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Please note that the Official Languages Act requires that government publications be available in both official languages.
In order to meet some of the requirements under this Act, the Commission's transcripts will therefore be bilingual as to their covers, the listing of CRTC members and staff attending the hearings, and the table of contents.
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TRANSCRIPT OF PROCEEDINGS BEFORE
THE CANADIAN RADIO‑TELEVISION AND
TRANSCRIPTION DES AUDIENCES DEVANT
LE CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
Various Broadcast Applications/
Plusiers demandes en radiodiffusion
HELD AT: TENUE À:
Westin Edmonton Hotel l'Hôtel Westin Edmonton
10135 100th Street 10135, 100e rue
Edmonton, Alberta Edmonton (Alberta)
June 20, 2006 Le 20 juin 2006
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
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
Canadian Radio‑television and
Conseil de la radiodiffusion et des
Transcript / Transcription
Various Broadcast Applications/
Plusiers demandes en radiodiffusion
BEFORE / DEVANT:
Michel Arpin Chairperson / Président
Barbara Cram Commissioner / Conseillère
Rita Cugini Commissioner / Conseillère
Ronald Williams Commissioner / Conseiller
Stuart Langford Commissioner / Conseiller
ALSO PRESENT / AUSSI PRÉSENTS:
Chantal Boulet Secretary / Secrétaire
Joe Aguiar Hearing Manager /
Gérant de l'audience
Anne-Marie Murphy/ Legal Counsel /
Shari Fisher Conseillères juridiques
HELD AT: TENUE À:
Westin Edmonton Hotel l'Hôtel Westin Edmonton
10135 100th Street 10135, 100e rue
Edmonton, Alberta Edmonton (Alberta)
June 20, 2006 Le 20 juin 2006
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PHASE I (Cont.)
PRESENTATION BY / PRÉSENTATION PAR:
Bear Creek Broadcasting Ltd. 304 / 1984
Sun Country Cablevision Ltd. (OBCI) 351 / 2194
Jim Pattison Broadcast Group Ltd. 417 / 2495
Vista Radio Ltd. 491 / 2785
Crude Communications Inc. 543 / 3120
Standard Radio Inc. 618 / 3564
INTERVENTION BY / INTERVENTION PAR:
Crude Communications Inc. 667 / 3865
Edmonton, Alberta / Edmonton (Alberta)
‑‑‑ Upon resuming on Tuesday, June 20, 2006 at 0834 /
L'audience reprend le mardi 20 juin 2006 à 0834
LISTNUM 1 \l 1 \s 19791979 THE CHAIRPERSON: Good morning. Good morning, everybody. Well people watched that game last night because they are still resting. Obviously, they didn't have too big a party, but we do from our own end our best. But that being said, we can move with the rest of the agenda and calling the meeting open and I am asking the Secretary to call for the next applicant.
LISTNUM 1 \l 11980 THE SECRETARY: Thank you, Mr. Chairman.
LISTNUM 1 \l 11981 We are now at Item 5 on the agenda, which is an application by Bear Creek Broadcasting Ltd. for a licence to operate an English‑language FM commercial radio programming undertaking in Grande Prairie.
LISTNUM 1 \l 11982 The new station would operate on frequency 103.3 MHz (channel 277C1) with an effective radiated power of 100,000 watts (non‑directional antenna/antenna height of 256.6 metres).
LISTNUM 1 \l 11983 Appearing for the applicant is Mr. Ken Truhn who will introduce his colleagues. You will then have 20 minutes for your presentation. Mr. Truhn.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 11984 MR. TRUHN: Thank you. Mr. Chairman, members of the Commission, CRTC staff, good morning. My name is Ken Truhn and I am the President and majority shareholder of Bear Creek Broadcasting Ltd.
LISTNUM 1 \l 11985 Before beginning our presentation I would like to introduce the other members of our panel. On my far left, to your right, is Mr. Alec Houssian who is one of Grande Prairie's most prominent business people and whose corporate group represents one of the biggest users of radio advertising in the market. Mr. Houssian has been a retailer in Grande Prairie in excess of 30 years and has seen firsthand its significant population expansion and market growth. His family owns and operates Nevada Bob's, Action Sports, Ed's Menswear, Town Centre Furniture as well as numerous commercial properties. Last summer Alec was able to gather some very important feedback for me as to the acceptance of our format within the local business community while I was putting together my application.
LISTNUM 1 \l 11986 On my immediate left sitting next to Mr. Houssian is Mr. Brian Nash who, along with being my best friend and partner in Bear Creek Broadcasting, is also a prominent businessperson in Grande Prairie. Brian owns a travel and tour business, a shopping centre, a trailer park and numerous other holdings. Brian, it should be noted as well, was also a recipient of the Governor General of Canada's Commemorative Medal in recognition of his contributions to multi‑cultural student exchanges between Alberta and Quebec.
LISTNUM 1 \l 11987 To my immediate right is Mr. John Yerxa who is our Research Consultant and advisor on this project. I have been involved with John since the mid 1990s when he first began to work with Monarch Broadcasting and over the years John Yerxa Research has conducted numerous programming and advertiser research studies for me in Grande Prairie. During my long tenure at CJXX I feel that John played a pivotal role in the success of that station.
LISTNUM 1 \l 11988 Mr. Chairman, members of the Commission, we are now ready to begin our presentation. Once again, my name is Ken Truhn and I have spent all of my adult life, the past 27 years, in the radio business. Within the past year, however, I elected to walk away from a very successful job with one of the larger broadcast groups in order to pursue a dream that has been growing inside of me for many years. Today, I appear before you as a 55 per cent shareholder in Bear Creek Broadcasting Ltd. with my best friend and business partner, Brian Nash, who owns the other 45 per cent.
LISTNUM 1 \l 11989 Brian and I formed this company to further my goal of owning a radio station in Grande Prairie, the community where I have spent the majority of my life and where I have spent the majority of my broadcast career. Brian and I have both invested heavily in our community. We have been involved in bringing many excellent events to the Grande Prairie area and have supported numerous local initiatives along the way. Brian was instrumental in bringing the Royal Bank Cup, the National Junior Hockey Championships, to Grande Prairie in 2004.
LISTNUM 1 \l 11990 More recently, I played a prominent role in securing the 2006 Ford World Women's Curling Championship for our city. This event, which I just finished chairing in March, was the most successful world women's event ever held in terms of attendance and bottom line return.
LISTNUM 1 \l 11991 Currently, Brian and I both serve on the Crystal Centre Advisory Board, which provides expertise and direction in the operation of our community's largest entertainment and sports complex. Brian is also a sitting member of the Airport commission and the provincial tourism board and I am completing a six‑year term on the Hospital Foundation.
LISTNUM 1 \l 11992 Suffice it to say, for many years Brian and I have spent a great deal of our time supporting the terrific community that we call home, Grande Prairie, Alberta. Together, we also own and operate one of the Peace Country's largest tourist attractions, Telus Country Fever, an annual country music festival which has featured just about every Canadian country act in existence. It has showcased many new Canadian artists as well as established ones, several of whom have written letters of support for our application.
LISTNUM 1 \l 11993 As far as my background in radio is concerned, my career actually began in Fort St. John in 1978 as a sportscaster. I moved back to Grande Prairie where I did news for a year before moving into the sports director's role at CFGP, now known as SUN FM. In 1980 I was promoted into the sales department and spent 12 years in that role before accepting a job as the General Sales Manager with Radioseven in Red Deer. After three and a half years I was fortunate enough to be transferred back to Grande Prairie as the General Manager of CJXX, which eventually became Big Country 93.1 and there I remained for 10 excellent years until a call for Grande Prairie applications was announced by the CRTC.
LISTNUM 1 \l 11994 In the decade that I was General Manager at CJXX it became a top‑producing station in terms of bottom line profit for both Monarch and Pattison and for 10 years the station was continually recognized with both corporate families for its achievements. Of course, while I was at Big Country, my responsibility encompassed both expense and revenue budgeting, so I have a firsthand knowledge of the market and the money available in it.
LISTNUM 1 \l 11995 Members of the Commission, Grande Prairie is one of the most profitable radio markets in Canada, but it has been severely underserved in terms of radio for quite sometime.
LISTNUM 1 \l 11996 MR. NASH: Members of the Commission, just before reviewing the economic situation in Grande Prairie, I want to quickly add a couple of points about Ken and our partnership. Ken and I have known each other for over 20 years and we are not only long‑time business partners in the local country music festival, but the very best of friends. We get along exceptionally well, even when we do not agree with each other and I have absolute trust and faith in his decision making ability.
LISTNUM 1 \l 11997 He is widely regarded in the business community as someone who will deal with you fairly, honestly and with integrity and his experience in Grande Prairie is a huge asset. Ken also has extremely low staff turnover during his management of CJXX, which is a pretty good indication of how much the staff like working with him.
LISTNUM 1 \l 11998 The economic situation in Grande Prairie is red hot. In 2004 the Grande Prairie housing market had a record year at 14 per cent growth. In 2005 housing starts in Grande Prairie exceeded 1,000 units for the first time ever. And so far, to the end of May, 2006, housing starts are up 83 per cent from 12 months ago. Housing prices are now reported to have increased 30 per cent in the past year and in the past 10 years the cost of housing has more than doubled.
LISTNUM 1 \l 11999 According to last years' census Grande Prairie's population is 44,631. However, expectations now suggest the city population will increase by over 15 per cent in just the next two years to approximately 52,000 by 2008.
LISTNUM 1 \l 12000 It has been reported that Grande Prairie's population is currently growing by at least 250 people per month after having been declared the second fastest growing city in Canada by CMHC in 2004. The average income in Grande Prairie at approximately $70,000 is 15 per cent higher than the national average. Retail sales are reported at 108 per cent above the national average. Several retailers in our market continually ranked in the top five in retail sales in Canada.
LISTNUM 1 \l 12001 Grande Prairie serves an area of 250,000 people within a radius of 200 kilometres. It has become a central shopping area for North‑western Alberta and North‑eastern British Columbia. Millions of dollars flow over the B.C. provincial border into Grande Prairie from communities such as Dawson Creek, Chetwynd, Fort St. John and Fort Nelson.
LISTNUM 1 \l 12002 Our region is economically diverse. Besides the booming oil industry we have a strong forestry presence featuring Weyerhaeuser, Ainsworth and Canfor, and agriculture represents a significant base as well. All of these things now qualify Grande Prairie for more choices when it comes to radio.
LISTNUM 1 \l 12003 MR. TRUHN: The last time a new commercial radio station started in Grande Prairie was in the fall of 1979 when CJXX hit the airwaves. The population at that time was 20,427 people. Today, the population has more than doubled and yet we still only have the two commercial FM stations. If you are not a fan of country music your only alternative is Hot AC. We believe the market is more than ready to support one, if not two, new radio stations adding diversity and choice to a listening public that definitely wants it.
LISTNUM 1 \l 12004 I'm now going to turn the presentation over to John Yerxa, who will take you through the research data.
LISTNUM 1 \l 12005 MR. YERXA: In the fall of 2004 my company conducted 400 random telephone interviews with adult, 18 to 54, radio listeners in Grande Prairie. Once respondents were selected we first studied their listening behaviour, then probed their interest in five mainstream music formats and asked whether they could identify an existing local station delivering each one.
LISTNUM 1 \l 12006 The two most important calculations we performed were to identify the percentage of listeners that expressed significant interest in each format as well as the percentage that could not associate a local FM radio station with each format. By comparing these two results we were able to identify the largest musical hole or opportunity in the market simply by examining the trade‑off between popularity and availability.
LISTNUM 1 \l 12007 Obviously the more popular a music type is within the general population or target group the more economically viable that format will tend to be. However, the most easily available a music type is perceived to be the less opportunity it will have to grow as a distinct format without cannibalizing another player in the market. Therefore, suffice it to say that the more popular but less available a music type is the greater opportunity there is for that format in a given market.
LISTNUM 1 \l 12008 Using this approach, we were able to determine that classic rock clearly represents the best format opportunity in Grande Prairie, as it registered the highest popularity of the groups we tested and was also perceived by adult respondents to be the most difficult music type to find on the local FM dial.
LISTNUM 1 \l 12009 MR. TRUHN: You will notice that Mr. Yerxa's research highlighted the demand for classic rock, and yet I have positioned our proposed station as a classic rock/classic hits hybrid. The reason I did this is because from the time when CJXX was owned by Monarch Communications I did extensive research in the marketplace with John and clearly understood that there was a hole for both formats. But classic rock had long been the most noticeable void in the market in survey after survey and I simply wanted to reconfirm that fact with our research for this application, knowing that the crossover between classic rock and classic hits is well established.
LISTNUM 1 \l 12010 Indeed, at least one other applicant before you this week has suggested that their proposed format could be termed either classic rock or classic hits. However, a combined classic rock/classic hits format, while focusing on the same era, would be somewhat broader in its appeal than just classic rock and would allow us to mix in a much greater selection of Canadian artists in order to meet our 40 per cent CanCon commitment as well as supporting even more local and regional Canadian talent.
LISTNUM 1 \l 12011 Looking at the overall play list, we would be co! 0834mbining classic hits artists like!?! Fleetwood Mac; Corey Hart; Don Henley; Joni Mitchell; Huey Lewis & The News; Glass Tiger; Men at Work; Alanis Morissette; Blondie; Toto; Doug and the Slugs; Loverboy and the Eurythmics with classic rock artists like the Rolling Stones; Tom Petty; Dire Straits; The Guess Who; Pink Floyd; Crosby, Stills, Nash & Young; Blood, Sweat & Tears; Peter Frampton; Bruce Springsteen; Rush, Van Halen; Bob Seger; April Wine; Santana; The Who and BTO.
LISTNUM 1 \l 12012 In terms of overall balance, we intend to position our format as 65 per cent classic rock and 35 per cent classic hits, given classic rock's stronger appeal amongst target listeners. But, if asked by the Commission to choose between these two formats, we would definitely lean toward the classic rock position with classic hits as our second choice.
LISTNUM 1 \l 12013 However, the real point worth making here is that the two largest and most profitable holes on the Grande Prairie radio landscape are classic rocks and classic hits as opposed to a format which is too current in terms of its repertoire. If licensed, our station would undoubtedly have the support of many 25 to 54‑year old listeners, in particular 35 to 44‑year olds and the local business community.
LISTNUM 1 \l 12014 We will also be bringing a new and independent information voice to Grande Prairie by placing significant emphasis on local news and information seven days per week. Based on my long experience in Grande Prairie, I am well aware of the dependence our listening community places on local information and that explains why it is a staple element of our programming schedule. Our station will provide a total of 143 newscasts from 6:00 a.m. to just after 11:00 p.m. seven days a week. Moreover, the vast majority of our spoken word will be live, as we are planning to have our news readers deliver local news and information right up to 11:00 p.m. each weekday and up to 6:00 p.m. on Saturdays and Sundays.
LISTNUM 1 \l 12015 In total, we will have five fulltime news staff providing 12 hours and 15 minutes of news and information programming throughout the week, which I believe is a greater news and information commitment than perhaps any other applicant.
LISTNUM 1 \l 12016 We will also support numerous community organizations which require radio's help, either with public service announcements or to help them achieve their fundraising objectives.
LISTNUM 1 \l 12017 You will have noted from our application that we are proposing $60,000 annually in Canadian Talent Development initiatives for a total of $420,000 over a seven‑year period. While this is not the largest of the CTD amounts presented before you at this hearing, please remember we are a small company looking to operate a single station. Therefore, while a couple of the larger corporations should be applauded for their contributions to CTD, we believe that, relative to our size, we are making a significant commitment to Canadian Talent Development and our annual contributions will make a considerable difference in the lives of the recipients.
LISTNUM 1 \l 12018 I wanted to quickly review the six initiatives. First, there is a $20,000 annual contribution to a scholarship fund at the Grande Prairie Regional College for students enrolled in fine arts. This scholarship will be managed by a committee comprised of a representative of the station, the president's office at the college and the dean of the fine arts program at the college. That committee will determine the recipients from year to year. Second, there is a Prairie Art Gallery initiative in the amount of $10,000 per year, which is a direct cash payment to the six programs outlined in our deficiency response to the Commission dated December 5 of 2005.
LISTNUM 1 \l 12019 Third, there is our Community Development Foundation initiative, which calls for a $5,000 per year cash payment to establish a scholarship for First Nations students enrolled in the fine arts program at the local college. The Community Foundation would manage this scholarship. Fourth, there is a $5,000 initiative for Grande Prairie Little Theatre, which will be administered by them. Fifth, there is the Evergreen Park Talent Explosion initiative, which is an existing talent competition we will support with a direct cash payment of $10,000. This program will continue to run and be operated by Evergreen Park. Sixth, we are choosing to support Summer Slam and Telus Country Fever, this initiative calls for an annual $5,000 contribution to each festival and all of this money will be used to pay for Canadian artists to appear on stage.
LISTNUM 1 \l 12020 At this point, I would like to clarify a concern you may have with regard to the money proposed for Telus Country Fever, which is listed as Spilchen's Country Fever in the application but has undergone a sponsor change, hence the name change. While the funds allocated to this initiative will be paid directly to Canadian artists, upon reviewing our application Brian and I realized that our ownership of the festival will pose a conflict in the Commission's mind. Therefore, with your permission, we will immediately reallocate those funds directly to ARIA.
LISTNUM 1 \l 12021 Moreover, if there are any other CTD initiatives which we have outlined that are not acceptable to the Commission, we will immediately reallocate those portions to ARIA as well. Please understand, however, that our overall commitment to CTD is meant to ensure that as many dollars as possible will be allocated locally, as we are firm believers in directly supporting the community which supports our business.
LISTNUM 1 \l 12022 MR. HOSSIAN: Mr. Chairman and members of the Commission, last summer after discussing the Bear Creek proposal with a number of fellow advertisers and business people in our community, I informed Ken that it will be a success. With the feedback from a dozen or so business people I contacted suggests that the application will succeed because it attracts a large number of people who presently have no way of hearing the music they grew‑up with on the local dial.
LISTNUM 1 \l 12023 Many of the fellow business men and women are interested and are listeners because they cannot be reached that effectively through the existing stations in Grande Prairie. Moreover, most of the business people told me they will support this station because of Ken's 24 years of radio service in our community.
LISTNUM 1 \l 12024 MR. TRUHN: Mr. Chairman, members of the Commission, in summary, we feel that Bear Creek should be awarded a licence to operate a new FM radio station in Grande Prairie for the following reasons. First, we believe our business plan is solid because it is based on good research, advertiser feedback and my knowledge of the market. Second, we will be providing a distinct format to a market that is virtually screaming for it. Third, we will bring a new information voice to the Grande Prairie region and our five fulltime news staff will be offering a significant amount of local news and information in excess of 12 hours a week to the local community.
LISTNUM 1 \l 12025 Fourth, we will not only create 24 new jobs in the radio industry, but most importantly we will bring 24 new jobs, the most of any applicant before you, to our hometown. Fifth, we will reflect our community and its cultural diversity. Sixth, our CTD commitment, which we believe is impressive for a company of our size, will significantly benefit its recipients. Seventh, we are independent. In a speech not long ago to the BCAB, Chairman Dalfen emphasized the continuing importance of smaller broadcasters and we believe our presentation before you today upholds the ideals of that statement. Eighth, not only are we independent, we are truly local. Both Brian and I are long‑time residents of Grande Prairie and we are deeply invested in and committed to our community.
LISTNUM 1 \l 12026 Therefore, approval of this application will not only bring a new independent owner, but a brand new local owner into the broadcast industry. And ninth, I personally bring a great deal of broadcast experience to the table. I have spent my entire adult life in the radio business and now I am following a natural progression through the ranks to this position. I have always dreamed of owning and operating my own station in Grande Prairie. I have the experience, the community support and the desire to undertake this challenge.
LISTNUM 1 \l 12027 Thank you for the opportunity to make our presentation and we are open for questions.
LISTNUM 1 \l 12028 THE CHAIRPERSON: Thank you, Mr. Truhn. Commissioner Cugini.
LISTNUM 1 \l 12029 COMMISSIONER CUGINI: Good morning and thank you for being here promptly despite last night's upset. I guess I can now go back and cheer for my home team and we don't have to disclose the name of that team.
LISTNUM 1 \l 12030 My colleague yesterday did comment on how ‑‑ on the quality of the applications submitted in this proceeding and the quality of the presentations and certainly yours is no exception, but I do have some questions of clarification.
LISTNUM 1 \l 12031 The first set of questions I would like to ask you is in regards to your format, you describe it as a classic rock/classic hits format. Yesterday I believe, it was Newcap who said that classic hits runs across a number of genres, whereas classic rock is more of a contained definition. First of all, do you agree with that and, second ‑‑ let us answer that first, yes, do you agree with that definition of classic hits?
LISTNUM 1 \l 12032 MR. TRUHN: I am going to turn that question over to John Yerxa.
LISTNUM 1 \l 12033 MR. YERXA: Commissioner Cugini, may I first answer that by quoting directly out of the Newcap supplementary brief. Page 8, the station might also brand itself as classic rock rather than classic hits:
"It will be slightly more classic rock than other classic hit stations." "Fortunately, the two formats share a large number of artists and songs between them."
LISTNUM 1 \l 12034 Page 8, Newcap application. I completely agree, the fact is that there is tremendous crossover between classic rock and classic hits. There are a number of artists that are common to both formats, artists ranging from Queen; John Mellencamp; Journey; The Police; The Eagles; Don Henley; Canadian artists such as Neil Young; Loverboy; Brian Adams.
LISTNUM 1 \l 12035 Both of these formats are successful because they focus on the same era, basically the 1970s, the 1980s and the 1990s. Now, there are some differences and variances depending upon the market that you are in. You have some classic hit stations that focus more on the 1970s and the 1980s. For example, a lot of work that I have done in the States, specific stations we deal with, are a lot more classic rock or 1970s, 1980s focused. Other stations, for example, you had an applicant before you here at first that said we want to be more of an 1980s and 1990s radio station.
LISTNUM 1 \l 12036 The key, however, is that these formats are successful because they target an age group, the 35 to 54‑year old listener that wants to listen to the music that they grew‑up with. Particularly, in their late teens and early 20s, if you follow the impressionable years model of broadcast programming, which means particularly the average 45 to 50‑year old, someone who was around 20 years of age in the late 1970s early 1980s.
LISTNUM 1 \l 12037 Now, if you take a format like, for example, the Jack concept when they first launched, it was interesting because there was a tremendous amount initially with the format as they presented, which was the early to mid‑1980s. Now, that may have seemed somewhat brilliant at the time given the hit/non‑hit parameters that we have to deal with in Canadian radio, but what was particularly smart about it was that they were focusing on the bulge or the peak in the baby boom population in Canada, which generally lags the U.S. by a few years and so they were appealing to that bulge in the population.
LISTNUM 1 \l 12038 We have other formats like the Bonneville format I mentioned that are younger skewing. So classic hits really it can lean more classic rock, depending upon the dynamics of the market, or it can lean more pop and even towards AC if there is a large rock or classic rock component available in the market. So but let me just say that the statement that classic rock and classic hits are diametrically opposed, have no similarities, is absolutely wrong.
LISTNUM 1 \l 12039 COMMISSIONER CUGINI: Okay, let us take out the ors in your sentence and can you please tell me what this application and what this radio station, if licensed, will focus on when it reaps music from the classic hits format?
LISTNUM 1 \l 12040 MR. YERXA: Assuming that this radio station is the only one licensed, then obviously it would try and be as broad as it can be within the 35 to 54 demo, which means that our suggestion would be say 65 per cent classic rock, 35 per cent classic hits, approximately 40 per cent 1960s and 1970s, 30 per cent 1980s, 15 1990s, 15 year 2000 forward.
LISTNUM 1 \l 12041 COMMISSIONER CUGINI: Within the classic hits?
LISTNUM 1 \l 12042 MR. YERXA: Yes, within the ‑‑ it is about 65 per cent classic rock, 35 per cent classic hits, knowing that a lot of these artists crossover. I gave you a list ‑‑ I mean, I could give you a..
LISTNUM 1 \l 12043 For example, if I may, we did an analysis of the Jack format when it first launched as it was picked up by Infinity in the United States and the top 30 most played artists on the Jack format were included among them at the top 30 U2; Journey; John Mellencamp; The Police, The Rolling Stones; Bob Seger; Steve Miller; Foreigner; Queen; Genesis. Keeping in mind this was the format that really got this whole concept of classic hits moving. And of course, if you look at what the 10 most played songs were initially when this format was presented in various markets, Journey ‑ Don't Stop Believing; Queen ‑ Another One Bites the Dust; J. Geils ‑ Centrefold; John Mellencamp ‑ Jack and Diane; Police ‑ Every Breath You Take; Joan Jett ‑ I love Rock `n' Roll.
LISTNUM 1 \l 12044 So once again classic hits, but as you can see, very very rock oriented in its initial application in these markets. Keeping in mind, of course, that over time, depending up on the competitive dynamic of the market, you may adjust to move a little more this way, maybe a little more pop oriented, you may move a little more in terms of era, maybe a little more towards the 1990s if all of a sudden you have somebody who comes in and positions themselves as pure classic rock.
LISTNUM 1 \l 12045 But that, in a nutshell, is really what I am recommending to the client here, is if you are the only one licensed then a 65/35 split, knowing the dynamic, the make‑up of the market, the psychographic of the market, knowing that classic rock generally tends to skew a little more male and that up until this time looking at the existing players in the market, SUN FM has generally skewed more female, albeit at the younger end, whereas CJXX ‑‑ although, in our particular study they had a male/female split ‑‑ they generally have tended to skew more female. So you have the two existing stations in the market which have generally skewed more female, hence putting more emphasis on classic rock would position you a little better in terms of the overall opportunity.
LISTNUM 1 \l 12046 Now, of course, if you were to licence two stations in the market, it is a whole different ballgame.
LISTNUM 1 \l 12047 COMMISSIONER CUGINI: And we will get to that.
LISTNUM 1 \l 12048 MR. YERXA: Okay.
LISTNUM 1 \l 12049 COMMISSIONER CUGINI: So this radio station will not broadcast or will not include any contemporary hits, music, on its play list? In other words, we are not going to hear Britney Spears or Madonna's new song or anybody else from 2000 on?
LISTNUM 1 \l 12050 MR. YERXA: You will hear ‑‑ we say 15 per cent and, frankly, most of that if not all of it is CanCon. Because given the significant commitments now that broadcasters are making, the 40 per cent CanCon commitment, the key now ‑‑ and really it is a win‑win I guess, because you are giving these new Canadian artists an opportunity, be they classic or say rock oriented or say hits oriented, giving them exposure on the radio. But the key is that the challenge is you have to pick these artists that you can common thread and meld into the format without being schizophrenic. And you are going to find that most stations across the country, whether they are classic hits, adult contemporary doesn't matter, we have these commitments, we live up to them and that freshens the format, because you can't play April Wine to death.
LISTNUM 1 \l 12051 COMMISSIONER CUGINI: Thank you. You did say in your opening remarks that you are committed to 40 per cent Canadian content?
LISTNUM 1 \l 12052 MR. TRUHN: Yes, we are.
LISTNUM 1 \l 12053 COMMISSIONER CUGINI: And you will accept that as a condition of licence?
LISTNUM 1 \l 12054 MR TRUHN: Absolutely.
LISTNUM 1 \l 12055 COMMISSIONER CUGINI: Okay. Based on your research, and you mentioned it this morning as well, you did say the classic rock was the most popular, but you didn't ‑‑ did you ask the question about classic hits?
LISTNUM 1 \l 12056 MR. YERXA: No, I normally do that. And as you can appreciate, I deal with numerous clients across the country and at the time that Ken contacted me it was a very short phone call and he just said I want you to do a study, we have done a lot of work in the market, here is what I want to test, I want to be as distinct as I can, let us do classic rock, let us do country, let us do adult contemporary, you know, let us do the top.. In other words, he said to me here is what I want to do, we know what the market.. but confirm this for me, is this the best opportunity and so that is what we did.
LISTNUM 1 \l 12057 Of course, I didn't even know at the time really what he was after. I didn't know he was, you know, because he is not going to tell everybody in the industry that he is maybe going after a licence, he was probably testing the waters and so that is what we tested.
LISTNUM 1 \l 12058 COMMISSIONER CUGINI: And based on that then can you tell us why you did add classic hits?
LISTNUM 1 \l 12059 MR. YERXA: Well, we had done numerous research studies and we had done a lot of qualitative research as well and we knew about the crossover and I suppose that was probably as much my fault in the sense that when there was a call for the applications and I said to Ken are you going to be going after this. I had just said to him offhand, you know, if you are going to go for it and you get the licence you should be as broad as possible. And given the success of the Jack and Joe formats, although more Jack because it is more rock oriented, you know, you may want to consider being a kind of a hybrid format. So I may have thrown him off in that regard, but certainly we confirmed the classic rock format as being the best opportunity in the research.
LISTNUM 1 \l 12060 COMMISSIONER CUGINI: And your suggestion was made after you conducted your research?
LISTNUM 1 \l 12061 MR. YERXA: Well again, I didn't ‑‑ remember, I just get calls from people and they say just do this, do that, study this and six months later he said guess what, I am going to go after a format in Grande Prairie and that study you did for me, I am going to use that as a base and what do you see, based on your knowledge of what is happening across the country, what do you think we should do if we were successful. And so that is what I suggested he do, to branch out. But, as I said, if you were to licence two stations there is going to be a mad scramble to see who gets on the air first. And, of course, the first one in is going to ‑‑ I would recommend position themselves one way and then, of course, the other one is going to have to react.
LISTNUM 1 \l 12062 Now, heaven knows if all of a sudden SUN FM decides to flip format in the next six months then, of course, all bets are off and that is the reality of this business. But the key, of course, is that in that market it will be quite possible for anybody to find a very distinct and very meaningful hole to fill.
LISTNUM 1 \l 12063 COMMISSIONER CUGINI: Well, since you have now raised the question twice, I will take this opportunity and perhaps ask you, Mr. Truhn, how many radio stations do you believe the Grande Prairie market can support?
LISTNUM 1 \l 12064 MR. TRUHN: New radio stations?
LISTNUM 1 \l 12065 COMMISSIONER CUGINI: New radio stations.
LISTNUM 1 \l 12066 MR. TRUHN: Two for sure.
LISTNUM 1 \l 12067 COMMISSIONER CUGINI: And do you believe that one format over another would be more or less successful?
LISTNUM 1 \l 12068 MR. TRUHN: Well, as John alluded to, I believe that the classic rock format, if I had to choose between the two, would be the more successful of the two choices with classic hits as a second choice.
LISTNUM 1 \l 12069 COMMISSIONER CUGINI: We have an application before us for a gospel radio station, as you may have heard yesterday. Do you believe that ‑‑ or what do you think if we were to licence them plus two?
LISTNUM 1 \l 12070 MR. TRUHN: As far as the listening audience goes, I don't think that that would be a significant factor. Obviously, anytime you put another player into the market in terms of the revenue side of things, you know, that will play a bit of a factor, but overall I don't see that as a big challenge in the market place.
LISTNUM 1 \l 12071 COMMISSIONER CUGINI: Okay, we will now move onto the specifics of your application and the area of spoken word and your commitments. In your application I believe you committed to 10 hours of news, weather and sports and six hours of PSAs and liners. And then in response to deficiency questions you said it was nine hours of news, weather and sports and three hours of PSAs and liners. Could you tell us what your commitment is to spoken word?
LISTNUM 1 \l 12072 MR. TRUHN: Absolutely. In the supplementary brief where I outlined nine hours that was simply a mistake, it should have read 10.
LISTNUM 1 \l 12073 COMMISSIONER CUGINI: So and in the area of PSAs and liners?
LISTNUM 1 \l 12074 MR. TRUHN: Well it is six, but I also included a 24‑hour clock there, so from 6:00 a.m. to midnight I committed to a minimum of 10 hours of news and spoken word, plus three hours of PSA, the other three hours would have run between midnight and 6:00 and I realize that, you know, we are talking about a 6:00 a.m. to midnight time clock.
LISTNUM 1 \l 12075 COMMISSIONER CUGINI: Okay. Now, in terms of the news, weather and sports you also ‑‑ you repeated it today I believe.. Sorry, can you remind me of how many newscasts?
LISTNUM 1 \l 12076 MR. TRUHN: One hundred and forty‑three.
LISTNUM 1 \l 12077 COMMISSIONER CUGINI: What is the length of those newscasts?
LISTNUM 1 \l 12078 MR. TRUHN: They vary anywhere from three and a half minutes to seven and a half minutes.
LISTNUM 1 \l 12079 COMMISSIONER CUGINI: And does that include weather and sports?
LISTNUM 1 \l 12080 MR. TRUHN: Yes.
LISTNUM 1 \l 12081 COMMISSIONER CUGINI: And in terms of local news, of those three and a half to seven minutes how much of that will be local?
LISTNUM 1 \l 12082 MR. TRUHN: Seventy‑five per cent of the news will be local, 75 per cent of the sports and obviously 100 per cent of the weather.
LISTNUM 1 \l 12083 COMMISSIONER CUGINI: And the other 25 per cent will be national and international stories ‑‑
LISTNUM 1 \l 12084 MR. TRUHN: Yes.
LISTNUM 1 \l 12085 COMMISSIONER CUGINI: ‑‑ when they break? Thank you. In the area of CTD your presentation this morning was very clear in outlining your commitments to Canadian Talent Development. You are proposing a $20,000 annual commitment to the Grande Prairie Regional College fine arts program?
LISTNUM 1 \l 12086 MR. TRUHN: Yes.
LISTNUM 1 \l 12087 COMMISSIONER CUGINI: And that is for a scholarship program?
LISTNUM 1 \l 12088 MR. TRUHN: Yes.
LISTNUM 1 \l 12089 COMMISSIONER CUGINI: How many scholarships are you planning or how many scholarships is the college planning on offering with that $20,000 annual contribution?
LISTNUM 1 \l 12090 MR. TRUHN: A minimum of four, you know, and that would depend on the quality of the applications that were received for it each year.
LISTNUM 1 \l 12091 COMMISSIONER CUGINI: And will you have any participation in selecting who ‑‑
LISTNUM 1 \l 12092 MR. TRUHN: Yes.
LISTNUM 1 \l 12093 COMMISSIONER CUGINI: ‑‑ would receive those scholarships?
LISTNUM 1 \l 12094 MR. TRUHN: There will be a member of the radio station, likely myself, sitting on the selection board.
LISTNUM 1 \l 12095 COMMISSIONER CUGINI: And the $10,000 per year to Evergreen Park for sponsorship of their talent exposition, do you have a budget breakdown on how that $10,000 will be spent?
LISTNUM 1 \l 12096 MR. TRUHN: That money was to go directly to the winners of the competition, the top five, you know, broken out, you know, appropriately with more for first place obviously and less for last place, but directly to the winners of that competition.
LISTNUM 1 \l 12097 COMMISSIONER CUGINI: And will you participate at all in the selection of the winners of that competition?
LISTNUM 1 \l 12098 MR. TRUHN: No, that will be done by an independent panel, as it always is with that contest.
LISTNUM 1 \l 12099 COMMISSIONER CUGINI: Okay, thank you. And if we are to accept your initiatives in Canadian Talent Development as you mentioned today with the relocation of funds from the Telus Country Fever to ARIA you will accept that as a COL?
LISTNUM 1 \l 12100 MR. TRUHN: Yes.
LISTNUM 1 \l 12101 COMMISSIONER CUGINI: Okay. Now in terms of your business plan, despite what you may have heard yesterday, you are one of the highest in terms of your projections for revenue from the market. I do appreciate your comments today on how much you know the market and your experience in the market, but could you give us the rationale for your revenue projections?
LISTNUM 1 \l 12102 MR. TRUHN: Well obviously, because of my experience, I know what the money being spent on the two incumbents is each year. I have also done some research in regard to what Peace River Broadcasting is taking out of the marketplace and what the standard stations are getting out of the marketplace. I was able to derive a total of approximately $8.6 to $9 million somewhere in that range as it existed a year ago. My understanding is is that we haven't gone through a recession in Grande Prairie, so that number is likely a little bit higher, closer to the $9 million I would estimate in the radio market at this present time.
LISTNUM 1 \l 12103 I was around in 1979 working for COG when CJXX came on the air. There was some concern at that time, you know, from the original radio station that advertisers would cut, you know, their marketing budgets in half or at least not spend as much with them. And the truth of the matter was the market expanded significantly and COG saw a huge increase in advertising revenues that very first year. I suspect that it won't be quite the same with the addition or a third and/or fourth radio station, but I do expect that the market will expand by a little in excess of 10 per cent, I think it will be a $10 million market, you know, once this all shakes out.
LISTNUM 1 \l 12104 COMMISSIONER CUGINI: And so your projections were obviously based on one more, just one?
LISTNUM 1 \l 12105 MR. TRUHN: Our business plan was derived based on one more applicant being added to the market.
LISTNUM 1 \l 12106 COMMISSIONER CUGINI: By how much would you reduce your projections if we were to licence two? A percentage, just give me a percentage.
LISTNUM 1 \l 12107 MR. TRUHN: You know, I would have to say around 15, 20 per cent.
LISTNUM 1 \l 12108 COMMISSIONER CUGINI: Around 15 per cent?
LISTNUM 1 \l 12109 MR. TRUHN: Yes.
LISTNUM 1 \l 12110 COMMISSIONER CUGINI: Okay, thank you. As you know, there are more than one frequencies available in the market. Have you done a study to determine whether or not any of the other frequencies, other than the one for which you have applied, would suffice or would meet your needs?
LISTNUM 1 \l 12111 MR. TRUHN: We haven't done an actual study, no. But obviously, there is a wide range of frequencies available and certainly if we had to choose another one there are more options in the market that would, you know, suit our needs.
LISTNUM 1 \l 12112 COMMISSIONER CUGINI: And so another frequency would be acceptable to you?
LISTNUM 1 \l 12113 MR. TRUHN: Absolutely.
LISTNUM 1 \l 12114 COMMISSIONER CUGINI: There are just ‑‑ sorry, there is one more question I forgot to ask and perhaps, Mr. Yerxa, you could answer. In your presentation this morning you did say that your target audience is 35 to 44‑year olds?
LISTNUM 1 \l 12115 MR. YERXA: The broad target is 35 ‑ 54.
LISTNUM 1 \l 12116 COMMISSIONER CUGINI: Right.
LISTNUM 1 \l 12117 MR. YERXA: Are you looking for a median age?
LISTNUM 1 \l 12118 COMMISSIONER CUGINI: Well, your presentation this morning, if licensed our station would undoubtedly have the support of many 25 to 54‑year olds listeners ‑‑
LISTNUM 1 \l 12119 MR. YERXA: That's the broad target.
LISTNUM 1 \l 12120 COMMISSIONER CUGINI: ‑‑ in particular, 35 to 44.
LISTNUM 1 \l 12121 MR. YERXA: Thirty‑five ‑ 54 actually. So it is ‑‑ 35 ‑ 44 is probably the core, you know, that is your 10‑year sweet spot. But if you are going to play more classic rock, it is going to skew a little higher, 35 ‑ 54.
LISTNUM 1 \l 12122 COMMISSIONER CUGINI: And you anticipated, yes, and so what is the median age of your listener?
LISTNUM 1 \l 12123 MR. YERXA: Let us give it a 42.
LISTNUM 1 \l 12124 COMMISSIONER CUGINI: Male or female?
LISTNUM 1 \l 12125 MR. YERXA: Skewing more male with the classic rock component.
LISTNUM 1 \l 12126 COMMISSIONER CUGINI: And when you mix in the classic hits format?
LISTNUM 1 \l 12127 MR. YERXA: It is going to be skewing more male because we will be two‑thirds classic rock hopefully.
LISTNUM 1 \l 12128 COMMISSIONER CUGINI: Okay, thank you. Thank you very much, Mr. Chairman, those are all my questions.
LISTNUM 1 \l 12129 THE CHAIRPERSON: Thank you, Commissioner Cugini. Commissioner Langford.
LISTNUM 1 \l 12130 COMMISSIONER LANGFORD: Thank you, Mr. Chair.
LISTNUM 1 \l 12131 I want to go back to this question of your format. And without seeming in any way rude, I don't need anymore enthusiasm, I got the picture that you really like it and you think it is going to do it. What I am trying to find out is how you would react, in a strategic sense, should we be licensing you and someone else very very close? And I think you touched on it ‑‑ John is the first name, I can't remember the second name, sorry, this gentleman.
LISTNUM 1 \l 12132 MR. YERXA: John is fine.
LISTNUM 1 \l 12133 COMMISSIONER LANGFORD: John, okay. Well, it doesn't look too good on the record if we are all on a first name basis does it? Yerxa, that is it, thank you, sorry. Later in history you will say gee, these two brothers were handing licenses out to each other. We don't like that image here.
LISTNUM 1 \l 12134 It is almost difficult for me to phrase this question, though I have had time to think about it since your very interesting description. But there are about five other applications in front of us which have chosen, at least in their words and in their descriptions, something very very similar. Pattison, O.K., Crude, a number of them anyway. So what happens if we licence, for example, you and one of them? And just for the sake of argument, I am looking for a strategy now, we happen to licence the one that is as close to your chosen format as possible, what do you do?
LISTNUM 1 \l 12135 MR. YERXA: Okay, there are ‑‑ first of all, I know there are three applicants that Ken would definitely be hurt by or threatened by. There are three applicants and I know you are going to ask him that in a few minutes, who would hurt you. He can deal with that.
LISTNUM 1 \l 12136 COMMISSIONER LANGFORD: Well, you might as well name them.
LISTNUM 1 \l 12137 MR. YERXA: Okay.
LISTNUM 1 \l 12138 COMMISSIONER LANGFORD: Helps us.
LISTNUM 1 \l 12139 MR. YERXA: Do you want me to name them?
LISTNUM 1 \l 12140 MR. TRUHN: Well obviously, if we were granted a licence, you know, the most harmful effect to our business plan is going to come from the two incumbents and from the standard stations which are Standard, which has stations in Fort St. John and Dawson Creek and, you know, would have an opportunity to leverage in ‑‑ in the marketplace.
LISTNUM 1 \l 12141 MR. YERXA: So having said that, assuming one of the incumbents doesn't get it and create an imbalance, unless of course you want to give both of them that which may happen, but it really doesn't matter. The key ‑‑ unless you want to make, format a COL and that is not in the cards, so therefore get on the air, scramble as quickly as you can, position yourself and number two in they position themselves accordingly and everything will shake out. And you have seen that happen in numerous markets and, of course, you also recognize that upon licensing an incumbent could even switch and muddy the waters, so it really doesn't matter.
LISTNUM 1 \l 12142 We have identified a couple of very profitable opportunities in the market. The key is get on the air, get there first.
LISTNUM 1 \l 12143 MR. TRUHN: I might add, Commissioner Langford, if we were in the position where we lost the race to get on the air first, obviously we are going to have to ensure that whatever format we choose is appropriate for the market. So we would do ‑‑ you know, we would conduct some more research and be absolutely sure of what that second position is, you know, given the circumstances and whatever the first one on the air chose as a format.
LISTNUM 1 \l 12144 MR. YERXA: And that is a very important point, because I was quite interested in hearing at one of the other ‑‑ well, another one of the incumbents state that, you know, if you give us a licence well we are going to take our existing station and move this way, which I don't think is great news for Standard in their application, because that is where they are going to move. They want to become more mainstream AC pop.
LISTNUM 1 \l 12145 But that is what may happen, whether you give them a licence or whether you give someone else, assuming that rock hole is filled, then that existing station may have to adjust accordingly to narrow their focus.
LISTNUM 1 \l 12146 COMMISSIONER LANGFORD: Is there a scenario that would cause you to have to make more than an adjustment, in other words more than an even kind of a tuning? In other words, you just have to choose a whole new market niche?
LISTNUM 1 \l 12147 MR. YERXA: If one of the ‑‑ let us assume one of the incumbents, heaven forbid, says I am going after one of the ‑‑ well, this is great research everybody has brought forward and let us do it, that is a huge hole, we didn't really realize it was there. If they switch, they are going to create an opportunity and some hybrid opportunities around whatever they vacate. The market is big enough. There is two stations. You know, at any given time you have probably got four mainstream formats that are available and, generally speaking, regardless of population, so..
LISTNUM 1 \l 12148 COMMISSIONER LANGFORD: So you can adjust is what you are saying, even to a dramatic encroachment on your plans, on your plan territory there is still room out there for you to come up with a new plan?
LISTNUM 1 \l 12149 MR. TRUHN: Absolutely.
LISTNUM 1 \l 12150 COMMISSIONER LANGFORD: Okay. Now, let me just go back, Mr. Truhn, to your response about the kind of nightmare scenario here. And I am going to give you a piece of good news and then I am going to give you a piece of bad news, but it is all hypothetical. I am just trying to figure out, because you have the Grande Prairie experience and it kind of gives me the notion that you could probably respond to this almost better than anybody, with the possible exception of the two incumbents.
LISTNUM 1 \l 12151 Assume for a moment, hypothetically, that we licence you, but assume as well that we licence the two incumbents, nightmare scenario. So they each got two FMs, maintain some kind of balance. But we want to bring a new voice in. So we have two incumbents with two stations each, synergies, market power, all that stuff you know about, and then you because we want to bring diversity to the market or we want to encourage a new player.
LISTNUM 1 \l 12152 I am kind of painting this scenario pretty quickly off the top of my head. But what I am looking for is how you would react to that, if you could react to it, could you survive, could you thrive in a scenario like that?
LISTNUM 1 \l 12153 MR. TRUHN: I think, obviously, in that scenario that would be about as bad as it could get. Do I think I could survive? Absolutely. I have a strong base in the community and I think that, you know, would stand me in good stead. Would it be tough? There is no question. You know, I had some experience in Red Deer when I was the general sales manager there for RadioSeven in a situation that has been corrected recently of where we were a standalone AM station against an FM and a country AM station and it is extremely tough. It is very competitive, it tends to affect the price of the product and not in a positive way, but they obviously survived. And I believe, you know, given my experience in Grande Prairie, we would survive as well.
LISTNUM 1 \l 12154 COMMISSIONER LANGFORD: Thanks very much. I don't want to give you nightmares, but I just ‑‑ you might as well go to the extreme, in a sense, to get your reaction and then pull back from there and, you know, as I said you are on the ground, you are there, you know the area and if you think it can be done, I mean, that is something we have to take into consideration.
LISTNUM 1 \l 12155 Those are my questions, Mr. Chair, thank you.
LISTNUM 1 \l 12156 THE CHAIRPERSON: Thank you, Commissioner Langford. Picking up on your last reply, if you were or if the two incumbents would get each an FM licence and you are to get one and obviously, as you said you got to be.. Will that impair your ability to do the local news and the spoken word and local programming or where will you make the cuts?
LISTNUM 1 \l 12157 MR. TRUHN: Well, you know, given that situation I think we would, you know, review our whole business plan obviously. We are committed to our news and spoken word programming, it is a big deal in markets the size of Grande Prairie. They rely on the radio stations for all of the local information and relevant news.
LISTNUM 1 \l 12158 I think obviously we would have to look at our, you know, at our staffing in a situation like that. The news department is not an area that we would cut dramatically because it is still a key element in our programming. We would look for, you know, other areas long before we looked at that area.
LISTNUM 1 \l 12159 THE CHAIRPERSON: Commissioner Cram.
LISTNUM 1 \l 12160 COMMISSIONER CRAM: Thank you, Mr. Chair.
LISTNUM 1 \l 12161 I wanted to ask a couple of questions. Thank you very much for the part that starts off with your broadcasting staff grid. And you started in the first page talking about no automation during the broadcast week. And so, just to be fair to you, would you accept that as a COL that you would be live‑to‑air during the entirety of the broadcast week?
LISTNUM 1 \l 12162 MR. TRUHN: Yes absolutely, unless Commissioner Langford's worst case scenario came into play.
LISTNUM 1 \l 12163 COMMISSIONER CRAM: So that is where you would start making the cuts, would be the live‑to‑air issue?
LISTNUM 1 \l 12164 MR. TRUHN: We would have to definitely take a look at automation in some areas of the day for sure.
LISTNUM 1 \l 12165 COMMISSIONER CRAM: Secondly, you were talking with my colleague, Commissioner Cugini, about a minimum of 10 hours news, but this actually shows ‑‑ your newscast grid, the third page of that shows a total of ‑‑ oh Lord I didn't add it ‑‑ nine, 10, 11, 12 ‑‑ oh yes, 12 hours and 15 minutes.
LISTNUM 1 \l 12166 MR. TRUHN: Yes, it does. I think if you look at our application when we originally wrote it I said a minimum of 10 hours each week. Once I actually developed the grid it worked out to 12 hours and 15 minutes.
LISTNUM 1 \l 12167 COMMISSIONER CRAM: Okay. So and when I look at it it goes up to 11:00 at night both during the week and on the weekends?
LISTNUM 1 \l 12168 MR. TRUHN: Yes.
LISTNUM 1 \l 12169 COMMISSIONER CRAM: Do any of the incumbents do this?
LISTNUM 1 \l 12170 MR. TRUHN: To the best of my knowledge..
LISTNUM 1 \l 12171 COMMISSIONER CRAM: You don't listen to them?
LISTNUM 1 \l 12172 MR. TRUHN: I am a rabid fan of country or of country radio in Grande Prairie based on my experience but, yes, I listen to them both. To the best of my knowledge Big Country provides it for a longer period of time up until at least 11:00 I believe.
LISTNUM 1 \l 12173 COMMISSIONER CRAM: Okay.
LISTNUM 1 \l 12174 MR. TRUHN: It is not always live, but it is there.
LISTNUM 1 \l 12175 COMMISSIONER CRAM: Okay, I get your point. And there has been a fair bit of talk about the incumbents. I guess I need to know, given that we have on more than one occasion licensed the incumbents in order to keep a competitive balance, why should we not do that in this case?
LISTNUM 1 \l 12176 MR. TRUHN: Well, I think if you licence the two incumbents you certainly do keep a competitive balance for them. It doesn't necessary add as much diversity to the marketplace as you would by licensing two new players. And I think that, you know, there has to be some opportunity for independent broadcasters to get into this business. And whereas the two incumbents would probably like that, I certainly wouldn't.
LISTNUM 1 \l 12177 COMMISSIONER CRAM: Thank you. Thank you, Mr. Chair.
LISTNUM 1 \l 12178 THE CHAIRPERSON: Thank you, Commissioner Cram. Well, we are almost to the end of your appearance and I will give you two minutes to sum up and tell the Commission why you should be granted the licence.
LISTNUM 1 \l 12179 MR. TRUHN: Thank you. I am not going to reiterate all the points I made at the end of our oral presentation. I just have a quick quick summary.
LISTNUM 1 \l 12180 I know the Commission appreciates independents like us participating in this process, after all the industry has become extremely consolidated in recent years. At the same time I realize you probably hear this kind of statement from those of us vying for a licence against the larger broadcast companies.
LISTNUM 1 \l 12181 Here is what I truly think differentiates me from some of the other independents. I won't be appearing before you in the Fort McMurray hearing, nor will I be appearing before you in the upcoming hearings in Medicine Hat, Regina or Saskatoon. Grande Prairie is where my life is, has been and it is where it is going to continue to be. Having spent 27 years in the broadcast business I guess I put it all on the line this one time to pursue a career dream in the community that I grew‑up in and I would respectfully ask you for that opportunity. Thank you.
LISTNUM 1 \l 12182 THE CHAIRPERSON: Thank you. The legal people have a question for you. I apologize, I should have asked them before, but here we are.
LISTNUM 1 \l 12183 COMMISSIONER LANGFORD: I want you to know that the rest of us are not illegal though.
LISTNUM 1 \l 12184 MS MURPHY: Thank you, Mr. Chairman.
LISTNUM 1 \l 12185 Just a clarification with respect to your commitment by condition of licence for Canadian content Category 2 musical selections. We would like to confirm that that commitment relates both to CanCon throughout the broadcast week as well as for the period from Monday to Friday 6:00 a.m. to 6:00 p.m.
LISTNUM 1 \l 12186 MR. TRUHN: Yes, it does.
LISTNUM 1 \l 12187 MS MURPHY: Thank you. Those are my questions, Mr. Chairman.
LISTNUM 1 \l 12188 THE CHAIRPERSON: Thank you. Thank you, Mr. Truhn. Thank you to your people. We will take a 10‑minute break and we will move to the next item.
‑‑‑ Upon recessing at 0931 / Suspension à 0931
‑‑‑ Upon resuming at 0947 / Reprise à 0947
LISTNUM 1 \l 12189 THE CHAIRPERSON: Ms Secretary.
LISTNUM 1 \l 12190 THE SECRETARY: Thank you, Mr. Chairman.
LISTNUM 1 \l 12191 We are now at Item 6 on our agenda, which is an application by Sun Country Cablevision Ltd. on behalf of a corporation to be incorporated for a licence to operate an English‑language FM commercial radio programming undertaking in Grande Prairie. The new station would operate on frequency 103.3MHz (channel 277C1) with an effective radiated power of 100,000watts (non‑directional antenna/antenna height of 256.6metres).
LISTNUM 1 \l 12192 For the record and in response to the Commission's questions, the applicant has filed documents updating the ownership information relating to Sun Country Cablevision Ltd. These documents can be viewed on the application file which is in the examination room.
LISTNUM 1 \l 12193 Appearing for the applicant today is Mr. Ted Pound, who will introduce his colleagues. You will have 20 minutes for your presentation. Please go ahead.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 12194 MR. POUND: Thank you. Good morning. Mr. Chairman, commissioners and Commission staff, my name is Ted Pound. I am the President of Sun Country Cablevision, I am a founding director and shareholder of Sun Country Cablevision, which serves communities of Salmon Arm, Enderby and Armstrong in British Columbia for the past 21 years. Details of my 30 plus years of senior broadcast experience are noted in the application, not including the recent award of the Alberta Centennial Medal for outstanding community service by the Province of Alberta.
LISTNUM 1 \l 12195 On my far right is Walter Gray and on my left is Ron East, both are founding directors, shareholders of Sun Country and past Presidents of the British Columbia Association of Broadcasters. Between the three of us we have more than 110 years of radio business experience in small and medium markets. The fourth of our Sun Country directors is Mike Hall on my immediate right, the youngest son of the late Bob Hall. Mike was one of the inaugural employees of Sun Country Cable and has earned his way through the ranks to become the company's General Manager and now Managing Director.
LISTNUM 1 \l 12196 Mr. Gray is a former Mayor of Kelowna. Initially, Mr. Gray and Mr. Bob Hall established and operated radio stations in Salmon Arm, Revelstoke, Kelowna and established a mini radio network in the adjacent West Kootenay. Mr. Gray has been the President of the Chamber of Commerce, Director of the CAB and Radio Bureau of Canada. He received the BCAB Broadcaster of the Year Award in 1993. For eight years he served as board member of Telefilm Canada.
LISTNUM 1 \l 12197 Mr. East has had a significant radio career and a background, specifically working out of Prince George where he and the late Stan Davis established a radio company that services 18 communities in central British Columbia. Mr. East is very involved in his community and he was instrumental in the founding of the University of Northern British Columbia in Prince George.
LISTNUM 1 \l 12198 The other members of our panel, on my far left is Elder Angie Crerar, President of the Métis Nation, Grande Prairie. Elder Crerar is Canada's most recent recipient of the Governor General's Caring Canadian Award. In the back row we have Mr. Mel Brundige, Media Consultant, with over 30 years broadcast experience in radio sales and management. Mr. Brundige is a Radio Bureau of Canada CMM, that is a Certified Marketing Manager, and has served on the Radio Executive Committee of BBM for over 13 years.
LISTNUM 1 \l 12199 Mr. Howard Foot, Media Consultant, is a broadcast veteran with over 40 years of sales, management and ownership experience in Canadian newspaper, radio and television companies. Mr. Don Turri, CACFP, is a partner with MacKay LLP Chartered Accountants and Chairman of MacKay LLP Partnership, a firm with offices throughout British Columbia, Alberta and the Northwest Territories.
LISTNUM 1 \l 12200 Mr. Chairman, members of the Commission, I would be pleased to start our oral presentation.
LISTNUM 1 \l 12201 Mr. Gray, Mr. East and I formed our business alliance over 35 years ago. The three of us share the values of radio excellence and outstanding community service. We believe that there is a remarkable opportunity Grande Prairie to introduce our founding principles of community radio excellence, relevant radio with a big community heart, radio that Grande Prairie citizens have invited us to bring to their growing community.
LISTNUM 1 \l 12202 To assure that the Sun Country community service vision is focused and relevant in Grande Prairie, it is our commitment to establish a community advisory board. We are committed to the development and support of local Canadian music talent under the guidance of a knowledged professional in the business of Canadian and international music development. Our classic rock format, along with a strong commitment to news and spoken word, are well researched and targeted for the market.
LISTNUM 1 \l 12203 MR. EAST: My career has been involved with small and intermediate size radio markets for over 50 years. I have observed many similarities between central British Columbia and Northern Alberta. The dynamic growth that Grande Prairie has experienced shows no signs of slowing, the result is an extremely rich radio advertising market at Grande Prairie.
LISTNUM 1 \l 12204 Later in our presentation Mr. Brundige and Mr. Foot will focus your attention on their findings, both from their statistical review and their one on one interviews of local Grande Prairie merchants. What exists before us today is a two‑radio station market serving a trading area of 120,000 and there is no local TV station which would normally be in existence in a market this size. And there are resident sales persons in Grande Prairie whose job it is to sell advertising for the Dawson Creek and Fort St. John, B.C. stations and the nearby Peace River radio stations. There is also a resident salesperson selling for CFRN TV out of Edmonton.
LISTNUM 1 \l 12205 The Grande Prairie broadcast advertising market is significant for the population size. We firmly believe there is plenty of room to establish at least one other local radio station at Grande Prairie.
LISTNUM 1 \l 12206 MR. POUND: Sun Country is proposing a classic rock FM radio station for Grande Prairie with a heavy emphasis on community news, sports, features and events. Our radio station will be the voice for local community groups and musicians to promote awareness and showcase their talents. We will reflect the spirit of this diverse and growing community by involving local groups, organizations and individuals.
LISTNUM 1 \l 12207 Radio listeners currently have limited listening choices. Our music format will fill the void. Our music format will consist of a mix between classic rock and new rock with a 70/30 percentage split. The blended music will average a minimum of 35 per cent Canadian content, 40 per cent in the new rock category. Research we have done on the market supports our classic rock format. We are targeting an audience that skews slightly higher male between the ages of 25 and 54 with our core audience 35 to 44 and our median age is 39.
LISTNUM 1 \l 12208 We are committed to contributing over $735,600 in cash and in‑kind local support to Canadian Talent Development; $231,000 is in cash, $504,000 is in‑kind support. We will support the small market Canadian Association of Broadcasters, Canadian Development Plan initiative with $21,000 in cash over the period of a licence that will be directed to the Alberta Recording Industries Association Canadian Talent Development. Our CTD plan includes college scholarships, talent searches with airtime support and available digital studio production time.
LISTNUM 1 \l 12209 Grants to local musicians and a regular air schedule to support local Canadian talent. This commitment includes 21 30‑second commercials per week showcasing new Canadian album releases. Sun Country is a member of ARIA, the Alberta Recording Industries Association, whose mandate is to support excellence, diversity and vitality of American artists and the Alberta recording industry.
LISTNUM 1 \l 12210 To help coordinate our Canadian Talent Development commitments Mr. Neil MacGonigill, President of Indelible Music Inc., has agreed to join our community advisory board. Neil has spent over 35 years nurturing and developing and guiding the careers of Canadian artists such as Jann Arden, KD Lang, Paul Brandt and Ian Tyson. The experience has given him a unique perspective pertaining to the challenges and opportunities that lie ahead for a new generation of Canadian music talents.
LISTNUM 1 \l 12211 We are aware of our in‑kind support will not qualify in CRTC terms of Canadian Talent Development, but believe the dedicated initiatives are significant and bring value to our application.
LISTNUM 1 \l 12212 Our morning show, like all on‑air programs, will be focused on what is important to our listeners of Grande Prairie. Our news, sports, weather and road reports will be focused on providing local information first. We will employ three fulltime news staff members plus local stringers to cover the issues that are important to our community. During an average week in the category news‑related surveillance we will commit 313 minutes of news, weather, road reports and sports. We will broadcast 58 separate newscasts with sports highlights.
LISTNUM 1 \l 12213 In the general interest spoken word category we will commit to 316 minutes that will include a five‑minute Aboriginal program twice a week. As part of our commitment to the local sports and recreational groups within that community we plan to recognize and salute the local volunteers, the coaches and athletes through a weekly program called Local Heroes. Providing over 30 years of airtime during the week for this program in a series of 60‑second features.
LISTNUM 1 \l 12214 Black Gold will highlight the history and events of the oil patch in a daily 60‑second feature that will air 21 times during the week. We will focus on the agricultural community with a daily 60‑second feature aired 21 times a week. Our daytime programming will be live from 6:00 a.m. until 6:00 p.m. throughout the work week, 10:00 a.m. until 6:00 p.m. on Saturdays and 10:00 a.m. until 2:00 p.m. on Sundays to start, but we plan to add more live programming as the station matures and grows.
LISTNUM 1 \l 12215 At the heart of every community are non‑profit community groups working with thousands of volunteers. Our goal is to give them free access to our airwaves on a regular basis to promote their fundraising events, ask for volunteers and raise the level of awareness in the community for their cause. As apart of our commitment to the local community we are offering free access to our airwaves through a 60‑second feature that will run once an hour, 24 hours a day, over two and a half hours a week.
LISTNUM 1 \l 12216 When 103.3 signs on the air we will also launch our 103.3 Grande Prairie Children's Charity, Children Are Champions. The charity will focus on raising funds to help children in the Grande Prairie area. A non‑profit organization will be set‑up to raise those funds then distribute them to needy organizations, families and projects. Our community advisory board will screen and evaluate the many different organizational projects submitted that deal with children in the area. Whether it is a new playground, expenses for families to travel to larger centres for health treatments or simply paying for children for financially‑challenged families to participate in recreational activities, we will make a difference to Grande Prairie families.
LISTNUM 1 \l 12217 We are committed to working with the Grande Prairie Community College in the development of a local radio broadcast course that will develop local broadcasters and broadcast journalists. We will actively support the broadcast practicum programs of other Alberta broadcast schools in all facets of our operation.
LISTNUM 1 \l 12218 MR. EAST: Now to the market dynamics of our proposal. We will review the potential advertising dollars available from the market, the basis of our projections, the sources of new radio revenues and unusual revenue circumstances of this very buoyant market.
LISTNUM 1 \l 12219 Mr. Foot will now review the attitude of the business community toward the idea of a new Grande Prairie radio station.
LISTNUM 1 \l 12220 MR. FOOT: I have been involved in local media sales for the past 40 years, 26 of those years in local radio sales. As a result of 43 in‑person interviews that I conducted over a year ago in Grande Prairie with that business community I identified the following factors. Number one, the rates charged by the two local stations were felt to be too high. Number two, the advertisers want to spend more money on radio, but the local stations are sold out much of the time. Number three, there is a general feeling that the stations are operating as fat cats.
LISTNUM 1 \l 12221 Number four, with the tremendous economic health of the market more and more companies are moving into Grande Prairie and this puts even more strain on the amount of airtime available to businesses for advertising. Number five, the Friday edition of the local Herald‑Tribune newspaper is loaded with flyers and is of the size that you would expect in a much larger market. Number six, the major reason for optimism is that 76.7 per cent of the businesses that I talked with are definitely in support of another radio station in Grande Prairie.
LISTNUM 1 \l 12222 In summation, I would just like to say that if I was 30 years younger I would love to sell advertising for Sun Country's new radio station for Grande Prairie, because I feel it would be a very successful career.
LISTNUM 1 \l 12223 MR. EAST: Mr. Brundige will now review the distribution of new advertising dollars and the results of a statistical approach to this radio market.
LISTNUM 1 \l 12224 MR. BRUNDIGE: I am here today to give you some background on the revenue projections I prepared for the Sun Country application. The projections were prepared using two methodologies. As a percentage of retail trade in the county and from per capita spending on radio advertising in Northern Alberta, which was obtained from a special Statistics Canada report, both methodologies indicated a radio market of approximately $5 million, this is for 2004, which is a reasonable number for a market the size of Grande Prairie.
LISTNUM 1 \l 12225 Both methods, however, suffered from the disadvantage of using average numbers from wide geographical areas and applying them to a small geographical area, the County of Grande Prairie. A visit to the market lead me to conclude that it was an extremely hot market undergoing frantic growth that would probably continue for a number of years. A restaurant I went to had only half its tables opened because they could not hire enough staff to service the entire restaurant. The hotel I stayed in had a list of job fairs on its happening this week board that indicated three to four a day for the next seven days for various companies.
LISTNUM 1 \l 12226 Projecting revenue with any degree of accuracy in a market situation such as you find in Grande Prairie is very difficult. But I concluded that, based on my previous research in the extremely hot marketplace, that a number in excess of $6 million was probably correct for 2004. I worked in Prince George in the 1960s when it was a very hot market and I knew that the radio revenue would be very high for two reasons, every ad campaign would work and the retailers were making so much money that normal percentages went by the wayside and ad budgets of 6 and 7 per cent would not be uncommon as opposed to the normal 3 to 3.5. For these reasons, I regarded the revenue projections contained in our application as very conservative.
LISTNUM 1 \l 12227 Now that we have reviewed the revenue projections from the incumbent broadcasters' applications for second broadcast licences, we know that our projects were very conservative. It is documented that the current value of the market is in excess of $8 million.
LISTNUM 1 \l 12228 MR. GRAY: During our survey of the Grande Prairie market beginning 18 months ago and, in particular, since numerous visits beginning last fall, all four of the Sun Country directors have played a hands‑on role in developing and seeking support and input for our application, talking with community leaders and learning about the needs and opportunities in the Grande Prairie region. The fact that there are 10 applicants for radio licences demonstrates that growth in the region, the sustainable economy and the geographic advantage this community has says volumes.
LISTNUM 1 \l 12229 In the April issue of MoneySense Magazine Grande Prairie is ranked number four in all of Canada in a survey of Canada's best places to live based on measurable criteria. In the specific category of population growth Alberta really cleaned up, Calgary is number one for Canada, Red Deer is number two and Grande Prairie ranked number four. Grande Prairie is ninth highest in the nation for household income.
LISTNUM 1 \l 12230 As an independent applicant, an experienced communications company very committed to service to the community, Sun Country will be a fresh new competitive choice. We firmly that this citizens and advertisers of Grande Prairie deserve and will support more choice. Our research with community leaders tells us that a new station needs to offer more local news coverage and to work to connect the community and to offer a fresh new music format so that there is more choice and diversity in the marketplace.
LISTNUM 1 \l 12231 Our anecdotal findings are that there is an important role for local radio in the fight against crime and in education with regard to drug abuse, particularly amongst youth and young adults. To that end we met a number of times with the RCMP and with the City of Grande Prairie Crime Prevention Coordinator. We have discussed specific programs to deal with many of the social challenges of a growing community.
LISTNUM 1 \l 12232 In speaking with Elder Angie Crerar, who is with us today, President of the Métis Nation, we learned that radio is the most effective medium to inform and connect the Aboriginal community. Sun Country is committed to meet that challenge.
LISTNUM 1 \l 12233 We want to broadcast the Grande Prairie Storm Junior A hockey games. We have a letter on file with the Commission from the business manager of the team following our meeting with the manager/coach of the Storm expressing interest in our desire to do those broadcasts, it is win‑win and it adds remarkably to community spirit. Frankly, we are surprised that the games are not being broadcast.
LISTNUM 1 \l 12234 In a letter on file with the Commission from Persona, the Grande Prairie cable company, let me quote Persona's President, Mr. Dean MacDonald:
"The affinity between local cable television and local radio is strong. We currently work with another local licensee and would welcome the opportunity to work with others."
LISTNUM 1 \l 12235 He goes on to state:
"The radio experience and community track record of Sun Country principles is exemplary. They understand the opportunities that exist in a fast‑growing market like Grande Prairie and have agreed to work closely with Persona to ensure residents are well served with local information and entertainment. We encourage you, the CRTC, to award the licence to this applicant."
LISTNUM 1 \l 12236 And the Mayor of Grande Prairie stated in his letter:
"The City of Grande Prairie supports the efforts of Ted Pound in pursuing the opportunity of a new independent locally‑operated FM radio station for Grande Prairie."
LISTNUM 1 \l 12237 Mr. Chairman, members of the Commission, Grande Prairie Mayor, Wayne Ayling, expresses exactly our intentions, to be a new independent, locally‑operated radio station.
LISTNUM 1 \l 12238 Reference was made in Mr. Pound's opening comments that Sun Country has established a community advisory board. On numerous market visits in developing our community advisory board we identified key community leaders who will assist our vision of bringing relevant radio to Grande Prairie. The community advisory board will have direct input to management, they will be our additional eyes and ears of the community.
LISTNUM 1 \l 12239 The members of the community advisory board include Elder Angie Crerar, President of the Métis Nation representing the Aboriginal community; Dr. Scott McAlpine, PhD., Dean, Faculty of Arts, Science and Education at Grande Prairie Regional College; City Alderman, Bill Given, owner of a media design company, age 29, the youngest person ever elected to council; Neil MacGonigill, President of Indelible Music, his principal focus and responsibility will be in the development of local talent; Jackie Clayton, President of the Grande Prairie Chamber of Commerce and local retailer businesswoman; Alderman Dwight Logan, local businessman and highly involved in local service organizations, he is a former two‑term mayor and is currently serving his third term as Alderman, his principal interest is having more local news reporting on local media; Karen Gariepy, the City Program Facilitator for the Community Action on Crime Prevention; Constable Scott Haggerty, the Community Crime Prevention Officer for the Grande Prairie RCMP.
LISTNUM 1 \l 12240 It is the intention of Sun Country to add three or four additional members to the community advisory board. We will seek a youth member, someone to represent the arts community and other areas of importance that the committee may recommend itself. Sun Country is committed to connecting with the Grande Prairie community.
LISTNUM 1 \l 12241 I would now like to introduce one of the members of our community advisory board, Elder Angie Crerar.
LISTNUM 1 \l 12242 MS CRERAR: Thank you, Walter.
LISTNUM 1 \l 12243 I am happy to be here today in support of the Sun Country FM radio application for Grande Prairie. I am impressed with Sun Country's interest and commitment to advance the interests of the Aboriginal community of Grande Prairie and region. I am honoured to be a member of the Sun Country Radio community advisory board. I can assure the CRTC that I will advance the interests of the Aboriginal community and I will also work to advance a positive relationship between the Aboriginals and the non‑Aboriginals. I look forward to my role on Sun Country's Community Advisory Board. Thank you.
LISTNUM 1 \l 12244 MR. POUND: We at Sun Country are a small group of experienced and passionate broadcasters who believe in local community radio, the kind of radio that listeners and advertisers alike trust. We want to bring diversity and grassroots radio to Grande Prairie. We are committed to using our knowledge, experience and passion for local radio in creating a new corporate citizen that the community of Grande Prairie can be proud of.
LISTNUM 1 \l 12245 Thank you for your attention. We are available for questions.
LISTNUM 1 \l 12246 THE CHAIRPERSON: Thank you, Mr. Pound. Could I draw your attention to your page 9 of your presentation this morning? You said that the blended music mix will average a minimum of 35 per cent Canadian content and you added that it will be 40 per cent for new rock music. Am I right?
LISTNUM 1 \l 12247 MR. POUND: Yes, that is correct.
LISTNUM 1 \l 12248 THE CHAIRPERSON: Was it part of the application or it is something that you just added on this morning?
LISTNUM 1 \l 12249 MR. POUND: Sorry?
LISTNUM 1 \l 12250 THE CHAIRPERSON: Was it part of the application per se or is it something that you added this morning while you were making ‑‑
LISTNUM 1 \l 12251 MR. POUND: We were clarifying that segment. Part of our application said 35 per cent and the segment of the ‑‑ said more than 35 per cent actually ‑‑ was clarifying that the new music portion of that format would exceed 40 per cent.
LISTNUM 1 \l 12252 THE CHAIRPERSON: Because I also noticed that throughout the presentation ‑‑ not throughout the presentation, but in some instances you added some information that were not in your written oral presentation ‑‑ to say written oral presentation, but.. But the things that you have added are also all part of the written submission?
LISTNUM 1 \l 12253 MR. POUND: Yes ‑‑
LISTNUM 1 \l 12254 THE CHAIRPERSON: They were, okay.
LISTNUM 1 \l 12255 MR. POUND: ‑‑ and support letters to support that too.
LISTNUM 1 \l 12256 THE CHAIRPERSON: Fine. I am asking Commissioner Williams to ask the questions.
LISTNUM 1 \l 12257 COMMISSIONER WILLIAMS: Good morning, Mr. Pound and Sun Country panel.
LISTNUM 1 \l 12258 Would you like the questions addressed through yourself, Mr. Pound, or through your General Manager?
LISTNUM 1 \l 12259 MR. POUND: Probably direct them to me and I will redirect them through the panel.
LISTNUM 1 \l 12260 COMMISSIONER WILLIAMS: Okay, thank you. Well, we will begin in the area of gaining a better understanding of your proposed music format and how it differs from the other competing classic rock, classic hits and soft AC formats being offered and then specifically looking for why your proposed format would best provide Grande Prairie adult males, 25 to 44, with a superior level of programming diversity.
LISTNUM 1 \l 12261 Nine of the 10 competing Grande Prairie radio applications, including yours, are proposing to serve the Grande Prairie market with mainstream commercial FM music formats. These formats are, in broad terms, classic rock, classic hits and soft AC adult contemporary. As is the case with your application, most have identified adult male listeners in the 25 to 54 age group as being underserved by the two incumbent stations in the market. As an applicant in the competitive process, we assume that you have reviewed the other applications.
LISTNUM 1 \l 12262 You have identified the 25 to 44‑year old male listener as the core audience group you would target with your proposed blended classic rock/new rock format and contend that this is the principal audience group that is underserved by the existing Grande Prairie radio stations.
LISTNUM 1 \l 12263 I am curious about Grande Prairie's adult female listeners in the general 25 to 54 age group, and I am curious in a professional not a personal way. Would you also characterize women in either age group as being underserved in the current market or do you feel their needs are being met by either the existing CHR station, the country station, or perhaps even an out‑of‑market station?
LISTNUM 1 \l 12264 MR. POUND: I think our response in that area is, a general response first of all, the market is underserved with quality radio and the diversity of formats. Your specific question is in regard to the female members of the marketplace. No, I don't think they are being properly served entirely. There is a real opportunity to bring quality radio. In this case, when you look in our application, find the format finder, you will see the various targets that they identified. And the format that we are proposing, the classic rock format, although it does skew slightly to the male side, it does offer full coverage to male and female and I think they will be properly served.
LISTNUM 1 \l 12265 COMMISSIONER WILLIAMS: Concerning your proposed format, could you explain to us why you feel your format rather than say classic hits, soft AC or even a gospel music format would be the better choice of format to serve the Grande Prairie market?
LISTNUM 1 \l 12266 MR. POUND: Again, I will refer back to the format finder. We spent quite a bit of time researching the market to determine what was most applicable and would be best received in the marketplace. And as you have heard from other applicants already and you will hear from more applicants as we go forward, generally everybody has targeted that format with skews to the left or skews to the right. I think that supports our view on it too. We will probably get into this question, if there are more than two applicants we have some views on that too.
LISTNUM 1 \l 12267 COMMISSIONER WILLIAMS: I am sure you appreciate that there are five other applicants proposing the same format as we have just been discussing. While you provided some additional format information in your presentation, I wonder if you can expand that information. What, in your opinion, are the compelling differences, if any, between your proposed format and the five other classic rock type formats that would make your format the best choice to add programming and musical diversity to the market? What sets your programming above and beyond the others?
LISTNUM 1 \l 12268 MR. POUND: I think our format goes beyond music. Our format, as alluded to earlier yesterday, is a lifestyle. In our experience in the various communities we have worked radio in British Columbia. Radio stations were much more than music. Music became the cement or the mortar of building the brick or the wall of the radio station. The strength of our format targets a marketplace of a young vibrant community that is active and growing and are looking for that niche, if you like, that music mix that they are currently not receiving.
LISTNUM 1 \l 12269 We feel that the execution of the format that we will bring to the community, supported with the commitment to quality talent, will set us apart from any other broadcaster.
LISTNUM 1 \l 12270 COMMISSIONER WILLIAMS: And I am interested, why a blended classic as opposed to a pure format? Why have you chosen a blended classic rock/new rock format rather than either a pure classic rock format or pure album‑oriented rock format?
LISTNUM 1 \l 12271 MR. POUND: Again, we think it best serves the market. It is a complementary format, the new music and the classic rock. It was touched on about the energy involvement, that is it exactly. Although it is a little out of the form, I will share the story. My youngest son, 17, just graduated and the high school theme was The Carpenters We've Only Just Begun, which is quite a stretch for a 17‑year old and their peer group. But that is the identity that this music format stretches. It goes from ourselves all the way down to the 17‑year old and those are the two extreme ends of that format. But by mixing the new music with the classic rock you get a perfect blend, in our view, that the market wants to hear.
LISTNUM 1 \l 12272 COMMISSIONER WILLIAMS: Okay, thank you. We will now move into the area of spoken word. In your March 30, 2006 deficiency response you provided us with a well‑documented breakdown outlining the level of scripted spoken word you proposed to offer on your station. However, it would be helpful to get some idea as to the level of non‑scripted spoken word that you would offer. By non‑scripted I am referring to things such as announcer talk and such. As an average estimate, how many hours of non‑scripted spoken word do you anticipate on this station?
LISTNUM 1 \l 12273 MR. POUND: Well, maybe I can really cover all the spoken word. I will start with the news‑related surveillance. We have 313 minutes committed, about five hours, that is news and sports of about 206 minutes per week, those are 58 newscasts approximately three minutes in length. They will air between 6:00 a.m. and 6:00 p.m. Monday to Friday, and between 7:00 a.m. and 1:00 p.m. Saturday and Sunday.
LISTNUM 1 \l 12274 We have weather news, 29 minutes per week of weather. And then weather surveillance, 63 minutes per week of weather, that would be 126 forecasts. Road information is very critical in the area. We have allocated 15 minutes per week there. And this is specifically answering your question now, general interest of spoken word is 316 minutes: 10 minutes would be our First Nations update, it is a five‑minute program airing twice a week; 30 minutes would be the Local Heroes salute to local coaches and volunteers; 150 minutes would be our community service free air time that we talked about for service groups and charities, 60 seconds, once per hour, seven days a week; 21 minutes a program called Black Gold, weekly feature on the oil patch, a 60‑second feature running 21 times per week; an agriculture program, 60‑second feature 21 times per week, 21 minutes; we have 63 minutes in music‑related features, this is the announcer prep regarding music particularly, this doesn't cover music this covers the spoken word portion; and 21 minutes of additional announcer, if you like, soapbox or local events comments.
LISTNUM 1 \l 12275 COMMISSIONER WILLIAMS: Thank you. Your answers contain as much information as the preamble to some of the CRTC's questions, so you may see a bit of overlap in some of the questions that are following this and some of that is because of the completeness of your answer to this first question. So if you can just bear with us as we work our way through.
LISTNUM 1 \l 12276 In your March 30 deficiency response that your general interest scripted word program would focus on such things as local events, oil, agriculture, charity, non‑profit, something you call soapbox commentary, that the programming would account for four hours of spoken word per week. Would you provide us with more details on the type of content you would provide in these programs or duration and how they would be scheduled? And I think this is one of those questions that falls into that category, so if there is anything more that you haven't covered that you wish to add you are certainly free to do so now, okay.
LISTNUM 1 \l 12277 You have provided a programming grid on page 95 of your application that detailed the level of live versus automated programming to be offered on the proposed station. We have recalculated your numbers to reflect live and automated programming levels over the regulated 126‑hour broadcast. We can see that you would offer 72 hours per week of what you term live programming and 54 hours per week of what you term automated programming. What do you mean by the term automated programming?
LISTNUM 1 \l 12278 MR. POUND: Those would be the voice tracked pre‑recorded announcer inserts on the rotation of the music.
LISTNUM 1 \l 12279 COMMISSIONER WILLIAMS: And would that music be fully automated music programming?
LISTNUM 1 \l 12280 MR. POUND: Yes, it would be.
LISTNUM 1 \l 12281 COMMISSIONER WILLIAMS: You said your station would provide a local service that would cater to what you described as the underserved 25 to 44 male listener of Grande Prairie. However, as a local service you have decided to offer automated programming from 6:00 p.m. until midnight Monday to Friday accounting for 30 hours of programming. As well, with the exception of eight hours of live programming on Saturday between 10:00 a.m. and 6:00 p.m. and four hours of live on Sunday between 10:00 and 2:00, you would also offer 24 hours of automated programming over the weekend. Would you elaborate on your ‑‑ what is your thinking behind this programming decision?
LISTNUM 1 \l 12282 MR. POUND: I mean it is a combination of economic and serving the community. As we indicated, we will expand that as quickly as economically feasible, because our belief historically in any market that we have operated radio stations before is it has been 24 hours live as opposed to the automation. But I think the automation in the radio industry has become a factor of economics and we have taken a conservative approach to our application in that area to make sure that we are effective when we start out or turn on the radio station, if you like. As events happen, if there was a Kelowna fire, as an example, our radio station would be live immediately no matter what time that would be. But as laid out in our application, that is our intent at this moment.
LISTNUM 1 \l 12283 COMMISSIONER WILLIAMS: Okay thank you, Mr. Pound. On page 98 of your application you provide a news grid that outlines a scheduling duration and number of newscasts you will offer on the proposed station. You indicate a total of 202 minutes of news content which mirrors the figure you provided in your March 30 deficiency.
LISTNUM 1 \l 12284 I see that of this 202 minutes no newscasts are scheduled between 6:00 and midnight on any day of the week and only 36 minutes of news programming is scheduled over the entire weekend. Concerning the weekend newscasts, I see it is all scheduled in the morning with nothing scheduled over the 12 hour period from noon until midnight. Again, could you give us a bit more information on how you reached this programming decision?
LISTNUM 1 \l 12285 MR. POUND: That is correct and, again, it is based on a conservative approach on available staff. We have targeted the key areas of presenting news. We are committed, as I touched on moments ago, should significant news happen we will be live at any period during the day, I mean that becomes the mandate of our three members of the news department who get the call and have to be active very quickly. We are committed to that as part of the community involvement. But, as outlined, we are live between 6:00 a.m. and 6:00 p.m. Monday to Friday and are live 7:00 a.m. to 7:00 p.m. Saturday and Sunday in our newsroom.
LISTNUM 1 \l 12286 COMMISSIONER WILLIAMS: And these people are on standby or on call or..?
LISTNUM 1 \l 12287 MR. POUND: Absolutely, Blackberries, cell phones, whatever ‑‑
LISTNUM 1 \l 12288 COMMISSIONER WILLIAMS: Okay.
LISTNUM 1 \l 12289 MR. POUND: ‑‑ they will be available immediately.
LISTNUM 1 \l 12290 COMMISSIONER WILLIAMS: Back to your news grid for a moment. Where does the related surveillance material such as the 60 minutes of weather and 15 minutes of road information per week fit into this grid? Is it scheduled to follow the newscasts or will this information be scheduled at other times of the day and, if so, when and would any of this be available on the weekends during the timeslots we have been talking about?
LISTNUM 1 \l 12291 MR. POUND: Yes, it would be. Part of that, as we touched on before, part of that information presented is the announcer also. The 206 minutes per week run Monday to Friday as the times outlined, 6:00 a.m. to 6:00 p.m. and 7:00 a.m. to 1:00 p.m. Saturday and Sunday. Those are the news, sports, weather. The weather news itself runs 29 minutes per week. The weather surveillance is part of the announcer's presentation and our road reports are scheduled during the Monday to Saturday live period also.
LISTNUM 1 \l 12292 COMMISSIONER: During your 54 hours of automated programming what provisions and mechanisms would you have in place to go live to air with special news and information programming such as weather warnings, emergency measures and that sort of information?
LISTNUM 1 \l 12293 MR. POUND: Yes, that is very very important for our radio station as, again, touching on our people are on call immediately. Winter storms, blizzards, if you spend anytime in Grande Prairie, can be tremendous.
LISTNUM 1 \l 12294 COMMISSIONER WILLIAMS: So who contacts them, how are they contacted?
LISTNUM 1 \l 12295 MR. POUND: It becomes a management decision. Just like you have an emergency plan in a company, if something happens here are the steps that you go through to make sure things are taken care of.
LISTNUM 1 \l 12296 COMMISSIONER WILLIAMS: Okay, so let us say it is January of any given year and you have a blizzard. I guess your General Manager has looked out the window and he sees there is a blizzard and he will start phoning people? I am just trying to figure out how it would work.
LISTNUM 1 \l 12297 MR. POUND: Sure, I mean as you know there is some anticipation of severe weather and that, just like you have planned your programming day, you start to anticipate and then you have a plan in place to deal with those emergency situations. In situations, of course Prairie folks when we have been in the winter, we know that in some cases roads are cut off, in some cases people need to communicate to other people and they can't. On the rare occasion there is no communication and the radio station is the only communication available. That is the important role that our community station will take.
LISTNUM 1 \l 12298 COMMISSIONER WILLIAMS: Okay, thank you. Are there any challenges you face in creating relevant spoken word and news content to meet the needs of your target audience and, if so, what might they be and what specific plans do you have in place to serve them?
LISTNUM 1 \l 12299 MR. POUND: Well 63 minutes of that 316 minutes of general interest spoken word are the responsibility of the announcers preparing their programs and they are focused on the music format relating to artists' events in that music genre. But there is also 21 minutes of that spoken word content. Again, it is the responsibility of the announcer, which may touch on the music but certainly would touch on the lifestyle of our audience, whether it be local events going on related to our audience or commentary on entertainment news environment, that is how we would communicate to them.
LISTNUM 1 \l 12300 COMMISSIONER WILLIAMS: We will move into your contributions to talent. In your March 30, 2006 deficiency response you indicated that in addition to the $20,000 annual direct expenditure commitments Sun Country would contribute an additional $3,000 as required as a participant in the CAB CTD plan. For the public record, would you confirm that by condition of licence your proposed annual CTD expenditures would total $23,000 and, by extension, your CTD commitment over seven consecutive broadcast years would total $161,000?
LISTNUM 1 \l 12301 MR. POUND: Our cash support, as we outlined, will be $231,000. The $3,000 that you are referring to we would direct to the ARIA, the Alberta Recording Industries Association.
LISTNUM 1 \l 12302 COMMISSIONER WILLIAMS: Right, as per your opening remarks.
LISTNUM 1 \l 12303 MR. POUND: That is right. If you like, I can go through the rest of it or we can wait for another question.
LISTNUM 1 \l 12304 COMMISSIONER WILLIAMS: Sure, well maybe I will work through it and that way we will get all of the information on the record that we might otherwise miss.
LISTNUM 1 \l 12305 What measures, if any, will Sun Country have in place to ensure that the annual $5,000 grand prize will be used by the winning artist or band to underwrite studio time as stipulated in your application?
LISTNUM 1 \l 12306 MR. POUND: That is part of the role of our community advisory board. As we talked about, Mr. Neil MacGonigill will be our Canadian Talent Coordinator. Neil and I go back a long time, we started our broadcasts careers together. He moved towards the music industry and I moved towards playing the music that he developed in the music industry. So the radio station itself will have an arms‑length approach to something like that, we won't make the final judgement, we will supply the funding.
LISTNUM 1 \l 12307 COMMISSIONER WILLIAMS: What type of recorded material do you expect as a result of this initiative? Are we talking about a master recording or the winning song or something else?
LISTNUM 1 \l 12308 MR. POUND: It would be our intent to have a CD or what I used to call an album out of that, but we certainly would give exposure on our radio station and encourage other radio stations to do the same.
LISTNUM 1 \l 12309 COMMISSIONER WILLIAMS: Will it be in a current rotation category this new song?
LISTNUM 1 \l 12310 MR. POUND: That would be the intent, but we wouldn't deny the opportunity of local talent in another ‑‑ in a folk area, in a soft rock area, in a country area. We will make time available within our format to profile and highlight that local Canadian talent.
LISTNUM 1 \l 12311 COMMISSIONER WILLIAMS: How long would it be in your rotation?
LISTNUM 1 \l 12312 MR. POUND: I am sorry?
LISTNUM 1 \l 12313 COMMISSIONER WILLIAMS: How long do you anticipate Sun Country would keep the winning song in a current rotation? Are we talking weeks or a couple months or..?
LISTNUM 1 \l 12314 MR. POUND: It would always be part of the format, it would not disappear. It would take a higher rotation, obviously, closer to the event and it would be profiled with more than just a rotation experience. As a three‑month period perhaps it would fall back into a lesser rotation, but it will always be part of our library.
LISTNUM 1 \l 12315 COMMISSIONER WILLIAMS: Okay, thank you. Based on the total hours tuned estimates for your proposed service you expect to generate nearly 200,000 hours of audience tuning in year one, which represents approximately 13 per cent of the total hours tuned in the Grande Prairie market. What factors lead you to believe that this is a large enough audience to sustain your business plan?
LISTNUM 1 \l 12316 MR. POUND: I will pass that to Mr. East and then to Mr. Brundige.
LISTNUM 1 \l 12317 MR. EAST: Let us go straight to Mr. Brundige.
LISTNUM 1 \l 12318 COMMISSIONER WILLIAMS: Mr. Brundige.
LISTNUM 1 \l 12319 MR. BRUNDIGE: I expect that the station will have roughly a 28 share of the audience in the City of Grande Prairie, in the County of Grande Prairie. And that would indicate to me that somehow those numbers don't match up.
LISTNUM 1 \l 12320 COMMISSIONER WILLIAMS: Okay, we can check that. Can you tell me a bit about your economic analysis and research, Mr. Brundige? Some of the other applicants like Hunsperger interviewed 300, Newcap 250, O.K. 403, Bear Creek 400. What was the sample size of your research data?
LISTNUM 1 \l 12321 MR. BRUNDIGE: I did not do the research that way. Mr. Foot did the interviews. I did a study based on the retail trade available in the County of Grande Prairie.
LISTNUM 1 \l 12322 COMMISSIONER WILLIAMS: That is the 43 business owners and managers?
LISTNUM 1 \l 12323 MR. BRUNDIGE: No, no, no. Mr. Foot dealt with those people.
LISTNUM 1 \l 12324 COMMISSIONER WILLIAMS: Okay.
LISTNUM 1 \l 12325 MR. BRUNDIGE: Do you want me to continue on with what I did?
LISTNUM 1 \l 12326 COMMISSIONER WILLIAMS: Yes please.
LISTNUM 1 \l 12327 MR. BRUNDIGE: So I took the retail sales from Canadian markets and then projected a percentage of that number as the radio market for Grande Prairie. Then I got Stats Canada to give me a special run on radio revenue in a defined area of northern Alberta and worked out a per capita amount of spending on radio advertising and applied that to the Grande Prairie market. The numbers came in roughly $60,000 apart, one being slightly under $5 million and the other one being slightly over $5 million. Then I went and did a visit to the market, I talked to various individuals in the market. I am sorry I couldn't give you a list on it, because I was not doing what Mr. Foot ‑‑
LISTNUM 1 \l 12328 COMMISSIONER WILLIAMS: That is fine.
LISTNUM 1 \l 12329 MR. BRUNDIGE: ‑‑ was doing. However, I came away from that visit convinced that the $5 million for 2004 that I had arrived at was low and that it would be considerably higher, probably in the $6 million for 2004. As you have heard today and as I have heard today and as I have heard today, the market since 2004 has grown explosively so we are left with a very very conservative revenue projection.
LISTNUM 1 \l 12330 COMMISSIONER WILLIAMS: Okay. Based on your experience and the work that you have done, how many new radio stations do you believe Grande Prairie could support at this time?
LISTNUM 1 \l 12331 MR. BRUNDIGE: I am sorry, who did you direct that question to?
LISTNUM 1 \l 12332 COMMISSIONER WILLIAMS: Mr. Brundige, sorry, I was still ‑‑
LISTNUM 1 \l 12333 MR. BRUNDIGE: Well, I think I will pass that question onto Mr. Pound.
LISTNUM 1 \l 12334 COMMISSIONER WILLIAMS: Okay, Mr. Pound.
LISTNUM 1 \l 12335 MR. POUND: Well, in light of the news that came forward yesterday, I think the market can quite comfortably support two new radio stations.
LISTNUM 1 \l 12336 COMMISSIONER WILLIAMS: Okay, so it could quite easily support two new radio stations. And if we were to licence one of the incumbents and an independent or two incumbents or two independents, which would be the preferred licensing scenario from your perspective for the Grande Prairie market?
LISTNUM 1 \l 12337 MR. POUND: If we were able to influence the decision we would encourage two independents. We think that brings more diversity to the marketplace, it creates more competition, it gets everybody focused. In our history of broadcast radio enterprises that we have done we thrive in competition. We look forward to a challenge.
LISTNUM 1 \l 12338 COMMISSIONER WILLIAMS: Okay, thank you. In the event the Commission decides not to licence you for the frequency for which you have applied, have you considered the use of another frequency? If yes, which one and, if no, why not?
LISTNUM 1 \l 12339 MR. POUND: Mr. Gray will respond to that.
LISTNUM 1 \l 12340 MR. GRAY: It is of course only in recent months it became quite evident to us that there was the very real possibility there could be two licences granted, so obviously we had to look at where we might go should our frequency be awarded as well as us. And we are convinced and we have confirmed with our consultant from DEM Allen & Associates that in fact the frequency allocation situation in Grande Prairie is really not an issue. I think we have already heard some of the applicants suggest that there are three, four, possibly even more for opportunity, so ‑‑
LISTNUM 1 \l 12341 COMMISSIONER WILLIAMS: So any one of these opportunities would be capable of meeting your coverage ‑‑
LISTNUM 1 \l 12342 MR. GRAY: Yes, yes.
LISTNUM 1 \l 12343 COMMISSIONER WILLIAMS: ‑‑ objectives and would have no negative impact on your business plan?
LISTNUM 1 \l 12344 MR. GRAY: No.
LISTNUM 1 \l 12345 COMMISSIONER WILLIAMS: Okay, I think that concludes my questioning, Mr. Chair. Thank you very much.
LISTNUM 1 \l 12346 THE CHAIRPERSON: Thank you, Mr. Williams.
LISTNUM 1 \l 12347 This morning in your oral presentation and again in answering to a question from Commissioner Williams you mentioned that your CTD cash commitments were $231,000. The information that we have recorded amounts to $161,000, as Mr. Williams mentioned to you. Could you, for our benefit, layout what are those commitments?
LISTNUM 1 \l 12348 MR. POUND: Yes, thank you. Five thousand dollar is the annual music scholarship to attend the Grande Prairie College fine arts music program. And again, our community advisory board, in association with the college will adjudicate and determine where that money goes, to what individual. Five thousand dollars annual talent search program, $2,500 goes directly to the first prize winner, $1,500 to the second prize winner and $1,000 to the third prize winner.
LISTNUM 1 \l 12349 We have budgeted $10,000 in local grants to support new Canadian songwriter, song singer performers to gain exposure in live performance and that is where the assistance of Mr. MacGonigill and our community advisory board will be, to adjudicate and evaluate those. Ten thousand dollars in the annual business of music seminars. This is annual seminar, again under the direction of MacGonigill will help new Canadian talent understand the business side of music.
LISTNUM 1 \l 12350 We will put on a workshop and bring the industry professionals to the community of Grande Prairie. So that they have an opportunity to learn from people who have been in the business. And really the key of this is it is the business of music, how to sign a contract, what to anticipate in a contract, what the experiences are on the road, how to budget accordingly, areas that they can share of their past experience to these new budding performers. I think that is an overlooked area. And of course, the $3,000 annual contribution to the Alberta Recording Industries Association.
LISTNUM 1 \l 12351 We are very committed that the money for the Canadian talent support comes out of the community as part of our broadcast facility and we are very passionate about the fact that it should go back into the community and on a secondary basis back into the region.
LISTNUM 1 \l 12352 THE CHAIRPERSON: Staff has it recorded, your business, $10,000 that you are allocating to the business seminar. Is it a new initiative that you are introducing today or was it really part of your application? And if it was part of your application, where ‑‑ on which pages of the application will I find the information?
LISTNUM 1 \l 12353 MR. POUND: It came out of the conversation in talking to Neil of making this commitment in our application. This is new in our Canadian talent. But you will see it identified in our support areas.
LISTNUM 1 \l 12354 THE CHAIRPERSON: Okay, I have Commissioner Cugini who wants to ask a few questions.
LISTNUM 1 \l 12355 COMMISSIONER CUGINI: Good morning. I just want to ask you a couple of questions on your format, classic rock versus new rock. You mean new rock as opposed to alternative rock music?
LISTNUM 1 \l 12356 MR. POUND: Yes, we do.
LISTNUM 1 \l 12357 COMMISSIONER CUGINI: And will these be scheduled in day parts or will the new rock be scattered throughout the day?
LISTNUM 1 \l 12358 MR. POUND: It is all part of the mix.
LISTNUM 1 \l 12359 COMMISSIONER CUGINI: And the difference between the classic rock and the new rock, other than the era, is there also a difference in the artists that you will play? In other words, will we hear a Rolling Stones song in the classic rock and then their latest release and that will be considered a new rock song, or will you be introducing new artists in the new rock category?
LISTNUM 1 \l 12360 MR. POUND: It will be principally new artists because of the growth in that area of the music industry, but it will feature a Rolling Stones new song. It is new music, current music is probably a more apt description as opposed to what you were calling it, alternative rock, as a category description. It is new music.
LISTNUM 1 \l 12361 COMMISSIONER CUGINI: And in terms of your reflection of the Aboriginal community, will that include playing Aboriginal rock music?
LISTNUM 1 \l 12362 MR. POUND: Absolutely. We would encourage that if it is available. The support of Elder Angie and her direction, so that we can connect to that Aboriginal community. That was the reason that we invited her to be part of our community advisory board so that we did have that connect.
LISTNUM 1 \l 12363 COMMISSIONER CUGINI: Thank you. Thank you, Mr. Chair, those are my questions.
LISTNUM 1 \l 12364 THE CHAIRPERSON: Mrs. Cram.
LISTNUM 1 \l 12365 COMMISSIONER CRAM: I want to go back to the CTD and I confess, I am confused and I think we all are. If I can take you to 5.5 of your supplementary brief. By my numbering it is 18‑Z‑4 and 5. Have you found it? Supplementary brief 5.5.
LISTNUM 1 \l 12366 And I read that, and maybe it was amended, as saying you would be providing $20,000 per year cash commitment.
LISTNUM 1 \l 12367 MR. POUND: Is there a page number on the top right?
LISTNUM 1 \l 12368 COMMISSIONER CRAM: It says 18‑Z‑4.
LISTNUM 1 \l 12369 MR. POUND: Yes.
LISTNUM 1 \l 12370 COMMISSIONER CRAM: You have it? And 18‑Z‑5, both say your CTD would consist of $20,000 per year cash.
LISTNUM 1 \l 12371 MR. POUND: Yes.
LISTNUM 1 \l 12372 COMMISSIONER CRAM: There is no reference whatsoever ‑‑ there is reference to the $5,000 scholarship, the talent search $5,000, and $10,000 to local musicians, singers and bands ‑‑ there is no reference to the $10,000 for the business side of music seminars.
LISTNUM 1 \l 12373 MR. POUND: That is correct.
LISTNUM 1 \l 12374 COMMISSIONER CRAM: And there is no reference to the $3,000 a year for ARIA?
LISTNUM 1 \l 12375 MR. POUND: It is referenced in the deficiency letter where we were asked is the $3,000 inclusive of the $20,000 or external ‑‑ that may not be the right wording ‑‑ and we responded it is external to it and we would ‑‑
LISTNUM 1 \l 12376 COMMISSIONER CRAM: Can you tell me what page that is on your deficiency letter? Maybe I can direct you to paragraph 6 or question 6, March 30 letter. You have it?
LISTNUM 1 \l 12377 MR. HALL: Yes.
LISTNUM 1 \l 12378 COMMISSIONER CRAM: Okay, what that says is you will pay the $20,000 cash but it does not include the small market contribution as a participant in the CAB CTD plan.
LISTNUM 1 \l 12379 THE SECRETARY: Can you please turn on your microphone when you are answering, you know, for us to have the benefit of the ‑‑ for the transcript. If you could just have your microphone turned on when you are answering the questions, so that we can have it for the benefit of the transcript, thank you.
LISTNUM 1 \l 12380 MR. POUND: Sorry.
LISTNUM 1 \l 12381 THE SECRETARY: That is okay.
LISTNUM 1 \l 12382 MR. POUND: Yes, the CAB Canadian talent plan and in that Canadian talent plan is a list of where the authorized or accepted, I guess is a better word, participants in that Canadian talent money and we allocate it to the Alberta Recording Industries Association. We did not identify the Alberta Recording Industries there.
LISTNUM 1 \l 12383 COMMISSIONER CRAM: Yes. You will agree with the that the public record, which is what the competitors have to compete with, there is no mention of ARIA?
LISTNUM 1 \l 12384 MR. POUND: Correct.
LISTNUM 1 \l 12385 COMMISSIONER CRAM: And you will agree with me that the competitors had no notice whatsoever that you were going to give $10,000 to the those business seminars?
LISTNUM 1 \l 12386 MR. POUND: Correct.
LISTNUM 1 \l 12387 COMMISSIONER CRAM: And you agree with me that this is a competitive process?
LISTNUM 1 \l 12388 MR. POUND: Yes, I do.
LISTNUM 1 \l 12389 COMMISSIONER CRAM: You amended your application and in your amended application at 7.2, if you can find that, in your March 30 letter, you amended your..
LISTNUM 1 \l 12390 MR. HALL: Question ‑‑
LISTNUM 1 \l 12391 COMMISSIONER CRAM: Have you got it?
LISTNUM 1 \l 12392 MR. HALL ‑‑ 7?
LISTNUM 1 \l 12393 COMMISSIONER CRAM: 7.2, it is Canadian Talent Development.
LISTNUM 1 \l 12394 MR. HALL: And that is the March 16 letter?
LISTNUM 1 \l 12395 COMMISSIONER CRAM: Yes. You have it, 7.2? It is the amended application that you filed with your deficiency letter.
LISTNUM 1 \l 12396 MR. HALL: On the March 16 letter I have just seven under programming.
LISTNUM 1 \l 12397 COMMISSIONER CRAM: Yes, and then keep going down the page. Okay, by my numbering ‑‑ the numbering on the page it is 92, page 92. Does that help you?
LISTNUM 1 \l 12398 MR. HALL: No, I don't know what..
LISTNUM 1 \l 12399 COMMISSIONER CRAM: You can't find it?
LISTNUM 1 \l 12400 MR. HALL: No, I can't.
LISTNUM 1 \l 12401 COMMISSIONER CRAM: Okay. I then wanted to talk about your 313 minutes of news, sports and weather as you said in your talk today at page 12. And I was looking at the file on page 98 of the file, and I hope you can find that, it is the grid, the news grid, and it says 206 minutes for 58 newscasts. Is the difference between the 206 minutes and the 313 minutes that you mentioned today those surveillance and road reports that you were referring to with my colleague, Commissioner Williams? I am sorry, have you not found the news grid?
LISTNUM 1 \l 12402 MR. HALL: The news grid is right there. Yes, 206 minutes.
LISTNUM 1 \l 12403 MR. POUND: The 206 minutes is our 58 newscasts, approximately three minutes that are being aired between 6:00 a.m. and 6:00 p.m. Monday to Friday and between 7:00 a.m. and 1:00 p.m. Saturday and Sunday.
LISTNUM 1 \l 12404 COMMISSIONER CRAM: Okay, that is the 206 minutes, right?
LISTNUM 1 \l 12405 MR. POUND: Correct.
LISTNUM 1 \l 12406 COMMISSIONER CRAM: So what is the difference between the 206 and the 313 of news, sports and weather that you spoke of today?
LISTNUM 1 \l 12407 MR. POUND: Road reports 15 minutes per week, the weather surveillance 63 minutes per week, 126 forecasts, the weather news, which is your extended forecast, 29 minutes per week of weather news.
LISTNUM 1 \l 12408 COMMISSIONER CRAM: Okay. So really ‑‑ and this 206 minutes, when you say news on page 98, you mean news, weather, sports?
LISTNUM 1 \l 12409 MR. POUND: Yes. Three minutes of news, approximately a minute of sports and 30 seconds of weather.
LISTNUM 1 \l 12410 COMMISSIONER CRAM: Okay. So if I were what I would say comparing apples to apples, when the other applicants are referring to their newscasts, I would be comparing 206 minutes versus what the other ones are saying were their newscasts?
LISTNUM 1 \l 12411 MR. POUND: I would agree.
LISTNUM 1 \l 12412 COMMISSIONER CRAM: Okay, thank you very much. Thank you, Mr. Chair.
LISTNUM 1 \l 12413 THE CHAIRPERSON: Mr. Langford.
LISTNUM 1 \l 12414 COMMISSIONER LANGFORD: Thank you, Mr. Chairman.
LISTNUM 1 \l 12415 I too have a fairly simple question of clarification and it may just be that I misheard you but it is better, rather than wait for the transcript, to get it on the record. As I understood your projected audience for your service, for your new service, on page 29 of the Carat market study you projected an audience of 10.7 per cent for year one rising to 15.1 per cent by year seven and that would be for all persons 12 plus. I thought, however, that in response to Commission Williams' question you predicted a 28 per cent share by year seven. Now, I may have heard that wrong, but I think that is worth clarifying.
LISTNUM 1 \l 12416 MR. POUND: I will pass that to Mr. Brundige.
LISTNUM 1 \l 12417 COMMISSIONER LANGFORD: Thank you.
LISTNUM 1 \l 12418 MR. BRUNDIGE: Does the Kerat study become part of the application?
LISTNUM 1 \l 12419 COMMISSIONER LANGFORD: Well it is now, it is filed to support the application and, to be very clear, I have year one at 10.7 per cent, year two at 12.3 per cent, year three at 13.9 per cent, year four at 14.2, year five 14.5, year six 14.8, year seven 15.1. But the number I thought I heard this morning was 28 per cent which would be, I think you would agree, a considerable improvement on 15.1. So I just want to make sure that we have a clear record on this.
LISTNUM 1 \l 12420 MR. BRUNDIGE: The 28 per cent is what we believe the format will deliver.
LISTNUM 1 \l 12421 COMMISSIONER LANGFORD: Sorry, could you repeat that?
LISTNUM 1 \l 12422 MR. BRUNDIGE: The 28 share is what we believe the format will deliver.
LISTNUM 1 \l 12423 COMMISSIONER LANGFORD: Okay, so you have got to help me here. You are basically saying the Kerat study was the Kerat study, but having had time to reflect on the entire context of this application you would like to state that you foresee a 28 per cent share?
LISTNUM 1 \l 12424 MR. BRUNDIGE: That is correct.
LISTNUM 1 \l 12425 COMMISSIONER LANGFORD: And can you give me any idea kind of what elements sort of ‑‑ I mean it is just ‑‑
LISTNUM 1 \l 12426 MR. BRUNDIGE: How did I get there?
LISTNUM 1 \l 12427 COMMISSIONER LANGFORD: ‑‑ right up there with St. Paul on the road to Damascus, you know. This is a huge conversion, you have almost doubled your projections. Can you give us some help to understand that?
LISTNUM 1 \l 12428 MR. BRUNDIGE: Yes, I can. I came on board with Sun Country after the Kerat study was done. What I did in doing the audience projections was that I looked at Brandon, Lethbridge and Prince George where you had small to medium sized markets with rock stations in the marketplace. I looked at what share those stations had. I then did some, which I must admit is subjective, juggling and poking at it, and then applied the share points to the population of Grande Prairie. And I arrived at a number ‑‑ of course, when you are doing this kind of work you are really not going to wind up with a number, you are going to wind up with a range ‑‑ and I wound up with a range of between 25 and 30 as the share that could be expected for this format.
LISTNUM 1 \l 12429 COMMISSIONER LANGFORD: Okay, I wonder if I could pursue that with you for a moment, and you may want to get back to me on these numbers and that is fair. Did you arrive at that 28 share based on only one new service being licensed?
LISTNUM 1 \l 12430 MR. BRUNDIGE: Yes, I did.
LISTNUM 1 \l 12431 COMMISSIONER LANGFORD: Now here is a series of scenarios for you and, as I say, if you want to get back to us in Phase 3 that is fine. I would like to have your reaction to the notion of two commercial being licensed, your reaction to two commercial plus the speciality gospel station being licensed and your reaction to three commercial being licensed. And of course, the good news is you would be one of anyone of those scenarios. But I would think the 28 figure may change, but I leave with you if you want to get back to us on that, that is perfectly all right and you can do that in Phase 3.
LISTNUM 1 \l 12432 MR. POUND: Just for clarification, you are looking in the context of share of market?
LISTNUM 1 \l 12433 COMMISSIONER LANGFORD: Yes.
LISTNUM 1 \l 12434 MR. POUND: Okay.
LISTNUM 1 \l 12435 COMMISSIONER LANGFORD: You might also, if you want to, indicate whether you think that would have a major impact on your business plan, you can throw that in too. I mean, because all the information is relevant to us trying to decide first of all what is ‑‑ you know, we have to figure out what is good for the market, what is good for you, we don't want to put you in an.. It is no fun to licence someone and watch them die, this is not where we get our pleasure. And we get no pleasure out of watching incumbents go down the tubes either. So if you have any views on that at the same time, if you want to share those with us, that would be fine.
LISTNUM 1 \l 12436 MR. BRUNDIGE: Commissioner Langford, I would like to ask you one question or make a comment about what you have asked us to do.
LISTNUM 1 \l 12437 COMMISSIONER LANGFORD: Usually we ask the questions, but all right I will give you a chance.
LISTNUM 1 \l 12438 MR. BRUNDIGE: I am well aware of that, sir. In looking at two commercial plus the gospel, two commercial and three commercial, the share that can be projected out of that scenario is very very dependent on what the incumbents do to shuffle their formats compared with what the new stations are doing. And I would like to ask you if you would accept an answer for each one of those scenarios that gave you a range?
LISTNUM 1 \l 12439 COMMISSIONER LANGFORD: Absolutely. I understand that, you know, we don't have any Harry Potters here, this isn't divination class or something.
LISTNUM 1 \l 12440 MR. BRUNDIGE: Yes.
LISTNUM 1 \l 12441 COMMISSIONER LANGFORD: So sure, as close as you can come to help us to understand what happens with us on different scenarios. Because I am interested to see here that coming on board late, sir, you have looked at 15 and practically doubled it because you are saying no, no, no, you know, I understand this market differently. So obviously, it is very tempting to for us to want to pick your brain and your experience and say well help us understand the sort of fallout that might come from different scenarios. And if you could share that with us in Phase 3 that would be very very helpful.
LISTNUM 1 \l 12442 MR. BRUNDIGE: No problem.
LISTNUM 1 \l 12443 MR POUND: If I could add a comment to your overall question?
LISTNUM 1 \l 12444 COMMISSIONER LANGFORD: Absolutely.
LISTNUM 1 \l 12445 MR. POUND: We have operated radio stations at times when interest rates were 20 per cent and employment or unemployment, depending on what side of the fence you are on I guess, has been as high as 17 per cent. We know how to operate in a very tight economic environment without taking the salt off the popcorn, if you like. And we are prepared to operate in that environment, if need be, to bring good radio to Grande Prairie.
LISTNUM 1 \l 12446 COMMISSIONER LANGFORD: Well, I appreciate that and you will have two more phases in which to kind of make that statement as you begin to, you know, understand more of what your competitors are saying. And I think by now people ‑‑ anybody who hasn't figured out the line of questioning coming off this panel by now maybe should be starting with a paper route rather than a radio station. But any guidance you can give us would be gratefully received.
LISTNUM 1 \l 12447 MR. EAST: I wonder if I ‑‑
LISTNUM 1 \l 12448 COMMISSIONER LANGFORD: Those are my questions, Mr. Chair.
LISTNUM 1 \l 12449 THE CHAIRPERSON: Thank you, Mr. Langford. Do you want to add something, Mr. East?
LISTNUM 1 \l 12450 MR. EAST: Yes, I do. I just wanted to clarify the differences of the numbers that Mr. Langford has brought up. What we did in gathering our statistics is we retained Mr. Brundige, we retained Mr. Foot, we retained the Kerat company to do their work for us and whatever they came up with is what we have filed with you. So that is the difference and so it is in there to be noticed as a difference.
LISTNUM 1 \l 12451 Now, speaking specifically of the Ceret, we also had them do a financial segment for us. And while there were some of these differences that we had on the programming side, on the revenue side they projected something like $700,000 in the first year and we said no, no, we can't accept that, we don't want to put that in our brief at all, so what have you done possibly wrong. And they come back and said no, statistically was where they approached their numbers from, statistically that is what the market should do. So their revenue numbers are not in there, but their programming numbers are and they are somewhat different in areas compared to what we finalized for ourselves.
LISTNUM 1 \l 12452 COMMISSIONER LANGFORD: Well then it is my guess, that though we have given you a little homework, you should welcome the opportunity to straighten this out.
LISTNUM 1 \l 12453 MR. EAST: Right, love homework.
LISTNUM 1 \l 12454 COMMISSIONER LANGFORD: Thank you.
LISTNUM 1 \l 12455 MR. GRAY: Mr. Langford, if I can comment, we do appreciate that opportunity. What happened and that was the sequence of events that Mr. East provided to you, we simply looked at the Kerat report to do with the financial thing and chose not to include it, because clearly on that basis why would we even apply. They were clearly wrong, this was Grande Prairie, not somewhere else.
LISTNUM 1 \l 12456 However, as far as the information you do have on file, it was filed because clearly they nailed the format, they knew where the void was, we agreed with that, we simply did not agree with the share and that is why you and Mr. Brundige are having the exchange you are. So the opportunity you have now given us is appreciated and we will get that clarified. But it is rather interesting because in this case Kerat, the consultant, we got their information and usually you pay them for things you don't know, but the experienced broadcasters at this table simply said the client knows more than the consultant.
LISTNUM 1 \l 12457 COMMISSIONER LANGFORD: That is why we are licensing you folks maybe and not Kerat ever.
LISTNUM 1 \l 12458 MR. GRAY: Thank you for the licence.
LISTNUM 1 \l 12459 COMMISSIONER LANGFORD: Check the word maybe.
LISTNUM 1 \l 12460 THE CHAIRPERSON: Mr. Pound, you are going to have a community advisory board and there were no discussions whatsoever about your.. But could you give, in a few strokes, give me its mandate and how often they will be meeting and to whom they are going to be reporting and is it a consultative board or is it a board that makes decisions or whatever?
LISTNUM 1 \l 12461 MR. POUND: Thank you. I will pass that answer to Mr. Gray.
LISTNUM 1 \l 12462 MR GRAY: Thank you, Mr. Arpin.
LISTNUM 1 \l 12463 First of all, I would like to mention that the notion of the community advisory board is on the record and it will be found in at least one of the letters of support and it would find its way onto the record that way, because we obviously talked to community leaders and it was really in the community of Grande Prairie itself that the idea came up.
LISTNUM 1 \l 12464 We as broadcasters were aware that they do exist. We are also aware that usually they wind up being window dressing and don't work. However, we saw a community here that really understood what it needed and where the void was and where the services were required. So we do have a draft copy here and I will read them for the record and I can get a cleaned‑up copy and submit it to the Secretary so you have it.
LISTNUM 1 \l 12465 So we have defined here, and we did read off earlier the people that would be on the advisory board so I won't repeat that, the goals the guidelines for the community advisory board and there are about eight points. But in answer to your question about is it just an advisory board or are they a decision‑making board, there are a couple of areas in here where they wind‑up being third party and do make the decisions on behalf of the applicant and I will go through them and I will point that one particular one out as we get to it.
"To recommend to management, from time to time, opportunities to better serve the Grande Prairie community and the target radio audience. To monitor the news and spoken word programming by the station to make sure that 103.3 FM that the station's commitment for fair and balanced news and information coverage, with a focus on local coverage first, is maintained. To monitor and report to the management team that in the opinion of the advisory board the overall performance of 103.3 FM fairly and honestly reflects the geographic, ethnic, cultural and socioeconomic needs of the Grande Prairie and region citizens. To monitor and recommend fair and sufficient promotion and radio coverage for local events, organizations and causes."
LISTNUM 1 \l 12466 And this is the area where they wind‑up without the influence or interference of management:
"To manage the distribution of Canadian Talent Development funds where other third parties have not been designated. To recommend appropriate and effective programs and initiatives to 103.3 FM to help reduce the problem of substance abuse in the community."
LISTNUM 1 \l 12467 And it was in that area that this idea was spawned.
"To recommend to 103.3 FM a means by which it can assist the RCMP and the City of Grande Prairie Crime Prevention Coordinator with crime prevention initiatives."
LISTNUM 1 \l 12468 Such as Hot Cars program and some of those, but we won't go into those at this moment.
"To monitor and advise 103.3 FM's Children are Champions Charity, the advisory board will review and recommend organization and individual needs project applications for fund assistance. To keep minutes and records of all Grande Prairie community advisory board minutes and to advise and liaise with the 103.3 FM on community issues and to provide the documents to the corporation owners and management for consideration and community action."
LISTNUM 1 \l 12469 So in other words, what they do will be on the record and even the directors who aren't involved in hands‑on day to day operation will be aware of what is happening between management of the station and the advisory board. And finally,
"To recommend annually community members to be board members that best represent the values and goals of the Grande Prairie community."
LISTNUM 1 \l 12470 So thank you for the opportunity for giving you more details.
LISTNUM 1 \l 12471 THE CHAIRPERSON: Thank you very much, Mr. Gray. I think there is no need to file, because the recorder took it and so we know where to get the information.
LISTNUM 1 \l 12472 MR. GRAY: Thank you.
LISTNUM 1 \l 12473 THE CHAIRPERSON: Before moving, the legal counsel has a question for you, Mr. Pound. Where you heard me ask and all my colleagues ask each of the applicants where will be the ‑‑ well, the target, you identified your target being 35 to 54, but we have been looking for the median age. So have you had a chance to think about what will be the median age of your listener?
LISTNUM 1 \l 12474 MR. POUND: It will be 39.
LISTNUM 1 \l 12475 THE CHAIRPERSON: It will be 39, and it will be skewed mostly ‑‑ more towards men than female, but ‑‑
LISTNUM 1 \l 12476 MR. POUND: That is correct.
LISTNUM 1 \l 12477 THE CHAIRPERSON: ‑‑ do you have an idea of the ratio, 60/40 or 55/45?
LISTNUM 1 \l 12478 MR. POUND: Yes I do, I have to just get my mind wrapped around it. I should have written it down, it is 70/30.
LISTNUM 1 \l 12479 THE CHAIRPERSON: Seventy/thirty male. And having the legal counsel..
LISTNUM 1 \l 12480 MS FISHER: First of all, we just wanted to thank you for submitting the documents updating the ownership information concerning Sun Country Cablevision Ltd. And we note that you filed the Certificate of Incorporation of 572843 Alberta Ltd., but that the Articles of Incorporation for that company were not filed. And so we would like to request that you could please file a copy of the Articles of Incorporation for that company, excluding the certificate which you have already filed, no later than June 30?
LISTNUM 1 \l 12481 MR. POUND: Yes.
LISTNUM 1 \l 12482 MS FISHER: Thank you. My second question is with respect to the request from Commissioner Langford and we just wanted to confirm when you could provide the information on the clarifications regarding the audience share for us. He has indicated Phase 3 and we wondered if you could provide that by the end of day today?
LISTNUM 1 \l 12483 MR. POUND: Yes, we will.
LISTNUM 1 \l 12484 MS FISHER: Okay, those are my questions. Thank you, Mr. Chair.
LISTNUM 1 \l 12485 THE CHAIRPERSON: Thank you. Well, now it is your two‑minute chance to tell us why you think the Commission should grant you a licence to serve Grande Prairie.
LISTNUM 1 \l 12486 MR. POUND: Thank you. Sun Country's application to serve the Grande Prairie and district community has the financial resources, the extensive industry experience in community radio and a corporate board of directors with a proven track record to provide the vision for success that cannot be matched by any other applicant. We have targeted the market with the optimum format, classic rock. We bring an independent newsroom to reflect and report back to Grande Prairie, we bring a new ownership group to the community. Sun Country brings diversity and broadcast excellence to Grande Prairie.
LISTNUM 1 \l 12487 Our new radio station will effectively and continuously connect to Grande Prairie with the guidance of our community advisory board members. Citizens of Grande Prairie who believe in our passion and focus to bring outstanding community service and quality radio to the Peace Country. Sun Country will be Northern Alberta's most committed advocate of our region's new songwriters, song singers and performers. Our local Canadian talent will enjoy the endless opportunities of financial, promotional and educational support in their budding careers. We propose a realistic business plan based on sound judgement and successful business experience.
LISTNUM 1 \l 12488 Mr. Chairman, Commission members, Commission staff, we are proud and passionate about our application before you today. We firmly believe our commitment to the CRTC and the citizens of Grande Prairie are head and shoulders above the rest. This is our only radio application of available opportunities and it is for the community and radio listeners of Grande Prairie. Thank you.
LISTNUM 1 \l 12489 THE CHAIRPERSON: Thank you very much, Mr. Pound. Thank you to your team. We will take a 10‑minute break and we will get back to hear the Jim Pattison Group application.
‑‑‑ Upon recessing at 1115 / Suspension à 1115
‑‑‑ Upon resuming at 1133 / Reprise à 1133
LISTNUM 1 \l 12490 THE CHAIRPERSON: Ms Secretary.
LISTNUM 1 \l 12491 THE SECRETARY: Thank you, Mr. Chairman.
LISTNUM 1 \l 12492 We will now proceed with Item 7 on the agenda, which is an application by Jim Pattison Broadcast Group Ltd. (the general partner) and Jim Pattison Industries Ltd. (the limited partner), carrying on business as Jim Pattison Broadcast Group Limited Partnership for a licence to operate an English‑language FM commercial radio programming undertaking in Grande Prairie.
LISTNUM 1 \l 12493 The new station would operate on frequency 104.7 MHz (channel 284C1) with an effective radiated power of 100,000 watts (non‑directional antenna/antenna height of 266.4 metres).
LISTNUM 1 \l 12494 Appearing for the applicant is Mr. Rick Arnish, who will introduce his colleagues. You will then have 20 minutes for your presentation. Mr. Arnish.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 12495 MR. ARNISH: Thank you very much, Madam Secretary.
LISTNUM 1 \l 12496 Good morning, Mr. Chairman, members of the Commission and Commission staff. Before we begin our presentation this morning I would like to introduce to you our panel.
LISTNUM 1 \l 12497 My name is Rick Arnish, President of the Jim Pattison Broadcast Group Limited Partnership, which is headquartered in Kamloops, B.C. We are very pleased to be here today to present our application for a new classic rock FM radio station to serve the City of Grande Prairie, Alberta.
LISTNUM 1 \l 12498 With me today is our Grande Prairie Alberta Management Team responsible for the day to day local management of our existing Grande Prairie station, Big Country 93.1 CJXX FM. To my immediate left is our General Manager, Mr. Ken Norman, who has been working in the Grande Prairie radio market for 17 years. To his left is our News Director, Mr. Gord Sharp, who has worked in the Grande Prairie market for 25 years. To my immediate right is our Sales Manager, Anne Graham, who has been working at the station for 17 years.
LISTNUM 1 \l 12499 To the right of Anne is Kim McKechnie, who is Sales Manager of the Pattison Group radio stations in Kelowna, B.C. Immediately behind me is Chris Weafer, our legal counsel from the law firm of Owen, Bird in Vancouver. To the left of Chris is Vice‑President, Finance of the Pattison Broadcast Group, Mr. Bill Dinicol. And to the Chris's right is Mr. Gerry Siemens, of our Vancouver operations who assisted with the preparation of our application. We are now ready to begin our presentation.
LISTNUM 1 \l 12500 The Jim Pattison Broadcast Group Limited Partnership is a regional player in the two most western provinces of our country, Alberta and British Columbia. Our group consists of 23 radio and television stations with all stations located in small markets, except for our two Vancouver stations and our medium‑sized market station in Kelowna, B.C. As a small‑market broadcaster we have made significant commitment to provide top quality local programming, outstanding local news and information services and a total dedication to be intertwined in the cities and towns we serve. The 107 letters of support for our application confirm we have met these commitments in Grande Prairie.
LISTNUM 1 \l 12501 Our local stations and staff serve as the voice of their communities. Our broadcast group's public service record, I am proud to say, speaks for itself and has been recognized by the Canadian Association of Broadcasters, regional broadcast associations and the RTNDA on a number of occasions over the years.
LISTNUM 1 \l 12502 The Jim Pattison Broadcast Group knows how important it is to provide local and regional reflection. We have local management in place at all of our stations who make local decisions in the best interest of the station and the community. All of our stations' on‑air news and information personnel have a major commitment to provide local live reflection in these markets as opposed to networking from a larger centre. Our mandate is to ensure that our best practices for the marketplace is that of local programming staffed by live personnel.
LISTNUM 1 \l 12503 In Grande Prairie we are a standalone FM station in a marketplace competing against one other standalone FM station. Our existing station, Big Country CJXX FM is a country music format designed to serve a broad spectrum of country music listeners, including teenagers, young adults and a more mature audience. Our competitor station is CFGP FM, a Hot AC radio station geared to 18 to 49‑year olds.
LISTNUM 1 \l 12504 We believe, consistent with the Commission's criteria, that a new station for Grande Prairie must: one, provide a new music format choice to the market; two, have strong Canadian Talent Development initiatives and other tangible benefits that contribute in a material way to the Canadian broadcast system; three, be based on a solid realistic business plan and have the financial resources of a strong owner to ensure commitments are met over a seven‑year licence term and beyond; four, have minimal impact on existing players; and five, be of benefit to the local community.
LISTNUM 1 \l 12505 I will now turn our presentation over to our Grande Prairie team lead by Ken Norman.
LISTNUM 1 \l 12506 MR. NORMAN: Our research clearly indicates that a major portion of the Grande Prairie radio audience is not being served by a local FM station playing a unique and distinct format, which is classic rock. Classic rock has been described as the Energizer Bunny of radio music. In market after market research shows classic rock subgenres like older classic rock Led Zeplin, Jimmy Hendrix, Neil Young, Rush, Chilliwack, Pink Floyd along with younger classic rock like Van Halen, ZZ Top, BTO, Brian Adams, The Eagles and the Dooby Brothers consistently rank at or near the top of listeners' preferences.
LISTNUM 1 \l 12507 While classic rock has broad‑based appeal, the format has been tested and been proven to be particularly popular with males 35 years of age and older. The distinct and unique classic rock format continues to grow across Canada and the United States as our population ages.
LISTNUM 1 \l 12508 In the last several years classic rock has been one of the top music cluster choices of 35 to 54 adult males in the radio marketplace. There are a number of contributing factors to the format's performance, among them is a target demo focus, classic rock stations have a core audience of men 35 to 54. It was just over seven years ago that classic rock surpassed oldies in 35 to 44‑year old men's listening choices and the format hasn't looked back.
LISTNUM 1 \l 12509 Our classic rock station will be distinct from what is already available in the Grande Prairie market. Our new station will reintroduce many songs that will appeal to 35 plus males that have not been aired on any local stations in significant numbers. By carefully balancing pure classic rock artists such as the Rolling Stones, Eric Clapton, The Guess Who along with AC/DC, Prism, Aerosmith and Trooper, the classic rock format has become as comfortable for the 35 plus male as a pair of Levis or a mustang convertible.
LISTNUM 1 \l 12510 Here is a sample of what their new radio station will sound like.
‑‑‑ Audio presentation / Présentation audio
LISTNUM 1 \l 12511 MS GRAHAM: In building our application we realize that image in the format is very important. If approved, our goal will be to create a bond with our listeners stronger than most stations can, simply because the target audience will associate the music and surrounding pop culture of the station with the best times of life. They are not feeling old, but forever youthful because of that relationship and the classic rock format defines that moment in their lives.
LISTNUM 1 \l 12512 Our search for a desirable format was for one that would have minimal impact on the stations already established in Grande Prairie. Our classic rock format will appeal to males 35 to 54 years of age, but also to include male listeners five years younger or older than this demographic. We will focus on Canadian and international artists of the classic rock genre, we would also spotlight new and emerging Canadian artists and give them the opportunity to expose their music to a new audience.
LISTNUM 1 \l 12513 Our station named The Drive will air a number of special programs that will provide our listeners with a full range of classic rock. They include, as described in our supplementary brief: Ear to the Tracks, this will highlight a Canadian album in its entirety; Border Crossing, this will feature culturally diverse rock music from around the world; Electric Lunch, every weekday from noon to 1:00 p.m. we will ask listeners to fax, email or telephone in their suggested music sets; Live Wire, an extension of the classic rock format as we profile the heavy music that typified the rock of the 1980s; Off the Record, an in‑depth look at rock `n' roll's classic artists with host Joe Benson; The Canadian Rock Review, a short‑form feature which will air twice a day providing background on the people that made the music.
LISTNUM 1 \l 12514 And now to our commitment on local reflection in Grande Prairie here is Mr. Gord Sharp.
LISTNUM 1 \l 12515 MR. SHARP: Our new station, The Drive, will be a classic rock format with a heavy emphasis on news and information programming. Nine hours and 15 minutes each week will be devoted to providing information to our audience, 35 to 54‑year old males, which are significant consumers of news and information. Our news and sportscasts will be well researched, written and broadcast with a focus on the local community and region covering the meetings, press conferences and emergency happenings that our audience needs to know about.
LISTNUM 1 \l 12516 Focus groups have told us what the area wants from an information department, strong local coverage and strong on‑air news and sports personnel. The Drive's news department will build on our existing contacts in the region. Currently on CJXX FM we average more than 25,000 stories annually from across the region aired on our newscasts. We strive for 80 per cent local content on each cast, but often it is 100 per cent. The new station will also have local and regional coverage as its top priority. We also pride ourselves on localizing provincial, national and international stories, federal and provincial budgets, terrorist attacks, crime, agriculture and other stories from outside the Peace Region will be broken down and local comment will be sought.
LISTNUM 1 \l 12517 We will continue our practice of the current newsroom in developing strong relationships with city, county and other politicians from across the area. We regularly interview our member of Parliament and MLAs representing the region and have them explain political issues to our listeners. The Regional College in Grande Prairie is a great resource to our newsroom, we will continue to interview the political scientists, historians, economists and other experts when the expertise is needed.
LISTNUM 1 \l 12518 Grande Prairie is an active sporting life with winter and summer sports drawing thousands of fans and competitors each season. Local coverage on The Drive will be our priority in sports coverage.
LISTNUM 1 \l 12519 Members of the Commission, there is no morning newspaper or local television in Grande Prairie. While we will broadcast news throughout the day, morning information on radio is vitally important to the people of the region. This will continue to be important. Samuel Johnson wrote, "Journalism is a flaming sword, hold it high, guard it well." We will.
LISTNUM 1 \l 12520 I have always felt it an honour and a privilege to be in the news profession. Our new station will work very hard to uphold the news and sports standards that CJXX FM currently provides to the people of Grande Prairie and, in particular, The Drive's 35 to 54‑year old male demographic. We are particularly pleased to receive a letter of support from Dr. Duff Crerar of Grande Prairie Regional College, the letter stated:
"To coin a term, CJXX has been able to localize national and international news coverage by its close interaction with professional scholars at Grande Prairie Regional College. In this way, the station has provided a valuable forum for informed discourse across the region. I hope that this application will be successful, as both their trajectory and intentions are to maintain and improve this service."
LISTNUM 1 \l 12521 In Grande Prairie the ability to develop synergies with our existing newsroom at CJXX FM and other Pattison Broadcast Group stations in Western Canada will enable us to make a commitment to news and information programming that a standalone station would find difficult to match. Our commitment includes hourly five‑minute newscasts from 6:00 a.m. to 6:00 p.m. Monday to Friday with additional updates on the half hour during breakfast and late afternoons. The Drive's news coverage will continue on the weekend as well. Our newsroom will remain staffed Saturdays and Sundays with five‑minute reports every hour from 6:00 a.m. through 6:00 p.m.
LISTNUM 1 \l 12522 The Drive will provide a minimum of nine hours and 15 minutes of news and sports reflection each week. In addition to that commitment, we will provide local and surveillance material of three hours, 30 minutes per week covering issues such as weather, traffic and other current and relevant events.
LISTNUM 1 \l 12523 It cannot be stressed enough that being live and current is critical to those who live in the north, that is why we commit 30 minutes a day, seven days a week to environmental and surveillance material.
LISTNUM 1 \l 12524 Our weekly commitment for local reflection of news, weather, sports, environmental and surveillance coverage will be 12 hours, 45 minutes. When we include interstitial spoken word and our special music program spoken word we will have 23 hours and 51 minutes of spoken word per week.
LISTNUM 1 \l 12525 MR. ARNISH: I would like to highlight the significant tangible benefits that will come from approval of our application. Our application contains commitments in an amount of over $2 million in direct expense Canadian talent and employment equity initiatives. This is almost three times the next highest commitment of any other applicant in these proceedings. We will spend $700,000 over the course of our licence in support of the Save the Music Foundation initiative. We believe that in the Save the Music Foundation we have identified the most significant new initiative for the development of emerging talent in Canada. This addresses Canadian talent at its most crucial point, the education of our youth in music.
LISTNUM 1 \l 12526 We have established a unique partnership with the Canadian Rocky Mountain Music Festival which has earned an international reputation as one of the leading festivals of its kind. Our partner will be responsible for ensuring that our annual $100,000 commitment per year is distributed in accordance with the Commission's guidelines for Canadian Talent Development.
LISTNUM 1 \l 12527 Contributions will ensure instruments are in schools, mentoring occurs for music educators, opportunities are created for students to travel to music events and competitions away from home and bursaries and scholarships are available to students in Alberta.
LISTNUM 1 \l 12528 Our Save the Music Foundation has struck a cord in the community of Grande Prairie. As Ms Arlene Miller stated in her letter of May 18, 2006 to the Commission:
"The CRTC has worked within the radio industry to sustain, develop and ensure that the Canadian music industry reflects our unique Canadian culture and heritage. Without children and music programs in Alberta how can we build a foundation to achieve those goals?"
LISTNUM 1 \l 12529 We also greatly appreciate the support letter we received from talent representative agency IMAC Management which stated:
"Save the Music Foundation is a vital tool that addresses Canadian Talent Development at its most infinite grassroots stage and it will raise the quality of music education in Western Canada."
LISTNUM 1 \l 12530 We further commit an additional $500,000 over the course of seven years to other CTD initiatives, those are outlined in our supplementary brief and we are very proud of the contribution we will make to the Grande Prairie community in Canadian Talent Development in the region.
LISTNUM 1 \l 12531 We have also made a significant financial commitment of $350,000 over the licence term for the Canadian women in radio Career Accelerator Program. This is a program which is on the verge of running out of funding absent our commitment. We are aware that women across the country have benefited from this significant initiative, we hope to keep it alive.
LISTNUM 1 \l 12532 We have also committed $350,000 for a new career accelerator program designed for broadcasters that are Aboriginal persons, visible minorities and persons with disabilities. We have also committed $175,000 for an employment equity initiative in alliance with the Métis Nation of Alberta and the Grande Prairie Regional College.
LISTNUM 1 \l 12533 We are pleased to have the support of the Métis Nation of Alberta, as stated in their letter of May 15, 2006. The Métis Nation of Alberta has worked with the Pattison Group in other areas of the province successfully. We hope that this application presents another such opportunity to expand a relationship with them. The Pattison Group should be commended for their continuing efforts to reach and support the Métis community within Alberta.
LISTNUM 1 \l 12534 Why the Pattison Group?? Mr. Chairman, you have a large number of applicants before you, we are all making promises about contributions to the community, to Canadian talent and the to the broadcast system. But to deliver on these contributions there must be a business case. The Pattison Broadcast Group has a long history of running successful small‑market stations. We are confident in our ability to meet the ambitious commitments that we have made. We have a solid and attainable business plan and we have the resources of the Pattison Group of companies behind us. The Broadcast Group is at the very cornerstone of that group of companies and we are in the broadcast industry for the long haul.
LISTNUM 1 \l 12535 In every business that the Pattison Broadcast Group goes into it does so on the premise that the business is multi‑generational and our commitments in this Grande Prairie application, if approved, go beyond any given licence terms. As the Commission is aware, it is generally the case that smaller markets have different challenges than larger markets. In smaller markets where the Commission licences additional owners a common result has been a net reduction in spoken word programming in the market as licensees seek efficiencies to respond to the competition.
LISTNUM 1 \l 12536 Given the critical importance of spoken word programming in smaller markets, it is important to note that granting our application will result in the most significant increase in the availability of spoken word programming in Grande Prairie. Our commitment to news and information in the market is already established and granting of this new licence will enable us to increase this level of service. Licensing an additional owner to the market will inevitably result in pressure in all players to find the most efficient way to service the market, often resulting in a decrease in local originated spoken word programming.
LISTNUM 1 \l 12537 In smaller markets where an additional owner has been licensed it has often been the case that there is a rush to the middle in terms of programming format as the multiple owners compete to attract the largest audience. This rarely results in an increase in sustainable diversity of format in the smaller market. Licensing and incumbent in a secondary market ensures that the competitors will attempt to diversify their formats as there is no incentive to compete against your own format. In Grande Prairie we submit that the issuance of a licence to an incumbent player will have the most positive benefits to the Grande Prairie radio market.
LISTNUM 1 \l 12538 Mr. Chairman, the Pattison Broadcast Group keeps its promises and serves its communities. We have a core belief that the more we serve our community the more successful we will be. In the acquisition of Monarch Broadcasting in 2001 we committed over $1 million to build a state of the art media arts centre for young students at Pacific Academy in Surrey, British Columbia. That outstanding facility was opened to students in September of 2005.
LISTNUM 1 \l 12539 Also in 2005 our radio and TV stations gave back $10.3 million in public service and community service time to the towns and cities we work in. We operate excellent radio stations. New Country 93.7 JRFM has been named Canada's country music station of the year by Canada Music Week three years in a row. Our group has received a number of CAB gold ribbon awards, RTNDA awards, along with many others in recent years. Recognition for this commitment was accorded to Mr. Pattison when he was awarded the Canadian Association of Broadcasters most prestigious award, the gold ribbon for broadcast excellence.
LISTNUM 1 \l 12540 In conclusion, members of the Commission, we have a unique format designed for an audience that is being underserved in Grande Prairie. We have committed $2.1 million in tangible benefits. They include $1.2 million to our unique Canadian talent initiatives highlighted by the very original brand new Save the Music Foundation which will impact Canadian talent where it really matters, our youth. We have also committed to the highest level of spoken word programming of all applicants at this proceeding, all of which we submit will provide significant benefits to the community of Grande Prairie and serve the objectives of the Broadcasting Act.
LISTNUM 1 \l 12541 Mr. Chairman, members of the Commission, we appreciate the opportunity to appear before you today and we look forward to responding to your questions.
LISTNUM 1 \l 12542 THE CHAIRPERSON: Thank you, Mr. Arnish. I am asking Mrs. Cram to ask the questions.
LISTNUM 1 \l 12543 COMMISSIONER CRAM: Thank you, Mr. Arnish and panel.
LISTNUM 1 \l 12544 I was struck by your comments, Mr. Arnish, at page 9 when you were talking about the issue of the rush to the middle. And the last sentence of that paragraph says:
"Licensing an incumbent in a secondary market ensures that the competitors will attempt to diversify their formats, as there is no incentive to compete against your own format."
LISTNUM 1 \l 12545 Is that what we should be looking for, diversity of formats, or should we be looking for diversity of news, diversity of different voices in the community? What should be more important?
LISTNUM 1 \l 12546 MR. ARNISH: In our opinion, Commissioner Cram, I think the diversity of formats in smaller markets is becoming an increasingly bigger issue for the whole industry right across Canada. As the Commission heard at the recent radio review in Ottawa, that whole topic about over‑licensing in smaller markets was a very big issue of broadcast companies, small independents and companies of our size right across the country. And we strongly believe in markets like Grande Prairie, if the Commission was predisposed to licence the two incumbents with two new licences for that marketplace, that is really in the best interest of the marketplace. Because there is no doubt in the history that we worked in markets where there has been two ownership groups with four licences, there definitely is a diversity of formats.
LISTNUM 1 \l 12547 In markets where we have more than two ownership groups and perhaps there is four stations in the market owned by three ownership groups or there's five stations in the market owned by three ownership groups there always is a rush, for the most part, to the middle to gain the biggest audience share which obviously transposes into sales of advertising in the marketplace. And that, to us, is not good for the broadcasting system, it is not good for the community as well.
LISTNUM 1 \l 12548 So we strongly believe that diversity of format rather than ‑‑ not necessarily diversity of spoken word information ‑‑ is extremely important in markets like Grande Prairie. Our competitors and ourselves have worked extremely hard in that market to build the market over the last 10 to 15 years. The O.K. Radio Group has done an outstanding job with their Hot AC format. Our team in front of you this morning has done a wonderful job with the country format. If we are privileged to receive a classic rock station licence for Grande Prairie and the incumbent is also privileged to receive a station licence I really do feel at the end of the day they are going to have a Hot AC station, they will move more to a modern rock format. We will have our country station and we will definitely be the classic rock station in the marketplace.
LISTNUM 1 \l 12549 So diversity of format really does work and it is not dissimilar to markets similar to the size of Prince George where there is two ownership groups, four stations, four diverse formats. In Kamloops there is two ownership groups, there is a new station going to be coming on the air here shortly, so we will have five stations there, but at the end of the day we are going to have five distinct formats.
LISTNUM 1 \l 12550 The same thing could be said in Red Deer where we have two ownership groups, four distinct formats in the marketplace as well just to give you some examples.
LISTNUM 1 \l 12551 COMMISSIONER CRAM: Now, I think you heard Mr. Truhn, your country station presently are there news reports on it up `til 11:00 in the evening?
LISTNUM 1 \l 12552 MR. ARNISH: I will ask Mr. Sharp to talk to that.
LISTNUM 1 \l 12553 MR. SHARP: Yes, they are. From Monday to Sunday we have news from 5:30 in the morning until 11:00 p.m.
LISTNUM 1 \l 12554 COMMISSIONER CRAM: Nothing on Sunday?
LISTNUM 1 \l 12555 MR. SHARP: Didn't I say Sunday? Sorry, until Sunday, yes.
LISTNUM 1 \l 12556 COMMISSIONER CRAM: Oh, I thought you said Monday to Saturday.
LISTNUM 1 \l 12557 MR. SHARP: No, until Sunday.
LISTNUM 1 \l 12558 COMMISSIONER CRAM: Oh okay, sorry. And so if you are providing news at night, it would appear there is a demand for it?
LISTNUM 1 \l 12559 MR. SHARP: There is, yes.
LISTNUM 1 \l 12560 COMMISSIONER CRAM: Why wouldn't you be doing the same with this station?
LISTNUM 1 \l 12561 MR. ARNISH: Well, we can talk about that and Mr. Sharp has some views on that as well. But we looked at this format as and we talked about it in our opening presentation that the male genre, 35 to 54 with the median average age of 44, in our opinion that is the target market we are going after, wants to certainly know about news and information spoken word throughout the day. But in the Pattison Group we basically have five radio stations that run a very similar format as we are proposing here in Grande Prairie.
LISTNUM 1 \l 12562 In everyone of those cases evening news, because of the fact that we are playing just about all music, doesn't factor into the equation. We have live announcers as we proposed there in Grande Prairie, so if something major was to take place our newsroom is on call 24 hours a day, we will be live in the evening right through until midnight. We are able to call on the newsroom staff to be able to cover any stories that may come up. But as far as surveillance material, weather, road information in the wintertime in the evening, because of the live staff that we will have there, they will be able to provide that coverage.
LISTNUM 1 \l 12563 Mr. Sharp or Mr. Norman, do you want to add anything?
LISTNUM 1 \l 12564 MR. SHARP: That is right, we are also on a 24 hour notice, all five people in the newsroom, as will be the four in The Drive newsroom. So we will be available to cover emergency events and our jocks, as well, will be well versed in getting information out to the people.
LISTNUM 1 \l 12565 COMMISSIONER CRAM: You talk about the 35 to 54 male being underserved and I guess I was surprised by that, but the market currently skews female I gather in Grande Prairie, Alberta. I mean, it is almost a ‑‑ I don't understand why that exists right now.
LISTNUM 1 \l 12566 MR. NORMAN: Commissioner Cram, I can shed some light on that a little bit. With the current formats that we have, ours being a country radio station serving an audience ‑‑ really, we have teenagers calling in our request lines right up to grandmas and grandpas. So country music covers a wide demographic and does cater a little more to a female audience. SUN FM also, a little softer rock station, pop, AC, whatever you would like to call it, also caters to an audience of ‑‑ that is a little higher in female listeners. What is missing and what we have not only seen in the research, as you may have heard Mr. Truhn's case as well, what is missing is a harder edge radio station for the male demographic of 35 to 54.
LISTNUM 1 \l 12567 COMMISSIONER CRAM: And so your core demo would then be what? I mean, you have the range there, is there a core within it?
LISTNUM 1 \l 12568 MR. NORMAN: Our median age would be 44 ‑‑
LISTNUM 1 \l 12569 COMMISSIONER CRAM: Okay.
LISTNUM 1 \l 12570 MR. NORMAN: ‑‑ and we would shoot for an audience separation of male 70 per cent listeners, female 30.
LISTNUM 1 \l 12571 MR. ARNISH: You know, the Grande Prairie market, as you have heard and I won't be too repetitive here because you have heard it already yesterday and today, but it is in the oil patch, there is also a huge agricultural component to it and there is a major forest component to it as well. But obviously the oil patch and the lumber industry and the pulp and paper industry in Grande Prairie, there is lots of males there and really the market up until this point in time, we believe, has not been servicing that male demo and the demo that we are projecting. And we don't want to lose them to iPods, we don't want to lose them to satellite radio. Perhaps when they are at home off the oil field or off not doing their work in the lumber industry they are listening to radio on the internet, but we want to repatriate some of those listeners to the Grande Prairie market.
LISTNUM 1 \l 12572 Unfortunately, we don't have any statistics through BBM that says how much out‑of‑market tuning is in Grande Prairie because the market isn't rated at this point in time. But we feel there is a major component of a male audience there that would, as our research says, would clearly love to have a pure classic rock station. And I would like to build on the word pure. We are talking about a pure classic rock station. We are not talking about a classic rock/classic hits hybrid, we are not talking about a classic rock/modern rock hybrid, we are talking about a pure classic rock radio station geared strictly toward males. It will garner some females, but we are definitely geared toward the male demographic.
LISTNUM 1 \l 12573 COMMISSIONER CRAM: I guess I am interested in your median age being you said 41, didn't you?
LISTNUM 1 \l 12574 MR. NORMAN: Commissioner Cram, 44.
LISTNUM 1 \l 12575 COMMISSIONER CRAM: I am sorry.
LISTNUM 1 \l 12576 MR. NORMAN: Yes.
LISTNUM 1 \l 12577 COMMISSIONER CRAM: When the median age of Grande Prairie, at least another applicant showed, your fellow incumbent, that the median age in Grande Prairie was 29.7. Why would you ‑‑ I suppose because they have more income I guess at age 44 or..?
LISTNUM 1 \l 12578 MR. ARNISH: Well the ‑‑ the median age for Grande Prairie ‑‑ and I will get Ken or Anne to respond to this if they wish as well, they live in the marketplace ‑‑ but as we all know, I mean, it is common sense with what is going on with the economy in Alberta, particularly in the north that it is attracting a lot of young people, there is no doubt about it, and it has driven the age of ‑‑ the average median age in Grande Prairie down to that demographic. But the marketplace has told us that there is a big void out there for that 35 to 50 or maybe 40 to 50‑year old male that is mature, working in the oil patch, working in the lumber and forest industry and the trucking industry in Northern Alberta and we just feel that we can repatriate those listeners to this format.
LISTNUM 1 \l 12579 MR. SIEMENS: Commissioner Cram, if I might, it really is a function of the format as to why the median listener would be 44 years of age. We determined through our research that classic rock was the format to be and so then if you look at the classic rock genre and what it is performing at right now it is definitely targeted 35 to 54 with the 44‑year old listener begin right in the sweet spot.
LISTNUM 1 \l 12580 COMMISSIONER CRAM: But you could make it younger, couldn't you, by adding the newer hits and that sort of thing?
LISTNUM 1 \l 12581 MR. ARNISH: Well, we could and Gerry and Ken might want to add to this, but that is not our intent. Our intent is to ‑‑ again, and I don't want to be repetitive here ‑‑ but this is a pure classic rock format and we are good at it. We have five stations that are in this format now, we do very well with them. Yes, we could go younger if we decided we wanted to play more modern rock, but that is not our intent here. Our intent is to be a pure classic rock radio station. Gerry.
LISTNUM 1 \l 12582 MR. SIEMENS: I haven't anything to add to that.
LISTNUM 1 \l 12583 COMMISSION CRAM: And in terms of the other five applicants in this market that are saying they are going for classic rock, can you distinguish your proposal from theirs? I know some of them are hybrids and I recognize that.
LISTNUM 1 \l 12584 MR. ARNISH: I guess it does concern me that it has come up even today that some applicants, and they have to look at their business plan and what they propose to the Commission for this market place, have said well maybe it is a classic rock/classic hits hybrid. You know, we applied for a classic rock format and now we are talking about classic hits. There is a huge difference in our opinion, for the most part, between a pure classic rock radio station and a classic hits radio station. There would be some overlap in classic hits music played on a classic rock station, but you heard our demo and I think the demo really clearly defines the station that we are planning to take to air if we are privileged with a licence for Grande Prairie.
LISTNUM 1 \l 12585 If you are true to the format you are true to the pure classic rock format that we have described here today, as we have put in our application as well.
LISTNUM 1 \l 12586 MR. SIEMENS: And I think, if I might, another defining character of our radio station would be ‑‑ we have outlined in the supplementary brief and cross‑referenced today ‑‑ a number of full‑length music‑based programs that will be unique to our station, Ear to the Tracks; Border Crossings; Electric Lunch; Live Wire; Off the Record and so on, so those are definitely characteristics that set us apart from our competitors. And then that doesn't even begin to address our huge commitment to news and spoken word, which is certainly a defining character.
LISTNUM 1 \l 12587 COMMISSIONER CRAM: Those programs that you were talking about, the ‑‑ I will call them accompanying music‑based programming ‑‑ all locally produced?
LISTNUM 1 \l 12588 MR. NORMAN: I can answer that, Commissioner Cram. They will be produced by our new Grande Prairie Drive staff and we have one syndicated show and that is the show called Off the Record with Joe Benson that will air for an hour on Sunday nights.
LISTNUM 1 \l 12589 COMMISSIONER CRAM: Thank you very much for this. My notes say, yes, it is 12 hours, 45 minutes of the news, sports, surveillance which includes road and weather. Now, for some reason I thought there was going to be 12 hours of scripted news, sports. But there isn't there is only nine hours, 15 minutes of the scripted news, sports, is that correct?
LISTNUM 1 \l 12590 MR. NORMAN: That is correct, yes.
LISTNUM 1 \l 12591 COMMISSIONER CRAM: Yes.
LISTNUM 1 \l 12592 MR. NORMAN: And I will let Mr. Sharp talk a little bit more about this. The surveillance material would take in ‑‑ because we will be on the air live from 6:00 a.m. until midnight ‑‑ announcer talk during the evenings. As you heard in our presentation, life in the north is very unpredictable, so we need to be able to tell people when the highways are impassable, the RCMP need to be able to get a hold of us locally and then our announcer who is on the air, if it is deemed necessary, can contact our news director or news staff to follow‑up on that. But I will let Gord Sharp tell you a little more.
LISTNUM 1 \l 12593 MR. SHARP: Thanks very much. That nine hours and 15 minutes on The Drive news department ‑‑ I came into this business in the halcyon days of radio news, the mid‑1970s, and quite frankly the last 10, 15, 20 years have been tough for news people across this country, but I am proud to say Grande Prairie news and sports is very important to both our radio station and the people of the Peace River Country. As I mentioned in my opening remarks, there is no morning TV or morning newspaper in Grande Prairie, it is extremely important. And time and time again we hear from our audience just how important it actually is.
LISTNUM 1 \l 12594 One thing that strikes us all who work in Grande Prairie is yes, the economy is going very well there, but that is not just by accident. The people of the Peace Country work very hard in all sectors, whether you work in the oil patch, forestry, whether you teach, you are a nurse or a doctor, whether you are in business, the folks up there work very hard. And I have always felt it is incumbent on a news department to roll‑up our sleeves and duplicate what the folks up there are doing and that is why our focus always has been local coverage. In the last few days alone, some of the stories coming out of Grande Prairie, a proposed $265 million hospital, a local doctor from the Grimshaw area climbs Mount Everest, the oldest man in Canada to ever do that. We talked to him by satellite phone just hours after he came back, that is great local radio, I guess great radio anywhere.
LISTNUM 1 \l 12595 The schools up there are simply busting at the seams and parents are concerned that they need more money from the province and we need to get our microphones out there and talk to them and that is what we do. Another 66‑year old man sold his ranch and he bought a great big boat and he is now three‑quarters the way around the world. By satellite phone he has been a major part of our newscasts for the last seven months. I don't know if you recall the name Grant Notley, he was the NDP leader of Alberta in the 1980s who died in a plane crash. His daughter announced last week that she is running for a seat in Edmonton. She is a resident of our area, just a brilliant lawyer in Edmonton and I think it is just great she is following in.
LISTNUM 1 \l 12596 Roberta Bondar, the great Canadian astronaut, who has got a résumé longer than this room I think, was a part of our morning show when we had this wildly successful science fair last fall, Roberta Bondar came in and the response was just incredible. As you have heard in some of the other applications, Ford World Women's Curling, greatest event ever as far as a crowd and the success of it. The sporting events in Grande Prairie, nonpareil as far as turnout and same with entertainment events.
LISTNUM 1 \l 12597 We don't run kickers on our newscasts, ladies and gentlemen, we run stories on local events, charities, service clubs, area people who go the extra mile to help people. And out of these softer news stories at the end of our casts we often get very hard news stories like a heartbreaking story of a lady from Beaverlodge who phoned me whose daughter is serving in Afghanistan. It made for a fantastic interview. Another father who took part in a huge cancer relay a couple of weeks ago, just a year and a half after his wife and daughter had died of the disease. To me, that has always made great radio whether you are living in Toronto or Grande Prairie and we do our best. And I have to say, mentioning some of these stories, terrific place for young news people to start, because it is such a vibrant busy area.
LISTNUM 1 \l 12598 MR. ARNISH: Commissioner Cram, if I just add to that. As you are aware, we are adding a significant amount of spoken word in the news and information portion of our application on The Drive if we receive a licence. And we are hiring new people, four new people for the newsroom to compliment our five that we have already there.
LISTNUM 1 \l 12599 But I would like Gord just to spend just a brief moment to tell you or perhaps even demonstrate to you that at the end of the day we are going to have a major news commitment on The Drive, but the news presentation on The Drive will be different than what the news presentation currently is on CJXX FM, because we think that is very important that the way we write the news and deliver the news is different than what we are doing currently on our country station in Grande Prairie.
LISTNUM 1 \l 12600 MR. SHARP: Good morning, I am Gord Sharp, Big Country News. So close, but what a great run, the Canes beat the Oilers 3‑1 in Game 7 to win their first Stanley Cup. We have this report from Raleigh and Big Country Sports Director, Big Paul Thomas. Thanks, Paul. Cam Ward, born and raised just outside Edmonton, Conn Smythe winner and boy is he cool as a cucumber throughout the playoffs.
LISTNUM 1 \l 12601 Jim Dinning, leading candidate to replace Ralph Klein as Alberta Conservative Leader, was in Grande Prairie yesterday just one day after officially declaring his intentions to run for leader. Dinning told Big Country News he fully supports the proposed $265 million hospital for the city, saying he sympathizes with the healthcare crisis. The Health Authority recently announced there is a shortage of 36 doctors and 25 nurses across our region.
LISTNUM 1 \l 12602 Grimshaw, a proud community this morning. Late yesterday Dr. Andries Botha finished his climb up Mount Everest. The physician who espouses a lifestyle of no alcohol, no nicotine and lots of exercise is the oldest Canadian, at 56, to conquer Everest. He will join us on our news magazine focus tonight by satellite phone.
LISTNUM 1 \l 12603 MR. NORMAN: Good morning, I am Ken Norman, 104.5 The Drive news. The only team happier than the Carolina Hurricanes is the Calgary Flames, 3‑1 Canes over the Oil last night. The impossible dream ended in Game 7, Cam Ward playoff MVP, so close.
LISTNUM 1 \l 12604 Premier wannabe Jim Dinning was in the city yesterday. The former Alberta treasurer said he would support the proposed $265 million hospital and says the healthcare crisis in Grande Prairie is a joke and he will clean it up when he replaces King Ralph.
LISTNUM 1 \l 12605 Here is a sawbones that follows his own health advice, Grimshaw Dr. Andries Botha has climbed Mount Everest. At 56 he has become the oldest Canadian to do so. Have a beer, Doc, you deserve it.
LISTNUM 1 \l 12606 MR. ARNISH: So that gives you a bit of an example of how different the newscasts would be between CJXX, our country station, and The Drive, our classic rock station.
LISTNUM 1 \l 12607 COMMISSIONER CRAM: So just let me figure this out. There is four new news staff, four FTEs I guess I will call them, fulltime equivalents, but then, Mr. Sharp, would you still be the director of both?
LISTNUM 1 \l 12608 MR. SHARP: Yes, I would, yes.
LISTNUM 1 \l 12609 COMMISSIONER CRAM: Okay.
LISTNUM 1 \l 12610 MR. NORMAN: And I should add too, Commissioner Cram, the mandate that Gord has set out for his news employees to file stories and get reports on our local area will be followed the same on The Drive. And maybe Gord could allude a little to what he does on XX FM now.
LISTNUM 1 \l 12611 MR. SHARP: We have a quota of 50 stories per week per newsperson, myself included, and as I reach my 50th year that becomes more difficult for me, but that is the quota we have. That works out to about 1,000 stories a month. Sometimes it is way more than that, because I can't stress how busy we are up in the Grande Prairie area. Each one of these stories runs a minimum of two, more likely four, times and that takes us well over the 25,000 mark per year. So news and sports coverage is a huge part of what we do.
LISTNUM 1 \l 12612 COMMISSIONER CRAM: So do the news people cover sports also?
LISTNUM 1 \l 12613 MR. SHARP: We have a fulltime sports director. But certainly, we have 80 years between all of us in the news department as far as experience. A lot of us love sports, so we help out. But he is the fellow who covers the local Alberta Junior Hockey League team, he will cover golf and curling. But if he needs help, yes, we will pitch in.
LISTNUM 1 \l 12614 COMMISSIONER CRAM: Okay. And how many news staff would there be dedicated to programming, Mr. Norman or ‑‑ if I ask a person I don't mean to restrict that person to answer.
LISTNUM 1 \l 12615 MR. NORMAN: Well, Commissioner, the answer to that is four.
LISTNUM 1 \l 12616 COMMISSIONER CRAM: Four new programming ‑‑ programming staff? Okay.
LISTNUM 1 \l 12617 MR. NORMAN: Four news.
LISTNUM 1 \l 12618 COMMISSIONER CRAM: No, programming?
LISTNUM 1 \l 12619 MR. NORMAN: Oh, for programming staff, yes. The programming staff ‑‑ we have it listed that we will have 13 fulltime staff and two part‑timers. And as fulltime staff, we will have a program director/announcer, morning announcer, midday announcer, afternoon Drive announcer, and evening weekend, evening weekend, so that works out to six fulltime.
LISTNUM 1 \l 12620 COMMISSIONER CRAM: Now you did say live‑to‑air the full time. Now you really mean live‑to‑air save and excepting that one program, Off the Record?
LISTNUM 1 \l 12621 MR. ARNISH: That is correct.
LISTNUM 1 \l 12622 COMMISSIONER CRAM: And would you accept that as a COL?
LISTNUM 1 \l 12623 MR. ARNISH: Yes, we sure would.
LISTNUM 1 \l 12624 COMMISSIONER CRAM: Now you say, and I found it fascinating, you say that you would be live‑to‑air "over the complete first term of the licence". What about the second?
LISTNUM 1 \l 12625 MR. ARNISH: I think we would continue to do that in the second and third and fourth without question.
LISTNUM 1 \l 12626 COMMISSIONER CRAM: It was ‑‑
LISTNUM 1 \l 12627 MR. ARNISH: It is a fair question.
LISTNUM 1 \l 12628 COMMISSIONER CRAM: ‑‑ jarring looking at it, yes. In terms of synergies with the existing station ‑‑ and I want to start with news and programming synergies first and then we will get into the other. So either one of you, Mr. Sharp or Mr. Norman or Mr. ‑‑ I mean..
LISTNUM 1 \l 12629 MR. SHARP: You mean as far as Big Country news staff helping out The Drive news staff?
LISTNUM 1 \l 12630 COMMISSIONER CRAM: Yes.
LISTNUM 1 \l 12631 MR. SHARP: The Drive news staff would have their own mandate as far as working that. We would all work out of the same news department. We would, you know, really try not to duplicate up on meetings, so we could use people to cover a lot more in the area. But we need to stress here that The Drive news people would be for The Drive FM and Big Country people would be for Big Country, because while they would help each other out and, because I have a background in sports, I believe greatly in working as a team, they would be two very separate radio stations and news departments.
LISTNUM 1 \l 12632 COMMISSIONER CRAM: It sounds like though, Mr. Sharp, that because you are going to be the only news director, there is really no sort of editorial independence in the sense of one being completely independent from the other. I mean, you are going to be their boss, so you would be able to say I want this covered, I don't want this covered, that kind of thing?
LISTNUM 1 \l 12633 MR. SHARP: There would be some of that, but we would follow the laws of news, of course, and we would, you know, cover as much as we can on both stations. There is so much to cover up there that.. But I can guarantee you that both stations would be different from a news perspective.
LISTNUM 1 \l 12634 COMMISSIONER CRAM: And what about programming?
LISTNUM 1 \l 12635 MR. NORMAN: Programming would be separate as well. The only synergies we really have are the nine management positions and/or administration. The rest of it would be like ‑‑ and they are in different buildings, except for, you know, we will obviously have the same General Manager, myself, and Gord in the newsroom, Anne as our Sales Manager for both, that type of thing.
LISTNUM 1 \l 12636 COMMISSIONER CRAM: Did you say you are going to be in a different building?
LISTNUM 1 \l 12637 MR. NORMAN: No, I am sorry.
LISTNUM 1 \l 12638 COMMISSIONER CRAM: Oh okay, you are going to be in the same building?
LISTNUM 1 \l 12639 MR. NORMAN: Yes, we will.
LISTNUM 1 \l 12640 COMMISSIONER CRAM: And then you have what I will call DJ talk of 11 hours and 21 minutes. Maybe I shouldn't ‑‑ DJ talk would be six hours and the rest would be scripted interstitial? I am back at your handy dandy sheet here.
LISTNUM 1 \l 12641 MR. NORMAN: Yes, I will call on Gerry Siemens to help me out a little bit with this one. The announcer dialogue, is we had forecast ‑‑ for instance, our plans are to be on the air for 18 hours a day. So what we have done there, Commissioner, is calculated in the talk per hour that the announcers will do.
LISTNUM 1 \l 12642 MR. SIEMENS: Well, Commissioner Cram, Commissioner Langford yesterday gave some applicants some homework and, frankly, I am not that big an Oilers fan, so I did that ahead of time last night.
LISTNUM 1 \l 12643 COMMISSIONER LANGFORD: Everybody is saying that now.
LISTNUM 1 \l 12644 MR. SIEMENS: It is true, it is true. So to walk you through our spoken word programming schedule, you already know that we have committed to nine hours, 15 minutes of news and sports and surveillance material of three hours and 30 minutes, which would include rapidly changing weather conditions and road reports and so on, so that is a total of 12 hours and 45 minutes. Now, we also committed to a Fun Chaser, which will be throughout the Grande Prairie and region phoning back reports from all sorts of community events and we have those scheduled 28 times a week, they will be about two minutes in duration, so that is 56 minutes for the course of the week.
LISTNUM 1 \l 12645 The Electric Lunch and Brunch actually is on for nine hours in the course of the week. We allowed for 10 minutes of dialogue in that program. And if that sounds like a lot, it is really not, if you consider four breaks in the course of an hour at two and a half minutes while we engage our listeners in requests and other dialogue, it is not that much. But it does workout to one hour and 30 minutes in the course of the week. Ear to the Tracks, 10 minutes of dialogue in the course of the program. As you pointed out, Commissioner Cram, it will be quite likely scripted. And Live Wire and so on, 16 minutes and eight minutes respectively. The Canadian Rock Review is 90 seconds in duration, it will be on 14 times a week, which accounts for another 21 minutes.
LISTNUM 1 \l 12646 And as to announcer dialogue, at 120 hours when you take out the block programming that we already alluded to there, we thought four minutes an hour would be reasonable, that is four breaks an hour at two minutes in the course of a break, which is another six hours, which brought us up to 11 hours, 21 minutes in interstitial talk for a total spoken word commitment of 23 hours and 51 minutes for the course of a week.
LISTNUM 1 \l 12647 COMMISSIONER CRAM: Okay, so the ones that are then scripted would include Ear to the Tracks and what else?
LISTNUM 1 \l 12648 MR. SIEMENS: Ear to the Tracks, Live Wire, Border Walk or Border Crossings and the Canadian Rock Review.
LISTNUM 1 \l 12649 COMMISSIONER CRAM: Okay, thank you. Have you figured out a percentage of music to spoken word or spoken word to music? So if I use my mathematical skills and took 23 hours, 51 minutes divided by 126, I would come up with the percentage?
LISTNUM 1 \l 12650 MR. SIEMENS: You would, so would I if I had a calculator.
LISTNUM 1 \l 12651 COMMISSIONER CRAM: No, I can just do it in my head.
LISTNUM 1 \l 12652 COMMISSIONER LANGFORD: You might want to undertake to bring that number in yourself.
LISTNUM 1 \l 12653 COMMISSIONER CRAM: Knowing that I got 64 in grade 12 algebra and have not forgotten it obviously. To your CTD, I first wanted to start with Save the Music Foundation and I guess I need to figure out the structure. On page 7 you talk about the Save the Music Foundation. Now, that is actually going to be a foundation?
LISTNUM 1 \l 12654 MR. ARNISH: Yes, Commissioner Cram, just maybe I will give you some background because when we were in Calgary you were not at the hearing, but I think you have heard about the Save the Music Foundation. We are very proud of this new Canadian Talent Development initiative. I am going to get Gerry to answer your question in some more detail here in a moment, but I just though I would give you some quick background history on it.
LISTNUM 1 \l 12655 When we were getting our team together to talk about Calgary and also Grande Prairie, and we also took a look at Fort McMurray as well, we decided at the end of the day that we thought that it would be great to create something new, some brand new initiative for Canadian talent in Canada.
LISTNUM 1 \l 12656 So we go back about a year ago now and one day I was talking to our legal counsel, Chris Weafer, on the phone about the application and I said to Chris, I said, "How is my tuba buddy doing?" Because, as I said, in Calgary I play tuba. And Ryan, his son, plays tuba in a high school band in North Vancouver. So Chris went on to tell me about what the band program was doing at Seacove Secondary in North Vancouver and how much fun these kids were having with music as being part of their life and their youth in this day and age. And we got into a discussion about funding for school music programs.
LISTNUM 1 \l 12657 And out of that, long story short, we decided to have a meeting with Mr. Lee, who is the head music educator at Seacove Secondary, and we had a really good discussion with him about under‑funding for music programs of all sorts in the school system in general right across the country, because he has major contact with music educators across the country. He then put us in touch with Willie Connell of the Rocky Mountain Music Festival and really the rest is history.
LISTNUM 1 \l 12658 And I will turn it over to Gerry to give you a brief description about the foundation and how we are going to set it up and how it is going to operate. It is very exciting. We have made major commitments in Calgary, as you know, well over $3 million in commitments to the CTD initiative, $700,000 here in Grande Prairie and we are looking at other opportunities to put way more money into this fund that is going to be for true emerging Canadian talent. And we heard about emerging Canadian talent at the radio hearing in Ottawa. I can't think of better money spent than on Canada's youth when it comes to music. So with that, I will turn it over to Gerry and he can fill you in with some more detail.
LISTNUM 1 \l 12659 MR. SIEMENS: I think the first point I would like to try to make clear is that our goal is not to take the place of government. We think that government have a responsibility to educate our youth in music and in all facets of their education and that is their job and they should do that job and they do do that job.
LISTNUM 1 \l 12660 However, government can only go so far. And the Save the Music Foundation is being developed to identify and to help kick to the next level the best of the best that the school music programs have to offer and that can come by way of a whole bunch of different things. And Save the Music Foundation will not primarily exist to buy a French horn for a young person in Beaverlodge because they can't afford it. We would do that, of course, if we were asked, but that is not the primary function.
LISTNUM 1 \l 12661 The primary function is to give these kids that are coming out of school a leg up to the next level and we can do that by mentoring programs for music educators. More and more educators are coming out of college and they are reluctant to get into music programs because they fear it could be a short‑term deal. So we would develop mentoring programs for music educators, mentoring programs for students by bringing in qualified musicians, professional musicians, role models that they can look up to and also to assist in fundraising for all sorts of different things.
LISTNUM 1 \l 12662 In Calgary, Commissioner Cram, we had four young men from North Vancouver sing Acappella at the hearing and they were outstanding. And I made the point at that hearing that those four young men had been asked to perform on behalf of Canada in Belgium and in Japan and couldn't go on either occasion because they couldn't raise the money. More recently they have been asked to perform at Carnegie Hall in New York and so they are back out conducting bake sales and carwashes and leaning on their parents. So that is the sort of thing that the Music Foundation could step up and do.
LISTNUM 1 \l 12663 Last night the winner of the Conn Smythe trophy was a young man who grew up just a few miles from here in Sherwood Park, a great young goaltender. Now, when he was learning his craft and when he got to a point where he could compete he was moved to a junior hockey level, I am sure, where he could play at a very high level and determine if he had the goods to turn pro or not. Unfortunately, in the music education system there is no Western Hockey League and that is kind of what we are talking about what we are designed to do.
LISTNUM 1 \l 12664 Just one more thought and then I will let you ask your next question. But you asked is this actually a foundation. It will be. We have an application pending for the purchase of Island Radio and there are some funds earmarked from our initiatives there to the Save the Music Foundation. We hope for approval on that application and that we will start the Music Foundation. We are already sponsors of the Canadian Rocky Mountain Music Festival as the Pattison Group and we also have funds earmarked for the Save the Music Foundation from our purchase of the O.K. Radio Group in Victoria, so we are on our way.
LISTNUM 1 \l 12665 COMMISSIONER CRAM: Well, that at least answered my question about why B.C. should get any money. Because previously, Mr. Arnish was only talking about Calgary, here and another place in Alberta, and I am thinking why should B.C. people get any money just because Mr. Weafer is there.
LISTNUM 1 \l 12666 MR. ARNISH: No, the funding is available to all school districts, all school music programs in British Columbia and Alberta.
LISTNUM 1 \l 12667 COMMISSIONER CRAM: And Alberta. And I am not getting this and it is my legal mind, you are going to create a foundation, a separate entity, and how is it going to be separate? Like, are you going to be on the board? I mean, like what..?
LISTNUM 1 \l 12668 MR. ARNISH: Sure, we can answer that. We talked about that in Calgary as well. I will have Gerry give you an outline on it. We are in the process right now of registering it as a foundation, as a society, and that process is ongoing at this point in time. We will have an independent board of directors, we will have some members of the Pattison Broadcast Group as part of that board. But for the most part, and Gerry can give you a breakdown, the makeup of the board is going to come from the Rocky Mountain Music Festival.
LISTNUM 1 \l 12669 And school districts or if a music educator wants to start an elementary school band in Beaverlodge, for example, or High River, whatever the case may be, it may even be here in Grande Prairie, they can certainly come forward and apply for funding for that. The Save the Music Foundation will look at the funding for a program like that and make a decision at the end of the day whether they feel that that program should be funded or should it be something else. But all the money will be dispensed on an annual basis and we will report where that money is spent as part of our annual CRTC returns at the end of the year.
LISTNUM 1 \l 12670 COMMISSIONER CRAM: Will Pattison be the majority shareholder? Who will have control of the foundation?
LISTNUM 1 \l 12671 MR. ARNISH: The Rocky Mountain Music Festival will have control of the foundation.
LISTNUM 1 \l 12672 COMMISSIONER CRAM: So the foundation is in fact the partnership that you were talking about on page 7 ‑‑
LISTNUM 1 \l 12673 MR. ARNISH: That is correct.
LISTNUM 1 \l 12674 COMMISSIONER CRAM: ‑‑ with the Canadian..? Okay.
LISTNUM 1 \l 12675 MR. ARNISH: That is correct.
LISTNUM 1 \l 12676 COMMISSIONER CRAM: But it will be controlled by the Canadian Rocky Mountain Music Festival?
LISTNUM 1 \l 12677 MR. ARNISH: That is correct.
LISTNUM 1 \l 12678 MR. SIEMENS: Commissioner Cram, we anticipate four board meetings a year. Willie Connell, who you are going to meet probably tomorrow from the Canadian Rocky Mountain Music Festival, will be here to speak to that. But there are no administrative costs from the radio stations. The board will operate on its own and, yes of course, there will be Pattison representation on the board, but it will be controlled by the board itself.
LISTNUM 1 \l 12679 COMMISSIONER CRAM: What about the admin costs of the foundation, who pays that? Is some of this money going to go to the admin costs or is it just going to go to seminars, bursaries, scholarships, high school instruments, regional talent competitions?
LISTNUM 1 \l 12680 MR. ARNISH: I don't anticipate there will be any administrative costs really. The board will be responsible for a pool of money, yet to be determined how large, which will go in and directly back out to the students and music programs that make application for it.
LISTNUM 1 \l 12681 COMMISSIONER CRAM: Who will be receiving and processing the applications and assessing them?
LISTNUM 1 \l 12682 MR. ARNISH: The Canadian Rocky Mountain Music Festival.
LISTNUM 1 \l 12683 COMMISSIONER CRAM: Okay, on behalf of the foundation then, at their cost?
LISTNUM 1 \l 12684 MR. ARNISH: Yes, Commissioner Cram.
LISTNUM 1 \l 12685 COMMISSIONER CRAM: Okay. And do you as yet have ‑‑ what is the word ‑‑ a definitive list of where the monies will go, in the sense of they shall not go here, they shall go to this, this, this, this?
LISTNUM 1 \l 12686 MR. ARNISH: No, we haven't because we haven't got the foundation up and running yet. We are waiting on some decisions to come from the CRTC. We have put some money into the Rocky Mountain Music Festival, as Mr. Siemens mentioned, we sponsored the Rocky Mountain Music Festival this year, the Jim Pattison Broadcast Group. We haven't gotten down to the definitive terms of that yet, but we are in the process of working on those and we would be most pleased to file those with the Commission as soon as that is done as well.
LISTNUM 1 \l 12687 COMMISSIONER CRAM: I notice that when you were talking about the other commitments, the CWC Career Accelerator and there was another one for radio ‑‑
LISTNUM 1 \l 12688 MR. ARNISH: Métis.
LISTNUM 1 \l 12689 COMMISSIONER CRAM: ‑‑ the career accelerator designated groups.
LISTNUM 1 \l 12690 MR. ARNISH: Yes.
LISTNUM 1 \l 12691 COMMISSIONER CRAM: And then you had GPR College. And you have ‑‑ I guess it looks like you have refined it more, an employment equity initiative in alliance with the Métis Nation of Alberta. Now, you recognize that none of these are CTD as defined by us and I see you call it a significant financial commitment as opposed to CTD?
LISTNUM 1 \l 12692 MR. ARNISH: Well we had this discussion in Calgary and it is a great question, because it does give us the opportunity I guess to sort of wave the flag for Canada and wave the flag for the broadcasting industry in general. Yes, we clearly understand what Canadian Talent Development initiatives are all about. But the industry is struggling, in our opinion, to bring along new people into the industry, it is struggling to bring new people into the industry that are in the four designated groups. We do a great job in women but, as you know, in Aboriginals, people with disabilities and First Nations, we could do better, the industry as a whole could do better, but it is tough getting qualified people.
LISTNUM 1 \l 12693 I am a very strong believer in the promotion of women in management. I think the industry, over the last few years has done a great job with that but we can do a better job. And we do believe the initiatives that we put on the table here related to this Grande Prairie application is for Canadian Talent Development. It may not be in the musical genre of pure Canadian talent, but we believe it is in Canadian talent of women, Aboriginal persons, people with disabilities, so on and so forth and giving them the opportunity to train, to join this fabulous industry of broadcasting and radio and television and we look up on our commitments as truly pure CTD. It may not be in the criteria of the Commission, but that is the way we look at it.
LISTNUM 1 \l 12694 MR. SIEMENS: If I might just elaborate on that, Commissioner Cram. We recognized when we wrote the application, and the one in Calgary as well, that these proposals we were putting forward are colouring outside the line a little bit and we take full responsibility for that and embrace that.
LISTNUM 1 \l 12695 We just look at these programs ‑‑ we think they should be Canadian Talent Development, but even if they are not we have clearly identified them for you as a tangible benefit, because we think these programs are so worthwhile. I mean, we are all struggling to boost our employment equity, to find Aboriginal persons and others that want to get into our industry, that need some encouragement to get into our industry, need some barriers lowered and we think that these programs all do that.
LISTNUM 1 \l 12696 And what is more, the small markets need programs like these. We just heard an applicant yesterday saying how hard it is to attract people to smaller markets that fit the criteria. So we need more people in the pool, that is what we need and we think this does that. So is it Canadian Talent Development? We think so. But if it is not, it is definitely a tangible benefit and we stand by it.
LISTNUM 1 \l 12697 COMMISSIONER CRAM: And you would accept a COL that you would spend these monies?
LISTNUM 1 \l 12698 MR. ARNISH: Absolutely.
LISTNUM 1 \l 12699 COMMISSIONER CRAM: Mr. Norman, how many Aboriginals do you have on staff in Grande Prairie?
LISTNUM 1 \l 12700 MR. NORMAN: At present in Grande Prairie we do not have any.
LISTNUM 1 \l 12701 COMMISSIONER CRAM: And what kind of programming do you have sort of geared towards Aboriginals?
LISTNUM 1 \l 12702 MR. NORMAN: We have a number of community events we take part in and Gord Sharp, in a second, could allude a little more to that. Also, Ms Anne Graham is involved not only as a sales rep with our radio station but as a community liaison too. And in the north there is a significant Aboriginal population and quite a few events going on. So I will pass it to Gord to comment on that.
LISTNUM 1 \l 12703 MR. SHARP: We have done lots of news stories with Aboriginal groups. There are seven First Nations within a 100‑mile radius of Grande Prairie, very active, done a lot of stories with the Métis group. The closest First Nations to Grande Prairie is Horse Lake, they are very active in the sporting community and Sturgeon Lake is another one very active. We have done a lot of stories with them over the years.
LISTNUM 1 \l 12704 COMMISSIONER CRAM: What do you do to recruit Aboriginals, Mr. Norman?
LISTNUM 1 \l 12705 MR. NORMAN: We have made some significant inroads in that. Unfortunately, at this time, we still do not have an Aboriginal working for us. But we are working on that and a program has been established by our sister station in the Pattison Group in Medicine Hat who have taken the initiative to get things rolling for our company.
LISTNUM 1 \l 12706 And you will meet Greg King tomorrow from the Métis Nation or when he appears. Greg is really excited about this new program, Teaming the Métis Nation of Alberta. He is the Head of Education for the Métis Nation of Alberta based here in Edmonton. And he is really excited about teaming up with the program we have for audio visual and new media at Grande Prairie Regional College. He said it is an opportunity of a lifetime and he said I love classic rock, can I be an announcer part‑time, so I might end up with somebody there. But you will meet Greg tomorrow and we truly are trying to make this an initiative.
LISTNUM 1 \l 12707 MR. ARNISH: You know, we talk about this in our whole group all the time because we meet quarterly and we meet often. We take employment equity very seriously and, you know, even in some of our larger centres that are in small markets, Kamloops, Kelowna, Prince George, for example, Red Deer, even in Vancouver, it is extremely difficult, and I think other broadcasters in the room would say this as well, to find qualified people from the Aboriginal community. And I think some of these programs that we are talking about here, these new initiatives with the Alberta Métis Association and the Grande Prairie Regional College go a long way in trying to foster people that will be trained to join us or join others in the industry as a whole.
LISTNUM 1 \l 12708 And we have had people from First Nations that have done well, they have come and joined us. I will give you an example. In Kamloops, we had a camera person who was a First Nations fellow and we hired him, he did very well, he came along and then the big market stations in Vancouver found out about him and hired him away from us, which is fine, we are glad he could pursue his career in Vancouver and it was a great opportunity and more money and all that. But we had a difficult time trying to replace that position and I don't think to this day we were able to do that in that particular area.
LISTNUM 1 \l 12709 It is tough, there is no doubt about it. But I think all of us in this room, I think all broadcasters are trying to grow the quotas, if I can use that terminology, in that and other areas as well. We believe, in the Pattison Group, that is our responsibility, we should be doing that.
LISTNUM 1 \l 12710 MR. SHARP: It is very hard to find workers in the Grande Prairie area. And the Grande Prairie Regional College ‑‑
LISTNUM 1 \l 12711 COMMISSIONER CRAM: In any event.
LISTNUM 1 \l 12712 MR. SHARP: Sorry?
LISTNUM 1 \l 12713 COMMISSIONER CRAM: In any event, it is hard to find anybody.
LISTNUM 1 \l 12714 MR. SHARP: Yes, that is right. And just a couple of months ago Grande Prairie Regional College started a program to help train heavy duty operators in the Aboriginal community and they have had some great luck with that and we did several stories on that. And they are hoping that will help people from the Peace Country and Aboriginal people from the Peace Country get good‑paying jobs which will be in the area for a long time. So yes, we need to work harder at it, but we are doing as many stories as we can on it as well.
LISTNUM 1 \l 12715 COMMISSIONER CRAM: Moving onto finance. You say that 80 per cent of your revenue will come from the incumbents. How much of that will come from O.K.?
LISTNUM 1 \l 12716 MR. ARNISH: I will have Anne and Kim talk to you about that, how we put our business plan together. Kim.
LISTNUM 1 \l 12717 MS McKECHNIE: Thank you, Commissioner Cram. I believe in our deficiency letter we indicated that based on local advertising revenues from the existing licensees in the market approximately 80 per cent of the revenue from the new station will come from local advertisers rather than other stations.
LISTNUM 1 \l 12718 COMMISSIONER CRAM: Okay. So what percentage of your revenue do you think will come from O.K.?
LISTNUM 1 \l 12719 MS McKECHNIE: Well, do you want me to give you a breakdown of where all our revenue is going to come from?
LISTNUM 1 \l 12720 COMMISSIONER CRAM: No, just percentage of your revenues that would come from that one incumbent.
LISTNUM 1 \l 12721 MS McKECHNIE: Well, we are estimating around 20 per cent is going to come from other stations, but that would include our own as well.
LISTNUM 1 \l 12722 COMMISSIONER CRAM: Yes.
LISTNUM 1 \l 12723 MS McKECHNIE: So if we split the difference, 10 per cent.
LISTNUM 1 \l 12724 COMMISSIONER CRAM: Oh, you think it would be about 10 per cent?
LISTNUM 1 \l 12725 MS McKECHNIE: It is a guesstimate.
LISTNUM 1 \l 12726 COMMISSIONER CRAM: Okay. And of course you are the incumbent and you again have high high revenues, second only to O.K. in projections, and the same question as my colleague, Commissioner Langford, asked O.K., why are you so bullish?
LISTNUM 1 \l 12727 MR. ARNISH: Well, I can let our team talk to you about that. We have been in the market a long time. We have been in the market as long as O.K. has to a degree. We know the market very well, the market has grown over the last probably five to seven years quite nicely and we project a growth, as you heard from other applicants at this hearing as well, for Grande Prairie will continue over the next coming years as well. We know the marketplace without question. And when we put this business plan together we felt that with a pure classic rock radio station, our commitment to news and spoken word programming that we are going to repatriate a lot of the listeners.
LISTNUM 1 \l 12728 We went out, and Anne can talk about this, we went out and talked to a number of our clients, over 100 of our clients, about would they increase their budgets, would they look at supporting a station like this. And I am going to let her give you some finite detail, but at the end of the day when we went out and did our homework, and we always do our homework, we do our due diligence. We realized at the end of the day that we could launch this new station in Grande Prairie ‑‑ because we built our business plan on their only being one station in Grande Prairie, I will say that, because that is what the call for licences was for ‑‑ but we felt very strongly that the marketplace could support this station and then at the end of the day we realized perhaps it could support two.
LISTNUM 1 \l 12729 Anne.
LISTNUM 1 \l 12730 MS GRAHAM: I am just going to, for one moment, defer this to Kim McKechnie who would just like to further comment on that and then I will address the issue as well.
LISTNUM 1 \l 12731 MS McKECHNIE: I will give you the long boring math version how we came up with those numbers. In projecting the revenues for The Drive we used our revenues from our existing station in Grande Prairie at the time we prepared the application so, of course, that was going back sometime around 2004. We assumed that our competitor was doing roughly the same, which gives us a figure of around $7 million. Based on the historical growth in the market around 3 per cent we bumped that up to $7.2.
LISTNUM 1 \l 12732 From there, we projected at approximately there would be about 10 per cent growth in at least year one and year two when you are adding an additional station. The 10 per cent figure we arrive at for revenue is based on new businesses to Grande Prairie, not just to radio, but to Grande Prairie. Then existing businesses who may not have, in the past, had a venue for their ads and then incremental users. The estimate is, in part, a bit of an educated guess as well based on our experiences in, more specifically, Red Deer, as a recent example.
LISTNUM 1 \l 12733 To test the formulas then we went out into the market and polled 100 business with approximately 40 per cent of them indicating that they would increase their advertising budgets to add the rock station into their mix. So this, coupled with the new businesses, should comfortably bring us to our 10 per cent projected growth in each of year one and year two.
LISTNUM 1 \l 12734 Our research shows us that we can expect at least 25 per cent market share. So calculating our share of the projected market brings this figure to $2 million in year one with similar growth in year two. We assume that these figures will slow to a more normal pace throughout the remaining term of the licence and beyond. And I will just let Anne elaborate on what the business polling was.
LISTNUM 1 \l 12735 MS GRAHAM: Thanks, Kim. As we talked to more than 100 businesses in Grande Prairie in March of 2006 and the results came in that, as Kim had mentioned earlier, the 40 per cent of those surveyed indicated that they would be willing to support and they were looking forward to advertising on a classic rock radio station. Forty per cent of the respondents also indicated that they would shift some advertising dollars around, maybe repatriate some of the dollars that was bleeding from the community in the trade area which is going to some of the other stations that, although they sell on the market they don't really serve the radio market or the Grande Prairie market, sorry.
LISTNUM 1 \l 12736 And about 20 per cent of them had responded that ‑‑ or sorry, 20 per cent were not using radio in the market at this time because they just didn't feel that the two existing stations could serve or reach the target demographic that they were seeking. However, with the excitement of the classic rock radio format that could be coming to the market, they would definitely use it and would definitely spend advertising dollars on The Drive.
LISTNUM 1 \l 12737 MS McKECHNIE: I might just like to add that in our revenue figures we are projecting about 20 per cent of that is going to come from national buys. In an unrated market they tend to buy the campaign across the board for all the stations, so that money should be instant.
LISTNUM 1 \l 12738 COMMISSIONER CRAM: Now, I just wanted to get into non‑programming synergies. It would be sharing space I suppose, admin, back office, anything else?
LISTNUM 1 \l 12739 MR. NORMAN: Commissioner Cram, there would be technical, sales, promotion and management positions, yes, and same office space, yes.
LISTNUM 1 \l 12740 COMMISSIONER CRAM: Yes, okay. Now, Mr. Arnish, you have just said that Grande Prairie could have two new licences. Are you going to go for three? I mean, two years ago when you made this application it was one, so two years later it is two. People won't launch next year maybe, so I mean should we go for three?
LISTNUM 1 \l 12741 MR. ARNISH: Great question, I knew it was coming. You are right, when we did our business plan, we alluded to that earlier, we built the business plan on one radio station. We guesstimated, as you heard Kim say, that we felt that the O.K. station was probably doing equally or maybe even perhaps better. I mean, we don't know all the finite details on the market. So we guesstimated that even though if we put a business plan together that is similar to ours that the market can support the additional one station.
LISTNUM 1 \l 12742 But the application goes back to a year, year and a half ago when we started to put it together and you have heard and we agree with it, that the marketplace has certainly continued to grow and perhaps will continue to grow into the future. I don't have a crystal ball, I am not sure what is going to happen with the lumber industry, the pulp and paper industry, the oil and natural gas industry. I think they are still going to have bright futures.
LISTNUM 1 \l 12743 So in answer to your question, if you look today at what the marketplace is doing I and we believe that the market could support two radio stations with diverse formats. But again, I guess I would just pitch my line that I talked to you about earlier, that I think we have to be careful about ‑‑ if the market can support two, should it be two new independents or should it be two new diverse formats. We have been in a number of markets where there has been more owners in the marketplace than two and it hasn't been good for the marketplace. There is predatory pricing wars, there is a merging of formats together to get the greatest audience share for advertising revenues.
LISTNUM 1 \l 12744 I do believe at the end of the day that the marketplace can support two radio stations, two new commercial stations. I do believe and I will say this, in this particular case they should go to the incumbents. I think the incumbents will ensure again at the end of the day that there will be a modern rock station geared to young males 18 to 34 and are demographic geared to males in the classic rock genre.
LISTNUM 1 \l 12745 If the Commission decides at the end of the day that the specialty applicant, Mr. Hunsperger, Touch Canada, has a good application before you and decides at the end of the day that that licence should get approval in Grande Prairie, we don't believe that will impact the two incumbents.
LISTNUM 1 \l 12746 I guess the other thing, talking about if you licence two new independents, not only does it impact the marketplace with predatory pricing and formats going to the middle, but it certainly could impact the spoken word of the two current incumbent stations in Grande Prairie as well because you have to become more efficient at the end of the day. I wouldn't like to see that happen, but it has happened in other markets.
LISTNUM 1 \l 12747 COMMISSIONER CRAM: But surely, I mean with the PBITs you would have to go a long way before?
LISTNUM 1 \l 12748 MR. ARNISH: I think you would but I guess, again, I will just reemphasize my point again, that I think what is in the best interest of the general public and the Broadcasting Act and the community of Grande Prairie is to have, if you are going to licence two, have four very distinct formats. And I think you can achieve that, Madam Commissioner, by licensing the two incumbents, because we will follow through with four distinct formats.
LISTNUM 1 \l 12749 It has worked very well in many other markets that we are in. In fact, I think you could ask other radio competitors that are appearing before you here for Grande Prairie that they have had the same type of situation in markets that they are in that we are not in.
LISTNUM 1 \l 12750 COMMISSIONER CRAM: And you know, Mr. Arnish, the alternate frequency question?
LISTNUM 1 \l 12751 MR. ARNISH: Yes, we have talked to our consulting engineer, Mr. Hanke, who is here if you wish him to come forward to make a statement on the record on that. He has told me there is five other frequencies available in Grande Prairie and we should have no difficulty if we can't use the proposed ‑‑ there is five plus our own I should say, for six ‑‑ if for some reason you don't allow us to use the frequency that we have proposed to the CRTC.
LISTNUM 1 \l 12752 COMMISSIONER CRAM: None of which will impact your projections?
LISTNUM 1 \l 12753 MR. ARNISH: No, not at all.
LISTNUM 1 \l 12754 COMMISSIONER CRAM: Thank you. Thank you, Mr. Chair.
LISTNUM 1 \l 12755 THE CHAIRPERSON: Thank you, Mr. Arnish. When you spoke with my colleague regarding the Save the Music Foundation it prompted me to look at the CIRPA intervention. I don't necessarily need that you specifically answer to the specifics of the CIRPA if you want to wait for the Phase 4. But if you are not planning to wait for the Phase 4, can I have your comments on the fact that they are making the case that CARAS MusiCan is doing exactly what the Save the Music Foundation is planning to do. Do you have any comments? And you can reserve your comments to Phase 4, because I saw that you have a written reply, but you didn't really address the specifics of that comment from CIRPA.
LISTNUM 1 \l 12756 MR. ARNISH: I might wait until Phase 4, but I guess I could say at this point in time we understand the CIRPA intervention and I think we have responded to it in‑kind and we have given a very detailed outlook on our viewpoint ‑‑
LISTNUM 1 \l 12757 THE CHAIRPERSON: Yes, but not specifically to the argument that CIRPA makes that CARAS MusiCan is a foundation that ‑‑
LISTNUM 1 \l 12758 MR. ARNISH: Yes.
LISTNUM 1 \l 12759 THE CHAIRPERSON: ‑‑ has the same purpose than the Save the Music Foundation.
LISTNUM 1 \l 12760 MR. ARNISH: We are a great support ‑‑ the Pattison Group record I think speaks for itself, is a great supporter of FACTOR, we received a very nice award from them last year at the Canadian Association of Broadcasters Convention for ‑‑ along with other broadcasting companies as well. We certainly support the CAB Starmaker and Radio Fund‑‑ Starmaker Fund, those are great programs as well. We just believe in Western Canada. There isn't a program of this such, of this type that could benefit where it will benefit the most and that is with youth in musical programs, in high schools and youth coming out of high school and wanting the help and the opportunity to be taken to the next big level and make themselves the best of the best.
LISTNUM 1 \l 12761 As I said in Calgary, around our table in the Pattison Broadcast Group we are extremely proud of this legacy ‑‑ if you give us the opportunity we will be extremely proud of this legacy that our broadcast group can leave to Canada's youth. And as I discussed, I think even funding from our foundation for a jazz band from Grande Prairie to travel to Chicoutimi to exchange Canadian youth viewpoints in Canada I think is a wonderful opportunity. And this fund that we have set up will allow that to be a legacy going forward. And as I said in Calgary, I think Canadians talking to Canadians is what we have to do. We have to continue that process, especially young Canadians talking to young Canadians and what better way than through music and them exchanging ideas and exchanging travel between one province and the other.
LISTNUM 1 \l 12762 THE CHAIRPERSON: Well, could you look specifically at CARAS MusiCan, so we have answer for the record?
LISTNUM 1 \l 12763 MR. ARNISH: Yes, I will.
LISTNUM 1 \l 12764 THE CHAIRPERSON: Well, now it is it the last opportunity that you have to pitch for your inquiry, so I am giving you two minutes to tell us why the Pattison Group should get the licence.
LISTNUM 1 \l 12765 MR. ARNISH: Thank you very much, Mr. Chairman Arpin.
LISTNUM 1 \l 12766 I will be brief, as I have just seven points to make. The Jim Pattison Broadcast Group believes that the granting of a new FM station in Grande Prairie, as we have proposed, will meet the objectives of the Broadcasting Act as well as contributing to the objectives that the Commission outlined in its commercial radio policy of 1998 and which is currently under review with the recent CRTC Radio Review.
LISTNUM 1 \l 12767 First, the proposed station will add a new and distinctive format to the City of Grande Prairie. The new Drive FM would accomplish that without duplicating music currently being exposed on either Grande Prairie FM station.
LISTNUM 1 \l 12768 Second, the application by the Pattison Broadcast Group includes a comprehensive package of tangible benefits that totals $2,075,000 in direct costs and an additional $2.1 million in indirect expenses, which equals to $4,175,000. The Canadian talent initiatives are well thought out and are designed to have an immediate and a positive effect in Northern Alberta.
LISTNUM 1 \l 12769 Three, the application by the Pattison Broadcast Group includes a significant commitment to news and information spoken word content. In a rural community access to information is critical and we have responded with a promise of a minimum of nine hours and 15 minutes of new news and sports coverage weekly, plus a minimum of additional three hours and 30 minutes in live local surveillance information.
LISTNUM 1 \l 12770 Four, approval of our application will result in the creation of at least 15 new jobs in the broadcast industry.
LISTNUM 1 \l 12771 Five, licensing a new station to the Pattison Broadcast Group will strengthen one of the very few multi‑station broadcasting companies based Western Canada. It will allow us to develop positive synergies with our existing station in Grande Prairie and will deepen our commitment to the north.
LISTNUM 1 \l 12772 Six, the Pattison Broadcast Group understands and thrives on small‑market radio. We are thoroughly familiar with the special relationship between a radio station and the community in small markets. We embrace the extra level of civic service required of small market stations and that, combined with the synergies we would develop with our existing Grande Prairie station, will allow us to provide a level of service to the community that a standalone station will find difficult to match.
LISTNUM 1 \l 12773 And seven, our company is based in Western Canada with a strong contingent of stations throughout Alberta. We have strong connections to the social, political and economic life in the province. The residents, listeners and business community of Grande Prairie have unequivocally endorsed our application for 104.7 The Drive with 107 letters of support, a 350‑name petition and countless interveners wishing to appear on our behalf at this hearing.
LISTNUM 1 \l 12774 Mr. Chairman, members of the Commission, our group plays an intricate role in the make‑up of the community of Grande Prairie. The community has recognized this commitment by giving us their overwhelming support for a second FM radio licence. We won't disappoint them or you if you grant us this privileged opportunity.
LISTNUM 1 \l 12775 On behalf of the entire Jim Pattison Broadcast Group team I thank you for this opportunity to appear before you and wish you well in your deliberations.
LISTNUM 1 \l 12776 THE CHAIRPERSON: Thank you very much, Mr. Arnish. Thank you very much to your team.
LISTNUM 1 \l 12777 We will break for lunch and we will start at 2:00.
‑‑‑ Upon recessing at 1301 / Suspension à 1301
‑‑‑ Upon resuming at 1411 / Reprise à 1411
LISTNUM 1 \l 12778 THE CHAIRPERSON: Thank you for waiting. We will resume the hearing.
LISTNUM 1 \l 12779 Madam Secretary, could you introduce the next applicant.
LISTNUM 1 \l 12780 THE SECRETARY: Thank you, Mr. Chairman.
LISTNUM 1 \l 12781 We will now proceed with Item No. 8 on the agenda, which is an application by Vista Radio Limited for a licence to operate an English language FM commercial radio programming undertaking in Grande Prairie. The new station would operate on frequency 104.7 MHz (channel 284C) with an effective radiated power of 100,000 watts (non‑directional antenna/ antenna height of 218.1 metres).
LISTNUM 1 \l 12782 Appearing for the applicant is Ms Margot Micallef who will introduce her colleagues.
LISTNUM 1 \l 12783 You will then have 20 minutes for your presentation.
LISTNUM 1 \l 12784 Ms Micallef...?
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 12785 MS MICALLEF: Thank you.
LISTNUM 1 \l 12786 Good afternoon, Mr. Chairman, Members of the Commission, CRTC staff.
LISTNUM 1 \l 12787 Before commencing our presentation I will introduce our panel.
LISTNUM 1 \l 12788 My name is Margot Micallef and I'm the Chair and CEO of Vista Radio Limited. To my immediate left is Bryan Edwards the President of Vista Radio Limited. To his immediate left is Jason Mann our Vice‑President Programming. To Jason's immediate left is Glenn Hicks our Director of News and Spoken Word for Vista Radio. To my right is Paul Mann Executive Vice‑President Operations for Vista Radio.
LISTNUM 1 \l 12789 Mr. Chairman, Members of the Commission, we are now ready to start our presentation.
LISTNUM 1 \l 12790 It is an honour to appear before you today with an application for a new FM station to serve Grande Prairie, Alberta. The basis of our proposal is simple. Grande Prairie has a booming and expanding economy estimated by the Financial Post at $1.2 billion annually and there is a clear demand for additional choice by the citizens of Grande Prairie.
LISTNUM 1 \l 12791 Vista will introduce a distinct format to Grande Prairie designed to reach one of the largest unserved segments of the adult radio listening population.
LISTNUM 1 \l 12792 Vista has a strong well funded business plan which will enable Vista to ably compete with the two well established commercial broadcasters already in Grande Prairie.
LISTNUM 1 \l 12793 Vista will bring a new editorial voice to northwestern Alberta. Vista will make a significant direct contribution to the development of Canadian talent and, finally, by providing a new radio station reflective of the community with a significant emphasis on local programming. Our application will clearly meet your licensing criteria and benefit the Canadian broadcast system.
LISTNUM 1 \l 12794 MR. EDWARDS: Vista Radio's commitment is to be a strong western Canadian small and medium market broadcaster providing local content which is relevant and very connected to the needs of our audiences.
LISTNUM 1 \l 12795 The addition of an FM station in Grande Prairie helps form the foundation of our expansion into Alberta where most of our shareholders currently reside. In fact, a group of our shareholders are the founders of one of the largest employers in the Grande Prairie area. Birchcliff Energy has invested upwards to $300 million in the area and shares Vista's values of supporting the communities in which we operate.
LISTNUM 1 \l 12796 As a small market broadcaster Vista has and continues to make major commitments in all of the communities we are licensed to serve. We have local management in place at all of our stations and all of them make local decisions in the best interests of their respective markets.
LISTNUM 1 \l 12797 Vista not only endeavours to employ people locally but to ensure that each of our stations has sufficient on air and information personnel to deliver a distinct musical sound, excellent local news and an absolute dedication to the communities in which we operate. We view our stations not only as the voice of their communities but the building blocks of those communities as well. We support the issues which are important to our listeners.
LISTNUM 1 \l 12798 Over the past 60 days we have raised a total of almost $100,000 for the Cowichan Regional Hospital in Duncan, the Therapeutic Riding Association in Powell River and the Children's Miracle Network in Prince George.
LISTNUM 1 \l 12799 Our business plan is threefold: one, to give each of our stations a professional sound with its unique identity; two, to staff each of our stations with local personnel; and, three, to deliver local programming relevant to that community.
LISTNUM 1 \l 12800 MR. P. MANN: Why Grande Prairie? Because Grande Prairie is clearly an underserved radio market.
LISTNUM 1 \l 12801 You have heard yesterday and today from all seven of the applicants who have preceded us that Grande Prairie is a thriving city and the citizens of Grande Prairie are crying out for more choice. You have also heard that advertisers and others can't get on the air and that significant advertising dollars are leaving radio and the community.
LISTNUM 1 \l 12802 For example, we have been told that significant radio revenue is being taken out of the market to stations in Fort St. John, Dawson Creek and Peace River. More choice in Grande Prairie and more radio inventory in Grande Prairie will help repatriate some of that market spending and further grow what has already been confirmed by one of the incumbents at something approaching a $9 million radio market. This number is substantially higher than any of the applicants have projected as the annual radio revenue in Grande Prairie.
LISTNUM 1 \l 12803 When we started our analysis at the time of this application, almost one year ago, the Grande Prairie retail climate stood at about $914 million. Recently, the Financial Post updated those figures and today the projected retail sales for 2006 are at $1.2 billion. That's $200 million more than the last prediction for fiscal 2007.
LISTNUM 1 \l 12804 We are not going to repeat what is already on the record. All of the previous applicants have shown evidence that supports the viability of not one but likely two new FM stations in the market. This view was supported yesterday by OK Radio, an incumbent who has enjoyed the benefits of this thriving market and who knows it well.
LISTNUM 1 \l 12805 MR. J. MANN: To begin with, our proposal is for a Classic Rock FM station specifically designed to appeal to a core audience between 35 and 44 years of age and, more broadly, adults 30‑49, many of whom are now listening elsewhere to satisfy their hunger for the music they grew up on.
LISTNUM 1 \l 12806 Even though the median age in Grande Prairie is 29.7 years old, this group of respondents was satisfied that their music of choice, a more modern selection, was being met.
LISTNUM 1 \l 12807 MR. P. MANN: The research provided to Vista by Decima Research suggested Classic Rock would fill a major void in the market. According to the research, it simply says:
"...a format targeted at adults between 35 and 44 years of age and, more broadly, adults 30 to 49, where the largest void exists, and a mainstream format that will have the least impact on any of the existing commercial stations." (As read)
LISTNUM 1 \l 12808 Therefore, Vista will be able to monetize that opportunity by growing overall market revenue as clearly the two existing formats leave a large unserved void in that market. This substantially unserved target audience is extremely valuable to the local advertising community and therefore we are confident the revenue projections in our application are realistic.
LISTNUM 1 \l 12809 MR. J. MANN: Vista's research mandate specifically outlined two objectives: number one, to locate a format that would be commercially viable and popular; number two, to locate a format that while popular would have minimal impact on the incumbent commercial stations and also serves the greatest unmet need in the market.
LISTNUM 1 \l 12810 In Classic Rock we have found a format that will primarily appeal to adults between 35 and 44 years of age and, more broadly, adults 30 to 49, by reintroducing many songs and artists which are not being aired locally in any significant numbers.
LISTNUM 1 \l 12811 Classic Rock, 104.7, has been designed to speak to the baby boom generation that is currently being underserved in Grande Prairie. The station will present a wide scope of Classic Rock artists, including the Rolling Stones, David Bowie, Neil Young, Led Zeppelin, Rush, Van Halen, the Eagles, Robbie Robertson and Aerosmith.
LISTNUM 1 \l 12812 To fulfil Cancom commitments, we will not only revisit past Canadian acts but we will also present newer Canadian artists who are compatible with the overall sound of the station. Artists like Matt Mays and El Torpedo, 54‑40, Colin James, Jeremy Fisher, the Trews and Mr. Completely, which is a Campbell River band, that our stations on Vancouver Island were the first to play.
LISTNUM 1 \l 12813 Our view is that the insertion of more up‑to‑date Canadian acts will add a variety and freshness to our format without breaching the overall premise of Classic Rock 104.7. After all, the key to this station is that it will be providing a much greater amount of 1960s, '70s and '80s Classic Rock music than the existing stations currently do and in doing so it will be focused specifically on serving adults between 35 and 44 years of age and, more broadly, adults 30 to 49.
LISTNUM 1 \l 12814 MR. HICKS: But Classic Rock 104.7 will do a lot more than satisfy the music needs and wants of Grande Prairie. It will take back the streets, a very clear Vista Group news policy now mandated in all of our small market stations. By taking back the streets I mean when it comes to knowing, respecting, understanding and reflecting the new stories, issues and debates going on right in our very own communities, in our own backyard.
LISTNUM 1 \l 12815 Vista has a very clear news philosophy in place. We handle news in a way that engages local interest in terms of people's health, heart and wallet. We offer an almost blanket reflection of our local communities. We make sure our newscasts focus on the local, local and local and when that is not enough we give them more local.
LISTNUM 1 \l 12816 This is such an important area for us in Classic Rock 104.7. It is quite a commitment to offer extensive local hourly news programming seven days a week. I have listened to so‑called local radio stations that claim they are in touch with community news but end up filling newscasts with wires copy and audio from areas that are nowhere near their own small markets and with very little relevance. Wires can quickly become a crutch.
LISTNUM 1 \l 12817 Classic Rock 104.7 will deliver six hours of local newscasts per week, 12 newscasts per weekday, another 12 at the weekend, and we will have a target local content quota of 80 per cent or better. That is precisely what we endeavour to do every day in our current operations.
LISTNUM 1 \l 12818 Four out of every five stories in most newscasts there are local with audio clips making our newscasts a mosaic of real local voices, and that's before local sports stories.
LISTNUM 1 \l 12819 We are passionate about local news at Vista. Grande Prairie will get that passion too. With our research indicating the greatest need in the market is the more mature news‑needy and news‑aware age bracket, we know that our attitude to saturating the airwaves with relevant local news content will satisfy that market.
LISTNUM 1 \l 12820 Other than the scheduled news, we will also run structured spoken word content along these lines: special 90‑second agri‑bus and energy reports which will run twice per weekday, that's 30 minutes a week; and that's in addition to weather updates in each cast and regular road reports, they contribute another two hours of spoken word a week. Furthermore, there will be hourly 60‑second community service announcements, entertainment and community events. That's seven days a week, three times a day. That's almost another one hour and 30 minutes of spoken word.
LISTNUM 1 \l 12821 All of these components add up to a total of over 10 hours of spoken word a week.
LISTNUM 1 \l 12822 We will appeal to those currently not listening to the radio in Grande Prairie or those listening less because their genuine local content needs are not being met.
LISTNUM 1 \l 12823 When it comes to news we know and understand our place, our duty and on what level we can genuinely offer something more and something new in a small marketplace.
LISTNUM 1 \l 12824 MR. EDWARDS: Mr. Chairman and Members of the Commission, we would like to update the Commission on Vista's policy regarding Canadian talent development.
LISTNUM 1 \l 12825 Vista is prepared to make a direct cash commitment of $500,000 over a seven‑year period or $71,000 a year in support of Canadian talent development.
LISTNUM 1 \l 12826 At the time we filed our application we intended to direct our CTD commitment in five initiatives: the first being area, the second to Starmaker Fund, the third to a music and schools program for Grande Prairie, the fourth to FACTOR, and the last to a talent search initiative called Front and Centre. This last initiative was to be managed by Vista.
LISTNUM 1 \l 12827 We have reviewed the letter of intervention by CIRPA and we intend, with your permission, to heed the requests of CIRPA to redirect the $87,000 originally aimed at our Front and Centre initiative to FACTOR. We agree with CIRPA that these programs are well managed and well received and that there is no need to duplicate this program.
LISTNUM 1 \l 12828 MR. P. MANN: Our new station will employ, starting from the launch day of the Grande Prairie operation, 16 new full‑time employees and one part‑time employee, including on‑air announcers, news, sports reporters, creative writers, salespeople, administrative and promotional personnel.
LISTNUM 1 \l 12829 We are committed to being a local radio station and Vista's operating philosophy of investing our money in small and medium markets across western Canada is one that we maintain now and in the future.
LISTNUM 1 \l 12830 We are committed to hiring from the local community when possible and endeavour to mirror within our company the demographics of the communities we serve.
LISTNUM 1 \l 12831 Vista Radio is committed to creating a barrier‑free, respectful workplace and corporate culture that offers equal opportunity and reflects the diversity of the communities we serve.
LISTNUM 1 \l 12832 MS MICALLEF: Mr. Chairman and Members of the Commission, let's quickly review the merits of our application.
LISTNUM 1 \l 12833 We have provided evidence underlining the strengths and dramatic growth of Grande Prairie and the need in this community for two or more stations.
LISTNUM 1 \l 12834 We propose a music format that is commercially viable and which will add diversity in the market.
LISTNUM 1 \l 12835 Our business plan is well thought out and we are well capitalized.
LISTNUM 1 \l 12836 Our revenues are achievable and our costs are reasonable.
LISTNUM 1 \l 12837 We will bring a new editorial voice to Grande Prairie with a commitment to news that is presently unmatched in the market.
LISTNUM 1 \l 12838 We will fully meet the Canadian content requirements and are prepared to allocate over $70,000 per year for a total of $500,000 over a seven‑year term to support Canadian talent development.
LISTNUM 1 \l 12839 From day one, Vista will be committed to creating a workforce that reflects the cultural diversity of Grande Prairie and the province as a whole. Our mantra is local.
LISTNUM 1 \l 12840 Paul, Jason, Bryan and I founded this company with a commitment to operating in small and medium markets.
LISTNUM 1 \l 12841 Unlike many of our competitors, these small communities are not an afterthought to us, they are our focus.
LISTNUM 1 \l 12842 Our stations stand on their own. They are not mini versions of larger market stations. We do not have a bear and a little bear station or a cool and a less cool station. We strive to give each of the communities we serve the opportunity to identify with a station that mirrors their community.
LISTNUM 1 \l 12843 This application will not only contribute significantly to the objectives of the Broadcasting Act but it is truly a reflection of the commitment Vista Radio is now bringing to all of its small market radio stations and the communities we are licensed to serve.
LISTNUM 1 \l 12844 I wish to thank the Commission for this opportunity to explain our proposal and we would welcome your questions at this time.
LISTNUM 1 \l 12845 THE CHAIRPERSON: Thank you, Ms Micallef.
LISTNUM 1 \l 12846 I think your introductory remarks and your application speak for themselves so I will go immediately to my list of questions. Some may appear to you basic, but we need your views for the record.
LISTNUM 1 \l 12847 I know that regarding the Front and Centre project that you have, you are changing the initiative to go to FACTOR. I have noticed that you have done the same thing also for your Fort McMurray application.
LISTNUM 1 \l 12848 MS MICALLEF: Yes, we have.
LISTNUM 1 \l 12849 THE CHAIRPERSON: We will start by talking about your demographic. You have been talking about reaching an audience of 35, 44 or even extending it by five years in the two directions so covering 30 to 49. You are saying it is going to be evenly balanced between men and women.
LISTNUM 1 \l 12850 Directionally, we know that Classic Rock is more skewed toward males than females. Could you explain to us why you have decided to target your station equally between men and women?
LISTNUM 1 \l 12851 MS MICALLEF: Certainly. I will ask Jason Mann to please address that.
LISTNUM 1 \l 12852 MR. J. MANN: Thank you for the question.
LISTNUM 1 \l 12853 Indeed, typically a Classic Rock station would, at the high end anyways, be three portions to one portion male to female audience, but I think it's more in the perspective. I think the perspective was that the format would skew much closer 50/50, somewhere in the neighbourhood of 55/45 or maybe depending on the actual market performance 60/40. Certainly, that is a significant difference than 3:1 as well.
LISTNUM 1 \l 12854 The size of the whole in the marketplace speaks to repatriating disenfranchised female listeners who we envision selecting our radio station if it was the only radio station in the marketplace, and we have broadened our playlist and made it a little bit softer than the typical Classic Rock station.
LISTNUM 1 \l 12855 Those are sort of the key areas where we would see attracting that type of an audience composition.
LISTNUM 1 \l 12856 THE CHAIRPERSON: You choose to target your programming toward ‑‑ even if the research that Decima conducted for you is saying that the format will be much more attractive to men than to women?
LISTNUM 1 \l 12857 MR. J. MANN: This is definitely an interesting discussion. I will draw a little bit on my experience with Jet FM in Courtenay, CFCP‑FM. Some of it comes to the non‑music elements of the radio station, some of the stationality, what we do, what we say on the air, what we do in the community.
LISTNUM 1 \l 12858 For example, we did a wedding wish promotion where we gave a $50,000 wedding prize to a lucky couple and it was dynamic and it was very much female skewed as far as appeal, so we saw a very high female response.
LISTNUM 1 \l 12859 Additionally, and I don't know how much more you want me to speak on the subject but as far as Classic Rock radio stations go you really don't have any pure Classic Rock radio stations in Canada. The genesis of Classic Rock might be said to be in the United States. In Canada, due to Cancon and non‑hit and hit regulations you will have a variance in the era and format composition of the Classic Rock format.
LISTNUM 1 \l 12860 Whereas most Classic Rock stations in Canada tend to skew more modern Alternative Rock as far as their current portions of their playlists, we would tend to skew on the softer side of current selections, still guitar‑based, guitar‑driven and considered Rock music by all means. You know, a Jeremy Fisher is going to have a significant female appeal.
LISTNUM 1 \l 12861 THE CHAIRPERSON: Why do you say that there is room for Classic Rock in Grande Prairie? Obviously, there are only two other radio stations in the market, and you and many others have identified Classic Rock as being the format of choice, but ‑‑
LISTNUM 1 \l 12862 MR. J. MANN: Certainly the other applicants have corroborated our research.
LISTNUM 1 \l 12863 Back in June‑July of last year Decima conducted the research, 400 respondents. The methodology included an unaided recall as far as what format is missing in the marketplace and the first format or the top format in that line of questioning was indeed Classic Rock. Then Decima tested four other formats, which also included Classic Rock and gave examples of the type of music a pure Classic Rock format would attract, and it scored at the top of the list as well as far as desire.
LISTNUM 1 \l 12864 Then, on the other side of the spectrum, what was available. They asked the residents of Grande Prairie what was and wasn't available, and so low availability for Classic Rock, the lowest availability, perceived availability of Classic Rock in the marketplace, and the highest demand.
LISTNUM 1 \l 12865 So I think that is why you are seeing that many applications for Classic Rock or variations thereof.
LISTNUM 1 \l 12866 In your submission you said that obviously Classic Rock is your format of choice but the situation will change, and I'm quoting you from your supplementary brief:
"The situation will change however if an existing station begins to use the Classic Rock music format before a new licence is granted. We have an alternative." (As read)
LISTNUM 1 \l 12867 Can you expand on which alternative you are talking about and what will be the impact of that alternative on your business plan?
LISTNUM 1 \l 12868 MR. J. MANN: In our supplementary brief we had indicated Classic Hits would be our alternate. We believe that the older age demographics are underserved in the community to the point where there is definitely room for two Gold‑based stations there.
LISTNUM 1 \l 12869 I think the invisible hand of the free market will move subtly and at some point in time we will find, you know, our way if we were licensed there and certainly believe that there is an economic model for radio stations in the marketplace. There would be definitely four distinct opportunities.
LISTNUM 1 \l 12870 As far as it impacting our business plan, I will defer...
LISTNUM 1 \l 12871 MR. P. MANN: Frankly, between the Classic Rock and Classic Hits options format, we didn't see having to make one choice or the other if it came to that making an appreciable or material difference on the overall business plan, and that was, candidly, before we clearly got recognition that the market was about a third larger.
LISTNUM 1 \l 12872 THE CHAIRPERSON: Yesterday we heard one of the applicants presenting some kind of a hybrid situation where it will be two thirds Classic Rock and Classic Hits. If we were to grant them a licence and also to Vista another licence, what will you do?
LISTNUM 1 \l 12873 MR. J. MANN: Well, I think that it has been stated that the first two beyond the air in the ‑‑ well, the incumbents actually have the first advantage, and I would imagine they will be actively repositioning their radio stations when things have been announced.
LISTNUM 1 \l 12874 The first new radio station in the marketplace is going to definitely have the advantage of choice. There will be a mad rush for positioning and it would depend on where we were ‑‑ if we were licensed ‑‑ where we entered into the marketplace, either third or fourth. We would definitely be supportive of maintaining a distinction in formats.
LISTNUM 1 \l 12875 I'm sorry; did I answer your question?
LISTNUM 1 \l 12876