ARCHIVED -  Transcript - Gatineau (Québec) - 2004-12-06

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Best Western Cartier Best Western Cartier

Champlain A & B Room Pièce Champlain A et B

131 Laurier Avenue 131, rue Laurier

Gatineau, Quebec Gatineau (Québec)

December 6, 2004 Le 6 decembre 2004


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


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

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participant à l'audience publique.

Canadian Radio-television and
Telecommunications Commission

Conseil de la radiodiffusion et des
télécommunications canadiennes

Transcript / Transcription



Andrée Wylie Chairperson / Présidente

Andrée Noël Commissioner / Conseillère

Ronald Williams Commissioner / Conseillier

Joan Pennefather Commissioner / Conseillère

Stuart Langford Commissioner / Conseillier


Pierre Lebel Secretary / Secrétaire

James Wilson Legal Counsel /

Valérie Dionne Conseillers juridiques

Steve Parker Hearing Manager /

Gérant de l'audience


Conference Centre Centre de conférences

Outaouais Room Salle Outaouais

Portage IV Portage IV

140 Promenade du Portage 140, promenade du Portage

Gatineau, Quebec Gatineau (Québec)

December 6, 2004 Le 6 decembre 2004





Radio 1540 Limited (OBCI) 770 / 4481

Newcap Inc. 872 / 5024

CKMW Radio Ltd. 988 / 5630

Gatineau, Quebec / Gatineau (Québec)

--- Upon resuming on Monday, December 6, 2004

at 0857 / L'audience reprend le lundi 6 décembre

2004 à 0857

4473 THE CHAIRPERSON: À l'ordre s'il vous plaît. Order, please. Good morning and welcome to our hearing. Nous vous disons bonjour et nous vous souhaiterons un bienvenue à notre audience.

4474 Est-ce que je peux vous rappeler aux gens, lorsque vous êtes dans la salle d'audience, vous devez désactiver vos téléphones cellulaires et vos téléavertisseurs s'il vous plaît.

4475 So please, I remind those that are in the room maybe for the first time that your cell phones and beepers must be turned off while you are in the room. We would appreciate everybody's cooperation in this regard.

4476 Mr. Secretary, please.

4477 MR. SECRETARY: Thank you, Madam Chair.

4478 Item 12 on the agenda is an application by Radio 1540 Limited on behalf of a corporation to be incorporated, for a licence to operate an English-language FM commercial specialty radio programming undertaking in Ottawa.

4479 The new station would operate on frequency 96.5 MHz on Channel 243A with an average effective radiated power of 2,600 watts.

4480 Mr. Lenny Lombardi will be introducing the panel. You have 20 minutes to make your presentation.


4481 MR. LOMBARDI: Thank you, Mr. Secretary.

4482 Good morning, Madam Chair and Members of the Commission. My name is Lenny Lombardi and I am President and CEO of CHIN Radio/TV International.

4483 Before we begin our presentation, I would like to take this opportunity to introduce the members of our panel.

4484 With me today are to my right, Mr. Joe Mulvihill, who is Executive Vice-President and COO of CHIN Radio.

4485 On my immediate left is Gary Michaels, Program and News Director of CHIN 97.9 here in Ottawa/Gatineau. Gary has been involved in radio here in the National Capital Region for his entire career.

4486 Seated beside Gary is Ed Ylanen. Ed is Vice-President and General Manager of CHIN 97.9 and has a wealth of experience in multicultural broadcasting that expands over 20 years.

4487 Seated in the back row to my right is Duff Roman, Vice-President, Industry Affairs at CHUM Radio.

4488 To Duff's left is Sarah Crawford, Vice-President, Public Affairs for CHUM and, finally, Dr. Karim Karim, Associate Professor at Carleton University, School of Journalism and Communication, and currently a visiting scholar at the Centre for the Study of World Religions at Harvard University.

4489 Regrettably, however, Mr. John Hilton, QC, and a long-time advisor to CHIN Radio, is unable to attend the hearing this morning as he teaches at Osgoode in Toronto and was unable to change his agenda for this morning. So he sends his regrets.

4490 Madam Chair, Members of the Commission, it is a pleasure to appear before you today to present our application for Fusion 96.5, a new culturally diverse smooth jazz radio station that will serve listeners in the Ottawa/Gatineau area.

4491 Our company was founded in 1965 by my father, Johnny Lombardi, who pioneered ethnic broadcasting in this country.

4492 Since then, CHIN radio has grown to become the largest multicultural radio broadcaster in Toronto and one of the largest in Canada. Today our stations, CHIN AM1540 and CHIN FM 100.7 in Toronto, and CHIN 97.9 in Ottawa/Gatineau are a vital part of the daily lives of Canadians from a variety of ethno-cultural groups providing a rich cultural mosaic of entertaining and informative programming.

4493 We are very proud of what we have been able to accomplish, with your help, over the past four decades. With this application, CHIN is both looking to build on its past and chart new directions for the future.

4494 Fusion 96.5 will be the first radio station of its kind in Canada. The cornerstone of this station's weekly programming schedule will be 36 hours of high quality, culturally diverse, English-language spoken word programming, a type of programming that CHIN has pioneered on its existing stations.

4495 The music component of the schedule will consist of smooth jazz, a genre of music our research found to be very complimentary to the spoken word programming we will provide, and one that is not currently available to listeners in the Ottawa/Gatineau area.

4496 With this innovative programming mix, we believe that Fusion 96.5 will contribute to the achievement of the objectives of both Canada's multiculturalism policy, and the Commission's ethnic broadcasting policy and, at the same time, directly respond to the needs and interests of listeners in this market.

4497 MS CRAWFORD: CHUM is excited to be involved in this application as a minority shareholder.

4498 CHIN Radio and CHUM have a long history of collaboration. Half a century ago, a discussion between Lenny's father and CHUM founder Alan Waters, led to Italian language programming being offered on CHUM AM, making CHUM the first radio station in Canada to feature third language programming.

4499 A quarter century later, CityTV Toronto began offering CHIN television programming on weekends, a practice that continues to this day.

4500 CHUM's long-standing commitment to promoting diversity and inclusiveness is well recognized. CHUM has long maintained that cultural diversity is the mainstream.

4501 We believe that this station will contribute in a meaningful way to making cultural diversity a focus of mainstream radio in Ottawa.

4502 More important, it will serve as an innovative, new radio model in Canada.

4503 MR. LOMBARDI: In 1971, Prime Minister Pierre Elliot Trudeau advised the House of Commons that his government had accepted the recommendations of the Royal Commission on Bilingualism and Biculturalism with respect to the contribution of other ethnic groups to the cultural enrichment of Canada.

4504 The Prime Minister stated, and I quote:

"National unity, if it is to mean anything in the deeply personal sense, must be founded on confidence in one's own individual identity. Out of this can grow respect for that of others and a willingness to share ideas, attitudes and assumptions.

Reflecting these objectives, Canada's multiculturalism policy envisions an inclusive citizenship in which all citizens can retain their ethno-cultural identity and take pride in their cultural heritage, while at the same time having a sense of participation and involvement in the larger Canadian community."

4505 MR. LOMBARDI: The Commission's ethnic broadcasting policy supports the introduction of third language programming services which facilitate cultural retention, while at the same time transmitting Canadian values.

4506 This policy also encourages cross-cultural programming to promote the exchange of information and points of view between different ethno-cultural groups.

4507 In addition, the Commission has encouraged all broadcasters to ensure that their programming and operations better reflect Canada's cultural and racial diversity.

4508 In fact, this was a key objective that was identified both by the Minister of Canadian Heritage and Chairman Dalfen in their speeches at the Canadian Association of Broadcasters earlier this week -- actually last.

4509 We believe that Fusion 96.5 is the next logical step in the evolution of these policies, an opportunity to make culturally diverse spoken word programming a vital component of mainstream radio broadcasting.

4510 By the phrase "culturally diverse programming", we mean programming with an editorial viewpoint that is rooted in the diverse perspectives of the many ethnic and aboriginal communities here in Ottawa/Gatineau. Those diverse perspectives will set the agenda for our spoken-word programming and will provide an ongoing basis for the healthy exchange of ideas, attitudes and assumptions.

4511 By producing this programming in English Fusion 96.5 will bridge the language gap between ethnic groups and reach into a wider community as well.

4512 MR. KARIM: Almost every country in the world is seeking to come to terms with the diversity of its population.

4513 An underlying premise of the Nation States since its emergence several hundred years ago has been the existence of a populus within its borders that is culturally, ethnically and linguistically monolithic.

4514 Today, that underlying premise no longer holds. Canada has been a leader in the world in recognizing the increasing diversity of the Nation States population and the implications of that diversity.

4515 However, the views and perspectives of cultural minorities still do not have easy access to the dominant public sphere. They are reflected in the alternative or ethnic media, but generally do not reach the broader audiences of the media that are directed to the members of the dominant official language groups.

4516 If Canada's policy of multiculturalism, which envisions multiple cultures co-existing within a single democratic nation state is to be effective, then the opportunity to engage in meaningful citizenship must be detached from exclusive cultural belonging.

4517 One important way to do this is to increase the opportunities in public spaces, such as broadcast media, for individuals from different backgrounds to interact with each other.

4518 Ottawa/Gatineau, with a diverse cosmoplitan community of over one-million people is an ideal environment in which to increase the opportunities for culturally diverse interaction.

4519 Sixty-four per cent of the population of Ottawa/Gatineau has at least one ethnic origin other than English or French. As such, many people have an interest in ethno-cultural perspectives, even if they do not speak a third language. Fully, 18 per cent of the population is foreign born and 14 per cent are members of visible minority groups.

4520 In addition, residents of Ottawa/Gatineau tend to have higher levels of income and education and more likely to be employed in jobs that require them to consider broader questions of public policy.

4521 All of these factors increase the need for and interest in the culturally diverse spoken-word programming that CHIN is proposing.

4522 In fact, this type of approach, where no particular group has implicit dominance, helps to facilitate inter-cultural dialogue in which everyone speaks as an equal citizen.

4523 CHIN should be lauded for developing this innovative concept, one that I am pleased to support.

4524 MR. MICHAELS: As noted earlier, we currently offer some English-lanugage, cross-cultural spoke-word programming on the CHIN Radio stations in Toronto and here in Ottawa/Gatineau.

4525 Based on that experience with the resources that we will have with this new station, we are confident that the culturally diverse spoken-word programming proposed in this application will prove to be effective and popular with our listeners.

4526 Our commitment to provide no fewer than 36 hours of culturally diverse spoken-word programming each week means that we will have much greater scope to develop this programming concept, and we will be able to address a wider variety of topics, build in many more enhanced programming features, and present a greater diversity of ethno-cultural perspectives.

4527 Our culturally diverse spoken-word programming will be modeled on the best local public affairs and information programming on radio today, and it will feature well-known on-air personalities, cover a range of current topics, offer interviews with experts, politicians, celebrities and provide ample scope for listener participation.

4528 However, unlike other radio programming, it will consistently offer our listeners access to a wide range of ethno-cultural and aboriginal perspectives.

4529 CHIN 97.9 here in Ottawa/Gatineau currently employs some 26 associate producers drawn from the ethno-cultural groups in the area. Together these associate producers have a comprehensive understanding of the needs, the interests and the perspectives of the area's ethno-cultural communities.

4530 We will rely on and compliment these individuals to ensure that the issues addressed and perspectives presented in our spoken-word programming are always lively, topical and diverse.

4531 And, moreover, we will ensure that at least one of the on-air personalities on Fusion 96.5 is from the aboriginal communities.

4532 In our application, we identified two types of culturally diverse spoken-word programming. First, we will offer English-language programs that address current issues from culturally diverse perspectives. These programs will give our listeners the opportunity to interact and to share their perspectives and, in so doing, will promote and celebrate our cultural diversity.

4533 And, secondly, we will offer programs in the English language that focus on particular communities, and these programs will provide an opportunity for members of ethno-cultural or aboriginal groups who do not speak their heritage language, to participate in the social and cultural life of their respective community.

4534 These programs will also act as a window into the culture of particular communities for members of the broader community.

4535 To help illustrate what we are talking about, we have attached a sample programming schedule for the morning and afternoon drive periods in your copy of our opening statement.

4536 MR. LOMBARDI: Research conducted in connection with this application, shows a majority of the area residents surveyed would listen to the various types of culturally diverse spoken-word programming proposed by CHIN. Seventy-five per cent of all respondents agree that this type of programming would be a positive addition to the community.

4537 With respect to music choices, smooth jazz generated the highest level of interest among respondents who indicated that a station featuring this type of music would significantly increase musical diversity, since there are no other local commercial radio stations with a jazz-related format.

4538 Over 78 per cent of the respondents said that they would listen to a smooth jazz station. Smooth jazz is a more contemporary R&B field than traditional jazz and, as such, it includes a wider range of musical artists and appeals to a wider demographic.

4539 The smooth jazz format is one of the fastest growing radio formats in North America. Since 1999, the Commission has licensed smooth jazz stations in Hamilton, Winnipeg, Calgary and, most recently, Edmonton. These stations have helped to make household names of jazz artists like Diana Krall, Carol Welsman, Brian Hughes and Warren Hill.

4540 In addition to established artists, smooth jazz also embraces newer or emerging acts, like Canadians, Jesse Cook, John Stetch, aboriginal artist, Jeff Kashiwa, and Ottawa-based Victor Nesrallah.

4541 These emerging artists perform in unique styles, providing the depth and variety that is the essence of the format.

4542 Smooth jazz is a music where the instrument is the start: the piano, saxaphone, guitar and even the voice provide a narrative vastly different from pop music.

4543 Instrumentalists like Jamie Bonk and Michael Kaeshammer and the Clayton Scott Group, are establishing new frontiers in this area.

4544 Our research found a good fit betweenc culturally diverse spoken-word programming and the smooth jazz format.

4545 This is not surprising, given that jazz has both influenced and been influenced by many cultures from Japan to Brazil, Denmark to the Ukraine.

4546 Respondents who were more likely to listen to talk programming, were significantly more likely to listen to the smooth jazz format than the other formats that we tests.

4547 Almost half of those respondents who said that a smooth jazz station could be their favourite station, expressed a strong interest in culturally diverse spoken-word programming.

4548 MR. MULVIHILL: Fusion 96.5 will achieve financial viability over the term of the licence with no material impact on existing radio stations.

4549 The Ottawa radio market has experienced strong revenue growth and sustained profitability over the last five years. Moreover, economic indicators point to continued growth in the Ottawa market for the next several years.

4550 According to the Conference Board of Canada's most recent forecast, Ottawa's economy will expand by 3.1 per cent in 2004, and 3.5 per cent in 2005.

4551 Retail sales growth is forecast to come in at 3.2 per cent in 2004, increasing to 4.9 per cent in 2005.

4552 We project that Fusion 96.5 will generate $880,000 in revenues in year one, increasing to 2.2-million in year seven.

4553 Even if the radio market in Ottawa/Gatineau only grows by 3 per cent each year, our projected revenues will largely be sustained by natural market growth.

4554 As such, our proposed new station will have no material economic impact on existing stations. We expect that Fusion 96.5 will break even by year three and achieve market level profitability by the final year of the licence term.

4555 These projections are based on the assumption that the station will attract a two per cent share of 12 plus listening in year one, increasing to a 4.2 share by the end of the licence term.

4556 Fusion 96.5 will have its own dedicated program director, as well as announcers, operators and production and news staff, however, there will also be significant operating synergies between 96.5 and the existing CHIN Radio station in Ottawa/Gatineau.

4557 We anticipate that the two stations will be operated by a single general manager and will share other administrative, sales and back office personnel.

4558 CHIN Radio will also be able to realize operational efficiencies by sharing the cost of office space, administrative and technical equipment, the location of the transmitter, station vehicle, commercial production facilities and computer hardware and software costs.

4559 MR. LOMBARDI: Our application contains strong commitments to provide increased exposure for Canadian musical artists and to support their growth and development.

4560 We see these commitments as significant in the light of our financial projections, and taking into account the important social benefits that will arise from our commitment to provide a minimum of 36 hours of culturally diverse spoken-word programming each week.

4561 Smooth jazz is a Category 3 speciality format. The radio regulations require that only 10 per cent of musical selections from Category 3 be Canadian. However, to demonstrate our commitment to promoting Canadian jazz artists, Fusion 96.5 will ensure that 35 per cent or more of all musical selections are Canadian.

4562 In addition, if licensed, Fusion 96.5 will spend over $71,000 each year on Canadian talent development, for a total of over $500,000 over the term of the licence.

4563 As discussed in detail in our application, these funds will be directed at such worthwhile organizations as Factor, Canadian Music Week and the Ottawa International Jazz Festival.

4564 We will also initiate a jazz talent contest, convene a community-based forum of multiculturalism and cross-cultural understanding in radio, and award a number of scholarships to enable young Canadians to pursue journalism studies at Carleton or the University of Ottawa.

4565 MR. YLANEN: CHIN 97.9 has established a local advisory board to consult with and advise management on the overall programming and community access objectives of the station.

4566 The board currently consists of seven individuals from the Ottawa/Gatineau area, including community leaders and representatives from established multicultural agencies and ethnic associations.

4567 The local advisory board worked closely with CHIN management in the development and launch of 97.9FM. It helped to identify the ethnic communities to be served, to establish programming policies, and to identify associate producers.

4568 The board continues to play an active role in the growth and development of CHIN 97.9 by facilitating ongoing communication between radio station personnel and the communities that their programs serve.

4569 Should this application be approved, we will extend the mandate of the board to include the new station.

4570 Board membership will be expanded by three to provide for representation from the broader community, including the aboriginal communities.

4571 MR. LOMBARDI: Madam Chair, Members of the Commission, we believe that the time is right for a new concept in Canadian radio broadcasting, a concept that represents the next logical step in the evolution of Canada's multiculturalism policy and the Commission's ethnic broadcasting policy.

4572 The time is right for a radio station that will set a new standard for cross-cultural reflection on our airwaves by putting English-language culturally diverse spoken-word programming at the heart of its programming schedule and in the mainstream of the Canadian broadcasting system.

4573 The time is right for this type of radio station in Ottawa-Gatineau. Our research clearly shows that there is interest in and demand for both culturally diverse spoken word programming and for the smooth jazz format in this market.

4574 This new station will significantly increase choice for listeners and will provide substantial new support for Canadian talent development. We believe this is the right application to bring this new diversity to listeners in Ottawa-Gatineau, and given our commitment to diversity and proven track record of success, we believe we are the right people to do it.

4575 For all of these reasons, we believe that approval of our application would be in the public interest and we look forward to your questions. Thank you.

4576 THE CHAIRPERSON: Thank you, Mr. Lombardi and your colleagues.

4577 Commissioner Pennefather, please.

4578 COMMISSIONER PENNEFATHER: Thank you, Madam Chair.

4579 Good morning, Mr. Lombardi, gentlemen, Ms Crawford. Welcome to our hearing.

4580 MR. LOMBARDI: Good morning.

4581 COMMISSIONER PENNEFATHER: Your proposed new station is called Ottawa's Jazz Diversity Station, as I understand from page 1 of your brief, and the concept, as you have well outlined again this morning, is based on the concept of English-language culturally diverse spoken word programming and smooth jazz.

4582 It seems to me that certainly one of the key features of your proposal is the spoken word programming. You have given it to a context of not only comments made in our society by many but also our own policies, both ethnic and general policies related to cultural diversity.

4583 So that is where I would like to start, to get a better understanding and clarify what you are proposing for the spoken word programming, and then we will move on to the music.

4584 So if I understand, in addition to the three hours of news, you plan to provide a minimum of 36 hours a week of this English-language culturally diverse programming, and in your supplementary brief, starting at page 9 and moving on through pages 11 and 12, you are describing this programming, which I understand is similar -- from what you have said today and in your supplementary brief -- similar to what you currently offer at the noon-hour period on CHIN Radio; is that correct? It is going from that...

4585 MR. LOMBARDI: Yes, it is similar to that type of programming.

4586 COMMISSIONER PENNEFATHER: But in this case, you are planning to offer this programming between 6:00 and 9:00, and 5:00 and 8:00, and six hours on the weekend.

4587 Now, you provided us this morning with a draft schedule, which I am just trying to focus on in light of what I have seen in the supplementary brief so far. So perhaps we could start this way.

4588 You have talked about two different categories of programming: one, programming about a variety of different topics examined from a multicultural perspective; and two, programming featuring a variety of topics of relevance to or about particular ethnocultural communities.

4589 Could you go through the schedule that you have tabled this morning and talk to us about which of these programs -- I am not sure if they are programs so much as elements of the morning and afternoon drive periods. If you could describe to me which is the first type of programming and which is the second type of programming, just as a start, to get a better understanding of what you are proposing.

4590 MR. LOMBARDI: Sure, I would be happy to.

4591 If we look at the 6:00 a.m. proposed schedule, these are simple examples of what we could do in that period.

4592 For example, at 6:03, we have announcements of upcoming community events, and I look at that as topics that would be relevant to a particular community and community events such as what could be happening within various local communities such as the Caribbean community, the Arabic community, Chinese or Italian, if you will, somewhat of a community calendar that members of those communities would be particularly interested in hearing about and having it shared in a much broader audience.

4593 COMMISSIONER PENNEFATHER: So in other words, the second type of programming, Mr. Lombardi, that...

4594 MR. LOMBARDI: That would be number two, right.

4595 COMMISSIONER PENNEFATHER: And it is important that we get a sense of that.

4596 So you are talking in that example of the announcements to a particular community?

4597 MR. LOMBARDI: It could be. For example -- but the program could consist of 10 items, 10 community events that might be going on that would touch on 10 particular ethnocultural groups that members within those respective groups would be particularly interested in. Not necessarily in this case would it be exclusively for a particular group but maybe a number of groups in there.

4598 COMMISSIONER PENNEFATHER: Okay. If you could give us another example from -- so I see, next, you have basically the news, weather and sports and traffic, which is somewhat typical of, let's say, the morning period announcements, then the interview.

4599 MR. LOMBARDI: Well, for example, at 6:00 a.m., we have an interview with a senior representative of the Ottawa Police on a recruitment drive.

4600 Now, we are dealing with their outreach programs to the multicultural communities and this is an opportunity to discuss the sensitivities of diversity recruitment and cadet diversity training in the police force. Now, we see this as falling into Category 1, current issues that have a culturally diverse perspective.

4601 We believe that all or many ethnic communities would be interested in those types of programs and what problems the police force face and what are some of the concerns of some specific visible minorities with regards to gaining access to recruitment in the police force and whether the force has the type of diversity training programs in place.

4602 So this would be number one, Category number 1.

4603 COMMISSIONER PENNEFATHER: So am I to understand, too, that this is just the spoken word programming that we are talking about in this schedule and that we are looking at music as well or is it all talk?

4604 MR. LOMBARDI: All talk.

4605 COMMISSIONER PENNEFATHER: And it is all talk in both?

4606 MR. LOMBARDI: This is all talk.

4607 COMMISSIONER PENNEFATHER: So the 36 minimum hours is concentrated in these two periods of the day --

4608 MR. LOMBARDI: That is correct.

4609 COMMISSIONER PENNEFATHER: -- 6:00-9:00 and 5:00- --

4610 MR. LOMBARDI: Eight.


4612 Again, we have going on an interview at 6:30, a three-part series on the Ottawa School Board, how they are responding to diversity, an interview with a nutrition expert.

4613 It says:

"In each case, focus will be from a multicultural perspective." (As read)

4614 What do you mean by that and how specifically will that be carried out?

4615 In other words, one could look at the list and say, these might be interviews I would hear on any station if a station chose to do nothing but talk in the early period.

4616 What are the elements that provide these programs really with their culturally diverse components?

4617 MR. LOMBARDI: Well, what we would like to do is bring to bear the experience and the resources of CJLL.

4618 As Gary mentioned, we have over 26 socio-producers now under the umbrella of CHIN Radio, and through our socio-producers, we have a network of contacts and relationships with various support services. There is a lot of information, there is a lot of issues that involve and are involving those various communities.

4619 We are going to put those resources to work for us at Fusion and with a specific and dedicated cultural view of various topics. Many of those producers will be guest hosts or part of debates and interviews.

4620 Those individuals are coming from the communities themselves. For example, on the Ukrainian vote in the Ukraine, we would have representation from the Ukrainian community here in Ottawa that would be giving the perspective, not only from the community but from a broader sense of the related associations that their involvement might have.

4621 We may break a story earlier. We may see something with our producer from -- our Ukraine producer actually was well aware of the impending problems in the Ukraine with the upcoming vote and was speaking about that quite early in her programming, and now it is a very hot topic.

4622 So there will be a tendency for us to start earlier with stories of that nature and how they affect the Ukrainian community here and how Canada views it, and we probably will stay with it much longer than after it has fallen off the front page.

4623 COMMISSIONER PENNEFATHER: So can I assume, for example -- and forgive me if I haven't understood this but I am trying to get a sense of what I am hearing as I tune in from 6:00-9:00 on Fusion 96.5. Is there a host throughout this morning?

4624 MR. LOMBARDI: We have planned -- yes, there will -- we have planned to have a programming department of eight individuals. We propose to have an anchor host for both the morning and the afternoon drive period, augmented by our researchers and other associate producers from CJLL, who will help feed the program content with news stories, researching ideas and presenting programming ideas to the programming director, and that is how we will basically put the show together.

4625 COMMISSIONER PENNEFATHER: So the interviews would then -- what you called, on page 11 of your supplementary brief, program features, that is what I am seeing here, the 10-minute, 15-minute, 20-minute feature. As opposed to a longer program, these would be produced by the associate producers?

4626 MR. LOMBARDI: Co-produced.


4628 MR. LOMBARDI: Co-produced.

4629 COMMISSIONER PENNEFATHER: On page 11, there is a description of some of the programming. This is what I am seeing here on the draft schedule?

4630 MR. LOMBARDI: There are elements of the programming and topic issues there on page 11 that have been incorporated in this draft proposal.

4631 COMMISSIONER PENNEFATHER: And you are saying that the reason that these are elements that -- the reason that these are culturally diverse is the perspective brought by the associate producers --

4632 MR. LOMBARDI: That is correct.

4633 COMMISSIONER PENNEFATHER: -- the kind of interviewees they would look for?

4634 MR. LOMBARDI: That is correct.


4636 What I am still also trying to be clear about -- and remembering that you have two different types of programming and I think from what you are saying -- is there a balance in my schedule of 6:00-9:00 here between the first type and the second type of programming? What is the balance between the two?

4637 MR. LOMBARDI: Commissioner Pennefather, there are actually elements of both, issues of a multicultural nature that could be shared with the broader community and those types of programs that may be of particular interest to a single cultural group.

4638 I think we will seek to find balance throughout. It is the mix of the content providers, if you will, it is the influence of the various broadcast professionals that we have come to work with over the last year, the connections that we have in ethnic journalism and the related support services around those individuals and the multicultural communities, that will give us a greater sense of how those types of programs will be fleshed out.

4639 In both the drive and afternoon, it wasn't difficult to find an easy blend of the two, good programming to pepper the show with upcoming cultural and community events as well as feature local heroes from certain communities. These are important programming elements that will blend both categories.

4640 COMMISSIONER PENNEFATHER: One of the reasons I am asking that, not only to give us a sense of what we are going to be hearing but really to go a little deeper than -- I understand well, and obviously, the proposal you are making is an important one in terms of different perspectives being brought to, for example, the news of the day or other events in our community but I just want to try to perhaps make it a little bit more focused in terms of understanding where we are going.

4641 Given the nature of these programs and the fact that they are cross-cultural in nature -- in other words, one of the objectives that you tabled several times in your proposal is that you are doing this to encourage cross-cultural understanding -- what I am not clear about is who the target audience is.

4642 In one point you say -- on page 11 of your supplementary brief:

"One of the limitations of traditional third-language programming is that it isn't accessible by members of the target community that do not speak the language it is broadcast in, hence, ethnocultural community, or the general public." (As read)

4643 So who is the target audience? Is it all the ethnocultural communities, is it singular particular communities or is it the general public?

4644 MR. LOMBARDI: I think it is a blend of all of it. This is a mainstream application and we intend to broadcast to the widest and broadest possible audience with informative programming.

4645 What exists today in cultural broadcasting, for the most part, is regulated to ethnic broadcasters, who are doing a fabulous job. We have been doing a great job for close to now 40 years and we have developed the notion of multiculturalism and cultural diversity to a level now where there is a world of information and entertainment and experience that has yet to actually be shared beyond the realm of ethnic broadcasting.

4646 What this station proposes to do is to bring those elements that are created on CJLL and created on other ethnic stations across the country but what we are talking about here in Ottawa is to take those elements and to bring them into the mainstream where -- one of the problems that we have on CJLL with our ethnic licence -- it is not a problem but our cross-cultural talk show was designed to do that and we are doing the best that we can.

4647 But what I found, the difficulty is attracting a sizable enough audience. When English-language cross-cultural programming is sandwiched between two third-language shows, there is a tendency not to be able to create a broader audience other than picking up some of the listeners from the show that it precedes and perhaps picking up early listeners that are anticipating the show to follow.

4648 What we are proposing to do with this show is to target a broader audience and develop a reputation for culturally diverse issues and topics that are going to be dealt with from that perspective, and our idea is to try and reflect to Canadians of different social and cultural perspectives an opportunity to hear themselves on radio.

4649 Ethnic broadcasting has difficulty doing that because of our commitment to third-language programming. I mean that is what we do best and, in fact, on CJLL, there is even greater demand now for more third-language programming.

4650 So my cross-cultural show is under siege, if you will, in that I am compelled to give it to another third-language group, which is more my preference, if you will.

4651 COMMISSIONER PENNEFATHER: The current cross-cultural show, "The Noon Hour," who is listening to that show? What is your sense of -- your target audience there is the ethnocultural communities or is it the general public? You have had a little experience with it now. What has been the reaction?

4652 MR. LOMBARDI: Well, before I turn to Gary, who was the host of that program, our experience is that we do have an Italian listenership, because we have a morning show in Italian, that will take us to 12:00, and then that talk show follows -- the Arabic program follows that talk program.

4653 So I would say that the major component of our listeners come from those two communities but the issues that we discuss are much broader and aren't specifically directed to those two ethnocultural groups but they have a much broader appeal.

4654 Gary can perhaps elaborate.

4655 MR. MICHAELS: Commissioner Pennefather -- thank you, Lenny -- a number of guests have appeared on our cross-cultural talk program on CHIN Radio. I can give you a few examples.

4656 Recently, a young lady by the name of Karen Cho, who is of Chinese ancestry, born and raised, grew up in Montreal, was telling the story that her grandmother passed on to her about the Chinese head tax way back in the late 1800s, early 1900s, when many Chinese men came to this country to work and they were forced to pay a head tax, which at that time amounted to $500, which they tell me could buy two homes in Montreal during that period of time.

4657 Karen was so taken by this story that she heard, all about her grandfather suffering through all this, she decided to make a movie about it, and in conjunction with the National Film Board, she did produce a film that lasted some 92 minutes, I believe. It was recently premiered at the Library and Archives building on Wellington Street in Ottawa and she toured the country with this movie, telling her story, the story of her grandfather.

4658 With her was a gentleman by the name of Wei Lee whose mother lives in Ottawa. He is living in Chelsea here in Quebec and his mother told him similar stories about what his dad went through when the Chinese were here working on the railroad, let's say, and they were separated from their families in China for a long period of time. Back in those days, there was no communication or very little. So it was awful what the families back home in China went through and what the men went through here.

4659 So that was one story that was relayed in English where the rest of us had not heard of this before and here was this young lady that took it upon herself to tell Canada or tell the world about the suffering that her grandparents went through.

4660 We also touched on lighter topics. We have had guests from the various multicultural communities, from the Lebanese, the Greek communities, people like Chris Wanna who runs a number of Mycell Mobility business outlets here in Ottawa, very successful franchisee who has done extremely well and a very proud member of the Lebanese community. But also who gave back to the community in many ways by contributing to charities. Marc Kosmos, well-known football player for the Ottawa Rough Riders back in the great days of football in Ottawa. Marc, a member of the Greek community who immigrated here from Baltimore, played his football here, stayed in the community and has opened up a successful chain of sports bars, Local Heroes, in Ottawa.

4661 It is their stories about their Greek upbringing, their Lebanese upbringing and how proud they are of their communities, but to be able to tell their stories in the English language in that one hour that we have, we would like to bring that over to Fusion 96.5 and give it a little more exposure, if you will, to the rest of our listening audience and to the new audience that hopefully we will attract.

4662 COMMISSIONER PENNEFATHER: Thank you for that description, it is very helpful. And also, if you are interested in perking up my interest, and you mentioned the National Film Board, I'm listening really well. But I think why I wanted to ask you that question was to say that is that program on CHIN Radio with its ethnic approach, with its ethnic programming goals.

4663 Now we are coming to a commercial radio operation and bringing this concept forward into the morning drive period and the afternoon drive period. What I have here now is a schedule which perhaps gives me a better sense of how you will handle those two morning periods, but they are in the commercial radio world where a lot of the revenue comes from, where a lot of the listenership is expected to be obtained. This is where we come back to being sure we understand well your target demographic and why you chose in fact to put 36 hours of diverse cultural programming into those two time periods. Broken up as you have it here, it is not so much a half hour program so much as pieces through those periods.

4664 The deficiency letters weren't quite as clear on when that programming would occur, the deficiency letter of July 12th, but I take it you have decided that your 36 hours would be... and again, I am not sure if that adds up to 36, I haven't had a chance to review it, but I am understanding that this spoken word represents that commitment. Why have you chosen to go into these peak audience periods?

4665 MR. LOMBARDI: Because we wanted to make a serious commitment to our culturally diverse spoken word content on Fusion. This is what is driving this application for me. I have seen the evolution of ethnic broadcasting, I have had many years experience with our Toronto station, we have a lot of similar programs that are in the English language that have a much broader appeal and have a much greater message to be shared, but difficulty in attracting audience because of the ethnic nature of our stations. I think there is a real need. I have seen this coming for quite sometime.

4666 So, my main interest is the spoken word content of this station. So, I wanted to make it quite clear where I was going with this and so I thought the best way to do that is to put it in primetime listening periods, create informative and entertaining spoken word content unlike anything that is currently being heard in the Ottawa area and supplement that with the best appropriate format that we tested and that turned out to be smooth jazz.

4667 PROF. KARIM: Madam Pennefather, if I can add to that. The particular points made by Mr. Lombardi speak to a third space which the proposed radio station would be creating. We have currently our mainstream stations exploiting a very narrow band of possible voices in Canada and, in this case, in Ottawa. The examples given by Gary speak to a range of other Canadian voices that we don't usually hear and the kind of voices that could also be included in my thinking about such a station would draw from the various embassy staffs which are often not tapped by mainstream programmers whom the associate producers, the co-producers would have contact with. The certain MPs of various ethnic backgrounds who are under-accessed I think, as well as various professionals from various ethnic backgrounds who don't have a full voice in mainstream broadcasting. They do have access to ethnic broadcasting at the present, but there is so much more to offer to the broader audience.

4668 In your attempt to distinguish the particular audiences the way I tend to think about this is that these are overlapping audiences, of the ethnic communities and the larger communities and it is the English language which basically makes this transparent, because when you speak in Arabic or South Asian languages or other languages there is a certain opaqueness to the larger communities and to the various other ethnic communities. Here you open it up so just about anyone listening into that station would be able to draw from it the kinds of voices that we don't often hear in the other stations. So in this case, you not only bring a certain freshness or a certain vitality and I think certain voices which are important to hear. There are certain events which occur around the world and in Canada which we often don't have access to because the people who are brought to fore in the various broadcasting stations don't include the other voices who could add to the public discourse. This is the strength I think that this particular station has to offer.

4669 COMMISSIONER PENNEFATHER: Thank you, Dr. Karim.

4670 MR. MULVIHILL: Commissioner?


4672 MR. MULVIHILL: Maybe if I could add to that from a commercial perspective and business perspective. If you appreciate that 64 per cent of the market come from ethnic origins other than English and French, we appeal to the broad domain. You have radio stations like CFRA in the market that target very heavily with a news talk format in the major drive periods... that represent drive. We feel very confident we can do the same thing. Our research says to us over 77 per cent of the people that responded to research would listen often to culturally diverse spoken word format.

4673 COMMISSIONER PENNEFATHER: I appreciate input from you, Dr. Karim, as well and fleshing out the concept as a whole. But that is very helpful, because I was also looking at your market research. And just so that I understand, I have the bottom line as it is called in the market research document saying that the study indicates the existence of a meaningful audience in Ottawa for general interest multicultural themed talk shows, which I gather was the question put forward to get your 70 per cent.

4674 Now, just to be clear, when this research was done was it done with ethno-cultural communities or the general public or both? What was your goal in undertaking this research? Because you mentioned as well and my question was based on the business plan point of the early morning and afternoon drive periods being rather central to the business plan and to your planned share in revenue. So, could you just clarify for us a little bit more how this research was done and who was the target audience for the research?

4675 MR. MULVIHILL: The target audience for the research was the market of Ottawa-Hull and it was to the marketplace of adults 18 to 54.

4676 COMMISSIONER PENNEFATHER: That is what I thought, it is 18 to 54.

4677 MR. MULVIHILL: Yes.

4678 COMMISSIONER PENNEFATHER: Is that going to be the target audience for your programming going forward?

4679 MR. MULVIHILL: No, we tested the demographic of 18 to 54 for its broad adult-base appeal and that was because we were looking to test for three music formats: world beat, alternative and smooth jazz, in addition to testing for four culturally diverse talk formats.

4680 COMMISSIONER PENNEFATHER: So, it is the talk formats for the moment. So, you did test for the talk formats perse?

4681 MR. MULVIHILL: Yes.

4682 COMMISSIONER PENNEFATHER: And this is a talk format which you are proposing and certainly we can hear that it is going to be different from talk formats. Yet research tends to show us that adult listeners, slightly older age group, are satisfied with the talk formats they currently have in the Ottawa market. How do you see your proposal filling in a gap when they seem to be satisfied with what they are getting and how do you see it surviving in that environment?

4683 MR. LOMBARDI: I would like to answer that. I think this is a totally unique brand of talk format that we are proposing. This will bring new voices, almost 100 per cent, to the airwaves in the English language that perhaps have never been heard before, in the host that we use, the associate producers that will be involved and the support groups around those various producers.

4684 You know, we plan to give full expression to every aspect of the Ottawa-Gatineau society, and there are areas that aren't given that type of exposure on mainstream radio. So, it is going to be very different and it is going to be quickly recognized as different alternative programming in the talk format and so I think, at that point, people will then have an opportunity to choose. It will offer, you know, greater diversity and views that they may not have become accustomed to hearing in the past.

4685 COMMISSIONER PENNEFATHER: Do you see any particular programming challenges with your concept in trying to meet the expectations? You noted interest in this talk show format of the multicultural, I think as I mentioned the bottom conclusion of the market research, that there may be expectations... programming information expectations in line with what you are proposing. Do you see any particular challenges with the spoken word programming? For example, in your supplementary brief and today you talked about groups including Chinese, Arabs, Italians, South Asians, Portuguese, you have mentioned others. There is only a certain amount of time here, is there going to be...? And you seemed to indicate to us that this is for all ethno-cultural groups in the community as well as the general public. How is everyone going to be satisfied?

4686 MR. LOMBARDI: We will take a very balanced approach to our programming. I think there will be stories and issues that have a broad multicultural appeal, such as education, immigration and refugee status, issues of multiculturalism. I think those are topics that are going to have a broad appeal and we will be able to involve or we will attempt to involve as many diverse perspectives on those issues within those shows and that will depend largely on who we invite to be participant in the talk format, who do we reach out and establish interviews with of that nature.

4687 For the most part, the other community groups will be given top priority with regards to cultural activities within their own communities and we can, you know, dedicate time slots on a weekly basis or a daily basis that actually cover off throughout the week those types of opportunities that are available for those cultural groups.

4688 All the while keep in mind that this is a message that is being shared with the broad public and so that is really the goal. Is not only to elevate the status, if you will, of those ethno-cultural groups who are living in Ottawa but also share what these groups are creating and doing and working at with a much broader audience.

4689 COMMISSIONER PENNEFATHER: You plan interviews I see. I see something, open mic show. Would that be open line programming?

4690 MR. LOMBARDI: Yes, it would.

4691 COMMISSIONER PENNEFATHER: So I assume that you would be aware of the regulations regarding open line programming and be ready to follow those guidelines?

4692 MR. LOMBARDI: Yes. Actually, it will be a lot easier than we currently have to incur, because in third language radio programming it is a little more difficult because, you know, we have to be fluent in 20 languages at a time. In this case, it is the English language, it is a little more manageable.

4693 COMMISSIONER PENNEFATHER: In that sense, I guess.

4694 MR. LOMBARDI: In that sense.

4695 COMMISSIONER PENNEFATHER: Now, before we complete our discussion of the spoken word programming, one further question on the amounts. You said a minimum of 36 hours I understand. Is it all within these two time periods? That is it?

4696 MR. LOMBARDI: The morning and afternoon drive?


4698 MR. LOMBARDI: Those are the areas that we are suggesting, Monday through Friday, and we have three hours a day on Saturday and Sunday, and we have not made a commitment with regards to how we would like to program that --


4700 MR. LOMBARDI: -- we might do something else with regards to features.

4701 COMMISSIONER PENNEFATHER: But the balance of the day period would be in terms of standard spoken word programming --

4702 MR. LOMBARDI: That is right.

4703 COMMISSIONER PENNEFATHER: -- with news breaks? The three hours of news would be only within those time periods or throughout the day?

4704 MR. LOMBARDI: Throughout the day.

4705 COMMISSIONER PENNEFATHER: In what way would you accomplish your culturally diverse goal in that other programming, in the balance of the programming?

4706 MR. LOMBARDI: In regards to smooth jazz?

4707 COMMISSIONER PENNEFATHER: No, we will get to music, I am still with spoken word. We have the culturally diverse programming in the morning and the afternoon periods --

4708 MR. LOMBARDI: Correct.

4709 COMMISSIONER PENNEFATHER: -- the rest of the day it is not culturally diverse, the spoken word?

4710 MR. LOMBARDI: So, after our culturally diverse segments at 9:00?


4712 MR. LOMBARDI: How do we reflect cultural diversity in there?

4713 COMMISSIONER PENNEFATHER: Other than those periods that we have talked about, how do you reflect cultural diversity or is it just in those periods?

4714 MR. LOMBARDI: Primarily, it is just in those periods.

4715 COMMISSIONER PENNEFATHER: You reference on page 9 of your supplementary brief and again this morning you talked about the ethnic broadcasting policy 1999-117 as recognizing the need for programming in English that can play an important role in meeting the needs of Canada's ethno-cultural communities and in facilitating cross-cultural exchange. If we look at your proposal in this light you again have this second type of programming. As we noted earlier, you have two types and, as you have said, there seems to be a mix throughout the two program periods. The second type is programming which features a variety of topics to or about a particular ethno-cultural community.

4716 Now, as you well know the ethnic broadcasting policy sets out that a cross-cultural program in English or French or any language in fact qualifies as ethnic programming if it is specifically dedicated to any culturally or racially distinct group. This is part of the Commission's definition of an ethnic program. So, it could appear that in some instances, for example, in the announcement of upcoming community events or perhaps one of the interview shows where it is our Chinese-Canadian with a story or another member of another community specifically, while in the English language, specifically addressing their particular community.

4717 Could you care to comment on the fact that in some instances what we appear to have here is ethnic programming?

4718 MR. LOMBARDI: My definition of cross-cultural in PN in 1999 is one that, as I understand it, programming the English language that is directed to a specific cultural group in the English language. It also serves as a cross-cultural program because in the English language it actually can include a wide variety. It is also programming in English or a third language if, for example, we are talking about Chinese New Year in English but we are running it in an Italian program. So, we are directing this segment of the program to the Italian community, but talking about another culturally distinct group. That is my interpretation.

4719 The programs that we are discussing here, an element of those programs deal with culturally specific issues such as, you know, Italian Christmas if you will... we will stay on that theme. That is one component in that program. It is not directed to any specific cultural group, it is about that cultural group. You know, we are describing things that many of us in the broader community don't perhaps know as much about and would like to know more. That is just one example if we just stick with religion and cultural celebrations, Diwali, the Festival of Lights, you know, there are so many different aspects of our existence that we co-exist here in our community that none of us really have a clear understanding about. This will be an opportunity in a forum in which we can exchange ideas. Although it is not directed to the South Asian community or the Italian, it is really much broader.

4720 COMMISSIONER PENNEFATHER: You see how it fits with our discussion up to date, this morning as well, is to understand who the target audience is and it seems natural at some particular time that a story could be directed to a particular community in the English language, which would make it an ethnic program. But you are saying, as I understand you, that your purpose is the broader audience of all --

4721 MR. LOMBARDI: Very much.

4722 COMMISSIONER PENNEFATHER: -- ethno-communities. Now this component of your proposal, the cross-cultural diverse programming in English language is an important component of your proposal. Would you care to comment on a condition of licence which would commit you to the minimum of 36 hours a week of cross-cultural programming in English language?

4723 MR. LOMBARDI: Well, we're absolutely committed to, as a condition of licence, to provide a minimum of 36 hours of culturally diverse spoken word.

4724 COMMISSIONER PENNEFATHER: Let's move on to the music, which you say is the good fit with this proposal and as you know from following the hearing, we are having a good discussion with all the applicants to try to get a clear picture of what the music format is.

4725 You're proposing smooth jazz and another applicant in this hearing is also proposing a smooth jazz format, although to a francophone audience. Could you tell us how your proposal for smooth jazz differs from the other applicant's smooth jazz proposal, if it does? How is it different?

4726 MR LOMBARDI: Are you referring to...

4727 COMMISSIONER PENNEFATHER: The CHORUS application has a smooth jazz.

4728 MR. LOMBARDI: CORUS has a smooth jazz. The primary differences are that CHIN has a large commitment to culturally diverse spoken word of 36 hours and it's an English language station. CHORUS application is primarily a French language smooth jazz with a smaller commitment, a significantly smaller commitment to spoken word.

4729 COMMISSIONER PENNEFATHER: The music itself though, however, would you say that it's generally the same type? How would you... let me put it this way. We had a description of smooth jazz from the CHORUS group. How do you describe smooth jazz?

4730 MR. LOMBARDI: Well, as I have said in my supplementary brief and my oral, in general terms it's music with a more of an R & B feel, it's lighter, it's more accessible and it's easy-listening and perhaps I would ask Gary Michaels to comment on some examples of that type of music.

4731 MR. MICHAELS: Commissioner Pennefather, the smooth jazz component of our program schedule would lend itself to the talk segments because it would be unobtrusive, it would blend well together. The smooth jazz itself is relatively new to us here in Canada as a music format. There is... as Larry mentioned, it's a mix of jazz with some R & B sole. There are names such as George Benson, Diana Krall, of course, Canadian artist from Nanaimo who was introduced to jazz at the age of 15 after studying classical piano for many years and discovered that, hey! this is really a nice soft feel to it.

4732 I think the fact that there are so many stations in the United States that are featuring the smooth jazz format now and we are just learning about it here in Canada, a few stations, as we mentioned, in Calgary and Winnipeg, Vancouver as well have been licensed by the Commission to program smooth jazz music.

4733 But here we have a type of music that boils, as I mentioned some of the R & B, some of the old jazz as there is... I like that some of the names on the current charts, for example, from Bill Borden, in radio and records, you have people like Ray Charles that are on the charts now, pieces of dream by... with Assembly required Paul Hardcastle. A lot of these names are relatively unfamiliar to most of us, but I think people start listening to Fusion 96,5 and they will become introduced to this new... this new format and these names will become household names over a period of time.

4734 I feel that... or we feel that this is a type of music that will blend itself very nicely to our talk segments as well, with the drive hours morning and afternoon.

4735 COMMISSIONER PENNEFATHER: I thought that we said earlier there was no music in the... it was all talk?

4736 MR. MICHAELS: No, but to blend from music to go to the talk segment.


4738 MR. MICHAELS: It's not a... it's not a drop change.


4740 MR. MICHAELS: Exactly. So, you know, you're listening to the music, you're relaxed, you're enjoying it and you get into your talk format, there is not... there is not that harsh cut.

4741 COMMISSIONER PENNEFATHER: Because we've got a schedule here for the morning period and the afternoon period, but there is the rest of the day. So, I'm assuming the rest of the day takes on largely a music format. Is that correct?

4742 MR. MICHAELS: Uh-huh!

4743 COMMISSIONER PENNEFATHER: And it's all smooth jazz interrupted with news and...

4744 MR. MICHAELS: With some rolling talk and it's exactly.

4745 COMMISSIONER PENNEFATHER: Which is why my question previously about whether the culturally diverse programming per say is all chunk into these periods or if it's heard throughout the day. So, the smooth jazz fit is really to keep your listeners throughout the day. Is that what I understand?

4746 MR. LOMBARDI: It is, Commissioner Pennefather, but we also are aware, because of our international background in music, we will be able to source interesting international smooth jazz artists from around the world and integrate those types of sounds as well into the format, with an effort to blend, you know, the sense of a culturally diverse spoken word program with easy-listening smooth jazz.

4747 COMMISSIONER PENNEFATHER: One of the points that we have been talking to all the applicants about is trying to look at this from a music point of view now on whether you really would bring some diversity to the market.

4748 If you look at the existing stations, Magic 100, for example, or Couleur FM in French, a number of the music elements you list on the play list could be found on those stations. There is a cross-over category 2 and 3 in several instances. We have got Norah Jones on these lists, Diana Krall, Nura who was here with an easy-listening applicant.

4749 Could you care to comment on why you feel your smooth jazz format would offer something new to the listeners in Ottawa, considering what we currently have in this market?

4750 MR. MICHAELS: I could answer to that, Lenny, if I may. Some of the artists we would also include, I neglected to mention to you, Commissioner Pennefather, would be Spanish artists, Astrola Pietzola from Argentina, Arturo Centival of Cuba, Milton Stamos, George Metropolanos, Panus Kovalos Greek artists; Ukrainian John Stetch, Dutch artist William Bruker Kornchein.

4751 Many of these people would be featured on our play list, whereas you probably wouldn't hear them on those of the other stations.

4752 COMMISSIONER PENNEFATHER: So, you're looking at then a number of the category 3 sub-category 34, world beat component in your smooth jazz, which would perhaps distinguish it from existing.

4753 And again, is the target... you see it's a good fit with the target audience for the culturally diverse spoken word programming. So, I'm assuming again to confirm that it's a target audience of 25 to 54 and is it the general community or is it ethno cultural groups? Who is the target audience for the music?

4754 MR. LOMBARDI: Just before Ed or rather Joe answers it more fully, we surveyed the Ottawa-Gatineau market and we tested three formats. We tested smooth jazz, we tested world beat and we tested alternative and we say smooth jazz is a good fit because those who we tested that liked the diverse talk formula also rank smooth jazz as their favourite format.

4755 The only one that was ranked as far as the music format was concerned, was alternative rock, but we don't feel the demographics really match the kind of audience that we're appealing to with the diverse format and so, that's why we believe that, but Joe can give you a much fuller answer than that.

4756 MR. MULVIHILL: Yes. The merits between a talk format profile and a smooth jazz profile, if you appreciated from an adult age demographic profile, you're looking at on talk format, an audience that is generally 35 to 54, 35-64 strongly tend to be owner managerial, higher educated, higher in commerce. Smooth jazz is also likewise the same way. On our testing of our research, 34-44 and 45-54 tested extremely strong.

4757 So, when our overall format demographic of our station for talk as well as music, the 25-54 target group is where we're at; 25-34 on the other end tests well, but the core is 35-54.

4758 I think the second point in our research that came out very strongly is that of the respondents in the market on our survey, that 24 per cent of them said that they would listen to smooth jazz often.

4759 But more importantly, they also said that they would listen to multi-cultural... general multi-cultural talk format, 45.8 per cent of the time. That's extremely high, so we are very comfortable in the relationship between the two.

4760 COMMISSIONER PENNEFATHER: Thank you for that. Just to conclude, if we look at the spoken word since you put the emphasis on presenting this in your research as talk and then looked for the music format that would match it best, at least that's one angle we could look at the research at, we end up though still your proposal with a breakdown of spoken word to music, spoken word about 30 per cent, music about 70. Am I correct?

4761 MR. LOMBARDI: That's correct.

4762 COMMISSIONER PENNEFATHER: Canadian talent development now. I think most of the proposals are clear except I wanted to discuss with you and clarify a little bit the proposal on the forums or fora perhaps.

4763 On page 17 of your supplementary brief you lay out the goals for these forums on multi-cultural, cross-cultural understanding, $70,000 over the term, to facilitate meaningful dialogue between radio broadcasters and ethno cultural groups, to examine ways in which radio can encourage and promote multi culturalism and cross-cultural understanding, including the development of best practices.

4764 Could you just elaborate a little more on these forums and I think you proposed perhaps having two or three a year? We will get back to the numbers in a moment because that was clarified later.

4765 Who would participate in these forum and how would they work and how do you see the initiative affecting the broad spectrum of radio broadcasters or is this more related to the ethnic broadcasting community? Could you talk to us a little bit more about the forum?

4766 MR. LOMBARDI: It kind of speaks to the heart of what we are trying to accomplish here with culturally diverse spoken word. I am very interested in tracking our development and finding ways in which to do what we do better.

4767 And so, the idea would be to invite members of the community at large paying close attention to the ethnic communities for... with their participation, and conduct under the auspices of professionals, such as doctor Karim, for example, to oversee the forum in an attempt to generate dialogue, opinions, ideas, on how we can improve the method in which we are delivering the message, if you will, on radio.

4768 And this is primarily a local initiative. This is going to be for the Ottawa-Gatineau area and...

4769 COMMISSIONER PENNEFATHER: Is it for the ethnic radio or is it for non-ethnic radio or both? A forum; who would be the invitees, for example?

4770 MR. LOMBARDI: Well, I think it would be a broad invitation. I think we would want to invite people who have an interest in cultural diversity and all of its forums and how radio can play a more important role in servicing that need in the public airwaves.

4771 I wouldn't say it's for the ethnic broadcast community, but I would also say that it's something that we would want to share.

4772 The initiatives that are behind this proposal is to develop better programming ideas for Fusion and the findings of that study can be shared by all broadcasters, including ethnic broadcasters.

4773 COMMISSIONER PENNEFATHER: Ah! So, if I'm clear then, you say it's really for you, Fusion, to bring in members of the community, to improve your programming?

4774 MR. LOMBARDI: To attract our programming. To help advise or give greater information to the Advisory Board Management on our progress. You know, I think we want to do the best possible job and we felt that investing money in this type of a forum would generate tremendous results for us.

4775 COMMISSIONER PENNEFATHER: How would you measure that the initiative was successful?

4776 MR. LOMBARDI: I think we put these plans into practice, whatever the results that came of it. I think any exchange of good ideas will result in, I think, enhanced programming development and research in direction as to how we continue to do the best possible job that we can.

4777 MR. MULVIHILL: Commissioner, I also think that, you know, we are in the main stream now in terms of what we're talking about, so there is always the obvious report card, which is the broadcasting measurement audience survey. You know, we have based this on drawing a certain size audience and if we don't do that, then we're obviously not doing our job on talk.

4778 COMMISSIONER PENNEFATHER: Indeed. I was speaking more of the forums themselves. If you have an initiative which I now understand is a little different from what I thought, I thought that perhaps what you were describing is a forum which would encourage other radio broadcasters in the area of cultural diversity and in that sense, asking what... how you would judge that initiative, not so much the success of the radio station, but of the forums.

4779 So, in that sense, the budget for the project of the forums, two or three such forums, with $70,000.00 over three years and you provided a sample budget in the July 12 deficiency letter, of $28,200.00 for one forum and can you confirm for us that your $70,000.00 budget will be by condition of licence and will be spent, irrespective of the number of forums scheduled, should this proposal be accepted by the Commission?

4780 In other words, it's a little difficult to add it up, but it's $70,000.00 total. So, would you be willing to commit to that total as a condition of licence, irrespective of the number of forums?

4781 MR. LOMBARDI: Excuse me. Yes, absolutely.

4782 COMMISSIONER PENNEFATHER: Now, if you do not hold some forums and they are cancelled, will you return to the Commission for authority to re-direct these expenditures into an eligible CTD initiative?

4783 MR. LOMBARDI: I can assure you, Commissioner Pennefather, that we fully intend to execute these forums. We think they will be very beneficial, but in the event that, for whatever reason, there is anything left over from the $71,500.00 we would ask the Commission to re-direct, your permission to re-direct to another CTD file.

4784 COMMISSIONER PENNEFATHER: And then back to... going backwards somewhat and to square one. There is perhaps as well a concern that the Hushen initiative would not be considered Canadian talent development. As you know, Canadian talent development initiatives really should find their way into the promotion of artists and artistic talent.

4785 In the event that the Commission did not consider this initiative as eligible for a Canadian talent development, will your overall seven-year CTD budget then be reduced by that $70,000.00 to a level of $430,500.00 or will you maintain your current CTD budget at $500,500.00?

4786 MR. LOMBARDI: Well, the quick answer is, yes, we will maintain the $71,500.00. We strongly believe though that it would qualify once it's perhaps more fully explained and shown that there would be direct benefits and lead to direct talent development within the community, so...

4787 COMMISSIONER PENNEFATHER: And how would that be? Could you explain how you think that these forums would really support the development of Canadian artistic talent?

4788 MR. LOMBARDI: Well, it's just that. I think what... there is an element of education, if you will, with regards to seeing the cultural stories within the story and perhaps there has not been enough attention with regards to writers and researchers and broadcasters to look at that side of the story and find perhaps a more human element or an area of that story that touches more directly to the community that it affects. And if it helps people become better writers, then I think that will apply.

4789 COMMISSIONER PENNEFATHER: So, just to be clear in the event that the Commission determines that this initiative of $70,000.00 is ineligible as a CTD, you will maintain your full seven-year commitment at $500,500.00 by condition of licence?

4790 MR. LOMBARDI: Yes, we would.

4791 COMMISSIONER PENNEFATHER: And you will return to the Commission to re-direct that $70,000.00? Is that appropriate?

4792 MR. LOMBARDI: Yes. Yes, we would.

4793 COMMISSIONER PENNEFATHER: The Advisory Board, you talked about the Board this morning and in your supplementary brief at page 15 and you're proposing to extend its mandate. Currently CGLL-FM has the local Advisory Board and you will expend its membership as well, not only its mandate, but its membership from seven to ten named members and ensure representation from the aboriginal community and cross-cultural representation.

4794 Why have you decided to extend the mandate and the size of your current board, instead of establishing a separate second board?

4795 As was just said, we are now mainstream. This is different. We have been trying to clarify that difference all morning. Why the same advisory board?

4796 MR. LOMBARDI: It is a natural fit from the area of synergies with regards to intellectual talent that is available. One station offers intellectual talent in the third language. Fusion will offer that intellectual talent in the English language.

4797 I felt that a greater opportunity existed to really put this "fusion" -- or, rather, spoken word forth in a proper way when the same advisory board members were collaborating with new members of Fusion 96.5, because they are actually able to access and advise with regards to the great amount of talent that we have on CJLL.

4798 Why we chose to increase the number of advisory board members is, of course, because we are obviously a different station, number three. We wanted to add an aboriginal member to the board, as well as two others, which would be specifically towards the smooth jazz component.

4799 I think the elements of the two stations marry well together because of the resources they are managing.

4800 COMMISSIONER PENNEFATHER: I would have thought that there would be a different -- certainly, I guess, you will look for representation in different sectors of the community, because I understand that you were trying something different with the Fusion proposal, as opposed to CHIN Radio.

4801 How often does this board meet?

4802 MR. LOMBARDI: Just to clarify the question, it in fact is quite different, but similar in that the resources of CJLL on the intellectual side -- the 26 associate producers that I spoke of -- are potential resource individuals who will fuel the diverse spoken word content of Fusion. That is where we saw the assistance of the advisory board of CJLL in helping to facilitate that. So we do see it as quite different.

4803 The board members for this new Fusion --


4805 MR. LOMBARDI: They will meet four to five times a year.

4806 COMMISSIONER PENNEFATHER: How do they impact programming?

4807 MR. LOMBARDI: I think that we basically have a game plan, and I think what we want to do is put together a program schedule and confirm it with the advisory board members as to their sense within the community of its acceptance and whether or not they feel confident that the direction we are going in will be a successful one for the communities we are trying to serve.

4808 COMMISSIONER PENNEFATHER: Leaving aside the local advisory board, which I understand is, as such, an advisory board, and the decisions on programming are made obviously by you, then, the station, what other measures will you have in place to ensure that local issues and concerns are reflected in your programming?

4809 MR. LOMBARDI: Because of our high content of spoken word programming and the fact that we will be working very closely with various communities within Ottawa and Gatineau, we believe that we will be able to fulfil that mandate very clearly.

4810 MR. MULVIHILL: Commissioner, also, from a manpower perspective, please appreciate that we have a separate full-time program director. We also have a separate news staff.

4811 Lenny has mentioned before our program hosts. We will have four program hosts dedicated to the smooth jazz format, another two program hosts who will also have responsibilities in research, as well as a full-time news person who will also be involved in news talk.

4812 COMMISSIONER PENNEFATHER: How many staff will be shared with CHIN Radio?

4813 MR. MULVIHILL: We have 17 full-time Fusion staff, and then there are 7 shared staff.

4814 COMMISSIONER PENNEFATHER: Moving on to what we have discussed with other applicants -- cross-tuning. I don't know if you have been assisting at other discussions here at the hearing, but this is an Ottawa-Gatineau market. It is a bilingual market and your principal language of broadcast is English, as you have said. In developing your business plan, have you given any consideration to the possibility that your program format might appeal to francophones tuning into the station? Let's call it cross-tuning.

4815 I believe some studies that we have with us table that cross-tuning to an extent of 26 per cent, francophones tuning into English-language stations on a fairly consistent basis. Have you given any consideration to this particular point about this market in your business plan and in planning the format for the station?

4816 MR. MULVIHILL: Our primary focus has been the English market, so the overlap of the bilingual, francophone-anglophone market we expect will be there, but our focus is English.

4817 COMMISSIONER PENNEFATHER: To what extent do you think this is an important part of planning for a station in this market -- the cross-tuning?

4818 MR. MULVIHILL: The appeal is naturally going to be there within the format itself. We have mentioned that the audience we will attract is older, it is a higher educated audience. So a large part of our audience will be bilingual by the very nature of it. So the comprehension factor for both English spoken word will be very strong and the appeal at the same time for a music format that fits. So I think it is a very high correlation.

4819 MR. LOMBARDI: It is a very different type of station that we are proposing from the other smooth jazz -- in particular Chorus. Because of our high content of spoken word in prime time, I think there will be minimal cross-tuning, in my opinion.

4820 COMMISSIONER PENNEFATHER: Even if some members of the ethnocultural communities may be interested, even though their background may be francophone more than anglophone, do you think there is any sense that there would be an interest there?

4821 MR. LOMBARDI: I imagine that there would be some interest, of course, but my experience in language is that people tend to tune into the language that they are most comfortable with and they want to hear. That is why we propose an English-language service of this nature.

4822 COMMISSIONER PENNEFATHER: Continuing on with your proposed audience, in terms of the business plan, can you give us any sense of the proportion of your audience that would be new listeners to conventional radio?

4823 We are going to get to the advertising revenues you are expecting to glean from existing stations, but particularly with this proposal, do you sense that you will be bringing new listeners to radio?

4824 MR. LOMBARDI: I think the quick answer is absolutely, yes, largely due to the fact that our spoken word content will be quite new and I think we will attract listeners strictly because of that segment of our programming schedule.

4825 The sense that we have is that this type of spoken word has not been given the kind of prime time exposure in the past, and we feel that we will be able to generate new listeners who perhaps have been listening to other formats and they may want to tune in to get a different perspective on Ottawa-Gatineau.

4826 COMMISSIONER PENNEFATHER: In your letter to the Commission of July 12th, you estimated 15 per cent of the advertising revenues would be garnered from existing local stations.

4827 That is on page 5.

4828 How did you arrive at this estimate?

4829 It is the July 12th letter, page 5, "Existing local stations -- 15 per cent..."

4830 MR. MULVIHILL: There is no magic formula. You establish what you feel is going to be within the range.

4831 Given the kind of format it is and its newness to the marketplace, and the fact that it is a very specialty niche market, we are not going to be a Category 2 mainstream radio station. The reason that is going to affect the revenue side is very obvious, because we are only going to be -- as we mentioned in our forecast, we are looking to go from a 2 share to a 4.2 share over the licence term.

4832 It is very similar to what we do currently in Ottawa and in Toronto, where we are not even an audience-measured station because we are purely ethnic.

4833 This is similar in the sense that we are very comfortable in where we are going to derive the revenue from, and it is not going to be, in large part, from the existing radio stations because we are not going to be able to compete in the audience wars that they compete with.

4834 I have spent over 20 years doing that work, and for most of those stations in this market.

4835 Where we are going to be very comfortable is in driving our new business and the kind of clientele that we can go after. We are going to be going after clients that, because of the kind of audience we are going to have, being higher profile, older, disposable incomes being high -- we will be able to go after higher import luxury cars, financial wealth companies, financial institutions, immigration services, and import-export companies that are very unique to our world that spend a lot of advertising money.

4836 COMMISSIONER PENNEFATHER: That was going to be my next question, but from a slightly different angle. You did say that you will garner a 2 per cent share of 12-plus listening in year 1, rising to 4.2 per cent in year 7.

4837 Another question around that is, if you look at Fall 2003 BBM Survey results, jazz stations garner 1 per cent and 2.8 per cent shares in other Canadian markets. Can you comment on why you are proposing a share of 2, rising to 4.2 in year 7, considering that in other Canadian markets smooth jazz is at a 1 per cent or 2.8 per cent level of share?

4838 MR. MULVIHILL: First off, our own market research -- I have learned over the years that what happens in one market doesn't necessarily happen in another. In this marketplace we have specifically tested 500 people, and it clearly showed that there was potential, on a smooth jazz-only format, to be a 5 to a 6 per cent share potential.

4839 We have lowered our conservative estimate on that over the licence term because we feel that, with the large spoken word component we have, you can't directly do the correlation of smooth jazz to this.

4840 The most successful market that I think you are talking about would be the Hamilton station. It has had the largest share, but it has also been the station that has been established the longest in the market.

4841 The other two stations are still relatively new. I think that it takes time to develop formats of the type that we are talking about today.

4842 COMMISSIONER PENNEFATHER: What is driving the share? Is it the music or the talk, in your view?

4843 MR. MULVIHILL: Definitely both.

4844 COMMISSIONER PENNEFATHER: Both. It's a combination.

4845 MR. MULVIHILL: Yes.

4846 COMMISSIONER PENNEFATHER: Since you make the point, and it has been made before, that this is a higher level than in some instances of spoken word, I was wondering what impact that had on the share.

4847 It's both?

4848 MR. MULVIHILL: Absolutely.

4849 COMMISSIONER PENNEFATHER: On page 20 of your brief you say that you are confident the market can sustain the addition of one or potentially two new stations.

4850 If we consider that perhaps the one is your proposal -- and I am assuming you would agree -- what is your comment on a second station being licensed in this process and, if so, which would you prefer it be?

4851 As you know, we have asked this to other applicants as well.

4852 MR. LOMBARDI: We would not be concerned as much with a French-language service. We feel that the best possible solution for CHIN -- Fusion, rather, would be for a French-language service and not a smooth jazz licence, which is quite obvious.


--- Laughter / Rires

4854 For example, you mentioned alternative rock. Interestingly enough, your market research came out with smooth jazz or alternative rock as a good fit for your listeners. Can you comment on that?

4855 MR. LOMBARDI: Alternative rock scored as high as the smooth jazz format. Although it is not, in our opinion, a good fit for the spoken word component, so we wouldn't want to combine that format with our spoken word.

4856 But I have to say that if CHIN were licensed and any French language service were licensed, that would not have an undue impact on CHIN -- or rather Fusion.

4857 COMMISSIONER PENNEFATHER: I have two other questions and, Mr. Lombardi, if I may, this question is going to jump over you to the two people in the back, who have been a little silent up to this point. With your agreement, I note that Madam Crawford and Mr. Roman are here.

4858 In your supplementary brief you talk about CHIN Radio and CHUM's long history of collaboration, and on page 8 of the July 12th deficiency letter you say that you don't anticipate any synergies between Fusion 96.5 and CHUM's operations in Ottawa. And granted that at 29.9 per cent there is no issue regarding ownership, I am curious to know -- perhaps you could elaborate for the panel CHUM's role in this proposal.

4859 MR. ROMAN: From the aspect of CHUM, we think there is an historic and very fitting corporate philosophy mesh.

4860 We have known each other for a long time.

4861 From the standpoint of where we fit at 29.9, we will not be involved in any of the day-to-day operations.

4862 We provide, I think, some financial stability, and we would certainly be there if there was a cash call.

4863 But other than that, it's a 15/40 show to run, as far as we can see.

4864 COMMISSIONER PENNEFATHER: Thank you, Mr. Roman. Those are my questions. As you know, my colleagues may have questions, and at the end we will ask you to come back and talk to us about why you feel that your program constitutes the best use of 96.5, and there is considerable competition for that frequency.

4865 Those are my questions, and thank you for your co-operation and patience.

4866 MR. LOMBARDI: Thank you, Commissioner Pennefather.

4867 THE CHAIRPERSON: Commissioner Williams.

4868 COMMISSIONER WILLIAMS: Good morning, panel.

4869 I note in your opening remarks that you are going to have an aboriginal on-air personality, and you are also expanding your local advisory board to include representation from the aboriginal community. How do you go about finding these people? What is your approach, or have you already located some aboriginal people who are interested in doing this?

4870 MR. LOMBARDI: As a matter of fact, Commissioner, we have actually asked Armand Ruffo, who is a professor at the University of Ottawa, and he has agreed to join our advisory board members, and he also happens to be a jazz enthusiast, which I think is a perfect combination.

4871 These types of individuals we look for with the assistance of our current advisory board members, but we are also well connected within the multicultural communities and have outreach programs that allow us to quickly identify individuals who are interested and who meet our qualifications.

4872 In fact, Armand was brought to my attention by one of our avid advisory board members. After speaking with him, he was happy to join us. And we will basically follow the same route.

4873 COMMISSIONER WILLIAMS: The aboriginal community is fairly diverse in its own right, so would you have them from the same community, or from an aboriginal community resident in Ottawa?

4874 How would you go about doing that?

4875 MR. LOMBARDI: I think we would seek to, obviously, have residents in Ottawa that would be on our advisory board, but we would also seek to find members who were balanced and aware of the responsibilities that they hold with regards to reflecting those views and perspectives on Fusion.

4876 COMMISSIONER WILLIAMS: Thank you very much.

4877 THE CHAIRPERSON: Commissioner Langford.

4878 COMMISSIONER LANGFORD: Thank you. I had a couple of questions, but I wouldn't mind following up on the questions that my colleague Mr. Williams asked.

4879 What size is the aboriginal community in Ottawa? Why this commitment?

4880 Certainly one is enough, but what is the size? Do you have any idea of the size of the community you are reaching out to?

4881 MR. LOMBARDI: I have it here.

4882 Dr. Karim, do you have that?

4883 DR. KARIM: Yes. According to the 2001 Census, it was 34,265.

4884 COMMISSIONER LANGFORD: And is that Ottawa or Ottawa/Gatineau or how is that broken down?

4885 MR. KARIM: The National Capital Region.

4886 COMMISSIONER LANGFORD: The region. And does that include Maniwaki where I know there is a large, I think, Algonquin community?

4887 MR. KARIM: I don't think that is part of the National Capital Region?

4888 COMMISSIONER LANGFORD: That is not included in?

4889 MR. KARIM: Not in the census figures, no.

4890 COMMISSIONER LANGFORD: Okay. Thanks. I just wasn't sure what was counted in on that number. Thank you.

4891 My questions are meant to follow up on some of the questions asked by Commissioner Pennefather, and I'm not sure that I will get much farther with them because I think she plumbed it pretty completely. Yet, I have still a disconnect between the very essence of what you are doing here and so I just can't get my mind around this. It seems like what you have got are two really good radio station ideas, but I'm not entirely sure they work together.

4892 So you have got talk radio with a kind of an ethnic and very diverse look and then you switch to smooth jazz. I don't mean to imply that I don't think people who like talk radio won't like smooth jazz, but it seems a little bit like enjoying peanut butter and sardines but you wouldn't them in the same bowl. I don't know how else to describe better. Maybe somebody would. Ice cream and sardines. You know, they are both good, but I am not sure they are good together.

4893 The reason I ask is I just don't know whether you can -- with what I have seen here with such a complete split from morning to music from music to the afternoon drivetime, if I can call it that, back to music, how can you ensure that your audience will follow you? How can you ensure that you won't in a sense alienate both, rather than charm both?

4894 That's where I am having my problem. I am just not entirely sure how -- and this, of course, goes eventually to your business plan and everything else -- how this will work, how you are comforted in the sense that though you have got two popular formats, how are you comforted that they will work together and they won't end up just kind of somehow alienating both or compartmentalizing both so that people just forget to switch over for their morning fix of diverse talk, or forget to switch from that to smooth jazz?

4895 Is that clear?

4896 MR. LOMBARDI: Yes, it is, and thank you for the question, Commissioner Langford.

4897 I don't see it as quite as jarring as peanut butter and sardines. It is more like samosas and shish kebob for me. It's a little more palatable than that.

4898 COMMISSIONER LANGFORD: I will have to take your word for that.

4899 MR. LOMBARDI: Actually, it kind of speaks directly to the notion of the kind of cultural diversity that we are bringing to this format.

4900 I think it is important that we recognize in this application cultural diversity is what is driving us, drives me with this application, and smooth jazz is a format that is currently under served here in the Ottawa/Gatineau area. So there is an opportunity for us to introduce, I think, a successful music format combined with something totally unique and different. The challenge remains as to how do you connect the two?

4901 I am of the opinion that you don't necessarily need to have 18 hours of smooth jazz per se to attract a following. What I believe is that there are members within -- and our research proves it -- members within the community of Ottawa that enjoy and would enjoy culturally diverse talk that have a propensity to enjoy smooth jazz.

4902 My personal tastes are I enjoy a talk format, information in the morning when I am going about my business, but at some point during the day I want to listen to some music. You know, I don't need to be informed of the repetitiveness of news stories that have not yet developed or issues that perhaps need more time before the end of the day when I am ready to receive more information.

4903 So that is the kind of logic between book ending the culturally diverse talk in those hours, and we feel it's a great fit with smooth jazz in the day part where people can go to us for the music.

4904 MR. KARIM: Could I expand on that, sir?


4906 MR. KARIM: When I looked at this application and Mr. Lombardi got in touch with me about this concept, I was quite intrigued, although I focused more on the talk side when he told me about the results of the survey. I found it very, very intriquing because on the one hand you have got the notion of fusion. It sort of brings in this idea of hybridity across cultures and across the nation, across the audience, which is very, very diverse, including the larger groups who are of British and French ancestry. So you have got a whole range of fusion, so to speak, taking place, and it is a very hybrid kind of a radio environment in which the talk will take place.

4907 When he told me about jazz, jazz of course has its origins, as we know, in the black experience in the United States, but today jazz draws from so many different cultures and so many cultures, musical cultures, have found the mode of jazz -- the very, very -- I guess I could use the word "convivial" kind of musical format which allows for the kind of blending of Western and Eastern and Latin American rhythms and styles. When he told me about this I found it unlike sardines and ice cream, although I think I would like to try that sometime.

4908 COMMISSIONER LANGFORD: Well, you are a brave man in more ways than one, I see.

--- Laughter / Rires

4909 MR. KARIM: So that's where I would like to leave it. I think it sort of allows for a transition from talk to music in a way that sort of has an overall kind of a continuity to it.

4910 COMMISSIONER LANGFORD: Now, as I said at the beginning, I don't have any problem with either one of the pieces. It's the pieces together that I am having a little bit of difficulty with.

4911 Let me take it from Mr. Mulvihill's perspective. Again, I am just prodding at this. I don't expect that anybody has got the -- if anybody could look into the crystal ball and say, "This works perfectly, don't worry", we wouldn't have to do this. You just mail in your crystal ball results and we could save a lot of time, but at the same time a little prodding can't hurt.

4912 You spoke, Mr. Mulvihill, speaking about the business end of this in response to some questions by Commissioner Pennefather. You were talking about how the smooth jazz format attracts a kind of higher end of advertising. You talked about luxury cars and, for some reason, the type of listener who would be attracted to smooth jazz would also be attractive to high-end advertisers, I think was the term you used that I jotted down here.

4913 Now, I go to the type of topic in your talk aspect. Now, I take your point that this is only a sample, but it's all we have got to go with here today. I wonder whether again, and it may be possible, you are going to have to find two completely sets of advertisers. I mean, do the kind of people who are interested in police recruitment drives, racism and hate crime, integration issues, English as a second language issues, these sorts of things, are they necessarily also in the demographic or the income bracket or whatever it is that is going to appeal to the high-end luxury car marketers and salespeople? I'm not saying they aren't, but I don't know precisely why they would be.

4914 In other words, are you mixing too much here so that even the advertisers -- you will have to appeal to two completely different areas of advertising. Does that make sense?

4915 MR. MULVIHILL: Absolutely.

4916 COMMISSIONER LANGFORD: Then let me have it, Mr. Mulvihill.

4917 MR. MULVIHILL: It's a good question. Do you want to answer it?

4918 If you appreciate, as I mentioned, owner/managerial, older demographic, the very connotation of that owner/managerial, we are talking about people that work with people everyday, either through owning their own businesses or managing businesses or being officers and corporations or middle management layers. That will be a large part of our component. They need to understand their people, and in today's workplace environment that we operate within there is a strong ethnic diversity that goes with it.

4919 We conduct our business in English. It is the official language of business. These people conduct their languages in everyday lives in English. Their origins are different. That is the diversity and that is the beauty of not only Ottawa but Canada at large, and that is the excitement within it.

4920 My comment regarding upper/owner/ managerial high-end sports cars or whatever, if you may, that was only in a microcosm within the sense of talking about where our revenues are going to come from. We are going to have a segment that is 15 per cent, I think is what I said, to the existing radio stations within the market, but there is a whole wealth of areas. Trust me, the high-end market is very small for cars. That is not going to be a big part of what we are talking about, but areas of today with an aging population, with our target core going to be 35-54, people are concerned about their own private wealth management: How are they going to retire? How are they going to look after their families? How are they going to look after succeeding their businesses? Who involved in their businesses is in a position to do that? All those kinds of talks, format topics if I may, blend in very well with what we are trying to talk about.

4921 COMMISSIONER LANGFORD: So are those going to be some of the topics on the spoken word, because that's not the sort of topics you have got here.

4922 We are talking about -- I mean, in one sense you are talking to me now -- you are saying, "Okay. Set aside luxury cars for a minute. It's not a big piece, but we are looking at an older demographic. We are looking at retirement needs, investment needs", the sort of thing you mentioned. But when I look at your Fusion 96.5 Draft Schedule, you are talking about things like child obesity. You are talking about the rights of parents versus children's education. We are talking about, as I said earlier, police recruitment. Does that attract the same older demographic with lots of money that want to talk about investments and that sort of thing?

4923 MR. MULVIHILL: Well, first off, the examples that have been provided for you are exactly that. They are samples in one day part -- you may say one day.

4924 COMMISSIONER LANGFORD: No, I acknowledge that, and I think I did acknowledge that at the beginning, but there is a certain pattern to the examples that seemed to look at a younger demographic to me, and then the music is looking at older. But you could correct me on that.

4925 MR. MULVIHILL: No. I mean, yes. If you look at general multicultural talk in our research, it very clearly talks about ranging in topics from food, entertainment to youth concerns to economic matters. General multicultural talk, diverse talk, is exactly that. It is diverse. We will be covering a range of topics. So on given days it may be dealing with your youth, your family youth problems. On the other days it could be dealing with your economic factors.

4926 COMMISSIONER LANGFORD: Because you are going to be locked into this as a specialty station. It's not something you can sort of a year from now say, "Well, goodness gracious, this isn't working". That's really the reason why I am pushing this. The business plan, I would think, can only succeed if both these pieces work together, if both these pieces appeal to the same advertisers or, in the alternative, if somehow you can sell two different stations on the same day to two different audiences to two different advertising groups. It would seem to me the second challenge would be much harder than the first.

4927 MR. LOMBARDI: Well, Commissioner Langford, I understand exactly what you are saying. We are no strangers to this sort of thing. We jump throughout our broadcast day selling to different clients up to 30 times. So we have 30 different language groups in Toronto, 20 here in Ottawa/Gatineau.

4928 In a way, this is a model that we chose that is similar to the OMNI Television model, if you will. They have a high content of third-language programming on both the 1 and 2, OMNI. 1 and 2, and in between their program schedule they carry programs like Everyone Loves Raymond, The Simpsons, and so on and so forth. So you could be watching Everyone Loves Raymond and then the South Asian newscast will come on. Fans of Everyone Loves Raymond are not going to necessarily stay tuned for the South Asian news, but they might.

4929 I think the point I am trying to make is it's English-language programming that is informative. It's different. It's inclusive of the communities in which we are living. I think that we intend to sell and build our business plan on both those segments, try to combine them in the best way as possible given the music selections that we have as a means of bridging and continuing that type of listenership.

4930 So I think it's quite possible that -- and we are very confident that we will be able to achieve those ends.

4931 COMMISSIONER LANGFORD: You mentioned television but what about radio? Is anyone else doing this anywhere?

4932 I throw that question open to the folks from CHUM as well. Is there a precedent for this? Not that you can't break new ground, and you have done it before. I am just probing what you may have based this twin format on. Is anyone else in the States, Europe, anywhere that you know of, doing this kind of thing?

4933 MR. LOMBARDI: To my knowledge, no. I don't know if Duff or Sarah are aware of any other stations that do it.

4934 MS CRAWFORD: Commissioner Langford, to my knowledge, no, there isn't, and it's one of the intriguing things that appealed to CHUM when Mr. Lombardi approached us about this application. We, as you probably know, we have got a little bit of experience in delving into a form of cross-cultural programming; again, to give you a TV example, on some of our stations, specifically City TV in Vancouver. What we found there is that it's a re-framing of the mainstream.

4935 We were talking earlier about different audiences and the different audiences for music and spoken word, and I guess I want to try and re-frame that conversation too, because as Mr. Lombardi first explained it to us, we are all from specific ethno-cultural communities. We all have specific ethno-cultural interests, but we all have common shared Canadian values and interests as well.

4936 So this station is really an attempt to connect the dots more specifically and directly to specific ethno-cultural communities to include a more fulsome selection of ethno-cultural communities in the mainstream but, in essence, we are -- the mainstream is that diverse ethno-cultural community. It is comprised of the diverse aboriginal communities. So that is the mainstream that we are describing here.

4937 MR. KARIM: Mr. Langford, if I could add to that?

4938 This is really innovative and we have used that word a number of times. Coming from an academic perspective, I have discussed this with other academics in Canada and at Harvard and they find it very, very thrilling because a whole number of people have been talking about the lack of inter-cultural communication, inter-cultural talk and sharing ideas and so on. Politicians have also been talking about a lack of this and in the creation of common values, of social cohesion in the country and so on.

4939 Here, when I hear this kind of a proposal, I said, "This exactly seems to be answering this particular lack". So in a sense, when I talk about the "third space" -- to define the first two spaces, the first space is of course the broadcasting. In a broadcasting sense you have -- the mainstream programming in English and French in this country that would be the first space. The second space would be the ethnic programming and the various other languages and they are not talking to each other. Here you have something using one of the official languages in which you have cultural programming being made available to a broader audience, an Ottawa/Gatineau audience, a Canadian audience in which common values can be shared. So there you have this kind of a bridge building.

4940 COMMISSIONER LANGFORD: I am not trying to diminish in any way, to use your word, the sort of "thrilling" possibilities here. But what I am trying to ensure, because this is a seven-year lock-in type of licence, I am trying to get as much information as I can about whether it will work.

4941 I think this is my last question. I won't beat this to death. You have had a long morning. But to come back, Mr. Lombardi, to what you said, your comparison to OMNI and the television, I think it's fairly well known that the Everyone Loves Raymond segment, the prime-time segment, pays the freight for that model of station and a good thing too, say all of us, because something pays the freight.

4942 What will be paying the freight on this one of yours? Is the advertising in the smooth jazz segment going to financially carry this, or do you anticipate as much advertising revenue, breaking it down on a ratio of hours, per hour anyway, from the spoken word side? What will be the revenue driver of this station?

4943 MR. LOMBARDI: Well, I believe that we are going to sell the station across the board and we are going to sell it on market share. I think we are going to attract our listeners primarily from -- well, I think we are going to attract our listeners with a unique combination of these two formats. I think smooth jazz is certainly going to be the most accessible and the most immediately understood. Then we are going to work very hard to establish our culturally diverse format and sell that along with our smooth jazz format.

4944 Like the OMNI model, Everybody Loves Raymond certainly pays the freight but what it also does is it attracts advertisers that buy that program and there is an additional buy that goes on into other programs. That's what we hope to be able to create until we get our programs well established. Then they will speak for themselves literally.

4945 COMMISSIONER LANGFORD: Thank you very much. Those are my questions.

4946 THE CHAIRPERSON: Thank you.

4947 Is there a relationship at the moment working or otherwise, or sharing, between CJLL and CHUM in Ottawa?

4948 MR. LOMBARDI: The working relationship with CHUM and CHIN, if I date back to --

4949 THE CHAIRPERSON: No, specifically in Ottawa with CJLL?

4950 MR. LOMBARDI: We have no financial relationship whatsoever, although we cooperate in promotional aspects. For example, every Thursday morning Cheryl Antoine does a live cut-in into the morning show and RO was also a television media sponsor with CHIN at the NCC for the first annual CHIN International Picnic in July.

4951 THE CHAIRPERSON: No selling --

4952 MR. LOMBARDI: None.

4953 THE CHAIRPERSON: -- together?

4954 MR. LOMBARDI: No, in fact, we have a relationship with Standard Broadcasting with regards to our actual sales.

4955 THE CHAIRPERSON: For the sales. And in local sales no cooperation?

4956 MR. LOMBARDI: No. There is no association at all.

4957 THE CHAIRPERSON: And where -- are you not -- oh, are you in the same building?

4958 MR. LOMBARDI: No, we are not.

4959 THE CHAIRPERSON: We are not?

4960 MR. LOMBARDI: Our address is at 30 Murray Street.


4962 Now, you have a board of five with one CHUM representative. Correct?

4963 MR. LOMBARDI: Yes.

4964 THE CHAIRPERSON: It shows Paul Ski here. I guess the others -- Pat Summers, that would be a CHUM representative?

4965 MR. LOMBARDI: No, Pat Summers is my representative.

4966 THE CHAIRPERSON: Pardon me?

4967 MR. LOMBARDI: Pat Summers --

4968 THE CHAIRPERSON: He is not a CHUM -- excuse me --

4969 MR. MULVIHILL: He is our legal counsel, Madam Chair.

4970 THE CHAIRPERSON: -- representative. So Paul Ski would be the only one or they would be one out of five.

4971 Now, this entire proposal is going to be financed with debt. Right?

4972 MR. LOMBARDI: Correct.

4973 THE CHAIRPERSON: And the company will hold the debt.

4974 So 29.9 per cent of the debt would be yours, Mr. Roman, unless you want to pass it onto Miss Crawford.

4975 MR. ROMAN: Yes.

4976 THE CHAIRPERSON: Obviously, you are already at the maximum stations possible in Ottawa. Correct?

4977 MR. ROMAN: Yes.

4978 THE CHAIRPERSON: I heard you say if there was a problem you would be able to help them financially. How would that be done?

4979 MR. ROMAN: Proportionate to the 29.9 per cent.

4980 THE CHAIRPERSON: I see. And do you have that in a shareholders' agreement of some sort?

4981 MR. ROMAN: Not in what you have received. We have a memorandum of understanding to that effect, yes.

4982 THE CHAIRPERSON: And has that been filed with us?

4983 MR. ROMAN: I don't believe so.

4984 THE CHAIRPERSON: I think it would be helpful if you filed it. Obviously, our questions are in ensuring that -- we are impressed by the presence of two CHUM representatives at the table of seven, unless Mr. Roman is replacing Mr. Hilton.

--- Laughter / Rires

4985 MR. ROMAN: I couldn't in my wildest dreams.

4986 THE CHAIRPERSON: So it would be helpful, I think, if you filed this memorandum so that we are clear on the relationship of CHUM, considering that involvement is often considered to go beyond just the financial investment.

4987 MR. ROMAN: We would be pleased to do that.

4988 THE CHAIRPERSON: Thank you.

4989 Questions, Counsel?

4990 MR. WILSON: If I could just confirm, Madam Chair, that the document that the chairwoman just asked you to file, would you be able to file that with us by the beginning of Phase IV?

4991 MR. LOMBARDI: Yes, we will be able to do that.

4992 THE CHAIRPERSON: It would probably be helpful if you provided a copy for the exam room. Oh, by Phase IV it would be a bit late. Thank you.

4993 But the relationship is as you describe it, one member on the board; if there is any need for future funds, it would be in proportion to the shareholding.

4994 Can you confirm, Mr. Lombardi, that there are no other sections in that memorandum that would speak to control or give some unusual rights to CHUM?

4995 MR. LOMBARDI: No. I can, and I can assure you that there are no further rights granted to CHUM. CHUM is a minority shareholder.

4996 THE CHAIRPERSON: And everything speaks to the fact that they are in the memorandum?

4997 MR. LOMBARDI: Yes.

4998 THE CHAIRPERSON: So this memorandum is similar to a shareholders' agreement?

4999 MR. LOMBARDI: Yes, it is.

5000 THE CHAIRPERSON: Establishing the relationship between the two parties. So in that case, I would expect your filing it later is not a problem.

5001 Can you get that sent to Ottawa on a more -- do you have a copy with you?

5002 MR. LOMBARDI: A copy?

5003 THE CHAIRPERSON: Of the memorandum.

5004 MR. LOMBARDI: I think we would have to get it from Toronto.

5005 THE CHAIRPERSON: If possible, it could be put in the exam room even today if you have a copy.

5006 MR. LOMBARDI: I will work on it --

5007 THE CHAIRPERSON: And give a copy to us, so that if parties are concerned and want to look at it they may and they will have an opportunity to comment if they wish to.

5008 Thank you very much. We thank you for your cooperation.

5009 Oh, no, you are supposed to have your three minutes now to tell us that we should give you a frequency in Ottawa.

5010 MR. LOMBARDI: Thank you, Madam Chair. Just in conclusion, in closing, I want to thank you for your indulgence in hearing our application this morning.

5011 But what I want to say is that this application is quite unique and it really speaks to cultural diversity, and I think it is an opportunity to put this type of programming, cultural and diverse spoken word programming at the heart of broadcast mainstream.

5012 We believe that this is the right time and Ottawa is definitely the right city in Canada to launch this new concept. I am encouraged by the Minister of Heritage Frulla and CRTC Chair Charles Dalfen with their comments at the CAB last week and we believe that this application makes a real attempt, a very real attempt, at increasing diversity in radio.

5013 This is a blend of programming formats that we believe fit very well together and complement the existing media spectrum here in Ottawa and is unique to the market.

5014 Finally, synergies between CJLL and Fusion result in bringing a wealth of diverse new voices to mainstream radio. It utilizes experience, professionalism, enthusiasm of the broadcasters in the ethnic field who presently are without voice in the mainstream.

5015 So thank you for hearing our application.

5016 THE CHAIRPERSON: Thank you, Mr. Lombardi and your colleagues. This completes Phase I of the hearing of your proposal and I am sure we will see some of you later.

5017 We will now take a 15-minute break. We will, therefore, return at 25 after 11:00. Nous reprendrons à 11 h 25.

--- Upon recessing at 1110 / Suspension à 1110

--- Upon resuming at 1125 / reprise à 1125

5018 THE CHAIRPERSON: We will hear your presentation and then we will have to adjourn -- we have to get back to the office for a meeting -- and we will resume at 1:30 with the questioning. It will be a bit awkward if we start before lunch, so we will hear you and then adjourn for lunch since we have to attend a meeting.

5019 Mr. Secretary, please.

5020 THE SECRETARY: Thank you, Madam Chair.

5021 The next application is by Newcap Inc. for a licence to operate an English-language FM commercial radio programming undertaking in Ottawa.

5022 The new station would operate on frequency 88.5 MHz, on channel 203C1, with an effective average radiated power of 5,200 watts. The applicant is proposing an alternative rock format.

5023 Mr. Robert Steel will introduce his colleagues. You have 20 minutes to make your presentation.


5024 MR. STEEL: Good afternoon, Madam Chair, members of the Commission, Commission staff.

5025 I am Rob Steel, President and Chief Executive Officer of Newcap Radio, and before we begin our presentation, I would like to introduce our team.

5026 Seated in the front row to my left is Laura Mainella, News Director of HOT 89.9; next to Laura is Mark Maheu, Executive Vice-President and Chief Operating Officer of Newcap Radio; beside Mark is Rob Mise, the General Manager of HOT 89.9; next to Rob is Josie Geuer, Assistant Program Director and Music Director of the station.

5027 In the second row directly behind me is Dave Murray, Vice-President Operations for Newcap Radio; next to David is Sherwin Pagtakhan, Promotions Director of HOT 89.9; next to Sherwin is Steve Jones, V-P of Programming for Newcap Radio.

5028 Beside Steve is Trevor Stewart of Hummingbird Music, who advised us on the development of a significant part of our $7-million Canadian Talent Development Proposal. Founded in 1976, Hummingbird now has 42 staff members and operates the Nepean School of Music, Pebble Studios and Boulder Records, providing artist management, label and publishing services.

5029 Next to Trevor is Mark Kassof, who conducted our research for this application.

5030 We appear before you today requesting a second broadcast licence for Ottawa-Gatineau. This is an important application for Newcap Radio and very much in the public interest.

5031 Approval of our application for a new alternative rock format will allow us to improve our service to the youth of this area and, as you will hear, Newcap Radio's application focuses on a format that is clearly in demand by people under 35.

5032 To tell you more, I will now turn the presentation over to Mark Maheu.

5033 MR. MAHEU: Thank you, Rob.

5034 Good morning. It is a pleasure to appear before you today with an application for a new FM station for Ottawa-Gatineau.

5035 We are the licensee of CIHT FM, better known as HOT 89.9, which launched in February 2003. HOT 89.9 has moved quickly to be a real presence in the Ottawa-Gatineau market.

5036 In our first BBM rating, spring 2003, we were eighth in market share for all people 12+, with 6.1 per cent of the hours tuned. By spring 2004, we were fifth, with an 8.2 per cent share.

5037 But the real story for us is our impact with younger people. Our spring 2003 share of 16.7 was first place in our central market for those aged 12-34. By spring 2004, we had solidified our lead with a share of 23 per cent.

5038 Our success here is based upon our commitment to the youth demographic. This is an area which Newcap Radio has been developing for some time with youth-oriented radio stations in St. John's, Newfoundland, Sudbury, Ontario, Ottawa and Edmonton.

5039 Our Ottawa success also comes from the drive, knowledge and experience of the team you see sitting here with us this morning. Newcap understands youth radio and this team knows Ottawa youth.

5040 We are here today to present you with a proposal for a modern alternative rock station that we have dubbed LIVE 88.5. The station will serve a younger demographic, with most of its audience coming from those aged 12-34, with about half the audience under the age of 25. It will attract slightly more men than women, although women will make up about 40 per cent of the audience.

5041 We propose an exciting and innovative package of spoken word designed to address the needs and interests of younger listeners, making use of the latest technologies that they use to allow them to communicate with each other.

5042 The station will also be a wonderful addition for the local and national Canadian music scene, with 40 per cent Canadian content and a Canadian Talent Development package of $7 million over the term of our licence.

5043 To provide you with details of the proposal, I would like to now call on Rob Mise.

5044 MR. MISE: Thanks, Mark, and good morning.

5045 In just the past 18 months, the Ottawa area has lost two stations that served youth. KOOL FM, a Top-40 station, and X FM, an alternative rock station, both disappeared.

5046 These changes provided an opportunity in part for HOT 89.9 but also reduced the tuning by younger people to radio. While in the spring of 2003, Ottawa area teens listened to radio an average of 12 hours per week, by spring 2004, this dropped to 10.5 hours.

5047 Ottawa youth are under-served. According to Stats Canada, of the 630,000 Ottawa-Gatineau residents who speak English at home, some 36 per cent are aged between 10 and 34, while 42 per cent are aged 35-64.

5048 Yet, there are only two stations with significant tuning in the younger group: HOT 89.9, with 88 per cent of its audience in the younger group, and CKQB FM, known as The BEAR, with 63 per cent of its audience from 12-34.

5049 Seven other local commercial English-language stations draw most of their tuning from those over 35.

5050 Clearly and unequivocally, the under-served segment of the English-language market is the youth demographic.

5051 In order to determine precisely what format the market wanted, we asked Mark Kassof to conduct a detailed market study.

5052 Mark.

5053 MR. HASSOF: We conducted a survey of 500 people aged 12-64 to ensure that we tested all segments of the market. We studied listeners' current tuning patterns, their satisfaction with existing radio and their interest in six radio formats.

5054 Their largest positive interest was contemporary hit radio and alternative rock. However, when we take a closer look at the market, it becomes very clear that the missing format is alternative rock.

5055 Twenty-six per cent of the audience showed a positive interest in alternative rock, essentially tied with the CHR format. Twelve per cent showed strong positive interest, tying with CHR.

5056 Fans of alternative rock, that is those with strong positive interest, are less satisfied with Ottawa radio than those of any other format we tested. Sixty per cent of fans of alternative rock said they miss X FM a lot. Fans of alternative rock listen to radio less than the average person and spend more time listening to CDs and MP3s.

5057 Overall, 6 per cent of listeners expressed positive interest in alternative rock and cannot identify any existing station with the format, what we call per cent of format void. Among 12-34 listeners, alternative's format void per cent is 11 per cent. Among 12-24 year olds, it is 15 per cent, more than double that of any other format.

5058 I project the station will reach 26 per cent of all persons 12-64 in the market, drawing a 7 per cent share of their hours tuned. It would draw most of its audience from 12-34 year olds, especially 12-34 men.

5059 MS GEUER: Good morning.

5060 After all those statistics, it is my job to tell you about what LIVE 88.5 will sound like. I won't recite a list of all the fabulous music we will play on the station as we have already provided that in one of our letters to you.

5061 LIVE 88.5 will be what the industry calls an alternative rock station or a modern rock station, but for LIVE 88.5's audience, the music we will be playing will not be alternative. It is their mainstream and a mainstream that they have not had on radio since the disappearance of X FM.

5062 This is the music that they listen to on their iPods, their MP3s, and that they download over the Internet. This audience knows this music as they have information about it from a wide variety of sources.

5063 The music which LIVE 88.5 will play will be largely new, with over two-thirds of the play list being songs released within the past 12 months. Some of these songs may end up on other stations, even including HOT 89.9, but they will be played on LIVE months before the other stations decide that they have become popular or mainstream enough for them to play.

5064 Over 70 per cent of the music played on LIVE will not be heard on any other station in the market. While LIVE 88.5 will focus on playing music and much of our schedule will feature music sweeps, we also plan to have lots of music features.

5065 Our audience is passionate about their music. They want to hear the latest recordings. They want to know who is in the studio, what bands have formed or re-formed, and they want to influence what we play. Our schedule is designed to meet that need.

5066 Our own locally produced "Countdown" show will let our listeners know what is hot in alternative music here in Ottawa-Gatineau.

5067 "Use It or Lose It" will let them influence the songs that make it onto our play lists.

5068 "Buzz Cut" will feature a hot new track at specific times each day, giving our audience a chance to tune in and find out what the buzz is.

5069 "Rough Edges" is particularly exciting for both our audience and the local bands that our audience supports. We will feature up-and-coming local bands who are creating and recording music in their garages and basements, their home recording studios and even in the more professional studios around the region.

5070 Of course, our on-air staff will be passionate about the music in order to be credible to our audience. They will talk about what they are playing, the influences on the bands and what they are all up to.

5071 And since old rock is really a local phenomenon, they will be right up-to-date with everything going on in the local music scene, whether it is who is playing where, who is releasing a new track or what sites on the Web are featuring information about their music.

5072 LIVE 88.5 will be a new and original alternative rock station.

5073 To tell you a little bit more about this alternative rock station is Laura Mainella, our News Director.

5074 MS MAINELLA: Thanks, Josie.

5075 It seems to be the standard cliche that young people don't really want to hear talk on the radio, they just want to rock, but our experience with youth tells us what they want is programming that speaks to them.

5076 They don't want to talk about the same old things in the same old way. Rather, they want to hear people of their own generation talking about things that matter to them, presented in a way that will engage, challenge and stimulate their interest.

5077 LIVE 88.5 will provide over 15 hours per week of spoken word programming. This will include almost six hours of news and information programming, with regularly scheduled newscasts in the morning and afternoon drive periods.

5078 LIVE 88.5 will hire two new journalists, one of whom will be the station's News Director. Based on the success of our street team at HOT 89.9, we have decided that LIVE 88.5 will have its own street crew to gather information at street level from events around the national capital.

5079 With Newcap Radio's growth and strength in youth-oriented radio across the country, we decided it would be interesting to talk about issues of interest to youth across Canada. Our daily...

5080 THE CHAIRPERSON: I am sorry, we have people who have to translate everything you say.

5081 MS MAINELLA: I am speaking too quickly? Okay. All right, thank you.

5082 COMMISSIONER LANGFORD: But you get high marks for enthusiasm.

5083 MS MAINELLA: With Newcap Radio's growth and strength in youth-oriented radio across the country, we decided it would be interesting to talk about issues of interest to youth across Canada.

5084 Our daily five-minute noon hour newscast focuses on the capital cities we serve, St. John's, Charlottetown, Fredericton, Halifax, Ottawa and Edmonton, and while the emphasis will be on the capitals, we may have a story or two from Sudbury, Calgary or Cold Lake as well.

5085 The emphasis will be on the kinds of stories that interest youth, such as stories about Aboriginal youth in Edmonton, the economic future for youth in Charlottetown or living with another one of Halifax's weather disasters.

5086 We are particularly proud of a new youth-oriented five-nights-a-week talk show. This show will be controversial, yet balanced. It will include interviews with newsmakers, live discussions and lots of opportunities for listener input by phone, email or instant messaging. We plan a program that addresses the real issues facing young people today, from issues as serious as peer pressure and bullying to relationships and health and fitness.

5087 While many of the shows will be issue-focused, I can see having at least one free-for-all night where any topic can be raised. A seven-second delay will ensure we meet the requirements for balance and avoid abusive comments. This unique innovative program will be an electronic town hall for the youth of Ottawa-Gatineau.

5088 LIVE 88.5 will also be a platform for local and Canadian musicians.

5089 To tell you more, here is Sherwin Pagtakhan.

5090 MR. PAGTAKHAN: Thanks, Laura.

5091 Modern and alternative rock have the street feeling, the garage bands of the sixties, the punk rock of the late seventies and eighties, and the grunge bands of the past decade, and that kind of music is strong on local feel and on Canadian content.

5092 Canadian alternative artists have become international mainstream successes. Ottawa's Alanis Morissette became a star on alt-rock radio as did Our Lady Peace, and that kind of talent is still coming up across the country. Whether it is Gob, Sum 41, Billy Talent, Three Days Grace, Alexis On Fire or The Salads, Canadian artists are leaders in this area.

5093 For this reason, we believe that it will be easy to meet and exceed our Canadian content proposal of 40 per cent just as we do on Hot 89.9, which clocks in at a minimum of 42 per cent per week.

5094 This kind of airplay is key for developing artists and we will ensure that local artists get more than their fair share. But we have gone well beyond that with a comprehensive Canadian talent development proposal of $7 million over the licence term or $1 million per year. The chart to my left summarizes the components of our plan: $2.1 million over seven years will go to the radio star maker fund to support their excellent work in helping mid-level talent make the next step; $700,000 will go to the Aboriginal Voices Radio Network to support the work of a Canadian talent development coordinator whose responsibility will be to seek out Aboriginal talent in all forms of music; $350,000 will support the development of new National Capital area musicians with two equal and related components, the Jam Clinic and the Jam Clinic Band Development; and, $3.85 million will provide sustained support to seven new local bands.

5095 I would like to ask Trevor Stewart to speak to the need for and the impact of our local music programs.

5096 MR. STEWART: Thank you, Sherwin, and good morning.

5097 The local initiatives that Newcap Radio is proposing will develop new local talent on several key levels. The Jam Clinic initiatives will help younger talent develop their performing skills, while the making of a band initiative is a concerted effort to help a new band break through. Hummingbird will play a role at these two levels. Over the past few years we have operated Jam Clinic, an intensive boot camp for young musicians, helping them develop their performance skills with intensive coaching, band sessions, individual teaching and utilizing a variety of training techniques, we have taught young musicians the dynamics of group performance.

5098 It requires a significant amount of money to operate a program of this calibre. Unfortunately, the funding we once had for this program is no longer available. With Newcap Radio's support we can continue this program and make it available to kids from all economic backgrounds. In discussions with Newcap Radio I mentioned that a number of kids emerged during each clinic that show serious development potential. However, once the program ends the students have no ongoing support. Together, we came up with Jam Clinic II. This would be an extension of Jam Clinic providing these top performers additional training, rehearsals and studio time leading to the development of a new band.

5099 The second initiative is to take three emerging bands and prepare them for the next level. As a label operator and a talent manager we often find that acts face a funding dilemma. There are gaps between the factor funding initiatives and the radio star-maker program. Newcap Radio's proposal for making of a band will fill that gap. Each year three bands will be selected and groomed for showcase with industry professionals. Thereafter, one of these bands will be the recipient of a previously unheard of level of promotional and financial support. The financial support alone is tremendous and $3.85 million will go a long way towards creating future stars in the Canadian music industry.

5100 But, as a talent manager I can assure you that the jewel of the Newcap Radio proposal is radio airplay on stations across Canada. Airplay in Ottawa, Edmonton, Halifax, St. John's, Moncton, Sudbury, and other communities will help build a buzz for the band. Newcap Radio's commitment includes supporting these bands as they embark on a tour across Canada. Newcap Radio stations will organize, support and promote the concerts giving the alternative music fans across the country the chance to experience great new music live.

5101 MR. MAHEU: Madam Chair, Members of the Commission, before I close this presentation, we would like to show you a short video that captures the essence of the new Live 88.5.

--- Video Presentation / Présentation video (@11:44 TO 11:47)

5102 MR. MAHEU: We believe that our application is very much in the public interest. Live 88.5 will fill the largest music void in the English language market. It will provide innovative, involving and compelling spoken word programming to Ottawa-Gatineau youth. It will provide Canadian bands a full 40 per cent Canadian content in both the broadcast week and during weekdays. Our innovative and comprehensive package of Canadian talent development initiatives of $7 million is significant and is supplemented with solid airplay commitments in many of our markets.

5103 The Ottawa market is flourishing and can easily support a new English language station with minimal impact on existing radio stations. And last, but perhaps as most important as any of these points, the licensing of Live 88.5 will enable us to continue to provide a complimentary package of services to youth in the Nation's Capital.

5104 It is difficult to build revenue success with a youth only audience. Advertisers are still mostly interested in baby boomers and broadcasters chase this interest. Our station, Hot 89.9, captures about 25 per cent of the 12 to 34 year old tuning. Combined with an alternative rock station that captures over 20 per cent of this audience, we have a compelling story to tell advertisers and to compete effectively with the three Rogers stations and CHUM's powerful cluster of four stations.

5105 At Newcap Radio we believe our proposal for an alternative rock format for Ottawa-Gatineau is in the public interest and provides significant benefits to the youth of the area and to the local music industry. Our focus on the airplay of new local Canadian music, our comprehensive plan to fund and promote Canadian talent and our desire to enhance our service to youth is the cornerstone of our request for a new licence in Ottawa-Gatineau.

5106 We thank you for your attention and we would be most pleased to answer any questions you may have.

5107 THE CHAIRPERSON: Thank you, Mr. Maheu and Mr. Steel and your colleagues. We will now break for lunch and be back at 1:30 with the questions. Nous reprendrons à 13 h 30.

--- Upon recessing at 1149 / Suspension à 1149

--- Upon resuming at 1330 / Reprise à 1330

5108 THE CHAIRPERSON: Order, please. À l'ordre, s'il vous plaît.

5109 Commissioner Williams, please.

5110 COMMISSIONER WILLIAMS: Good afternoon, Mr. Steele and Newcap panellists. Your opening remarks were quite thorough and actually obliterated a couple of my questions, so obviously the information has been provided, so I'll try not to be repetitive in some of my questions.

5111 The area I would like to begin with is in the area of spoken word programming. I think you proposed many spoken word programs, voluntary activities, local news initiatives, drinking and driving, anti-drug speakers corner and things that make you go, hum!

5112 Could you, please, tell me a bit more. Is programming to the demographic that Hot 89.9 is targeting... I may just want to get your views on how difficult it is to program demographic. Are there specific challenges that Newcap would face in providing relevant spoken word content to this youth young adult audience and if so, how do you meet these challenges?

5113 MR. MAHEU: Thanks for the question. It's an interesting discussion that we spent a lot of time at Newcap preparing our application, considering the best way to approach this.

5114 What we are trying to develop, Commissioner Williams, is a really new and different kind of radio station targeted at young people traditionally youth-oriented radio, is very music intensive, with a little bit of new or spoken word information in and around the edges.

5115 Our experience in markets across the country where we are programming to youth-oriented audiences, as we alluded to in our opening statements, the research we are doing in those markets and the feedback we are getting from those markets is leading us to believe that in an ever increasingly competitive environment with young people, in an environment that includes the Internet, text messenging, on-line gaming, 24-hour day music video channels, et cetera, being out there, that in order for radio to continue to be relevant now and in the future in the lives of younger people that we, as a medium, are going to have to do somewhat of a different or dare I say better job at creating content that is compelling and engaging.

5116 We know with a great degree of certainty if we play the right songs, we're going to get a good number of people listening to our radio station, but, you know, music can be duplicated by radio stations in many different ways and your competitive advantage can disappear in a hurry.

5117 We felt that one of the ways to build a long term competitive advantage in the Ottawa-Gatineau market was to create something that would not be easily duplicated, something that would dub tail nicely into the music format and that was the spoken word.

5118 In a moment, I'm going to ask Laura Mainella, our news director, to talk to you a little bit more about the specifics of some of the spoken word that will answer your questions specifically.

5119 There are certain obstacles that can make it a little more difficult to program spoken word to younger listeners. Finding the right hosts for a show like that and keep it engaging and compelling and keep it moving along and can deliver the type of program that would meet or exceed expectations is difficult, but we're confident that we can recruit and identify and hire the right people to do that.

5120 But in the end, it all comes down to content. The topics and the issues that we are discussing on the radio on a day-to-day basis relevant to the lives of the people that we're trying to reach. And that's what is going to differentiate our spoken word programming from that of many other outlets that are doing some spoken word.

5121 There is no radio station in the market right now doing any significant spoken word programming targeted directly at an audience younger than 35 and some of the issues you have mentioned in your question are the issues that we feel are important and we will also continue to do research in the market with these listeners to find out what issues are important.

5122 But the cornerstone of our spoken word programming centres around a weekly or a nightly five night a week talk show that is targeted directly at listeners under the age of 35 and I'm going to ask Laura to tell you just a little bit more about that program and how it is unique and different.

5123 MS MAINELLA: Thanks, Mark. As Mark mentioned, we do believe that spoken word programming is incredibly important to our younger listeners.

5124 We're proposing a total of five hours and 25 minutes per week of news and information on Live 88.5. What I believe, however, will set this apart from any other station is our idea of a unique youth-oriented talk show and that would be five nights a week.

5125 Basically, the kids... the youth parents listen to talk radio and their talk radio talks to them. They talk about aging, financing, banking. This show will target these youth. They will talk about the web, music, relationship, the club scene. So, it will talk to them.

5126 Also, there is an open forum they can call, they can use the web where we have live forums and interaction. So, I really believe that this could be the coolest thing for them. This is something they will be talking about in their schools and this is going to be the next big thing in Ottawa, for sure.

5127 COMMISSIONER WILLIAMS: O.K. You've stated in some of your written presentation that young Canadians are interested in many issues that routinely end up below the main stream media radar.

5128 Can you elaborate on that? What would some examples of that be?

5129 MR. MAHEU: Again, I'll ask Laura in just a moment to comment on those because she is... she is quite close to it, but I think she is correcting what she said a moment ago where traditional talk radio targeted at people over the age of 35 and predominantly 45 plus, tends to centre out areas like the current state of politics, business and finance, managing your money, mortgage rates, et cetera.

5130 When we talk about the youth of Ottawa-Gatineau, I think we need to be careful that we are not characterizing it as teenagers. What we are really referring to are people generally in the ages of their mid-teens to their late twenties. We call it 12 to 34, but if you wanted to narrow that scope slightly, it would be mid-teens to late twenties or late thirties.

5131 These folks face a number of issues that are not addressed in normal talk radio programs on a regular basis and, Laura, I know you have several of those types of issues that you can explain.

5132 MS MAINELLA: We do. For example, you know, when George Bush was in town, we got the perspective from the adults and we didn't really get to hear from, you know, the young protestors or the young people on their thoughts. This forum will allow them to speak their mind.

5133 Another part of this that I think is really important is that the show would be hosted by a senior news person. We are also going to have, as a co-host, a student from a high school or a student from a college, someone who can also add to that as part of the show and not just as a listener.

5134 COMMISSIONER WILLIAMS: Have you recruited this younger person or are you going to revolve that co-hosting job or... How are you going to try and do that?

5135 MS MAINELLA: That can evolve. We also have a huge street team, a street crew that are very eager to be a part of this show and we can have them as well as, you know, going and recruiting in schools as well.

5136 COMMISSIONER WILLIAMS: O.K. So, will it be the same youth host all the time or is it going to be...

5137 MR. MAHEU: No.


5139 MR. MAHEU: Our intention is to have one stat that goes to as hosting the show all the time and then, the co-hosts, depending on the issue, depending on the circumstance, will rotate through. And this would be in addition to guests or guest experts that would appear on the show from time to time and take calls and answer questions to provide perspective on things, but there will always be the anchor host that is the host of the show with a number of co-hosts that kind of come in and out of the show, depending on the subject matter.

5140 COMMISSIONER WILLIAMS: Can you tell us a little bit about how you treat the news at Hot 89.9-FM? What is your approach to managing or handling the... handling the news?

5141 I think that you've stated that news is not treated in a traditional way, but we do provide the information programming in most day parts. Can you build on that?

5142 MR. MAHEU: Sure, I would be happy and again, I'll ask Laura to give you some specific examples. Suffice it to say that the news, any information programming we do now on Hot 89.9 is different from what you might consider traditional types of news cast and the reason for that, Commissioner Williams, is the fact that we're dealing with a different demographic group and a different type of audience that most of the other radio stations in the market.

5143 Again, the key to serving these people well is to do our very best to give them what they want, what they need and what they expect in a relevant and in an effective way. We think we have done a pretty good job at that Hot and that has led to the kind of success we've had and Laura has the specifics on how we present it differently.

5144 MS. MAINELLA: I'll tell you how it is going to differ. We would like our live 88.5 street crew to be more out there, to be more intensive. When you listen to other news programs, let's say, for a hockey game at the university, you'll hear the end result and what we would like is to be a the game. We would like to have people calling us from the half time and telling us what's going on.

5145 We would also like our street crew to come back with some audio from interviews that we've had. So, we would like to be more exclusive. We would like to have more detail and we believe that's what the youth want to know.

5146 MR. MAHEU: I think in terms of Hot 89.9, how its news and information is different today than most other radio stations just on top of what Laura was talking about, is the fact that if you... and when you listen to the station, the style and the presentation of the news is different.

5147 It's a little more informal than you might find in some more traditional radio stations and we know from our audience and the feedback we get that that's the way they enjoy it.

5148 The types of stories that we cover are fairly similar to other main stream news outlets including radio, but many times a story order is different because what leads on another station may not lead on ours.

5149 Our focus is to really look at our listeners' age predominantly 18 to 34 on Hot and get a good sense of what their needs and wants and expectations are in terms of stories and news and try to do it in that order.

5150 Also, as I've said, the presentation is somewhat different and it doesn't make what we do and we believe any less effective, but it does make it a little more listenable for those folks where on a traditional news talk radio station or an older based focused AC station you tend to have music fade-out, big production intro., news cast and then, a break for commercials, then back with weather and so on.

5151 What we try to do is we try to weave the news and information on Hot and we will do the same thing on Live 88.5 right into the fabric of the program, so there isn't as big disconnect between what you're doing musically or what you're doing from an entertainment point of view and then, the news.

5152 We try to bring the news and information and inter-weave it into the fabric of the program, so that it doesn't stand out. It's just part of what we do and we find that that is quite effective.

5153 COMMISSIONER WILLIAMS: Will there be differences between Live 88 and Hot 89 in terms of the news presentation and the topics, the delivery style?

5154 MR. MAHEU: There will be differences. We're going to have separate news people for Live 88.5 apart from Hot 89.9, so you have the separation there. We're talking about targeting relatively the same demographic group, so in terms when we talk about demographics, we're talking about age.

5155 COMMISSIONER WILLIAMS: So, the stories might... the stories might be the same, but they would be presented slightly differently?

5156 MR. MAHEU: Slightly differently because the life groups are different or the psychographic, as you might refer to it. Not all people age 25 think alike. We know that people who enjoy alternative rock a lot have certain predispositions about news and information that may well be different from a 25 year old with a... who is a first choice user of rhythm base or rhythmic dance top 40 music like you would hear on Hot 89.9.

5157 I would say largely the types of stories that we would feature on both radio stations, there would be a great deal of similarity in the types of stories. I think the perspective would be different from time to time.

5158 I think Laura brought up a great example with recent events last week and that's not to imply that all fans of alternative rock are radicals and protesting in the street, quite the contrary, but there were a lot of people who wanted to hear about what was going on and the reasons it was going on.

5159 If you listen to most of the traditional news cast, they reported on the events, this happened such and such a street was closed, this many people were involved, the many people were injured, et cetera, all relevant facts, but they all tended to come from the same perspective.

5160 We believe that we can bring a slightly different perspective targeted towards a different demographic and psychographic group.

5161 So, our point of view or our presentation style, the story order, may change from station to station between Hot 89 and Live 88.5.

5162 I would say if they were duplicate exact copies, no greater good would be served and the station would have a hard time differentiating itself because it would be different from Hot, so the news would have to be as well.

5163 COMMISSIONER WILLIAMS: How did your Hot station cover the events from the last week, should we say, in general terms?

5164 MR. MAHEU: Yes, that's a good point because it's one of those once in a while happenings that engages everybody. I'm going to pass it to Laura to tell you about it in just a second. It's just that, you know, when you're a radio music station and somewhat music intensive like Hot 89.9 is, this type of an event in the city, you know, casts a big shadow over everything that goes on, including your regular programming and we felt it was important to be part of it and relate to our audience what was going on and Laura, I'll let you talk a little bit about a couple of things that Hot did.

5165 MS MAINELLA: Yes. And this is why we would like our live street crew to be like the Hot 89.9 street team; they're fantastic. They're passionate, they're driven and they're everywhere.

5166 This team was out there and they were following exactly what was going on and we knew what was going on because they called us and they came back and said, here is what's happening with the George Bush visit, here is where streets are closed, we are here right now, put us on the air.

5167 So, people knew what was going on when it was going on and that's what we want for live. We want a street crew that will do what our Hot street team is doing as well.

5168 COMMISSIONER WILLIAMS: So, like you proposed to provide relevant programming to youth and you are going to do it in a different manner than our traditional news gathering method, I guess.

5169 So, how would you... if you could give me an example of how you would... how you would report, say, on the large group of people gathered in front of the Chateau Laurier? What would you say? There are 5,000 people here?

5170 MR. MAHEU: Well, I think what we might do that might be different from some of the other radio stations or news outlets, live 88.5 is a radio station that would pride itself on being very close to its constituency, very close to its audience or as Laura might have referred to, having a bit of a street feel to it.

5171 COMMISSIONER WILLIAMS: So, that would be the focus of your interviews?

5172 MR. MAHEU: And it would and you're right, and how we might be different if this were happening while Live 88.5 was on the air, is we might very well put a number of these protesters on the air and then, get a perspective or comment from the other side of the street.

5173 There may be people carrying flags and posters welcoming the President to the city, thanking him for all the things he has done in Iraq. There are a number of different constituencies out there.

5174 We tend to hear about one of them a lot and we think that there is room to be a little bit different and to answer your question specifically, if this were to happen while Live 88.5 was on the air, I think we would take microphones to the street and whether they were live to air, that might be questionable, but we would certainly be doing streeters and interviews with people and that tape would be sent back to the station immediately cut up and be put on in a news cast or any information segment, so you hear it right from the street.

5175 COMMISSIONER WILLIAMS: O.K. I think we have covered that ground fairly well. We have a good understanding of your spoken word and news.

5176 I would like to talk a little bit about your plans for the sharing of resources with your existing station, synergies, staffing levels and, particularly the program in synergy that would be realized.

5177 In your application, you indicate that two new journalists announcers would be added to Hot 89-FM staff team, one person to be news director while the other would be both on air announcer and reporter. In response to a deficiency, you further indicate that six full time persons would be hired to produce the programming on the station and that other programming staff would be shared with Hot 89.

5178 To what extent would program synergies be realized between the proposed station and your existing station and what would these programs... what would these programming synergies be and how would they impact on the proposed stations ability to deliver... station produced programming that are both relevant and meet the expectations of your targeted audience?

5179 MR. MAHEU: The synergies enjoyed between our station now, Hot 89,9 and the proposed Live 88.5, the synergies would be largely in sales and back-off as responsibilities.

5180 In terms of programming synergies, it's our intent to have each radio station largely be independent from a program point of view. The types of programs that we would be doing on Hot 89,9 would have very little in common with the kinds of programs that we would hear on Live 88.5

5181 For instance, the talk show that we would do every night on Live 88.5 wouldn't be airing on Hot 89,9 and the station doesn't do any open line or long form spoken word programming like that. So, there is no synergies or savings there.

5182 The best synergies that we feel that the stations would enjoy would be in the area of sales, one Sales Department, our own Sales Department would market and sell advertising for both radio stations and we see that as being a real benefit because that's part of the reason why we are proposing this format as we feel there is some great synergies with two radio stations being able to develop some critical mess in a eutherian audience to offer a very compelling offer in the advertisers.

5183 There is the obvious back office situations with trafficking and billing and collections and things like that, that the stations could and would share.

5184 COMMISSIONER WILLIAMS: Would each station have their own general manager?

5185 MR. MAHEU: No. There would be one general manager for both radio stations, which is quite common and our experience is the most effective that there is one leader and one vision for the business.

5186 But each station would have its own program director and its own music people and its own on-air staff and I'll let Rob Mise speak to this little bit more specifically, but our intention was that in terms of voices that you would hear on Live 88.5, that they would be separate and distinct from the people you would hear on 89.9 now.

5187 MR. MISE: That's correct, Mark. There will be no duplication of announce staff on both radio stations, very separate announcers, but different thoughts, knowing that they are going after separate demographic and actual listeners with different needs and wants.

5188 COMMISSIONER WILLIAMS: And how about news? It would be separate... would you separate the editorial portion of the news?

5189 MR. MAHEU; Yes, I think, you know, there is no question that they would share space in a news-room environment, but there would be a separate news staff and news gathering staff or Hot than there would be from Live 88.5.

5190 COMMISSIONER WILLIAMS: Who would have editorial responsibility for the news content of the proposed station?

5191 MR. MAHEU: Generally, that's a shared responsibility between a news director and a program director of a radio station where both of them work together and news directors normally report to the program director.

5192 COMMISSIONER WILLIAMS: They would both be Live 88.5 staff then?

5193 MR. MAHEU: That's our intention. Each station would have its own program director and its own news director.

5194 COMMISSIONER WILLIAMS: It's own news director.

5195 MR. MAHEU: Yes.

5196 COMMISSIONER WILLIAMS: How many hours are you going to be live to air on a daily basis and what role will your web site play in meeting your audiences expectations?

5197 MR. MAHEU: Our intention at this point is to be live on Live 88.5 pretty much 18 hours a day, 600 in the morning till midnight, seven days a week. We haven't made a decision on the overnight show.

5198 My inclination is that if possible, we would have a live person to do the overnight show, we feel that's a great opportunity for young people to break into the business and they're very... there are fewer and fewer opportunities all the time for people to kind of caught their teeth and be able to make some mistakes and learn the crafts.

5199 So... but definitely 600 in the morning or 530 in the morning till midnight will be live. Our live talk show goes actually at 1100 at night, so we're certainly live there, but there are going to be host and personalities on the air throughout the day and throughout the night.

5200 I'm sorry, Commissioner Williams, for the second half of that question.

5201 COMMISSIONER WILLIAMS: I just wanted to know the role...

5202 MR. MAHEU: Yes, the web site.

5203 COMMISSIONER WILLIAMS: ... that your web site would play in your stations?

5204 MR. MAHEU: It's going to be big and we know that the web is an important source of communication and information gathering with this group of people under the age of 35. That was part of the way we were able to develop so many positive interventions for this format and get the word out to people in Ottawa-Gatineau that this potential... this type of radio station was a possibility.

5205 We set up a web site called and most of the traffic to that site was viral. Just the word got out, you know. People started instant messenging each other and swapping stories about this great new on-line place that there might be this radio station coming to tell.

5206 We also streamed a three-hour sample continuously of what the station might sound like and asked people to listen to it and tell us what they thought and if they would like to hear a radio station like this. So, we know that the web is going to be a very big part of how we communicate, how we distribute the information to our listeners.

5207 We also see it as a very important component in keeping in touch and having the feedback to us, what we can do more of, what they like, what they don't like. We can try out new songs. We can certainly use it to help with our Canadian talent development initiatives, to let them know what's going on with station promotions and so on and letting them communicate with us. It's a big big part of it.

5208 We're also right now developing a scenario where... and it hasn't been done before, but we are working on a software solution and we are trying to develop ourselves for the web that would allow our overnight show. I was talking about having a person out overnight where from midnight till maybe 400 in the morning, we could start experimenting with a totally live-by-request type of show, which is totally web driven.

5209 So, people listening in the late evening or overnight hours could go to our web site and be offered a menu of songs that could possibly be played next. And all they do is click on the one that they would like to hear next and the one that gets the most votes gets played next and it's totally web driven and could be tied instant messenging and other things.

5210 So, we see that as a great new horizon and a great opportunity for us to communicate with them outside of our own airwaves and get feedback from them.

5211 COMMISSIONER WILLIAMS: Thank you, Mr. Maheu.

5212 Your open line programming, can you tell us a bit about your one-hour program that's going to be running from 1100 till midnight each evening Sunday to Thursday that is dedicated to youth issues? I have got a bunch of preamble here, I'm going to skip it and just let you describe and you can probably describe it better than ...

5213 MR. MAHEU: Sure. Thank you. It's the kind of program that you wouldn't traditionally think might fit with an alternative rock music format, but as I mentioned earlier and we referred to on our opening statements, we are getting more and more expertise programming to younger audiences across the country with a number of our radio stations and we do a lot of research in those markets and we get feedback in those markets from people and we feel that the spoken word programming, the one-hour talk show especially, is going to be a way that we can really differentiate our radio station from other radio stations in the market.

5214 The one-hour talk show is not going to sound like your traditional news talk radio open line show and there is a place for those and they serve the interest of a number of people, predominantly older, but certainly serve their interest very well.

5215 What we want and what we propose is a dynamic, engaging, one-hour give and take with the host, with listeners who call in and participate. It would be largely an issues driven type of program, very topical, so if this were the night that President Bush's visit, I would imagine that that hour of the show we would be talking about Canada-US relations, the impact on our economy, the impact on the entire social fabric of Canada as we relate to the United States, try to get as many sides of the issues we possibly can.

5216 But the idea here is to create a talk show in an environment for talk to take place that traditionally isn't happening on other radio stations and that is focusing on some of the issues, some of the concerns and some of the relevant going on for people predominantly in their mid till eighteens to late twenties to early thirties.

5217 COMMISSIONER WILLIAMS: Some of the topics that you've mentioned there, the issues would be drugs, bullying, suicide, minorities, virginity, pregnancy. Will you just be involved in your audience or will you have some experts or a panel or other people as part of this whole discussion?

5218 MR. MAHEU: I'll let Laura comment on that. It's a little bit of both, depending on what the issue is but Laura, maybe you would like to comment on it.

5219 MS. MAINELLA: Sure, of course, it's a bit of both. It's a bit of everything. We're going to have people in there who are experts. We're going to have people in there that have experienced the topic that we're talking about.

5220 And as I've mentioned before, they can interact with us in numerous ways to the phone, text messenging. We have message boards, every way and any way they can get a hold of us and communicate, they will, so it will be exciting for them.

5221 COMMISSIONER WILLIAMS: So, let's talk the topic of, let's say, bullying. Will you have bullies and those that have been bullied, for example?

5222 MS. MAINELLA: Absolutely.

5223 COMMISSIONER WILLIAMS: You will have both sides of that plus an expert?

5224 MS MAINELLA: Sure a therapist or a counsellor, a school counsellor, yes.

5225 MR. MAHEU: Talking about the reasons, how these types of things happen, effective strategies for dealing with them. Maybe again this kind of ties to the web, we are going to try to be as timely and topical as we possibly can.

5226 If there is a resource centre or more information available about this particular topic, that's the kind of thing that would be published on the web site in real time so we would be referring people to that, hey! if you would like more, here is a toll free or confidential line you can call to get some help or, you know, here is some links on the web for reference material and so on.

5227 But largely, without quantifying it, you know, we kind of talked this around, about half the shows are likely going to have some sort of outside "expert" or person who brings some authority to the subject matter on the show, whether they are in the studio or on the phone. At that hour of the night, it might be more on the phone than in the studio because of the late hour and people...

5228 COMMISSIONER WILLIAMS: Does your Hot radio station have a similar kind of program as this?

5229 MR. MAHEU: No. No, this is something new we are proposing for 88.5.

5230 COMMISSIONER WILLIAMS: Well let us take a look at virginity, what would your approach be to that type of program? No, I am curious. You say that is a type of program you are going to offer, so how do you propose to package it?

5231 MR. MAHEU: Well, I am not an expert on the topic, but --

5232 THE CHAIRPERSON: Where is it?

5233 COMMISSIONER LANGFORD: Just tell Dr. Williams how you feel.

5234 MR. MAHEU: We believe that there is a great... on that topic, I think what we are really talking about is sexuality and sex and unplanned pregnancies and things of that nature. When you get into areas like that there is always more than one perspective or one point of view to be offered from abstinence to contraception to everything in between. What we would like to do on a show like that is to be able to bring those different points of view to the table. Have the audience act and interact and react to what is being said and from that discussion some good things will come. People will learn more or they will learn what questions to ask.

5235 We are not going to save the world every night on this program, but we do believe that if we are talking about things that are topical, that are relevant to people in their late teens to their late 20s, early 30s, that some good will come of it. In the meantime, it is entertaining and engaging radio. If you scan around the radio dial at 11:00 at night I can tell you from personal experience in this market, there is not a lot going on. It is music and lots of it.

5236 COMMISSIONER WILLIAMS: So what kind of safeguards would you put in place to try and say keep control of your program?

5237 MR. MAHEU: That is a good question and we have given that considerable thought. I am going to let Rob Mise, our General Manager, speak to that a little bit.

5238 MR. MISE: Well, the host will be coached and will be directed. We have every confidence that we are going to be within CBSC codes and CRTC guidelines. As a matter of fact, we did have a very intensive chat with Mr. Ron Cohen from the CBSC just a couple weeks ago and we talked about talk show guidelines. I will pass it over now to maybe Laura to have a couple of comments on that as well.

5239 MS MAINELLA: Basically, he suggested we implement a seven second delay, also get a call screener and, of course, our main host will be experienced and will know themselves, they will be very well coached and they will know what to talk about. But basically, he was very clear on the talk show guidelines with us.

5240 COMMISSIONER WILLIAMS: Okay, so the seven second delay I guess is for those that maybe aren't as experienced and are just phoning in to interact with you at 11:30 at night?

5241 MR. MAHEU: Yes, it is really to protect listeners from abusive comment from callers more than anything else, because we certainly know the host will by and large be fine. But all the programming that falls within that show and on the whole station, but that show in particular will certainly be within keeping of the CBSC code of ethics, CRTC regulations and guidelines.

5242 COMMISSIONER WILLIAMS: We are talking about your programming between 11:00 and 12:00 and you have said if you turn on the radio now you very seldom hear anything even remotely similar or I guess at that time of the day. Historically speaking, the tuning data would suggest this time slot is one of, if not the lowest, tuning periods. So, why have you chosen to program this open line show at 11:00 to midnight? How is this reflective of your stated commitment to super serve your audience and why do you feel that you would be able to attract an audience between 11:00 and midnight? And, to conclude, why wouldn't this program serve your youth/young audience if it was slotted an at earlier time in the evening when tuning numbers are much higher?

5243 MR. MAHEU: Two reasons. First and foremost 11:00 at night, unlike traditional radio stations, you are right, the amount of tuning done to radio at that hour of the night or sets in use or homes using radio is low. One of the reasons we wanted it at 11:00 at night is that for our format, alternative rock and the demographic we are targeting, that is prime time. Eleven o'clock at night is not late. That is when things are just starting to happen. We are proposing this show on a Sunday night through Thursday night basis. You know, university students, people in their mid to late 20s who are out there building careers and working, they are up at 11:00 at night.

5244 So, we don't look at that as off-time. And if you look at youth oriented formats, the evening quarter hour averages are much higher in terms of 12 plus quarter hour average than a lot of traditional stations that target older. Because the audience is available to radio and the programming that is on the radio at that hour of the night attracts a predominantly larger audience than normal AC or country or other types of adult skewed formats.

5245 The second reason we propose the show at 11:00 at night is that it does not compete with prime time television which, as good as we think we are and as entertaining and as engaging as we want to be, it is very difficult to compete against Survivor and all these other shows that are out there. So, we felt that if we took it out of the prime time watershed, you know, of television that after the prime time viewing is done there is something on the radio at 11:00 when people are checking their email or starting to do their homework or starting to get ready for next day's business meeting or whatever, that is something that you can kick on and be part of.

5246 It is also going to be streamed on the web in real time, so if you are not near a radio but you are working on a computer with internet access, you can log on and listen live. We are trying to make it as easy as we possibly can to reach as many people. We believe that that is part of super serving an audience. Again, this is a bit non-traditional because we are talking about a unconventional and non-traditional type of approach. This isn't a 25 - 54 or 35 - 54 radio station, it is a radio station for 12 to 34s.

5247 COMMISSIONER WILLIAMS: Your proposed alternative rock format would serve Ottawa-Gatineau's young listeners, a group you have identified as being currently underserved by radio. Other applications are before the Panel proposing to provide a similar format serving the same audience group. Could you explain how your format differs, if at all, from the other alternative rock, youth contemporary music, and urban pop rock music format proposals? How are you different from the others?

5248 MR. MAHEU: The other proposals?


5250 MR. MAHEU: The big points of difference in our proposal and the other proposals... I have looked at them, I don't know them intimately or I wouldn't know them as well as you folks do, but I certainly have had a good look at them, the spoken word is a huge difference. We are proposing to be more than just a music radio station and we are going to put the resources and the commitments behind it to make it an integral part of what we do and what we are famous for.

5251 Secondly, another big area of difference is that we are proposing to be a straight ahead, flat out excellent alternative rock station. Not an alternative rock station with a little CHR field or a little dance here or... this is going to be an alternative rock station.

5252 COMMISSIONER WILLIAMS: Okay, so this answer would probably serve on my next question as well. Is the impact on the existing stations, if you want to call it, --

5253 MR. MAHEU: Sure.

5254 COMMISSIONER WILLIAMS: -- in that area as well? Say two of them, CKQB and CHEZ, and even the French station, CKTF, they currently offer rock with some alternative or modern rock acts as part of the programming.

5255 MR. MAHEU: Right. Rock is a rather large umbrella on which a lot of music falls underneath that umbrella from the hardest extreme heavy metal industrial rock to the soft rock of the Carpenters and Celine Dion. It is a very very big umbrella.

5256 Underneath that umbrella is an area called alternative rock, which is what we are proposing. And, you know, how we are different and what impact it will have... let us deal with how we are different first and then if I may --

5257 COMMISSIONER WILLIAMS: Yes, please do.

5258 MR. MAHEU: -- talk about the impact on the other stations in the market. Howe we are different is that we are a pure play adult alternative rock, young adult format. We are not going to be mixing in elements of classic rock, we are not going to be mixing in elements of CHR or rap or urban music. This is going to be a straight ahead alternative rock radio station, the kind of radio station that listeners told us very clearly in the research that they want and that there is a passion for out there.

5259 The other difference in our proposal is not only are we a pure play alternative rock format, the largest amount of our music is going to be current based, recent new releases or releases in the past 12 months. We are not going to rely on the tried and true library of, you know, hits that are already there playing Nirvana and Stone Temple Pilots and all that kind of stuff, because then that starts to border on classic rock and you start swimming in somebody else's pool and that is not our intention here. We want to be as pure as we possibly can, we want to bring something new and different, bringing diversity to the marketplace, something that does not exist right now and this is a fairly significant format hole.

5260 The other way we are going to be different along with being a pure alternative radio station is our focus on not only Canadian alternative rock, but as much local alternative rock as we can possibly get on the air. And our Canadian talent development initiatives go a long way towards doing that, but I won't get into that at this point but, you know, we believe that we can, in as much as some of the talk programming and so on that we are going to do can position us with listeners, we believe that the local portion of the Canadian content that we are going to play is going to be very important.

5261 We are fortunate in this format, because this is a great format for a lot of small up and coming bands, many of them local. The cost of recording a demo, the cost of putting together a CD now has come down quite a bit and there are literally dozens and dozens and dozens of these types of bands right here in the Ottawa market today trying to scratch out a living or doing it for fun.

5262 We believe that one of the big differences of our radio station is going to be the fact that you can turn on 88.5 and not only hear great alternative rock all the time, but you can hear bands that are making music that are from your own town. Some of them are going to be better than others, let us face it, but --

5263 COMMISSIONER WILLIAMS: Maybe from the garage next door?

5264 MR. MAHEU: You got it, and we have a number of features that are geared around that. Our goal here is by the time our first term of licence is up, our goal is to shoot that purely a quarter of all the Canadian content that we play or 10 per cent of the music we play, because we are committing to 40 per cent Canadian content, that it would come from local artists and that is a very very lofty goal. But, we believe we can go a long way towards getting there and that is why we put the CTD program together like we did and everything else.

5265 But, the differences are really an opportunity to focus on alternative rock, keep it narrow and keep it focused, the majority of the music we play over 70 per cent is current or released in the last 12 months, and that our focus on the Canadian content side is to play as much local alternative rock as we possibly can. That, along with the spoken word, differentiates us quite a bit.

5266 COMMISSIONER WILLIAMS: Given the large number of music format choices currently available in this market, why do you consider your target audience to be underserved in the market and why do you believe that your alternative rock format would provide the greatest degree of programming diversity and the best choice of format to serve this demographic?

5267 MR. MAHEU: Right now, taking a look on the English broadcast spectrum, commercial English radio, people aged 10 to 34 according to StatsCan I believe represent about 32 per cent of the population. People 35 to 64 represent 46 per cent of the population. Of all the commercial English language radio stations on the air today only two serve the young demographic with any degree of success, and that would be CKQB-FM and our own FM CIHT, Hot 89.9. Eight-eight per cent of our audience right now presently comes from people under the age of 35 and I believe CKQB's percentage is somewhere in the 60s, about 66 or 68 per cent of their audience comes from people under the age of 35.

5268 All the other radio stations in the market, and I know this from my long experience and history in this market, all the other radio stations target adults 25 plus or 35 plus, most of them targeting 35 to 54 because that is where the bulk of the advertising money lies and that is where everybody kind of moves to the middle and tries to come up with a format alternative or opportunity that will given them the greatest upside for revenue, and there is nothing wrong with that.

5269 But we feel, having youth oriented radio station in the city now with Hot 89.9, we have carved out a pretty good niche for ourselves in the short-term here. We have done a good job of getting out of the gate and getting it up and rolling. Over the longer term, we feel that the best use of this spectrum, this frequency 88.5, would be to bring and add another diverse choice for people under the age of 35, so now there would be three radio stations serving people under the age of 35 and seven serving people over the age of 35.

5270 COMMISSIONER WILLIAMS: That is assuming we only licence one, but anyway.

5271 MR. MAHEU: Correct. But no matter how you slice it, we have clearly identified that younger people, those under the age of 35, are not as well served and do not have as many choices as people over the age of 35. So, if we were applying for this licence... We gave very considered thought to, you know, what type of format makes the most sense for the marketplace, we did the research, we did the homework. Could we make it a case for smooth jazz? Maybe. You can put the numbers together and make your case, and they are all worthy applications.

5272 But we felt the best opportunity for Newcap in this market over the longer haul was to have two radio stations targeted at youth. We have a very successful one now and it is somewhat difficult selling a younger demographic in a 25 to 54 world, but it can be done and we have proven that. It is difficult, but it can be done. It becomes a little more effective when you have two radio stations targeted at a youth demographic and you are able to bring critical mass to the marketplace, then you have a very compelling sales story to tell and a very valuable audience to deliver and it makes it a little more effective and somewhat easier for us to compete with other stations that are clustered, consolidated and targeted 25 - 54 where 80 per cent of the money is.

5273 COMMISSIONER WILLIAMS: Cross-tuning, was that a factor in developing your business plan? I wouldn't mind getting your view on what way to format proposals cross-tuning potential should be given in assessing which format proposal represents the greatest programming diversity, best use of programming. I think you are aware that Rogers' alternative rock was drawing 14 per cent share, I guess, in fall 2003. So, what weight did you give to the cross-tuning opportunity for your station when you chose this format?

5274 MR. MAHEU: We took a look at it and we certainly considered it. Cross-tuning has impact in two potential areas. Actual tuning or hours tuned on the francophone side, and that is one impact area. The second impact area is on revenues. So, is your station actually taking some tuning away on the French side and are you taking revenue away?

5275 We know from our experience in this market and I am sure others will have confirmed this, the Ottawa-Gatineau market as diverse as it is today is two very distinct markets. There is an English market and there is a French market in terms of sales.

5276 COMMISSIONER WILLIAMS: Okay, just in terms of sales.

5277 MR. MAHEU: In terms of sales.

5278 COMMISSIONER WILLIAMS: There is no cross-tuning... there is no financial opportunity associated with that?

5279 MR. MAHEU: Zero. So, there are two very distinct revenue markets. So, whatever impact Live 88.5 may have on tuning for francophones, we will not be able to monetize any of that tuning at all, so it certainly will have no financial impact on any of the francophone radio stations if we do in fact get some tuning.

5280 Secondly, if you take a look back to the last BBM that XFM was still in the alternative rock format, it did only a one share, 12 plus, in area 5072, which is the Gatineau region of the BBM. So, there was very little rating impact for that format in the Gatineau region by French listeners in the last BBM in which it was rated. Our research looked at English tuning and English pre-dispositions for various formats and we found that there was a high level of interest and a great passion for alternative rock. We would anticipate there are going to be some francophone listeners who will tune in from time to time.

5281 But, the other thing is with a large amount of spoken word programming in English, the chances of that cross-tuning by francophones will be less.

5282 COMMISSIONER WILLIAMS: Even in a bilingual region like this area?

5283 MR. MAHEU: We certainly can't rule it out, but the chances are there might be less and that is the age old problem for radio in bilingual markets like Montreal and Ottawa-Gatineau, is that even though the vast majority of people, we know from research and from BBM, the vast majority of people who are mother tongue francophone are bilingual and do understand the language very well and advertisers won't buy it.

5284 COMMISSIONER WILLIAMS: So, if we were to give any weight to the cross-tuning business opportunity, it would be a zero weight then I guess is what...?

5285 MR. MAHEU: Very little.


5287 MR. MAHEU: Very little.

5288 COMMISSIONER WILLIAMS: Okay. In your supplementary brief, you offered a commitment to broadcast a weekly minimum 40 per cent Canadian content, Category 2, music throughout the licence term. If licenced, the Commission may impose this commitment as a condition of licence. Do you have any comments on this possibility?

5289 MR. MAHEU: Happy to do it.


5291 MR. MAHEU: As we indicated earlier, we have a 40 per cent minimum weekly commitment on Hot 89.9 as well, and we routinely are able to meet that and actually exceed it. I think we are averaging about 42 per cent. So it's not a problem.

5292 COMMISSIONER WILLIAMS: Okay. We are going to move into the area of Canadian Talent Development now.

5293 MR. MAHEU: Sure.

5294 COMMISSIONER WILLIAMS: Now, you have proposed to allocate a minimum of $7 million in direct cost expenditures to support Canadian Talent Development over a seven-year licence term. Your proposed minimum annual CTD is set at $1 million. So the Board is quite clear as to how you want to spend it, and I want to get some clarification on some of the specific initiatives.

5295 You proposed an initiative for the creation of a new position for a coordinator of aboriginal talent to be employed by Aboriginal Voices Radio Network, and you have indicated that this expenditure of $100,000 a year will be used to pay a competitive salary as well as travel and other office expenses of the coordinator. I note that you have submitted budget details and overall activities for this position.

5296 Could you briefly go over the role of this talent coordinator and, (b) will the talent coordinator be responsible for overseeing and distributing any of AVR's existing CTD expenditures; and if "yes", would you outline these expenditures for us if you are able, and if not, who currently at AVR is responsible for these duties?

5297 MR. MAHEU: Certainly. I am going to ask our Vice-President of Operations, Dave Murray, to tell you a little bit more.

5298 Suffice it to say that our funding of the $100,000 a year for the Aboriginal Talent Coordinator is a continuation of our commitment to Aboriginal Voices Radio Network, something we started a number of years ago, and we felt that this position -- we certainly talked to them and this position was indicated to us would be a great fit with what we are trying to do, and it will also solve some of the needs we have. I will let Dave give you a few more of the details.

5299 Dave.

5300 MR. MURRAY: Sure. Thanks, Mark.

5301 First, I will give you a little bit of a background on the position itself, and then I will talk a little bit about the talent funds that we have for -- that they are using.

5302 The position will operate from Ottawa/Gatineau out of our office at Live 88.5. The person will be bilingual.

5303 The aboriginal population is skewing young. It's much younger than the Canadian average and I think that this person will find a lot of aboriginal talent in the hip-hop, metal and alternative rock music genre, which will contribute to our Canadian content requirements. The position will dramatically increase the focus on youth in the aboriginal community and will greatly increase the probability of finding aboriginal artists that, like I said, will produce music hopefully for Live 88.5 and also other stations.

5304 I think this is a real key position for aboriginal voices, one that they haven't had the funding for.

5305 COMMISSIONER WILLIAMS: So if I can just clarify? So they are going to be employed by AVR, but they are going to work in your facility?

5306 MR. MURRAY: We are just going to provide them space.


5308 MR. MURRAY: That's right.

5309 Like I say, this is a real key position for them. There is funds that Newcap has set aside now to go towards developing aboriginal talent that isn't being spent because of a position, that Aboriginal Voices Radio just don't have the manpower to find the talent and get the money in their hands. So I think this position will be a key one.

5310 COMMISSIONER WILLIAMS: Have you identified an individual for this position already in the event that you may be successful --

5311 MR. MURRAY: That will be --

5312 COMMISSIONER WILLIAMS: -- getting a licence?

5313 MR. MURRAY: Well, Aboriginal Voices Radio will be.

5314 COMMISSIONER WILLIAMS: They will supply the person?

5315 MR. MURRAY: They will supply the person. Yes, absolutely.

5316 COMMISSIONER WILLIAMS: As a result of a number of Newcap decisions following your appearances before us at various competitive radio hearings, you have been advised that funding proposals to support AVR are ineligible as direct cost CTD initiatives, although the Commission has accepted such contributions as meeting the objective as set out in paragraph 3(1)(0) of the Broadcasting Act.

5317 We may remind you again that it may be determined that your funding proposal directed to AVR may not qualify as eligible CTD, and I note in your deficiency response dated July 8th, 2004 that you indicated that should AVR funding be deemed ineligible as CTD that you would redirect this funding to Radio Starmaker Fund.

5318 Should the Commission decide that AVR funding is ineligible as a direct cost CTD initiative, how do you wish to proceed? If you choose to redirect this funding to the Radio Starmaker Fund would you abandon the AVR initiative completely or would you continue to support the creation of a coordinator of aboriginal talent for AVR as a separate initiative outside of CTD?

5319 MR. MAHEU: We would certainly hope that the Commission, as it has in the past, has seen the benefit and the value of Newcap's support to AVR and we hope that if we were fortunate enough to be licenced at this time that the same thing would apply.

5320 We have no problem in redirecting the money to the Starmaker Fund as we indicated in deficiency if the Commission deemed our initiative with the AVR not to be acceptable as CTD. In terms of working with them and assisting them, we would continue to do that. To the extent financially at which we would do that would be dependent upon the circumstances at the time, but in terms of having a place for them to be housed and provide an office space and so on, we would still be prepared to do that. But we really believe that the $100,000 for the Aboriginal Talent Development Coordinator is money well spent and in keeping with the spirit of what we were trying to do with AVRN all along.

5321 COMMISSIONER WILLIAMS: So in your work with AVR have you -- can you tell us a bit about it? What has been achieved since you have become involved?

5322 MR. MAHEU: I am going to ask Dave Murray to comment a little bit on that, although I can say Newcap -- we are very proud of our association with AVR and they have had their share of challenges which I know they are overcoming step by step. But we believe that in the long run they are going to serve a great benefit to the listeners of Canada in the markets they serve. We are looking forward to the Ottawa situation being up and running hopefully fairly soon.

5323 Dave, do you want to comment a little bit more?

5324 MR. MURRAY: I think, as you know, they were successful. They have launched their Toronto flagship and they were successful at increasing the power. They have done a lot of groundwork here in Ottawa. They have purchased an equipment transmitter, equipment, et cetera, and now they are just trying to get the rest of their business plan together. They have run into some problems with some conflicts with the CBC in Vancouver, the Victoria area, but I don't have a whole lot more information for you on that. But I think they are very proud of what they have accomplished so far and they are looking forward to --

5325 COMMISSIONER WILLIAMS: And progress is being made, in your opinion as experienced broadcasters?

5326 MR. MURRAY: Yes.


5328 With respect to your initiative to fund an annual summer Jam Clinic which proposes a three-week intensive music skills development course for young people, I note that you will be associated with the Nepean School of Music and that the Ottawa-Carleton Catholic School Board has indicated it is interested in partnering with the Nepean School to offer the program as a credit program.

5329 Approximately how many youths would benefit from this program each summer? How would you ensure the money is used as intended? Would you request that the school provide you with a report at the end or do you have other mechanisms to help attract the funds and has the Nepean School of Music reached an agreement yet with the Ottawa-Carleton Catholic School Board? If no agreement is reached, would this mean that the project would fall through and, if so, again, would the funds be allocated to another initiative?

5330 MR. MAHEU: I am going to, in a moment, call on Trevor Stewart from the Nepean School of Music to talk a little bit more about your specific questions.

5331 But Jam Clinic, as it relates to the oversight of the funding that Newcap would be providing them to execute the Jam Clinic and so on, our goal is to work very closely with them and monitor the progress of the number of young people signing up for the program, the number of people participating. It will also probably include a number of members of the radio station dropping in, maybe being guest speakers as well. So we are going to be there from time to time and see what is going on and participate in it to some extent. We would scrutinize the expenses the same way we would look at any other expense being submitted to us.

5332 The Jam Clinic and the work the Nepean School of Music has been doing is quite amazing and it goes on without a lot of fanfare. Some really interesting things happening there, and I will let Trevor talk to you about it.

5333 In terms of the separate school board, whether or not they are in or they are out, we see this going forward. Worse case scenario it is not a credit course, but that wouldn't cause us to want to withdraw the funding or redirect that money. We really believe this is something that is going to help young musicians, singers and songwriters in the Ottawa-Carleton area.

5334 So I will ask Mr. Stewart to comment specifically on Jam Clinic.

5335 MR. STEWART: Thank you, Mark.

5336 Jam Clinic has run very successfully for four years and we are very proud of that program. Last year, in order to cut costs, we tried to partner with the Ottawa-Carleton Catholic District School Board who saw the course in the previous year and were very pleased with it and wanted to offer it to their student bodies and the entire student body as a credit course, expanding it to three weeks. So they felt that the course was very viable, very feasible and very valuable.

5337 Unfortunately, utilizing their policies and procedures last year they had insufficient numbers to run the programs. So last year for the first time it didn't run. However, their interest continues and they are still prepared to partner with us. However, we may take the program back and run it ourselves because then we know we can run the program, provided that we have financial support.


5339 Mr. Maheu, given your substantial level of CDT funding, who will be responsible for ensuring the $7 million is being spent as committed in this application?

5340 MR. MAHEU: Well, that's a great question and it's an important question. Obviously, our commitment to spend the $7 million is complete and absolute and it comes with no strings. We are prepared to spend the money as we have outlined there.

5341 We have internal controls at Newcap to ensure that, along with reporting annual reports to the CRTC and so on, that our CTD commitments are honoured in a timely and reasonable fashion. We would work directly with Rob, the General Manager of the radio station; Dave Murray our Vice-President of Operations, and on something of this size and scale I personally would have an active interest in making sure that (a) the money is being spent, (b) it's being spent in the manner in which we promised it would be spent, and (c) along with those two things, making sure we get great value for that money; that it is doing what it is supposed to do, and taking more of an interest than just signing the cheque and relieving ourselves of the commitment there; the money is gone; it's done.

5342 We want this money to go to work. We want it to produce the kind of results that are going to create more opportunities for Canadian singers, songwriters and musicians and groups and bands so that there is more recorded Canadian music out there for us to have a shot at playing, that some of these folks actually can make a living and go a little bit further than maybe they would have been able to without our help.

5343 So it begins at the station local level and goes all the way to the top at Newcap.

5344 COMMISSIONER WILLIAMS: Okay. One moment.

5345 Let's talk about the impact of your proposed station on existing stations. You have predicted that your revenue would be completely funded for market growth and there would be minimal impact. Can you elaborate on that as to why Live 88.5 will not negatively impact any portion of the radio market in the Ottawa/Gatineau area?

5346 MR. MAHEU: Sure, I would be happy to.

5347 The billing of the radio station and our revenue sources for LIVE 88.5 will be somewhat similar to our revenue sources for HOT 89.9. As we talked about earlier, in this marketplace the vast majority of the revenue that is devoted to radio, that advertisers spend on radio, is targeted at adults 25 to 54. During Astral's presentation I heard Mr. Sabbatini refer to the figure of -- their numbers were 80 per cent of all the advertising in the marketplace was directed 25 to 54, and I would say that's a fairly accurate estimate.

5348 So we have all these radio stations, or many of them, chasing 25 to 54 advertiser demographics. What's different with our application and our existing station is the vast majority of our revenues are going to be coming from advertisers that are not trying to reach 25-54 listeners because we just won't have them. We just won't have enough of them to be competitive.

5349 But there is money being spent on radio with people targeting a younger demographic. We are hoping to generate significant rating and share, as we have done with HOT, on LIVE in that 12 to 34 demographic, 12 to 24, 12 to 34, 18 to 34. They are somewhat non-traditional advertiser markets, but we have come up with ways in training salespeople and so on to go out and make the case that these people have the kind of discretionary and disposable income that we know they have. They buy cars. They buy insurance. They go out for dinner. They buy clothes. They are getting mortgages and so on.

5350 So the 25 to 54 audience target is where all the other radio stations live in terms of being able to generate their revenue. We are not going to have any significant impact on those radio stations because we are not going after the same advertisers they are. We are going after advertisers that are looking to reach a younger audience.

5351 Also, by the time LIVE 88.5 were to go on the air, sometime after mid-late 2005 for instance, the Ottawa/Gatineau market is going to be approaching a $60 million market. It's one of the hottest economies in the country and one of the most buoyant radio markets in all of Canada. We feel with the demographic we are looking to target, which is a different demographic than all the other radio stations are selling, that we will have a minimal impact or a negligible impact on the revenues of other radio stations in the market. We are going to create some of our own new money.

5352 COMMISSIONER WILLIAMS: In your application, though, you stated that 35 per cent of your advertising revenue would be garnered from existing local radio stations. How do you reconcile that with what you just said and how did you arrive at that estimate?

5353 MR. MAHEU: The 35 per cent, the majority of that 35 per cent, is going to come from HOT because we are going to be cannibalizing some of our own sales to begin with and some of our own rating and share in the early days. We are looking at a combination opportunity here between two radio stations that are targeting young, and when we go out with another offering it's obviously going to have another impact on some of the business we are doing now.

5354 COMMISSIONER WILLIAMS: Are you going to have to modify the programming at HOT to adjust to this new potential entrant to the marketplace?

5355 MR. MAHEU: We would modify it slightly because right now HOT does play some alternative rock, because in current-based music there are really a couple of constituencies. It is rhythm-based dance music and alternative rock. Put together with some other mainstream music it is called Top 40 or CHR. If there was --

5356 COMMISSIONER WILLIAMS: So you would modify it slightly but you would still target the same demographic?

5357 MR. MAHEU: The same demographic but the station would move a little over to the left where HOT would play very little if any alternative rock because it wouldn't have to because there would be a peer play alternative rock station on the air. So it would really focus on what it's famous for now, anyhow, and that is rhythmic-based urban dance music. That's what the station is known for.

5358 In terms of -- just I want to go back on the economic impact, the 35 per cent. Yes, we did lay that out but, again, the majority or the significant portion of what we would be billing, the 65 per cent is going to largely be new money.

5359 COMMISSIONER WILLIAMS: Okay. So 65 per cent would be new money. You indicate in your application that your new station would attract its audience from a wide variety of existing stations with the largest share coming from CKQB.

5360 Could you please provide us with your estimate of the listening share of advertising revenues that would be derived from CKQB and from the other existing stations and perhaps comment on the ability of these stations to absorb the impact of the licencing of your proposed station?

5361 MR. MAHEU: Sure. Of the 35 per cent that we felt that would be coming from the other radio stations, in very round figures we would suggest that 10 per cent of our revenue would come from The Bear, 10 per cent would come from HOT, and the remaining 15 per cent would be spread amongst the other commercial English-language radio stations in the marketplace. But the majority of the money that we would generate would be new dollars to radio, targeted at a youth-oriented demographic that doesn't have enough critical mass right now to go out there and generate that revenue. We feel too we would be able to do that extremely efficiently.

5362 COMMISSIONER WILLIAMS: Could you give us an estimate of how many new listeners would be attracted to conventional radio as a result of the licencing of LIVE 88?

5363 MR. MAHEU: It's hard to give you an estimate of new listeners to radio because, largely, I think the last number I saw was about 94 per cent of the population still listens to radio weekly.

5364 But I think what we are looking at, Commissioner Williams, is the amount of time spent listening, especially with people between the ages of 12 and 34 who prefer alternative rock. They are probably still -- we know from BBM -- still listening to a little bit of radio now. So it is not a matter of them coming back to radio but it is a matter of them spending a lot more time with radio than they are now.

5365 So the amount of hours tuned in by that demographic group, 12-34, should rise a little bit.

5366 COMMISSIONER WILLIAMS: It recently has been dropping.

5367 MR. MAHEU: Yes, it has, and we hope to repatriate some of that tuning back.

5368 And again, as we touched on earlier, there is a lot of competition for attention with people between the ages of -- you know, in their mid-teens to late twenties, early thirties, more entertainment choices, more new media, electronic gaming, text messaging, instant messaging, cellphones, specialty television programs, et cetera, and music on demand, what you want, whenever you want, via the Internet or MP3 players and iPods.

5369 So we have to do a good job of giving these folks what they want and the beginning of that job is to actually make it available. It is available for free over the public airwaves on the radio.

5370 And then it is our job, if we are fortunate enough to get the licence, to make it as compelling and as entertaining and as engaging and as reciprocal as we can possibly can, that this is really a two-way street. We are not just broadcasting it and people are receiving it and they are happy. We want to engage these folks through some of our spoken word programming, some of our promotions, and be part of this community, be part of their lives and part of their community.

5371 COMMISSIONER WILLIAMS: Do you have any information on the amount of disposable income your target audience have available to spend?

5372 MR. MAHEU: There are a number of studies and I think -- I can't remember if in our supplementary brief we broke that down.

5373 David, did we...

5374 MR. MURRAY: Not by --

5375 MR. MAHEU: Not by demographic group.

5376 MR. MURRAY: -- specific demographic group. I don't think that is available but we do know that Ottawa has the second highest personal incomes in the country next to Calgary. But we only have that as an entire population.


5378 Why should we determine that your proposal is the best use of the frequency?

5379 This isn't your three-minute sum up. It is a warm-up to the three-minute sum up.

5380 MR. MAHEU: Then I will maybe save the best for last.


5382 MR. MAHEU: Why is this the best use of the frequency? There are really three reasons this is the best use of the spectrum and the frequency that is available.

5383 Number one, it gives people age 12-34 a radio station -- another radio station. There are only two radio stations right now that have any programming directed largely at this group of people and they deserve another voice, another radio station in the marketplace, we believe anyhow.

5384 COMMISSIONER WILLIAMS: And they represent, I think you said earlier, 32 per cent of the market?

5385 MR. MAHEU: Thirty-two per cent of all people. And of all the commercial English-language radio stations, there are only two that really serve this group of people.

5386 Secondly, why our proposal would be the best use of the frequency is we are prepared to do more than just play music. We are prepared to invest in spoken word programming and break some new ground that we feel will really add a distinctive, diverse voice to the marketplace that doesn't exist today, that we bring something else to the table on a day-by-day, week-by-week basis, more than just a jukebox.

5387 We feel that that is going to be the cornerstone of what makes us sound different, what makes us be able to relate differently to our audience. So that is number two.

5388 And number three, we believe that we have brought a unique, well-funded and comprehensive Canadian talent development plan to the table. What we have proposed to do with our Canadian talent development initiatives, we honestly believe, is going to help give more people a leg up in their pursuit of a music career.

5389 It is going to create more opportunities for air play for local Canadian bands, and hopefully, over the term of our licence of seven years, if we were to be granted one, that we are going to create a couple of new stars.

5390 It won't happen every year necessarily but we have put enough money and enough weight behind it, combined with promotion in other markets, that we can find the next new big thing coming out of this area and we are willing to put our money behind it and try to make that happen.

5391 For those three reasons, the pure format, the spoken word and our commitment to Canadian talent development, we believe, makes this proposal a compelling one and the best use of the frequency.

5392 COMMISSIONER WILLIAMS: Do you see a lot of synergies between the other stations that you have in Canada as opportunities for LIVE 88 to work with them in promotion and development of these future stars that you have just described? Are the formats similar enough that that is a real possibility?

5393 MR. MAHEU: It is a definite possibility, and actually, we have committed to it as part of our Canadian talent development plan. This is indirect funding that we have promised, not direct funding, not part of the $7 million, but we have committed to an extensive amount of air play of the bands that make it through the "Making of the Band" initiative on our compatible stations across the country from Edmonton all the way to St. John's, Newfoundland.

5394 So we see that as being a distinct advantage that we bring to the table, that if we can light the fire here, we can fan that flame across the country and provide exposure and air play to artists that they might not normally get, and we are going to get behind it as a company, not just as a single radio station.

5395 COMMISSIONER WILLIAMS: Let us discuss the possibility of more than one station being licensed along with your station in this marketplace.

5396 Which stations would be most and least compatible with your station in terms of financial impact, programming diversity -- mainly in those two areas? Who is easiest to live with and who isn't?

5397 MR. MAHEU: It is a wonderful loaded question. I will take my very best opportunity to give you a frank and candid answer.

5398 COMMISSIONER WILLIAMS: You have been doing well so far this afternoon. You have actually made questioning so easy because your answers are so full and complete, I invariably have to skip a question or two. So continue on.

5399 MR. MAHEU: Well, thank you.

5400 If the Commission saw an opportunity to license more than one radio station, obviously, we would like ours to be one of the radio stations.

5401 If the question is what other radio station would least get in the way of this radio station having a chance to be successful, from our perspective, there are a lot of worthy choices.

5402 We think the possibility of licensing a second radio station in the French language would probably serve the market well, and whether it is a -- there seem to be a lot of soft choices being proposed for the French side, in the French language, and one of those would not cause us any difficulty in terms of being able to generate rating and share or generating revenue. Those stations also would pose no threat to us whatsoever.

5403 So in terms of compatibility in an ideal world, if two were licensed, we would suggest ours and a softer French-language choice.

5404 COMMISSIONER WILLIAMS: And what would the nightmare scenario be, other than not getting the licence?

5405 MR. MAHEU: I like that, other than not getting the licence.

5406 Well obviously, the nightmare scenario would be licensing two alternative rock stations in the English language because -- not that you couldn't see the wisdom in that -- but it obviously...

5407 COMMISSIONER WILLIAMS: The market is large and attractive but it is not that large?

5408 MR. MAHEU: Absolutely, and since formats generally are not a condition of licence, unless they are specialty music formats, it wouldn't be long before one of those radio stations morphed into something else, and that is part of the reason why we have taken a lot of time and effort to prepare our application, to do the research, to do the homework and to make the commitments we have.

5409 We are making the commitment for the long term. We are making the commitment that is compatible with what we are already doing here. So we know what our plan is, going forward, and it makes sense and we are prepared to live with that and we are prepared to execute well and do what we have to do to be successful.

5410 We don't want to come to you one day and ask you for a licence for an alternative rock station, and two years later be back here for something else and you will say, well, what happened to that alternative rock station we licensed, well yes, it is a soft AC now but, you know, things changed and, you know...

5411 COMMISSIONER WILLIAMS: Yes, mainly because you guys licensed two of the...

5412 MR. MAHEU: Right. So the nightmare scenario is, you know, licensing in the same language very similar formats that are going to end up competing directly against each other, normally one winner and one loser, and then, you know, the diversity is gone.

5413 We feel that what we are proposing does bring diversity and a new voice and a new offering to the marketplace that just isn't available right now, and it is a significantly large format hole, about the same size as country music, and we don't consider country music to be a niche format. It is a pretty mainstream format and alternative rock is the same way but a city of almost a million people doesn't have one.

5414 COMMISSIONER WILLIAMS: Okay, thank you, Mr. Maheu and Mr. Steel and Newcap panellists.

5415 That concludes my series of questions, Madam Chair.

5416 THE CHAIRPERSON: Commissioner Noël.

5417 COMMISSAIRE NOËL : Monsieur -- I will pronounce it the way it should be -- Mr. Maheu.

5418 M. MAHEU : Merci.

5419 COMMISSIONER NOËL: Talking about morphing, can you explain to us or do you have clues about why CIOX morphed into a country station?

5420 MR. MAHEU: I can provide some anecdotal insight. I wasn't in the boardroom when that decision was made.

5421 COMMISSIONER NOËL: My question is more about was it because there is not a sufficient market to make a decent living out of an alternative rock format?

5422 MR. MAHEU: No, I don't believe that was the reason at all. My insight, my professional experience tells me there were two reasons that they were unsuccessful with that radio station.

5423 The first was that it had an impaired signal. It was a Smiths Falls signal that did not have great coverage in some part of the metro Ottawa area. So that was difficulty number one, there was a signal problem.

5424 Secondly, and probably most importantly -- and I know this from personal practical experience managing in this market for many years -- that when you have a cluster of radio stations that is predominantly targeted at 25-54 year old adults and then you have one radio station in your group that targets very young and it is very different, it is a different sell. It is very difficult for an organization to be organized in such a way to monetize that rating and share to the level necessary to make it a success.

5425 What I am using a lot of big words to really say is it comes down to your ability to sell the audience that you are attracting, and selling a younger audience is more work. It is hard work and there is a lot of heavy lifting and a lot of types of things that you need to do that you don't need to do when you have a 15 share of 25-54. You have to go out there and prospect and you have to turn up new business and you have to make a lot of presentations and a lot of proposals.

5426 Some companies are willing to invest more time and effort in doing that than others, and I am not saying that the old X FM weren't good at what they did, it is just they were not able to monetize it to the extent that we know we can because we are doing it with a young-targeted radio station now.

5427 COMMISSIONER NOËL: It brings me to a number of questions on age. You mentioned that 32 per cent of the market was between the age of 12 and 34.

5428 What proportion of that is between 12 and 18? And then you will see where I am going after.

5429 MR. MAHEU: Dave, do we have that?

5430 MR. MURRAY: It is 36 per cent between 10 and 34.

5431 COMMISSIONER NOËL: Thirty-six...

5432 MR. MAHEU: Ten to 34 is 36 per cent.

5433 COMMISSIONER NOËL: But you don't have a breakdown of 12 to 18? Because, you know, you mention in your presentation -- and I am on page 3 -- that the number of hours per week that these younger listeners listen to is much lower than the average, and you say 12 hours per week in the spring of 2003 and 10.5 in the spring of 2004.

5434 I am just sort of worrying, you know, shouldn't they be in school during the day --

5435 MR. MAHEU: We would hope so.

5436 COMMISSIONER NOËL: -- at least those that are between 12 and 18? It is about the time that they go through high school, end of the grade schools, and the high school.

5437 I am just sort of wondering if that could not be an explanation, you know, they are sitting in a classroom. Normally, they don't have a radio on, or if they do, they should change the teachers.

5438 MR. MAHEU: Commissioner Noël, are you referring to the amount of time spent listening done by teenagers during the day?


5440 MR. MAHEU: Yes. Well, that has remained fairly constant, but what has gone down is younger tuning in hours where they are available to radio, whether it be the morning show or evening and on weekends to some degree. So that is falling and it is less than it used to be.

5441 There are a lot of different reasons for that. There is no exact science to determining exactly why the time spent listening is falling. We are making some assumptions that part of the reason it is falling is because radio is not doing a good enough job of giving them what they want. Alternative rock is a huge format that is just not available.

5442 So if you like alternative music, you are not going to hear it on the radio. Therefore, it would make sense that you might spend time with other media like recorded music or digital music or the Internet to get what you want and that would lead to a corresponding fall in time spent listening with younger people.

5443 I do have the answer to your question now in terms of teen tuning. Stats Can breaks it out 10-14 and 15-19.

5444 COMMISSIONER NOËL: That is fair enough.

5445 MR. MAHEU: Okay. Of the total population -- do you want to talk English or total population?


5447 MR. MAHEU: English.

5448 COMMISSIONER NOËL: Because your statistics were English.

5449 MR. MAHEU: Exactly.

5450 There are 629,800 people aged 1-99, and of that 629,000, rounded off, 86,900 --

5451 COMMISSIONER NOËL: Let us say 87.

5452 MR. MAHEU: -- 87,000 are between the ages of 10 and 19.

5453 COMMISSIONER NOËL: Which is what in proportion, a little over 10 per cent?

5454 MR. MAHEU: Oh, here we go with the math. Eighty-six on...

5455 COMMISSIONER NOËL: I see you have a calculator there.

5456 MR. MAHEU: Yes. Eighty-six on -- 13.7 per cent.

5457 COMMISSIONER NOËL: Which normally shouldn't listen to radio during the day?

5458 MR. MAHEU: Would normally not be available to listen to a lot of radio between --

5459 COMMISSIONER NOËL: Hopefully.

5460 MR. MAHEU: -- yes, between 9:00 and 4:00, let us say. Yes. Right.


5462 Now, I will take you to page 7 of your presentation of this morning and of -- not the last paragraph, the one just on top. You say:

"The show will be controversial, yet balanced." (As read)

5463 Can I have a bit more explanation as to what "controversial" means?

5464 MR. MAHEU: Certainly, and I think the best person -- I will ask Laura Mainella, our News Director, to talk to you a little bit about what we mean by controversial and even-balanced.

5465 Laura.

5466 MS MAINELLA: Well basically, any and every topic to these teens are controversial. They want to speak their mind. They will make any topic about them. Therefore, it can be controversial.

5467 We, again, have a -- the host of the show is a professional, is educated, has been told exactly what to say and what not to say.

5468 COMMISSIONER NOËL: That is where I was going.

5469 MS MAINELLA: Right.

5470 However, our co-hosts are from high schools and colleges and can be a member of our street crew. So the topics will come up as they will, according to our listeners and the hosts themselves.

5471 COMMISSIONER NOËL: But in your view, the hosts would not be controversial, at least the professional ones?

5472 MR. MAHEU: No.

5473 MS MAINELLA: No, they won't be.

5474 COMMISSIONER NOËL: And how do you intend to control that?

5475 MR. MAHEU: Well, it is very similar to having a talent on the air doing a music show that may be wild or outrageous. They report to the Program Director and are supervised, and there are certain codes of conduct and standards that we set as a radio station that we want followed.

5476 We want the show to accomplish certain objectives and be a certain way, and the person we would hire would have those kind of attributes, that understands what we are trying to do, what we are trying to accomplish, and is willing to do their best to make that happen, and she or he would act accordingly.

5477 Again, the idea is that the subject matter that the show would deal with would, from time to time, be controversial but the way we approach it would be balanced, and not necessarily the host being controversial but the subject matter may, from time to time, be considered controversial.

5478 COMMISSIONER NOËL: Okay. So you don't have any plans of using your second-delay machine to control the host?

5479 MR. MAHEU: We certainly don't -- wouldn't be in that position, and that delay would be implemented, really, to maybe catch anything that sneaks through from callers or so on that we don't know what is coming.

5480 COMMISSIONER NOËL: Thank you, those are my questions.

5481 MR. MAHEU: Thank you.

5482 THE CHAIRPERSON: Commissioner Pennefather.

5483 COMMISSIONER PENNEFATHER: Thank you, Madam Chairman.

5484 I think the last time we spoke I was instructed very clearly your name is Maheu --

5485 MR. MAHEU: Thank you.

5486 COMMISSIONER PENNEFATHER: -- having said Maheu for an entire hearing at some point.

5487 MR. MAHEU: No problem.

5488 COMMISSIONER PENNEFATHER: Commissioner Noël actually covered one of my questions, which was really based on what you and others have called the challenge of bringing young people back to radio, and that challenge includes the fact that when plugged into the earphones on the buses and walking and talking, they are on their iPods or MP3 players. That is the reality today in going forward, and certainly, with alternative rock, you are going to find the vast selection through whatever means is available.

5489 So, again, just so I'm clear what... what it is that draws back to the radio. Going past the fact that alternative rock as such is not a format available in the market, it's available through these other means. What is it that draws them back to radio?

5490 MR. MAHEU: That is the... that's the Holy Grail of trying to bring and repatriate some younger listeners back to radio.

5491 We believe a big part of what is going to help anyhow, I don't think there is any silver bullet for it, but we do believe what will help is the people in that age group, that 12 to 34, 18 to 34 age group, it's part of what made the internet so successful because internet is all about communities. It's all about being connected to something that you fell part of, that you... and the most successful approach is on the internet or always communities-based, whether you are interested in Corvettes or Mustangs or collecting coins or whatever happens to be these communities of interest have sprung up.

5492 There is a huge community of interest for alternative rock in this market place and we are proposing and are hoping that Live 88.5 is going to be kind of the meeting place for that community of interest, for the music, what's going on with the music, live music, local music, the promotions, the talk programming that goes along with it as well, that we are trying to create a sense of community through a radio station.

5493 It's very difficult to compete with the world of on-demand music, I want to hear what I want, when I want and I'm the father of three kids who all they want for Christmas is an IPOD and I'm in the radio business and everything they have and everything I have is due to my 25 years in radio and my kids want IPOD for Christmas and, you know, my son is a musician and he is kind of involved in that alternative music scene a little bit and we're hearing the same thing: there is just nothing for me out there.

5494 So, they find it in other places. What we want to do and it's a tough job, and we are under no illusions that this is going to be easy, but we are prepared to do it.

5495 We are prepared to go out there on the street, we are prepared to get the word out about this new radio station that plays alternative music. And the one thing about this community of alternative music lovers, they can spot a phonie at a thousand paces.

5496 If you are not real, if you don't deliver, if you say you're alternative rock and you're sneaking in this and you're sneaking in that because you're trying to be a little more 25-54, they are going to run.

5497 And that's part of what happened in the other case that the Commissioner a little while was referring to, that I didn't mention. But in order to be credible, we have got to be true to it, we have got to play alternative rock, we have got to, you know, position the station properly, even to the point where we are considering, you know, what type of building we are going to have and, you know, should there be a live performance venue as part of our radio station or a building and things like that. So, we are willing to think outside the box on this one and we think our CTD plan and our spoken word initiatives and so on will help, all those little things will help bring some people back to radio or at least give them cause to want to try it again.

5498 COMMISSIONER PENNEFATHER: Thank you. That helps quite a bit. And one last quick question on the CTD, the making of the band initiative. Will the CDs produced be available to other broadcasters?

5499 MR. MAHEU: The answer to that is, yes. Each band is going to get a label deal and it's up to them to choose the label they want to go with and those CDs will be distributed as any other product would be by label, free of charge for our radio stations and hopefully they are going to sell a lot more than at record stores across the country.

5500 COMMISSIONER PENNEFATHER: Thank you. Thank you, madam Chairman.

5501 THE CHAIRPERSON: Commissioner Langford.

5502 COMMISSIONER LANGFORD: Thank you, madam Chairman.

5503 I just have a couple of really narrowly focused questions. You said that because... if you were granted this licence, the new... your new station or new alternative rock station would cause you to reformat somewhat your existing station because you are playing some alternative rock there now.

5504 Can you give me some notion of a percentage or a number somewhere to quantify that?

5505 MR. MAHEU: Yes, I can, Commissioner Langford. I think reformat might be not the most accurate word to describe it, but...


5507 MR. MAHEU: Yes. The modification, a slight modification. I would say it would probably involve less than 10 per cent of the music that we currently play and that would be about right, Rob?

5508 MR. MISE: I would say probably eight.

5509 MR. MAHEU: Eight, okay. And it's just a matter of...


5511 MR. MAHEU: So, let's call it nine. But it would be... it would be a relatively small amount because alternative rock is not a big part of the music mix although there is a little bit of it.

5512 COMMISSIONER LANGFORD: And if, the other side of the claim, say Genex were to be successful, which is a supplying... which is also proposing alternative rock or CKMW, also proposing alternative rock, would you also drop the 9 per cent?

5513 MR. MAHEU: It would depend. I guess we would have to hear what they actually signed on with and what impact that might have on our product.

5514 I certainly wouldn't suggest that we would be modifying our format at all before it came on in probably some time after that if there was any modification necessary.

5515 We would modify it because when we control the two signals, we can make sure that each offering is focused and is diverse as it can possibly be and so that means there is little overlap as possible. In a competitive circumstance now we're talking about a different approach.

5516 COMMISSIONER LANGFORD: And finally, just on the question... one of the last of Commissioner Williams' questions dealt with, you know, who do you love, who could you live with and you were pretty clear on preferences overall.

5517 But what I am wondering about the French language when you could live with the French language soft music or soft jazz or whatever, in the older demographic, but what happens if either Genex or Radio Nord, Radio Nord is successful, Genex would be exactly your format with different spoken word, and this is about musically your format and Radio Nord would be... well, a young demographic if not quite your format. Would you still hang in there and try to launch as planned?

5518 MR. MAHEU: Yes, we would. That wouldn't be the nightmare scenario that was contemplated earlier, but it wouldn't be the best scenario for us.

5519 COMMISSIONER LANGFORD: Just a bad dream.

5520 MR. MAHEU: Yes, it would, where you have two radio station, one French language, one English language which are largely playing the same genre of music, it becomes a very competitive head on head battle, but obviously we would... we said we would do this format, we would fight a good fight and hopefully win out.

5521 COMMISSIONER LANGFORD: Because it brings to my mind something I haven't been able to figure out yet and we're on day four and I haven't... I just can't get it, but in a sense we know there is what we call "cross-tuning". I mean the statistics are clear on it. Yet, the advertisers don't admit it. I mean, it's just that there is no evil here, no evil touch, it's just simply doesn't exist.

5522 And yet, you're saying your life would be harder because you're going head-to-head with these people who are in another advertising world altogether. So, why would it be a bad dream scenario and what actually do you lose? Is it just gross numbers? Is that... is that the problem, even though you... even though you can't sell some of your gross listening numbers to the advertisers, you want to have them for some comfort level?

5523 MR. MAHEU: Well, I'll try to answer your question as specifically as I can.

5524 COMMISSIONER LANGFORD: I am not even sure I would have asked the question or you can answer and take my head off to...

5525 MR. MAHEU: And I don't think you... I don't think you are sick, but it can be confusing and it's a bit of an anomaly that is existing in this market and to some degree, in Montreal.

5526 It's not that advertisers don't acknowledge that there is cross-tuning. The reality is they don't want to pay for it. That's the real reality.

5527 So, if we are an advertising agency or a local advertiser and we're buying your English numbers, we're only going to pay for English because that's all we want. But if you've got a bunch of French listeners too that understand English, we would like to have them for free and, you know, speaking candidly, that's really what it's all about.

5528 It's a negotiation, but it has been a very very hard and fast situation for as long as I can remember, that they will not pay for an audience in a different language. Now...

5529 COMMISSIONER LANGFORD: All right; step 2, O.K.

5530 MR. MAHEU: Now, how does that relate to why would it be... why would it be an issue. It boils down to competition for ears. If you have an English language radio station or a French language radio station for that matter, that's doing the type of programming that can generate large amounts of cross-tuning, the station it's competing against in whatever language is going to lose some listeners in their language.

5531 That doesn't mean the station that's generating that listenership is going to be able to monetize it in any way because we already know they won't. But that's audience share that you as a station don't have to sell any more. It's those hours tune that are gone.

5532 And although the other operator cannot monetize them, it costs you more time and energy and money and promotion and so on to repatriate that tuning.

5533 Yes, there is cross-tuning. I don,t think there is that much as everybody thinks there is, but there are certainly some.

5534 COMMISSIONER LANGFORD: So, when the advertiser comes to you, your typical local advertiser, all right, more likely you go to the advertiser, but whatever, but...

5535 MR. MAHEU: Yes.

5536 COMMISSIONER LANGFORD: ... whatever. You sit down at the table and what is it that they are paying for in this type of market where you have got, say, in your scenario, you've got the English listeners that you've got. You've got some addition, sometimes we're hearing numbers as high as 14 per cent, but you've got some addition of French speaking listeners from the other side of the river, what's setting the rate for the advertisers then? What are they looking at? What's the test?

5537 MR. MAHEU: Well, the ultimate test in radio, especially in a format like Hot 89,9, which is a younger demo, and we are not to selling rating points 25-54 because we just don't have enough of them to be competitive, so the ultimate test is the test that has always been there and it is the only one that matters and that is results.

5538 When you advertise on a radio station, the people walk in your door, do your sales go up because the amount of traffic you get go up, and that's really what it's all about.

5539 And that's where it is a little more difficult for us, but we are getting quite good at it because when we don't have the same demos that the other stations have, we have to sell very much on results and what we talk about is that, you know, a commercial that would cost you $1,000.00 for one commercial is cheap if it accomplished the goals and objectives you set out and spots that cost a dollar each, if they don't work, are too expensive.

5540 So, it's all about matching and we are very careful, you know, we match up advertisers needs and wants with our audience and we know that there are certain products and services that lend themselves well to our format and others that may not lend themselves as well and we target accordingly.

5541 But when you're having that negotiation, Commissioner Langford, with the advertiser, it's strictly in the language that you're broadcasting in and that they are doing business in. They will not pay extra for the cross-tuning.

5542 COMMISSIONER LANGFORD: And they're getting your spill-over free?

5543 MR. MAHEU: Yes.

5544 COMMISSIONER LANGFORD: Thank you very much. Those are my question, madam Chair.

5545 THE CHAIRPERSON: Thank you. Do you have, yet, the Fall BBMS? I'm told there was a problem producing them in Ottawa?

5546 MR. MAHEU: There is a small problem. They wouldn't be released anyhow until the 15th of December.

5547 THE CHAIRPERSON: Do you have any idea what they are for you?

5548 MR. MAHEU: No. No, we are not...

5549 THE CHAIRPERSON: You have no idea whether there are any near what the Fall or Spring 04 was?

5550 MR. MAHEU: No.

5551 THE CHAIRPERSON: Would it be fair to say that you had an 8 per cent share then?

5552 MR. MAHEU: Yes.

5553 THE CHAIRPERSON: And that was second after CJMJ.

5554 MR. MAHEU: Third.

5555 THE CHAIRPERSON: Well, there was another 8 per cent, another 8 share. So, it was 10 and two 8?

5556 MR. MAHEU: Right.

5557 THE CHAIRPERSON: At least, that's what I think someone put on the record.

5558 If I were to... are you able to... if I were to ask you in the latest BBMS that you have what proportion or percentage of your... of your share was from the 12 to 24, what would be the answer?

5559 MR. MAHEU: In terms of the number of all the hours tune that we have tuned in the radio station, what per cent of the hours tuned for 12 to 24 represent?

5560 THE CHAIRPERSON: Yes. I guess the 8 represents 12 plus?

5561 MR. MAHEU: Right.

5562 THE CHAIRPERSON: What percentage of that would come from the 12 to 24?

5563 MR. MAHEU: I would have to give you an estimate or Rob might be able to be more specific, but I'm going to say half.

5564 MR. MISE: Probably 60 per cent.

5565 MR. MAHEU: Yes.

5566 THE CHAIRPERSON: Ah! O.K. I have old numbers here, but that works. That would certainly make you, if you use 50 as a base line, a 12 make CIHT at 12 to 24 station very young target, very young at least achieved target, although it was 18 to 34, right.

5567 So, now, your target is 12 to 34 with this particular station.

5568 Are you expecting to get a 12 to 18 demographic in the same fashion on live?

5569 MR. MAHEU: The potential for teen tuning to the alternative rock format is not quite as high.

5570 THE CHAIRPERSON: As on the other one?

5571 MR. MAHEU: As on Hot 89.9, there is...

5572 THE CHAIRPERSON: So, that's more bubble gum type of easier... is that the reason? Easier for younger kids who are not in a more hard edged?

5573 MR. MAHEU: It varies market to market, but in this particular market, this is a very good rhythmic dance music market and the teen tuning that we receive on Hot 89,9 is largely as a result of that. If live 88.5 were to be licensed, it would certainly generate some teen tuning, but not to the same degree as the format Hot does.

5574 THE CHAIRPERSON: What would you expect it to be in the 12 to 24?

5575 MR. MAHEU: In the 12 to 24, I would say slightly less than half of our hours tuned would be...

5576 THE CHAIRPERSON: Only slightly half, of course...

5577 MR. MAHEU: Slightly, just under 50 per cent.

5578 THE CHAIRPERSON: What I am trying to explore is you have used the word "cannibalise" and taking 10 per cent from 89.9, et cetera and, of course, it's always better to cannibalise oneself than to have one's lunch eaten. So, I am wondering whether... when we look at impact on the market and so on, that's one... one perspective, but we also have to... or as you know, we approach it from the perspective of diversity and you have talked about the difference between the two.

5579 You have also reminded us that formats can be changed without any authorization from us and I am wondering just to what extent these two stations may easily sound alike over time, considering that you're already hitting the very young... the younger demographic and you're aiming for it again.

5580 If I were to look at your play list right now and a play list for this proposal, how much overlap would there be, at the moment? Because you talked about... you mentioned the possibility that you have to perhaps modify it 10 per cent. What is it now? Would you have any idea of what the overlap is?

5581 MR. MAHEU: Between Hot 89.9?

5582 THE CHAIRPERSON: Of what you're actually broadcasting and getting 60 per cent of the 12 to 24, as opposed to what you're proposing?

5583 MR. MAHEU: If Live 88.5 were licensed and were launched today on the air and we didn't adjust Hot at all, there would be about 10 per cent of the music would overlap until we hold it back. It would be about a 10 per cent overlap in the music.

5584 THE CHAIRPERSON: And how much spoken word do you have on CHIT?

5585 MR. MAHEU: I believe it's just over five hours a week, is it not?

5586 MR. MISE: That's correct.

5587 THE CHAIRPERSON: So, you would have about all told, so here it's 15 and a half hours, correct?

5588 MR. MAHEU: That's correct.

5589 THE CHAIRPERSON: So, you would have three times as much spoken word?

5590 MR. MAHEU: Yes.

5591 THE CHAIRPERSON: Do you have anything else to add with regard to this possible concern that you already serve a young demographic and you would have a second FM and we all know there aren't that many frequencies, there are arguments about what the market can bear.

5592 From a diversity viewpoint what reassurance can you add to what you've told Commissioner Williams that we won't end up with... because the argument that, when two stations are owned by the same company they are different, it's good on paper, but I understand it doesn't come out in reality necessarily that you find two stations in the same market. In the States, possibly in Toronto and looking the same and you had an interesting discussion about why Rodgers drop alternative rock was because a company finds it easier to have the same market and it can be a more viable proposition than having two different ones. So, you can see where I'm coming from, we're looking at diversity, why won't these two stations become closer together?

5593 MR. MAHEU: They absolutely will come closer together and let me try to explain why and this is a very important point you've raised because largely the Commission does not regulate format any more unless it's in a specialty format.

5594 We are in a young demographic format now. We have carved out a pretty good audience niche and we are starting to monetize that rating and sure to the point where we're starting to see some signs progress.

5595 The reason we can tell you with a great degree of certainty that the alternative rock format we are proposing will be here today, tomorrow and for many years to come is because the whole strategy in this Ottawa-Gatineau market place would be to have as much critical mass on the younger demographic from an audience point of view as we can possibly get.

5596 Again, if we're competing for revenue, we either have to join the pack of 25 to 54 year old targeted radio stations, try to carve out a small niche of that and then go after the advertisers that they are going after.

5597 We have chosen to go a different path and that path is one that's somewhat less travelled because it's more difficult. We are targeting an audience that's largely 12 to 34 on Hot 89.9.

5598 In order for us to be able to continue to be successful there, we felt the best opportunity for us was to apply for another radio station that targeted the same demographic group.

5599 Life group in psychographic needs and wants are very different. Age-wise, they're similar. Their music taste needs and wants are quite different, but if we take, as we've talked about earlier, about the 26 per cent share that we are getting of tuning on Hot, if we could even get another 20 per cent with live 88.5, then we can dominate that younger demographic in this market place and we can monetize that extremely well.

5600 We can make a nice living standing out of the way of most of the other radio stations in the market and that allows us to stay in these formats because as long as they are financially viable, most operators aren't going to change format.

5601 The number one reason for changing format is it's not achieving the financial objectives, they are not making any money or they are not making enough and our proposal, we believe, is fairly modest, very achievable and allows us to keep Hot exactly where it is, focused on being a young... youngest youth, rhythmic based, dance radio station, which is what it was licensed for originally and allows Live 88.5 to be a true alternative rock radio station and the only way we're going to be able to build an audience in that format is to stay with the format and not cheat on it because the audience won't stand for it.

5602 THE CHAIRPERSON: So, could I summarize by saying that Hot 89.9, I think you identify it as 18 to 34, but as we have just discussed, it's really 12 to 24 by the fact that it's got 60 per cent of its share in that.

5603 The other one is 12 to 24, so you know, when you just look at the target audience, diversity doesn't come out as the prime thing.

5604 Is what you are telling us that not all 12 to 24 are the same?

5605 MR. MAHEU: That is exactly correct, madam Chair, that... and we talked about earlier even in the 25 year old, there are 25 year old who like classical music who love country music, who like hard rock. Don't be... let us stray by the word "demographic" because it only refers to age group.

5606 THE CHAIRPERSON: There it's the broadcasters who use it, not I.

5607 MR. MAHEU: Correct, and you're correct and we also...

5608 THE CHAIRPERSON: Because when you look at how the share is achieved on 89.9, it doesn't match the demographic because you are not supposed to have below 18 and, you know...

5609 MR. MAHEU: That's correct.

5610 THE CHAIRPERSON: So, what you are saying is you have some who have lost even 18...

5611 MR. MAHEU: Something like that and...

5612 THE CHAIRPERSON: So, they're either alive or Hot, whichever. On that note, you will have your three minutes.

5613 MR. MAHEU: Thank you. Well, madam Chair and Commissioners, Newcap's application for a new FM licence for Ottawa-Gatineau truly offers something new and different to the listeners and citizens of the region.

5614 We promise diversity and we will deliver it every day we are on the air and we promise you that. The alternative rock format is significantly large and an important music genre presently not being served in the Ottawa-Gatineau area.

5615 The majority of the music we play in this format is different and unique from all the other radio formats presently available on the market. 70 per cent of the music we play and are proposing to play is not getting any air play in this market right now.

5616 We are also proposing the vast majority of the music we play, especially the Canadian content will be new, fully 90 per cent of the music heard on Live 88.5 will be new or released in the past 18 months.

5617 Are extensive proposal of spoken word programming will enhance radio for younger listeners and add another distinctive voice to the region. Since we are targeting a youth audience, the financial impact on other stations will be small to negligible as they do their business with advertisers trying to reach older adults 25 to 54.

5618 We have proposed a complete and comprehensive plan to develop Canadian talent in the Ottawa-Gatineau region and we have pledged $7,000,000.00 in cash over seven years to ensure a fruit and creates new Canadian success stories for Canadian radio.

5619 In the end, it's all about giving people what they need and what they want and today in Ottawa-Gatineau, young people who like today's rock music, alternative rock music, have no place to call home on the radio dial.

5620 It makes me think about a line from the song Happy Birthday to me by alternative rocker cracker and in the song cracker sings: I'm happy for the small things today. Having a radio station, you can call your favourite may well be a small thing to most people, but for the youth of the Ottawa-Gatineau area, your positive decision to licence Live 88.5 may well be bigger than you could ever imagine.

5621 On behalf of all of us, thanks for the opportunity.

5622 THE CHAIRPERSON: Thank you very much. That completes the first day of the hearing for you and I'm sure we'll see some of you again in other phases.

5623 We will now take a 15 minute break and hear the second CKMW application.

5624 In order for people to organize their lives, we will not hear Genex until tomorrow morning. So, we will be back in 15 minutes at a quarter to four.

5625 Nous reprendrons à quatre heures moins quart.

--- Upon recessing at 1530 / Suspension à 1530

--- Upon resuming at 1545 / Reprise à 1545

5626 THE SECRETARY: Thank you, Madam Chair.

5627 Item 14 on the Agenda is an application by CKMW Radio Ltd. on behalf of a corporation to be incorporated, for a licence to operate an English-language FM commercial radio programming undertaking in Ottawa. The new station would operate on frequency 98.5 MHz on channel 253A with an effective radiated power of 700 watts.

5628 Mr. Paul Evanov will be introducing his colleagues.

5629 You have 20 minutes to make your presentation.


5630 MS LAURIGNANO: Okay. Just before Paul introduces, I wanted to let you know that Margaret of Stubbe Chocolate heard about the great advertising and promotion of her location, so she wanted to make sure that everyone in the room got a little chocolate. So I think if anyone is missing one we have a little basket over there.

--- Laughter / Rires

5631 MS LAURIGNANO: And she wanted us to tell Commissioner Langford that he doesn't have to line up for the bunny. You can just go to the front of the line and she will do that around Easter.

--- Laughter / Rires

5632 COMMISSIONER LANGFORD: It's all too much. I don't know if I can adjust to it.

5633 MR. PAUL EVANOV: Good afternoon, Madam Chair and fellow commissioners.

5634 My name is Paul Evanov and I am the Vice-President of Programming for the CKMW Evanov Radio Group.

5635 I will begin by introducing our panel, several of whom will be familiar faces to you by now.

5636 To my left is Carmela Laurignano, Vice-President and a shareholder in this application.

5637 To my right is Ky Joseph, Vice-President and also a shareholder of this application. To her right is Adam Robinson, Director of Programming and News for YCR Ottawa.

5638 In the back row from my left is Mike Kilbride, Director of our Finance.

5639 Next to Mike is Scott Fox, the person in charge of developing our spoken word programming for our Ottawa proposal.

5640 Next to Scott is Debra McLaughlin, President of Strategic Inc., the author of "Demand Study".

5641 To Debra's right is Lora Serafini, our in-market researcher.

5642 At the side table, starting at my far right, is Bill Evanov, President of the Evanov Radio Group.

5643 To Bill's left is Stuart Robinson, our legal counsel, and beside Stuart is Kristy Sunwall.

5644 And, finally, to round out introductions, throughout the filed application we refer to our proposal for this market as "The Buzz". For the purposes of our presentation today, however, we will be referring to our application as simply "YCR Ottawa".

5645 In the past four years, CKMW Radio Limited has appeared before the Commission on four separate occasions, advancing an application to serve a youth market.

5646 We remain convinced that the key to having a radio market tomorrow lies in developing patterns of listening and a connection to radio among younger consumers today.

5647 If the defection from radio by listeners from the 12-24 age group is not stopped, from where will we develop future radio audiences.

5648 Is it reasonable to assume that consumers who had little use of a medium when they were younger will suddenly adopt it in later years? We don't think so, and the data supports that conclusion.

5649 MS. LAURIGNANO: The bulk of radio tuning in this country today is done by the 35 plus demographic. In total, they represent 64 per cent of the population, but 72 per cent of all hours tuned to radio.

5650 Conversely, teens represent 9.3 per cent of the population, but only 4 per cent of the tuning.

5651 If you look back over the tuning patterns for the past couple of decades, you can trace the use of radio by today's 35 plus demo. The current high levels of tuning to radio by this group are similarly high to the levels of tuning that took place 20 years ago when they were part of the younger demos.

5652 In other words, they listened to radio then, they listen to radio now.

5653 In their youth, this group relied on radio to provide them with non-stop access to music as well as a window on their world. These elements are as critical to youth today as they once were.

5654 So, what has changed? In our estimation, two separate but critically linked developments. The first and most obvious is the introducton of the Internet, and the second is a shift in the programming paradigm of commercial radio.

5655 Up until four years ago radio, not the Internet, was the dominant source for the discovery of new artists and new music. Now, the Internet is almost equal and, among some genres of music, the dominant source.

5656 So, what has happened? We believe that radio has become less relevant to the younger demographic. The range and manner in which music is played is simply not what they want to hear. And, frankly, what they tell us they want does not easily fit with common programming strategies.

5657 Further, if you follow their prescription for a successful youth radio format, it is a given that you will not attract an older, more lucrative audience.

5658 Our research mirrors that done in the U.S. by Edison and shows that music is not the only area where radio is not making the grade. Spoken word is also, by and large, missing the mark.

5659 It was these perceived shortfalls that were the genesis of Youth Contemporary Radio.

5660 As the unique proposals we have designed for each market indicate, YCR cannot be defined by a single genre of music or a single sound. It is radio targeting a demographic and a lifestyle. It can be a single genre of music or a combination, depending on what is missing in the market.

5661 The defining element is that it is programming that is relevant to attract a 24-year-old audience and it speaks to and for them.

5662 MR. ROBINSON: Our examination of the Ottawa market revealed that despite the presence of two rock services and a hits-driven service, audience levels were in decline among younger listeners.

5663 A demand for alternative rock was evident in the consumer study we conducted, evident in our discussions with advertisers, and made very clear by our discussions with the youth, who reported using the Internet to give them access to the music they loved. There was clearly a hole left by XFM, Ottawa's alternative rock service when it dropped the format in January, 2004 to switch to country.

5664 So, our proposal is to fill that void with YCR. We will provide alternative rock as the primary music component in a format that youth can relate to and endorse.

5665 Alternative rock is, by definition, music not found in the mainstream, it is an alternative selection of music that typically never finds its way onto the pop charts or the more adult-oriented formats.

5666 It is often loud, sometimes in your face and frequently pushes the edge of the creative envelope. In those very characteristics, lies its attraction if you are 12 to 24.

5667 It is typified by a common message, if not a singular view of the world, individuality, self-expression and challenges to conventional wisdom are celebrated. Views and lyrics found in alternative rock are frequently not expressed in any other form of music. It is rebellious, non-conformist and is frequently described as independent.

5668 The artists tend to be on their way up, and the labels that produce the music tend to be smaller and less hit-driven. This is not to say, though, that there are not some veteran alternative rock performers who have large and loyal fan bases.

5669 Quite the contrary: the Clash, the Smashing Pumpkins, Nine Inch Nails and 54/40 are perennial favourites. The genesis of alternative rock, the need to find new musical expression for age-old issues, means that many artists seem to pass through the alternative rock format on their way to becoming modern or classic rock artists.

5670 To understand the differences, let me use an analogy. Consider rock as being a living entity within a life phase, alternative rock is adolescence, modern rock is the young adult and classic rock is maturity.

5671 When an artist performing in the rock genre starts out, it's rare they're able to get air play on a mainstream rock format. Alternative rock, where one of the key programming tenets is new and fresh sounds is likely, however, to consider playing them.

5672 As the fan base for the group grows, they are likely to get picked up by modern rock services. Perfect examples of this are: Pearl Jam, Sound Garden, the Tragically Hip, Our Lady Peace and Ottawa's own Alanis Morrisette.

5673 Over time, if the group endures or the hits they produce are sufficiently popular, classic rock will also play these artists.

5674 Nirvana had no radio play beyond alternative services until "Smells Like Teen Spirit" made sales history in 1991. It is the experimental spirit of alternative rock, not the more tried and true approach of the other two styles of rock radio which frequently gives the new artist their first radio exposure.

5675 The reality is that many of the artists played on alternative rock will not evolve beyond the format, but this not diminish their appeal or their success among the youth audience. True to the ethos of non-commercialism, some bands will choose to remain independent of the management associated with contracts from larger labels with broader distribution.

They continue to have a home and an audience on alternative rock services.

5676 This is because the sound for alternative rock radio is discernably different from other formats. A repeat factor on song play is much lower. Our emphasis on new music is much higher and our goal to break new bands, a guiding principle. If we had been on air this morning, you would have heard more music selections than is typically found on Ottawa radio.

5677 Between 7:00 a.m. and 8:00 a.m. you would hear 10 selections versus the average of six. You would hear unique alternative artists like Marilyn Manson, Jakalope and Interpol and, over the course of an hour, at least two new selections.

5678 You would also hear artists starting to cross over to the modern rock chart, like Franz Ferdinand, the Stills and Optimar(ph).

5679 Information, including news, weather and traffic surveillance will be presented but in a manner that, once again, reflects our audience rather than traditional programming.

5680 Instead of offering extended back-to-back plays of music selections, we will provide a more integrated approach. Our spoken word will be interspersed between songs with no more than two to three minutes of interruption to the music flow, all the while providing them with all the information content they need.

5681 We recognize that the sound of alternative rock is simply not for everyone. Alternative rock is a new service in the broader spectrum but, most importantly, it is a key format for the youth market. That Ottawa has lost this format explains why tuning to radio is down between 12 to 24 and Internet traffic is up.

5682 MS SERAFINI: Having recently completed research in three other markets on the tuning preferences of youth, we approached Ottawa with some confidence expecting the patterns we had identified to be present.

5683 To confirm this, we did two levels of research: we looked at the tuning trends in Ottawa, across Canada and in the U.S. to identify what formats were missing and if these were viable; then we commissioned a demand study which assessed the market through focus groups.

5684 The focus groups allowed us to examine in some depth the current musical preferences within this demographic in Ottawa and identify the sources of this music for youth.

5685 It also led us to discover what a 16-year-old would love to have a radio station sound like and differentiate that sound from what is available in the market today.

5686 The conclusions from the group were clear: Give us alternative rock, use more listener feedback in the programming and be more interactive, provide less talk and more music. Reduce the repetition of songs and schedule more new music. Play the sub-genres of alternative rock like punk, metal and grunge. Make the humour edgier and more age appropriate. Schedule fewer commercials and make them relevant to the age group. And, finally, reduce the frequency of newscasts and make the news more local.

5687 We also spent some time in the clubs, concerts and schools talking to our target audience, and I can tell you first hand that the interest in alternative rock in Ottawa identified in our research is supoprted by our investigations.

5688 We were almost mobbed when they heard of our plans with fans wanting us to bring alternative rock back to the market.

5689 All of the recommendations from the formal and informal research we undertook have been incorporated into our programming grid and we believe the proposal we have before you reflects a new option for the market and, most importantly, is a proposal that will capture the imagination and listening hours of the youth market.

5690 MR. FOX: The feedback from our research on spoken word was particularly compelling. Participants described the talk currently in the market as being about somebody else's life and meaning nothing to them. They described morning shows where late night feedings and home buying were the topics of discussion. None of this meant anything to them.

5691 What they told us they want is less talk and more music. And when talk is happening, they want it to be focused on the music, on the lifestyle or on their age group.

5692 This we can do. When there's a news report they want to hear more about the local market. This is also something we intend to provide.

5693 Our news will emphasize happenings in Ottawa and, in particular, how that impacts our 12 to 24 demographic and our news content will not be limited to formal presentations but, rather, be woven throughout the programming.

5694 One of the keys to our success will be our website. It's unreasonable to believe that a medium that allows consumers to instantly chat with friends, play games and access all manners of entertainment will be abandoned simply because of the new radio format.

5695 However, we believe that radio can be complimentary to the Internet and we can use the Internet to build listenership to our service.

5696 Our website will contain many of the standard features that most radio websites, like our play list, a chance to enter contests, an opportunity to vote for new music, a communications link to our programming department and information on our staff.

5697 But we will also offer a chance for young people to submit editorials on games, new movies, new artists, new releases and fashion to our web master. The best of these will be published ina peer review page.

5698 Most important to our broadcasting mandate, however, will be the streaming audio. Our research in Ottawa found that the hole in the formats left by the exodus of XFM is currently being filled by radio stations streaming over the Internet. The Edge in Toronto, as well as services in New York and Boston, were listed as the primary sources for alternative rock.

5699 It is our goal to make YCR Ottawa the source for alternative music and, through a focus on the area, make YCR Ottawa the most listened to alternative rock station in the City.

5700 MS JOSEPH: When I was asked to estimate revenue for this service, my research naturally took me to the public reaction to the demise of XFM and, in particular, the reaction to the loss of a service to the youth market.

5701 I also read the comments that were made in the press by Rogers management suggesting that, beyond beer, there isn't much interest in directing advertising campaigns to young males.

5702 I have to admit being somewhat shocked at this comment.

5703 The range of products and services interested in youth cover several categories. These inlcude electronics such as stereo and cell phones, fast food outlets, snack foods, video gaming, clothiers, car manufacturers, after-market car services, shoe stores, sporting goods, event marketing, movie releases, nightclubs, health facilities, dietary supplements, hair products, skin care products and, yes, beer. The list goes on and on.

5704 Our first-hand experience in speaking with Ottawa advertisers confirmed that, like the audience XFM served, they too were left without good options when the format disappeared.

5705 Nina, owner of Top of the World, the skateboard shop on Rideau Street, plays alternative rock all day in her store, but it's from CDs.

5706 Nina told us that Ottawa needs a station that provides alternative rock and she would use it to promote her store.

5707 Similarly, we found interest from the Pita Pit, a Bank Street fast food outlet that stays open until 3:00 a.m. on Sunday to service the patrons of the local alternative rock venues.

5708 Owner Angela would love a media outlet that would allow her to promote her restaurant to draw traffic during regular business hours.

5709 Clubs like the Inferno, MTL, Barrymore's and Babylon have told us that they would direct much of their budgets currently directed to print to a station delivering the alternative rock format.

5710 I think our perception that the alternative format is viable differs from the encumbent because we have different criteria. We find that most profitable use is often substituted for viability and the interest of diversity and consumer demand gets lost in that assessment.

5711 This is why a niche format like alternative rock may not be the choice of another broadcaster, but we can see that if left to consumers, it would ber.

5712 We believe the YCR format with alternative rock as its music component can revitalize the interest in radio within the youth market and we believe the business case is easily made.

5713 MS LAURIGNANO: As we described in our earlier presentation in this hearing, CKMW Radio Limited has some specific tests for CTD development. They are: that each initiative is impactful and, secondly, that each fits with the format and can benefit from inclusion in our programming and promotional plans.

5714 Our level of financial commitment is relative to the business plan, specifically our revenue potential, and is also based on the need of the artistic community.

5715 We pride ourselves on developing formats and establishing a brand. This takes continued investment over several years.

5716 The balance we have struck with this application is to provide a substantial of CTD support, while at the same time ensuring the station can invest in brand development with the goal of being self-sustaining during the first licence term.

5717 Our investment of $1.2-million provides support in several critical areas of artistic development. We will be funding education through our scholarships with Carleton, Ottawa U and Algonquin, and our sponsorship of the National Arts Centre Orchestra, Youth Section.

5718 Our investment will expand performance opportunities in existing venues like Festival Franco-Italian. Additionally we will be providing funding to enable artists to record and produce their words through contributions to Factor and MusicAction.

5719 Finally, we will create or own showcasing event with the Annual Capital Concert. Through this event, we will provide direct funding to the artists for their performances and create an opportunity for emerging artists to perform their works among recognized headliners.

5720 All of these initiatives will benefit from promotion within our programming day which will effectively increase the contribution to the system.

5721 MR. P. EVANOV: Our proposal for a new Ottawa service is similar to our other recent applications, because as I noted at the outset, we are seeking to fix an imbalance in the market.

5722 We believe, just as every other demographic has at least one format on radio from which to choose, so too should the youth of Ottawa.

5723 We also believe that letting this potential audience migrate away from radio will be a mistake with long-term implications for broadcasters across the country.

5724 Beyond our conclusion that alternative rock will meet a need and develop tuning among youth, we have demonstrated through our research and investigations that this format will do well in the market.

5725 To recap. In the absence of this format tuning among the youth declined again in summer 2004, according to BBM.

5726 In the years prior to the switch of formats, the shares of XFM were similar to that of Edge in Toronto and sufficient with which to establish a business case.

5727 The focus groups shows alternative rock has a missing format in the market.

5728 We are uniquely positioned, given our direct experience in the demographic and our ability to develop new revenue streams to enter this market with a distinctive brand and minimal impact.

5729 Our history speaks to our corporate strategy, us sticking with our format and the assurance the Commission can take that we will not abandon the 12 to 24s regardless of our competitors' shifting interest.

5730 We have crafted a Canadian talent development strategy that provides support for local institutions and affords exposure of Canadian talent.

5731 Above and beyond this, our proposals allow for on-air support through our programming and promotional plans which greatly increases the impact of our initiative.

5732 Our interest in serving the youth market has not wavered and we are before you once again because we believe that it is critically important to address the needs of this demographic through an innovative and focused format.

5733 Thank you for your attention, and we welcome your questions.

5734 THE CHAIRPERSON: Thank you, Mr. Evanov and your colleagues.

5735 Commissioner Langford.

5736 COMMISSIONER LANGFORD: Thank you, Madam Chair, and welcome back to the panel. Slightly changed, I guess, but basically the same.

5737 I am glad that Miss Sunwall got onto the record. She was obviously doing Yeomen service back there as a "no-name" member. It's good to see you with a personality and a character.

5738 I want to talk about the usual stuff. Really, we are getting into a routine now and if you were in the room earlier you have an idea of what we are trying to talk about here, obviously format, spoken word, business plan. It's always more or less a variation on the same theme, but we want to see where you fit in.

5739 I am going to start with format, and I want to start with a very specific question, probably to Ms McLaughlin, but I will leave it to you to direct them where you want.

5740 I am looking at page 6 of your supplementary brief where you set out the results of what participants in your focus group, having listened to nine different musical types, told you and what you concluded from what they told you. This is a very, very specific question.

5741 You say at the very end, and you say it again today, and you say it in a dozen other places:

5742 "Prior to the music tests the

groups were asked what music they liked to listen to and alternative rock was mentioned by several participants."

5743 Then when I go up to the top of that page, I see "Rock/Alternative" as scoring a high of 7.7 and an average of 6.8. What I want to know is, is there any difference between alternative rock and rock/alternative?

5744 MR. EVANOV: I would first like to ask Debra to respond to that for other research, and perhaps after that if it is not clear then we will give a description, the differences between rock and alternative and whatnot.

5745 COMMISSIONER LANGFORD: In other words, what I am driving at, is rock/alternative actually a broader statement than alternative rock?

5746 MR. EVANOV: Yes. I will ask Adam in a second to -- before we get to Debra -- to really explain rock as it is. In a life phase there is alternative, modern and classic to be broken down, but to really explain and kind of walk you through because it does get confusing, the formats, and especially when all these notes, slash this and slash this, so to make it clear for everybody I will have Adam demonstrate.

5747 COMMISSIONER LANGFORD: Well, could we start with Ms McLaughlin on this actual specific question of whether they are the same thing --

5748 MR. EVANOV: Yes.

5749 COMMISSIONER LANGFORD: -- on this page?

5750 MR. EVANOV: Yes.


5752 MS McLAUGHLIN: For the purposes of this test, I asked the station to provide me with several formats, and one of the things I asked them to provide me for was the three -- what I viewed as sub-genres of rock. So when I organized this data I was very literal. I put rock/alternative. It's the exact same thing in this. It's just how I have organized the titles for the tests that I took out.

5753 COMMISSIONER LANGFORD: May I question your conclusion just to be sure I am sure?

5754 MS McLAUGHLIN: Absolutely.

5755 COMMISSIONER LANGFORD: You said it's the same thing, and I got that message, but you said earlier you asked to be provided with several genres of rock. So in fact, are you -- were you questioning or were you presenting the members of this focus group with a broader selection of rock-based music examples than would be played under the definition of alternative rock?

5756 MS McLAUGHLIN: No, and I am sorry that I was unclear. When I go out to do a piece of research, very often it is in complete development form. So when I ask for play lists I ask for probably 10 more than you see here. What happens in the process of discussing this -- because I will ask for all of the music samples I am going to get, it takes a little while to get them. And then I will go into the market and look at what is happening in terms of the demographics and that will naturally move some out. You don't see a country selection here. I asked for a country selection.

5757 So this literally -- there was three sub-titles under rock and it got transcribed exactly as I requested it because we tend to be sort of literal in the company.

5758 COMMISSIONER LANGFORD: And you can comfort me by saying then that the alternative/rock format that is being put forward by YCR Ottawa is in fact the same type of music presentation that received an average of 6.8 in your focus group studies.

5759 MS McLAUGHLIN: I am just going to see if I can take you to the list of artists. In that, I would direct Adam to page 9 of the research report and you can talk about if any of these artists actually crossover, because we do provide a list of the artists that we tested for this very reason.

5760 COMMISSIONER LANGFORD: Okay. I am on that page now.

5761 I am sorry to sound so picky about this but I do want to make sure that the information that you are relying on as applicants to describe your format in fact was the information tested, obviously.

5762 MR. ROBINSON: Well, I think it's fair to say that given the different selections that were tested here under rock/alternative these are alternative rock bands, or they certainly began their existence being played on alternative rock formats.

5763 These four particular songs that were tested here definitely fall into the umbrella of alternative rock. Since this testing was done, a number of these bands have moved onto a great deal of play on what we call a modern rock radio station. It takes me back to what was said in the original presentation today, that we view rock as a life cycle of phases. Three different types of rock fall underneath this umbrella.

5764 First, you begin with alternative rock. It is new music. The play lists generally feature a great number of new artists on small, independent labels who are not getting exposure in mainstream rock circles. It's geared towards youth who are constantly hungry for fresh, new sounds and it doesn't try to grow with its listeners. It is specifically geared towards a young audience.

5765 The next phase in the evolution takes you to modern rock, which falls into the middle of the spectrum. It attracts an older demographic, mainly 25 to 44. Most of the songs played are familiar, proven hits. It draws from a smaller base of music and not much new music is broken on that particular format. It is chart and hit driven with a high repetition factor.

5766 COMMISSIONER LANGFORD: Mr. Robinson, I don't want to -- at the risk of sounding rude, you were really clear on that when you did it earlier.

5767 MR. ROBINSON: Okay.

5768 COMMISSIONER LANGFORD: I guess, and so as not to lose time, and I appreciate you going over it again, but as you are not going to be taking the journey with these groups into their new incarnations as older rockers until they all become Rolling Stones, I suppose, I would really like to focus just on this, if that's all right with you.

5769 MR. ROBINSON: Certainly.

5770 COMMISSIONER LANGFORD: As I said, I don't want to risk being rude, but also I don't want to keep people here until midnight.

5771 So I thank you for that, but what I would like to do is just now move to my next question on this particular format, if I could do that?

5772 MR. ROBINSON: Certainly.

5773 COMMISSIONER LANGFORD: Thanks very much.

5774 In your opening statement on page 5, you state that -- the very last line:

5775 "We will provide alternative

5776 rock as the primary music

5777 component."

5778 I want to stress again, as I did on your application the other day, there is no tricks to this. I am just looking -- you don't have to be worried about being led down the primrose path here to where I finally jump up and go, "By Jove, Carruthers, I have got you". This isn't the point. I am just really trying to understand precisely the product that you are bringing us.

5779 So you say "primary" -- "alternative rock as the primary music component". What would the other components be?

5780 MR. EVANOV: The other components obviously entailed in that are spoken word and our special programming features within that.

5781 When we say primarily alternative rock there will be a small percentage, a little bit, of modern or new rock in there as well. A very minute part of it will be newer to attract some audience and because the 12 to 24 still, aside from really liking alternative rock they still like to hear some of the hits once in a while, we will be providing.

5782 But also meant by that is in a spectrum of alternative rock there is different sub-genres such as punk, industrial, garage. So those will be included within that.

5783 COMMISSIONER LANGFORD: But they still fit into the umbrella of alternative rock, the punk as in garage and all these formats that I am so familiar with. The noises used to come out of my daughters' rooms but now they have iPODs, thank the Lord. I know that's not good for the radio business, but it is certainly good for the sanity of parents.

5784 What I am trying to figure out, though, is what percentage of your format, if you could tell me, would be pure alternative rock, if we can call it that, and what might be something else, a little urban, a little dance. I don't know what you might be putting in the mix.

5785 MR. EVANOV: Alternative rock could be around 90 per cent to 92 per cent of our format and the remaining would be, say, 8 per cent modern rock. We would be playing no urban at all and no pop at all. The only dance element we would be including is in our live to air programming, but it is a form of dance called house music, kind of electronic, fat boy/slim house music. It fits in with alternative rock within the club spectrum there.

5786 So that would be a very -- dance would be 1 per cent and only during the live to air section of our programming there. We are an alternative rock radio station, primarily with, as I said, about 8 per cent modern within there interwoven.

5787 COMMISSIONER LANGFORD: The reason I ask this is because, well, first of all, it wasn't clear to me and, second of all, I think I have heard from CKMW a number of times -- correct me if I am wrong -- in Halifax earlier this week, here. I think I have heard that you have come to believe as a general principle of programming that you can't be purely one thing, that you have to bring a mix. So is this just the exception that makes the rule the rule?

5788 MS LAURIGNANO: Okay. I am going to answer that.

5789 COMMISSIONER LANGFORD: Good, because you always make that statement. So I am pleased to have you respond to it.

5790 MS LAURIGNANO: Well, this proposal is exactly the same in concept as we have proposed for Kitchener, for Halifax, for Edmonton, and that is it's the YCR, as we have coined and trademarked it, which is the youth contemporary radio. It is premised on a departure point being served in the -- serving the demographic -- and serving the demographic for us means that it must be a package of spoken word, other programming elements as well as music.

5791 The determining factors in establishing what the music is going to be and what the levels are come to us from research, from surveying the market and making that fit into there, both in terms of ensuring that we have a viable business plan and in terms of filling the need for the music.

5792 So in the case of Kitchener, it was urban and dance that fit. In the case of Halifax, it was four music genres that were fitting.

5793 In this case here, as of today, it is alternative rock, or rock, let us say, but the younger sibling of rock with some variables within there, and that is the hole today.

5794 If someone were to vacate another format, if some new taste comes along, the whole purpose in being for YCR is to serve the demographic. So we would certainly adapt to fill that need, always premised on the demographic rather than the music genre.

5795 It just happened that there was an overwhelming need here for rock alternative, based on the actual local culture that exists here. It has a very impressive and active culture, and based on the fact that X FM vacated and based on the fact that other services, including The BEAR, which serves the older rock, and HOT 89, that serves the CHR, are being met.

5796 That is really the criteria for the music. Two years, three years down the road, we don't know.

5797 COMMISSIONER LANGFORD: Because you must have heard -- I think you were in the room or perhaps some of you were when Mr. Maheu from Newcap said -- and I wrote it down, maybe not perfectly, but he said:

"You must be true to the format. You can't sneak other things in." (As read)

5798 So it seems that that is where your starting point is here but for a bit of 8 per cent variation.

5799 MS LAURIGNANO: Right.

5800 COMMISSIONER LANGFORD: But you are suggesting that you don't have to be true to the format, that, in fact, if a vacuum occurs somewhere, say, in urban or --

5801 MS LAURIGNANO: Right.

5802 COMMISSIONER LANGFORD: -- hip-hop or whatever, you could, in fact, sneak some in?

5803 MS LAURIGNANO: Oh, I think that the only way to stay true to the format, as we propose, is to change and evolve with the tastes. It doesn't make good business sense to stick with the format if somebody else is going to do it or do it better, you know, not that we are not up for the fight or we couldn't do it or we don't have a record there.

5804 It just doesn't make good economic sense, I mean, for us to be before you and say, you know, we are going to stick with the alternative music format for seven years at the risk of showing an operating loss at the end of a certain time. It is not the way we approach it.

5805 We treat this as a business proposition. We know that if we serve the format and if we do what we do best, which is develop the non-traditional sources of advertising, being on the street, reflecting what this demographic wants and needs, not just in music but in the whole package, as I said, the spoken word included, then we are very comfortable that we can deliver the business plan as we developed and meet all our obligations, including the CTD and that kind of thing.

5806 COMMISSIONER LANGFORD: But I think what you are telling me -- and I don't think I am splitting hairs with this -- you are being true to the demographic then rather than the format; would that be an accurate statement?

5807 MS LAURIGNANO: Well...

5808 COMMISSIONER LANGFORD: If the audience changes its needs or its interests, you will shift with them --

5809 MS LAURIGNANO: Well, yes.

5810 COMMISSIONER LANGFORD: -- assuming that the need isn't filled somewhere else?

5811 MS LAURIGNANO: I am telling you that and I am saying that, you know, in our view, the format is not just music, it is not just looping records, that perhaps we are evolving or defining a new format which is the Youth Contemporary, as, for example, you hear of an AC format that is not premised on, you know, just playing one chart or anything like that, that it fills the need of a generation, of a demographic.

5812 The format is really also a mission for us, you know. We are out to get the young people to radio and keep them there.

5813 COMMISSIONER LANGFORD: In terms of where they are going now, The BEAR, I guess, and HOT 89.9, are we to assume, because your breakdown is 92 per cent alternative and 8 per cent somewhat other rock formats, that there is only about an 8 per cent overlap at this point?

5814 MR. P. EVANOV: I will answer one station first.

5815 In regards to HOT 89.9, they are a rhythmic CHR providing the urban and the pop. We do not plan on including that in our play list there.

5816 In regards to The BEAR, they are primarily a modern rock station. They do, however, play a few tracks, you know, very minute tracks of alternative music as well.

5817 When we looked at the market, we didn't look at specific radio stations first. We didn't look at play lists first.

5818 We came in with Youth Contemporary radio. We looked at the demo first, the 12-24, and we came in to find out what was missing within that demo, what weren't they getting, what did they want to hear.

5819 A big part of that -- and I will ask Debra to speak to it -- was in the research that came back to us. We went in and the research that came back to us was overwhelming alternative rock.

5820 I will ask Debra just to answer how overwhelming and how we really came to that conclusion.

5821 MS McLAUGHLIN: When we came into the market, as Paul said, we came in to look at the demo and we met with people in the demographic as opposed to doing a telephone survey.

5822 That was going to be our first step in measuring the interest in this but it became so clear within the first two groups, there was almost a visceral reaction to playing some of the selections that we did end up playing for them, that by the -- usually, I have to change the order up. I actually had a bit of a problem with that because I was going to lose their attention if I played Britney Spears anymore.

5823 This was a group that was randomly selected. We had people from many cultures, people who readily identified themselves with a culture. They just weren't clearly of another culture. They spoke highly of how connected they were and it all came back to the same thing, alternative rock. It was the majority. It was clear.

5824 While I don't want to misrepresent the interest in urban, because there clearly was an interest, the overwhelming statement was this was a hole and there was almost a purist approach to it as opposed to a passing interest. Those who were passionate about it were very articulate, very clear, and provided us with numerous lists of artists that they just can't possibly hear.

5825 MS LAURIGNANO: Just to add a little bit to that is we also looked at the fact that until January of this year, three rock stations existed in this market and there was room. They co-existed and nobody was suffering, with the other two stations to force them out of the format.

5826 We looked at what the exit share for X FM was, which was 2.2 of the market, and while we are not here to speculate as to why they may or may not have stayed in the format or with that, if you look at our business proposal, our share in year one is 2.8. So while 2.2 or something in that range is not enough for somebody to execute a business plan, for us, it is enough. So we are not coming at it from speculation or with unreasonable expectations.

5827 Now, with regards to your question about the impact on other stations, we have done some analysis on cross-tuning and what numbers of people were exclusive to one or the other and I think that -- do you have those numbers?

5828 Debra, if you wish, could just take you through those numbers, about what numbers were exclusively listening to X, what numbers exclusively to The BEAR --


5830 MS LAURIGNANO: -- and what numbers exclusively to the...

5831 COMMISSIONER LANGFORD: Well, we were going to get to business plan and impact eventually, so why not do it now. Don't wait till spring, do it now, as the old-timers used to say. Go ahead.

5832 MS McLAUGHLIN: One of the real advantages in coming into this market and discovering that alternative rock was the preferred format is that we don't have to go into a telephone survey format to ask people what they were listening to. We don't have to create proxies is what I am saying. We have an actual real, live and current, for that matter, sample.

5833 The fall BBM is generally considered to be the most robust because of the sample and the most recent fall BBM that we have available to us did include X FM. We looked at it and one of the things you can do through BBM is determine what per cent of an audience is exclusive to that format.

5834 So we looked at X FM against HOT 89.9 and we found that 73 per cent of HOT 89.9's audience was exclusive to them; 58 per cent of X FM was exclusive to X FM. With The BEAR, 46 per cent was exclusive to The BEAR, and 44 per cent was exclusive to X FM.

5835 We also, just to be purist on the rock format, looked at CHEZ and we found out that 48 per cent of the audience that listens to CHEZ is exclusive to them when it is relative to X FM, and 76 per cent of X FM was exclusive to them relative to CHEZ.

5836 What this all boils down to is when you put them all together and you say, who has the most loyal audiences, if we just look at the cross-tuning across it all, we find that the most loyal group of all of those listeners to their rock format happens to be alternative. Twenty-four per cent of X FM when compared to the other three formats were loyal: 18 per cent of CHEZ, 4 per cent of The BEAR and 6 per cent of HOT.

5837 I will just turn it over to Ky who...

5838 COMMISSIONER LANGFORD: Could you give me the X FM? Was it 18, did you say or twenty -- what was the loyalty?

5839 MS McLAUGHLIN: Twenty-four.

5840 COMMISSIONER LANGFORD: Twenty-four. So they had the highest loyalty --

5841 MS McLAUGHLIN: Yes.

5842 COMMISSIONER LANGFORD: -- rating of the three?

5843 MS McLAUGHLIN: And it speaks to that whole passion for that alternative rock format. It is a very fresh sound, as Adam has described. It is unparalleled in terms of its development of new artists and in terms of breaking those sounds.

5844 If you want a higher repeat factor, if you want to hear more familiar sounds on a regular basis, you wouldn't be tuning to this format, but this is a very specific type of audience, a very specific type of tuning. It tends to have lower shares in the rock format. A classic rock format has a higher one, modern the next, and alternative the lowest.

5845 So on a pyramid of impact, an alternative rock coming into a rock environment actually has the least impact, though its audience is highly focused in the youth demographic.

5846 COMMISSIONER LANGFORD: So what do you do to improve on that then?

5847 I think we will just make this kind of a free-flowing discussion. I am not going to try and hold myself to format. We can come back to it later.

5848 What do you do to improve on it? I mean if you have these kinds of numbers, like 58 per cent exclusive, 24 per cent, as you just said, putting them higher than the other two in the same kind of demographic, and yet, they are still coming out only with -- I think their highest number was about a 4.2 share of the 12+.

5849 You are hoping to do better than that right from the get-go. How do you do it? What enables you to break the Rogers' jinx and turn this into a winner?

5850 MS LAURIGNANO: We know how to make money on a lower share. It comes from experience and not having the deep pockets in our approach to how we view the market and starting from the premise that each station has to be standalone and it has to make it in its own market. It doesn't matter how many stations we hope will be able to fall within our umbrella.

5851 I think Ky, if you wish, can express how we approach it from a sales point of view and why we can sustain the business plan.

5852 COMMISSIONER LANGFORD: Well just before we do, I mean you know how to make money on lower numbers but I have looked over the kind of expenditures you have and they are very generous on CTD, they are very generous on programming. So you are not skimping on that level.

5853 You don't have the economies of scale in the sense that a Rogers would have with four stations and we heard from an earlier applicant that there can be some problems with that if they are not all focused in the same direction. Still, you don't hear a lot of people crying about the notion of having four stations in any one big market. So I am not going to lose a lot of sleep over that.

5854 What makes you think you can push this, if I can call it, X FM, now YCR format? If we could maybe leave aside the spoken word and just deal with the music, what makes you think you can push that into getting so much healthier a share of that young demographic?

5855 MR. P. EVANOV: We have experience in targeting a youth audience, a younger audience, with one of our other operations and an operation before that, CINJ and CIDC, where they were in a very competitive Toronto CMA market.

5856 Rogers was also in that market with KISS FM when it flipped to a CHR. They came in the market basically head-to-head and they launched -- they were targeting youth. They were basically emulating what we were doing, coming at us as far as competition, as far as music, spoken word and everything.

5857 We stuck true to our format, and it is not a slight against anything in their programming and everything else. After a few years, we stayed consistent with our share. They eventually went down and eventually decided to flip to a Jack FM format from there.

5858 Specific reasons as to why, really, I can only speculate as to their programming or...

5859 COMMISSIONER LANGFORD: Well, it is irrelevant in terms of your application but...

5860 MR. P. EVANOV: And in that sense -- and the same with X FM -- we have experience with the youth market. We have solid programmers. We know that in this market -- we know how to target the youth.

5861 We know that in this market the youth are under-served and we know from overwhelming, and not just research, our own research from even being here this past week and a half, going to the market and all the pubs, alternative rock, alternative rock, it is not being provided.

5862 They are being forced to go to the Internet. They are being forced to go to iPods, being forced to find their alternative music somewhere else right now. We know there is an overwhelming demand for this music within that demographic and we know that we can provide it.

5863 COMMISSIONER LANGFORD: Well, maybe we could get back to just a bit of the format then and come back on business or do you want to do it right now?

5864 MS JOSEPH: Yes, I wanted to answer your question about...

5865 COMMISSIONER LANGFORD: All right. I can see you wanted to get in there.

5866 MS JOSEPH: Yes. Thank you, Commissioner Langford.

5867 When you are serving a demographic target like the youth, it is not, as many would say, as lucrative as the 25-54 demographic or an older demographic, and so you have to figure out how to outperform your share-to-revenue ratio. We have been very successful with that and we have figured out how to do that.

5868 You will notice that from our projections, only 5 per cent of our revenue comes from national business. That is because 95 per cent comes from the local market.

5869 Generally when you look at any market, you will notice that the top three ranked radio stations will generally garner at least their share-to-revenue ratio or higher and that is simply because most of them are targeting the 25-54, an older demographic, and just based on sheer numbers, sheer ratings, they are generally always included on a buy, whereby if you are somewhere down the food chain in terms of ranking, seventh, eighth or ninth, you generally underperform your share-to-revenue ratio.

5870 So why then would we as a station plan to outperform our share-to-revenue ratio when, one, we are targeting a younger demographic, and two, we project that our share will rank down the food chain?

5871 COMMISSIONER LANGFORD: Excellent question!

5872 MS JOSEPH: It is because our company sales philosophy successfully contributes to these factors.

5873 One, we know that the best way to outperform your share is to brand your station, and what I mean by brand your station is do not flip format. Stay true to who you are and dig deep and know exactly where you -- what categories that you would index very high in and really target those.

5874 Advertisers who are planning annual buys will automatically include you on a buy, an annual buy or a semi-annual buy, if they know that you are who you say you are.

5875 More importantly though, our strategy for outperforming our share-to-revenue ratio is selling non-traditional revenue, and what I mean by that is that our stations have a mandate to sell a certain number of non-traditional revenue promotions throughout the year.

5876 Somebody mentioned, I think, in the Newcap application that youth are savvy consumers and therefore targeting them effectively takes crafty, grassroots marketing so that you don't look like you are something that you are not. We know this because this principle has significantly contributed to outperforming our share-to-revenue ratio in the Toronto CMA to the tune of 24 per cent.

5877 An example would be Gillette razors, Oh Henry, TD Bank, who traditionally don't have revenue for a 12-24 demographic. We go to them with an idea so compelling, showing them that it will deliver that market and effectively target that market, being the 12-24 market, and they buy into it.

5878 That is how we have been successful in outperforming our share-to-revenue ratio and it is a significant part of our business plan.

5879 COMMISSIONER LANGFORD: What do you project -- I just have the book behind me, so help me rather than pile another book in front of me.

5880 What are you projecting as a share in year seven? You are starting with 2.8. Where are you at year seven?

5881 MS JOSEPH: 4.4.

5882 COMMISSIONER LANGFORD: 4.4. Not that far off where Rogers was.

5883 How low could you go and still successfully pitch these advertisers you are talking about? How low could you drop below that and still hold them to advertising to that chunk of listeners that you would be delivering?

5884 MS JOSEPH: Well, we believe that we will certainly get to that share just based on our research.

5885 COMMISSIONER LANGFORD: Oh, I don't doubt it. I am just kind of wondering how much -- the way you describe getting out and selling this demographic, it just makes me wonder what kind of flexibility there is in there, how tied you are to those numbers.

5886 MS JOSEPH: Well, I can answer that question because it happened to us in the Toronto CMA, where there were several other radio stations that came into the market.

5887 Your share does fluctuate but, once again, you know, you are not on an awful lot of national buys. You are not. That is why our revenues project 5 per cent in year one.

5888 So we sell on a profile, on a consumer and certainly on results to our advertisers. So it is not a numbers-driven demographic. This is not a numbers-driven sale. We are selling a profile. We are certainly selling results, which we have been very successful with at other stations, and we are very successful selling the youth market.

5889 COMMISSIONER LANGFORD: So there is flexibility?

5890 MS JOSEPH: Absolutely!

5891 COMMISSIONER LANGFORD: Okay. Can we go back to format? Having destroyed my own lesson plan myself I will try and recover some of it. I do have a few more questions and when I get to some of the questions we have already talked about in terms of market share and business I will try not to ask them again. If I fall into the rut, I am sure you will remind me.

5892 You promise in your format a higher ratio of new musical selections but you don't define "new". In other words, it is a selling point, I gather. when I read your application, "we are going to have more new selections", but I don't quite know what that means since just about everything you play is by people that are so young it is pretty new stuff anyway.

5893 How does that distinguish you from --

5894 MR. EVANOV: As we said in the outset, on average most stations maybe will add three cuts, three new tracks per week on average. We will be adding six if not seven tracks per week.

5895 This format, alternative rock, requires the use -- the listener for this format, they crave and desire new music. It is very important to them. Most of this format is based on new, cutting edge, fresh music. They don't want to hear the same thing over and over and over again.

5896 A lot of the feedback we got was, we keep on hearing the same songs by the same artists over again. Our intention is to have a bigger music universe in the area of 2,500 songs to play roughly 10 to 11 songs per hour, out of those three new songs. Throughout a week on average, given the timing, we would have about 1,400 selections and 800 of those would be distinctive, new.

5897 With this format also we have a lower rotation. Some stations in the market, rock stations in the market, will play stuff 36 to 35 times. Our top spun song will probably be 18 times, because we know with this format, what came back to us, was we don't want the repetition, we don't want to hear the same songs over and over again. New music is so vital to this that a lot would be new.

5898 When I say "new", I mean new basically almost to radio. It is not new in the sense that another station picks it up: oh, here is a new single from this album which meanwhile the album has been out for six months. I am talking new, fresh, cutting edge music. It is stuff that you won't hear anywhere else really. That is why it is alternative.

5899 Our focus to new music is very important. We have included a nightly feature Halt or Alt where we want even input back into the new song that we play weeknights at 7:00 to find out if they like it or they don't. It is a brand new song they will never hear before and allows input back via phone, text messaging, e-mail.

5900 COMMISSIONER LANGFORD: Okay. You are running ahead of me a little bit, and we will get to that.

5901 MR. EVANOV: Sorry.

5902 COMMISSIONER LANGFORD: No. It is just that my teeny, tiny brain can only hold so many ideas at a time and it just went over the limit.

5903 I want to get back to new, then.

5904 Are you basically saying that new is synonymous with more, in a sense? Is that what you are telling me? It is not new in the sense that it is only a week old or three weeks old, but what you are actually going to be doing is more. Instead of three you will be doing six. Instead of so many repeats you will be doing fewer so that you are adding more selections. Is that really what it comes down to?

5905 MR. EVANOV: On both parts of that I will have Adam --

5906 COMMISSIONER LANGFORD: Which isn't a bad thing. I just want to make sure I understand.

5907 MR. EVANOV: It is two parts. It is a wider music universe to allow less repetition, to allow fewer spins, to allow more new music to be introduced in the program, but I will have Adam speak to exactly new music and what it is in this format.

5908 COMMISSIONER LANGFORD: Yes. You talk about new musical selections, but you also talk about the breakdown between repeats and new music and I am just trying to understand precisely if there is a difference between those two or whether it all comes down to really just more.

5909 MR. ROBINSON: There is an element of more.

5910 New music by definition is music that people have not heard before. Because we will not be spinning them more than 15 to 18 times a week they will have a lower burn factor. So a song that may pop onto our radar screen this week may still be considered new music three, four weeks down the road because of the low burn factor because we are not spinning it so hard.

5911 We are going to feature a very broad base of recurrent selections, some of which will have been picked up by modern rock radio charts. We are going to dig deeper into an artists catalogue. We are not just going to play a potential single. We are going to take a look at the album as a whole and say, maybe we should play this song, maybe we should play that song, and give it a spin like that.

5912 New music, by adding so much every week, there is always going to be a sense of the radio station being fresh.

5913 COMMISSIONER LANGFORD: Will you be adding it across the board or are there going to be particular times in the day where you say, oh, here is the time for something new and something untried or will there just simply be a wider selection across the board whenever there is music?

5914 MR. ROBINSON: We have our feature, nightly feature, at seven o'clock called Halt or Alt, which will be a showcase for new music. We will give some information about the artist. We will give some information about the cut we are about to play and we will allow our listeners to chime in with their comments on whether or not they want to continue to hear that song.

5915 We are also going to have a show every Monday night called new cuts Monday, which will be a solid hour devoted to the new music that we have added that week or that we have found in the span of a week that we can present to them in a package, but it will be blended into the format throughout the day.

5916 Again, going back to the lower burn factor, with the volume of new music that we are going to be adding and with the fewer number of spins that we are going to be giving to each of these titles, the music will stay new and it will blend into the format.

5917 COMMISSIONER LANGFORD: We can turn to these programs because you have anticipated my next question. You have a huge selection here in your supplementary brief of what you call a week with the buzz and the different programs that come within that other than just music being introduced or news and information. I might as well start with the one you mentioned. Is it Halt or Alt? Is that what you call it?

5918 MR. ROBINSON: Yes.

5919 COMMISSIONER LANGFORD: Is that only going to apply then to new selections? I got the impression when I read it that people could contact you by phone or Internet and they could say, I don't like this any more, take it off, or, why aren't you playing this other selection.

5920 MR. EVANOV: It is a brand new song. Say on a Monday night we introduce here is a brand new song, we play it in its entirety and then we offer feedback from the listener. With this demographic and this age we want to make it as easy for them as possible. Now more than ever text messaging is huge but we also offer e-mail, text messaging and phone. We play the song and ask for their input.

5921 Basically, it is like a mini-focus group almost. We invite as many callers as possible to call in, text message in, e-mail in and let us know what they think of it. Either halt it or alt it. Halt it is stop, I don't want to hear that song. Alt it obviously is they want to hear that song.

5922 Throughout the course of the callers and the feedback we get, we take that into consideration. If it is 100 listeners call in and 90 per cent like it, obviously it has great reaction and we get a good sense of do they like the song, another sense if we play another song on another night and it gets halted by 95 per cent -- it is not to say it is the end all, be all, that if it gets over 51 per cent it gets added automatically, if it doesn't it doesn't get added ever, but it is a good gauge for us. It is a great way for us to test the music with the listeners, see what they want to hear and also involve them.

5923 A big part of this format is interactivity and allowing them to have a say and allowing them to be a part of the radio station. This, along with our other features, allows them, but this one feature really allows them to give a direct response, to be interactive with us about the song specifically. It is a great gauge.

5924 COMMISSIONER LANGFORD: I can see why the advertisers roll over for you guys. You are very persuasive, aren't you.

5925 Is Alt or Halt then on New Cuts Monday? That's when it takes place.

5926 MR. EVANOV: No. Those are two completely separate features.

5927 Halt or Alt runs Monday to Friday from 7:00 to about 7:15.

5928 New Cuts Monday runs just Mondays from --

5929 COMMISSIONER LANGFORD: I'm not finding it on your list. I'm looking on pages 9, 10 and 11 of your supplementary brief. Unfortunately, my copy of your schedule is really -- it is a lesson on how not to send us --

5930 MR. EVANOV: Sorry.

5931 COMMISSIONER LANGFORD: Because once it gets photocopied it is all in black and grey. Where would I find it?

5932 Oh, I see it here now. I apologize.

5933 MR. EVANOV: Would it be possible to give a lighter copy to the Secretary to pass on?

5934 COMMISSIONER LANGFORD: All right. It is on 7:00 p.m. I see it now. Sorry.

5935 It is only a 15-minute show, Halt or Alt.

5936 MR. EVANOV: It is 7:00 to 7:30.

5937 COMMISSIONER LANGFORD: Look what the hired help gets.

5938 MR. EVANOV: I will make it nice and clear. It is 7:00 to 7:30 and really you play one song and then after that you allow the feedback to go in. We play other songs within that half an hour but throughout, after every song, we put listeners on the air seeing what they think of it, and then after at 7:30 we say, now Halt or Alt, and we give the results at 7:30 if the listeners liked it or they didn't.

5939 New Cuts Monday is a separate feature that runs Mondays only.

5940 COMMISSIONER LANGFORD: Okay. But I'm looking at Halt or Alt. I don't want to be picky. You obviously can change these things and you will again should you be successful, but it only shows 15 minutes on my -- unless I'm reading this incorrectly.

5941 MR. EVANOV: No.

5942 COMMISSIONER LANGFORD: It seems to show 7:00 p.m. to -- there is something at 6:45 and there is something at 7:15, which leads me to believe that it is a 15 minute segment. But that's fine.

5943 MS LAURIGNANO: It is the Excel program couldn't break it down. It broke it down into -- when we did it we realized that's the impression that it does give. As you can see, the whole schedule is broken by 15 minute increments, so that when you type a line it is taken by the whole 15 minutes.

5944 COMMISSIONER LANGFORD: Anyway, it is a half hour show.

5945 MS LAURIGNANO: It is a half hour show where the audience has direct feedback.

5946 If I may, just to clear up the new music thing there. What we call new music is music that is defined either as just recently released or music that is not heard before. For example, if there is a group or a CD that has a hit single on it, then we will go deeper into that and in effect it will be new to the market. That is what we meant by that.

5947 The new music is very much a factor outside those blocks that we have identified. Obviously, the Alt or Halt, it is a new song where the audience has a chance to vote on whether they like it or not. They get to play program director, whether they like that song, we should consider it, keep it on. Their input there is done through telephones, through the Internet, which is a very valuable tool for us.

5948 COMMISSIONER LANGFORD: When they telephone, do they get the DJ or the announcer?

5949 MS LAURIGNANO: Yes, they do.


5951 MS LAURIGNANO: We have a specific line that we will go into, but they don't go on air necessarily.

5952 COMMISSIONER LANGFORD: They don't go on air.


5954 COMMISSIONER LANGFORD: So you have that sort of controls in mind.

5955 MS LAURIGNANO: That's right.

5956 There the new music is incorporated in a whole program schedule throughout the day and I think Paul said somewhere up to three new music selections per hour would be an average.

5957 In addition to that, the features that are really designed to introduce the new music, so as we have described, the Alt or Halt feature at 7:00 to 7:30, the New Cuts Monday Monday night which is all new music there, the Canadian Waves program, the Punk Rules program on the weekend, so there is actual specific emphasis on new music and sometimes in a particular genre, a sub-genre, where it is really big, as is the Punk Rules thing.

5958 COMMISSIONER LANGFORD: These New Cuts, Canadian Waves, Punk Rules -- Punk Rules, I assume that means punk is in charge rather than rules for punkers.

5959 MS LAURIGNANO: Yes. Punk is good.


5961 They are an hour each. They also talk kind of -- because we are moving slowly here and exorably towards spoken word, two of them speak about feature background interviews. That is in New Cut Monday. On Canadian Waves you mention interviews.

5962 Are you rolling part of this hour into what you will later describe as the amount of spoken word you have got? Would some of that come into that?


5964 COMMISSIONER LANGFORD: Okay. So we will find some of that there.

5965 Then I assume that would be the same as well for School's Out which will have a bit of interviews, interviews with questions from our audience.

5966 Then also you will be taking text messages/questions during the interviews. These are on pages 9 and 10.

5967 Will all of that be then rolled into the amount of spoken word?

5968 MS LAURIGNANO: Yes, that's right. Spoken word will be delivered --

5969 COMMISSIONER LANGFORD: Could we just wait for a second? We are going to get to that, but we might as well just knock off my last music question, that is, on World Chart Show, Tuesday at 9:00. You then describe the sort of music you would have, and I am going to read a bit of it to you, if you would bear with me:

"This captive audience brings with it a rich and varied experience of other cultures in music as well as an appreciation for `other youth music'."

5970 Then you say:

"The World Chart Show would use playlists and top spin summaries accessible from around the world, including England, France, Germany, Spain and Italy, define the best rock sounds and bring them to the market."

5971 So will this be something of a variation from pure alternative rock? Is this where we will see some of the 8 per cent or 9 per cent of other rock formats coming in?

5972 MS LAURIGNANO: No, not necessarily. This is alternative rock from around the world. It could be rock in a new form or evolving or a newly introduced phenomenon.

5973 COMMISSIONER LANGFORD: But it still has to be alternative.

5974 MS LAURIGNANO: It has to be alternative. But the idea here is to in fact reflect the local community to some degree.

5975 We recognize that the young people of this demographic are very savvy, very connected to the world. They know a lot more than we do about breaking music around the world. They have been doing it and downloading it and acquiring it. In fact, we are going to rely on them to some degree to tell us we have built the mechanisms to allow them to tell us what is hot in Germany or Japan and be able to reflect that in that particular program.

5976 COMMISSIONER LANGFORD: Okay. Let's move then from these shows. We will use that as a bit of a bridge into spoken word.

5977 You have said that some of your sum total of spoken word, which I see now on your lovely graphic that you have punched up behind you to be 19.2 per cent of your programming -- which answers one question, thank you very much, but I'm kind of interested in breaking that down and I had trouble. I don't mean to be critical, but I had trouble trying to break down the pieces of your application.

5978 I will give you an example. When you came to Halifax with a similar format you proposed four hours and 22 minutes, if I recall correctly, of news. I don't see anything like that here, but I may be doing the math wrong.

5979 Is there a way, to just throw out a general question, you can break down the segments of your spoken word, so that I have some idea of what the pieces are and how long, how much time each piece will consume?

5980 MR. EVANOV: Yes, definitely. We will ask Scott Fox to speak and give a clear understanding of our spoken word and how it really breaks down.

5981 We have also distributed to everybody the graph that you see up on the screen. It is also distributed there. It is easier to see.

5982 COMMISSIONER LANGFORD: Thank you. I didn't get to that. I was so taken by the names of the groups in your playlist that I forgot to look at the other pages.

5983 Right. Anyway, carry on.

5984 MR. FOX: Our spoken word is really made up of three different parts. We have our feature programming, we have our rolling announcer talk, which weaves in and out of the music that we play, and we have our news.

5985 I think one of the questions specifically was --

5986 COMMISSIONER LANGFORD: Sorry. You just have to go a little slower. You have your feature programming.

5987 MR. FOX: We have the features that we have created specifically for this format here in Ottawa.


5989 MR. FOX: Some of the features you referred to a few minutes ago, like our Halt or Alt, Canadian Waves, New Cuts Monday and the World Charts Show.


5991 MR. FOX: So some of the spoken word is included within our feature programming. Some of it is in our rolling announcer talk. This is non-feature programming. This is a regular hour where we are playing alternative rock music and we have one of our DJs on the air playing music and talking about lifestyle issues or what have you.

5992 COMMISSIONER LANGFORD: This is what we used to call happy talk in the old days, is it?

5993 MR. FOX: Yes. Yes.


5995 MR. FOX: I think you asked specifically about news.

5996 COMMISSIONER LANGFORD: I would like to know specifically about all of them, the breakdown, but I am happy to have the categories. Thank you.

5997 MR. FOX: Sure. News specifically. It is 4.5 hours weekly of news, weather and traffic presented in the traditional form.

5998 COMMISSIONER LANGFORD: How much of that is news? I make it about 98 minutes, but I may be one.

5999 MR. FOX: News is 1.16 hours per week in the traditional sense. I should stress that. In the traditional sense it is 1.16 hours a week. Those are formal, top of the hour news packages that are very fast paced and headline oriented.

6000 COMMISSIONER LANGFORD: These are the two minute ones.

6001 MR. FOX: Those are the two minute news updates.


6003 Rolling announcer talk. What are we reckoning that would amount to in a given day or week, if you like?

6004 MR. FOX: It is 9.16 hours over the course of the week.

6005 COMMISSIONER LANGFORD: We are now down to double digits, 9.16. God help the guy if he burps. Right? All right.

6006 Okay. And features?

6007 MR. FOX: Within our feature programming I can give you numbers on individual features if you like. I don't know that I have an exact total.

6008 COMMISSIONER LANGFORD: It is pretty tough. I mean, I assume you are going to be interviewing people. You can't just say, that's it, I can't talk any more with you. Do you have a general sense of -- in all these programs we were talking about that feature interviews, do you have a sense of how much of that would be spoken word in a week? I mean, if you want to go through it one by one, but what a job.

6009 MR. FOX: It is a lot. For example, we are anticipating in our live concert series that is .33 hours per week; in our Punk Rules show that is .25 hours a week; Live in Ottawa, 2.8 hours weekly of spoken word.

6010 COMMISSIONER LANGFORD: You have to stop. Sorry. I don't mean to be rude. Maybe you could add that up and we could get to it later because it is too much. I can't deal with it. Sorry. But we could add that up.

6011 Let me then just talk about news while you are doing your adding and ask you why it is so much lower than Halifax. You haven't launched yet in Halifax, unless you are the fastest launchers on earth. So what have you learned on the road from Halifax to Ottawa?

6012 MR. EVANOV: They are two different markets. To explain how we came to it, we will go back to the research again, first.

6013 MS McLAUGHLIN: I was not the person that prepared the research for Halifax, but I did read that research carefully because I was involved in those hearings. One of the big differences in that market in Halifax was there wasn't a strong news brand outside of the CBC.

6014 In Ottawa, there is a strong news brand. It is CFRA. As surprising as it was, when we were in focus groups, we asked people where they got their news, where they were listening, if it was important and how important was it that they have dedicated news. They listed other sources. One of their chief complaints was that they just wanted more music. That's what they needed to hear. It wasn't that they didn't have an interest in news. It was that the formal newscast wasn't necessarily anything that would keep them tuning.

6015 To your earlier point: how are you going to be different from Rogers? Well, reducing the number of formal newscasts but folding the news into informal conversation and imparting that information in a different manner is one way we will keep them tuned, because they referred to large blocks of talk, whether it was news, combined with commercials, or just rolling talk, as Scott has described it, as being the point at which they left that radio station and went somewhere else.

6016 So it's how you deliver it. There's a higher incidence of music per hour in this plan than there is in many stations, and that's directly reflective of what we heard the groups tell us they want.

6017 It's not so you can be assured that we didn't come and look at this market. I have been researching youth across the country and where there is a strong news brand you find that, in fact, they have a source for their news. So you still deliver it, but it's not as critical as a market like Halifax, where there wasn't that brand available.

6018 Rogers has been licensed. I suspect that will change, which may, in fact, change what happens with this group over the period of time when they are in their licence. But for the point in time when they did the research, news was critically important to that group.

6019 COMMISSIONER LANGFORD: But I want to approach this from two positions, because I'm a little surprised by the level when we don't set a level. I can't admonish you, it's not intended to do that, but I'm bit surprise at the drop from Halifax to here.

6020 I take your point that there are other sources, but let's take one look at it. From a straight commercial point of view, do you want to risk losing your audience, even for 10 minutes, while they go to CFRA or to the CBC, or wherever? Is that good business sense? Or should you be holding them? Two minutes, it's kind of war in Iraq, hurricane in Halifax, now this from Velvet Revolver. It doesn't give you much time.

6021 And you say there's an appetite for news. A lot of sources, but an appetite, even in this demographic. Why would you risk losing them to another station?

6022 MS LAURIGNANO: Well, in our view, we are not risking losing them. It's a safeguard for keeping them. Because in this case here, you either have a large majority vacate it or a small number go somewhere else, get their news fix and then come back. Because the reason people are listening to this radio station is because of the music. They want more music. Hence, we have proposed an average of 11, versus the conventional seven or eight that go in the morning. They want talk and information, but it's not the same level of news that is expected for an older type of demographic. So, yes, they want news, and some will cross over. Obviously, if it's an international story, something that's important, they want, but what's really important is the local information and news, and that, to us, is delivered in the after-school features, it's delivered in the event calendar, it's delivered in the specific shows.

6023 One of the things that they want is information, news about their artists, their clubs, their concerts. So, for example, in the New Cuts, we can give them the news about what's just released, what's happening, what some band member has just done, and that's the way we accomplish it.

6024 It is the beauty of the YCR format, which I tried to describe before. It's not something that is precut, prepasted and we just drop it into a market. We really have to look at it on a case by case.

6025 COMMISSIONER LANGFORD: If you are the only one offering this music that they so desperately want, this alternative rock, and it really is, it's 92 per cent pure, this stuff --

6026 MS LAURIGNANO: Right.

6027 COMMISSIONER LANGFORD: -- aren't they going to stick with you while you give them four or five minutes, or whatever, say, four minutes of -- I mean, if we took your Halifax number -- I'm sorry I was there, but you can't keep all these numbers in your head --


6029 COMMISSIONER LANGFORD: -- what would it break down to? Instead of a two-minutes newscast, what are they getting? A four-minute newscast, or something like that?

6030 MS LAURIGNANO: We had, I think, a combination of newscasts about roughly that, plus, at the top of the hour, then we had some other ones which are slightly -- 90-second updates of news throughout the --

6031 COMMISSIONER LANGFORD: So four minutes, and more often, as I recall?

6032 MS LAURIGNANO: That's right.

6033 COMMISSIONER LANGFORD: Why wouldn't you go with that, because you know they are never going to leave you because they love what you are offering them?

6034 MS LAURIGNANO: We don't know that they are never going to leave us. They still have the CDs and everything else that they are using right now. The possibility that it could change later on, I'm not offering that as a defence, at all, for this particular thing. Should circumstances change within the market, where a new service drops off, then we could, theoretically, increase it.

6035 Now, the other thing, too, I just wanted to add something about -- you asked before how we ensure that we keep this audience and how we program and deliver what they want. Well, they are our advisory committee. We consult our audience. We have an integrated plan with the Internet and other facilities for them to tell us what they want.

6036 Should they say, "Too much", "Not enough", we will be there to react.

6037 COMMISSIONER LANGFORD: Okay. And here comes sort of the old fogy question, if I can put it that way, but do you have any sense of public duty to keep these people informed? I mean, you have a captivated hunk of the Ottawa market here, assuming you are licensed, and they are going to through life knowing whether Velvet Revolver lost a member of the group or something like that, but they may not know that there has been a war in Iraq. Does that disturb you at all?

6038 MS LAURIGNANO: Well, we have a duty, for sure, and we take that duty very seriously. Anything happens, they will know. It's just not delivered in the same traditional way. We know with this market, and with this particular segment of young people, who are core listeners of the alternative rock format, they are not going to stick around if you give them the same old stuff because their whole thing is about rebellion, about not doing it like I do it or you do it, and most of us in this room do it. They want things differently. They want it fresh. They want it another way.

6039 COMMISSIONER LANGFORD: As I say, I'm in the geezer demographic, but 14 minutes a day does really seem to me to leave you with a challenge that's coming to informing this group of people. As I say, it's not something we regulate, in a sense, but it does seem, to me, to be very little.

6040 MS LAURIGNANO: Well, I agree in terms of --

6041 COMMISSIONER LANGFORD: I wish you luck, but 14 minutes a day doesn't seem like a lot of time.

6042 MS LAURIGNANO: In the terms of traditional newscast, "And now the news sponsored by, brought to you by...", in that kind of sense, but if you look at the program schedule in Detroit, there is like full -- almost 20 per cent of our programming schedule is spoken word --

6043 COMMISSIONER LANGFORD: And you reckon --

6044 MS LAURIGNANO: -- which includes the news in the traditional form, as well as news and updates through the talk and through the features that are -- and programming features and special features that run every day.

6045 COMMISSIONER LANGFORD: I see the features, but if I have just played "Combat Baby" by Metric and am about to move on to "Check It Out" by the Beastie Boys, the segue between those two to "Supreme Court Rules in Ukraine" seems a tough one to make to me. I have made my point. I can't convince you of this, and that's not my job, but I just wonder whether it can be done in 14 minutes.

6046 MS LAURIGNANO: Well, you see, part of the problem that we have is that we are programming 12 to 24. Clearly, what's relevant to a 12-year-old is not relevant to a 24-year-old. The traditional type of newscast, in the absence of news services, that, say, the older end of the demo could just quickly flip through and find out what's going on, make sure the world is still there, or whatever, then that makes sense for that end.

6047 But when you are talking about newscasts where, if they want news, they can do a quick exit and come back, for a 12- or 13- or 14-year-old, they don't want a five-minute newscast at the top of the hour. That was the programming elements that we went with and how to address them.

6048 COMMISSIONER LANGFORD: That's your choice. I'm just kind of curious about the challenge of bringing some meaningful news in so short a period of time, particularly, as I said, in light of your Halifax commitment.

6049 Have you got a figure on the spoken word on the other thing, on the other programs, the different hour-long programs, or even longer ones, through the week?

6050 MR. FOX: I certainly do. The total is 5.19 hours weekly for our features programs.

6051 COMMISSIONER LANGFORD: Would you mind providing someone here at this table with a copy of that breakdown? Not this minute, but once we finish up for the day. I think it would be very helpful for us to just get a sense of what the spoken-word breakdown is through some of these shows and how the interviews weave in with the music.

6052 MR. FOX: We can provide that, but my math isn't all that good. This is chicken scratch here. We are just going to write it up nicely for you.

6053 COMMISSIONER LANGFORD: Sure, if you could write it up, that would grand. And handwritten is fine. We work with that kind of stuff all the time.

6054 Now that I know they have these beautiful colour copies, I have no sympathy for them. In fact, chicken scratches may be good enough.

6055 Okay, I would like to just move on quickly. We are almost done, by the way. One of the reason we are almost done is you did a brilliant job on your CTD descriptions. I have no questions, other than the clarity question on the whole proposal.

6056 You refer to a seven-year expenditure plan, rising from $167,000 in the first years, in each of the first five years, to $177,000 in year six, $188,000 in year seven. If I have that correct, would you accept a COL to stick to that plan, a condition of licence?

6057 MS LAURIGNANO: Yes, I can confirm that is correct, and the answer is, yes.

6058 COMMISSIONER LANGFORD: Thank you very much. That's it for CTD. And it's not that we aren't excited by it, it's just that your application is perfectly clear.

6059 I would like to move on to a question we have been tormenting other applicants with, and I think we tormented you with earlier, and that's this question of what I think has now generally come to be known, in this room anyway, as cross-tuning and the whole question of the relationship between the Ottawa and the Gatineau markets and does crossing that river have any relevance when it comes to advertising rates.

6060 I would like to know your view on that. We have heard different views, and I would like to know whether you have factored any kind of cross-tuning element into your business plan.

6061 MR. EVANOV: We will first start with the research and the sales aspect of that question, the sales impact and the sales, how we looked at it from a revenue standpoint.

6062 MS JOSEPH: With regards to sales, it's very clear that the French- and the English-language markets are very different, in terms of advertising and targeting a specific market. So we will not be soliciting the French-language advertising community and we have not factored that into our business plan whatsoever.

6063 COMMISSIONER LANGFORD: And if some wanders across the bridge and offers itself to you?

6064 MS JOSEPH: Well, we are not going to be programming any commercials in French, and when we were in the field and talking to advertisers, both English and French, this was one of the questions that came up. It was a quick deterrent.

6065 COMMISSIONER LANGFORD: And then the discussion I had earlier with the representatives from Newcap, with regard to, if I could call it, sort of spillover audience, if you attract, and your audience figures show that you are attracting a considerable element of the Gatineau market, Gatineau listeners, it was Newcap's feeling that, though that would be a lovely thing to have happen, in the sense that you are getting your music out there, that it would have no impact on their advertising because the advertisers simply would be happy to have it, but wouldn't pay for it.

6066 Is that your position, as well?

6067 MS JOSEPH: Yes. To answer your question about that, yes, that is the position, but, unfortunately, they wanted us as free audience. The same thing happens in a CMA, for example, in Toronto, where have spill, you have the Toronto CMA and then you have spill into other markets, whether it Barrie or Kitchener or Hamilton, and unfortunately, if they are buying that market, they do not want to pay for the spill. Unfortunately, they just won't do it.

6068 COMMISSIONER LANGFORD: Okay. Thank you for that.

6069 I'm going to move on. It's going to get a little jerky here because I'm just moving from one point to another.

6070 Your Internet interactivity, you seem pretty keen on it. It keeps coming up. I understand halt and alt very clearly now, but I think it goes farther than that, from some of the comments you made. So can I just open that door for you and let you educate me a little bit on precisely how you are going to use this tool in your programming, in your planning, in any way you might be using it?

6071 MR. EVANOV: Definitely. The Internet goes far, far beyond just the one feature of halt or alt. It's an integral part of this generation, the 12 to 24, and our proposal. To walk you through and just show you how much emphasis and how important it is to us and this audience, I will ask Scott Fox.

6072 MR. FOX: We know that our potential listeners are on the Internet. We want to use the Internet to bring them back to our new radio station. The plans that we have for a website are essentially to create what is the coolest website in Ottawa. It will have streaming audio. We know that one of the reasons the youth have gone to the Internet is to get music. So you will be able to listen to the radio station when you are visiting our website.

6073 But we want to make it more than just a chance to listen to the radio station. We want to, essentially, create a portal into the station and the community for our listeners. You will be able to do certain things, like vote for our countdowns -- sorry, vote for features like halt or alt, you will be able to sample some of the new music, you will be able to offer feedback on the music we play.

6074 That's a very exciting component of our website called the Volunteer Web Panel. Listeners will be prompted to join this volunteer web panel by a pop-up the first time they visit the website. And if they agree, then they can enter into a one-on-one exchange, not third-party contact, but a one-on-one exchange between the radio station and themselves, to offer feedback. So we can take direct feedback from them and help make the radio station that they have chosen to listen to on-line and, hopefully, on-air, the best that it could possibly be for their needs.

6075 You will be able to view our playlists. It's one of the most frustrating things: to be listening to a radio station and you think: "What was that song?". Well, the fact that you can go back and view our playlist will answer that dilemma. It's a really good reason for someone to go to our website in the first place.

6076 You will be able to interact with our announcers one-on-one via e-mail. Local information, like news, weather, sports, entertainment headlines, that will be on our website. You will be able to read about the different things that are going on at the radio station. We would like to create a real family feel between the radio station and our listeners and the fact that they can go on-line and read what they may have missed or connect with the radio station by viewing some of the content on our website is fantastic.

6077 Also, many of our CTD initiatives will be outlined on our website for people who may be able to take part in that, who may be able to benefit from that. They will be able to find that information on our website. It's a cool place to go. It will be a fun place to go that gives them something back in return for visiting our website, in turn bringing them back to the radio station, itself.

6078 COMMISSIONER LANGFORD: Okay. Anything more specific to add? For example, I notice in All-requests Sunday morning, the playlist requests on-line -- or sorry, the audience is asked to select the playlist on-line, by phone or through text messaging. How often are you going to have this sort of thing, where they are actually getting through to the disk jockey and asking questions or asking for, what I guess we used to call an open-line show, but now it's going to be what, an open digital line show, or something like that?

6079 MR. FOX: Well, I guess that's the next evolution, and this generation is certainly leading it. This is a technology revolution, of sorts, and the Internet is fuelling it. It's fantastic that people can have that ability, if they are sitting at home on a Sunday morning, or they happen to be with a friend on a Sunday morning, to be able to go on-line and have a communication with our announcer.

6080 Now, I would like to stress these aren't chatrooms or anything like that. This is a one-on-one exchange between the radio station staff, whether it be our DJ or whatnot, and between the listeners, themselves. There is a certain amount of satisfaction to know that you can have that instant link and have our opinion voiced and known right away.

6081 I think it also goes to show that we are responding to our listeners and we are listening to them and paying attention to them and giving them what they want in return.

6082 COMMISSIONER LANGFORD: So you are not posting a kind of never-ending list of messages coming to you, just one comes in, you either respond to it or you don't and it goes somewhere into the ether.

6083 MR. FOX: It is a policy that we always respond to every e-mail, whether it be to simply to thank them for their opinion, maybe to discuss it further in that one-on-one exchange between the person and between the radio station staff.

6084 But the e-mails will go to our webmaster, for example, and if somebody writes a fantastic editorial on a book that they read or they write a really cool poem, maybe they have an interesting spin on something that happened in town, a local news event, then those are things that could appear on our peer review page.

6085 COMMISSIONER LANGFORD: How do we stop that turning that into a chatroom, not that you may want to? But how do you stop that? Wouldn't people then respond to that and then somebody would respond to the response, and on it would go?

6086 MR. FOX: No, those messages go to the webmaster, they don't get posted directly on the Internet. The webmaster takes those and creates a fair and balanced profile.

6087 COMMISSIONER LANGFORD: I see. Okay. Thank you for that.

6088 Business plans, we did talk quite a bit about business and advertising and whatnot, but one thing we haven't talked about is the fact that you have filed two business plans, one for The Jewel an one for The Buzz. I assume they are standalone, but what happens if you get them both? Never thought of that, eh? Christmas comes early.

6089 MS LAURIGNANO: We will be very happy. We thought about it.

--- Laughter / Rires

6090 COMMISSIONER LANGFORD: All right. So what does that do to the business plans, in the sense of synergies, expenses? Can you give us any idea of -- you may not have it dollar by dollar, but can you give some idea of what the impact would be?

6091 MS LAURIGNANO: Yes, we can. I'm going to ask Mr. Kilbride to respond to your question.


6093 MR. KILBRIDE: Thank you, Carmela.

6094 The answer is we have looked at the possibility that we would be granted both licences in the Ottawa area, as well as having to get the Halifax station on this air this year by June. We think if we are successful in getting both licences in Ottawa, there will be a cost saving of approximately $100,000 a year. The $100,000 arises from the savings primarily in the administrative area, in the accounting area, some savings regarding the amount of space that's required in duplication of admin services; however, there wouldn't be any savings at all in programming, because those departments would be completely separate, just as they are in Toronto, between The Jewel and Z103. Likewise, the sales departments would be completely separate. So there wouldn't be any savings in those areas, but there would be a small saving, I think, in the administrative areas in both stations in Ottawa.

6095 COMMISSIONER LANGFORD: Why would the sales department be separate? Just because you need a sort of younger person to go out to sell younger ads? Why would they be --

6096 MR. KILBRIDE: Yes, you really can't send a 60-year-old out to sell this particular format, we don't think.

6097 I will let Ky add to that.

6098 MS JOSEPH: Boy, have I had that experience.

6099 You really do need two separate sales forces. It's two separate demographics, it's two separate profiles and, yes, you can't have a young person going out to -- I mean, in some cases you can, but we found, for the most part, that when you are enthusiastic about the radio station that you are selling, it really does help with the sell, especially when you are selling, like I mentioned, not so lucrative, perhaps, of a format being right that middle road, you have to be able to -- again, you are not selling numbers, so you are selling sizzle.

6100 MS LAURIGNANO: It also comes from experience. We have separate sale forces with our existing operations and we know that sales people sometimes will go and sell what they think is easier, rather than what the station wants. It's like the old you go fishing, you put two or three fishing poles, you are going to catch more fish, than just trying to put one in at a time.

6101 So we found that to get the best, really, for its own station to have its dedicated sales force because it's a different calibre and category of clients, it's a different effort, and that's really the best way that we know that we can meet the business plan.

6102 MR. EVANOV: That rings true with the announce staff and the programming staff, as well. It's two very different formats, obviously, and two very different demographics. And both formats, they are both very passionate formats, so we want the staff in there, the on-air staff on each station, to live the life of the listener and to be connected to them, in order to do that.

6103 MS LAURIGNANO: And especially the newsroom. They definitely would have to have two separate newsrooms.

6104 COMMISSIONER LANGFORD: You may need separate buildings before this over.

6105 MS LAURIGNANO: That's right, at least separate floors.

6106 COMMISSIONER LANGFORD: Okay. And your projected revenues, $1.4 million, year one, $3.8 million, year seven, you break that down into some coming from ads, of course, and some coming from different places.

6107 I'm kind of interested in the 30 per cent of the ad revenue in year one coming from existing stations. I'm wondering who's going to get hit the hardest on this. Overall, it's not a huge amount, but, because of your demographic, I assume it's not going to come from the "nearly dead and the newly wed" crowd, but more the very young.

6108 MS JOSEPH: Well, the best way to identify impact in a marketplace is to go in and find out who those listeners are going to be that are going to be attracted to your radio station, and then ask them what their favourite radio station is that they are listening to right now. We have concluded there is a combination of six radio stations, one being the Bear, Hot 89.9, CKCU, CHEZ, CHUO and the Team 1200, when there is a hockey season.

6109 We also noted that doesn't really tell the whole story. The reason for that is because in our research, as you will notice on page 8, at least one-third of the participants could not identify a favourite. Their dissatisfaction was so engrained that they even declined to identify the stations which they listen to the most.

6110 I will quote. One of the people that were in the focus groups said:

"Yes, I listen to one station more than another, but it is not my favourite. It is convenient, less annoying than the others and at some points even tolerable, but to suggest I have a favourite is not understanding the real lack of choice in the market." (As read)

6111 So it leads us back to 70 per cent of our revenue will be generated from entirely new streams of revenue --

6112 COMMISSIONER LANGFORD: From entirely?

6113 MS JOSEPH: From entirely new sources of revenue, meaning the breakdown --


6115 MS JOSEPH: -- increases in budget, other media, and then, of course, new to radio.

6116 COMMISSIONER LANGFORD: But there are not that many new listeners out there, we are being told. So, essentially, what you are doing is get these dissatisfied listeners. They are not new, they are not new to radio, but they are unhappy where they are. Is that a fair statement?

6117 MS JOSEPH: Yes. Again, it is 30 per cent of our projected revenues, it's $430,000. When you look at all the economic indicators, they lead us to believe that the growth in the market will be able to sustain this impact on existing stations. Once again, when we look at time spent listening, before XFM flipped, we noticed that there was exclusive reach. We looked at the exclusive reach, Hot 89.9 being 73 per cent exclusive reach, the Bear being 50 per cent and XFM, at that time, being 45 per cent, so by reintroducing YCR in the form of alternative rock, we believe that they will all be able to coexist in the marketplace, for a healthier market.

6118 COMMISSIONER LANGFORD: So you are just clawing back a little that might have gone to them when XFM went country, is that what you are saying?

6119 MS JOSEPH: And I would also like to add that we noticed in the spring 2004 ratings period, which was six weeks before ratings, so you are an XFM listener and all of a sudden your station goes off the air and you are scrounging to find a radio station, we noticed, when the book came out, that the 4.4 hours tuned went to either Hot 89.9 or the Bear. But what we also realize is in the summer book that there was actually half-an-hour lost in time spent listening.

6120 So it leads you to believe that although listeners went to two different radio stations to try and find some source of music that they liked, we don't believe that they will be able to sustain those and we are certain that if YCR comes to Ottawa that we will be able to repatriate those listeners. So the impact is minimal.

6121 COMMISSIONER LANGFORD: So, in fact, there is almost none, if you look at it in that way.

6122 And these people that you are going to repatriate and the brand new 11-year-olds that are going to jump into your demographic in a year, how do advertisers see them as a market? Is it essentially their parents' pockets that they are going after? Or do they actually have a definable amount of money from their little paper routes, or whatever the darlings are doing these days, that the advertisers are looking at?

6123 MS JOSEPH: Well, we basically looked at youth culture, it was research done by Trend Scan, to really identify exactly how much money they do have. Boy, is it overwhelming.

6124 Today's teens and children, they are children of boomers, the echo-boomers. They are also the grandchildren of the wealthiest and early retiring elders in history. I'm sure you have heard this term before, but they are coined as the "six-pocket phenomenon", whereby, in a lot of cases, they are from divorced families, so they are picking from this pocket, that pocket, then the grandparents' pocket. So, yes, they do get money --

6125 COMMISSIONER LANGFORD: A new and terrifying term, actually.

6126 MS JOSEPH: Isn't it, though. I know.

6127 COMMISSIONER LANGFORD: I'm glad to hear it, I suppose. I always like a little education.

6128 MS JOSEPH: It's actually called the six-pocket phenomenon, probably maybe even the eight-pocket phenomenon.

6129 COMMISSIONER LANGFORD: It sounds more like a pool table than a family, but, anyway, carry on.

6130 MS JOSEPH: But the actual specifics of the research show that teens surveyed aged 12 to 19 have a combined $19.1 billion of annual income. That's $107 per week per teen in Canada.

6131 This survey also showed, largely, that it is disposable, with the exception of perhaps a cellphone, and that half of Canada's teens are working during the school year, which translates into 528,000 teens, for a total of $4.7 billion or, if you can believe this, $8,900 per year per teen amongst those working.

6132 So, yes, there is a lot of disposable income.

6133 COMMISSIONER LANGFORD: Thank you for that. It's breath-taking.

6134 I'm simply out of questions, but we will ask you this--we have asked almost everyone, when we forget, we hope they will tell us--other applications and impact. I mean, I can't believe you are worried about tourism, but how do the scenarios break down? Obviously, the dream scenario is for you to get two licences.

6135 Can you tell me, to borrow Commissioner Williams' rather lovely term, what's the nightmare scenario and what are the ones in between? What are some scenarios you could live with? Well, you have to live with whatever we give you, but what would you be more happy to live with?

6136 MS LAURIGNANO: We will ask Bill to speak to that.

6137 MR. EVANOV: The dream scenario is that we found two wonderful formats for Ottawa, two holes, one for the youth market and one for the adult market, with the easy listening permit that we proposed.

6138 The nightmare scenario, we had our nightmare years ago when Chorus and Rogers came at us and we no longer have nightmares, because I think it made us stronger, and we are not concerned.

6139 We don't flip formats. We have stayed with them, unless, like Carmela said, if the audience changes and they don't want it, then, that's a different matter.

6140 So it doesn't matter, really, who you give that third licence to, there's three frequencies. We would like two of them. Regardless who you give the third one two, it really doesn't matter to us because we will carry on, we will serve the two demographics that we were licensed to serve and the other broadcaster can't impact us.

6141 COMMISSIONER LANGFORD: Focusing on just this application, how would you respond to a successful licence bid by a French-language licensee operating out of Gatineau, but in a youth format? So it would be, I suppose, Radio Nord or Gen X, in this case.

6142 MR. EVANOV: That would not impact us at all. I think it would be a complement to the market. We would have a market that we would target, they would have a market that they would target. As Ky mentioned, the advertisers would target the French market in the French language, the English market in the English language. We don't see a problem at all.

6143 COMMISSIONER LANGFORD: Do any of the other type of English-language applicants, other than, obviously, Newcap, which is right on where you are and whatnot, but any of the other formats: smooth jazz, easy listening, do any of these cause you to lose any sleep, linked with your YCR?

6144 MR. EVANOV: Oh, with the YCR.

6145 COMMISSIONER LANGFORD: No, not with -- we have done the other one already. Just focusing on this application.

6146 MR. EVANOV: No, we feel they are too narrow, but they are not going to affect us in any way.

6147 COMMISSIONER LANGFORD: You feel what, sorry?

6148 MR. EVANOV: We felt that they were a little narrow --


6150 MR. EVANOV: -- in terms of their targeting, but that doesn't affect the YCR in any way.


6152 Those are my questions. Thank you very much, Madam Chair.

6153 THE CHAIRPERSON: Thank you.

6154 MS McLAUGHLIN: Excuse me, could just beg an indulgence here?

6155 Commissioner Langford, I'm feeling rather bad over here because it was my advise that the news content be at the level that it is. I just wanted to clarify that for you. I know this is out of ---

6156 COMMISSIONER LANGFORD: Well, these are adults, and if they took your advice, the must live with it. I don't think you should feel badly at all.

6157 MS LAURIGNANO: It was good advice, by the way.

6158 MS McLAUGHLIN: I think it's the interpretation, really, of it. Regardless of what music-based format you have, if war in Iraq breaks out, they are leaving you because you haven't developed that brand. The best a music format can ask to do for its listener or be expected to do for its listener is to inform it that something big has happened, and they will leave you.

6159 My advice to them was to develop the brand that they would return to, and to do that they had to put an emphasis on the music. They could never compete with a news-based format. They could never compete with the CBC, which, frankly, you will be pleased to know, got frequent mentions in this research among the youth as being the news voice in the market. So the emphasis was no developing the brand in the area that they had the greatest potential to change the fate of an XFM.

6160 COMMISSIONER LANGFORD: Thank you for that.

6161 MR. EVANOV: If I can add one thing, on September 11, with our youth format in the Toronto area, we kept the music rolling and we would interrupt it with updates and there would be information flowing through the entire program, but the music kept on going. It didn't stop.

6162 COMMISSIONER LANGFORD: I suspect everyone was watching television, anyway, at that point. Some things television does do better.

6163 MR. EVANOV: No, actually, we were beseiged with phone calls from people --


6165 MR. EVANOV: -- young people that wanted to know, and I think Adam can attest to that because he was looking after the news.

6166 MR. ROBINSON: Absolutely. It was quite something that day because all of the other broadcasters in the market had gone to external news sources. At first, the FM stations were simulcasting their AM news talk formats, and then later some were going to places like CNN. We stayed true to it, and we would do that again if a similar situation arose.

6167 COMMISSIONER LANGFORD: Madam Chair, could I beg your indulgence for one more question?

6168 This comment about television and radio does remind me of something that Newcap said near the end of their presentation. I had written it down, but you have brought it back into may mind.

6169 When I look at your special programs, if I can call it that, New Cuts Monday, Canadian Waves, Punk Rules, most of them are in what I would call primetime television time, 7:30, 9 o'clock. A lot of them are at 9 o'clock.

6170 The comment that Newcap made was that's a really bad time to schedule that type of programming because you are going head-to-head with primetime television. And the example they used as "Everyone Loves Raymond". So they are scheduling their similar type of programming much later, around 11. Could you respond to that suggestion?

6171 MS LAURIGNANO: Yes. While we agree that there is going to be some who are watching television, our experience and knowledge of this market is that they are not watching CNN and a lot of that stuff, they are at their computers, they are doing their homework, they are chatting with friends, they are on the phone, they are listening to CDs, they are talking with each other.

6172 So, to us, that's primetime, and it is a good time because, as was discussed earlier, during the day a good segment of this population at certain times of the years is in school. So they don't have that access. You have to appeal to the broadest segment of the population. Most young people now have their own computers, they have their own room and that's where they are at that time of the day.

6173 COMMISSIONER LANGFORD: So you are kind of the background to their homework or their chat group or whatever they are doing?

6174 MS LAURIGNANO: That's right. Or just want to be alone, they want to hang around with us old geezers while we watch Raymond.

6175 COMMISSIONER LANGFORD: Thank you very much.

6176 I'm pretty sure, Madam Chair, that if you move to that button quickly, you can finally cut me off.

6177 Thank you.

6178 THE CHAIRPERSON: Could you role the next slide?

6179 I'm puzzled, as I discussed with Newcap before, at the means of showing that a certain demographic is not served and that when we look at diversity and what we should license, there is it, it's this particular demo, and we seldom get -- well, we get some research that uses the actual BBMs, what are people actually doing, and at the bottom here I read:

"There is no radio station in Ottawa targeting the youth market 12-24." (As read)

6180 Now, I'm using the spring '04 BBMs. CIHT was second in the market of a number of stations, with an eight share, together with CFRA, with an eight share, and 64 per cent of its audience was 12 to 24, and yet its demo is 18 to 34.

6181 If you go to CKQB, which was seventh, so either third or fourth, depending on whether you take CFRA in, which is a news, its demo here, to show that there's nobody trying to get the target 12 to 24, is 25 to 44 and 32 per cent of its audience was 12 to 24. To make the same point, CKKL, which is shown as 35 to 64, had 46 per cent of its audience between 12 and 34.

6182 When we are trying to decide whether the youth market really wants alternative rock, because there is nothing they like and they don't listen to the radio, why is it the second-most-listened-to station in Ottawa gets 64 per cent of its listening 12 to 24?

6183 Now, I must be honest here that I don't have a breakdown of '04, by demo, but I do have '03, the fall of '03. But it's bizarre that researchers will say: how can you say there's no radio station? They may no be targeting youth, but youth is certainly listening to them. Help me with that? What is it we are supposed to look at, the real test that there are a lot of youth? This is the second-most-listened-to station. And 64 per cent of its listenership, that's a lot of radio listeners in Ottawa are 12 to 24.

6184 MS LAURIGNANO: I definitely agree, because the numbers are what they are, and we know. However, radio stations have what's called a core demographic, and that is that there is a middle sort of bench mark that they use to program what their target demographic is. And that's predicated sometime on the type of advertisers they are attracting or they want to attract, and it's also sometime based on their format. For example, a CHR format, as Hot 89.9 is, is traditionally an 18 to 34 radio station. It's not to say that there is no spills at either end of the demographics. Sometimes what you find is that the younger end of the demographic and the upper end of the demographic also attract the --

6185 THE CHAIRPERSON: Yes, but CIHT, can you stand by this statement, that "There's no radio station targeting the youth market 12 to 24", when the second-most-listened-to commercial music station has 64 per cent of its audience, in the fall of '03, between 12 to 24? Or am I not reading this properly?

6186 MS LAURIGNANO: No, you are reading it right. Debra will have some insight, but the other issue is -- there's two issues here, besides the target demo that stations -- the demographic that they want, that they are getting the other stuff is a bonus and a lot of time they are not getting buys or money for it because their target demo is not that one.

6187 Then, there's the factor of the diversity in the market, that it's not just a matter of reaching the young people, but in what kind of format and what kind of choice are you giving.

6188 The third thing is that the dust has not settled with the exist of XFM. Right now people who are used to listening to the radio are just scanning up and down and they are finding the closest thing. In fact, I believe that already tuning is showing as having done down half-an-hour, if I'm correct.

6189 THE CHAIRPERSON: Do you know what the spring '04, or just before they switched, what their share of the market was in Ottawa, Smith Falls, the Smith Falls station, the XFM? Two?

6190 MS LAURIGNANO: I believe we have it. Debra is it 2.2?

6191 Yes, 2.2.

6192 THE CHAIRPERSON: I know somebody has mentioned it wasn't covering sufficient or as well the city.

6193 It's difficult. What we are trying to find out is: what are people listening to? Of course, researchers tell us: "Well, we asked a sample and, no, no, they don't like it. They listen to it, but they don't like it. It's something else they want and it's whatever the broadcaster wants to implement in the market", and we are asking ourselves: well, will it be diversity? Will it be listened to? Will it change format because that's not going to work? Sometimes I find it unfortunate that there isn't as much emphasis placed on what's actually happening. XFM shut down. CHIT gets 64 per cent of its audience from the 12 to 24, but then we get very learned research showing something different.

6194 MR. EVANOV: I think, in one sense, we look at CIHT and the demographic, even with their application from today, they say they are looking to serve and superserve a demographic which is 18 to 34. As Carmela mentioned, sometimes when you are -- and that's their goal. They have clearly stated that 18 to 34 is their goal.

6195 And so in this market, when there is a lack of choice or a lack of something else, and it hasn't even been a full year yet since XFM went off the air, the youth, that audience, they are disenfranchised, they are lost, they are trying to find a station to listen to or they might be listening to, and some of the BBM numbers reflect, that this age group is tuning to some of these stations, it's not their choice or preference, it's really there is no other choice in the marketplace to do that with.

6196 But when we came in, what was evident was they are not happy with these services, not only musically, but spoken word. Stations such as the Bear, they are not talking to a 15-year-old, they are not talking to a 16-year-old, they are not talking to an 18-year-old. They are targeting an older demographic with their music, and also with their spoken word and their relevance. And their announcers, if you listen to their announcers, they are not talking to them. In the sense of so much in classic hits, the same thing, although there might be a couple of tracks here and there they might enjoy once in a while, but, really, it's that lack of choice that they are listening to these stations. It's happening in other markets, as well, where there's nobody in there.

6197 In the case of Halifax, C100 in Halifax, which was a hot AC, they were the number one teen station in that market for teens, but when we went in there, and what was evident, is teens hated that radio station. They did not like it, they did not like listening to it, it didn't relate to them, they had no spoken word directed at them, the music, they did not enjoy at all, but, yet, it's the number one teen station.

6198 And the reason why? Because there was a lack of choice and there was nothing else in the market until we were fortunate enough to do that. And that's part of the rationale, why I think the BBM numbers reflect that: if they are not targeting the youth, why are they getting these numbers? Those are staggering numbers, BBM numbers. They are very clear that they have that. But I think that is a strong reason as to why.

6199 THE CHAIRPERSON: Newcap's target is 12 to 34, superserving 12 to 24, is what I recall, I stand to be corrected, and not surprisingly. Maybe there is somebody else there in that age group that would like something different and may want alternative rock, but it is interesting, too.

6200 There's no doubt that when I look at the Ottawa world, the way I'm looking at it now, that the older demographic is well-served. There are more stations beginning with 35 and 45 than there are between 12 and 34. But we have to look at what's likely to be a diverse format that will work, and it's difficult to take this slide as is, for me anyway, and to conclude that there is no one targeting the youth market, when a station gets that high, its BBMs, and is doing very well in the market at the moment. Anyway --

6201 MS LAURIGNANO: Madam Chair --


6203 MS LAURIGNANO: -- Ms. McLaughlin may have something to add, just from a research term, on just this conversation for second.

6204 MS McLAUGHLIN: Commissioner Wylie, it gets to this whole notion of default tuning. One of the things I did to look at this was to take the fall 2003 and look at the distributions of the stations you are talking about. That's just the distribution of their hours.

6205 When XFM went off the air, you saw a huge jump in that distribution into the youth. So for the Bear, 5.8 per cent in fall of their total hours tuned was in 12 to 17. That almost doubled in the spring. That doesn't represent a substantial change, in terms of how they are programming, it's just that they move over. This isn't a --

6206 THE CHAIRPERSON: Now, wait, wait, wait. The 64 per cent of CIHT is fall of '03.

6207 MS McLAUGHLIN: Okay, but --

6208 THE CHAIRPERSON: That's before the demise of XFM, is it not?

6209 MS McLAUGHLIN: Okay. And I just want to clarify what I'm talking about. I'm talking about a per cent composition of their audience. So if you look at 12-plus and you break it out by the groups, there was a shift over from younger people, so it went up in the spring.

6210 It is an essence of default tuning. I would say it happened, as well, in the fall. The dissatisfaction we tapped into wasn't just a result of XFM. There were some changes to how they wanted an alternative rock format programmed.

6211 XFM went from a 4.2 to a 2.2. I don't think you can express that as being a result of a signal problem. I think you have to look specifically at how the programming was done. So there was a degree of dissatisfaction.

6212 Radio is immensely popular amongst youth in the fact that it's portable. Where it falls shorts is in providing what they want to hear. And the point in this research is not to limit it to a BBM perspective, but to go out and talk to these people and say, "What is it that will bring you back?". When we find a vein of dissatisfaction, those are the people we talk to.

6213 THE CHAIRPERSON: Yes, but the same argument can be made that when CIHT came on the air and became known, half of the audience of XFM moved over, the 12 to 24. Can't I make that argument, too?

6214 MS McLAUGHLIN: Absolutely, and you would be right.

6215 THE CHAIRPERSON: And then to say, well, is it really alternative rock that the largest number of youth want? It is just a question mark, but I thank you for the clarifications. It's not that easy to come to easy conclusions when you look at the actual numbers, to the extent that BBMs are a reflection of what it is that people are listening to or moving to. When you get a dance format, I could argue that XFM lost half of its audience, isn't that correct, in the 12 to 24?

6216 MS McLAUGHLIN: Yes. And I think that would go to the point that this group, I know, when I have been with them and not with them, have consistently made, and that is to view the 12 to 24 group, as one homogeneous group preferring one format of music, is a false assumption.

6217 If you are going to recover this group to radio, if there's only going to be a single licence, you are going to have to find the best mix of music to serve them, because they just don't have a single interest. And if there are multiple licences, then you have to identify the most popular strains. In doing that, if there was endless frequencies, my recommendation to anyone would be: serve them well and serve them through individual formats.

6218 This may be a market where that's possible. I leave that to your wisdom. But I don't think we can dismiss the alternative rock format as being a viable option for this group simply because there has been some shifts as new stations come on.

6219 There are people that are quite passionate about this format, and only this format. There are people who are quite passionate about urban, and only that format. They both fall into the 12 to 24 and we have to recognize that there are different tastes.

6220 THE CHAIRPERSON: Yes. And I agree with you, all of that has to be looked at and balanced against the context of limited frequencies. Of course, each group has different tastes, there's male/female, there's age groups, but you can't really target them all.

6221 You have your three minutes, now, to wrap up.

6222 MS LAURIGNANO: Thank you, Madam Chair.

6223 As you know, our company is again encouraging the Commission to make certain that the young people of Canada are engaged by their radio broadcasting system. The Broadcasting Act, itself, states that it must address persons falling within the youngest demographics. I quote:

"Through its programming and the employment opportunities arising out of its operations, the broadcasting system shall serve the needs and interests and reflect the circumstances and aspirations of Canadian men, women and children." (As read)

6224 Research has shown that youth have been tuning out of radio and looking elsewhere for their information and their music entertainment to such places as the Internet. If they are not brought into the system, the radio of the future will suffer. People will look to other media and radio audiences will begin to decline in the older demo.

6225 It is well understood that broadcasting, to young people, means listening carefully to them and in dedicating the radio station to staying focused on what the demographic wants and not aging with the young people as they grow older into the next phases of their lives. A true YCR station is always welcoming new listeners, as they enter the demo.

6226 It is also well understood that young people do not have the buying power of older age groups. The target demo does not support as lucrative a format as others, and so the Commission must be looking to broadcasters who can build and execute business plans that stay faithful to the youth format.

6227 Our company is such a broadcaster. We have researched this market and have found a solid demand for the format we propose. We have a generous package of $1.2 million in benefits to promote Canadian talent development in ways that support the younger members of our community.

6228 We know from our research, our music selections and from meeting the potential advertisers that we will have a minimal impact on existing broadcasters in the marketplace. More importantly, we will certainly bring diversity to the voices and ownership in the marketplace, as we would be a new voice and unconnected to any other company already in the market.

6229 And we are bringing women into the ownership structure and picture. Also, we will be the only station speaking the language of youth in Ottawa-Gatineau. Our business plan, including our very substantial CTD promise, is such as to ensure that we will be able to live out the licence period and continue into the future doing what we do best: serving the youth market on a profitable basis.

6230 We do not rely on cross-subsidies from other markets to sustain the local radio service in Ottawa-Gatineau. Licensing YCR Ottawa is the best use of a frequency. It meets the criteria of the Broadcasting Act, the Commission's expectations and standards and it is in the interests of the young people of the area.

6231 Thank you, Madam Chair.

6232 THE CHAIRPERSON: Thank you very much, Mr. Evanov and your team. Thank you for your cooperation.

6233 We will adjourn now and resume at 9 o'clock tomorrow morning.

6234 Alors, nous reprendrons à 9 h 00 demain matin avec la demand de Gen Ex Communications.

--- Whereupon the hearing adjourned at 1755, to resume

on Tuesday, December 7, 2004 at 0900 / L'audience

est ajournée à 17 h 55 pour reprendre le mardi

7 décembre 2004 à 09 h 00


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