It's just there are a lot of numbers and this just helps us assess it later on when we're sitting around. I appreciate that. Now when you talk about "acquired", we spoke about "Canadian acquired", "Canadian acquired" and "American acquired". When you talk about the word, where you use word "Canadian acquired", are you talking about just purchased or could it be purchased in this way, through -- in a licensing situation?
1179 MS. YAFFE: That's the licensing situation.
1180 MR. LANGFORD: That's the way you would do it, more likely than not, so even if it's lifestyle or fitness or cooking you would license somebody else to do it? You would purchase a license rather than buy the program outright.
1181 MS. YAFFE: Yeah, acquired really means that it has come from a source of a finished program. Instead of commissioning it we would buy it already made and absolutely the service would -- for any of the independently produced programming you would just be buying a licence, renting it to show for a period of time with a limit on the number of plays we could run.
1182 MR. LANGFORD: Now, you talk in the synergy section as well about your bench strength if I can put it that way, the strength of your library and the strength added by having these other specialty channels. When you have licensed cooking shows for Home and Garden, have you had the presence of mind to think that some day down the road we might have conventional stations or do you already have rights in your back pocket or do you have to go back now and say: Gee, we think this will fit in our lifestyle section of our acquired. And how would that work, if you have to go back?
1183 MS. YAFFE: It depends on the program itself. We may have more rights than just specialty; we may not. But if we didn't, we would go back in and if we chose a particular show we thought would do well we would have to pay a licence fee to rent it, to show on conventional television, above and beyond anything we contributed for any specialty licence.
1184 MR. LANGFORD: So you don't have these rights in your hip pocket?
1185 MS. YAFFE: We have some.
1186 MR. LANGFORD: When you come to American acquired, it would seem more this probable ball game but you do have some down here for example from five to 6:30 you have a one-hour block of American acquired and you have a half hour block of American acquired, two different sections here.
1187 MS. YAFFE: Right.
1188 MR. LANGFORD: That's on Monday to Friday, I should clarify. How would you obtain this, to use your word, how would you acquire this programming?
1189 MS. YAFFE: In the same fashion that -- under the same sort of terms that is we would rent the programming for a period of time with a certain number of plays we would go to all of the distributors who exist both in Canada and outside of the world -- outside of North America and the rest of the world to acquire what for the service the ability to show the program for a limited period of time. We do that for all of our services right now.
1190 MR. LANGFORD: But your services so far haven't been conventional so I think this puts you in a different competitive marketplace, does it not?
1191 MS. YAFFE: Yes. We have not been buying conventional rights for foreign programming, absolutely. On the other hand, what we have done is built very good and long standing relationships with all the distributors who sell those programs so we're very familiar with the process and with the marketplaces where one goes to do that. We clearly would have to enter into different agreements to licence those programs for GTTV. The one exception I guess I would say is U.K. and Australia, New Zealand drama and other programs. Often those programs don't find access to conventional television and they probably have been happy to have those shows shown anywhere and we may actually have in those licences, we may have some conventional rights as well. Those would be interesting programs to share back and forth between some of our specialties and conventional. It's really -- I think it's one of the -- you know as a viewer of those shows I guess I find it odd that conventional television has been so afraid to show dramas from other parts of the world. It does happen rarely but it doesn't happen on an ongoing basis and right from the day that we started specialty programming we found there was a real appetite for it.
1192 MR. LANGFORD: I just want to give you a chance -- to read you a note, it's unnerving to get them and not be able to read them. If anyone else wants to jump in, you don't have to send notes.
1193 MS. YAFFE: You have Commissioner Cram, a whole team. I guess to add to that and to go forward the smart thing for us to do as Michael points out and is absolutely right, will be to try to acquire all the rights, conventional and specialty, for programs that we are, you know, going out there finding and think will work on either specialty or a conventional, it's one of the synergies of being in both those businesses that we really bring to the table.
1194 MR. LANGFORD: On a small point, to get back to that sort of notion of original, if you found out that you owned these rights, lo and behold, oh, happy day, would that count as original because it hadn't been shown on conventional in your mind or does it have to be shown nowhere to be original? How do you use the word original?
1195 MS. YAFFE: Our calculation of that gigantic 12,000 number is I believe absolutely original commissioned for GTTV, not that it would mean new to GTTV but that we would be the commissioned broadcasting creating new hours in the system.
1196 MR. LANGFORD: So the things we are talking about now are extra?
1197 MS. YAFFE: That's right.
1198 MR. LANGFORD: Acquiring licences or exercising licence rights you didn't know you had. And when we buy from -- if we could just stay with the Americans for a minute and we could go to the other non-American form. When you are buying this five to 6:30 block of an hour slot from 5:00 to 6:00, and a half hour slot from 6:00 to 6:30, who do you buy from? Do you buy directly from the Americans or do you buy from some Canadian who has already purchased rights?
1199 MS. YAFFE: Actually, both. I think there is an interesting mix of support -- of suppliers in the marketplace. First of all the major distributors, the studios like Warner Brothers or MGM obviously have operations in Canada and those people call on us regularly with programming for our service today and we continue to buy from them, as we do today.
1200 Also of course in the packaging of programming and I am -- I will explain that if it isn't clear but clearly when the big packages of American programming are sold to networks they often put in the very, very best and a few that may not be quite so wonderful, but are important. And some that really the buyer just does not have time to show. And so there could be an oversupply to some of the buyers in the marketplace today and so they will be buying Canadian conventional rights for those American shows but actually not broadcasting them and we might go to those suppliers and actually in an interesting way buy American rights from a Canadian source that has actually rented those and has the ability to sublicense them if necessary.
1201 MR. LANGFORD: So to put in an example that might be understandable out of ["agara"] as you guys call it, I had agoraphobia by the end of it, I must say. You would go to someone like Global for example who has Survivors and Friends and so on, these other very, very popular shows and in buying those, what you're saying is they may have bought also XY and Z and they just simply have no room for them, they're decent shows they could be popular they are perhaps playing in some places in the States to good audiences but we are not seeing them and those you would pick up from Global and others you would pick up from Warner brothers themselves.
1202 MS. YAFFE: Right.
1203 MR. LANGFORD: Okay. Thank you very much. Is there a difference in price do you think or do you tend to get a good deal if they're just lying around on the shelf or do they drive a hard bargain because you are the new guys in town?
1204 MS. YAFFE: Well, we work hard to get them at a good price.
1205 MR. LANGFORD: What position does it put you in -- I notice that your line of credit at the TD Bank exceeds mine by a considerable amount and I was delighted for you. I am still trying to peddle that 1988 Volkswagen. What position does that put you in money-wise, compared to the established three that you referred to in your opening address? How do you compete?
1206 MS. YAFFE: Well I think to be honest a new entrant into television doesn't have the opportunity to compete at the same table. We certainly won't be at the major event of the year, the May screenings, which is where the big broadcast programs are sold, we won't be at the same table there. Those are, first of all, long standing relationships. A lot of those programs, Survivor and others, have been dealt to broadcasters and have year-after-year renewal elements to those contracts. We don't actually see ourselves at the same -- in that competition. We do on the other hand believe and we have great experience that shows that there are other places to get both American and non-American programming. Other networks, particularly the cable networks in the United States commission more and more original programming that isn't on conventional television today and we think those are good places to shop at a reasonable price, which is what I like to do.
1207 MR. LANGFORD: No argument from me. But does it put you in a position of -- disadvantageous position in the sense of ratings because your -- you could hook on to, you know, sort of the next Monty Python or something low budget that everybody falls in love with and it's yours and oh, happy day. But on the ordinary hand it's arguable, speaking academically, is what you are buying second level, second tier. If it were first tier Global would be showing it instead of Survivor, or they would find a way to show it. Does it put you at a disadvantage when going out and getting advertising for the maximum buck?
1208 MS. YAFFE: One of the questions you have to ask yourself in putting the business plan together is what share of audience do you think you will attract because that really does drive your advertising revenue. And we have been practical and realistic about it: no, we don't think we will compete for Survivor but yes, we watched other conventional stations lock into the Monty Python of the day. We do expect to be able to offer different programming and we hope some of it will become very popular but it hasn't -- it isn't a fundamental of our business plan that we compete for the ERs and West Wings of the day but we choose to try to do things a little differently by choosing programming that one wouldn't automatically expect to see there and will resonate with audiences. So we have been conservative with that audience but I think we show that the size of audience we think we can attract will drive our business plan.
1209 MR. LANGFORD: That's a good segue into our final area which is audience and dollars and, as you say, your conservative plan but it still deserves a little bit of poking and prodding. You speak in one of your charts you provided what you think your share of revenue will be and you provide a split in year one of projected advertising revenue, Canadian versus foreign, of 30 percent Canadian and 70 percent foreign. But then you have it moving in very clear incremental steps. Year two is 32 - I am just doing the Canadian now - year three is 33, year four, 35, year seven (sic) 37, year six, 38, year seven, 40, to a 40/60 split.
1210 MS. YAFFE: Right.
1211 MR. LANGFORD: Perhaps nothing is typical in this business and you have a plan and you have a very local, focused plan, but can you give me some idea how you reached what I would say is an optimistic conclusion based on what else you have seen?
1212 MS. YAFFE: I guess you would have to describe Alliance Atlantis as an optimist, I think that's been our heritage and I think that's what we believe in and I think we think that by spending real dollars on Canadian programming and putting in the heart of prime, you can drive an audience with it and that's what that reflects and our experience to date, at least on our specialty channels, is in some of the lifestyle channels, in our drama channel, we have been able to create Canadian content that is in our top 10 programming and often outperforms foreign programming. So I guess what you're seeing there is optimism for Canadian content. As you mentioned it's our heritage, it's what we do best and we believe in it and we think it will drive advertisers because it will drive audiences so I guess you have caught us being optimists.
1213 MR. LANGFORD: Okay. We all like optimists but people say pessimists are optimists with experience so we don't want to leave them out of the equation either. I am looking at your schedule again though and we're looking -- using your chart and your projections, would it be a considerable move, 10 percent is a considerable move albeit over a seven-year split, it's still 10 percent -- but when I look at a schedule, assuming the schedule stays somewhat like this, more or less like this, I don't see where there would be enough Canadian to generate it, even if it were extremely popular Canadian. That may be my misunderstanding, but if you look at Canadian acquired on Monday you have got an hour from 10:00 to 11:00; on Tuesday an hour from 9:00 to 10:00; another hour on Wednesday from 8:00 to 9:00. You get the picture that stays consistent I assume. So give me some idea of why you should be that optimistic.
1214 MS. YAFFE: I will let Mark answer that in a second, but one comment on the schedule. Of course it is just one draft. What you have actually been identifying is that Canadian is in the heart of prime time and I think it is fair to say that there are lots of conventional stations that don't today, although of course they meet their conditions they may not put it in the heart of prime time and we have chosen to do that. Of course that's where you have the opportunity to have the most viewers. But I'll let Mark answer that.
1215 MR. RUBINSTEIN: Thanks, Phyllis. Commissioner, I think to turn the issue around slightly, number one is we thought the important thing was to be prudent in the early years recognizing the challenge that any new local entrant is going to have coming into the GTA. It is surely going to take some time for all of our local programming and some of our Canadian programming to build audiences and through a sustained innovative marketing approach, the tremendous cross promotional opportunities that Alliance Atlantis bring, not just through our television operations, but our other operations in the GTA, including theatre screens, video distribution centres, et cetera, we think that given -- given sufficient time over the years we will be delivering greater audiences to -- to our Canadian schedule.
1216 And I guess going back to a comment you made earlier in the questioning, if anyone knows the craft of producing Canadian programming well, it's our company. And so if any company can come before you and show some modest growth in viewing to Canadian and we have an experienced television sales force led by Brad Alles behind me who may want to add to this, I think it's our company which can make that claim. We have tried to be conservative, realistic. It is a seven-year projection, sometimes things don't go as planned. It may be off slightly but we are determined to make growth in that area because we believe in Canadian programming as part of the service.
1217 MR. LANGFORD: Well, help me to understand where the money will come from because if we focus on your Canadian content, an awful lot of it - and I only say this as someone who is just counting hours, I don't say this in any way critically - but an awful loft of it is local. And local is your focus on this station. But is that where the ad dollars are?
1218 MR. RUBINSTEIN: Well, local -- local can be a good business. Local news done well for the GTA can be a real differentiator for advertisers and although -- we haven't gone into this area specifically but if one looks at the void in the marketplace for advertisers in Toronto, as we talked about in our opening presentation, that void is specifically in part to address consumers and viewers in the GTA. And what programming speaks better, in a sense, to those consumers and those viewers than local programming? So you know, having had the experience of working in conventional television and seeing the draw of local programming, both the viewers and the advertisers, again I think we have tried to be -- we have tried to be conservative in our early years with some modest growth out to year seven.
1219 MR. LANGFORD: But would it be incorrect of me to suggest that though you may capture an admirable slice of the local advertising dollar as you hope to do and as you project doing, some of it from Buffalo, some of it from other local people some of it because there is just to time available so you say, no time for sale, isn't it in a way hampering your ability to earn maximum dollars for that time? And wouldn't you be smarter in a way to fight it out for the national advertising the larger regional advertising rather than to take the local? It may be the other conventional stations will say fine if that's all they want is Fred's Pontiac around the corner let them have it, because I'm going to sell to General Motors or to Ford. How does that really help you earn the kind of money that these sorts of stations need to generate in order to survive?
1220 MR. RUBINSTEIN: I guess it returns to the question of balance. You're absolutely right, the national advertising is vital to every conventional television station in the system today. And as you see in our application, national advertising revenues represent the majority of revenues throughout the term of our licence so that's not changing can that's simply a fundamental -- a reality of the conventional television business. But you know, there are intangibles that go with the sales process which don't just have to do with specific advertising and those kind of intangibles include creating a recognizable identity for a new entrant which in part is formed by innovative local television which fills unmet demands in the marketplace. So we feel that our local programming commitments are not just sales opportunities, they are; but they also allow us to build over time a credible relationship with viewers who haven't had anything new to look at in terms of local television for a very long time.
1221 MR. LANGFORD: I appreciate the relationship and I think you were very clear on that earlier this morning. I am just trying to be clear in my own mind of what programming would attract what type of advertising. And are you indicating to me now that some of your local programming, whether it's GTA morning, GTA neighbourhoods, might attract national as well as local advertising?
1222 MR. RUBINSTEIN: What -- what -- we're saying that -- that national advertisers, advertisers who advertise in many markets across the country including Toronto, wish to reach GTA viewers. And if we deliver those GTA viewers through strong local programming we have actually formed the relationship which national advertisers are seeking. Local advertisers, predominantly physically located, headquartered in the GTA, have an even closer affinity to local audiences which can be delivered through local programming so the symmetry fits all ways. Both national and local advertisers seek to serve local audiences, the GTA audience that we seek to serve.
1223 MR. LANGFORD: So that's a yes?
1224 MS. YAFFE: The answer is yes.
1225 MR. LANGFORD: I am not trying to be facetious and it's not my area of expertise so I want to be sure I am right on this, otherwise it puts an awful burden on your five hours in prime time, a huge burden if it's not being spread over your other 41 hours of original local programming.
1226 MR. RUBINSTEIN: Well it does place a burden in terms of percentage terms of course when you look at the absolute dollars involved. If you look at the 20 percent of local advertising as a percentage of our total year one and year two revenues, it's quite a very small percentage relative to the existing total amount of advertising that's in the Toronto market today, the GTA area today. So while in percentage terms it may seem potentially burdensome, in real dollar terms it's not overly ambitious.
1227 MR. LANGFORD: Let's talk about the burden on others a little bit. I think I am almost at the end of my questions, and you may be at the end of your ropes. There is not much either of us can do about that at this point. If you are going to take -- let's deal with the narrow focus at first. You are obviously not going to attract all new advertising, by your own assessment some of it will come from others. Now, one station that you have pinpointed is the FOX station coming out of Buffalo. What gives you the sense that you can count on taking the amount of money you think -- you have projected to take? Why have you hit on that sum?
1228 MR. RUBINSTEIN: With respect to repatriation, I guess there are a couple of issues we should try and deal with quickly. One is, what's the size of -- of the amount of money that Buffalo border stations including WUTV would be taking out of Toronto? And there has been I think historically both in Toronto and other markets where border stations sell, debate about this. I have had the privilege of working on some industry groups over the years, exactly on this issue within the context of Bill C-58 to try and understand whether or not that tool was still a good tool as part of a support mechanism for the broadcasting system. And five or six years ago, based upon industry estimates, as part of that exercise the pool was identified as somewhere in the range of $25- to $30- million. For purposes of our application we independently went out to media buyers and got their pulse on whether or not Buffalo border stations are actively and successfully selling in the GT area. And the answer was yes. We then further independently commissioned Insight, which is a division of media company, one of the largest buyers of advertising time in Canada, who also found the same conclusion.
1229 So we have this range, it could be 25- million dollars, it could be 22-million dollars. Of whatever that range is, it's still a larger amount of money being siphoned out of the system. Our estimate is that 17 percent -- pardon me, that 4.2-million dollars would come from repatriation dollars. 4.2-million dollars. That's about 17 percent of the amount of money that WUTV predominantly is taking out of the market. And when you talk to advertisers why they're buying that station in the first place, it goes back to precisely the void in the marketplace. Media agencies are buying Buffalo border stations because of the regionalization of Toronto stations over the last decade. So it's no longer fully affordable, nor can they find available inventory in good programming slots if they only want to reach GTA viewers, because by doing it on the regional stations - because they are all now regional - they're paying for audiences they didn't want in the first place in some instances. And when we asked these media buyers, and again confirmed independently by Insight, are you prepared to return some of that spending to a new local entrant, based upon the kind of programming schedule that Phyllis and Norm and others have taken you through, and based upon the fact that we intend to be able to work actively with local advertisers on promotions, market-driven specific initiatives, we were told in each instance, yes. And for a couple of reasons. One, their reference is to buy Canadian, if they can. Two, there are currency market fluctuation issues where you are never quite sure where the Canadian dollar is going to rest. And three, Bill C-58 remains an important barrier. And you know, it is a big hassle still to try and deal with that bill and so if a new local entrant, as proposed by our company, is licensed, we think we can repatriate not all of the revenue, but a reasonable portion, as I have indicated.
1230 MR. LANGFORD: Just a small point on. Thank you for that answer, it's very clear and I appreciate it. A small point on your -- your Insight study. On page 34 of that study they estimate the amount being spent in Buffalo at 30 to 40 million and then later on in the study at page 49 they change that to 25-million. I just want to be clear on this; anybody can make a typo. You have said 22 to 25. Is 22 to 25, is this your final answer?
1231 MR. RUBINSTEIN: Our final answer is in the range of 25-million dollars. If you like, David Brethauer could speak to the range.
1232 MR. LANGFORD: If you wanted to ahead, that's find. I will take all the information I can take.
1233 MR. BRETHAUER: The original estimate of 30 to 40 was based on a number of people in the industry. The 25 was what we utilized in projecting for the future and in a desire to be conservative and not over inflate the possibilities, 25 was used for protection purposes but 30 to 40 is still the estimate of what's available in the market.
1234 MR. LANGFORD: Thanks very much. Finally, just the impact on others. There is a great deal of concern, I think you probably share it on the other side of your -- of your brains, that though obviously new entrants with new ideas and new energies are the most welcome thing that can happen, on the other hand, nobody wants to put an existing licensee with their own level of energy and their own ideas into difficulty. And it's not necessarily that we think a licence entitles you to life everlasting; but it does seem counterproductive to bring in one group and destroy another when what we are trying to do as mandated by the Act is to have as strong an industry as possible and that's perhaps -- well it's perhaps an even exchange but it doesn't really get you anywhere.
1235 The amount of money that you have projected to earn comes in large part, 48 percent, I think was your estimate, almost half, from existing conventional broadcasters. Talk to me a little bit about how they can absorb that and perhaps if you were brought into their team, what they can do to find other advertising to keep themselves whole after this new licensee is on the scene.
1236 MS. YAFFE: Well, I am going to ask Mark to comment on the range of places we think we will get our advertising from. But I guess the one thing I think should comfort the Commission is our experience in specialty has been not just to go after the national advertisers who are out there and whose commitments go out to the regular players but to unearth new advertisers and bring some new dynamic forces into the market. We think we can do that not just in the programming side where we have an innovative programming philosophy, but this applies to our ability to unearth new advertisers and bring them to conventional television. And energize the category of national and local advertisers on conventional television. Let me ask Mark to explain a little bit more of how we came to those numbers as well.
1237 MR. RUBINSTEIN: Commissioner, you asked specifically about the 48 percent amongst the existing conventional incumbents. Number one is I always like to talk about absolute dollars because I think that's really the important way to analyze the impact. Forty-eight percent represents about 13.7-million dollars of our year two revenue. We outline in our oral address that the total Toronto/Hamilton television advertising pie is in excess of a half a billion dollars currently earned by these players. So we're talking -- out of the universe, 13.7-million.
1238 We know from the studies we have done in other markets where our new local entrants are licensed that you do see some fragmentation of viewing amongst the incumbents. It tends to be spread amongst them all, not perhaps always evenly but usually most lose a little bit of tuning. There is not always a direct relationship between share of tuning and share of advertising but it is a good proxy. If we could assume therefore that it's reasonable to suggest that this 13.7-million would be spread amongst all of the incumbents in the market -- and we take one example: We talked a little bit about our sales strategy, we have a sales strategy that focuses on demographic that is slightly older in the industry called 25 to 54. There are a number of players who are strong in that demographic. We took Global as an example. And if you assume that one third of the 13.7 came at the direct expense of Global, that -- that represents about 4.7-million dollars coming from Global in Ontario. Now, that represents about two percent or less of Global's total revenues. So the fact that -- that the impact is spread, that the absolute dollar amount is relatively small, both to their existing businesses and to the pie overall, I think means that they should sleep well at night.
1239 I think -- I think one last point, which perhaps we didn't emphasize, is that we believe there is a structural safeguard in place for the existing players and that is their regional strength. And when we say regional now, we mean regional in the sense that these are Toronto stations that extend all the way to the east including Ottawa, most to the north including Sudbury and that area and all the way to the west including Windsor and they are regional either through signal extension or through network affiliation. And in the buying process advertisers and agencies seek to effectively buy, there exists a priority of buying where these regional players will be bought first before whatever remaining money is available to be spent locally in different cities across the country including Toronto.
1240 So for that structural reason, and for the other reasons I mentioned, we don't believe and I think we have established that our impact would not be undue on the existing players' financial capability in the future.
1241 MR. LANGFORD: That's a good answer. I suppose though that you have got plans for the eastern front and the western front eventually too, and that this isn't the end of your ambitions to -- I say that in a -- in the most kindest way, this isn't -- isn't the end of your -- of a movement into different areas of television. My final question would be, what areas might you be getting out of? I mean is -- is this large corporation now changing? I was interested - what got me thinking about this is that I did give you an opportunity to rethink your 75 percent commitment to outside production and you weren't interested. Are you moving out of production, are you moving out of any existing areas you are in and putting your resources more into conventional television, and perhaps moving regionally eventually?
1242 MS. YAFFE: I will invite our chairman, Michael MacMillan to answer.
1243 MR. MACMILLAN: Certainly the single priority for Alliance Atlantis's strategy going forward is to grow our broadcasting business. Having said that, we think it's very important that successful broadcasters are broadcasters who are also content people, and our contact background and our contact skill is an essential part of being a good broadcaster. We have in our program making and program distribution side of the business, we have been in the process of making some changes and it's really this: We have decided that based on market conditions and what we are good at we want to focus on two things in our production business. Number one, impactful, clearly Canadian programs that are made first for the Canadian viewer. And in our company's history are currently shows like This Hour Has 22 Minutes or The Associates or Traders, those kind of shows. High impact, clearly Canadian. The second category I want to focus on is equally high-impact internationally focused but quality shows. In our recent experience, mini-series like Nuremberg or Joan of Arc, series like CSI. What we don't want to do particularly and we are going to be reducing our involvement in, is the in between stuff: that vague, beige land of programming that's mostly financed by and aimed at the U.S. syndication market that neither gives us adequate financial returns nor is prideful. Often it would involve Canadians but is shot in New Zealand or Australia. They don't deliver effective financial results. So we want to focus our resources on the two areas I just mentioned. But it's not getting out of production, it's a matter of focus. And at the same time we are growing aggressively our documentary and children's production business, particularly the documentary business; (a), we're good at it and (b) it's an area of traditional Canadian strength.
1244 MR. LANGFORD: We will be seeing more of you.
1245 MR. MACMILLAN: Yes, indeed.
1246 MR. LANGFORD: Well, those who are against you joining the club at least know how much you want to join. Thank you very much those are my questions. The chair will tell you whether there are other questions. There certainly will be some I think from the legal side of our business. Thank you very, very much.
1247 MR. MACMILLAN: Thank you.
1248 THE CHAIRPERSON: Commissioner Cram.
1249 MS. CRAM: Thank you. I wanted to start with you, Ms. Armstrong. And you were talking earlier today about 84 percent -- oh, my colleague was referring -- Commissioner Langford was referring to 84 percent of people being very or somewhat satisfied with present TV and you referred to the bulk being in the "somewhat", which is lukewarm. Isn't that also right that when you talk about very likely and likely, that the likely is also lukewarm? So when you talked about 76 percent of people in July of this year being "likely" to watch, and then those numbers going up to 86 percent being "likely", that also is lukewarm?
1250 MS. ARMSTRONG: You are absolutely right that it is true that people are more somewhat likely had -- or rather somewhat satisfied than very satisfied with current offerings and true people are also somewhat likely than very likely to say they are going to watch the new station. My assessment of this is that, as I said before, when we as researchers ask satisfaction questions, we know that Canadians, as I said before, are nice and want to give answers that are going to please the researcher in terms of satisfaction questions. So they may overstate their satisfaction with -- with local TV service, with anything really. In contrast, I am not sure that people are as likely to overstate their likelihood to change their behaviour or to do something like watch TV, therefore I don't think that people have overstated their interest in watching this new station, I think that other evidence as well from the study shows that there is -- there is an appetite for the kinds of changes that Alliance Atlantis is proposing.
1251 MS. CRAM: How many people said they would be very likely to watch at the first of the survey and the second -- the last part of the survey, the end of the survey?
1252 MS. ARMSTRONG: Thirty-three percent said that they would be very likely when we asked the question right at the beginning of the survey. And 38 percent said that they would be very likely to watch after we had gone through all the discussion.
1253 MS. CRAM: Thank you. The other area that I was concerned about in this application is the issue of -- you have been in specialty programming and, fair to say I think, have done an excellent job. But the difference between specialty and conventional is the fact that you are off-air, widely available. And it appears to me that we have different requirements for that, especially in terms of on-aerial presence and reflection. And I note what you have talked about in terms of the on-air initiatives and the diversity of concepts.
1254 But I guess what I am concerned about is Toronto. And the numbers are startling to me in terms of people who -- who are not English, British origin. And when I look at the 1996 census, in Toronto alone 4.3 million and British origin 457,000. And as we know the numbers are increasing. Now, -- and so I preface that with I don't think the EEA is enough. And I -- I don't see, with all due respect, an aggressive approach to both the on-air presence and -- and the reflection issue in terms of diversity and I only say in passing, and I am glad there are five women on your panel, but it does not appear visible minorities are respected overly and you know we take things from that, at least I do. I shouldn't speak for my colleagues but this is a new area for you -- and something that to me needs something more than exploratory talks with APTN.
1255 MS. YAFFE: Well I am very glad you raised it, because it is one of the fundamental underpinnings of our programming philosophy, and I think we could engage for just a minute I would like to ask a few people to comment on this, particularly Cindy and Rita Cugini. We certainly want to emphasize that one of the reasons we approached this from the greater Toronto perspective is because that is very much made a part of the city that has become home to many new Canadian who we want to represent on the service so we think that first issue does help bring people who are somewhat underrepresented on to the television screens.
1256 I would have said, and perhaps we didn't make it clear in our presentation, but I would have said we have taken a very aggressive approach to this. First of all, we believe that the diversity issue is the best issue -- the diversity of the city is best reflected by building it into everything you do in the station, not just the on-air personalities, not just the way you cover local news stories, but building it into your total programming philosophy. And that's what we tried to do in building these blocks of programming. We also believe it's absolutely crucial to be reflected not just in front of the screen but behind the screen in the employees that you bring to the business of broadcasting. And I am just going to ask Cindy to tell you a little bit about how we think we could bring a new approach to that perspective on the air and I am going to ask Rita to tell you a little bit how we will bring those people to the GT environment altogether.
1257 MS. WITTEN: I would like to speak specifically about how we will approach stories and local issues. It's something we have thought a lot about. Maybe I could use an example. Take Ramadan. Instead of doing a standard story, going to a mosque and talking about what Ramadan is, I think we will go a little further. I think that that kind of treatment is more of a curiosity, it doesn't say anything specifically to the Muslim community, it creates a non-Muslim/Muslim distance. And so what we would like to do is treat it much more inclusively and we would stories that we do throughout the month so for example we will have our health specialist do a story about addiction. So we will interview a pilot that is en route to Europe and has to go several hours without smoking. We will interview a stockbroker who is observing Ramadan and is a bit light-headed because he is not drinking his usual five cups of coffee we will talk to a physician about what's happening in our body when we're going it through withdrawal and we'll consult an additional specialist with strategies on how to deal with these periods in our life. I think this story illustrates that that it is a unique experience but at the same time a shared experience and we are speaking it a specific community quite directly, while we're speaking to all communities. And it's really the way stories should be told in a community as diverse as ours.
1258 MS. CUGINI: Thank you, good morning. Alliance Atlantis has developed a diversity best-practices document that will be applied not only to GTTV but to all of our specialty services a well. And I should preface this discussion to say that on our specialty services I think if you flip through the dial you will see that we go to great strides to reflect the diversity that is Canada with programs like Life's Little Miracles on Life Network. Certainly history programs on History Television and throughout our specialty services.
1259 But in this diversity document, what we have included are not only initiatives and practices, but actual measurement of how we will reflect the cultural diversity. Specifically for GTTV there are four very important initiatives. Donna Bevelander has already mentioned the community liaison officer who will be in each of the five bureaus. But as well we create a talent database that will draw from all of the community groups not only of the four designated groups but we have also expanded our definition of diversity to include cultural groups. Michael argues with me all the time that he is just as much an ethic as I am. So we include the cultural groups we include the gay and lesbian community and so on. This talent database will provide for us the faces we can put on the screen. Similarly, a source database for the people who can answer the questions, the experts who we can put on the screen. We will set up a community advisory board to help us with and identify the issues because quite frankly no one group could pretend to know all the issues of all the cultural groups in the GTA. And we have begun discussions with all of the groups and I venture to say that letters of support from the Canadian Centre of Minority Affairs or the black business and professional association or the North American Association of Asian professionals is very much an indication of how much they believe in this kind of television station and why they believe we are the people to bring it to them.
1260 MS. YAFFE: I think if I could just add one more thing, I think it's important to note that Alliance Atlantis Broadcasting in all of its channels today and from the very beginning has asked the independent producers who create a lot of programming for us to be very careful in reflecting the diversity of wherever they come from or wherever they're shooting to -- so the programs on air do reflect the diversity of the country. We volunteered to fill out the employment equity form for the government last year a little early, but we were happy to do it, and we tested our own staff and we found that you're right we do have a lot of women who work at Alliance Atlantis Broadcasting, I don't know how we did that, we just did it and we're proud of it, we also represent a significant proportion of visible minorities throughout the ranks of the broadcasting group as well as, we're happy to say, both native Canadians and -- and people with disabilities. We know that there is room to grow, there is always room to improve in this matter and we take it very, very seriously. We have -- our practices, that Rita referred to, are really in just a piece of paper. There are practices that Michael and our CFO have agreed to, and that Mark Rubinstein is in charge of making come to life on air and behind the scenes and we feel very, very strongly about those.
1261 MS. CRAM: I actually agree that Scots are a separate culture. I am from the McGregor clan. I wanted to talk about the rebroads. Can you live without your rebroadcasters?
1262 MS. YAFFE: We have looked at that of course and we really believe the issues that cross those barriers, that those boundaries of geography are not -- you know, -- are -- there are no barriers, those territories really do intermingle. Ms. Middleton is just one example of people who live and work as far west as Grimsby and come all the way to Toronto every day. So from a programming point of view we think it seriously impedes the notion of service. We think it's a fundamental of what we're trying to accomplish. We would rather do it with those rebroadcasts.
1263 MS. CRAM: Were your financial projections based upon having those rebroads?
1264 MS. YAFFE: Obviously not from selling local advertising into those markets. Of course the larger the audience it would help us on financials.
1265 MS. CRAM: So it was based on share of having those rebroads.
1266 MS. YAFFE: Yes.
1267 MS. CRAM: Were your financials based on cable coverage on channel 13 in the area covered by rebroads?
1268 MS. YAFFE: Well, certainly living within the priority carriage rules is an assumption we'd make.
1269 MS. CRAM: And if you didn't have the rebroads and the coverage it would give you, how would that impact your financial plan?
1270 MS. YAFFE: Somewhat, I think I will ask Ms. Middleton to answer that question.
1271 MS. MIDDLETON: We did a number of different scenarios and models and it would not have a material impact on our business plan. It may just have our breakeven a year or two later.
1272 MS. CRAM: Thank you. Thank you, Madam Chair.
1273 THE CHAIRPERSON: With regard to the -- to your -- the news component which is very extensive, can you tell me what the difference would be for example GTA morning news, GTA noon news and GTA neighbourhoods, perhaps I can more easily see a difference with GTA scene because it's going to be entertainment. The reason I am asking is this was brought up in Vancouver as well, recently. In the last while and during the hearing -- in the renewal of the Global and the CTV stations I personally was surprised to find that a lot of things we thought -- I thought would disappear from the screen because they were on -- under non-news were actually in the news, in the news item. So where would, for example daily, would they be in GT neighbourhoods or in the news, things like today's sunshine child or the most active senior in Oakville or Burlington or Newmarket? Like is news going to be actually happenings, murder, an accident, a fire, the election of a new mayor - of course you will have not too many around - council whatever, because when we speak -- when I look at this many hours of news, some of which is local and Commissioner Langford, if I recall, raised that, it's a lot. But it all depends on what's in there. For example I found when we had a renewal of CTV and Global, that something like -- or I think we asked in Vancouver and we could ask here, where would a program such as parenting a toddler of Chinese heritage in Richmond Hill, especially if it ended up in saying, well there is no daycare with Chinese-language care givers. What's the difference between GTA neighbourhoods and the news, and what's in the news? Because I kind of agree that the amount of local news makes you wonder how is this going to be done and be of quality. I know a lot of things are happening but it's every day and it's a lot.
1274 MS. YAFFE: Right. Well it's five days a week of course and I think you're right in saying that the -- the three hour morning news is -- is really a combination of many different elements. But the half hour programs that go throughout the day are much more focused on news that is timely and factually based. I am going to ask Cindy to explain to you a little bit about our theory of where those kind of shows of moments would be covered. But I think it's fair to say that what seems like news in Halton is -- is a story that sometimes might be covered and because we have the bureau, it might be covered in one -- in our neighbourhood show, you know, we will have to make that distinction as we create these shows. It may not seem like news to people from outside of Halton, but if we can reflect the diversity of their community in some part of our scheduling, I think we have gone a long way to adding.
1275 THE CHAIRPERSON: I am not sure that -- that you have understood. What I mean is what am I supposed to imagine goes into -- into this length of time? Is it just news in a very traditional way of what people think of news, or does it include what used to be clocked under non-news, and let's say in this CTV station in Ottawa, and we are told no, no, no that's not going to be disappearing because when we press about this in this case: not why so much local news? Are you going do it, but why not enough, were where are these programs going, no, no, no, they're in the local news they're not going in this case it's the flip side. Are those issues going to be in what is called news which would make it a little more believable that you could actually make this length of time in news interesting?
1276 MS. YAFFE: Let me ask Cindy to take you through.
1277 THE COURT: I hope this is helpful now.
1278 MS. WITTEN: I think that our news will differentiate from our other programs by being harder. It will be stories of hospital, schools, highways, taxes. I think that we are - our value-added in the newscast is we have specialists, consumer specialists that will be doing bigger pieces that respond to what our audience is thinking about and caring about and issues that they have. We will have columnists with satire and opinion pieces about the news. So those are some of the elements that will make up the harder portion of the say the 6:30 news. I think that neighbourhoods will be a little bit softer, it will be positive, it will be upbeat will profile people that are making a difference in their neighbourhood such as a single mom who is collecting gifts for teenager education program, the minister of a Chinese baptist church in Brampton who has opened up his church to a Caucasian English-speaking minister, those kind of stories.
1279 THE CHAIRPERSON: So we wouldn't have to burn all of Halton down to have news every day for three hours. Cable carriage, you will be reaching how many cable companies?
1280 MR. RUBINSTEIN: A large number.
1281 THE CHAIRPERSON: And I don't know if Mr. Elder will eventually come back to us and explain away or explain that in fact the way that Toronto is configured once you reach one head end you are on your way to Brampton and that's not technically possible to limit.
1282 MR. RUBINSTEIN: My understanding is that number one, a large number of these cable systems certainly in many of the major areas are controlled by the same distributor and of course we are talking about one signal, we are not talking about multiple signals for multiple stations since our rebroads are just that, the rebroad of our main GTA service. My understanding is although I am not a cable expert, my understanding is that with -- that those distributors do have the technology to ensure that even if there is some interconnection going on, even between their own systems and other systems not owned there is a way to ensure that our signal is not being carried in areas that it's not required to be carried.
1283 THE CHAIRPERSON: I was thinking more of where Rogers for example has interconnected head ends. I stand to be corrected but I -- my understanding is that it's very difficult on analog to limit the coverage once you reach that head end. And -- or else in many cases there are no head ends it's just interconnected --
1284 MR. RUBINSTEIN: Well --
1285 THE CHAIRPERSON: -- To a very large area.
1286 MR. RUBINSTEIN: To use Rogers as an example, in southwestern Ontario where they are interconnected our service would be carried, therefore the interconnectivity is not an issue. I guess we can investigate to find out whether or not if there is some interconnection into Ottawa, for example, --
1287 THE CHAIRPERSON: Well, no, do I think Mr. Lastman has reached Ottawa yet nor the interconnection but it can be a very -- very large area around Toronto. Now, I stand to be corrected by Counsel if I am making a mistake but I thought in some cases even a rebroad over the air would become a signal that has to be carried, because it's based on technology, not -- not on a pure rebroad because it's an over-the-air signal that fits within the regulations. It's not relevant whether it's a station in the sense that it has local programming or different programming.
1288 MR. RUBINSTEIN: And it's not our intention to have the two signals on one cable system.
1289 THE CHAIRPERSON: That's what I was driving at. Therefore you would, like an applicant we heard yesterday, be quite amenable to an exception being granted if you were to grant all three antennas, that you would be satisfied.
1290 MS. YAFFE: Yes.
1291 THE CHAIRPERSON: And I think that was the other question. Counsel?
QUESTIONS FROM MR. RHEAUME/
QUESTIONS DU M. RHEAUME:
1292 MR. RHEAUME: Thank you, Madam Chairperson.
1293 One quick question regarding your financial projections, and you touched on it in a discussion with Commissioner Cram. The significance of the Hamilton and Kitchener transmitter regarding your business plan. I am not quite clear on this. If we look at your projections over seven years, is there a percentage that is derived from either Hamilton, a Hamilton transmitter or Kitchener transmitter or both?
1294 MS. YAFFE: Mark?
1295 MR. RUBINSTEIN: We have done the work in terms of the first couple of years in terms of a projection. I mentioned earlier that although it was not a direct proxy between viewing and revenues, it's some indicator. We expect less tuning in Kitchener/London to GTTV than it would secure in the GTA but I will ask Brad to give you the specifics in that regard in terms of revenues.
1296 MR. ALLES: Thank you, Mark, good morning. In year one we have calculated that revenue from the Kitchener and London market will total approximately $900,000 so it's been 4.6 percent of our total revenue in that first year. And just by way of note the Insight study suggested that market was worth roughly 90-million dollars so this would be approximately one percent of the money that was going to Kitchener and London. It rises somewhat throughout the seven year period to approximately 13 and a half percent of our year seven revenue directly attributable to London and Kitchener - without, as Mark said earlier, any local sales in those markets.
1297 MR. RHEAUME: And how about the Hamilton market? you would be, I assume, on cable in Hamilton. So is the Hamilton transmitter of any significance to your business plan?
1298 MR. RUBINSTEIN: The -- the -- you are correct that -- that we believe that our transmitter in Toronto would make the station a must-carry in Hamilton on the basis of that transmitter, but we have applied for the retransmitter in Hamilton to get best-quality off-air coverage and since the station would be a must carry-on cable we thought it would be logical and -- and in the public interest to also have maximum quality off air.
1299 MR. RHEAUME: So there is -- there is no percentage of revenue, then, that is strictly attached to the Hamilton transmitter.
MR. RUBINSTEIN: Correct.
1300 MR. RHEAUME: Thank you. Now the key points from the application, key points 1 to 10 that you have discussed at some length with Commissioner Langford, I would think that you would agree that most if not all of these would be made conditions of licence; is that your understanding from the discussion with Commissioner Langford?
1301 MS. YAFFE: Yes.
1302 MR. RHEAUME: Right. So maybe clarify a couple of things here. Key point number two, eight hours of priority, I believe you answered that 176 hours over the year would be original. By this of course you mean never been seen on TV anywhere?
1303 MS. YAFFE: Pardon me?
1304 MR. RHEAUME: Never --
1305 MS. YAFFE: Never seen before on television.
1306 MR. RHEAUME: Never seen on TV.
1307 MS. YAFFE: Yes.
1308 MR. RHEAUME: Could you provide a breakdown of these programs, 176 hours or is it too soon to provide a breakdown?
1309 MS. YAFFE: We could. I think our plan in the draft schedule is to make it up with 26 hours of documentaries we have talked about, the 26 episodes of a drama, and some of the GTA scene, which is a priority program. So we could obviously write this down for you if you like but we do have a way of getting to that 176, clearly.
1310 MR. RHEAUME: Okay. Now, point number 5, new original dramatic series with local themes, et cetera, and then point number 6, Canadian drama or documentary in the heart of prime time, no less than five nights a week. How much of that would be original and how much would be reruns or having been seen on conventional TV or specialty?
1311 MS. YAFFE: Well the 26 half hours of course is original, that's the original and some of the other might be original, but certainly some of the documentaries of course would be original because those would be part of our priority programming that we have just discussed, the 26. So obviously part of the drama and some of the documentary.
1312 MR. RHEAUME: But you would not know right now what the quantity would be.
1313 MS. YAFFE: Of original programming within that hour --
1314 MR. RHEAUME: Of original, never been seen.
1315 MS. YAFFE: No, I would have to actually sit down and work that out for you. If you like I could.
1316 MR. RHEAUME: And that would be in peak time of course.
1317 MS. YAFFE: Yes.
1318 MR. RHEAUME: Descriptive videos. You commit to one hour a year and then escalating to two hours. Is it your plan that this commitment would be for dramas and documentaries and prime time.
1319 MS. YAFFE: Yes, we have already done quite a bit of it already and that's what we think is appropriate, yes.
1320 MR. RHEAUME: Thank you. Thank you, Madam Chairman, that's it for now.
1321 THE CHAIRPERSON: Thank you. The last word, is yours, Mr. MacMillan. You will have to persuade us now that the channel, channel 52, which is applied for by five applicants, should be awarded to you.
1322 MR. MACMILLAN: I learned a long time ago to always give the last word to Ms. Yaffe.
1323 THE CHAIRPERSON: Commissioner Cram will be delighted in that decision.
1324 MS. YAFFE: Well, I guess when we step back to try to convince you of that, I guess what we believe is that the fact, the objective facts about audience and advertiser research are clear on both the need and the demand for a new conventional station. And those are of course the first two tests one has to argue and win in terms of conventional television and in your call. We think that this market, the richest in the country, is strong and will not be damaged by a new competitor, in fact we believe by adding new, fresh, interesting programming but also people to the mix of conventional television, we think we will grow the market as we enter it.
1325 Our proposal is grounded in solid audience and market research, and we are very confident of its success. Our plan I think is the right one for the market as we live in it and see it and know it today. We think what we offer is a very experienced production and broadcasting team, a significant infrastructure that exists here in Toronto that allows us to create synergies from an already established broadcast facility. A new editorial voice which we believe is significantly lacking and hasn't been added to the television market in the Toronto area, as a matter of fact has been reduced in the Toronto area. An innovative programming philosophy that does rely on the changing diverse population that we think needs to be reflected on local television, part of the day. And our strength as great content creators/providers both to our channels and to other channels throughout the system and, most importantly, always strong, credible commitments to benefit the Canadian broadcasting system and if I could just add, we have been the people who have made strong commitments to the system over the years. Some would have said impossible-to-meet commitments, but every time in every situation we have met that bar and raised it for others as we joined this industry. We would love to have the opportunity to do that again at GTTV. Thank you.
1326 THE CHAIRPERSON: Thank you, Ms. Yaffe. I assume, I see that you agree with all this?
1327 MR. MACMILLAN: Every single word.
1328 THE CHAIRPERSON: We thank you for your co-operation and patience and we will see you again at the next phase.
1329 MR. MACMILLAN: Thank you.
1330 THE CHAIRPERSON: We will take an early lunch. It will be easier I think on the Craig panel than if we just begin and shift again. We will be back then at 1:30. Thank you.
--- Luncheon recess taken at 12:06 p.m.
--- On resuming at 1:35 p.m.
1331 THE CHAIRPERSON: Welcome back to our hearing. Mr. Secretary, please.
1332 MR. CUSSONS: Thank you, Madam Chairman. Our next applicant, Craig Broadcasters Incorporated. They have applied for a licence to operate an English language television station in Toronto with a transmitter in Hamilton. The new station in Toronto would operate on channel 52 with an effective radiated power of 59,000 watts. The transmitter in Hamilton would operate on channel 45 with an effective radiated power of 10,000 watts. The station would broadcast a minimum of 14 hours of local programming a week, local English language multicultural programs would be aired. Mr. Drew Craig and his colleagues are with us today. Welcome to our hearing, Mr. Craig.
1333 MR. CRAIG: Thank you very much.
PRESENTATION BY DREW CRAIG,
CRAIG BROADCASTING SYSTEMS INC./
PRÉSENTATION PAR DREW CRAIG,
CRAIG BROADCASTING SYSTEMS INC.:
1334 MR. CRAIG: Madam Chairperson, Commissioners, Commission staff, ladies and gentlemen. My name is Drew Craig, president and CEO of Craig Broadcast Systems. I am delighted to be here today to discuss with you our proposal for reinventing local television in the GTA with a conventional television service to be called Toronto 1.
1335 Before beginning our presentation, I have the distinct pleasure of introducing the members of our panel. To my immediate left is David Crombie, former mayor of Toronto, federal cabinet minister and head of Toronto's 2008 Olympic bid. David has graciously agreed to act as honorary chairman of our advisory board. To David's left is Bahadur Madhani, chairman of our advisory board, member of the Order of Canada and past chairman of the Toronto United Way. Bahadur spent much of the last three years as chair of the community outreach and volunteer committee for the Toronto 2008 Olympic bid. He is currently president of the Nelson Mandela Children's Fund, serves on the boards of Royal Ontario Museum, the YMCA, Ontario Premier's Round Table on voluntarily action, Ontario's Promise: a Partnership for Children and Youth and the Toronto Community foundation.
1336 To Bahadur's left is Joanne Levy, executive director of the A Channel Program Production Fund. Beside Joanne is Alexandra Brown, program consultant for Toronto 1. Alex has more than 20 years' broadcast experience; has been involved in the launch of eight Canadian television channels. To my immediate right is Jennifer Strain, vice-president, corporate and regulatory affairs for Craig. To Jennifer's right, Deborah McLaughlin; president, Strategic Inc., vice-president of air time television sales and the author of the consumer demand and market studies. Beside Debra is Cam Cowie, vice-president, revenue management of Craig.
1337 At the table behind me, from your right to left, is Lisa Meeches, executive producer of The Sharing Circle, Canada's longest running aboriginal news magazine program. Rahul Bhardwaj, a lawyer and executive director of our advisory board. Rahul was most recently the vice-president of the Toronto 2008 Olympic bid. He is also a member of the Board of Trustees of the United Way of Greater Toronto as well as chairman of the United Way South Asia committee and a member of the board of directors of the Canadian Opera Company, as well as the advisory board of the Canadian Tamil Youth Development. Paul East is our technical consultant. Al Thorgeirson, manager, station operations for the Craig stations; Linda Noto, Craig's chief financial officer; Jim Haskins, director of the news and entertainment programming for the Craig stations. Marina Glogovac, publisher, Toronto Life Magazine. Bill Duron, executive chairman of Key Media, and president of Toronto Life Publishing company.
1338 And the back table, from your right to left, Brian Ross, president and CEO of Omnicom Entertainment and author of the OMD programming study. David Cairns, author of the Asylum Think Tank Study. David has 20 years' experience in the Canadian advertising industry, heading media-buying operations in top agencies as well as his own media company. And last, but certainly not least, Terry Debono, vice-president of broadcasting, The Second City.
1339 THE CHAIRPERSON: Welcome Mr. Craig and all of you. You are not trying to intimidate us, are you? You are all welcome, of course. Go ahead.
1340 MR. CRAIG: There are two key things that define our proposal for Toronto. The first is that since the last conventional service was licensed in Toronto nearly 30 years ago, the face of Toronto has changed dramatically. Today more than half of Torontonians were born outside of Canada. It is time for a conventional service that reflects this diversity in a meaningful way through its programming. The second is that the Commission's 1999 television policy paved the way for broadcasters to focus their resources on particular genres of programming. In commenting on the distinctive program schedules of the smaller station ownership groups, the Commission said, and I quote, "It wishes to encourage such distinctiveness and provide the smaller players with the flexibility to experiment in new ways to meet the needs of their audiences." We have before you a model that's inclusive, innovative, intensely local, and fills the voids left by the incumbent broadcasters' focus on news as their primary commitment to local reflection. David?
1341 MR. CROMBIE: Thank you, Drew. Commissioners, in the past 30 years Toronto has gone through an extraordinary historic change. The Toronto of 1971 is no more. And the Toronto of the 21st century is now being created every day. For example, in the past 30 years the very economic basis of Toronto has been transformed. Transformed by new technology, new ideas, and new markets. And during that time, after over 50 years of taking in 60- to 75,000, 60,000 to 75,000 new people every year from all around the world, our demographic base has been dramatically changed forever. A stunning diversity of race, colour, creed, culture, ethnicity: those have become the defining characteristics of Toronto. And as we look outward, we have been seeking to renew our role in the Canadian heartland. We have deepened our presence in North America. And we are seeking even greater participation in a global world. In all of this, interestingly enough, we have felt the need to address our local selves, the new us. We felt the need to rediscover our historic civic culture which served us so well in the past and is still the key to our future. In particular, our commitment to economic opportunity and economic growth. Secondly, a continuing importance, crucial importance of place and community and development of the human personality. Thirdly, the constant need to extend the reach of social justice to sustain our social peace. That is why an effective and creative local television programming is so important to us all. The need to tell our stories, old and new, so that we can know one another better and discover where we want to go in the future, together.
1342 I think that Craig is tailor-made for the job. They have a proven record in developing and sticking with excellent local programming. They have developed in this application inclusive programming which will commend itself, in my view, to all Torontonians. If I may say so, they combine this experience and competence with the enthusiasm and energy of a new generation, something that will always be essential for Toronto's future. Thank you.
1343 MR. CRAIG: Thank you David.
1344 We recently filed television licence renewal applications for the Craig Alberta and Manitoba stations, in which we have made significant exhibition and expenditure commitments across our Western stations if licensed in Toronto. These commitments are reflective of the strategic importance of this licence to the Craig group of stations and our ability to continue to provide extensive and diverse local programming in our existing markets.
1345 What will the Toronto proposal mean for viewers in Toronto and for the broadcasting system?
1346 First, it means a commitment to broadcast eight hours of priority programming in Toronto and on the Craig stations in Alberta and Manitoba in peak viewing hours. Second, it means 25-million dollars in incremental funds for the development and licensing of new programs from independent producers in Ontario, and in the Western provinces. Third, it means that new window for Toronto's multicultural communities to have their stories aired and shared on mainstream television that has not been available to them before. Fourth, it means doing justice to Toronto's status as the entertainment and cultural capital of Canada with programming that is as vibrant and eclectic as the city itself. And fifth it means it new editorial voice in news and public affairs programming.
1347 Before discussing these benefits in greater detail, I would like to address the issue of the viability of the market to sustain a new local service.
1348 MR. COWIE: No one is going to argue whether or not we are in a period of economic uncertainty. We are, at the moment. But this is long-term application, long-term proposition. The Toronto and Hamilton market is unlike any other market in terms of diversity and industrial base and its ability to weather changes in the economy. It is also unique in terms of the impact the ownership consolidation has had on the buying and selling of advertising. Television continues to be a viable alternative for all local advertisers in every major market across the country except Toronto. The Toronto EM is no longer accessible to advertisers as a stand-alone market because clients are forced to buy other Ontario markets. As greater Toronto is generally the highest priority market for national clients, the problem of forced regional selling is more acute.
1349 The result is that advertisers have been driven across the border or simply chosen not to use television. This application therefore presents a real opportunity for a new local station to bring advertisers back to television and repatriate dollars from the U.S.. but this could only be done and achieved with high quality, relevant programming that draws audiences.
1350 MR. MADHANI: Toronto is truly a wonderful city, in large part as a result of its cultural diversity. With over 170 countries represented in its population, and over 100 different languages spoken in it every day, it has truly become a City of nations. It is vital for Toronto that all aspects of this diversity be reflected in the media for this is what promotes the common understanding of each other and this, we believe, lays the foundation for a strong future. When we translate this concept into TV parlance, we are talking about a strong commitment to local programming. It is this commitment that we believe is at the heart of Craig's application, its New Voices Fund and is why we have agreed to be the first members of its advisory board.
1351 MS. MEECHES: For 10 years The Sharing Circle has explored aboriginal stories that resonate with both aboriginal and non-aboriginal audiences. Today we know that 50 percent of the aboriginal population lives in urban centres, 22 percent live in Ontario and 50 percent of Ontario's aboriginal population is under the age of 25. Young urban aboriginal people are looking for an outlet that honours their roots and also embraces them as part of mainstream society. Sharing Circle in Toronto 1 will include the stories of Ontario's Mohawk and Ojibwa people and give them a home on conventional television where the stories can be widely shared.
1352 MR. HASKINS: Our research shows that viewers in the GTA wanted three things in terms of news: Alternative scheduling, a new perspective, and more in-depth coverage of news than they get from traditional newscasts. And we gave them all three.
1353 Our flagship newscast, Metro, starting at 7:00 p.m., will be a news magazine format rather than the traditional news headlines approach. Each newscast will include an investigative consumer report, segments about your neighbourhood, a Toronto Life update, as well as feature reports which will use the resources of Toronto life award-winning editorial department.
1354 And Metro will be complemented by stand alone weekly affairs programming such as Made In Toronto, featuring GTA's entrepreneurs; On Your Side, our investigative consumer show, which tested very highly in our research due to its exclusive focus on local issues. And also, One On One, a weekly talk show with the GTA's news makers.
1355 MS. BROWN: What is missing from program schedules in Toronto is local programming that celebrates Toronto's vast entertainment and cultural scene. On any given night, there are about 135 events or performances taking place in the GTA. And even more astounding is that beyond the occasional 60 second clip on a newscast, these performances are not being covered by existing broadcasters. We will cover them. Let me give you three examples.
1356 First, The Toronto Show. Our flagship, The Toronto Show, is one-hour in prime time every week night, of fast-paced television driven by a charismatic host and broadcast life before a studio audience celebrating musicians, comedians, dancers, theatres and bands. A high-quality music and variety show that will define the station, and indeed the city.
1357 Second, Toronto Life television. Toronto Life has been the award winning print voice of Toronto for 35 years. The fit with Toronto 1's local focus is ideal. In addition to daily Toronto Life segment, an hour has been reserved every Sunday night for Toronto Life, the television show, giving GTA residents a heads up in theatre, film, music and the arts, what's hot in cuisine and dining out as well as latest fashions. The show will bring the magazine's City Guides to life, and will draw upon its investigative journalism team to present an in-depth look at the more serious issues shaping life in the GTA.
1358 And third, The Second City. Since 1973 Toronto's Emmy-award winning Second City has been the launching pad for some of the best creative minds in the industry. We are delighted to join Second City to bring Second City Improv to GTA viewers.
1359 MS. LEVY: To support our commitment to priority programming across all of our stations, we are committing 17-and-a-half million dollars to create new priority programs. Seven-and-a-half million in Toronto, and 10-million in Alberta/Manitoba. This is in addition to the 7-and-a-half million for English-language multicultural programming for the GTA. Toronto 1 gives us the opportunity to leverage the tremendous success of the A Channel Production Fund which has, in just four years, completed 15 movies and put 38 projects into development. Toronto producers already know us well. We have worked with them in Ontario/Alberta co-production. And, in fact, many Ontario producers have told me they would love to have the kind of fund here that we have in Alberta to provide the kind of mentoring, funding and the very important green lights that we provide in Alberta. The licence we will offer will be significant, in keeping with our mandate to create quality programming that Canadians will want to watch.
1360 MR. CRAIG: You have heard the program concepts, now let's have a look at Toronto 1.
1361 MR. CRAIG: What makes our proposal the most compelling? We are the only applicant able or willing to offer system-wide benefits should this proposal be approved. We are the only applicant responding to the new diverse Toronto and have access to the collective wisdom and experience of our advisory members to guide us. We are a new voice in this market. We have real life experience launching conventional services in large markets. The projections we filed in 1996 as part of the application for A Channel Alberta are right on the numbers. We did repatriate dollars from U.S. stations. We did bring new advertisers to television. We did not hurt the incumbents. Despite their dire predictions, they continue to flourish. We have proven, time and time again, that we know what we're doing. Our partnerships with dynamic organizations such as Toronto Life magazine and Second City will help us hit the ground running with brands that Toronto viewers will immediately recognize.
1362 And unlike any of the four applicants for a conventional licence before you in this proceeding conventional television is our core business. We have worked hard in our existing markets to provide exceptional local programming. We have taken risks, we have distinguished ourselves from the larger competitors. Madam Chairperson, members of the CRTC, we are committed to making Toronto 1's inclusive, local, innovative format work. We thank you, we now be happy to answer any questions you may have.
1363 THE CHAIRPERSON: Thank you, Mr. Craig. Commissioner Pennefather, please.
1364 MS. PENNEFATHER: Thank you, Madam Chair. Good afternoon. Thank you for your presentation. Before I begin, I would just like to say that I couldn't agree more, Mr. Crombie on the next generation and the contribution to Toronto life and as my colleagues well know I would not miss the opportunity to say I am happy to contribute my new granddaughter to that who currently lives in Toronto.
QUESTIONS FROM THE PANEL/QUESTIONS DU PANEL:
1366 So perhaps we will get underway and start with the nitty gritty of the program grid and the program descriptions you have. On file, we have in schedule 17 the grid that you have proposed and the program descriptions. And if I may, what I have seen and we have worked out here is what looks like the following. We may be off a little bit here and this is the point, to clarify. We have a schedule looks somewhat like this: 55 hours a week or 39 percent of the total broadcast day, Toronto 1, will be acquired, foreign programming. 57 hours a week or 41 percent of the total broadcast day is Canadian acquired. So that brings us to approximately 80 percent programming will be acquired. What we look at, and I think we will need to clarify this, is 12 and a half hours of station produced programs or 9 percent of all programs with the remaining 11 percent as Canadian programs. And these are Real Life, Sharing Circle, New Voices, Second City Improv and World Cinema. There are 26 hours a week of children's programming which is acquired which includes station-produced interstitial programming on Saturdays between 6:00 and noon, 6:00 a.m. and noon.
1367 I want to go over each of these areas and particularly look at the local programming and how it breaks down between local news and local non-news. Particularly in light of your comments as to not only reinventing conventional television, but your particular vision, your particular approach. Your supplementary brief mentions local programming as, amongst other things, the main focus of the new station. And you particularly repeat often that local non-news is especially important as what is missing in the current television environment. This is brought up in several, several points in your proposal. So if we look again at what I just described as the construction of your grid, your program description, we come down to 12 and a half hours of station produced-programs, you have said that you will have 14 hours a week of local programs. With this proposal emphasizing so much the importance of local programming, non-news programming, it seems to occupy a very small amount of your schedule. Can you explain to us how you would go about really reinventing television through local non-news with such a small proportion of your schedule being so dedicated?
1368 MR. CRAIG: Let me start by giving you some indication as to how we developed the model. And what we did when we looked at the incumbent players and we looked at the marketplace, is we really looked at who was doing what. And it seemed to us that what you have in the Toronto marketplace in CTV and Global are effectively large players. They meet the 70 percent threshold in terms of hitting that threshold to be a large player and really the commitment is really in two areas, their commitment is in exhibition and -- and production of priority programming. Which equates to about eight hours a week in each one of their services so on CTV you have eight hours, on Global you have 16 hours. And effectively what they were doing in terms of the balance of their schedule was local news. When we looked at what CHUM is doing in this market, they are, in large part, focusing their efforts on local news programming.
1369 So what -- and what we also did was look at what difference we could make. We -- we read your 1999 program policy very carefully and you challenged us in that policy to be inventive and look for new ways to serve local markets and we think we have done that in Toronto 1. Local programming that's non-news is expensive to do, it's very hard to do. And when you get into the areas of variety programming as an example, it's a big commitment, it's a big leap for an English broadcaster to get into that level of programming so it's very expensive to do.
1370 So effectively what we have done is we have said, look, you've got drama on the one side of the equation for all the large players, and local news on the other side of the equation and what is really missing, what the void is in the area of non-local news programming that's reflective of the Toronto market. So that's really where we focused our efforts.
1371 MS. PENNEFATHER: So if we can, the amount of local programming you will have is how many hours a week?
1372 MR. CRAIG: 14 and a half hours a week.
1373 MS. PENNEFATHER: How much of that will be news?
1374 MR. CRAIG: Four and a half hours a week.
1375 MS. PENNEFATHER: So the balance is non-news.
1376 MR. CRAIG: Non-news programming.
1377 MS. PENNEFATHER: Is that sufficient in your mind, to really say that you have presented something new, you have reinvented television in the sense of providing local non-news? Because it seems to be a small proportion of the overall schedule.
1378 MR. CRAIG: I think it -- you know, when look at the sheer number in terms of volume, it's not a high volume [model], it's a commitment in prime time. As an example, when we look at the priority programming that we put forward, and we have eight hours of priority programming in the Toronto 1 proposal. Six hours a week, actually seven hours a week, I'm sorry, of the priority programming is actually local reflection. So we think by putting priority programming that's non-news in prime time is reinventing local television.
1379 MS. PENNEFATHER: Well let's get to that then, as you can see why it's important why we go through the grid and really understand clearly what is behind the terms as we discussed earlier, we have to be clear what we mean by these.
1380 Just before we get to the non-news, what it is and where it sits in the schedule and why it will have the impact you think it will, the news segment, Metro, I think Mr. Haskins described this as being different because it will be alternative scheduling and a new perspective. Can you expand on that and tell us why alternative scheduling offers a reinvented news, what approach.
1381 MR. CRAIG: I think that's -- should -- well I will ask Mr. Haskins to elaborate at as well in a second. But I think that's one of the elements that the alternative scheduling is just one of the elements that makes it different. I think that we see Metro as more than a news program, it's -- we described it more as a news magazine program -- we could go into more depth. I would like Jim to expand on that, please.
1382 MR. HASKINS: Thanks, Drew. We heavily researched our approach to news in the markets that we're serving now in Edmonton, Winnipeg and Calgary and then we did an extensive research study here in Toronto to find out where the void was, if there was a void and we came to the conclusion that this market is -- is adequately served with the traditional newscast that -- providing an array of national, international and local stories, running a minute and a half in length, covering your car crashes and your police actions and local political issues. And our research also showed that if there was a void, it was in in-depth pieces, investigative journalism. Those were two areas. And the other big one was a newscast that would be available to the commuter at 7:00 o'clock at night rather than the newscasts that are starting now at 6:00 o'clock or 6:30. So we based our model on a ton of research, in Alberta, Manitoba and then in Toronto.
1383 Our newscast, Metro, is more of a news magazine than it is a traditional newscast. There will be the day's news events for sure because the commuters are going to need that at 7:00 o'clock. They're going to need to know what has gone on in their world and in their neighbourhoods that day. But from there we will spin-off and go into our more in-depth pieces. On a nightly basis, we will have a consumer investigative report from the On Your Side team. That is being done on kind of a hit-and-miss basis in the market now, one report every two days, maybe one report a week. And we're promising to do that on a nightly basis, an On Your Side investigative piece focusing on consumer issues in the Greater Toronto Area.
1384 The other thing that we will be doing on a regular basis, once a week, is we will have a Toronto Life segment and we will be utilizing the editorial expertise of the Toronto Life team and we'll be bringing our viewers the best of Toronto on any given night. And that will be expanded, and I guess expounded upon, on the hour-long Toronto Life which will be once a week.
1385 A regular feature every night is Your Neighbourhood. These will be positive stories from throughout the greater Toronto region which will be dealing with the community issues and focusing on the community builders, people that are making a difference in our society. So to sum up, it's more of a news magazine than a traditional newscast because we feel that the market has enough traditional newscasts. Ours will be significantly different and we can think it will make a difference as well.
1386 MS. PENNEFATHER: And again you say this half hour would have national and international news, sports, weather as well?
1387 MR. HASKINS: Yeah, just -- almost a headline service when it comes to that, but we will touch on sports, sports is not a priority. We have a team of meteorologists. Certainly we will subscribe to CNN for the international news. We already have a cooperative venture with the national news out of Ottawa, it is available our audiences in Winnipeg, Calgary and Edmonton and we will keep that in place. Local news will continue to be a focus but the whole thrust of this is more in-depth so the day's news, weather, sports, will only encompass a small portion of that half hour on a nightly basis.
1388 MS. PENNEFATHER: It's your understanding that this is the kind of news that the audiences will watch, that they will expect?
1389 MR. HASKINS: Yes, that's our understanding I may ask Debra McLaughlin to expand on or research and what it means. But based on the research we did do in Manitoba, Alberta, and in Toronto we determined that this is something that viewers are not getting now and that they're committed to watching if we provide it.
1390 MS. PENNEFATHER: Just before -- certainly we will come back to your study on its own, Ms. McLaughlin. It's just that obviously changing in the scheduling of news is experiment which can be very risky as history has shown us. So I am sure you have considered that in your approach as well. I am just wondering again, in line with our discussions at previous hearings, it sounds to me that what you are proposing is really more of a non-news approach than news itself because there will be profiles on the community, there will be discussions of community events within what you were calling news. So can you help us get a clear understanding of why you call this news as opposed to non-news and the sense of the broader approach to community reflection? It sounds to me more like community reflection than actual news.
1391 MR. CRAIG: I think when we coded the show and put it in the application, you know, you put in the category you think best suits the overall program. I think what we're saying is that the pieces will be longer; we will go into more in-depth on certain pieces. Some of the consumer pieces take longer to produce. I guess there is a an argument to be made, is that news, or is it not news. A lot of broadcasters would call that news and that's generally how we have coded it but it is -- I guess in the broadest sense, news. And that's how we have coded it.
1392 Commissioner Pennefather, if I may, I would just like to clarify our numbers in terms of numbers of hours of programming that we have in the schedule because your numbers differ somewhat from ours. I would like to just give you our numbers in terms of what we have in the
1393 MS. PENNEFATHER: Fine.
1394 MR. CRAIG: And we could just walk you through the programming in terms of local reflection. Metro is four and a half hours a week, that's the program we just discussed. Toronto Life is one hour a week. Second City is one hour a week. Made in Toronto is a half hour a week, Special Edition is half hour, On Your Side is a half hour, The Toronto Show is five hours a week, New Voices is one hour a week. That totals 14 and a half hours of local reflection. On top of that, we would also include The Sharing Circle which is a co-production with Lisa Meeches and has material that's generated from Toronto 1 in that show. And also, Real Life which is also, it's a group production, it's a Craig group production which Toronto Life will feed into.
1395 So when you add to those numbers up, it's 14 and a half hours of Toronto 1 production, Sharing Circle is a half hour, Real Life is five hours. So the total number, including the group, is 20 hours a week.
1396 MS. PENNEFATHER: Let's go over that now in terms of content because as I said I did make a distinction when I said 12 and a half of station-produced which is traditionally the definition of local on which we rely to determine how local the program really is. So in that 12 and a half, obviously is the news and the non-news elements which are station produced would be which programs, then, in that list?
1397 MR. CRAIG: Sorry, the non-news?
1398 MS. PENNEFATHER: The non-news, which are station produced.
1399 MR. CRAIG: The non-news would be Made In Toronto, Special Edition, On Your Side and The Toronto Show.
1400 MS. PENNEFATHER: The balance of the list you gave you included --
1401 MR. CRAIG: I am sorry and Toronto Life. I should say Toronto Life.
1402 MS. PENNEFATHER: In that sense, you are calling them local. Can you explain how, for example, Toronto Life is local?
1403 MR. CRAIG: It's very much local.
1404 MS. PENNEFATHER: Can you give us some description of how it's local?
1405 MR. CRAIG: Sure. We would be producing the show, we would be using the station facilities to produce the show, we would have internal staff that would be responsible for actually producing the show but we would certainly have the resource at our disposal of the -- of the people at Toronto Life.
1406 MS. PENNEFATHER: I wanted to come back the association with Toronto Life and get a bigger picture of it, but in the 20 hours that you listed you are calling that local programming?
1407 MR. CRAIG: Yes.
1408 MS. PENNEFATHER: And you understand the reason -- I started out by saying that your local programming added up to 12 and a half and one count, 14 in another and now it's 20. In that 20, then, you are including programming which you say is local reflection; is that correct?
1409 MR. CRAIG: That would be correct.
1410 MS. PENNEFATHER: So therefore some of that would be acquired.
1411 MR. CRAIG: No.
1412 MS. PENNEFATHER: All of it is station produced?
1413 MR. CRAIG: With the exception of the Sharing Circle.
1414 MS. PENNEFATHER: All of it is station produced?
1415 MR. CRAIG: That's right.
1416 MS. PENNEFATHER: On Toronto Life, could you just explain the role of Toronto Life generally and its association with your proposal? I have understood that they are going to play a role in the Metro news program, and as well I understand that they have their own program. Would you explain how that association works, and who is doing the producing?
1417 MR. CRAIG: Sure. I will actually ask Jim Haskins, first of all, to talk about the nightly segment on Toronto Life that would fit into the Metro program.
1418 MR. HASKINS: Once a night, all five days there will be a three to five minute segment on Metro which will be produced by our news and public affairs department working in conjunction with Toronto Life magazine and will be -- one night it could be a restaurant guide, the next night it would be a -- a theatre review, another night it could be a movie review. So the reports themselves would vary in length, but would be between three and five minutes on a nightly basis and it would be through the combined use of our facilities, our reporters and the editorial expertise of the Toronto Life staff.
1419 MS. PENNEFATHER: As well as on page 21 of your supplementary brief you are talking about Toronto Life, the television show and there is also their involvement in the Metro news. Those are the two aspects of their involvement with you, the two separate things.
1420 MR. HASKINS: That's correct.
1421 MS. PENNEFATHER: Okay.
1422 Can you tell me then how much of the -- I am just interested to hear a little bit more about the synergies which you have described will exist between Toronto Life and -- and the news programming. And how you see that adding diversity. How much involvement will the Toronto Life journalists have, for example, in preparation for news, or is there a synergy that goes to the point that they are producing, in effect, the news for your station?
1423 MR. CRAIG: If I could start, I think Toronto Life is a wonderful resource for us in the context of what we want to do for Toronto 1. They have been around for 30 years; they understand the Toronto market. It's been an award-winning publication, they have award-winning journalists on staff and others that work for them on a contract basis. And I think it's -- it's a tremendous opportunity to be in association with Toronto Life on a number of fronts and I don't -- Toronto Life is not running our news department, Toronto Life is a segment in our newscast each night. The Toronto life show is effectively bringing the Toronto Life magazine to television, to a prime time audience, to a wider audience. It may, in many instances, expand beyond where the magazine goes. We have the resources of the magazine at our disposal but it's certainly going to be unique and distinctive from what people see on the newsstands. It's not -- and of course Toronto Life is concerned about selling magazines. So the Toronto Life program will go beyond where the magazine goes in many cases. So it -- it will be a distinct show and offered different content and different material than is actually in the magazine and on the news stand each month.
1424 MS. PENNEFATHER: Thank you, it's interesting to get a little bit behind those words because there is the part of synergies which is effective and interesting and evolves, as you say brings print to the screen, but there may be another question in terms of diversity that offers or not.
1425 Can we turn to another one of the local non-news components, which I understand it parted of the 20 hours, and that's the variety show?
1426 MR. CRAIG: Right.
1427 MS. PENNEFATHER: You have said in your supplementary brief and, while we are not at intervention phase, I think you did give us a lot more detail in your intervention on -- your reply on this programming. And you have said that you have focused really on this variety show as centerpiece, if I had understood it right, of your invention, of your inventive approach of your new approach. Why have you chosen to do so? How do you see the success of this variety show happening? Its a very challenging area, I think everybody in this room that there have been some experiments that have failed, some not. Why do you think this will succeed?
1428 MR. CRAIG: Well, I think that, you know, certainly the Toronto show in our minds will define this station, it will be the signature piece. And it is risky at the same time. Several years ago we began discussions with some French broadcasters about ways in which we could co-operate. And that broadcaster was [TVL]. We spent a lot of time talking to them about ways to make some of the program concepts that they made work in Quebec, work in the English language. They were of the view that it could work and we were of the view that it could work. We went down, we talked to them, we saw the facilities, we talked about how these shows were put together.
1429 And I think what the Toronto market represents is probably one of two markets in the country that could sustain its own local variety prime time television show. The Quebec broadcasters have done an absolutely terrific job of reflecting their communities and their markets through this program genre in fact the number one and number two shows in Quebec on television today are variety programs.
1430 And you know, there are a lot of skeptics out there that say it can't be done. But I think it can be done and it should be done and we want to do it.
1431 MS. PENNEFATHER: The reference to Quebec is an interesting one because obviously that's supported too by a very strong star system in the whole interrelated --
1432 MR. CRAIG: That's --
1433 MS. PENNEFATHER: Industry that really has agreed to that star system and that's one of the things we can be concerned about in our policy and of course in community.
1434 MR. CRAIG: That's partly why they have the star system that they do though is because they have broadcasters that are committed to producing these kind of programs. So I think it's a chicken-and-egg scenario, I think, that we are talking about and I think it is bold and it is gutsy and it is risky but we think we can make it work.
1435 MS. PENNEFATHER: One of the things I am struggling with, and I hope I am clear about this because -- well I can't, because I'm not clear about it -- is this kind of show to attract viewers in the first instance this is Toronto 1, and when we're talking of it as a local show, this would be a variety show about the Toronto artists, comedians, a talk show, whatever kind of shape the variety show takes - performance, right through the talk right through the format, we are used our new formats. And to make it work, would your appeal be sufficient? I don't mean to make that sound in any way a problem or denigrating to Toronto artists but in effect what we are talking about here is also the -- the national impact of what kind of show you would present, and who would you present on the show. Stardom is somehow the other side of the equation and just getting this concept clear as to how you think the variety show will reach enough people, that people will watch, that it will have enough of the pizazz and the buzz that will take it to the level you hope it will as the cornerstone of your approach, how do you combine those two phenomenon.
1436 MR. CRAIG: We see it a totally different way. I think that there have been a lot of national experiences in the this program genre. A lot of the shows have been tried that don't work when try to appeal to everybody. We think it's almost easier to focus it on the local market. And what you have in Toronto is a tremendous amount of material draw from. So in our -- in our view it's -- it's almost simpler to focus on the Toronto market. It's the 6th largest market in North America where there is a tremendous of talent that doesn't have the chance to be exposed.
1437 MS. PENNEFATHER: No, I am following you, I am not saying I don't see the potential, I'm just trying to think and describe the fact -- having described in another way where your thinking came from in attacking -- or tackling such a challenges programming idea and how it fits into what is calmed the local programming concept.
1438 MR. CRAIG: I think -- I think it was -- it was interesting that one of the intervenors made the leap from our proposal to the Vancouver show -- Pointed to it as being a failed experiment, I think as they put it, paraphrasing, but that's what I think they said.
1439 I totally disagree with that. I think that the Vancouver show was a success. People still talk about the show and nobody has had the guts to try it since. And it -- you know, that wasn't the reason why that particular station failed. That show defined that station and I think the Toronto show can do the same thing for Toronto 1.
1440 MS. PENNEFATHER: One of the questions I had too in looking at your schedule was how much it did reinvent conventional television in terms of the way the overall schedule is put together. And we will move on then to the acquired programming. And see why you chose to not only -- what the programs will be but the proportion they occupy of the schedule and how that sits or not in the business plan. I hope I am right on this count, that the Canadian acquired programming comes out to about 57 hours a week; is that close enough to the mark to get a right number on it? It's about 41 percent of the schedule? In any case you can check that for me and just make sure.
1441 MR. CRAIG: Sure.
1442 MS. PENNEFATHER: Part of what I am after here is getting a sense of the proportion of the new approach with more of a standard scheduling. In the Canadian acquired that's basically what the schedule says, Canadian acquired and, as my colleague said earlier, perhaps we should know about what kind of programming you are talking about so could you give us some examples of titles, or types of Canadian programs you would acquire for daytime, and then for the evening broadcasts?
1443 MR. CRAIG: Sure. It's -- it's often difficult to put program totals in a proposed service in a competitive market. But what I -- what I can tell you is that we have in Alberta and Manitoba, because we can offer a green light to independent producers, we have a lot of program producers that have programs on the air in our stations regionally that can't find a home in Toronto. So a lot of those programs would be -- would make up some of the acquired programming.
1444 In daytime as an example, we have produced programs with an independent producer's documentary series like -- programs like Stop Watch which is in our schedule right now; Electric Playground which is in our schedule right now, which is a teen show that talks about video games. There are Alberta producers actually producing programs that we would also put in the schedule as well. There is a program called Ride Guide which air afternoons in Alberta and Manitoba. There is a program co-produced with an Alberta producer a series called Edge. Those are examples of the kind of shows that we would put in the schedule.
1445 MS. PENNEFATHER: And these will be acquired from?
1446 MR. CRAIG: Independent producers.
1447 MS. PENNEFATHER: Independent producers. All acquired from independent producers?
1448 MR. CRAIG: Yes, or independent Canadian distributors.
1449 MS. PENNEFATHER: We will come back to that, when we go to the chapters which is an independent production I wanted to make sure I understand that. In the evening, the Canadian acquired programming in the evening is one hour? Is that -- what kind of programming would that be?
1450 MR. CRAIG: That could be drama programming. You know, we have -- we have helped sublicense a lot of programming. We have helped provide regional licence fees to a lot of programming. We have a program produced out of Vancouver called Dead Man's Gun which is a -- a program produced by [Peace Arch] that's Canadian drama that would be an example of a prime time program that we would look at.
1451 Producers are looking for a Toronto window. There is no question about that. We have programs in our schedule that we have licensed regionally where producers, the only other window they can find is on specialty. So they need another Ontario window for some of those programs I just mentioned.
1452 MS. PENNEFATHER: That's a little bit the sense of my next question, do you feel with the Canadian acquired programming that you will be bringing to the air do you think you will be bringing diversity to the market or will a number of these programs already have been seen?
1453 MR. CRAIG: They might be seen on specialty.
1454 MS. PENNEFATHER: But it is your sense you will be bringing new Canadian acquired programming?
1455 MR. CRAIG: Absolutely.
1456 MS. PENNEFATHER: Also I noticed --
1457 MR. CRAIG: Unduplicated.
1458 MS. PENNEFATHER: -- in your supplementary brief in the executive summary point 11 in fact that you say this is a new outlet for Canadian movies and priority programs developed in other parts of the country. Is that what you're referring to as potentially bringing programming from other parts of the country?
1459 MR. CRAIG: Sure, I would like to ask Joanne Levy to give you her view points in terms of what this can do for independent producers.
1460 MS. LEVY: What we -- what we do in Alberta is actually offer national licence either for all Canadian television or for all Canadian conventional television for the movies that we have licensed and for the documentaries and other series, other Canadian programming that we will be licensing now that the drama fund has extended to become the production fund. And of course it's easy for us to show them on our Alberta and Manitoba stations, but we sometimes have to work very hard to find other conventional homes for them and certainly a Toronto outlet will be extremely valuable to us.
1461 MS. PENNEFATHER: Can you give us some sense of how many of these programs will be first run, that would be seen in the Toronto market?
1462 MS. LEVY: They would be all first run. I have 15 completed movies and another one in prep and when that's done they will all be fresh material to the market. The only other place you might have seen them in is in the theatre because over half of them are feature films.
1463 MS. PENNEFATHER: First run in the sense of this market, but they may have already been seen in the Alberta or Manitoba markets?
1464 MS. LEVY: Actually they're just making their way now to conventional markets in Alberta and Manitoba because, as you know, there is an orderly procedure for the Canadian television market and most of them are currently being seen on pay TV.
1465 MS. PENNEFATHER: I am going to turn now to important aspect of your proposal which -- it's difficult to put things in compartments and this one in particular. And that's the ethnic programming approach so I will take it as such. But obviously we will come back to discuss this when we talk about all aspects of the application. In fact you have described to us in your supplementary brief what you call a multicultural plan which consists of program content and advisory board, of which we have the honorary chair with us; the employment equity commitment and the aboriginal programming. I would like to look at each of these components in detail and I think it's important that we understand that the program content we are talking about is ethnic programming in the English language.
1466 First, then, on the program content. Where is this content going to be coming from? And you say that you plan to licence programming from the Asian television network.
1467 MR. CRAIG: Yes.
1468 MS. PENNEFATHER: Could you tell us what types of programming you will -- you anticipate coming from ATN and I would like to know when they would be aired, how many hours per week, and will ATN produce programming for the local south Asian community, or for the Canadian South Asian community as a whole. Let's go through the ATN programming then, what type it will be, when will it be aired, how many hours a week, and what does this mean in terms of the ATN is producing itself?
1469 MR. CRAIG: ATN has an extensive material that is in the English language that speaks to the south Asian community. And it's a variety of different genres, from interview to cooking shows to talk shows. And this would be put in the schedule where it's appropriate. If it's a daytime, if it's you know, if it's a daytime program it would be put into a daytime period. If it's a variety program, that might appear in prime time in the schedule.
1470 MS. PENNEFATHER: So there isn't a slot per se for ATM? Does the fact that you will acquire programming by --
1471 MR. CRAIG: It's part of our Canadian acquired strategy. We haven't said look, it's Sunday afternoon at 3 o'clock. It's wherever the program is appropriate that we feel we can target an audience so that's the approach of what we're taken to scheduling.
1472 MS. PENNEFATHER: Will you be purchasing -- plan on broadcasting other ethnic programming in English, for example, from other sources?
1473 MR. CRAIG: Yes, we will.
1474 MS. PENNEFATHER: Are in any discussions or agreements currently?
1475 MR. CRAIG: We have spoken to Fairchild about programming that they may have targeted to the Asian community. And there are other applicants as well -- or other operators as well that are planning or working on digital licences that are in the English language but targeted to an ethnic audience. So there is becoming more and more programming targeted to the ethnic community that is in an English language. So we don't -- now we think this is something that's going to grow over the course of time. We think with the -- with the Toronto market being as diverse as it is, it can find a home. It has to be scheduled appropriately and not stuck into a corner on Sunday morning or Saturday morning.
1476 MS. PENNEFATHER: So that's why Canadian acquired is -- leaves us with a blank sheet here so you're saying the spots through the day period or through the evening period could be occupied by --
1477 MR. CRAIG: Yes, they could.
1478 MS. PENNEFATHER: --shows produced by ethnic producers in the English language.
1479 MR. CRAIG: That's correct.
1480 MS. PENNEFATHER: And what kind of programming would it be? Drama, documentary?
1481 MR. CRAIG: Well, ATN has an extensive library, as an example, from a myriad of program genres, from variety to talk to cooking shows to -- you name it, exercise shows. So they have offered this up as an opportunity for us to license this product. It offers them a window for this product on conventional TV allowing them to do more. So that's really the model.
1482 MS. PENNEFATHER: Another component of this would be to ask you, apart from that programming, how will the ethnic communities be reflected in the entire program schedule that you have proposed?
1483 MR. CRAIG: Toronto 1 will reflect the market. We have described to you in the oral presentation how important we think having the station that is inclusive and reflective is. One of the elements I think we have is -- one of the cornerstone elements that I think we have in terms of the direction of the station is our advisory board. We have got Rahul and Bahadur and Mr. Crombie with us to guide us and make sure that do we set the right course for Toronto 1 in terms of reflecting its diversity. We think we need to do that right in the outset as we enter the market. And I would like to now, if we could, just have Bahadur just give you his viewpoint as to what he thinks he can do with this station and with this advisory board.
1484 MS. PENNEFATHER: Good and I did have some specific questions about the board so please go ahead
1485 MR.MADHANI: Thank you Drew, thank you Commissioner. Today, really, other than inclusiveness, I think it makes eminent business sense not to disenfranchise the community which today forms more than 50 percent of Toronto. You know, some time back, some years ago someone said a country cannot prosper if it disenfranchises half its population. In those years we were talking about women, you I think we have come along way but it's not fully there.
1486 MS. PENNEFATHER: No.
1487 MR. MADHANI: Thank you. And in the context of a country like Canada and particularly a city like Toronto, I think by extension the same adage really applies. For anyone to succeed in doing anything in Toronto, it cannot disenfranchise half its population and that's the multicultural population. The advisory board, as it's presently mandated, their role will be to constantly advise Craig on the goings on in the community. One of the -- the programs that I do watch at ATM myself which could be utilized here are the various cultural festivals that go on across the city.
1488 And I mean 12 days from now, for example, tens of thousands of Muslims will be getting together in different parts of the city at the start of the celebration of the festival of [Ede] that comes at the end of the month of Ramadan. Once a year, 30,000 Sikhs for example get together in a temple in Etobicoke to celebrate the festival of [Bhaisaki]. The aboriginals get together at the Skydome for the annual pow-wow. Thousands go to Danforth for the Taste of Danforth, these are the Greeks. At best, most of these get perhaps a 30 or a 60-second blurb on the nightly news. The underlying philosophies, the culture, and the traditions, the history in some of these festivals date back 5,000 years ago.
1489 And today these are no longer special events in the city, they are events that happen in Toronto. Because they happen everywhere, throughout the year. That needs to be brought to the English speaking audience. And an example here really I would like to illustrate, very often I have to threaten my teenage kids that they will have to watch one of our programs in our language if they don't finish their homework on time. And certainly, that works. But they keep telling me -- and they keep telling me, but show us programming in the English language that we can understand so that we can ask you questions we can discuss and dialogue with you. The 18 to 34 today -- if you like, the first, second and sometimes now the third generation of immigrants into Toronto don't understand much of their mother tongue and they crave for being able to understand their cultures and traditions and events in the English language.
1490 And the advisory board and I -- I thank you for asking that question because it gives me a bit of an opportunity to blow my own trumpet, which I can't do at home much, the current composition of the advisory board, Madam Commissioner, I mean, our tiny perfect mayor, David Crombie, who is no stranger to anyone in Canada, has been instrumental on initiating so many institutions in Toronto that today form the basis of our society. No one knows Toronto as well as David does. My colleague, Rahul Bhardwaj, you heard about his involvement in the community and many other initiatives. Rahul is the VP and myself as the chair of the outreach committee, we were able to bring together all segments of the community of Toronto for the Olympic bid to the extent that in a period of less than a year we were able to sign up over 85,000 volunteers for the Olympic games. And they were all ages, both genders from all segments of the community, geographic as well as cultural. It is that level of grassroots understanding and connectedness with the community that we bring to the Craig advisory board.
1491 MS. PENNEFATHER: Are there currently, besides yourselves, members of the advisory board appointed?
1492 MR. MADHANI: The only other member that is appointed is [Shan Jhandershak] of ATN. No other members, but that will be one of the first tasks of this advisory board.
1493 MS. PENNEFATHER: And what is your view on the composition of the advisory board?
1494 MR. MADHANI: Thank you; with your permission, I would like to pass this question over to my colleague, Rahul Bhardwaj.
1495 MR. BHARDWAJ: Thank you Bahadur. Madam Commissioner that the board when properly put together will have 10 to 14 members, would of course be reflective of Toronto's diversity. We would put a lot of emphasis on community builders, people who have got proven commitment and experience to helping communities get along in Toronto and creating connections amongst themselves.
1496 MS. PENNEFATHER: I wanted to get back to a question of the role of the advisory board but I can't read some of the comments you made. You talked, and obviously this is about programming in the English language. I think I heard you say that it was important that all society, all viewers witness, view programming from different perspectives in the English language. You also said it is important not just that the homework gets done but the children can also watch their own cultural programming English language. Which is more important, English language programming for the ethnic community about their own cultures, or programming by the ethnic communities so that balance of the population is exposed to those different views and perspectives?
1497 MR. MADHANI: That is a very good question and this leads me really to recent events which unfortunately have shown us that perhaps the understanding of and between communities isn't as good as it ought to be. In a society like Toronto that we live in I think it is imperative that different communities come to know of the values and the traditions of the larger community that they live in. Again, to use an example of my children again, of course homework is important but for them to be able to communicate with their peers in school and be able to direct them to a TV program that they could watch so they can better understand our culture and where my children can watch programs relating to other communities for them to understand other cultures, I think is extremely important. If I was to prioritize, I would say that the common understanding of the -- all the segments of the community in Toronto of each other. As it says in the scriptures, God says, I made you into different tribes so that you may know one another and it's important that we should know one another and through the English medium particularly with the younger generation I think it's important that we know one another.
1498 MS. PENNEFATHER: One of the reasons I am asking, and thank you for your answer, one of the reasons I am asking this is to get back to the multicultural plan and how this whole programming grid was conceived. One of the things that surprised me in the studies in relation to your point, and maybe I am wrong on this but certainly the way I read it was, focus group A as I call it was the group that was asked about the schedule in general: what did you think, would you like more of this, more of that. And then there was a separate focus group of ethnic viewers, and the focus of that questioning seemed to me to be was it preferable to have English language programming for you or ethnic -- programming in the ethnic languages for you. My question is, why weren't the ethnic groups or were they included in the first focus groups to see if the overall programming for everyone in general was -- was useful or interesting to them as well?
1499 MS. MCLAUGHLIN: All of the programming concepts were tested across all of the groups. There was actually two sets of groups: the first set of group would be described as general population, and within that recruitment we did have people who expressed or identified themselves as members of ethnic culture.
1500 MS. PENNEFATHER: That's what I wanted to know.
1501 MS. MCLAUGHLIN: So they were involved in there.
1502 MS. PENNEFATHER: Because it would appear to me that you would need in terms of your multicultural plan to go to the lengths that you hope it does that you would want their opinion on the overall grid as part of the community and not segregate the ethnic groups into a separate focus group only.
1503 MS. MCLAUGHLIN: They weren't segregated for any other purpose but to identify, within distinct communities, preferences in case there were any differences. Because the variety of programming that is available in Toronto 1 on a language basis does differ by community and it does differ by scheduling so it's important that each group be seen individually and the languages that were selected, or the ethnic groups that were selected were based on various points of their maturity in terms of immigration patterns. Certainly the Italian group has been in Toronto for a long time, made up a significant portion of the population and for a good many years was the key emphasis of language producers. Following in on that there is the Chinese population. The East Indian population is a significant size and, while certainly established in Toronto, is much younger. And Spanish was identified by StatsCan as the fastest growing.
1504 So what we have are very important different stages in, I would say, settling into the community, to be perfectly blunt, and what is important in that is understanding that we are not just serving four groups, but we're understanding how people evolve into this community and how important not that they're culture remains, that the language remains because it was clear that the culture was fundamental to defining who they are were. What became necessary to us is how the programming that we would propose not only in this category but generally all of the new programming met their needs. And all of the programs were tested across all of the groups.
1505 MS. PENNEFATHER: You say in that study of the focus groups, what I call focus group B, and you say in the supplementary brief that third language services are not required in the greater Toronto/Hamilton area, this is your conclusion in your supplementary brief. How did you come to that conclusion, that third language services are not required?
1506 MS. MCLAUGHLIN: I think there is a word missing and that is a new set of third language services or a new third language service. And that conclusion, as you go through the group, you will see that people are asked about their connection to their culture. And we went through it in a great deal of detail. How they identify, how they act, where they prefer to shop, what identifies them, what makes them distinct in their own groups, how they act and behave. It became clear that the ties were very tight that they hadn't changed that much since coming to Canada or being born into the family.
1507 What became evident was the difficulty in finding programs that were relevant to them. I think when the multicultural or multilingual programs began, what - the key phrase was, we want to see ourselves reflected on television. The message that we got from these groups -- and I have to emphasize, they were randomly selected -- people got to identify on the phone what group they belonged to or community and they were organized into one of the language or community groups -- was that the reflection in the third language program wasn't them either. It would no longer fit the bill. What had happened was they had evolved. They were still Spanish, they were still Chinese and still Italian and fiercely proud of it. They were East Indian but they spoke English.
1508 And so the programming blocks that are offered to them, while it reflects them perhaps visibly, does not reflect who they are in terms of how they live their lives. They are very much integrated into a community for the large part that respects cultures but in fact communicates in English. And programming that does not address that need is not where the void is. They are certainly well served and certainly the elder members of their community appreciate the third language service so I mean I apologize because certainly the services that are in the market are doing a very fine job but we were asked to identify a hole and new market.
1509 MS. PENNEFATHER: I think also we are seeing the role of what the advisory board is as well in terms of interpreting the needs as not quite so black and white but, in this context I can understand where that is coming from. I think just to close on my point, is that I think what I was after was more of an attitudinal question. In the very first round, very first group of focus groups if the overall programming is to truly reflect a community, you make sure that in that first focus group or demand study that I would assume that you would include a number of ethnic groups and not interview them just because they're ethnic groups but because they're part of society. And that will change the way you approach your grid. This is what I'm after in terms of looking at how realistic the multicultural plan would be.
1510 Which brings me to one final question on advisory board and that is, what role will the board play? I think I would direct that to you first to you first, Mr. Craig, in choice of programs? And obviously, what you have said is their programming will appear at some point on the schedule. If it is not appearing enough will the advisory board have a role that will change what happens? Will they have a decisional role to play and if so, how will that work out?
1511 MR. CRAIG: I think in terms of the mechanics of the board there is -- there is two really distinct functions. One is an overall sounding-board type of role for the station so that we can determine from the very beginning how we approach this, this area. The second component of the advisory board is to advise the New Voices Fund and -- we haven't talked too much about the New Voices Fund but --
1512 MS. PENNEFATHER: We will, don't worry.
1513 MR. CRAIG: Okay. But that -- that's -- there is two very I think distinctive, tangible roles for the advisory board. One is overall station programming policy and how we reflect Toronto properly. And the second is how we -- how we tackle this issue of getting independent producers to reflect themselves in English language programming to their ethnic communities.
1514 MS. PENNEFATHER: Thank you. If we go back, then, to the ATN program content as one component of ethnic programming, and reflection of ethnic groups in the other programming proposals, what would be your reaction, or do you have a comment on, the possibility of a commitment or a condition of licence regarding the amount of programming in your schedule produced by ethnic producers.
1515 MR. CRAIG: We have a very specific amount of money that's outlined in the application --
1516 MS. PENNEFATHER: I am not referring to the New Voices Fund. I am not referring to that, I am referring to other programming.
1517 MR. CRAIG: In terms of the Canadian acquired?
1518 MS. PENNEFATHER: Yes. A proportion of that, considering how important this is to your approach and to the comment you made that you were looking for ethnic-produced programming in English, that it would be placed throughout the schedule, can you give us a sense of the proportion of that amount that programming? And are you willing to make a commitment to that proportion even to the extent to condition of licence?
1519 MR. CRAIG: If that was something that the Commission felt that was necessary, we would be prepared to -- to accept a conditional licence on that basis. I would like it put a little thought into -- into how that would be structured.
1520 MS. PENNEFATHER: I was going to say.
1521 MR. CRAIG: And how we do it, whether we do it in percentage of acquired budget or scheduling or whatever, but if we could have some time to think about that issue? We hear where you are coming from on that issue.
1522 MS. PENNEFATHER: Thank you very much, I appreciate that.
1523 We did discuss the advisory committee. They are another component of your multicultural plan is the New Voices Fund. I would like to come back to that on our independent production discussion. Finally there is your employment equity plan laid out in schedule 19, diversity in the work place, employment equity plan of action. Will you commit to implement this plan of action?
1524 MR. CRAIG: Yes, the plan is a Craig corporate plan. We have been working on it for over a year now. And we would -- we would commit to implement that plan as parted of Toronto 1.
1525 MS. PENNEFATHER: As present in schedule 19 of your application?
1526 MR. CRAIG: Yes.
1527 MS. PENNEFATHER: One aspect is how you monitor the success of your employment equity plan over a licence term.
1528 MR. CRAIG: There is a reporting procedure in the plan and I would -- I would like to ask Linda Noto to elaborate on that, please.
1529 MS. NOTO: Well we are regulated, and we submit to employment equity on an annual basis. We have for a long time. And we would obviously -- that would be applicable for the Toronto application as it will have more than a hundred employees as well. And we monitor that. Not only do we get those numbers and that's -- you know, the number crunching side of it, take our numbers and we compare that to the availability in our markets which is also what the Employment Act measures it against. We do that, we analyze that, we also look at our employment system and we review that.
1530 So that we know what our employment practices are like, we take that information and from there we did was we developed positive policies and practices. And that allows us not only by measuring our numbers but by measuring our positive policies and our procedures to make sure we are including the four designated groups and that the numbers help us tell us where we are number-wise.
1531 But the policies and practices in educating your employees and your management, that sort of the bigger part of it, that's where the hard work really is. I know in our numbers, I mean our on-air numbers in all of our markets in some areas, especially like in women in visible minority we exceed the expectations and we exceed it marginally, quite marginally and we're quite proud of that. And I have no doubt that we will take those same plans and same initiatives and move them into the Toronto area and in all honesty, how refreshing to be able to work at that where the availability is there. And we think it will make is somewhat nicer, easier.
1532 MS. PENNEFATHER: Thank you very much. I am going to propose Madam Chair we take our break. I have, as my colleague Commissioner Langford said, one short snapper though, before we go. It's on priority programming, your commitment to eight hours per week of Canadian priority programming. Could you comment on the possibility of the condition of licence to that effect?
1533 MR. CRAIG: We would accept that condition.
1534 MS. PENNEFATHER: Fine. And on that, Madam Chair, we could take our break.
1535 THE CHAIRPERSON: Thank you. We will be back in 15 minutes.
--- Recess taken at 1504/Suspension à 1504
--- On resuming at 1528/Reprise à 1528
1536 THE CHAIRPERSON: Order please. Before we proceed I will give you a heads up on tomorrow. We will start with Torstar, we will definitely hear from them tomorrow, starting at 8:30. We will hear Rogers and we will complete phase two, which is the intervention of the applicants into -- to each other's applications. And then begin with the CHUM intervention on Thursday morning.
1537 Go ahead, Commissioner Pennefather.
1538 MS. PENNEFATHER: Thank you Madam Chair.
Bonjour. We are going to talk now about independent production and your proposals for funds. But before I get into some of the questions I wanted to clarify your remarks today. I think, Madam Levy, you said that we are committing 17.5 million to priority programs, Toronto, 7.5, Alberta, Manitoba, 10 million. This 10 million that you mentioned today is over and above what is in the application and does not form part of the application, is this not so?
1539 MS. LEVY: This is a reference to our renewal.
1540 MS. PENNEFATHER: So what we are referring to in discussion of this competitive process is 15 million dollars, as presented in your application.
1541 MS. LEVY: Yes, I would refer to Jennifer Strain.
1542 MS. STRAIN: Commissioner Pennefather, we recently filed our licence renewal applications for Alberta and Manitoba about two weeks ago. And in that application is where we committed to an additional 10 million dollars across the Alberta and Manitoba stations for independent production in the event that we were licensed in Toronto.
1543 MS. PENNEFATHER: You agree, Ms. Strain, that that 10 million dollars is not part of this application, in this competitive process?
1544 MS. STRAIN: Yes.
1545 MS. PENNEFATHER: And -- that's okay. Thank you for clarifying that.
1546 Then we will talk about 15 million and the two funds that support what you have proposed, the priority programming fund at seven and a half and the New Voices Fund at seven and a half over the seven years. These are for original Canadian productions?
1547 MR. CRAIG: Yes.
1548 MS. PENNEFATHER: Now, the seven-and-a-half million for the priority program fund. I am having trouble understanding where this money is going to go since, as I read the application, it will support Second City Improv, the show Second City Improv, that's my understanding of the reading of the application. You do say, "and other programs by Toronto's small and medium producers." So could you clarify again for me what that breakdown is? Because as I see the Second City Improv it's one hour a week. What would the budget be and what would the balance be once that budget is covered, and how many independent projects could you support through this fund?
1549 MR. CRAIG: One minute, please, I just wanted to confer with Ms. Levy. I will figure the math out in a sec, but just for clarity, the seven-and-a-half million dollars supports the Second City Improv show and the balance of the money goes to fund independent production.
1550 MS. PENNEFATHER: Yes, that's in your supplement yes brief, page 26.
1551 MR. CRAIG: And it's the lion's share of the seven-and-a-half million dollar fund.
1552 MS. PENNEFATHER: So Second City Improv is getting the lion's share.
1553 MR. CRAIG: No I'm sorry. It's the reverse.
1554 MS. PENNEFATHER: That's what I wanted clarification on; if you could get back to us on that point.
1555 MS. LEVY: What we propose to do is license the Second City Improv program. We would not be covering the entire budget and therefore the Second City as an independent producer would come to us with a budget. We have a -- a notion of how much we would be paying as a licence fee for each of those programs and I -- I think my rough estimate is roughly three quarters of the money for licensing in the Toronto 1 priority program fund would be available for other small to medium-sized production companies from Ontario.
1556 MS. PENNEFATHER: So let me see if I have understood. For Second City produced by an independent producer you will be offering licence fees.
1557 MS. LEVY: Yes.
1558 MS. PENNEFATHER: Can you give us an approximate portion or an amount of money as how much Second City's budget is, and how much the production licence fee will be?
1559 MS. LEVY: I think we have -- I talked to Terry and we have come up with a licence fee of about $10,000 per program and if you would like more information about the budget, I think he's here and can fill you in, if you like.
1560 MS. PENNEFATHER: Or perhaps you could get back to us on that.
1561 MS. LEVY: Yes.
1562 MS. PENNEFATHER: Because it's really the proportions that I am interested in right now.
1563 MS. LEVY: The intent is to make sure that there is lots of opportunity for Ontario producers.
1564 MS. PENNEFATHER: So once we have covered off Second City Improv, what is left for producers in Ontario out of this fund?
1565 MS. LEVY: About three quarters of it.
1566 MS. PENNEFATHER: On in the breakdown that you provide on page 27, can you give me a sense of, other than Second City Improv, what the dollar amount for each production would be, and therefore what your licence fee would be?
1567 MS. LEVY: Actually because of the economy, really, of the Second City Improv, I think that the -- when we worked out the total hours of original programs that we thought could be covered by these funds, both of them over the course of a licence term, we came up with an average licence fee of about $35,000 per broadcast hour. Now that would vary, obviously, with the budget of a particular program, and it will vary enormously according to genre. But the intend to is to offer, as I say, substantial licence fee, $35,000 per broadcast hour for -- say a $100,000 documentary is 33 percent of that budget and puts a producer in very, very good stead to go forward to say the Canadian television fund for -- for the licence fee top up and so forth, because the threshold is 15 percent and a larger licence fee puts them in a better position. So our view is that even though a lot of this programming may be very Toronto-centric, and you know that's very much the goal, it will be well supported so that it looks good and will attract an audience.
1568 MS. PENNEFATHER: In terms of the management of the fund, there will be one director for both this fund and the New Voices Fund. Can you tell me why you made that approach and, considering our discussion on the ethnic programming, is there some concern there and your advisory board is connected to the New Voices Fund but not the other fund. And if it's one director, how will that work out?
1569 MR. CRAIG: Commissioner Pennefather, we agree with you and we have -- we have rethought that. We think that the executive director of the New Voices Fund is particularly important in getting that -- that product to air. So we -- we are of the view now that the New Voices Fund needs a specific executive director who will help put a lot projects in development and will nurture that programming so it's our view that each fund needs to be separately managed.
1570 MS. PENNEFATHER: Thank you. Let's step back just for a moment on the management of the fund from another point of view the priority program fund. In the deficiency response, September 13th, page 7, you are outlining the criteria for the priority program fund, and there are three. They are, fall into the priority program category of high quality, and brought to us by Ontario producers, in particular, small and medium producers. We will not eliminate proposals from Ontario producers will encourage co-productions with Ontario partners so there is an Ontario element.
1571 Perhaps you could expand on that a little bit. Again, we are talking about Toronto 1, we are talking about programming that is locally reflective and you just made the point that what this is about is support for the local reflection. And for the support to small and medium producers, it would appear to be in Ontario. Can you clarify for us if this is a fund for independent producers, namely Ontario producers, and what you mean by co-productions with Ontario co-partners so that there is an Ontario element? What does that mean?
1572 MS. LEVY: Very clearly the emphasis is on making this fund available to Ontario independent producers, first and foremost. We expect that most of those will be from the Toronto area because there is really healthy number of small to medium production companies in the Toronto area. What we experience in Alberta is you can sometimes bring more budget and more value to a program if you can get interprovincial co-productions or perhaps even international co-productions going. So it's not meant to be a diminishment of the position of the Ontario independent producer; in fact, that's vital. They must be involved and they must be involved in a significant ownership of the particular project. But we did want to make it clear that we encourage people to try to come up with interprovincial and even international co-productions if that becomes a possibility for them.
1573 MS. PENNEFATHER: I just want to be clear on that I don't want to give the impression that one is against providing producers several windows to go. It's hard enough to get programs off the ground in this country, and it will continue to be so for some time. But I think the point is worth repeating in the sense of this proposal for reinvented conventional television in the southern Ontario market is one that pins its hopes on local reflection. And yet you described a fund which may in fact fund projects from across the country. Can you give us some assurance what balance you would give to Ontario producers vis-à-vis interprovincial, if you will, productions.
1574 MS. LEVY: Our approach has been that the Ontario producer must be in a position equal to or greater than any of its co-production patterns and we very clearly, as I mentioned, are prepared to licence at a level that will allow them to do this on their own, if necessary. But there could be some wonderful examples of programming that could be of interest in other parts of the country or in other countries and we wanted to make sure that people realize that that is an opportunity for them that isn't limited. But certainly Ontario and Toronto in particular is the -- is the central focus of all this.
1575 MS. PENNEFATHER: Another aspect of the fund, in 28 of your supplement brief, you say Toronto 1 will help bridge the gap in Ontario by encouraging mentorship and assuring emerging - that film makers have access to funds. This may be done directly by the fund or in partnership with Ontario-based education training institutions. Can you describe what you mean, and if you have any agreements already in place in this regard?
1576 MS. LEVY: We have no set agreements in place other than the fact that we have certainly circulated the information about the various funds to all of the colleges and universities in the Toronto area, and have been met with a lot of enthusiasm. I have had several discussions with people particularly at Ryerson who can see some very interesting possibilities with the programs that -- that they have, that -- and scholarship programs that they have that encourage students from, particularly, various minority groups, now majority groups. So there are some interesting possibilities there.
1577 What he we want to do is not just put money on the table. Not just put time on the table. What we want to do is try to encourage a whole new generation of -- of creative people to look on broadcasting and production as a career choice. And I think that we have to do that by -- by talking to students and encouraging them, so that's -- that's certainly something that would we intend to pursue.
1578 MS. PENNEFATHER: Just wanted to get back to the New Voices Fund as well but before I do that, I had omitted to ask a question about aboriginal programming earlier when we were looking at the overall multicultural plan. And you described this approach on page 24 of your supplementary brief. Apart from Sharing Circle, what else do you have in mind in terms of programming by or for aboriginal communities in this region?
1579 MR. CRAIG: The way the Sharing Circle model works is quite unique. We have the advantage of Lisa's 10 years' experience in producing aboriginal programming and one of the unique elements of it is that we actually have a person trained by Lisa and her team in our respective news rooms.
1580 So what we envision for the sharing Circle as part of Toronto 1 is to do that same thing. So we would actually have people on the ground that are covering local news and information stories that are from the aboriginal community. So it's something that's reflected everything we do every day. It's not something that we do once a week; it's every night on our news, we have aboriginal reporters talking about the various issues that affect their local communities.
1581 MS. PENNEFATHER: That predicted another question, on-air personalities. But it's just when you look at schedule and you see one program, with due respect to the program it's important to understand how else the grid will reflect aboriginal voices.
1582 MR. CRAIG: Through our association with Lisa we have a number of projects that we have talked about that she has in development. We have a children's program that we have talked about and maybe like Lisa to make speak on that project that she's got under way.
1583 MS. MEECHES: Thank you, Drew, I guess the last 10 years I have been producing Sharing Circle the first seven were very important because APTN at that time was just starting out. A lot of interns and as a member of the CFTPA I had the opportunity to work with a lot of interns through that particular program. A lot of those people have moved on to key positions at ATPN. So we work as a partner with that particular network as well and encourage other networks to hire.
1584 But one of the things that we have done in the newsroom, for example, Adrian [Wolflake] who is a Blackfoot aboriginal from southern Alberta and myself provided a training session in our newsroom including sales and marketing on everything you wanted to know about aboriginal people and were afraid to ask. Of course it has proven to be very successful and we do the same thing in all of the Craig networks. We bring in spiritual advisors. I guess almost in the laying the prophecy unfolding on cultural distinctiveness it's something that I believe has been ignored in mainstream broadcasting.
1585 And if I might be able to beat my own drum at this point I would like to challenge other incumbent broadcasters to do the same thing that we have done for aboriginal programming on our network. I guess as an independent producers the last 10 years I have been hitting the pavement and hitting the incumbents in this region in the GTA and have been unsuccessful. And it's kind of discouraging because as an aboriginal role model I go to reserves and talk to the young people and they ask what does the future hold for aboriginal broadcasting in mainstream. And it's kind of bleak. And because of my relationship with this company, with the Craig family I have been able to reach an audience that has been somewhat ignorant to who we are and what we are.
1586 And you know, we're very -- are very proud nation but we're willing to share, we want people to understand who we are. You know the whole conception of Christopher Columbus coming here and thinking he found Indian people, you know, as beautiful as that culture is, we have our own and we're willing to share. And unless we have a voice in mainstream programming and in the grids of other networks we will never be able to move forward.
1587 MS. PENNEFATHER: Thank you. Which brings me to my question on New Voices Fund. One of the important components of these funds working to their goals is knowing that they exist. What will you do in terms of promoting the existence of this fund, and how will you go about ensuring that all groups, all communities are aware of its existence?
1588 MS. LEVY: Well, there are two really major components to this and Drew has already alluded to one of them and that is making sure that is there is a full time person in charge of that fund who is open, accessible, in the community, ready to take calls, ready to go out to wherever he or she is required to talk about the program. The other extremely important component is that that executive director of the New Voices Fund will be a key liaison with the advisory board and the advisory board will look upon as a really critically important resource acting as an ambassador for Toronto 1 and for the New Voices initiative but also coming back to us with those links and those suggestions for stories and for people in the community that we should be approaching for -- for sources for this -- for this fund.
1589 MS. PENNEFATHER: Thank you. I have a final question in the area of independent production and as I understand it, apart from priority program fund and New Voices Fund, the Canadian acquired list that's here will be all acquired from the independent production sector. And while this is not intervention phase I would like to table one concern that's been raised and have your comment on the event that a local station receives national distribution via satellite distribution undertaking. This concern has been raised and I was interested to know, if Craig were licensed to serve this market, would it be your intention to acquire national rights for any Canadian programs that you purchase from independent producers? Would the same be true regarding foreign programs?
1590 MR. CRAIG: I think our intention is to license them for the market, if possible. But it may be required, in some instances, to purchase national rights.
1591 MS. PENNEFATHER: So if that were the case, if the undertaking proposed to carry your local service, then you could assure us that you would pursue all relevant program rights and ensure that they have been cleared?
1592 MR. CRAIG: Yes.
1593 MS. PENNEFATHER: That would be your approach.
1594 Let's turn now to U.S. programming. Although no, let's not. I forgot one thing. Children's programming. It occupies the morning segment from 6:00 a.m. to 8:30 and then the good old Saturday morning children's programming hours and Sunday. This is all acquired programming as well?
1595 MR. CRAIG: Sorry?
1596 MS. PENNEFATHER: This is all acquired programming?
1597 MR. CRAIG: Yes, it is.
1598 MS. PENNEFATHER: Except for interstitials, as I understand it?
1599 MR. CRAIG: That's correct.
1600 MS. PENNEFATHER: Can you tell us what these interstitials are?
1601 MR. CRAIG: We are working with Second City to developing in this area that I think is quite unique and I would like to ask Terry Debono to expand on this initiative.
1602 MR. DEBONO: Thank you Drew. Madam Commissioner, as you may know, we have been in the comedy business for more than a few years, almost 27 now. What you might not be aware of is, in our theatre side which predates television.
1603 MS. PENNEFATHER: I am actually old enough to know both that, even pre-dating television.
1604 MR. DEBONO: Predates our role in television. We have launched a new initiative in the last two years that we believe is extremely important and has a very strong fit to the Toronto 1 application. We have launched Second City Students Rule which takes our improv-trained talent and takes it directly -- takes the performance directly into the GTA schools. We have done this because it's a wonderful way for us to teach improv to students as a way of conflict resolution, and as a way of dealing with their daily activities and the challenges that face all students. This last year we touched 48,000 students in the surrounding GTA environment, which is not insignificant. We do this not as a revenue generator, this is something we have brought corporate sponsorship to underwrite the cost to break even. This is a important part of who we are as part of this fabric of the community.
1605 I must tell you we are unique from the standpoint that most program producers don't exist at retail. We do. For 27 years we have run a theatre and restaurant and as you have had heard earlier the demographic makeup of the city has changed; I only need to go into the theatre to see it firsthand. We need to be multicultural and we need to be more empowering and going right to the students allows us to do this in a very unique way. It's a terrific reward for our performers but it also allows us to give something back. We're old enough now to have our own kids, be able to see what the improv can do. Toronto 1 gives us that opportunity to take that conflict resolution, the improv training and really apply it into a day time part or a weekend part series of focused at the kids themselves where the kids cannot only be trained but ultimately they become parted of the television broadcast spectrum.
1606 MS. PENNEFATHER: Thank you. Better than programming by video games, right?
1607 Let's turn to U.S. programming now and U.S. acquiring programming which I said earlier occupies close to a 55 hours every broadcast week, and about 39 percent of the daily schedule. Now, your studies support, and I think it is the Omnicom study in particular, support your premise regarding the availability of U.S. programming and the impact that your activity would have in the market on other broadcasters and so on and the diversity which you may or may not be providing. So I would like to open up the possibility for you to comment on what has been said that what you propose will not work because amongst other reasons, this programming just doesn't exist. That it's of such poor quality that it wouldn't be watched anyway and that in so doing you will drive up the prices for the programs that you are considering. And as such would have a very serious implication for those already in the market and already purchasing this programming.
1608 It would help us if you would describe the kind of programming that you are talking about, and if you would also expand on your claim that amongst other things your activity in purchasing this programming would not drive up the price of this particular kind of programming that you say exists and tell us again why you think it would work, why it would be watched when I think one of your studies, the Omnicom studies says a good 60 odd percent of it isn't seen in this country. What's the reason? Is it because it's not something that would work here? Perhaps you would expand on that -- those points.
1609 MR. CRAIG: Sure. I would like to start off the discussion by talking first of all about the volume of programming that we know is out there and what's happening in the marketplace. I think some of the discussions in the past have revolved around an argument that says look, we're using all the stuff, there is nothing left. And we just think that's patently false. What's happening and let's just talk about what's happening on the -- on the U.S. network side. We started buying independent programming in 1986 when we launched CHMI in Winnipeg so we have a lot of experience in this area. And when we watch that service the FOX network barely existed nobody wanted to buy FOX shows. We bought FOX shows and did quite nicely with them and we all know since that time the FOX network has emerged into a full-fledged network, some of the most popular shows in this country originate on the FOX network in the United States. The argument today reminds me of that 1986 argument that there just wasn't enough to go around.
1610 When you look at what's happening in other networks in the States in recent years and I will use the WB for example that network has emerged as a real player in terms of network television in that some of the most popular shows in this country originate on that network. That network is expanding every year in terms of its volume output. Next year they plan to add five hours of prime time programming that would be available to Canadian broadcasters. UPN network is expanding its schedule. The PAX network in the United States is continuing to produce original material at a growing rate, much of it actually Canadian content, some of it is seen on -- some of the broadcast outlets in Canada.
1611 On top of that, as the Omnicom study indicated, when you leave the network programming business aside, which we asked them to do, we asked them to take a look at what the programming was that -- that wasn't coming in this country. I will maybe ask Brian Ross to give you a little bit of an overview of what their findings were.
1612 MR. ROSS: Thanks, Drew. Just to back up, then, what we were asked to determine was is there enough quality programming available from either the U.S. or the U.K., was there enough programming available to create a unique and diverse programming schedule without impacting the existing broadcasters. So that's what we were asked to determine. Our methodology was very straightforward. In order to determine that, the -- the first thing we did, you have to understand what the existing broadcasters buy at the present time. And the existing broadcasters in Canada primarily buy U.S. programming that airs on ABC, NBC, CBS or FOX. Why? In order to have simulcast opportunities to maximize their revenues. So as a result we looked at every program in the U.S. that did not air on these existing networks. And we then analyzed the existing networks, both broadcast and cable, that did not enter the Toronto market.
1613 Then further to your point about whether the programming that we looked at was top quality, we only looked at programs that aired on an original basis -- so there was no reruns, no sitcom reruns, no drama reruns, only top 10 original programs. So we didn't look at the entire spectrum, we only looked at the networks that do not come into this country and only their programs that were original and were in the top 10 and even more specifically, to the 18 to 49 demo that Craig Broadcasting was looking at. And when you look at that and compare it to what's left, 63 percent of those programs do not come into Canada. These are high quality shows.
1614 MS. PENNEFATHER: This is the list that's attached to your study in the application?
1615 MR. ROSS: That's correct.
1616 MS. PENNEFATHER: It says top ten original programs airing on U.S. networks, not distributed in Canada. Is that the list?
1617 MR. ROSS: That's correct.
1618 MS. PENNEFATHER: This list appears to me to contain programs that are broadcast in Canada.
1619 MR. ROSS: The list was done July the 12th, so some of the -- there could have been additions and changes to what's on in Canada after that date.
1620 MS. PENNEFATHER: There is quite a few, actually, that are on specialty and conventional networks I am just wondering if there is a methodology that I don't understand here, yes, they are on Canadian networks. I am looking at the Warner brothers WB list for example which includes Gilmore Girls, for example. Those are programs that you include as programs not seen in Canada, yet this list says they clearly are and we know they are. So do I misunderstand this list then? Which is supposed to demonstrate what is available and if maybe what I am looking at is a list whereby the remainder is 63 percent, is that --?
1621 MR. ROSS: No, you are actually correct. In the first place, at the time list was done, did the Gilmore Girls air on a Canadian network? I mean there may have been a mistake, but at the time it was not showing up on any program listing.
1622 MS. PENNEFATHER: So what I am looking at is dated July.
1623 MR. ROSS: That's correct.
1624 MS. PENNEFATHER: So the July list is given as an indicator of all the programs available from various sources: Comedy Central, Court TV, the FOX family, HBO --I'm skipping through -- WB, UPN. And while there are many that are not shown in Canada, there are certainly a good proportion that are, so we should just read the list as such and extract those that are shown in Canada and -- to get a realistic picture of what you've got here.
1625 MR. ROSS: Yes.
1626 MS. PENNEFATHER: Okay. Am I right that the majority of are specials?
1627 MR. ROSS: I wouldn't say majority. There are a number of specials because clearly specials tend to get the highest rating and they are specials that were created for the U.S. cable networks.
1628 MS. PENNEFATHER: Okay. And the other question I had too was on the PAX. I went to their web site and you say they have original programming. Could you tell me what it is? Because what I see is programming of Remington Steele, which I remember from way back, and -- oh, Bringing Up Barbie, that's interesting. And Bonanza and so on. I am -- I realize this is not very good research on my part, but I was just curious on this as a source.
1629 Now, I recognize this is a new network and I recognize it's a family-oriented one, but again, because this point is one that's being argued and we are looking at diversity and new programming coming in through your approach, could you just clarify perhaps, Mr. Craig, or yourself, can you give us some more reassurance that what you are talking about as available has not been, give or take a few shows, has not been seen in this country?
1630 MR. CRAIG: Sure. Let me just clarify on the -- on the PAX situation. I am looking at a presentation that was done by PAX which I have in front of me which I am happy to supply that shows that in the 01/02 season in prime time Monday to Sunday we have 10 hours of original programming per week and that's grown from two hours in 98/99, so I am happy to provide that.
1631 MS. PENNEFATHER: As an example when you say programming do you mean its sitcom, do you mean it's -- a drama, a family show, a talk show? Just to give us a sense of that?
1632 MR. CRAIG: Let me see if I can give you a list of that here. I would say it's primarily drama. I am happy to provide a list from this report, if you would like. I don't have it at my finger tips but it's primarily in the area of drama. A program that actually airs on CTV, Mysterious Ways, comes from that list. So it is of a high enough calibre to air on CTV, so it isn't inconsequential programming by any stretch of the imagination.
1633 MS. PENNEFATHER: I hope you understand why I am pursuing this because you did go to the trouble of a full study on this point in the arguments are very strong that in fact there isn't the programming there that you assume there is and others have said that it's not quality, or it wouldn't work here, otherwise it would be here. Do you have a comment on that? Did you test any of these products in Canada? Do we know that they would work here? I would assume that they are available but would they necessarily draw your audience's attention?
1634 MR. CRAIG: Well, I would point to CTV's experiment with The Sopranos as a great example of a program that was on a U.S. network, not really in anybody's radar screen until it came ahead on the HBO and they put it on the full CTV network and made a huge success out of it, because they took a chance. It was deemed to be at the time a very, very risky move to try that, and they did it and it worked. And they have done it again and again. So I -- I think that there is a lot of programming.
1635 I think one of the indicators of the supply versus the demand is the way programs are sold in Canada. We filed some information our reply that indicates what the buying patterns are and I think that it's very helpful in understanding how the process works. Broadcasters buy programming in volume from different suppliers. If you want to get the West Wing, you have got to take some shows that aren't that great. So a lot of the programs are -- a lot of the -- the Canadian conventional buyers are aligned certain studios they buy their entire output a lot of that programming never gets used. And in fact gets put to them if they want to buy one of these grade A products. So that indicates that there is more supply than demand. And from the discussions that we have had with the suppliers, and we have great relationships with all the suppliers in Canada, I want to point that out we are not neophytes in terms of buying this stuff. We are buying this stuff directly from the suppliers all the time and what they have told us is they would rather sell it to somebody than put it to somebody because they want their programs on the air. They want their programs to be successful so when it's renewed they can get more money for it that's how the process works.
1636 So we think there is a -- there are a great number of programs out there that people end up with that they say well, they're no good. And when you -- when you -- when you sit back and look at some of the shows that have been put to people and -- or have been passed over, are these at a quality level that will attract an audience? You know, that list includes programs like the X-files. No-one wanted that show. Picket fences, no one wanted that show. CSI, no one wanted that show. So will these shows get an audience? I think they will.
1637 MS. PENNEFATHER: Just to help us with that process just to complete the story, then, the volume output deal contains some of these programs that weren't ones that the networks -- buyers were after but they're sitting there. And you say they would -- they could be sublicensed to you.
1638 MR. CRAIG: I am not suggesting they would be sublicensed. I am saying the way buyer would rather sell to a broadcaster than put it to somebody because they wanted that show on the air garnering some audience.
1639 MS. PENNEFATHER: Just in terms of fact you would be a licence competitor, why would your competitor help you get programming --
1640 MR. CRAIG: I am not suggesting we would be necessarily dealing with a competitor in that instance.
1641 MS. PENNEFATHER: I see. Because it is mentioned that the volume deals that you discuss in your reply and in your supplementary brief are looking at the deals that are created for CTV, CHUM, other Canadian broadcasters.
1642 MR. CRAIG: We have bought shows on that basis in the past. CTV, because of their volume commitments in the past, have overbought and had to sell off shows. CHUM has shows in their schedule -- in fact in their brief they point out the top three shows on the new net came from CTV. So if CTV would sell it to CHUM, why wouldn't they sell to us?
1643 MS. PENNEFATHER: What is your reason for saying that your activity in area would not drive up the prices of the -- not the top shows which you are not going after anyway, but you say that you are getting into the game would not driving up the prices of the smaller shows.
1644 MR. CRAIG: There is more supply than demand.
1645 MS. PENNEFATHER: And with the --
1646 MR. CRAIG: The other point is that -- that's quite interesting is that we have no incentive to get a price war going ourselves. You know, we have a business to run, we have budgets that we have set and we're fully prepared to operate within those budgets.
1647 MS. PENNEFATHER: On the final analysis you do not feel that the impact will be what is described by some as extremely dangerous to their ability to acquire programming as a reasonable price.
1648 MR. CRAIG: I wouldn't characterize it as extremely dangerous at all; in fact, I think it's a non-issue.
1649 MS. PENNEFATHER: Thank you for that answer. Just before we leave the Omnicom study in this area, I have one question, a nitty gritty question. It's in the Omnicom study, appendix B. It's a day part break out of total viewing Toronto DMA, target 18 to 49 and as we look at this which is a important part of our discussion about the audience available for this kind of programming, could you just clarify the numbers? Total viewing, 2,520, is that 2,520 period, or are there zeros after that?
1650 MR. ROSS: Can you tell me exactly which.
1651 MS. PENNEFATHER: I am in appendix B there is a summary page and then a typical first page describing the day part break out total viewing for Toronto DMA. It's not page numbered in there unfortunately. 18 to 49 target. Just what do knows those numbers mean?
1652 MR. ROSS: Those are thousand hours. Those are hours.
1653 MS. PENNEFATHER: Total viewing 2,520 hours?
1654 MR. ROSS: Yes.
1655 MS. PENNEFATHER: Thank you. Described video service. I wanted to clarify your commitment here. Wherever possible, will you be providing description video service on all programming you acquire, and programming other than those deliverable associated with one or both of your funds?
1656 MR. CRAIG: Yes.
1657 MS. PENNEFATHER: All right. So it's all programming you acquire, and programming other than those related to the funds.
1658 MR. CRAIG: Where it's available.
1659 MS. PENNEFATHER: All right. Because in your application, I see "all programs supported by the priority program fund," which is fairly limited amount. What you are committing to now is considerably more than that. So just make sure we understand each other that the DVS on all programming you require which often comes with described video, so you will commit to providing DVS on all programming you acquire?
1660 MS. STRAIN: No, no, just in relation to the priority program funded programming is what we have committed to. Where it's available we would certainly -- and we encourage producers to try and give us that sort of programming. But it's -- I think as you know, it's fairly expensive and starting to ramp up but there is not a lot of programming right now that is visually described.
1661 MS. PENNEFATHER: So only those programs produced through the priority program fund would come would come with a description video service?
1662 MS. STRAIN: That is correct.
1663 MS. PENNEFATHER: Do you have any plan to ramp up that commitment over the licence term?
1664 MS. STRAIN: We haven't made a specific commitment in there. What we did say was we think it would amount to -- just give me a minute, approximately 400 hours over the licence term.
1665 MS. PENNEFATHER: Do you see any possibility that you would go beyond the program priority fund and provide described video programming in other areas where appropriate, obviously? Other acquired programming in other words would seem to be the obvious next step.
1666 MR. CRAIG: I think we would make every effort to encourage producers to deliver that to us. And you have to get started somewhere. And I think that all of the original program that we would do through the funds we would provide described video and we could certainly encourage producers to deliver that to us. So my answer to your question was if it was available in other words a producer had it as part of a show, we are certainly interested if having that.
1667 MS. PENNEFATHER: All right, we will go on to demand, and the demand studies and then on to the questions regarding the business plan and they're very interrelated. Let's take first the strategic incorporated study called Consumer Demand for New Television Service in Toronto, Hamilton, Kitchener and Waterloo. Looking at this again, I have a question which comes up repeatedly, and we discussed earlier this morning with another applicant. If we take the executive summary describing the focus group results and I am looking at -- you have got a couple on file here, revenue. It would -- appears to come up fairly often that what people are saying is that they're satisfied with the local programming that's available now. Could you help us to understand why you conclude that there is the demand for new local service when what would appear to be the results of the study is that people are satisfied with what's there now?
1668 MS. MCLAUGHLIN: I think you will find in this study, in the two studies we did the focus groups and the telephone survey -- is that the question is asked in several manners and the reason we did that was not to challenge the respondent in either case to give us a difference answer but to fully explore what satisfaction meant. Because if I ask someone if they are satisfied, it is one of those words that is extremely open to interpretation. So what we did was we broke down -- we took the general satisfaction measure and then we broke it down in several categories. You're referring to the focus group report but I am thinking more of the telephone survey where we went through. But I did not get the impression that the level of satisfaction with level of programming in Toronto was complete. There was a decided and clearly expressed interest in new and fresh programming. You go through some of the comments you will see that people are referring to not being able to have a lot of choice despite the introduction of several new services. There is also problem facing several consumers and that is the prices much the new digital services will preclude them from enjoying that choice. So particularly in the area of local programming and local focus, there was a hole for people who are living if Toronto and either receive services off air or receive them on cable. Or receive them on cable and do not intend to pick up a digital box.
1669 Specifically, there was a dissatisfaction with local reflection in terms of the community and in the case of news, in particular, there was dissatisfaction expressed not with the amount of because certainly you are hard pressed to go through the cable dial and not strike a news service but with the range of perspectives that were being offered, it was commented -- and it is detailed in the focus group report -- that while there are a CP24 and CITY television they're essentially viewed as being one and the same. You not only see the same story reported but you see the same video feed and the exact same person reporting it. The same is true with CTV and CTV Newsnet, as well as CBC and CBC Newsworld. Those six sources for news are reduced in the consumer's mind because for the avid news watcher they're looking for a different perspective.
1670 We also found a shortage in investigative reports. There was absolutely no shortage that I could identify in the research I that did in terms of headlines. You can get headlines. But what was missing was another angle and an investigative portion of those headlines. Not necessarily to take the most recent tragic events, another documentary on Afghanistan, I didn't get that sense. What is missing is some of the behind-the-scenes of the local news, for example the waterfront development; the Oakridges Moraine, those type of stories that are front page in the newspaper but at best received one line mention or one and a half minute video to quote Mr. Haskins, in total. Those are bigger issues than a headline can handle and they're more complex. And certainly they're more divided in terms of the community's views on it than a single local service can even attempt, no matter how noble the goals, to cover. When we talk to people about identifying the focus groups what were local services there was a great deal of confusion. And I contrast this with Kitchener and Hamilton where immediately people knew what the local service was. I suppose it helps perhaps to have only one, but it was clearly identifiable there wasn't confusion with the range of services but it was perceived that the services in Toronto could only be identified as one local and that was CITY. And for -- for a city the size of Toronto to have but one local station, with one local reflection, seemed to be to a consumer's mind, very odd. And you know, I could just go on and on, but I suppose I maybe answered your question.
1671 MS. PENNEFATHER: My finger was descending to the mic, yes. I know, Ms. McLaughlin, you are very involved in these and they are not easy to discuss because we read this here and try to understand how this translates into programming grid and concept. And I hear you talking about people who are looking for more local perspective, I -- people who say yes, I have local programming but I want more and want a different perspective. What does that mean? And when it comes to a program grid where in the evening hours it's largely foreign acquired programming, we have to ask: demand study says we want more local, result, foreign programming. And in fact your demand study on page 52 says that the station's highest ranked prime U.S. prime time content did not rank as well with stations with less. So your own study concluded that yes, perhaps Canadians are looking for different kind of entertainment. But how does this translate into the programming schedule that you have proposed to us?
1672 MS. MCLAUGHLIN: I can start to answer that by saying, very specifically, we did test a range of program options. Some of which have been described in the supplementary brief, and some have been described here today. But there was a range of programming that is both available I suppose for development in the future, but certainly seemed to me in terms of having a unique, local feel, Toronto Life was an excellent example. Toronto Life actually came to this process not by way of this research but for research that had been done earlier in the year where Toronto Life was identified as being an extremely valuable entity within the Toronto market. It has incredible brand attributes, it has incredible appeal. I think it's fundamentally distinguished by its integrity on journalism. And I do not mean to do an ad for Toronto Life here, but we specifically tested Toronto Life to see in this context if it met the criteria that we were hearing earlier in those groups. Was it fresh? Was it new? Did it provide an alternative to another rerun of Frasier, or Friends, or whatever? All excellent programming, but if you turn on your television dial and you go through it, the chances are, particularly given the way these shows are delivered to broadcasters these days, it's not the case that you can watch Frasier at 6:30 and watch it at 7:00 and watch it at 10:00 because you absolutely love the show and see all episodes, you are going to see the same episode over and over again.
1673 And I think that underlines the consumer's impression in large part that despite the advancement in terms of options in fact the universe has shrunk, there aren't the multiple airings of these shows so their response was give us suggest new, give us something fresh. Toronto Life was one example. Second City TV was another. It was -- it was has brand equity will help to develop the immediate audience and yet was seen as being entirely fresh because of the approach of the improv. Each one of those shows we went through, we spoke to them and in the end -- at end of the focus groups in particular, they had the option of saying this doesn't address my needs. This doesn't address what I have told you is missing in this universe and in fact they concluded and I believe it's listed in the executive summary, that it did. They aren't expecting entirely new but they wanted something fresh.
1674 MS. PENNEFATHER: Yes, Mr. Craig?
1675 MR. CRAIG: Thank you, Ms. Pennefather. In terms of the foreign programming in prime time, we have the same amount that our competitors would have in Toronto 1 in prime time and I think what we did was when we got the research back and we looked at the propositions like Second City and The Toronto Show and Toronto Life, we said hey, you know, these are -- these are great program concepts but they're hard to do, they're expensive to do, to do them right. To do Toronto Life justice, you know, it isn't sort of quick and dirty exercise. To do justice to Second City and to create a variety show on prime time, you need the resources and direct the resource into those specific initiatives. And I think those initiatives could be very significant. If no one watches a local show, it's not relevant. And I think that what we have designed is a program grid that will attract audiences in those time periods that we have put them in.
1676 MS. PENNEFATHER: Well that's exactly why I keep coming back to the grid because the challenge obviously in doing something new is take a look at what you're up against and I think it's fair to say that as one looks at the composition of the grid there may be something here that bottom line requires to bring in the money that will pull this off and there is a way of looking at this that looks kind of very standard, not a reinvention, but kind of a standard approach of conventional television if I look at that whole thing.
1677 This brings me to revenues. And to -- you think the audiences are there for this kind of programming. And looking particularly in the evening hours, but is it going to work in terms of bringing home money, so to speak? I think what I would like to do is to start this -- the question with the revenue projections in schedule 13 of your application. And you provide a table showing projected annual increases and cost per rating point in market expenditures. In year two, the cost per rating pointed is projected to increase by two and a half percent and market expenditures are projected to increase by 2.5 percent as well. Can you explain how you arrived at these estimates?
1678 MR. CRAIG: I would like to ask Cam Cowie to expand on this, please.
1679 MR. COWIE: The market expenditure is -- we're looking at market growth and the CPR increases would be inflationary.
1680 MS. PENNEFATHER: Now the audience share projections provided in section 5.2 of your application indicate your proposed station would garner a five percent share of two plus tuning in Toronto, Hamilton EM by year five. Could you explain how you arrived at these audience share projections?
1681 MS. MCLAUGHLIN: I was actually the person who worked on audience shares. What I did is what I have done typically in a scenario like this, when asked to forecast the shares, and that is I have looked at the responses both within the focus groups and within the telephone survey. And discounted them because as I heard mentioned earlier today, people tend to try to please you when you are on the phone and I would agree with that. So what we do is when we are asking people if they would watch a program or a station we ask them very specifically to describe their level of commitment, as in, definitely watch; probably watch. And we go through the categories, we discount every one who was lukewarm. And we discount the definitely watches by 50 percent and the probably watches by 75 percent, so we come into a reach number. And what I do then is I have a look at the average hours tuning per station in the market and figured which part of the -- if I divided into three equal groups, we would likely as an entrant come in at the bottom. People would have to take time and I think of the average hours tuned for that station and multiply it out to get a total hours figure because share is based on the amount of time spent as a percent of the overall hours in the market in any given demographic and from that we arrive at the share projections that we have.
1682 MS. PENNEFATHER: Thank you. As we build a picture then, the next step is to look at the conclusions found in -- and I don't know where you got the name for your firm the Asylum Think Group but we have all been thinking -- at least it gets our attention, that's for sure. In any case again we are looking at market potential for this licence and it identifies a trend in Ontario towards regional coverage among conventional television stations and it maintains that this trend has made it more difficult for advertisers to focus an advertising message on Toronto, Hamilton or Kitchener without paying wider geographic coverage. I think you described that phenomenon quite well. But could you explain for you are us the significance of this trend for advertising revenues that would be generated by your proposed station?
1683 MR. CAIRNS: Are you looking for a response specifically about the revenue numbers?
1684 MS. PENNEFATHER: Well, what I'm looking at is to connect the trend you described for -- in the current advertising environment what effect that has had, what effect it has had then on the advertising revenues you project for your proposed station? What would change your trend in that sense? Because I understand that's the proposal you're putting forward.
1685 MR. CAIRNS: Well the study we did is a qualitative study and the major finding of the study is frustration amongst advertisers as well as agencies and industry groups and their inability to focus a message on Toronto specifically without paying for a much larger geographic area because so much of the broadcast signal is regional or network.
1686 So what that means is that agencies, advertisers, et cetera, are either not using television, so they are going into media like radio and newspaper, or they are not advertising at all and doing perhaps direct marketing efforts or in-store promotional activities or they are moving their money to border stations like WUTV. The opportunity to focus a message on Toronto with a specific front signal, allows advertiser who are not currently in -- in television, or not in Canadian television, to bring that money back into the medium in that market.
1687 MS. PENNEFATHER: Apart from the revenues going out of the market, which I will come back to, if you say that the television advertising inventory is not there right now, and a stand-alone station like this would bring them back, what will be the impacted on other players in the market, other sources where currently those advertising revenues are?
1688 MR. CAIRNS: Well, specifically about some of the other players, certainly on the border stations there will be an impact. I know that's been discussed in some of the other presentations. There will be an impacted on WUTV and there will be an impact on radio stations in the market, particularly those that focus on a younger demographic. And there may be impact on some of the other television stations as well. Again, those are some of the stations in Toronto market currently their mandate and their franchise tends to be older. We think those -- those stations are less liable to see any kind of impact from is a new station. What advertisers are looking for is a Toronto-specific station which will help them deliver a message against a younger audience. That's what WUTV is doing, providing for them. If you can replace that with a Toronto signal, that -- that's where the money will go.
1689 MS. PENNEFATHER: This focus on the younger audience, I did wanted to mention that. You have said that it seems to be that the reverse of the trend is related to the choice that's made here to skew towards a younger audience. Now that younger audience is watching the FOX station, this is the thesis. If you're going to bring them back the audience and therefore the advertisers, don't you have to imitate the programming that's on that American station right now? Basically the -- you know the [strikes] programming and so on. Isn't there a temptation then to imitate the style of programming? Are the advertisers going to be confident enough in the new approach even if it's geared to younger viewers, to say, they will watch this and instead of what they're watching on American stations?
1690 MR. CAIRNS: I will pass this back probably to Debra to answer this more fully, but clearly what I heard advertisers and agencies say, that they are looking for quality programming that will deliver audience against the demographic they are targeting at competitive prices. They are not looking to move money around particularly out of the Buffalo market for any patriotic reasons. It has to be that the programming will appeal to their audiences. Any broadcaster that can do that and it doesn't necessarily have to be the same programming but certainly quality programming that will deliver an audience, we'll have a revenue base.
1691 MS. PENNEFATHER: So what impact does that have on your program schedules, Mr. Craig? If you are going to ensure that you have that audience and that they'll watch, is that what we have here or is it going to push you more towards similar programming as the Buffalo station.
1692 MR. CRAIG: I think as David mentioned you don't need the same programs you just need to skew to that demo. I would like to ask Debra just to elaborate here.
1693 MS. MCLAUGHLIN: The key programming on WUTV, the FOX affiliate is simulcast between 8:00 and 10 o'clock. Their programming is pretty much covered by Canadian broadcasters. What we're talking about with WUTV, in terms of what they offer an audience is alternative programming. For example at ten o'clock they are running reruns of syndicated programs, I think of Seinfeld being an excellent example, this is a program that has aired extensively through several broadcasters. What people are looking for in that time block is alternative programming and this proposal does give them another window on that.
1694 In terms of the 6:00 to 7:00, people are looking to watch something that is not news and for the 7:00 o'clock that is the news scheduling alternative. So it does provide an alternative option which is what the U.S. signals for the most part do apply in the areas where they're not simulcast. This is not first run original programming not most part that are airing in those time slots. These are these are programs that, while attractive and certainly high quality, have been seen before or can be seen before by Canadian audiences in other time block an existing service.
1695 MR. CRAIG: One other point I would like to make in the research that David did and Debra did. That research was exact -- reached the same conclusion that we reached in Vancouver when we dealt with this issue at length with KVOS. The Canadian advertisers would rather advertise with a Canadian station. They can see it, they know what the people are, they know who they're dealing with. If they had another place to go they would rather spend in Canada.
1696 MS. PENNEFATHER: Okay. I think what was triggering my question was the comment in the Asylum study that is on page 4, that with a heavily-laden sitcom schedule, the viewing to WUTV's non-simulcast programming is significant against these groups, namely the younger viewers I guess I was looking at how, from the point of view advertising revenues that would influence your programming choices. And how, in fact, not only would they prefer to advertise with Canadian but also with what Canadian, enough to assure that you are going to have the resources to carry on.
1697 There is another area that I wanted to check, we touched on it briefly, and 5.6 section of your application you indicate the sources for your projected revenues and we did touch on that point a moment ago. You estimated 35 percent would come from existing off air stations while an initial 10 would come from specialty services. Could you just go back over where and how you arrived at these estimates, and particularly the 35 percent from existing off-air stations? Would this be distributed among several stations or would this be distributed or is it going to impact on a particular station, in your estimation?
1698 MR. COWIE: I think it was mentioned yesterday this is far from science and more of an art form. What we looked at for specialty was that there are dollars being placed against the Toronto market and I think we have to keep emphasizing the fact that part of the core marketing strategy is the fact that there are limited choices to get Toronto only. And that's one of the things that we're working on. There are in some cases dollars being spent against the Toronto core marketplace that will suffer the -- the inefficiencies of spill into other markets in order to achieve the Toronto market.
1699 Case in point: if you are sitting in Calgary and watching a particular specialty channel and you see a Pizza Pizza ad to come down and see Brett Hart at a local Pizza Pizza restaurant in Burlington or Hull or wherever the Pizza Pizza is, we're probably not going to hop in the car and zip across the country to Toronto. Yet the viewers are seeing it so there is evidence that these dollars are being spent and they're taking inefficiencies. And it's a cost of doing business.
1700 MS. PENNEFATHER: Thank you for that. There is another aspect to this that I wanted to ask you about. The figures that you provide in an attachment to the September 14th -- I'm sorry, 13th deficiency letter. It provides a table showing a percentage of total advertising revenue attributed to foreign acquired programming. The figures you provide indicate that by year 4 over 60 percent of the total revenues generated by your proposed station will come from Canadian programming. Do your station's other markets generate the bulk of their advertising revenues from Canadian programming?
1701 MR. COWIE: No, they don't. This model, what we're looking at when we go through and do the bottom-up analysis -- and that is, take each individual time slot, each individual program, look at what it will deliver against the marketplace -- the percentage difference between what we project as an achievement level for the Canadian program and what we predict for the foreign program in terms of rating points are considerably closer than they are in our Alberta stations or Manitoba stations. The highest-rated program when we're doing the bottom-up is a two rating of foreign and we average a one on Canadian. So there is a considerable difference between the properties in this market as there would be in the Alberta market, for example.
1702 MS. PENNEFATHER: Could you be more specific on why the Toronto station would perform differently in this regard?
1703 MR. COWIE: Well I think it's the program mix. We do have some first run, some simulcast opportunities so it's about the mix of programming what it would look like in the market.
1704 MS. PENNEFATHER: Going back to the repatriation issue briefly, you made some comments on this point and enclose a report to your reply that deals with this issue amongst other things, the Callaghan report and it's also in the strategic revenue study. The statement that we seem to come up with is that a certain amount of advertising dollars are leaving this country. And is it your understanding -- what is your understanding of the amount of advertising revenues that currently or best -- whatever the terminology is, are currently going to the Buffalo stations, and to the station in particular?
1705 MR. COWIE: We think that the amount, and it was raised this morning, was 24-million dollars Canadian. And it was -- we why quite shocked yesterday to here one of the applicants referred to this as a trickle. We would refer to it as a flood.
1706 MS. PENNEFATHER: Do you have an understanding of what the gross revenues are for example of WUTV?
1707 MR. COWIE: Yes.
1708 MS. PENNEFATHER: Would you say that this 25- million is a reasonable proportion of those revenues?
1709 MR. COWIE: Exactly reasonable.
1710 MS. PENNEFATHER: I am just -- all right I think we have covered that. I had some other questions on the Asylum study, just because I wanted to say that name again. We have done that.
1711 Cable distribution. Another component of this business plan. How far along are you in terms of your discussions with cable operators concerning cable carriage of this station, and can you identify those cable systems that you expect will carry your proposed service?
1712 MR. CRAIG: They have been notified through Industry Canada that we have filed applications. We have had no formal discussions with any cable operators, regarding what channel we might be on, as an example.
1713 MS. PENNEFATHER: Now, as you know, in this area of cable distribution, and regulatory system, potentially it would be possible that signal from the Toronto as well as signal from the Hamilton transmitter would have to be carried as a local signal. What is your position on this point?
1714 MR. CRAIG: I don't think it's a technical issue for us with the -- with the size of our Hamilton transmitter. Paul East to elaborate on this, please.
1715 MR. EAST: The Hamilton transmitter is a simple rebroadcaster for the Toronto transmitter and exists to provide coverage right to the Nielson DMA, right to St. Catharines and provide excellent over-the-air coverage to that region as well. So it gives cable head ends the opportunity to receive the same signal from two sources. We would expect that any class one BDU within 32 kilometres would be carry the station.
1716 MS. PENNEFATHER: But would they carry both?
1717 MR. EAST: No.
1718 MS. PENNEFATHER: That's your understanding?
1719 MR. CRAIG: We would not be expecting two signals.
1720 MS. PENNEFATHER: Would you be expecting carriage -- what area of the spectrum? Would you be expecting carriage on the base band, or ---?
1721 MR. CRAIG: On the base band.
1722 MS. PENNEFATHER: On the Hamilton transmitter, I just wanted to ask what effect the Hamilton transmitter has on your business plan. Is it as this is a very Toronto 1 is Toronto 1. And my concern was to know, if you didn't have that transmitter, would it affect your business plan?
1723 MR. CRAIG: It -- it is there to provide, as Paul said, off-air coverage into that region. Unlike other broadcasters who have higher powers and higher towers, we would need that coverage to replicate that Toronto signal. So what we try to do with our coverage is really replicate the Nielson DMA for Toronto.
1724 MS. PENNEFATHER: But would it change the revenue component of your business plan if you did not have the Hamilton transmitter? I understand.
1725 MR. CRAIG: Yes.
1726 MS. PENNEFATHER: the quality would -- Can you give us some sense of the effect of that?
1727 MR. CRAIG: It would be hard to break out because it's part of the Toronto delivery.
1728 MS. MCLAUGHLIN: The problem becomes that in -- on both approaches for projecting revenue for these stations we used a share which was developed on the full DMA and we used ratings which are calculated on the full DFMA so if you break off part of that, neither Nielson or BVM is prepared to create a new geography for this station or any other station in fact. What happens is those ratings are still calculated. So you will inevitably when expressed as a percent of the available audience, have lower ratings and therefore lower efficiency from an advertiser perspective.
1729 MS. PENNEFATHER: So you are relating that to the DVM defined Hamilton, Toronto/Hamilton.
1730 MS. MCLAUGHLIN: Actually we are relating it to the Nielson DMA which is a larger piece of geography.
1731 MS. PENNEFATHER: My last area of questioning may not be the last area of questioning because my colleagues may have some further questions, and Counsel. But I wanted to step back to look again at why Craig is here. What having this licence means to Craig. I believe you did say in your opening remarks this is important licence for Craig. One of the areas I would like to touch on when looking at that is the synergies which you have discussed in your application and subsequently. Where you identify some of the advantages that this licence would provide in terms of synergies, production side and so on. What does mean for Craig and why do you see this as a important component of your plan?
1732 MR. CRAIG: Well, as the Commission is aware, we have been in this game a long time. Since 1955, 47 years, three generations. And we want to grow this company. We have a great company. We reach 20 percent of English Canada today, we branched off somewhat into specialty. We have really focused the company in terms of where we think it needs to go. And we focused on television. And I think as you heard Gerry Noble describe the Toronto market yesterday, he said it drives the system. We want to create our own system in this country. And this is the most important market in the country. All of the other operators in the country that market, all of the major operators are in this market, they have that efficiency, we do not and there are a lot of incremental benefits we can bring to the table if we have more geography. That's the business we are in. We are in the business of garnering an audience and you need to have geography to do that in conventional television. So it is a huge opportunity for us, it's an important market for us. I think we can do great things here, if we are given the chance. And it's critical in terms of our success in conventional television.
1733 MS. PENNEFATHER: Thank you, Mr. Craig. I think at this point, Madam Chair, I would say that completes my questioning. We -- I said at the beginning that we would ask you to expand on why your application would be the best use of the frequency and perhaps we will leave that to the very end and see if Madam Chair or Counsel have any questions and I thank you for being patient with mine.
1734 THE CHAIRPERSON: Commissioner Langford?
1735 MR. LANGFORD: Thank you. I have a question that's just perhaps may sound it's coming a little from left field but there is actually -- there is no trap here, no trick here, no anything. It's simply some information I am looking for. Because there is something in my mind -- lots of unique things, but one that's particularly unique and that's the relationship with Toronto Life magazine. And I wondering if I could ask some questions of Marina Glogovac or anyone else that wants to answer them.
1736 But what interests me here is that you have a two -- in a sense historically -- very different ways of reaching audiences. A hard copy magazine, glossy magazine which comes out monthly and a television, conventional television station which comes out all day, every day. And of course we have seen recently lots of cases of hard copy getting together in different forms with television and we call it convergence and everybody hopes it's good idea maybe none of us will live long enough to find out whether it is or not . But isn't quite the same because you don't own the magazine, and the magazine doesn't own the television. You are two completely different individuals. So it's a brand new marriage of equals, perhaps. It's totally different therefore should be successful, using all the theories, but the question I have for you, Ms. Glogovac, is what confidence do you have that they won't destroy what you have taken years to build, not intentionally of course, but in somehow trying to translate what you have -- Debra McLaughlin called it incredible brand loyalty, freshness and newness in every issue. This is obviously a product that a lot of people put a lot of stock in people with the best intentions in the world are now going to try to convert it to a totally different format. How confident are you that that will work?
1737 MS. GLOGOVAC: That's a very good question but I think that we all have to make leaps of faith and I think we believe in what Toronto 1 will do for us. We have gone through our own thinking and sort of the liberation and we like what they do, we like their focus, we -- we like their fresh, gutsy, cutting-edge approach and we have -- I mean obviously gone through all of these questions and we have -- we have said our said to ourselves we really like it, that we believe in what they are doing and have confidence that they are actually going to enhance what we already do in Toronto market. And not destroy it.
1738 MR. LANGFORD: Confidence is one thing, everyone should have it and we have heard lots of optimism here today and it's good to hear more. What kind of safety checks do you have in place, what will be the relationship? In other words, you have something you created and has been going successfully for all these years and built this brand loyalty. You are going to hand the good will of your name over to these television folks and they are going to put it on the screen. Now what control will you have over that? Are you simply so confident you are going to step back and say have a at it, boys?
1739 MS. GLOGOVAC: I will defer to Bill, here.
1740 MR. DURON: When Drew first approached us this was a subject of confidential between our editor as well as Drew and Jennifer. And our editor John McFarlane is one of the most celebrated magazine editors in the country and he has very, very specific points of view on the way an editorial product should be, which is -- which has resulted in many national magazine awards. So Craig Broadcast Systems knew that they are were dealing with an editorial product that did have a strong point of view, that did have traditions and did have integrity and credibility with the marketplace that they had to respect. While we certainly respect the fact that Craig has to have editorial control or program control on the program, because they are the ones that are being hopefully awarded the licence, at the same time, they have assured us and we actually have it in writing, that the degree of creative collaboration and the degree of influence that the editors of Toronto Life will have on the programming will be very, very serious. In addition to that, we do an awful lot of service journalism. We probably make about 2,000 consumer recommendations per year on where to dine and which theatres to go to and which galleries to enjoy. But there are stories behind those that we can't necessarily cover in print, either because they are -- it may not be current enough and so forth. So we can actually, our editors can be a great source of leads for stories for the broadcaster. And it -- enables our editors to tell more stories that they have a pent up desire to do. So I believe that because Craig has a proven base of experience and focus on local programming which we have seen, and as a result we are satisfied that the type of programming the time of focus, that they offer in the markets that they're already serving is compatible with ours, we think that there is going to be an -- a wonderful creative collaboration between the two.
1741 And also we have experience in this area in that we -- or company King Media has another magazine called Fashion and 20 -- or 11 years ago we got together with CBC Newsworld for Fashion File TV. And I am happy to say that the editor and -- of Fashion magazine as well as Tim Blanks who is the host on Fashion File TV have a wonderful collaboration.
1742 MR. LANGFORD: So it may not be a case of marriage in haste and repeat at leisure and, as I say, I don't want to be a wet blanket, but have you got it a relationship built in writing on this? For example let me ask you one -- one perfectly pragmatic question. Will you
have some sort of editorial control over the script that will be the voice over whatever Toronto Life show has done or will be the basis of what Toronto Life television show has done, will you have editorial input even?
1743 MR. DURON: We will have editorial input, we will have editorial influence but in the final analysis it's Craig licence and it's Craig's channel so they have to have editorial control.
1744 MR. LANGFORD: And you're confident.
1745 MR. DURON: Yes.
1746 MR. LANGFORD: That's about as good as it gets. Thank you very much.
THE CHAIRPERSON: Counsel?
Questions from Mr. Rheaume/
QUESTIONS DE M. RHEAUME:
1747 MR. RHEAUME: Just one very brief clarification. I believe you have agreed that the -- the reference to 25 million in incremental funds is actually 15 million, part of this application. Would you agree as well that the eight hours of priority programs for Alberta and Manitoba are not part of this application?
1748 MR. CRAIG: We would agree with that.
1749 MR. RHEAUME: Was it going to be separate programs, by the way?
1750 MR. CRAIG: Some of it would be.
1751 MR. RHEAUME: Thank you.
1752 THE CHAIRPERSON: Thank you counsel. Yes. The mic is yours now, Mr. Craig or whoever, to give us your most compelling arguments why frequency 52 should be offered to Craig.
1753 MR. CRAIG: Thank you very much. As I mentioned earlier, this is important not only to the company but also to the Canadian broadcast system. This is perhaps the last market that can sustain another full-fledged conventional service in a long, long time. And we think the Toronto 1 application is very unique. What we have done in looking at it is we have looked at your program policy of June 1999. We have looked at the special role that you placed on mid-sized players. We have looked at ways that we could deliver on the differences that you saw between large players and small players and I have think there is a significant role for mid-sized players in this business, we firmly believe that we have told you that before.
1754 This is a different model. This is a model focused on non-news programming. This is a model focused on quality, it's not a high volume model. It will reflect Toronto. Toronto is a very unique city. It's one of the most unique cities in the world, and certainly in terms of television markets, it's one of the most exciting markets in North America.
1755 We think from Craig's perspective that we bring the best possible combination. You get a new voice and you get almost 50 years of television experience. I think that over the last 15 years or so, since we launched our independent station in Portage La Prairie in Winnipeg, we have learned a lot of things, we have learned how to repatriate dollars from U.S. border stations in both [Pemeda] and Spokane. They said it couldn't be done. We did it. We grew the pie. We created new retail markets. We have also learned how to create distinct local brands which have been embraced by the viewers. We know how to make good local programming. We have proved that. We also know how to make good local programming with independent producers, it involves small to medium-sized producers and we have proved that.
1756 So overall, I think the Toronto 1 application is the best scenario for not only this market, but for the system. It delivers on your program policy and meets the mandate of the Commission in a lot of ways. So I would like to at this time thank you for hearing us today. I would also like to thank our team. We are very proud of the team we have built. I think they're the best in the country. Thank you very much.
1757 THE CHAIRPERSON: Thank you, Mr. Craig. And we of course thank you and your colleagues for your co-
operation as well. Before we adjourn, I would like to advise you that the hearing manager has received Global's answers to some of the questions posed yesterday and I would assume it's on the -- on the public file in the exam room. You may have copies as well.
1758 MR. CUSSONS: Very shortly, Madam Chair.
1759 THE CHAIRPERSON: Thank you. So we will thank you and we will resume at 8:30 tomorrow to hear the Torstar application, followed by Rogers and then phase two, before we adjourn tomorrow night.
--- Whereupon the proceedings adjourned at
5:04 p.m., to be reconvened on Wednesday,
the 5th day of December, 2001, at 9:00 a.m./
L'audience est ajournée à 1704, pour reprendre
le mercredi 5 décembre 2001 à 0900
MINORI ARAI, CSR
- Date modified: