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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 broadcasting applications further to calls for
applications for broadcasting licences to carry on radio programming undertakings to serve Owen Sound, Windsor and Peterborough, Ontario /
Plusieurs demandes en radiodiffusion suite aux appels de demandes de licence de radiodiffusion visant l'exploitation d'entreprises de programmation de radio pour desservir Owen Sound, Windsor et Peterborough (Ontario)
HELD AT: TENUE À:
Rooms B, C & D Salons B, C et D
Delta Hotel London Armouries Hôtel Delta London Armouries
325 Dundas Street 325, rue Dundas
London, Ontario London (Ontario)
December 12, 2007 Le 12 décembre 2007
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 broadcasting applications further to calls for
applications for broadcasting licences to carry on radio programming undertakings to serve Owen Sound, Windsor and Peterborough, Ontario /
Plusieurs demandes en radiodiffusion suite aux appels de demandes de licence de radiodiffusion visant l'exploitation d'entreprises de programmation de radio pour desservir Owen Sound, Windsor et Peterborough (Ontario)
BEFORE / DEVANT:
Rita Cugini Chairperson / Présidente
Peter Menzies Commissioner / Conseiller
Helen del Val Commissioner / Conseillère
ALSO PRESENT / AUSSI PRÉSENTS:
Cindy Ventura Secretary / Secrétaire
Joe Aguiar Hearing Manager /
Gérant de l'audience
Kelly-Anne Smith Legal Counsel /
HELD AT: TENUE À:
Rooms B C D Salons B C D
Delta Hotel London Armouries Hôtel Delta London Armouries
325 Dundas Street 325, rue Dundas
London, Ontario London (Ontario)
December 12, 2007 Le 12 décembre 2007
- iv -
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PRÉSENTATION PAR / PRESENTATION BY:
Newcap Inc. 577 / 3466
Larche Communications Inc. 626 / 3754
Pineridge Broadcasting Inc. 658 / 3968
K-Rock 1057 Inc. 719 / 4349
Evanov Communications Inc. 773 / 4712
Frank Torres (OBCI) 823 / 5051
London, Ontario / London (Ontario)
‑‑‑ Upon commencing on Wednesday, December 12, 2007
at 0900 / L'audience débute le mercredi
12 décembre 2007 à 0900
LISTNUM 1 \l 1 \s 34613461 THE SECRETARY: Good morning and welcome to day three of the public hearing.
LISTNUM 1 \l 13462 We will now proceed with item 8, which is an application by Newcap Inc. for a licence to operate an English‑language FM commercial radio programming undertaking in Peterborough.
LISTNUM 1 \l 13463 The new station would operate on frequency 96.7 MHz (channel 244B) with an average effective radiated power of 17,000 watts (maximum effective radiated power of 50,000 watts/antenna height of 96.8 metres).
LISTNUM 1 \l 13464 Appearing for the applicant is Mr. Rob Steele.
LISTNUM 1 \l 13465 Please introduce your colleagues and you will have 20 minutes for your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 13466 MR. STEELE: Good morning.
LISTNUM 1 \l 13467 My name is Rob Steele, President and Chief Executive Officer of Newcap Radio, and joining me today are David Murray, Chief Operating Officer for Newcap Radio; Glenda Spenrath, Director of Newcap Operations; Steve Jones, Vice‑President of Programming; Josie Geuer, Program Director of Ottawa's Hot 89.9 and on the end, Scott Broderick, Director of Ontario Operations.
LISTNUM 1 \l 13468 Madam Chair, members of the Commission, Commission staff, we are very pleased to be presenting this application for a new FM radio station to serve Peterborough, Ontario.
LISTNUM 1 \l 13469 Peterborough is a thriving city whose residents enjoy lifestyle and economy fuelled by local manufacturing and recreation. Quaker Oats and General Electric maintain large operations in the city and from canoe building in the 1850s to today's status as a gateway to the Kawarthas, Peterborough has always had a special link to the outdoors.
LISTNUM 1 \l 13470 Peterborough's proximity to Toronto means that its residents readily receive a number of Toronto radio stations but, like Canadians everywhere, given the right choices residents of the city will naturally prefer local radio.
LISTNUM 1 \l 13471 Our research suggests a clear interest on the part of Peterborough residents for more local radio and greater format choice. According to BBM numbers, more than 40 percent of hours tuned in Peterborough currently go to stations licensed to other markets. Licensing a new entrant like Newcap will not only help repatriate such tuning but will strengthen local radio and its ability to successfully compete in the future.
LISTNUM 1 \l 13472 We believe that we have a strong application both because of our specific plans for serving Peterborough and because of what Newcap as a company can bring to the community.
LISTNUM 1 \l 13473 First, our local radio professionals always have the creative freedom to make the programming decisions that will best serve their local audiences.
LISTNUM 1 \l 13474 Second, we remain equally committed to growth in smaller and larger markets in Canada and we provide the research, resources and expertise needed to make it possible.
LISTNUM 1 \l 13475 And third, we make a difference by actively supporting local community organizations including hospitals, food banks and children's charities. Talent, growth and community are what we are all about.
LISTNUM 1 \l 13476 Newcap owns and operates radio licences across Canada but unlike Canada's large radio companies, most of our stations are in small and medium‑sized markets. But we are committed to serving diverse communities across this country.
LISTNUM 1 \l 13477 I would now like Steve Jones, our Vice‑President of Programming.
LISTNUM 1 \l 13478 MR. JONES: Newcap is proposing a Gold Based AC station for Peterborough.
LISTNUM 1 \l 13479 Adult Contemporary or AC as the format is known, is one of the most widely‑programmed formats in Canada. AC provides a non‑intrusive and familiar sound that appeals very strongly to the 25‑54 demographic, particularly with female listeners.
LISTNUM 1 \l 13480 Our selection of Gold Based AC came from our analysis of the existing formats in the market and an evaluation of the viability of nine different formats as diverse as Modern Rock and Country.
LISTNUM 1 \l 13481 The research initially uncovered two potential format opportunities in Peterborough, CHR and Adult Contemporary. Our research was confirmed and our choice made when shortly after CTVglobemedia converted CKPT from AM to FM and launched Energy 99.3 in the CHR format.
LISTNUM 1 \l 13482 We project a 10 percent share 18‑64 for a Gold Based AC format in Peterborough. We propose 35 percent Canadian content distributed equally throughout the broadcast day as the most appropriate level for this format.
LISTNUM 1 \l 13483 Gold Based AC is a natural complement to the existing FM stations in Peterborough of Rock, Country and CHR. Soft AC, Sixties and Seventies, Oldies and Classic hits are the primary components of a Gold Based AC station. These sub‑formats are familiar to Newcap as we operate stations in each of them, and our research shows that all would be in demand in Peterborough. Combined together in Gold Based AC they provide us with the best opportunity to add music diversity to the market and avoid the playlists of the incumbents.
LISTNUM 1 \l 13484 96.7 The River will focus on timeless music by artists such as Elton John, Sheryl Crow, Guess Who, The Beatles, Fleetwood Mac, Céline Dion, Bryan Adams, Phil Collins and many others. The music will be softer, older and more familiar than that of other available stations. Our listeners would expect to turn on 96.7 The River and hear songs they grew up with and have come to identify as the music of their generation.
LISTNUM 1 \l 13485 Although 96.7 The River will be rooted in the music of the past our playlist will not be entirely old. Today there is a strong crop of established and emerging stars such as Michael Bublé, Jann Arden, Nora Jones and John Mayer who are making exciting, fresh contemporary soft music. This rejuvenated new AC format combined with the music of the sixties, seventies and eighties is just right for Peterborough.
LISTNUM 1 \l 13486 96.7 The River will appeal to a core audience that is 65 percent female in the 35 to 44 demographic. At 40, the median age of our typical listener will reflect that of Peterborough itself.
LISTNUM 1 \l 13487 Not surprisingly, the other nine incumbent applicants in this hearing are all proposing either variations or elements of the Gold Based AC format. What sets Newcap apart is its ongoing ability to research and execute that choice to adapt and compete effectively with strong incumbents and to provide Peterborough with a strong local news and information programming that it deserves.
LISTNUM 1 \l 13488 MS GEUER: Our research demonstrated that there is a strong interest in news that is specific to Peterborough as well as to its status as an outdoor recreation destination. Our format will be flexible enough to permit frequent news flashes keeping our listeners up to date with timely capsules.
LISTNUM 1 \l 13489 96.7 The River will significantly increase the diversity and availability of local news and information programming. We will provide 79 newscasts throughout the week, including weekends, all sourced and presented locally. The station's news director will supervise a team of two journalist announcers in Peterborough.
LISTNUM 1 \l 13490 In addition to the local news team focusing on Peterborough news, the station will benefit from Newcap's existing news resources in Ontario and across Canada. We will offer our listeners 75 percent local and regional content in all newscasts with the remaining 25 percent being relevant news and information from other parts of Ontario, Canada and the rest of the world.
LISTNUM 1 \l 13491 Major hourly newscasts will run approximately five minutes inclusive of sports and weather, which together with half‑hourly updates will provide a total of over six hours of news content weekly.
LISTNUM 1 \l 13492 Frequent unscheduled updates on breaking news, weather, traffic and road conditions together with music and other commentary will bring our minimum total spoken word to 17 hours per week.
LISTNUM 1 \l 13493 Beyond the numbers, though, 96.7 The River will commit to gearing its news and information programming specifically to Peterborough City and County.
LISTNUM 1 \l 13494 Being so close to a major city like Toronto often a community such as Peterborough can find itself overwhelmed by the bigger city. Combating that means things like paying special attention to providing listeners with daily updates and scores from area high school and university leagues and games. It means Pause for a Cause, an hourly feature profiling community groups, non‑profit events and other causes that are relevant to the local community. And it means little things like visiting rinks with coffee and hot chocolate in the winter and stopping at the ball fields with water and pop in the summer.
LISTNUM 1 \l 13495 Other program features on 96.7 The River will include Change the World. One listener gets the opportunity to explain what they would do to make life better in Peterborough.
LISTNUM 1 \l 13496 Voices from Peterborough is a very unique concept to commercial radio. This will be brought to life on 96.7 The River. Half an hour on this station will be handed over to the personalities that make up the fine city, from politicians to poets, nurses to school teachers. Then we have River Requests. Every day listeners will have the chance to hear their requests on the air over the lunch hour. Listeners will be able to call, email or text message their request to the 96.7 The River studios.
LISTNUM 1 \l 13497 96.7 The River will also have an online presence that will go beyond the typical radio station website including a detailed and updated interactive community events calendar, Peterborough Picks; up to the minute local news direct from our newsroom and a local sports scoreboard featuring minor hockey, little league and school sports events.
LISTNUM 1 \l 13498 MS SPENRATH: Our commitment to commitment to community reflection on 96.7 The River will stem from a systematic approach to employment equity and include the three basic tenets of cultural diversity.
LISTNUM 1 \l 13499 First is our programming. Both our news and non‑news programming will reflect the cultural diversity of our audience. News stories will reflect the reality of Peterborough's cultural, ethnic, racial and aboriginal diversity. Our other spoken word will contain elements that appeal to our ethnic and aboriginal audience. In our River Requests feature we will appeal to our diverse audience to tell us what they want and we will listen.
LISTNUM 1 \l 13500 Second is our on air personalities. Our announcers and reporters will be representative of the ethnic mosaic that makes up Peterborough. Our culturally‑diverse audience will enjoy an association with the people delivering their daily entertainment and information.
LISTNUM 1 \l 13501 And third is our workforce. Both on and off the air our staff will be representative of the demographics of the community we serve. Our staff will be well versed in corporate policies designed to support cultural diversity in the workplace and the reflection of the diverse groups in our programming. Our goal will be to connect with the parents, network with the organizers and establish roots in the community. Consistent with Newcap's long tradition of providing intensely local service, this new station will make a difference to the community.
LISTNUM 1 \l 13502 Our Canadian content development plan is specifically designed to develop and expose emerging artists from the Peterborough area and Ontario. We have proposed by far the highest value package of Canadian content development among applicants, totalling $1,015,000 over the term of the licence with spending of the licence with spending of $145,000 in each year of the licence term.
LISTNUM 1 \l 13503 $609,000 or $87,000 annually will go in financial support to FACTOR. We will ask that FACTOR direct these funds toward artists and groups residing in Peterborough and Ontario.
LISTNUM 1 \l 13504 $406,000 will go to Peterborough's own Trent University which is $58,000 per year to help fund performance art programs, including such initiatives as scholarships and enhance aboriginal music theatre.
LISTNUM 1 \l 13505 Trent University is an exceptional post‑secondary academic institution based in Peterborough and we are delighted that they have agreed to work with us to develop and implement CCD programs that will make a difference to this community. Trent University was the first university in Canada to launch a native studies program in 1971 and is the only university in Canada to have a cultural studies program as a separate autonomous unit complete with a doctoral program, the focus of which is performance arts and the role of music and theatre and shaping culture.
LISTNUM 1 \l 13506 MR. BRODERICK: Ensuring new licensees do not have an undue impact on incumbents is an important objective of the Commission's licensing process.
LISTNUM 1 \l 13507 That said, in this hearing, we think that ensuring any new entrant has a reasonable chance of competing with the incumbents is also important.
LISTNUM 1 \l 13508 The four popular commercial radio stations in Peterborough are currently owned by Corus and CTVglobemedia.
LISTNUM 1 \l 13509 While CTVglobemedia's two FM stations may, theoretically, give them a slight edge over Corus' AM/FM combo, in reality the two companies are virtually neck‑and‑neck in the market.
LISTNUM 1 \l 13510 By contrast, any new entrant will be one station up against incumbent operators with two stations each, stations that have better frequencies, better coverage, and enormous corporate resources behind them.
LISTNUM 1 \l 13511 Additionally, we recognize that fully 40 percent of the radio tuning in Peterborough currently comes from outside radio stations, most notably the Toronto marketplace.
LISTNUM 1 \l 13512 Two of the top four 25 to 54 stations in Toronto are CHFI‑FM and EZ Rock. Based on the similarity of their playlists, the biggest opportunity for 96.7 The River will come from these Toronto radio stations, owned by Rogers and Astral, respectively.
LISTNUM 1 \l 13513 Coupled with the local multimedia competition from CTVglobemedia and Corus, and Quebecor's recent purchase of the Peterborough Examiner, the Peterborough media landscape truly is the land of the giants.
LISTNUM 1 \l 13514 Competing with these major players won't be easy, but we believe that Newcap and 96.7 The River are up for that competitive challenge.
LISTNUM 1 \l 13515 MR. MURRAY: Madam Chair and Members of the Commission, like most markets in Canada, Peterborough is a healthy market that can only benefit from the licensing of new entrants.
LISTNUM 1 \l 13516 The current competitive landscape is made up of large, experienced broadcasters, namely, CTVglobemedia and Corus in Peterborough, and Astral and Rogers out of Toronto.
LISTNUM 1 \l 13517 This will make Peterborough a challenging market to succeed in.
LISTNUM 1 \l 13518 We also believe that, over time, with competition from a range of new wireless, local, audio media, the environment will only get tougher.
LISTNUM 1 \l 13519 We feel that we are well equipped to serve local audiences in Peterborough in just such a market. We believe that our application strikes the right balance for Peterborough now and into the future. Newcap has the resources and commitment to build for the long term, and that would certainly be the case here: a strong business plan, based on deep resources, and our demonstrated expertise in bringing new formats to the market in exciting ways; a new format that presently is not available; a new editorial voice in the market; one of the highest commitments to local news and reflection; and the highest contribution to the development of Canadian content, more than $1 million over the next seven years.
LISTNUM 1 \l 13520 We look forward to the opportunity to serve this market.
LISTNUM 1 \l 13521 This concludes our presentation. We welcome your questions.
LISTNUM 1 \l 13522 THE CHAIRPERSON: Thank you, Mr. Murray, Mr. Steele, and your colleagues. Welcome to the hearing.
LISTNUM 1 \l 13523 I will ask Commissioner Menzies to lead the questioning.
LISTNUM 1 \l 13524 COMMISSIONER MENZIES: Good morning. Some of these questions are for the record. Your presentation answered a few of them, but I just wanted to go through a few of them, and then give you an opportunity to expand on a few areas.
LISTNUM 1 \l 13525 I need to confirm with you that you are committed to 6 hours, 7.5 minutes of news per week.
LISTNUM 1 \l 13526 MR. MURRAY: Yes, we are.
LISTNUM 1 \l 13527 COMMISSIONER MENZIES: Can you confirm that 75 percent of that will be local?
LISTNUM 1 \l 13528 MR. MURRAY: Yes.
LISTNUM 1 \l 13529 COMMISSIONER MENZIES: Maybe you could expand on the nature of your local news. Will that match or duplicate other local breaking news, or will it be distinctive in some way?
LISTNUM 1 \l 13530 Why would I tune to your news as opposed to anybody else's news, or is your news in addition to your core?
LISTNUM 1 \l 13531 MR. JONES: If I understand the question correctly, our news is designed to complement the service we provide, that being a gold‑based AC station.
LISTNUM 1 \l 13532 We recognize that we are primarily a music‑driven entertainment service to our listeners, but being intensely local in our news is what will set us apart.
LISTNUM 1 \l 13533 We commit to 75 percent local news, and we recognize that the only way to be successful is to be local. There are thousands of sources for what is going on overseas or in the U.S. or across Canada, but in your local market there are very few sources to find out what is going on around the corner.
LISTNUM 1 \l 13534 COMMISSIONER MENZIES: If I understand correctly, obviously music is the core product, and the provision of news ensures that people don't have to switch the channel and tune in someplace else to find out what is going on.
LISTNUM 1 \l 13535 Is that basically it?
LISTNUM 1 \l 13536 MR. JONES: Precisely, yes.
LISTNUM 1 \l 13537 COMMISSIONER MENZIES: And you have two journalist announcers. Typically, how would they work?
LISTNUM 1 \l 13538 Are they primarily in the station tracking news and giving updates, or do they get out and find things on their own?
LISTNUM 1 \l 13539 MR. JONES: We have planned for three full‑time news staff, and I believe a part‑time staffer, as well.
LISTNUM 1 \l 13540 One would be a news director, two news journalist announcers, as you noted, and one part‑timer.
LISTNUM 1 \l 13541 Their roles would be a combination of being in the station and being out of the station, but, for the most part, they would be in the station providing newscasts, as we have noted in our application.
LISTNUM 1 \l 13542 A lot of the collection of news and information these days is done electronically. They would pick and choose the events they would be personally covering.
LISTNUM 1 \l 13543 A lot of what they would do would be contacting the newsmakers and those involved in the news, and providing our perspective on the stories.
LISTNUM 1 \l 13544 COMMISSIONER MENZIES: Typically, where do you find the people to do that? Do you find them locally, or other places?
LISTNUM 1 \l 13545 If you find them other places, what do you do to make sure they have a sense of the local nuances in terms of interests?
LISTNUM 1 \l 13546 MR. JONES: In all cases, for all positions, it makes the most sense, generally, to hire locally. If we can find on‑air people who understand the community already, they are that much further ahead.
LISTNUM 1 \l 13547 For those that we cannot hire locally and we need to bring in from elsewhere, we try to create a staff that provides mentorship and leadership.
LISTNUM 1 \l 13548 An example might be in Thunder Bay, Ontario, where our news director has been the news director in that market for probably 20 years. When we bring new staff in, they mentor under his direction. He is able to give them a pretty good perspective on the market.
LISTNUM 1 \l 13549 MR. JONES: We were just noting that the same case exists in Newfoundland, at our Heritage news talk station, VOCM.
LISTNUM 1 \l 13550 Newfoundland is a unique market. Sometimes it can be difficult to recruit people from the rest of Canada to come that far east. Often, once they do, it is hard to convince them to leave.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13551 MR. JONES: It is an example of where a keen understanding of the market is essential to success, and we do that same kind of mentorship there.
LISTNUM 1 \l 13552 COMMISSIONER MENZIES: Okay. Thanks.
LISTNUM 1 \l 13553 What, precisely, is your minimum commitment to spoken word in addition to news?
LISTNUM 1 \l 13554 I believe you answered that, but I would like you to expand on it a bit.
LISTNUM 1 \l 13555 MS GEUER: Thank you, Commissioner Menzies.
LISTNUM 1 \l 13556 The spoken word will total, including news, 17 hours per week, which is about 13.5 percent. That will involve features like "Change the World", "Voices of Peterborough", "Then and Now", "River Requests" ‑‑ I can go into a couple, if you are curious.
LISTNUM 1 \l 13557 COMMISSIONER MENZIES: Yes, just some "for instances", and expand on those.
LISTNUM 1 \l 13558 MS GEUER: Absolutely. For instance, we have "Pause for a Cause", which will be a 60‑second produced feature that will run seven days a week, each hour. It will profile community groups and non‑profit events in the Peterborough area.
LISTNUM 1 \l 13559 For example, if 96.7 The River were broadcasting today, we might use "Pause for a Cause" to highlight the concert fundraiser that is happening this evening at Thomas A. Stewart High School at 7 p.m. That is a fundraiser for the homeless.
LISTNUM 1 \l 13560 That is what we would use "Pause for a Cause" for, for example.
LISTNUM 1 \l 13561 Also, I mentioned in our opening remarks that we have something called "Voices of Peterborough", which we are hoping to launch on 96.7 The river. This is a really unique concept. It's a lot of fun, and it is something that we have never done in Ottawa, and I am actually considering it, because I think it is a really great idea.
LISTNUM 1 \l 13562 What we would do is, we would bring in a member of the community. It might be a nurse from the regional hospital in Peterborough, or it could be one of 600 of their volunteers.
LISTNUM 1 \l 13563 In this case, we would bring that person in, and they would get an announcer to sort of show them the ropes, and they would get to choose some music from our format that they enjoy, and then they would get a half‑hour show to talk about their life in Peterborough, and what interests them.
LISTNUM 1 \l 13564 We would pre‑record that and pre‑package it and air it, most likely, on a Sunday afternoon.
LISTNUM 1 \l 13565 COMMISSIONER MENZIES: Okay. And what type of people?
LISTNUM 1 \l 13566 MS GEUER: They could be teachers, coaches. It could be a city worker, it could be a poet, an artist ‑‑ anyone who listens, basically, to 96.7 The River would be welcome to come in and share a bit of their life with the community.
LISTNUM 1 \l 13567 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 13568 How much of your commitment is live‑to‑air?
LISTNUM 1 \l 13569 Could you confirm that for me again?
LISTNUM 1 \l 13570 MR. JONES: About 75 percent of our broadcast week would be live‑to‑air, and the remaining 25 percent would be locally originated voice tracking.
LISTNUM 1 \l 13571 COMMISSIONER MENZIES: So it would be 100 percent locally ‑‑
LISTNUM 1 \l 13572 MR. JONES: Yes. There may be opportunities here and there where it may make sense to carry a syndicated program of some sort, like most radio stations would when perhaps a certain artist is performing in Peterborough, and we can find a really good syndicated special that profiles their career.
LISTNUM 1 \l 13573 But in an average broadcast week, 100 percent of our content would originate locally.
LISTNUM 1 \l 13574 COMMISSIONER MENZIES: In your presentation you mention that there is some familiarity with the formats currently in place, and obviously, with the Toronto market, there is a lot of cross‑over.
LISTNUM 1 \l 13575 What are the things that you have in common ‑‑ and there will be a second half to this question ‑‑ format‑wise with the other applicants?
LISTNUM 1 \l 13576 MR. JONES: Almost all of the other non‑incumbent applicants have proposed some form of similar AC format. What differentiates us, as we look through the other applicants ‑‑ and I can't speak with a great deal of authority to their applications, but from what we have seen, our format is significantly older and based more on the music of the sixties and seventies.
LISTNUM 1 \l 13577 We estimate that 50 percent of our playlist would be pre‑1980, whereas, from what we can tell at this point, most of the other applicants appear to be a little more in the eighties and today.
LISTNUM 1 \l 13578 COMMISSIONER MENZIES: How does that give you an edge?
LISTNUM 1 \l 13579 MR. JONES: We believe, from our research, that the greatest format opportunity is an AC format that is more broad, that encompasses music from as early as The Beatles' arrival in North America in the sixties, up until the softer hits of today and that gives us, we believe, the best ability to reach the biggest possible audience.
LISTNUM 1 \l 13580 COMMISSIONER MENZIES: Okay. Your ‑‑ I am sorry, I will just make sure I don't have you confused with anybody else.
LISTNUM 1 \l 13581 Your target audience ‑‑ I mean everybody talks about the 25‑54 but that is too big to make sense entirely. But your target audience is mostly ‑‑ the median age?
LISTNUM 1 \l 13582 MR. JONES: It is 40.
LISTNUM 1 \l 13583 COMMISSIONER MENZIES: Forty?
LISTNUM 1 \l 13584 MR. JONES: Yes.
LISTNUM 1 \l 13585 COMMISSIONER MENZIES: And it is primarily female?
LISTNUM 1 \l 13586 MR. JONES: We estimate 65 percent female. And of that 25‑54 demographic, we plan to reach a core audience of 35‑44 female.
LISTNUM 1 \l 13587 COMMISSIONER MENZIES: And why is that important to you?
LISTNUM 1 \l 13588 MR. JONES: It is important because 25‑54 is the demographic that drives most radio advertising and you win ‑‑ there is a saying in radio that 25‑54 isn't a target, it is a family reunion. So you narrow it down.
LISTNUM 1 \l 13589 It is a little bit like an archery target and if you want to win the big target you have to shoot for the bull's eye. So our bull's eye would be that 35‑44 and by hitting that bull's eye well, we can win the bigger demographic of 25‑54.
LISTNUM 1 \l 13590 COMMISSIONER MENZIES: Okay. If you hit that bull's eye, how does it work for you commercially? Like why would advertisers ‑‑ and you are going to need those ‑‑ why would they find that attractive?
LISTNUM 1 \l 13591 MR. JONES: The 25‑44 ‑‑
LISTNUM 1 \l 13592 COMMISSIONER MENZIES: Not that there is anything unattractive about 35‑44 year old women ‑‑
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13593 COMMISSIONER MENZIES: ‑‑ but what is commercially attractive about it?
LISTNUM 1 \l 13594 MR. JONES: I think Scott Broderick, our Director of Ontario Operations, is best to handle that question.
LISTNUM 1 \l 13595 MR. BRODERICK: I think it comes down to money. It really does. I think there is a perception among advertisers that in order to spend money you have to have money, and under 25 the belief is that you probably haven't accumulated enough wealth at this point in time to be interesting as a consumer.
LISTNUM 1 \l 13596 And over 55 your buying patterns are probably pretty well established at that point and the advertising isn't what is going to drive your purchasing, it is more pre‑established loyalties and brand loyalties. Once you are satisfied it is pretty tough to move you.
LISTNUM 1 \l 13597 COMMISSIONER MENZIES: And why are women better than men as a commercial audience?
LISTNUM 1 \l 13598 MR. BRODERICK: I hope I am not the first one to explain this to you but ‑‑
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13599 COMMISSIONER MENZIES: I know the answer, I just needed you to say it.
LISTNUM 1 \l 13600 MR. BRODERICK: A commonly held belief that women would control about 80 percent of spending in the marketplace.
LISTNUM 1 \l 13601 COMMISSIONER MENZIES: Right, thank you.
LISTNUM 1 \l 13602 Your scholarship criteria, as you have laid it out, is specific ‑‑ or the Commission's scholarship criteria, sorry, is now specific to music and journalism students in terms of that, in other words, content that is specific to audio.
LISTNUM 1 \l 13603 Is that outlet available through Trent for you?
LISTNUM 1 \l 13604 MS SPENRATH: Yes, it is. We have had discussions with our representatives of Trent University and they have a very interesting and complete cultural program, and as part of that they have workshops and classes that specifically look at music and its role in culture, and so we have taken a look at the opportunity to provide scholarships that would work in that direction to promote the music part of the culture.
LISTNUM 1 \l 13605 COMMISSIONER MENZIES: If for some reason that doesn't become available at some point during the period of the licence or the Commission were to rule otherwise, how would you adjust?
LISTNUM 1 \l 13606 MS SPENRATH: Well, I guess primarily ‑‑ first of all, we would try to keep to our commitment to Trent University because there are other opportunities there for us to provide funding in other areas. They have the musical theatre for Aboriginal talent.
LISTNUM 1 \l 13607 So we would try in negotiations and discussions with Trent University to find other avenues that are eligible and I guess if that is not available then our other alternative would be to direct it towards FACTOR.
LISTNUM 1 \l 13608 COMMISSIONER MENZIES: Okay. Technically your application's projected CCD expenses don't include a provision for the basic, although the overall is significant.
LISTNUM 1 \l 13609 Can you just clarify this for the record, please?
LISTNUM 1 \l 13610 MS SPENRATH: Yes. What we have identified here is clearly over and above the basic CCD and the basic CCD we will make in addition to this amount that is promised.
LISTNUM 1 \l 13611 COMMISSIONER MENZIES: Okay, thank you. Your application ‑‑ as you have said, all your programming will be local.
LISTNUM 1 \l 13612 Are there synergies to your advantage in other areas?
LISTNUM 1 \l 13613 MR. JONES: You mean as far as our ‑‑
LISTNUM 1 \l 13614 COMMISSIONER MENZIES: Your other operations.
LISTNUM 1 \l 13615 MR. JONES: Yes. They are few and far between. They do exist and where appropriate we would certainly take advantage of them.
LISTNUM 1 \l 13616 For example, across Atlantic Canada last week there was a major winter storm that kept power out in parts of Prince Edward Island for upwards of a week. Our news operation in Prince Edward Island was able to share that with the rest of our Atlantic Canadian stations who were also very interested in that story.
LISTNUM 1 \l 13617 There may be programming cases ‑‑ as I mentioned earlier, if a certain artist is playing in Calgary on a cross‑Canada tour and we can interview him in Calgary and share that interview with Peterborough so that when the artist comes to that community we have a programming edge on our competitors, we would certainly take advantage of those.
LISTNUM 1 \l 13618 But as I mentioned, off the top those synergies are few and far between and are not really the foundation of our application, which is to be intensely local.
LISTNUM 1 \l 13619 COMMISSIONER MENZIES: Okay. You mentioned this in your presentation and touched on it quite confidently but I would like you to expand on it a bit more.
LISTNUM 1 \l 13620 If you get a licence in this market you will have CTV and Corus incumbents to deal with. As you have noted, you will have Rogers and Astral to the south of you, and as you also noted, you have Quebecor with the Peterborough paper.
LISTNUM 1 \l 13621 That is a pretty tough company to compete with and I just want to give you the opportunity to expand briefly on why I need to believe you are tough enough to make it through that crowd.
LISTNUM 1 \l 13622 MR. MURRAY: Right, thank you.
LISTNUM 1 \l 13623 Well, we compete with these large broadcasters in many of our markets, in Ottawa and in Calgary and in Edmonton, and we hold our own and do quite well. I mean they are very good broadcasters and they do get a good share of the market.
LISTNUM 1 \l 13624 Now, I think, as Steve has said, the key to success in Peterborough is to be intensely local and to repatriate a lot of that 40 percent or ‑‑ we have heard different numbers depending on which BBM book you are looking at.
LISTNUM 1 \l 13625 But that 30‑40 percent of out‑of‑market tuning, once that is repatriated and we create an intensely local product, we will get our share of the audience and that is all you need to have. You need to have that niche audience in our format and then we can ‑‑ Scott can sell it.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13626 COMMISSIONER MENZIES: Okay, thank you. How many licences do you think this market can handle?
LISTNUM 1 \l 13627 MR. MURRAY: We think that probably ‑‑ our business plan was based on the fact that you might approve two new licences for Peterborough.
LISTNUM 1 \l 13628 COMMISSIONER MENZIES: I am not going to answer that question.
LISTNUM 1 \l 13629 MR. MURRAY: Which one? Do you have anything in mind?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13630 COMMISSIONER MENZIES: But is that what you think it can handle? I mean if you think it can handle four, tell me. If you think it can handle just one, tell me.
LISTNUM 1 \l 13631 MR. MURRAY: Right. Well, I think the difficulty with more than two is that there is really only one reliable good frequency, 96.7. As everybody has applied for and all of their engineering consultants have advised them, that is the plum frequency.
LISTNUM 1 \l 13632 Every other frequency has some adjacency problems which could get ironed out but the reality is it is going to be ‑‑ you would get those at a much lower power and much lower coverage.
LISTNUM 1 \l 13633 So a possible alternative ‑‑ it appeared from yesterday's hearing and from our analysis of our engineering information that 102.5 might be the best secondary frequency but it appears to only be applicable or acceptable off the Corus site.
LISTNUM 1 \l 13634 So I don't believe Corus has given anyone else permission to use their tower. So probably 102.5 would only work for Corus. So it might be acceptable in their flip but we think that the best use of 96.7 would be a new licence to bring some new people to ‑‑ new formats available to the public for Peterborough.
LISTNUM 1 \l 13635 COMMISSIONER MENZIES: Okay, thanks. You spoke about the commitment to diversity and reflecting the ethnic community of Peterborough, et cetera.
LISTNUM 1 \l 13636 Can you give me some idea what Peterborough looks like demographically in terms of that, its cultural makeup and its ethnic makeup, et cetera?
LISTNUM 1 \l 13637 MS SPENRATH: Yes. With that market and with all the markets that we operate in we tend to look to Stats Canada as a standard for our research.
LISTNUM 1 \l 13638 It does have a small Aboriginal and ethnic population, not as much as the major metropolitan areas like Toronto or Montreal, but there is, according to the information that we have, just under 4 percent on the ethnic, and Aboriginal is close actually to the ethnic community.
LISTNUM 1 \l 13639 COMMISSIONER MENZIES: Okay. Now, what would ‑‑ a couple of years from now if you were to launch in Peterborough and I were to walk down the street and ask people about you, how would they describe you?
LISTNUM 1 \l 13640 MS SPENRATH: I would say a big part of the fabric of the community and, you know, a welcome member.
LISTNUM 1 \l 13641 COMMISSIONER MENZIES: Okay. Anybody else?
LISTNUM 1 \l 13642 MR. JONES: Just to expand a bit on that.
LISTNUM 1 \l 13643 From a programming point of view, I would like to have people recognize us, as Glenda noted, as being very much involved in the community, intensely local, a fun and entertaining radio station that is on top of what is going on in Peterborough.
LISTNUM 1 \l 13644 And from a corporate perspective, I think we would like to be recognized as a contributing member of the corporate community and a positive influence on the business community.
LISTNUM 1 \l 13645 COMMISSIONER MENZIES: Okay, thanks.
LISTNUM 1 \l 13646 Could you just expand a little bit on your revenue sources, just give me some examples of 40 per cent of first year revenues will derived from non‑radio advertisers, including new radio advertisers and advertisers in other media?
LISTNUM 1 \l 13647 As you mentioned, I don't think the guys at Quebecor are probably that interested in giving up the revenue that they have. Can you expand a little bit on where that is going to come from and how you are going to get it and what trends there are in the market that make it possible?
LISTNUM 1 \l 13648 MR. MURRAY: Sure. I will ask Scott Broderick to expand on those percentages and give you an idea.
LISTNUM 1 \l 13649 But I will say first that, you know, through our experience and with operating in many markets of this size, like Moncton and Charlottetown and Fredericton, et cetera, we believe that our projections are quite conservative. We have exceeded those projections in most of the markets where we have started up new licences.
LISTNUM 1 \l 13650 And I will ask Scott to talk about the actual percentages and the clients, et cetera.
LISTNUM 1 \l 13651 MR. BRODERICK: Sure thing. I think, as you said, yes, I don't think Quebecor is anxious to be giving up anything. But I think there is a trend. I mean, radio revenues I think are up something like 25 per cent over the last five years, whereas newspaper revenues in terms of dailies are down something like 17 per cent. So there is a trend and that has to do with circulation numbers I think overall.
LISTNUM 1 \l 13652 There is a scene from All the President's Men, and they kept saying follow the money, follow the money. And in this case, that is what is going to happen here. I think that it is most likely going to come from newspaper. I think that the tuning that we repatriate into the marketplace is going to be very saleable to the local advertisers. So whereas before there wasn't a local radio solution available demographically, they are going to find a really palatable and very cost‑effective solution.
LISTNUM 1 \l 13653 And the other thing is, and this is kind of an answer to your other question about, like how do we know that we can compete with these giants? And it is because I think our sales approach is results‑based, it is not directly tied to ratings. It is activity and account by account management. And I think that when you look at our projections, by the end of our first quarter, we need approximately 10 clients active on the radio station on a weekly basis.
LISTNUM 1 \l 13654 By the end of our first year each of our five representatives would need eight clients, each, active on the radio station on a weekly basis. I think any sales manager, you know, here today would say that those are pretty reasonable expectations and it really comes from having a radio representative in front of a business person asking business questions and providing radio solutions. And that is just going to naturally grow the radio revenues in the marketplace, so we are very confident.
LISTNUM 1 \l 13655 COMMISSIONER MENZIES: Why does it work commercially for you and/or why is it culturally relevant, important, to repatriate listeners? I know it is the term common usage, but repatriating people from a Toronto station to Peterborough, why does that matter?
LISTNUM 1 \l 13656 MR. BRODERICK: Honestly, one of the things I often say to people is that we don't create spending in the marketplace, we move market share around. People are going to, you know, spend their money where they choose. We are able to introduce new clients, new opportunities to the listeners.
LISTNUM 1 \l 13657 And if they are not listening to Peterborough radio stations, they are not going to be introduced to Peterborough businesses. And I think repatriating those listeners on behalf of the business owners is a big part of the business plan.
LISTNUM 1 \l 13658 COMMISSIONER MENZIES: In your business plan your total revenue is 1.1 for the first year. You seem to bite off a very large chunk right off the bat and then predict, well, I wouldn't call it modest, but not excessive growth after that.
LISTNUM 1 \l 13659 MR. BRODERICK: M'hmm.
LISTNUM 1 \l 13660 COMMISSIONER MENZIES: How can you hit the market that hard and that fast and get that much revenue that quickly?
LISTNUM 1 \l 13661 MR. BRODERICK: Again, I think that is what makes us a little bit different. Because of our experience in the small and medium markets where ratings are much less part of the sales game, so we are used to selling without ratings. In fact, depending upon when the station launches, we could be without ratings for quite a while. So it is about transferring confidence and sitting down. And, frankly, a good idea will work on any radio station, so we focus on ideas with our salespeople. So that is why I think we will have more success early on.
LISTNUM 1 \l 13662 But it is about activity management and it is about getting out, getting in front of people and asking questions. So you are not going to necessarily make twice as many calls in your seventh year as in your first year. Hopefully, with good sales management, you are going to make about the same because we are just going to be out there visiting, talking to people, providing solutions and getting results. So it won't change dramatically over the term of the licence.
LISTNUM 1 \l 13663 COMMISSIONER MENZIES: I am interested in that, how you sell without ratings in terms of that. And just to confirm what you indicate, is you are basically going to get in there and get yourself entrenched early. And then most of the growth ‑‑ there is some increase in the client base, but it looks like a lot of it is a rate after that.
LISTNUM 1 \l 13664 MR. BRODERICK: Not necessarily. I think that what happens is you have some success with clients early on and those stories become ‑‑ the results that you are getting for other clients become what you are really selling. Saying, hey listen, we have had a tremendous amount of success, in particular maybe in the automotive category. So I think those success stories become very marketable.
LISTNUM 1 \l 13665 COMMISSIONER MENZIES: Okay. Yes?
LISTNUM 1 \l 13666 MR. MURRAY: Yes, if I could add just something and I will just hand it back to Scott.
LISTNUM 1 \l 13667 An example of that is that we were recently approved for an AM/FM conversion for Carbonear, Newfoundland. And this year Carbonear AM will do approximately $600,000 of revenue total for the year. And we plan to launch that new FM station in February. Last week we went into the market and pre‑sold $400,000 on Carbonear FM in three days. So it was a very systematic approach, we did our blitz of our salespeople from St. John's, which is 45 minutes away and, you know, created that through stories and, as Scott is saying, through confidence. And we have done, whatever that is, two‑thirds of last years' results already into this year with that FM.
LISTNUM 1 \l 13668 So we would do a similar thing in any new market that we started. The sales force would be hired two months prior launch and we would go with a large blitz and then we would be selling and telling our story throughout the lead‑up period and also, obviously, after we launch.
LISTNUM 1 \l 13669 COMMISSIONER MENZIES: Okay. I just have, I think, just one more question, forgive me if there is another.
LISTNUM 1 \l 13670 Can you tell me how comprehensive your research was into that market, how many people were surveyed and how many businesses?
LISTNUM 1 \l 13671 Actually, I will have one more question. Go ahead.
LISTNUM 1 \l 13672 MR. JONES: Our research was conducted by Mark Kassof & Company, who has appeared before you earlier in the hearings for Owen Sound and, I believe, for Windsor.
LISTNUM 1 \l 13673 Mark has done a great deal of research for Newcap. We take a great deal of pride in the amount of research we do, research is a compass. And if you are lost in the woods, if you don't have a compass, you know, you could end up further away from your goal with every step you take. So we try to gauge our direction first before we take any big steps.
LISTNUM 1 \l 13674 Our research in Peterborough was nine different formats and 300 individuals 18‑64. The margin of error in that research would be, on the ratings projections, 3.4 per cent plus or minus.
LISTNUM 1 \l 13675 COMMISSIONER MENZIES: Within the structure in terms of that?
LISTNUM 1 \l 13676 MR. JONES: I am sorry?
LISTNUM 1 \l 13677 COMMISSIONER MENZIES: The margin of error is 3.4 per cent within the ratings structure?
LISTNUM 1 \l 13678 MR. JONES: Yes, within the final ratings projections.
LISTNUM 1 \l 13679 COMMISSIONER MENZIES: Okay, thanks. Have you surveyed the potential advertisers in terms of that and had any sense of any interest or otherwise from them in the marketplace or is that premature?
LISTNUM 1 \l 13680 MR. MURRAY: Yes, we had not done that.
LISTNUM 1 \l 13681 COMMISSIONER MENZIES: Okay. That is it for me, thank you.
LISTNUM 1 \l 13682 THE CHAIRPERSON: Thank you, Commissioner Menzies. The more of these you will do, the quicker you will learn you never say I have one final question.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13683 THE CHAIRPERSON: I just have a couple of follow‑up questions and one has to deal with growth. I, obviously, just heard your conversation with Commissioner Menzies. But one area in which you don't project growth is in your audience share. It is steady at 13 per cent for year one through to year seven. What is your rationale for not including any growth in share of tuning?
LISTNUM 1 \l 13684 MR. JONES: We believe that there is a hunger for this format in Peterborough and that hunger isn't necessarily going to take a long time to wrap up or grow exponentially once it is on the air. We have seen, in the case of the recent CKPT flip, where the station immediately gained a 20 share plus in the first book.
LISTNUM 1 \l 13685 So when there is a hunger for a new format there generally isn't a long ramp‑up of escalating ratings. Things can happen, quite often, fairly quickly and we believe we can sustain that over the course of the licence.
LISTNUM 1 \l 13686 MR. MURRAY: And I would add that it is not like instant 13 and then 13 forever. It is, you know, our average ratings for year one will be 13, our average ratings for year two will be 13, et cetera, because that is what we believe ‑‑ that is what our research told us that we would enjoy. Obviously, there is going to be fluctuations and you are going to have great book ‑‑ BBM is not particularly reliable in all situations.
LISTNUM 1 \l 13687 And as Scott said, you know, we really don't depend on ratings, we depend on providing results for clients and our community involvement and our local local ‑‑ and ratings are nice but, you know, they are not critical.
LISTNUM 1 \l 13688 THE CHAIRPERSON: Okay, thank you. And in terms of format, I did have up here your amended sample playlist. In light of the format change in the market, in particular CKPT, what are the differences between that format and what I see here in your amended playlist? Because a lot of these artists and a lot of these songs could fit into the Hot AC format, could it not?
LISTNUM 1 \l 13689 MR. JONES: Yes and no. We did look at CKPT's current playlist and did an analysis of what we would project the overlap would be. And it would be about 10 percent or less and it would primarily be in certain artists that are Canadian for the most part. There is not a lot of crossover.
LISTNUM 1 \l 13690 For example, CKPT's current playlist includes 60 percent from 2006 and 2007 so only 40 percent of their current spins are derived from previous to 2005. On our approach only 10 percent of our entire spins would be from 2000 to today.
LISTNUM 1 \l 13691 So we are really looking at two stations that although on the surface may have some artist overlap, the actual overlap is quite small.
LISTNUM 1 \l 13692 THE CHAIRPERSON: Okay, thank you for that.
LISTNUM 1 \l 13693 In terms of your news and spoken word in your oral presentation you said:
"The station's news director will supervise a team of two news journalists/announcers in Peterborough." (As read)
LISTNUM 1 \l 13694 THE CHAIRPERSON: You have among all the applicants ‑‑ wrong stickie. Excuse me for just a second.
LISTNUM 1 \l 13695 Yes, amongst all the applicants you have the highest level of programming expenditures, not that that's a bad thing. But just for comparison purposes what do you include in your programming line? Is that just news staff or is it also the rest of your programming staff, like I say for comparison purposes because yours is the highest?
LISTNUM 1 \l 13696 MR. MURRAY: Sure. We do that in detail and Glenda can.
LISTNUM 1 \l 13697 THE CHAIRPERSON: Okay, terrific.
LISTNUM 1 \l 13698 MS SPENRATH: Yes, that would include the entire programming costs, including of course the biggest is our payroll staff complement. But it would also include our broadcast news, the cost of any news vehicles; any other supplies or costs are included in running the news and programming departments.
LISTNUM 1 \l 13699 THE CHAIRPERSON: So how many staff members does that line item include?
LISTNUM 1 \l 13700 MS SPENRATH: That includes the equivalent of five programming and part time and three fulltime news, and a part time as well news person.
LISTNUM 1 \l 13701 THE CHAIRPERSON: Okay, thank you.
LISTNUM 1 \l 13702 So it's not like you just pay the greatest salaries?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13703 MS SPENRATH: We think so.
LISTNUM 1 \l 13704 THE CHAIRPERSON: To attract the best people.
LISTNUM 1 \l 13705 Again, in your oral presentation you said:
"The station will benefit from Newcap's existing news resources in Ontario and across Canada." (As read)
LISTNUM 1 \l 13706 THE CHAIRPERSON: And I am wondering if you could elaborate a bit for us on that in that is it ‑‑ are we talking about synergies with resources or news stories? How is the station going to benefit?
LISTNUM 1 \l 13707 MR. JONES: Well, as I mentioned to Commissioner Menzies earlier, the synergies are minimal but they are there. And the benefit would primarily be in content that is locally relevant to all those radio stations.
LISTNUM 1 \l 13708 The example earlier was the snowstorm on the east coast where the content that happened in Charlottetown was really very relevant to our audience in Halifax or St. John's, Newfoundland because those communities are so interconnected in terms of travel and family members.
LISTNUM 1 \l 13709 So when news breaks in Ottawa where we have two radio stations there may be an opportunity. If the news that breaks in Ottawa is relevant to Peterborough, we can share those resources with our station in Peterborough.
LISTNUM 1 \l 13710 THE CHAIRPERSON: So it's not that Newcap has or is planning on having a centralized newsgathering?
LISTNUM 1 \l 13711 MR. JONES: Right. At this point we don't have that and don't have plans to do that, although I will elaborate slightly on one point in terms of the east coast.
LISTNUM 1 \l 13712 We have radio stations in all of the Atlantic capital cities and created a report we call "The Capital Report" that airs in each market each day that details the lead stories affecting each capital city across Atlantic Canada.
LISTNUM 1 \l 13713 So as our company expands, you know, that may be something we look at, but at this point we don't have any kind of central news service.
LISTNUM 1 \l 13714 THE CHAIRPERSON: And would you consider that ‑‑ the example you just gave about Atlantic Canada, would you consider that network programming?
LISTNUM 1 \l 13715 MR. JONES: Not so much network programming as simply sharing the synergies that exist between the stations because each radio station in that group contributes to it. It's not something that's, you know, beamed down centrally. It's a group effort.
LISTNUM 1 \l 13716 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 13717 MR. MURRAY: Just to expand a little bit on that, all of our stations use broadcast news. We also use a product called KLZ which is a computerized network news system and it allows us to post news stories on a website and any of our stations can access that and draw those stories down.
LISTNUM 1 \l 13718 As an example, our VOCM full service news talk station in Newfoundland provides a large number of stories to BN and we get a huge credit for that. So those stories are also available to our other stations directly from VOCM.
LISTNUM 1 \l 13719 THE CHAIRPERSON: Okay. Thank you very much.
LISTNUM 1 \l 13720 Legal counsel.
LISTNUM 1 \l 13721 MS SMITH: I have just a few questions for you.
LISTNUM 1 \l 13722 We note your comment from your letter of September 27, 2007, page three, where you state that:
"The use of 100.5 would generate 10 to 15 percent fewer sales and would cause you not to reach a breakeven PBIT until year seven." (As read)
LISTNUM 1 \l 13723 MS SMITH: Would you accept licensing on this alternative frequency?
LISTNUM 1 \l 13724 MR. MURRAY: Since that letter and since coming to the hearing we have received more information from our engineering experts. And 100.5 has additional problems that we weren't aware of then. So it's difficult to know what the impact would be.
LISTNUM 1 \l 13725 I think ‑‑ apparently there is interference, potential interference with a Bellville station. So basically what they said, you would need Bellville's permission to use 100.5 at a certain power level and they would have to agree to not increase their power in the future. So it's not likely that they are going to do that. They now have permission to operate at a higher parameter.
LISTNUM 1 \l 13726 So I think 100.5 is a core alternative in Peterborough and I think what ‑‑ so the answer is "no".
LISTNUM 1 \l 13727 MS SMITH: Thank you.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13728 MS SMITH: I just have two CCD questions for you.
LISTNUM 1 \l 13729 Could you confirm your understanding that if licensed your station would have to contribute a basic annual CCD contribution imposed by COL until the regulations are amended, based on the station's total annual revenues and in the amounts as set out in paragraph 116 of new radio policy, Public Notice CRTC 2006‑158?
LISTNUM 1 \l 13730 MS SPENRATH: Yes, that is my understanding. And we will be making basic CCD contributions in addition to the contributions that we have made in this application.
LISTNUM 1 \l 13731 MS SMITH: Thank you, just one additional question.
LISTNUM 1 \l 13732 Could you confirm your understanding as well that of this basic annual amount no less than 60 percent of the station's basic annual CCD contribution must be allocated to either FACTOR or MusicAction and that the remaining amount, if any, may be directed to any eligible CCD initiative at your discretion?
LISTNUM 1 \l 13733 MS SPENRATH: Yes, I understand that 60 percent must ‑‑ at least must go to FACTOR or MusicAction.
LISTNUM 1 \l 13734 MS SMITH: Thank you very much.
LISTNUM 1 \l 13735 THE CHAIRPERSON: Mr. Murray or Mr. Steele ‑‑ I'm not sure who it is ‑‑ but you have your final two minutes to give us your best pitch.
LISTNUM 1 \l 13736 Mr. Steele.
LISTNUM 1 \l 13737 MR. STEELE: And thank you, I appreciate that. I will be very brief and I will just cover some of the salient points.
LISTNUM 1 \l 13738 Well, thank you, Madam Chair.
LISTNUM 1 \l 13739 We believe that our application for 96.7 The River provides the best possible use of 96.7.
LISTNUM 1 \l 13740 96.7 is the only available frequency that can provide reliable coverage of Peterborough and the Kawarthas. Our application would maximize the public benefit from use of this scarce spectrum in four significant respects.
LISTNUM 1 \l 13741 First, we would be a new entrant and a strong new editorial voice in the market with a broad appeal format designed to add the greatest diversity.
LISTNUM 1 \l 13742 And secondly, we are an experienced midsize radio operator with the resources, the expertise necessary to compete successfully against the large experienced broadcasters who dominate the Peterborough radio landscape.
LISTNUM 1 \l 13743 And third, our contribution to the development of Canadian content of over one million is by the far highest before you and includes significant support for Peterborough's Trent University.
LISTNUM 1 \l 13744 And finally, our commitment to 17 hours of local spoken word, including over six hours of local news focusing on local and regional content is both one of the highest and will specifically appeal to residents of Peterborough and the broader region.
LISTNUM 1 \l 13745 We appreciate your consideration of our application and we look forward to subsequent phases of this proceeding.
LISTNUM 1 \l 13746 THE CHAIRPERSON: Thank you very much, and thank you to your colleagues.
LISTNUM 1 \l 13747 We will take a very short five‑minute break to allow for the change in panels.
‑‑‑ Upon recessing at 1000 / Suspension à 1000
‑‑‑ Upon resuming at 1005 / Reprise à 1005
LISTNUM 1 \l 13748 THE CHAIRPERSON: Madam Secretary.
LISTNUM 1 \l 13749 THE SECRETARY: Thank you, Madam Chair.
LISTNUM 1 \l 13750 We will proceed with item 9, which is an application by Larche Communications Inc. for a licence to operate an English‑language FM commercial radio programming undertaking in Peterborough.
LISTNUM 1 \l 13751 The new station would operate on frequency 96.7 MHz (channel 244B) with an average effective radiated power of 17,000 watts (maximum effective radiated power of 50,000 watts/antenna height of 96.8).
LISTNUM 1 \l 13752 Appearing for the applicant is Mr. Paul Larche.
LISTNUM 1 \l 13753 Please introduce your colleagues and you will then have 20 minutes to make your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 13754 MR. LARCHE: Thank you and good morning, Commissioners. Good morning, Chair, good morning CRTC staff.
LISTNUM 1 \l 13755 My name Paul Larche. I am President of Larche Communication.
LISTNUM 1 \l 13756 Again, it's very much always a privilege to present before you and we are doing that today for a new FM undertaking in Peterborough.
LISTNUM 1 \l 13757 Joining me is Mora Austin, Vice‑President of our company. Next to Mora is our company's Music and Program Director, Ted Roop, and next to Ted is our Marketing Director from CITZ FM Kitchener, Beth Warren.
LISTNUM 1 \l 13758 Now, since we just presented to you the other day and this is pretty much the same panel, for the sake of saving everyone some time we are going to skip some of the background on our company and our people and our vision and accomplishments as they are already on the public record and get right to the meat of the application.
LISTNUM 1 \l 13759 So Madam Chair and Commissioners, we are thrilled again to be here. Much like Owen Sound which we talked about the other day, the Kawarthas Region is like home to us because it so closely mirrors Simcoe County where our Midland operation resides.
LISTNUM 1 \l 13760 Both are considered cottage country to much of Southern Ontario. Their populations swell in the summer. They both rely heavily on tourism with a multitude of recreational opportunities. They are not only connected by the Trent‑Severn Waterway but by vibrant dynamic communities that share much of the same culture, values and challenges. Their economies are also alike and intertwined. That's why this application along with our application for Owen Sound, which is also part of cottage country, makes so much strategic sense for us.
LISTNUM 1 \l 13761 So let's get right into the business plan.
LISTNUM 1 \l 13762 Mora.
LISTNUM 1 \l 13763 MS AUSTIN: Thanks, Paul.
LISTNUM 1 \l 13764 Good morning, Commissioners.
LISTNUM 1 \l 13765 The Classic Hits format is the clear choice for Peterborough. LCI commissioned Radio Index Inc. to conduct a comprehensive market analysis to determine an underserved format opportunity for a new station and its impact on existing stations.
LISTNUM 1 \l 13766 The purpose of the study was to research the market viability of the top three FM radio formats currently not available on the FM dial in Peterborough at the time of the research; Top 40, CHR, Classic Hits and Adult Contemporary.
LISTNUM 1 \l 13767 Although all three formats showed a clear demand, Classic Hits showed the highest interest particularly with listeners 25 to 54. Over 43 percent of listeners in that demographic rated a high likeliness of listening to a Classic Hits station compared to 35 percent for CHR and 32 percent for Adult Contemporary.
LISTNUM 1 \l 13768 Furthermore, the radio index study concluded that 72 percent of listeners could not identify a local station that features Classic Hits music. It is the clear format void.
LISTNUM 1 \l 13769 Offering a local Classic Hits station will also bring listeners back to Peterborough. Many local listeners have left local radio and found Classic Hits on CKLY FM in Lindsay and CHUC FM in Cobourg or found other alternatives to get their Classic Hits music such as iPods, the internet and satellite radio. Currently, CKLY FM and CHUC FM garner a 4.3 share of hours tuned in Peterborough.
LISTNUM 1 \l 13770 To tell you more about our proposed Classic Hits format I will pass it to Ted.
LISTNUM 1 \l 13771 MR. ROOP: Thank you very much, Mora.
LISTNUM 1 \l 13772 Our new station is going to be called Classic Hits 96 and will feature a broad‑based music format that will air the biggest hits from the sixties to today with the primary focus on the eighties and nineties.
LISTNUM 1 \l 13773 The Classic Hits format derives much of its popularity from a very wide and diverse playlist covering many popular genres. Core artists would include Bryan Adams, Fleetwood Mac, Madonna, John Mellancamp, Corey Hart, Blondie, Tom Cochrane, Bonnie Tyler, B‑52s, The Police, Glass Tiger, Men Without Hats and Hootie and the Blowfish.
LISTNUM 1 \l 13774 Classic Hits 96's programming will be 100 percent locally produced and originating. We believe the only way to truly reflect the community you serve is to ensure all programming originates from the station.
LISTNUM 1 \l 13775 As mentioned in our Owen Sound application, our non‑music programming in a nutshell will be local, local and more local.
LISTNUM 1 \l 13776 Classic Hits 96 will offer Peterborough listeners over 12‑and‑a‑half hours weekly in comprehensive and local talk reflecting the community. This represents 10 percent of our total weekly programming and will include news, sports, weather, traffic reports, business reports and more.
LISTNUM 1 \l 13777 Our newsroom will broadcast every half hour in the mornings and again during selected hours during the day and weekend and we will provide close to four hours of news per week. The addition of this distinct news voice in Peterborough will increase diversity and add an alternatives news perspective to the market.
LISTNUM 1 \l 13778 Classic Hits 96 will also provide daily recreation reports from our station boat or station snowmobile on activities in the area. We will also provide daily relevant spoken word features such as community clips and the Peterborough Sounding Board on issues revolving around their lifestyle and local activities, and events that reflect the fabric and cultural makeup of Peterborough.
LISTNUM 1 \l 13779 We anticipate the impact on local stations will be minimal considering the current incumbent stations' formats and market growth. We will be repatriating out of market listeners and bringing back radio dollars that have left the market.
LISTNUM 1 \l 13780 Now, to talk about some of our exciting CCD initiatives here is Beth.
LISTNUM 1 \l 13781 MS WARREN: Thanks, Ted.
LISTNUM 1 \l 13782 Although we are applying for a Classic Hits format, LCI is dedicated to assisting and developing emerging Canadian talent. After all, today's current artists will become tomorrow's classics. That's just part of the reason why LCI is committing a total of $350,000 over the first licence term.
LISTNUM 1 \l 13783 Fostering emerging talent is not only an investment in radio but also in the artists, the music industry and in Canadian culture and heritage. Without the foundation to assist Canadian talent on record, most Canadian artists would never be able to afford to record. $20,000 per year will go to FACTOR in order to contribute to the growth and development of the Canadian recording industry.
LISTNUM 1 \l 13784 To help nurture the love of music in our young people another $10,000 per year will go towards the purchase of new musical instruments and equipment for Peterborough elementary and secondary schools.
LISTNUM 1 \l 13785 We have also committed $10,000 per year towards the Peterborough Kiwanis Festival of Music. These music festivals have been instrumental in developing the careers of some of Canada's biggest stars.
LISTNUM 1 \l 13786 Classic Hits 96 will also host the Star Quest Talent Search at a cost of $10,000 per year. This will be modeled on the successful Star Quest we conduct in Midland and Kitchener. The winner will receive studio time, reproduction and of course airtime on our station.
LISTNUM 1 \l 13787 Our application also outlines a commitment of $50,000 per year in airtime and features devoted to promotion of music‑related activities in Peterborough and area as it relates to emerging artists. This would include the promotion of concerts and performances by local artists, artistic and musical programs in the community and release of CDs by local artists.
LISTNUM 1 \l 13788 We are also planning a weekly one‑hour show called "Future Classics" featuring new Canadian music that fits the overall feel of the format.
LISTNUM 1 \l 13789 These are truly superior CCD initiatives that we believe exceed and surpass the Commission's CCD plan as outlined in the most recent radio review.
LISTNUM 1 \l 13790 Again, as mentioned in our Owen Sound application, LCI is committed to Canadian music. It's our lifeline and we realize we need a steady supply of high quality talent for our listeners. We always strive to introduce Canadian and emerging artists any time we are able to, often opening for a popular headliner so that there is a built‑in audience.
LISTNUM 1 \l 13791 LCI has presented many Country music concerts in both central Ontario and Kitchener‑Waterloo at our own expense and our own risk. As well, we often present concerts at no cost to the audience, creating a memorable experience for both the artist and our listeners.
LISTNUM 1 \l 13792 We hope to have the chance to do this in Peterborough.
LISTNUM 1 \l 13793 Paul.
LISTNUM 1 \l 13794 MR. LARCHE: Thank you, Beth.
LISTNUM 1 \l 13795 Again, sorry for the fact that we are repeating ourselves a bit, but we all do consider this a privilege.
LISTNUM 1 \l 13796 We understand and appreciate our mandate to the Broadcast Act, to give back, to bring value to our communities, to reflect like a mirror who we are as Canadians.
LISTNUM 1 \l 13797 Profits are not our main motivator. Sure, we need to stay economically sound, but an analysis of our returns over the past several years will show we invest our profits right back into our product.
LISTNUM 1 \l 13798 Too many in our industry are driven primarily by margin targets and shareholder expectations and others will run their operations on a shoestring, often because they can. Our motivator is to create great radio. We have a deep burning passion for this fantastic medium. To continue doing great radio we need some economies of scale to become more efficient, to weather the ups and downs of our business.
LISTNUM 1 \l 13799 Again, you have several great applications in front of you today by some really good broadcasters but we think ours holds up. To sum up, approval of this application will fill the largest underserved format in the market. Independent research clearly demonstrates the significant void Classic Hits will fill. This format will also repatriate some out‑of‑market tuning.
LISTNUM 1 \l 13800 We will provide a new distinct news voice. This application will result in over 12‑and‑a‑half hours of distinct and local news and spoken word programming in Peterborough.
LISTNUM 1 \l 13801 We will add an alternative news perspective to the market.
LISTNUM 1 \l 13802 We will invest considerably in Canadian talent development with $350,000 of expenditure over seven years.
LISTNUM 1 \l 13803 And also, approval of this application will benefit the Canadian broadcast system. As I mentioned in my introduction, Peterborough and the Kawarthas is part of cottage country and we know how to do great radio in cottage country. We have done it successfully for 10 years. Imagine the cross‑promotional opportunities and synergies that we could bring between our stations in Midland, soon to be Orillia, Peterborough and maybe even Owen Sound. They would not only be connected by water but by a group of radio stations that would reflect events throughout the region. Boating, fishing, snowmobiling, camping, cottaging, skiing, hiking, golfing; the list goes on.
LISTNUM 1 \l 13804 LCI could be the common bond and glue that pulls these communities together for the betterment of all. And isn't that what the Broadcasting Act is all about?
LISTNUM 1 \l 13805 Thank you.
LISTNUM 1 \l 13806 THE CHAIRPERSON: Thank you, Mr. Larche, and your colleagues. Welcome back.
LISTNUM 1 \l 13807 MR. LARCHE: You are welcome.
LISTNUM 1 \l 13808 THE CHAIRPERSON: And just so we are not accused of being repetitive I am going to ask you the CCD questions right off the top.
LISTNUM 1 \l 13809 So please confirm your understanding that if licensed your station will have to contribute a basic annual CCD contribution imposed by condition of licence until the regulations are amended, based on the station's total annual revenues and in the amounts as set out in paragraph 116 of the new radio policy, Public Notice CRTC 2006‑158.
LISTNUM 1 \l 13810 MR. LARCHE: Confirmed.
LISTNUM 1 \l 13811 THE CHAIRPERSON: Please confirm your understanding that of this base annual amount no less than 60 percent of the station's basic annual CCD contribution must be allocated to either FACTOR or MusicAction and the remaining amount, if any, may be directed to any eligible CCD initiatives at your discretion?
LISTNUM 1 \l 13812 MR. LARCHE: Confirmed.
LISTNUM 1 \l 13813 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 13814 And now we will move on to the specifics of your application. And as you know ‑‑ I will be repetitive here because I do like to start with format.
LISTNUM 1 \l 13815 MR. LARCHE: M'hm.
LISTNUM 1 \l 13816 THE CHAIRPERSON: And would I characterize your proposed format as the softer side of Classic Hits? Is that a fair characterization of what you are proposing?
LISTNUM 1 \l 13817 MR. LARCHE: I think the best characterization, and I'm sure Ted could talk more about this, we probably ‑‑ what we are proposing is as mainstream a Classic Hits format as you can without having launched it yet.
LISTNUM 1 \l 13818 Anytime you are going to launch a radio station you find the hole. But before we would launch we are also big believers in doing additional research, fine tuning, doing auditory and music testing to make sure that the music that we are going to play is exactly what the listener wants.
LISTNUM 1 \l 13819 So in a general sense I wouldn't want to say we are on the softer side of what a Classic Hits format would be because we would be Classic Hits and we would fine tune it to what the market wants, you know, if we have the good fortune to be approved for this.
LISTNUM 1 \l 13820 Ted, do you have anything to add to that?
LISTNUM 1 \l 13821 MR. ROOP: I would just ‑‑ as far as eras go with the music that we would be playing or playlists that we would probably be playing, about 20 percent from the sixties, 40 percent from the seventies, 20 percent from the eighties, 15 percent from the nineties and 5 percent current music.
LISTNUM 1 \l 13822 THE CHAIRPERSON: And just so I can increase my knowledge base what is auditory music testing? Is that ‑‑ do you bring in a focus group and play them a sample of what you will be playing on the station?
LISTNUM 1 \l 13823 MR. LARCHE: That is precisely what it is and the technology today allows an independent research company to bring in ‑‑ usually we do it with 75 to 100 people that fit the demographic we are going after. We will have them listen to basically hooks of upwards of 200, 300, 400, 500 songs and they have a little dial and they can punch in what they think of it. And we get data from that that allows us to tell us which songs they would prefer, which songs they feel they have heard too much and are burnt in the market. Again, it makes it very, very tuned to those listeners in Peterborough.
LISTNUM 1 \l 13824 THE CHAIRPERSON: And is this something you would typically do only once you are granted the licence as opposed to part of your application research?
LISTNUM 1 \l 13825 MR. LARCHE: Actually, many stations do it once a year. And online research as well ‑‑ you know, with our Country stations, Country is very much a current format versus a Gold Based format. So it's very important to find out things like you know, are people liking the music. And even more important is when are they getting tired of it because you can burn a song.
LISTNUM 1 \l 13826 And we do a lot of online research with a company called "Rate the Music" where we have literally hundreds and hundreds of listeners each week that will go through little clips of current songs. We get data back to tell us, okay, this song is getting a little tired, this one they really, really like.
LISTNUM 1 \l 13827 And what has been really great about that, you know from our perspective, is we found that a lot of Canadian music, and I'm talking Country, really fares very well. You know we don't have to pigeonhole what we are doing with music in terms of is it Canadian or not. We just want to play the music that people want and they are liking the most.
LISTNUM 1 \l 13828 But to answer your question, auditorium testing is often done on an annual basis or every second or every two years, especially on a Gold Based format like we are talking about.
LISTNUM 1 \l 13829 THE CHAIRPERSON: Okay. Well, thank you for that.
LISTNUM 1 \l 13830 Have you done a comparison of your proposed format with what is currently being offered in the market in terms ‑‑ to determine how much if any overlap there would be in terms of spins? We know that there might be in terms of artists but in terms of individual spins have you done that comparison?
LISTNUM 1 \l 13831 MR. LARCHE: The one that we would probably have the most spins with ‑‑ and again, Ted could talk more to this ‑‑ would probably be the Corus station, The Wolf.
LISTNUM 1 \l 13832 But our research shows that 72 percent of the listeners in Peterborough could not identify a station that would be considered Classic Hits in the definition that we gave them for Classic Hits. That station would probably have the most duplication but that's a rock station. They obviously would be, you know, considerably harder. They would also be playing some current rock. So we would have much of a different sound.
LISTNUM 1 \l 13833 In terms of AC, sure there would ‑‑ you know some artists in the seventies and eighties, the softer Elton Johns and so on and so forth, there would be some duplication there. But our sound would be very unique in the sense that we are very much an era‑based format. We are more of a Gold Based, a little more up tempo and not as soft as an AC station and that would really separate us from the pack there.
LISTNUM 1 \l 13834 Ted, anything to add to that?
LISTNUM 1 \l 13835 MR. ROOP: Yes, as far as duplication goes I think it would be probably about 50 percent between the current rock station Corus owns in Peterborough right now. It would be 50 percent, yes.
LISTNUM 1 \l 13836 THE CHAIRPERSON: 50 or 15?
LISTNUM 1 \l 13837 MR. ROOP: 50.
LISTNUM 1 \l 13838 THE CHAIRPERSON: 50.
LISTNUM 1 \l 13839 MR. ROOP: I mean they would be a lot harder than we would be, and then as far as the Hot AC station goes we would be a little hotter than they would be, a little edgier than they would be.
LISTNUM 1 \l 13840 THE CHAIRPERSON: And your target demo is 25 to 54 with a focus on 35 to 49?
LISTNUM 1 \l 13841 THE ROOP: And the median age probably would be ‑‑ well, it would be a 42 year old adult.
LISTNUM 1 \l 13842 THE CHAIRPERSON: You are a quick study, thank you.
LISTNUM 1 \l 13843 MR. ROOP: A man or a woman, sorry.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13844 THE CHAIRPERSON: We heard the previous applicant characterize Peterborough as "the land of giants" in that you would be competing with the two Corus and the two CTVglobemedia combo. As well, though, you will be competing with the out‑of‑market tuning to Kawartha Lakes, to Cobourg, to Toronto. I think the out‑of‑market tuning is as high as 43 percent in this market.
LISTNUM 1 \l 13845 What is going to allow Larche Communications to compete in this land of giants as it has been characterized?
LISTNUM 1 \l 13846 MR. LARCHE: That's a great term. It just came up this morning.
LISTNUM 1 \l 13847 Obviously, we wouldn't have applied if we didn't think we could compete.
LISTNUM 1 \l 13848 I think there are a few things we can bring to the table. Obviously, our experience. We compete in other markets, in Kitchener and in central Ontario, in Midland, Orillia and Barrie, with Corus and with Rogers and with CTV in these markets, and we hold our own. We run successful businesses.
LISTNUM 1 \l 13849 Also, one of the things I try to get across with our business plan ‑‑ and I say it time and time again ‑‑ is that we try to make it realistic, in the sense that we are not here with the highest cost for programming and for marketing and promotions.
LISTNUM 1 \l 13850 We are also not here with the highest revenue projections. We try to be conservative, because we know, as a small operator, that we have to live to the mandate of providing what we say we are going to provide in our applications, and give to the community, but we want to make sure that we are doing it not in a position where, financially, we could really get ourselves into some trouble.
LISTNUM 1 \l 13851 I think, if you were to look at our expenses, programming and otherwise, you would find that they are probably in the middle of the pack, but they are very realistic.
LISTNUM 1 \l 13852 I think that our revenue projections are also a little lower.
LISTNUM 1 \l 13853 We know that these are conservative numbers, and if that's the way it goes, then we can still weather it.
LISTNUM 1 \l 13854 I think there are a couple of other things, too. We will have some synergies throughout that region ‑‑ throughout central Ontario.
LISTNUM 1 \l 13855 Again, one of the things that excited me so much about the fact that there was a call for Owen Sound and Peterborough is that they are nice bookends for the part of the province that we live in and that we want to call home.
LISTNUM 1 \l 13856 There is no doubt that there are all kinds of great synergies that would abound, particularly when it comes to a lot of the culture in the area. We talk a lot about snowmobiling and skiing and golfing and boating. We all do a lot of it, because that is what people do in our area.
LISTNUM 1 \l 13857 We imagine having a marine team ‑‑ we do have one in Georgian Bay, but we imagine having another one in Peterborough, and possibly Owen Sound. On weekends they could be saying: If you are taking your boat through the Trent‑Severn system, let's see what the conditions are like on Lake Simcoe. Let's go to our sister station.
LISTNUM 1 \l 13858 That would be something that we could offer that wouldn't cost us any additional money, but would allow us to have a unique selling proposition, for lack of a better term, and keep our costs down.
LISTNUM 1 \l 13859 Then, of course, we would have the synergy of an engineer. We could have one engineer look after all of these radio properties, because they would be within an hour or an hour and a half's drive from where we are based. And accounting, and so on and so forth.
LISTNUM 1 \l 13860 To answer your question, because it is a good question and I was thoroughly expecting it: We could compete with no problem, if we were given the opportunity.
LISTNUM 1 \l 13861 I know you will probably ask about the frequency issue, so ‑‑
LISTNUM 1 \l 13862 THE CHAIRPERSON: Sure, jump ahead. Go for it.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13863 MR. LARCHE: When I say all of this, I want to preface it by saying that we would only be able to do this, we feel, if we received the frequency we applied for.
LISTNUM 1 \l 13864 We know that this is a competitive hearing. We know that there are a couple of other frequencies that are possibilities.
LISTNUM 1 \l 13865 Our alternate frequency is the same alternate frequency that Mr. Murray talked about this morning. Just a week ago we found out through Industry Canada that there could be issues with that frequency that could greatly diminish the coverage that that frequency would give us.
LISTNUM 1 \l 13866 THE CHAIRPERSON: So, as a result ‑‑ I believe it was in response to questions of clarification ‑‑ you said that it would have minimal impact on your business plan.
LISTNUM 1 \l 13867 MR. LARCHE: We say that it would have minimal impact on our deficiencies.
LISTNUM 1 \l 13868 THE CHAIRPERSON: Right.
LISTNUM 1 \l 13869 MR. LARCHE: But, again, since that time, Industry Canada ‑‑ and I think you will hear this, probably, from other applicants, as well, today. Many of us have applied for the same main frequency and alternate frequency, and there is an issue now with that alternate frequency.
LISTNUM 1 \l 13870 THE CHAIRPERSON: So is 96.7 the only viable frequency available in the market?
LISTNUM 1 \l 13871 MR. LARCHE: We believe it would be the only viable frequency available to us to be able to survive in that market, in the land of giants.
LISTNUM 1 \l 13872 THE CHAIRPERSON: If we were to grant you ‑‑ just to be absolutely sure, if we were to grant you a licence that was an approval, in part, which said, "Great idea. Yes, we approve your application, but go out and find another frequency," you would not accept that licence?
LISTNUM 1 \l 13873 MR. LARCHE: No, I wouldn't.
LISTNUM 1 \l 13874 THE CHAIRPERSON: Okay. Thank you. Best to be sure.
LISTNUM 1 \l 13875 In terms of the other characterization of the market, which is that of cottage country ‑‑ and we know that means that the population can swell on weekends, and in the summer in particular. How do you adjust in terms of audience share, and therefore advertisers, when you are in a market such as this, where the population does swell at different times of the year and throughout the week?
LISTNUM 1 \l 13876 MR. LARCHE: Again, we have been doing this for 10 years now. I think I mentioned the other day that, although we don't have an opportunity to translate a lot of the cottagers and people that come up during the summer into ratings, because, unfortunately, they are not rated, we do have a great opportunity to monetize them, in the sense that the local retail community knows that those people are going to be spending money in that area.
LISTNUM 1 \l 13877 It could be a box store, it could be a boutique, it could be groceries, it could be anything and everything in between.
LISTNUM 1 \l 13878 Obviously, when we are laying out our sales plan for the year, we know that. We build that into our cycle and we make sure that we are approaching clients at the right time to take advantage of that.
LISTNUM 1 \l 13879 But the population up there, again ‑‑ you know, you are looking across that region at a population base of probably close to 500,000 people, if you were to include the whole population base. Obviously, the people who live there buy their cars there and do most of their retail there, and those people we look after all year long.
LISTNUM 1 \l 13880 Mora, do you have anything to add to that?
LISTNUM 1 \l 13881 MS AUSTIN: As far as some of the things that we might do differently, if I understand your question correctly, about our on‑air product during the summertime?
LISTNUM 1 \l 13882 THE CHAIRPERSON: Yes.
LISTNUM 1 \l 13883 MS AUSTIN: We do some specialty programming at that time of year, such as "Cottage Country Traffic", for example. We probably triple our traffic reports on Friday evening and Sunday afternoon and Sunday evening, because there are so many people coming up from Toronto.
LISTNUM 1 \l 13884 As well, on Friday nights we do a drive‑through request show. We go to different ‑‑ we are out of Midland, but we certainly service a lot of other communities around there.
LISTNUM 1 \l 13885 So we would go there, and we would ask people to stop by and actually drive through and make a request. We are finding that we have the local people that come through, but, as well, we have some of the cottagers coming through, getting geared up for the weekend. They want to hear their favourite song.
LISTNUM 1 \l 13886 That kind of thing is where we would kind of tweak our programming.
LISTNUM 1 \l 13887 THE CHAIRPERSON: So, as it is commonly referred to, the DJ banter and the spoken word programming are then customized ‑‑
LISTNUM 1 \l 13888 MS AUSTIN: Yes.
LISTNUM 1 \l 13889 THE CHAIRPERSON: ‑‑ for those population swells at different times of the year.
LISTNUM 1 \l 13890 MS AUSTIN: Exactly, realizing that our main focus is our local residents.
LISTNUM 1 \l 13891 THE CHAIRPERSON: In speaking of spoken word, just to confirm, your application is proposing 12 hours and 38 minutes in total of spoken word programming?
LISTNUM 1 \l 13892 MR. LARCHE: That's correct.
LISTNUM 1 \l 13893 THE CHAIRPERSON: Seven hours of information programming, of which four hours would be news.
LISTNUM 1 \l 13894 MR. LARCHE: That's correct.
LISTNUM 1 \l 13895 THE CHAIRPERSON: The difference between the seven and the four, is that surveillance material for the most part?
LISTNUM 1 \l 13896 You say seven hours of information programming, and four would be news.
LISTNUM 1 \l 13897 MR. LARCHE: Yes. Four would be strictly news ‑‑ three hours and 58 minutes ‑‑ and then other surveillance material would make up a lot of the rest of it: traffic reports, obviously, being a big one; weather; sports ‑‑ Peterborough Petes coverage.
LISTNUM 1 \l 13898 We also are proposing community clips, which would be daily vignettes that reflect issues that are going on in the community.
LISTNUM 1 \l 13899 These are things that we currently do.
LISTNUM 1 \l 13900 Also, there will be features like the "Peterborough Sounding Board", where we allow people from Peterborough to give us their feedback on an issue of the day.
LISTNUM 1 \l 13901 Each day we talk about a local issue that is relevant, and usually we try to do it on something that is quite perishable. It is an issue that came up at council last night, or something to that effect. We would ask a question ‑‑ "Call on this line and leave your feedback", and the next day we would provide little snippets of people's comments in the area as it relates to that subject.
LISTNUM 1 \l 13902 We also do commentaries. One of our news directors, Brian Wicks ‑‑ we call it "Words of Wicksdom", where he will give 90 seconds of, basically, his opinion, or interpretation, of an issue, and we always solicit feedback on it.
LISTNUM 1 \l 13903 It is to give, again, an alternate perspective to what the mainstream might be doing.
LISTNUM 1 \l 13904 We also have in there entertainment reports and morning show interviews, and so on.
LISTNUM 1 \l 13905 THE CHAIRPERSON: As far as the news is concerned, the breakdown between local and national, regional, international?
LISTNUM 1 \l 13906 MR. LARCHE: We put 60 percent local, 20 percent regional, and 20 percent national/international.
LISTNUM 1 \l 13907 Again, those are guidelines, depending on what is going on.
LISTNUM 1 \l 13908 THE CHAIRPERSON: And for the regional news, there might be some synergies there with your Midland and Kitchener stations?
LISTNUM 1 \l 13909 MR. LARCHE: Yes, there would be.
LISTNUM 1 \l 13910 THE CHAIRPERSON: I believe your application calls for the hiring of two full‑time newspeople to produce this level of news.
LISTNUM 1 \l 13911 MR. LARCHE: That is correct.
LISTNUM 1 \l 13912 THE CHAIRPERSON: You heard my conversation with the previous applicant, in terms of programming expenses, and I believe yours are on the low side, when we compare those expenditures with the other applicants in this proceeding.
LISTNUM 1 \l 13913 Could you tell us what it is that you include in that expense line, just so we can compare that with what everybody else is doing?
LISTNUM 1 \l 13914 MR. LARCHE: We would include all of our on‑air staff, including news.
LISTNUM 1 \l 13915 THE CHAIRPERSON: What would that total? What would the staff complement be?
LISTNUM 1 \l 13916 MR. LARCHE: We have a total staff complement of 13 now. we have four on‑air, two news, and then there would be two part‑time news and two part‑time on‑air.
LISTNUM 1 \l 13917 So there would be six, and four part‑time.
LISTNUM 1 \l 13918 THE CHAIRPERSON: Which would translate into two full‑time, I guess; right?
LISTNUM 1 \l 13919 MR. LARCHE: Yes.
LISTNUM 1 \l 13920 THE CHAIRPERSON: Your expenditure line includes eight full‑time ‑‑
LISTNUM 1 \l 13921 MR. LARCHE: That's correct.
LISTNUM 1 \l 13922 THE CHAIRPERSON: ‑‑ equivalent full‑time people.
LISTNUM 1 \l 13923 MR. LARCHE: Yes.
LISTNUM 1 \l 13924 THE CHAIRPERSON: And their primary function is programming, whether it's news or ‑‑
LISTNUM 1 \l 13925 MR. LARCHE: It's programming produced on‑air, correct.
LISTNUM 1 \l 13926 THE CHAIRPERSON: Thank you for that.
LISTNUM 1 \l 13927 The capacity of the market to absorb new commercial radio stations.
LISTNUM 1 \l 13928 What do you believe the market can sustain?
LISTNUM 1 \l 13929 MR. LARCHE: The market can certainly sustain one. It possibly could sustain two.
LISTNUM 1 \l 13930 There are unique issues with this market: the application by Corus to flip their AM to FM, and the fact that there is only one, right now, really good frequency that is in the market.
LISTNUM 1 \l 13931 It goes back to what I said earlier. I think the market could possibly sustain two, but I wouldn't be the one that would want the frequency that may have an issue with it.
LISTNUM 1 \l 13932 I would need to have some very clear indication that there would be no issue that just popped up last week with an alternate frequency.
LISTNUM 1 \l 13933 To answer your question, I think the market could probably, for sure, absorb one, possibly two.
LISTNUM 1 \l 13934 It would depend on which two, as well; how the formats duplicate each other.
LISTNUM 1 \l 13935 If you were to license one that was going for a much younger demographic, and another station that was skewing older, then the impact wouldn't be as big.
LISTNUM 1 \l 13936 But it is a very healthy, vibrant market, there is no doubt about it.
LISTNUM 1 \l 13937 THE CHAIRPERSON: When you say that it could sustain two, does that include the Corus flip plus one, or is it the Corus flip plus two?
LISTNUM 1 \l 13938 MR. LARCHE: No, the Corus flip plus one.
LISTNUM 1 \l 13939 But if the Corus flip gave them 96.7 ‑‑
LISTNUM 1 \l 13940 THE CHAIRPERSON: Right, the frequency issue.
LISTNUM 1 \l 13941 MR. LARCHE: ‑‑ then it would be very tough for the plus one.
LISTNUM 1 \l 13942 I am speaking for myself. I certainly don't want to speak for ‑‑
LISTNUM 1 \l 13943 THE CHAIRPERSON: You are the only one you can speak for.
LISTNUM 1 \l 13944 MR. LARCHE: That's right.
LISTNUM 1 \l 13945 They might gladly jump on whatever frequency is there.
LISTNUM 1 \l 13946 THE CHAIRPERSON: Okay. Thank you very much.
LISTNUM 1 \l 13947 Colleagues?
LISTNUM 1 \l 13948 Legal counsel?
LISTNUM 1 \l 13949 MS SMITH: I have no questions. Thank you.
LISTNUM 1 \l 13950 THE CHAIRPERSON: Mr. Larche, you have your final two minutes.
LISTNUM 1 \l 13951 MR. LARCHE: Thank you very much. I will try to take half of that.
LISTNUM 1 \l 13952 Again, it is always a privilege and an honour to be in front of you. We are a young group of broadcasters ‑‑ well, I'm not that young, but most of the people who work with me are relatively young ‑‑ who, again, have a real passion for this business. Maybe the reason my costs aren't as high is because I bring in a lot of new people who are starting out in the business.
LISTNUM 1 \l 13953 Frankly, that is all I can afford, but I do look for ‑‑ we call them PLUs, people like us, who have that same passion for this industry and do what we do well. That is why I am really blessed with the fact that I have had employees who have been with me since Day 1, who are still here.
LISTNUM 1 \l 13954 We want an opportunity, again, to do that in Peterborough, but in a bigger sense ‑‑ and talking about Peterborough specifically ‑‑ I think our format choice is bang on. I think we are offering a format that will bring diversity to that market, because it is not there.
LISTNUM 1 \l 13955 Our research shows that 72 percent of the people couldn't identify a format like that.
LISTNUM 1 \l 13956 Obviously, we are going to bring in a new news voice.
LISTNUM 1 \l 13957 We are going to have minimal impact on the incumbents.
LISTNUM 1 \l 13958 We think we are bringing a pretty healthy CCD contribution for a company our size.
LISTNUM 1 \l 13959 Again, and finally, the bigger premise of this for us, from a strategic point of view, is that it would really allow us to solidify our company in cottage country, in that part of Ontario where we live and where we have decided we want to stay and contribute to the communities we serve, grow with them, and do good radio.
LISTNUM 1 \l 13960 That's it.
LISTNUM 1 \l 13961 THE CHAIRPERSON: Thank you very much, you and your colleagues.
LISTNUM 1 \l 13962 MR. LARCHE: Thank you.
LISTNUM 1 \l 13963 THE CHAIRPERSON: We will now take a 15‑minute break. Thank you.
‑‑‑ Upon recessing at 1045 / Suspension à 1045
‑‑‑ Upon resuming at 1100 / Reprise à 1100
LISTNUM 1 \l 13964 THE SECRETARY: We will now proceed with Item 10, which is an application by Pineridge Broadcasting Inc. for a licence to operate an English‑language FM Commercial Radio Programming Undertaking in Peterborough, Ontario.
LISTNUM 1 \l 13965 The new station would operate on Frequency 96.7, Channel 244B, with an average effective radiated power of 13,000 watts, maximum effective radiated power of 50,000 watts, antenna height of 150 metres.
LISTNUM 1 \l 13966 Appearing for the Applicant is Mr. Don Conway.
LISTNUM 1 \l 13967 Please introduce your colleagues. You will have 20 minutes to make your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 13968 MR. CONWAY: Thank you.
LISTNUM 1 \l 13969 Good morning, Madam Chair, Members of the Commission, and Commission Staff.
LISTNUM 1 \l 13970 Before we begin our presentation for a new FM licence to serve Peterborough, which we are calling Home 96.7, I would like to introduce our team.
LISTNUM 1 \l 13971 This is only our second oral presentation to the CRTC in our long history of providing quality radio service in the small market of Northumberland County. The first was in 1983, when we purchased CHUC‑AM out of bankruptcy.
LISTNUM 1 \l 13972 We have submitted a number of applications, so you are very familiar with us through the written and non‑appearing process. We know that you will appreciate that writing is not quite the same as appearing before you, so please excuse any nervousness, although we have been assured that you will not bite.
LISTNUM 1 \l 13973 THE CHAIRPERSON: We haven't so far.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13974 MR. CONWAY: Thanks. That's really encouraging.
LISTNUM 1 \l 13975 I am Don Conway, President and controlling shareholder of Pineridge Broadcasting. I have almost 35 years of experience in small market radio, in both Brockville and Northumberland County.
LISTNUM 1 \l 13976 Sitting at my immediate left is Dave Hughes, my business partner and General Sales Manager of our two Northumberland County radio stations, CHUC‑FM, known as 107.9 The Breeze, and CKSG‑FM, known as Star 93.3.
LISTNUM 1 \l 13977 Dave has more than 30 years of management and on‑air experience in the radio business.
LISTNUM 1 \l 13978 Next to Dave is Jennifer Thomson, our Retail Sales Manager. Jennifer has been with us for six years. She has a background in the financial industry, as well as in radio sales.
LISTNUM 1 \l 13979 To my immediate right is the newest member of our team, Jen Hudson. Jen is our recently appointed News Director. She has a great background in radio news. Most recently, she spent several years in Moncton, New Brunswick, and has also worked for Blackburn Radio in Chatham, and CJOJ and CJBQ in Belleville.
LISTNUM 1 \l 13980 Rounding out our team, on my far right is Joel Scott, our Program Director. Joel has been with us since 2002. He previously worked for the CHUM radio stations in Ottawa, Kingston and Brockville.
LISTNUM 1 \l 13981 Just before starting, I would draw your attention to the tabs in the folders that I presented to you. We will be referring to them during the presentation.
LISTNUM 1 \l 13982 Today we would like to describe to you the exciting new radio station that we propose to bring to the people of Peterborough, Home 96.7.
LISTNUM 1 \l 13983 We also want to tell you a bit about our company, and outline what led us to apply for a Peterborough radio licence.
LISTNUM 1 \l 13984 Almost all of the research conducted for this hearing came to a similar conclusion: What is missing in Peterborough is an adult contemporary radio station.
LISTNUM 1 \l 13985 AC is the most popular format in North America. In Canada, for example, Statistics Canada data for 2006 confirms that AC received the largest share of tuning of all radio formats, with more than one‑fifth of all hours tuned.
LISTNUM 1 \l 13986 Of particular note for Peterborough is the strong interest in this format by those over 35 years of age, and by women. Yet the FM dial in the market only has rock, country, and now a younger targeted hot AC/CHR.
LISTNUM 1 \l 13987 If you approve the Corus application, it will add an FM station focused on oldies or classic hits.
LISTNUM 1 \l 13988 Those who want the best pop and softer rock music available are not currently served by stations in the Peterborough market. In fact, they cannot even listen well to AC stations from Toronto because of the topography of the area.
LISTNUM 1 \l 13989 This is one of the reasons that Pineridge AC stations have drawn some listenership.
LISTNUM 1 \l 13990 We have included two maps under Tab 1 to demonstrate this.
LISTNUM 1 \l 13991 The spreadsheet and charts provided at Tab 2 of your binder are based on the fall 2007 BBM results, released just last week. It shows that people from a number of demographics listen to Peterborough stations.
LISTNUM 1 \l 13992 For example, teens listen predominantly to two stations, CKPT and CKWF.
LISTNUM 1 \l 13993 Women aged 18 to 34 listen mostly to CKPT, with some tuning to other stations, including out‑of‑market stations.
LISTNUM 1 \l 13994 Men 18 to 34 listen predominantly to the local rock station, CKWF, while older men listen to that station and to CKPT.
LISTNUM 1 \l 13995 But women 35 to 54 spread their listening across three stations, with a fair amount of listening to the market's only AM station.
LISTNUM 1 \l 13996 They may listen to out‑of‑market stations if they can receive them.
LISTNUM 1 \l 13997 To us, this means that there is no one station in Peterborough that is directed primarily to them. They settle for a rock station if they don't like country, or for a country station if they don't like rock or younger pop.
LISTNUM 1 \l 13998 In our view, what is clearly missing is a station that serves women from 35 to 54. This group makes up approximately 20,000 people in Peterborough.
LISTNUM 1 \l 13999 Five of the seven Peterborough applicants are proposing some variant of AC, whether soft pop and rock, or gold‑based AC, or mainstream AC. The exact mix of music they offer varies because no one really knew what the market would sound like. Researchers draw conclusions based on what respondents tell them is going on in a particular market. And there was a big change in the market just prior to the close of this call, unfortunately after the research was completed.
LISTNUM 1 \l 14000 CHUM had proposed a seamless transition for CKPT from AM to the FM band. This didn't come to pass. The station re‑launched as a hot AC/CHR hybrid, with a different sound and different audience appeal than their promised adult standards.
LISTNUM 1 \l 14001 We had foreseen that change, and therefore looked to other formats.
LISTNUM 1 \l 14002 Here to describe to you how our proposed station, Home 96.7 FM, will provide the format that will serve the largest unserved group is Joel Scott.
LISTNUM 1 \l 14003 MR. SCOTT: Thanks, Don.
LISTNUM 1 \l 14004 Good morning, Madam Chair and Commissioners.
LISTNUM 1 \l 14005 Home 96.7 will provide a music mix that is present in markets across Canada, but not in Peterborough. Home 96.7 will program a fairly broad range of mainstream pop and softer rock that will appeal to the whole of the under‑served group that Don mentioned.
LISTNUM 1 \l 14006 We will draw music from the sixties right through to the present, with about half of our music being relatively current from softer rock and pop artists like Celine Dion, Jan Arden, the new Anne Murray duets album, Michael Buble and Matt Dusk, as well as foreign artists like Phil Collins, Rod Stewart and Cheryl Crow.
LISTNUM 1 \l 14007 While the music will be on the softer side, it will not be the new easy‑listening. Rather, the music will be bright ‑‑ an at‑work and at‑home radio station aimed at adults 25 to 54, with a strong focus on women 35 to 54.
LISTNUM 1 \l 14008 If you want to think of a similar station, think of CHFI‑FM in Toronto, Majic 100 in Ottawa, CHQM‑FM in Vancouver, or perhaps Light 96 in Calgary.
LISTNUM 1 \l 14009 We recently conducted a comparison of one week of CHFI‑FM's playlist to the three Peterborough FMs using Mediabase, and we have included a summary at Tab 3 of your folder.
LISTNUM 1 \l 14010 Here is what we found.
LISTNUM 1 \l 14011 Eighty‑seven percent of all of the AC music broadcast on CHFI was not aired in the Peterborough market on FMs.
LISTNUM 1 \l 14012 Some 45 mainstream AC Canadian artists were not heard on Peterborough FMs that week. These included such stars as Celine Dion, Anne Murray, Diana Krall, Gordon Lightfoot, Burton Cummings, Jim Cuddy, David Foster, Corey Hart, Chantal Kreviazuk, Andy Kim and Jim Brickman.
LISTNUM 1 \l 14013 There are also a number of AC artists who are rising stars that are not heard on Peterborough radio. They include Ryan Malcolm, Amanda Stott and Shawn Desman.
LISTNUM 1 \l 14014 We have called our proposed station Home 96.7 for a number of reasons. Home 96.7 will be built on a strong foundation of familiar music and artists. Turning it on will be like coming home.
LISTNUM 1 \l 14015 We want Home 96.7 to be a station where listeners feel welcome, come to sit down, get comfortable and stay. In other words, long hours tuned.
LISTNUM 1 \l 14016 Home 96.7 will provide a wide range of features aimed at the heart and soul of most homes, the working and stay‑at‑home moms. In most homes the kitchen and family room are the heart of activity.
LISTNUM 1 \l 14017 For us, the morning and afternoon drive will be a beehive activity, with news features, and the best music available.
LISTNUM 1 \l 14018 Homes also have entertainment rooms. They have music rooms, and many have recreation rooms. Our equivalence will be the specialty programs.
LISTNUM 1 \l 14019 At noon every weekday we move into the dining room with our "All‑request Bistro", providing an opportunity for our listeners to program the radio station.
LISTNUM 1 \l 14020 Each weeknight we will move into the bedroom with Peterborough's "Pillow Talk" from seven to midnight. The emphasis will be on relaxing and romantic music.
LISTNUM 1 \l 14021 Saturday nights we move into the recreation and party room with "Party at Home". Here the music will be more uptempo and conducive to a party atmosphere.
LISTNUM 1 \l 14022 Sunday mornings we will put a hint of nostalgia in our morning brunch on the patio with "At Home with the Oldies".
LISTNUM 1 \l 14023 And Sunday evening we will venture out into the backyard to "Catch a Rising Star".
LISTNUM 1 \l 14024 But, of course, a radio station is much more than just the music, and to talk a bit about our news and community involvement, here is Jen Hudson.
LISTNUM 1 \l 14025 MS HUDSON: Thanks, Joel.
LISTNUM 1 \l 14026 Good morning, Commissioners.
LISTNUM 1 \l 14027 I just arrived at Pineridge from Moncton, but I do know that Pineridge puts a tremendous emphasis on news and other community involvement.
LISTNUM 1 \l 14028 For example, Don is the past president of the Northumberland Hospital Foundation and the Northumberland United Way.
LISTNUM 1 \l 14029 Dave is the current president of the Northumberland Central Chamber of Commerce.
LISTNUM 1 \l 14030 Jennifer is past president of the Northumberland Sunrise Rotary Club.
LISTNUM 1 \l 14031 Joel is very active in children's sports and the YMCA.
LISTNUM 1 \l 14032 In fact, every employee of Pineridge is involved in community volunteer activities.
LISTNUM 1 \l 14033 My new bosses have already asked me to join one of the many service organizations, and, in fact, I am about to join Hospice Northumberland.
LISTNUM 1 \l 14034 Our approach to serving Peterborough will have the same dedication to local coverage as the two Northumberland stations have today. We will hire two full‑time and two part‑time news staff to cover the market and to be our on‑air voices.
LISTNUM 1 \l 14035 Their work will also be supported by three regional stringers.
LISTNUM 1 \l 14036 During the summer months their work will be supplemented by the interns that we intend to hire.
LISTNUM 1 \l 14037 As well, our Peterborough news team will be supported by news stories developed in our Northumberland newsroom.
LISTNUM 1 \l 14038 The Peterborough news operation will be run separately, but where there are stories of common interest, we will benefit from the coverage initiated in Northumberland.
LISTNUM 1 \l 14039 Home 96.7 FM will broadcast six hours and 10 minutes per week of news, with over half of that devoted to coverage of Peterborough.
LISTNUM 1 \l 14040 But the news will only be the start of our reflection of the city. In our application we outlined the various scripted spoken‑word features that we will broadcast, news and features totalling 18 hours per week. Now, you will notice in your folders it says 12 ‑‑ 12 plus 6, apparently, equal 12 when we were typing.
LISTNUM 1 \l 14041 The real core of what we will do will be the unscripted, the improvised and the unexpected.
LISTNUM 1 \l 14042 In Northumberland our stations are deeply involved in the communities we serve. Here are just a few examples.
LISTNUM 1 \l 14043 Our morning shows have regular visits from those active in the community: social, charitable and political events. These include the mayors of the two major centres we serve, Cobourg and Port Hope, United Way organizers and local entertainers.
LISTNUM 1 \l 14044 We are very involved in the United Way of Northumberland, with on‑air promotions, interviews and even contests. Last year United Way recognized us for our contributions to setting a new fundraising record.
LISTNUM 1 \l 14045 When the Humane Society was in danger of closing we approached them to see how we could help. We were able to help raise enough money to get them back on their feet.
LISTNUM 1 \l 14046 We spearheaded a campaign to save the historic Capital Theatre in Port Hope. That campaign raised a million dollars.
LISTNUM 1 \l 14047 We are particularly proud of the initiative we took to get local residents to line the bridges over the 401 to show support when the bodies of slain Canadian soldiers from Afghanistan are brought from CFB Trenton to Toronto. That portion of the 401 is now known as the Highway of Heroes.
LISTNUM 1 \l 14048 We intend to follow these examples in Peterborough with regular morning show interviews and guest appearances by Peterborough Mayor Paul Ayotte; Len Lifchus, Executive Director of the United Way of Peterborough; Stu Harrison, General Manager of Peterborough and District Chamber of Commerce; just to name a few.
LISTNUM 1 \l 14049 These activities are above and beyond our hours of spoken word.
LISTNUM 1 \l 14050 Now, to detail our proposed contributions to Canadian content development, I would like to again call upon Joel Scott.
LISTNUM 1 \l 14051 MR. SCOTT: The format we are proposing is not one that generally breaks new artists, it is based upon familiarity, but we will introduce our listeners to new AC Canadian artists through a number of initiatives.
LISTNUM 1 \l 14052 While our proposed format does not lend itself to an elevated degree of Canadian content, our record at Pineridge speaks for itself. We always exceed the required 35 percent Canadian content level and Peterborough will be no different.
LISTNUM 1 \l 14053 Over and above our basic CCD commitment, we will contribute $25,000 annually to the development of Canadian content.
LISTNUM 1 \l 14054 In addition to our contribution to FACTOR, we will make annual contributions to developing new journalistic talent through scholarships and bursaries at our local school boards; support young emerging talent through a contribution to the Peterborough Kiwanis Music Festival; bring Canadian talent to summer concert stages through our contribution to Peterborough's Summer Festival of Lights; and bring emerging Canadian artists to the Showplace Performance Centre.
LISTNUM 1 \l 14055 While mainstream AC stations don't usually break new artists we believe that we have found an innovative way to feature new artists. Our program "The Rising Star of the Month" will provide exposure and experience to emerging Canadian artists.
LISTNUM 1 \l 14056 Each month we will feature an emerging Canadian artist whose music is compatible with our format. We will feature selections from their recordings, interview them on the air and link our website to theirs to help ensure that Peterborough residents know all about them.
LISTNUM 1 \l 14057 In addition to their exposure in the drive periods, our Sunday evening program will provide a longer look at them and we will try to tee this up with artists' touring schedules so as to create a buzz before they reach Peterborough.
LISTNUM 1 \l 14058 This initiative builds upon our commitment in Northumberland County to local artists. When we can we try to marry local community charitable and other activities with local artists and we will bring this approach to Peterborough as well.
LISTNUM 1 \l 14059 Don Conway now would like to tell you a little bit more about our company.
LISTNUM 1 \l 14060 MR. CONWAY: Pineridge began in 1957 as a standalone AM station, CHUC‑AM in Cobourg, the largest commercial centre in Northumberland County.
LISTNUM 1 \l 14061 We purchased the company out of bankruptcy in 1983. With a poor signal and competition flooding into our market from Peterborough and Toronto, we knew we had a long uphill fight to make the operation viable.
LISTNUM 1 \l 14062 In those early days, CHUC's signal and programming were so poor they were known locally as Upchuck Radio. Money was scarce and we had to learn to be very efficient and effective.
LISTNUM 1 \l 14063 In 1996 Dave Hughes joined Pineridge as a shareholder and General Sales Manager. Dave and I are the shareholders who run the station day to day.
LISTNUM 1 \l 14064 Over the years, through hard work, dedication to local and community service and thanks to the Commission's licensing process, we were able to put an FM station on air and convert our AM station to the FM band, giving us a more competitive playing field in our home market located just 20 kilometres south of Peterborough.
LISTNUM 1 \l 14065 The principal towns in our home market of Northumberland County are Port Hope and Cobourg, with a population of 18,000. Many of our residents commute north to Peterborough each day to work, to shop, study and be entertained.
LISTNUM 1 \l 14066 We have a relationship with many Peterborough merchants who wish to attract our Northumberland audience to their retail outlets and we have come to know Peterborough well.
LISTNUM 1 \l 14067 To tell you a bit more about the Peterborough market here is Jennifer Thomson.
LISTNUM 1 \l 14068 MS THOMSON: Thank you, Don.
LISTNUM 1 \l 14069 Good morning, Madam Chair and commissioners.
LISTNUM 1 \l 14070 When the Commission issued the call for applications in Peterborough we saw a great opportunity to develop a strong business plan to build upon our strengths and knowledge of the marketplace, and most importantly, to give our small independent company a new business opportunity.
LISTNUM 1 \l 14071 Our optimism is based on a number of factors:
‑ the relatively few radio stations now in Peterborough compared to other cities of its size;
‑ a growing population with the CMA expected to grow to 135,000 by our first year of operations, 2009, and this population is bolstered every summer by over 30,000 cottagers and tourists;
‑ a diversified economy with strengths in regional health and other services catering to a much larger market of 350,000 people;
‑ a strong private sector with employers such as Quaker Oats, General Electric, Siemens, Minute Maid and SGS Lakefield Research, to mention just a few.
LISTNUM 1 \l 14072 Peterborough acts as a regional retail centre attracting shoppers from Northumberland County to the south, from the new city of Kawartha Lakes to the west, and from Hastings County in the east.
LISTNUM 1 \l 14073 This results in a strong retail sales market that FP Markets indicates are 9 percent higher than the national average and these sales are expected to grow by another 8 percent by 2009.
LISTNUM 1 \l 14074 All of these indicators make us extremely optimistic about the capacity of the market to support a new radio station.
LISTNUM 1 \l 14075 You will see in Tab 4 that the topography makes a huge difference in the competitiveness of the radio listening market. While Pineridge competes in Northumberland with almost 100 stations, the Peterborough stations compete with only 20.
LISTNUM 1 \l 14076 At the same time we believe that a new station entering the market will not have it easy. Peterborough already has four commercial stations currently serving the city, operated by two of Canada's largest broadcasters, CTV and Corus.
LISTNUM 1 \l 14077 In addition to its two Peterborough FM stations, CTV also has an FM station in nearby Lindsay, now part of the city of Kawartha Lakes, which has a presence on the streets of Peterborough.
LISTNUM 1 \l 14078 At the same time Corus not only has its AM/FM combination, and they are here at this hearing to seek to make it two FMs, but it also has a Peterborough television station with a rebroadcaster serving neighbouring Oshawa‑Durham, with a sales presence throughout the larger Peterborough, Northumberland and Durham regions.
LISTNUM 1 \l 14079 Here is Dave Hughes with some further information.
LISTNUM 1 \l 14080 MR. HUGHES: Thank you, Jennifer.
LISTNUM 1 \l 14081 In order to be successful in Peterborough, a new station will have to pick the right format and have the market knowledge to take on these two existing giants, and it would help to be able to put the station on air with a minimal back office expense.
LISTNUM 1 \l 14082 We have that knowledge and we have those synergies. Here are a number of comparisons drawn from the competing applications that demonstrate this.
LISTNUM 1 \l 14083 The revenues.
LISTNUM 1 \l 14084 Our projected seven‑year revenues will all but match those of Corus at $6.6 million versus their $6.3 million. All other Peterborough commercial applicants are considerably higher, from a half‑million higher in the case of Evanov to about $3.5 million over seven years in the case of Newcap and K‑Rock.
LISTNUM 1 \l 14085 Advertising rates.
LISTNUM 1 \l 14086 We project an average first year of operation 30‑second unit rate of $15.00. The other applicants who have provided rates are projecting rates that in our experience are significantly above the current market rate.
LISTNUM 1 \l 14087 Expenses.
LISTNUM 1 \l 14088 We project to spend about the same as Corus, $5.6 million over seven years to their $5.8 million. All the other commercial applicants are much higher, ranging from $1 million to an astounding $3.5 million higher, and they are higher in the backroom costs as well for tech sales, promotion and administration.
LISTNUM 1 \l 14089 But at the same time our experience in efficient operations will ensure that we will provide as good or better a service as any of the applicants and I believe that Joel and Jen have made that adequately described in how they can do this.
LISTNUM 1 \l 14090 Don.
LISTNUM 1 \l 14091 MR. CONWAY: Thanks, Dave.
LISTNUM 1 \l 14092 Madam Chair, members of the Commission and Commission staff, we believe our application addresses all of the evaluation criteria.
LISTNUM 1 \l 14093 The Peterborough market can more than adequately absorb a new commercial FM station even with the conversion of Corus AM station.
LISTNUM 1 \l 14094 We have demonstrated that we can compete with Corus and CHUM, now CTV, two well‑entrenched broadcasting giants.
LISTNUM 1 \l 14095 We will provide a new editorial voice to Peterborough, one that is adequately resourced and has demonstrated its ability to serve local markets even in the most competitive of circumstances.
LISTNUM 1 \l 14096 We have proposed a high‑quality application, a robust and realistic business plan based upon the largest unserved format void in the market, a strong plan for local reflection, a record of exceeding our Canadian content requirements and strong locally focused Canadian content development proposals and an innovative on‑air support program for new Canadian softer pop and rock artists.
LISTNUM 1 \l 14097 Pineridge is a small independent company with two stations in a small market inundated with almost 100 signals from surrounding markets, including Toronto, Belleville, Oshawa, Peterborough, as well as many U.S. signals.
LISTNUM 1 \l 14098 We have competed with CHUM and Corus for years. Their signals penetrate our market and their sales and promotion people are active in Northumberland County.
LISTNUM 1 \l 14099 Despite these challenges, we have maintained profitability through hard work and strong community involvement.
LISTNUM 1 \l 14100 We ask that you permit us to bring the same attention to community to the Peterborough market.
LISTNUM 1 \l 14101 In our application we noted that we have two corporate reasons to apply for Peterborough. An additional source of revenues will help maintain our company on its solid footing.
LISTNUM 1 \l 14102 The recent fall 2007 BBM showed again that Peterborough stations draw more tuning in our market than do our two stations. The Peterborough stations put a good signal into Northumberland County.
LISTNUM 1 \l 14103 With the recent conversion of the CTV station to the FM band and the likely conversion of the Corus AM station we expect them to be even more competitive for audience in our market.
LISTNUM 1 \l 14104 In fact, for the first time Corus paid a premium to BBM for this fall to be included as the Northumberland market radio station. The only reason can be to draw off revenue from Pineridge stations.
LISTNUM 1 \l 14105 And even further, Corus, unlike any other applicant here, put less signal over the Peterborough market in order to push their 3‑millivolt contour over most of Northumberland County.
LISTNUM 1 \l 14106 Add to those conditions the addition of yet another new Peterborough FM station with a 3‑millivolt signal in parts of our market and a listenable signal throughout the whole market and we will lose further listening. This would raise serious issues for us as to our ongoing financial integrity.
LISTNUM 1 \l 14107 Thank you for your time and attention and we are more than prepared to answer any questions.
LISTNUM 1 \l 14108 THE CHAIRPERSON: Thank you, Mr. Conway and to your colleagues. Good morning.
LISTNUM 1 \l 14109 I see that you have done your research and you have figured out the cities in which all of us live when you cite examples of radio stations that are similar to your format.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14110 THE CHAIRPERSON: I will ask Commissioner del Val to lead the questioning. Thank you.
LISTNUM 1 \l 14111 COMMISSIONER DEL VAL: Thank you, Mr. Conway and your panel.
LISTNUM 1 \l 14112 Your application provides a lot of detail and your presentation this morning also covers quite a few of the areas that I had wanted to question you on, which is very good. So let's start with your success story in Northumberland County.
LISTNUM 1 \l 14113 When I was looking at page 9 of your supplementary brief, and you looked at the chart that you showed on the tuning for 12+ and what you have gained and how you have beaten up the giants, I don't want you to give away your trade secrets, and you touched on this, but what is setting you apart, do you think, in your market?
LISTNUM 1 \l 14114 MR. CONWAY: First, Madam Commissioner, page 9, I have the various formats, so I just want to make sure I am on the same ‑‑
LISTNUM 1 \l 14115 COMMISSIONER DEL VAL: Oh! 11, I am sorry.
LISTNUM 1 \l 14116 MR. CONWAY: Page 11, okay.
LISTNUM 1 \l 14117 COMMISSIONER DEL VAL: I should learn to count.
LISTNUM 1 \l 14118 MR. CONWAY: Now this is showing 2006 ‑‑
LISTNUM 1 \l 14119 COMMISSIONER DEL VAL: Yes.
LISTNUM 1 \l 14120 MR. CONWAY: ‑‑ and what I included in the tab ‑‑ and I can't recall which tab it is, I think it is 4 ‑‑ shows the share of tuning based on the most recent numbers of fall 2007. It is right after Tab 4.
LISTNUM 1 \l 14121 COMMISSIONER DEL VAL: Yes.
LISTNUM 1 \l 14122 MR. CONWAY: So presently we have 15 percent ‑‑
LISTNUM 1 \l 14123 COMMISSIONER DEL VAL: Yes.
LISTNUM 1 \l 14124 MR. CONWAY: ‑‑ and in the page you are referring to it was 17 percent, so somewhat similar.
LISTNUM 1 \l 14125 COMMISSIONER DEL VAL: A little bit but I see the CHUM CHQM has come up.
LISTNUM 1 \l 14126 But you are obviously competing very effectively in that market, which is the point you make, that you are up to the fight in this market.
LISTNUM 1 \l 14127 Now, what is it do you think that CHUM is doing to have given them a lead now in that market or what do you think you have been doing that has made it slip?
LISTNUM 1 \l 14128 MR. CONWAY: Well, Madam Commissioner, let me go back to the beginning.
LISTNUM 1 \l 14129 COMMISSIONER DEL VAL: Yes.
LISTNUM 1 \l 14130 MR. CONWAY: Let me go back to 1983 because that is pretty well base, when you buy a station out of bankruptcy and it is called Upchuck Radio.
LISTNUM 1 \l 14131 It took us quite a long time to turn that station around as an AM station in a small market. In fact, in our presentation, our supplementary, we said 55 stations competing in the market and that was, I think, unsuppressed that we had purchased three‑four years previously, and we said, okay, well let's see what it is now, a couple of weeks ago, and it is now ‑‑ 93, in fact, is what the new ones are.
LISTNUM 1 \l 14132 So the only way you can compete when you sleep beside the lion is to be very locally involved and that is how we have competed. Local news, we are out reporting on everything that goes on in the market.
LISTNUM 1 \l 14133 As you heard here, our people are all involved in various community organizations. We are very, very strong community people and that is something we intend, obviously, to bring to the Peterborough market.
LISTNUM 1 \l 14134 This year ‑‑ well, it goes up and down but the Peterborough stations put a very strong signal into our market ‑‑ very strong. So we have had to compete with them, you know ‑‑ even in 1983, CKQM, the country station, was there. It was the number one station in the market. And there were Toronto stations that were ‑‑ I mean we have brought them up since then.
LISTNUM 1 \l 14135 Maybe Joel would like to talk just about some of the community involvement that we have.
LISTNUM 1 \l 14136 MR. SCOTT: Commissioners, our community involvement with all of our staff, we encourage them to be involved in the community on any level they can. For those of us that are married a lot of us sit on our school councils and help out in the school areas. A lot of us have had involvement with United Way organizations.
LISTNUM 1 \l 14137 It really boils down to being involved any way you can because our source of survival is reflecting that back on the air. The more that our staff are in the community, the more that our staff are talking about people in the community and referencing people in the community or talking to people in the community, be it on the air, it really is what separates us from the giants.
LISTNUM 1 \l 14138 When your morning show is up against "Roger, Rick & Marilyn" and Erin Davis in the morning and these established talents, you have to do something to provide local and we have done the best we can to try and create partnerships in the community with a number of different organizations, a number of special events in the community.
LISTNUM 1 \l 14139 What we have seen through those partnerships ‑‑ for example, with the Town of Cobourg Events Department we have been involved with their Cobourg Sandcastle Festival, which has become one of the marquee tourism events in the region.
LISTNUM 1 \l 14140 Christmas Magic, which was an endeavour that was started by CHUC 10 years ago, where we put $150,000 Christmas lights in the downtown as a tourism venture, they get bus tours through.
LISTNUM 1 \l 14141 Those types of partnerships are what separate us from the other guys and that separate us from the Toronto and the American signals and it has been one of our sources of survival.
LISTNUM 1 \l 14142 COMMISSIONER DEL VAL: Thank you. I just want to go back to the signals from Peterborough and that leads to the question that has been quite obvious in this hearing, the frequencies.
LISTNUM 1 \l 14143 Now, as you know, you are asking for the best frequency for which everyone else is asking. So the bottom line is: If you were not granted that frequency, would you take the licence?
LISTNUM 1 \l 14144 MR. CONWAY: There are two frequencies.
LISTNUM 1 \l 14145 COMMISSIONER DEL VAL: Okay.
LISTNUM 1 \l 14146 MR. CONWAY: What CHUM has ‑‑ or Corus has proposed is 96.7 with an orientation north‑south. It drives their 3‑millivolt contour. They have shifted, as you can see, from all the other applicants. They have shifted it to the south in order to be able to put a stronger signal into Northumberland County.
LISTNUM 1 \l 14147 We had first looked at ‑‑ when we heard about the hearing we had looked at 96.7. Our engineers had come back actually with an east‑west orientation, which would have put the 3‑millivolt above Rice Lake. I don't know if you are familiar with where the lake is, between Peterborough and Cobourg.
LISTNUM 1 \l 14148 It would have not been in Northumberland County. We felt that was going to be what most people would look at because it was a good signal over Peterborough.
LISTNUM 1 \l 14149 COMMISSIONER DEL VAL: I am sorry, so that would be the same frequency but with a different orientation?
LISTNUM 1 \l 14150 MR. CONWAY: That is correct, it is an east‑west. They chose, however, to go north‑south and deep into Northumberland County. So they obviously had intentions of getting listenership in Northumberland County.
LISTNUM 1 \l 14151 So then when we found out that we could not go on the Corus tower ‑‑ we thought we could. We were given first indications that we could and then corporately they said no, we couldn't.
LISTNUM 1 \l 14152 So we looked at, first of all, other towers that we could use 96.7 on and we ended up with the CTV tower, which is off of Pigeon Lake.
LISTNUM 1 \l 14153 We also said, okay, are there other frequencies? We asked our engineer to look at other frequencies and he described 102.5 as another frequency probably better suited to Corus.
LISTNUM 1 \l 14154 In fact, he wondered why Corus wasn't taking that because the pop counts for 102.5 are exactly the same as 980 KRUZ. You asked the question yesterday and we already knew that. So it was surprising that 96.7 is what they ended up choosing but the pop counts are exactly the same for 102.5.
LISTNUM 1 \l 14155 So in our case if we were to have a choice, 96.7 running east and west, Corus having 102.5.
LISTNUM 1 \l 14156 COMMISSIONER DEL VAL: Okay.
LISTNUM 1 \l 14157 MR. CONWAY: And I believe you will see that map of 96.7 east and west was in the ‑‑
LISTNUM 1 \l 14158 COMMISSIONER DEL VAL: In your intervention?
LISTNUM 1 \l 14159 MR. CONWAY: In the Corus intervention, correct.
LISTNUM 1 \l 14160 COMMISSIONER DEL VAL: Okay. Thank you, that is helpful.
LISTNUM 1 \l 14161 Well, while we are ‑‑ well, we might as well stay on your business case since we are here already.
LISTNUM 1 \l 14162 Now given that you were not aware of CHUM's change to the new format on their flip to FM, can you lead me through the impact, if any, on your proposed business plan?
LISTNUM 1 \l 14163 Because I know you addressed this morning that that ‑‑ it sounded like you had anticipated part of it but is there any impact on your business plan that we should be aware of right now?
LISTNUM 1 \l 14164 MR. CONWAY: Maybe I am going to let our Sales Manager talk about the revenue potential of the Peterborough market.
LISTNUM 1 \l 14165 Dave.
LISTNUM 1 \l 14166 MR. HUGHES: Thank you very much, Don.
LISTNUM 1 \l 14167 In answer to your question we had some inside sort of knowledge that CKPT was going to be going to a hot AC format. So when we put our business plan together we had that knowledge already in advance of. So it was easy for us ‑‑ not necessarily easy but it was helpful for us to have that information.
LISTNUM 1 \l 14168 When we put together our business plan we assumed that KRUZ would be getting their flip and there would be a second frequency in the marketplace and that is the frequency, obviously, that we are going for.
LISTNUM 1 \l 14169 We have a tremendously strong working knowledge of the marketplace. We looked at building our business plan two ways.
LISTNUM 1 \l 14170 We looked top down, looking at the FP Markets information and the percentages spent on advertising by retailers and how much money is then allocated for radio.
LISTNUM 1 \l 14171 We then did a bottom up formula because we have such a good working knowledge of the marketplace and ironically, I guess, or maybe by design we came to almost the same figure.
LISTNUM 1 \l 14172 So we chose the optimistic figure from the FP model and that is how we came up with our revenue projections.
LISTNUM 1 \l 14173 COMMISSIONER DEL VAL: Now, what about the ‑‑ you did talk about the revenue projection today and how yours is comparatively very realistic.
LISTNUM 1 \l 14174 Now, the programming cost that you have included in your business case though, if you compare it to the rest, is on the low side. Would you care to comment on that?
LISTNUM 1 \l 14175 MR. CONWAY: Sure. Included in the programming, we have between programming and news seven and a half persons ‑‑
LISTNUM 1 \l 14176 COMMISSIONER DEL VAL: Mm‑hmm.
LISTNUM 1 \l 14177 MR. CONWAY: ‑‑ and we have the various things that you would do to run the programming department. We have two people in our news department and some production and some on‑air announcers.
LISTNUM 1 \l 14178 COMMISSIONER DEL VAL: Mm‑hmm.
LISTNUM 1 \l 14179 MR. CONWAY: The rest of the things that we would include in there would be the SOCAN fees and vehicles and that type of thing.
LISTNUM 1 \l 14180 COMMISSIONER DEL VAL: Okay. Now on the ‑‑ according to how you have run, and from your experience with your Cobourg stations, you are quite comfortable that those programming costs will allow you to compete very effectively with the giants?
LISTNUM 1 \l 14181 MR. CONWAY: Yes, no doubt, Madam Commissioner.
LISTNUM 1 \l 14182 When you buy a radio station out of bankruptcy you don't have a lot of resources to work with. So we have learned, in a small market surrounded by a lot of big players, that you have to do a lot of multitasking. So everyone pitches in and does various things.
LISTNUM 1 \l 14183 So the news director, Jen, would also be the co‑host on one of our stations and also works in the news. Okay, so she does more than one task. It would be the same thing with the music director. The music director could be afternoon announcer as well as doing the news, as well as possibly assisting with promotions. So there is a lot of multitasking and we have learned how to do that pretty well.
LISTNUM 1 \l 14184 COMMISSIONER del VAL: So then say your staffing costs ‑‑
LISTNUM 1 \l 14185 MR. CONWAY: Correct.
LISTNUM 1 \l 14186 COMMISSIONER del VAL: ‑‑ that are in the programming expenses, do they ‑‑ the staffing costs of say those who are multitasking, some of them would, you know, the same person would be performing some programming or administrative function. Which line do you put that in? Are those in your admin and general costs or would you put those in programming?
LISTNUM 1 \l 14187 MR. CONWAY: I mentioned the 7.5, they are all in programming and news. That includes four fulltime announcers, that includes two fulltime news, plus the part‑timers.
LISTNUM 1 \l 14188 COMMISSIONER del VAL: Okay, good, thank you.
LISTNUM 1 \l 14189 Now, you also commented on page 15 of your brief that you have some limited programming synergies with the Cobourg stations. So those would also lead to lower programming costs, would that be fair ‑‑
LISTNUM 1 \l 14190 MR. CONWAY: Particularly in the news department, there are some synergies, the fact that the Cobourg stations would be close, and it is a very regional area that we live in, between Peterborough and Northumberland.
LISTNUM 1 \l 14191 Maybe I can ask Jen to speak to that.
LISTNUM 1 \l 14192 MS HUDSON: Certainly. When it comes to the news department, for example, when we are talking about synergies between the Cobourg station and the proposed Peterborough station, as Don mentioned, it is a very regional place in which we live. For example, the school board is located in Peterborough but it oversees the schools in Cobourg.
LISTNUM 1 \l 14193 Currently, it takes some resources for us to be able to send a reporter up to Peterborough to cover those meetings. Whereas, if we were to have a radio station in Peterborough we would have the staff that would be able to not only cover that for their Peterborough market, but to funnel the stories down to us in Cobourg as well. So it saves us a reporter's salary to go up there, the gas, you know, all of the little necessary expenses that go on there.
LISTNUM 1 \l 14194 COMMISSIONER del VAL: Thank you. Do your synergies, with the Cobourg stations, would that include similar plans for packaging of sales, et cetera?
LISTNUM 1 \l 14195 MR. CONWAY: Well, we don't package presently and I will let Dave go further on that.
LISTNUM 1 \l 14196 MR. HUGHES: The Peterborough market will be standalone, sales for Peterborough will be Peterborough driven and in the market.
LISTNUM 1 \l 14197 COMMISSIONER del VAL: Now, if a licence in the Peterborough market were granted to someone other than yourself, what do you see would be the impact on your Cobourg stations?
LISTNUM 1 \l 14198 MR. CONWAY: Well, we will continue to compete, we have always competed against the big guys. But it would seriously impact on our financial ability. As you saw from 96.7, the other applicants, most of them come south of Rice Lake with their 3mV. So that means they are going to be well‑listened to in Northumberland County or available to be listened to.
LISTNUM 1 \l 14199 So you are going to have CTV, who has just flipped with a big station, who has taken share away from us because we were getting Peterborough's share by default. Basically, they have gone from a 2 to a 20, so they have taken that away from us.
LISTNUM 1 \l 14200 Corus, when they do their flip to classic hits, they will end up ‑‑ well, as you saw, if they use the 96.7 they are going to be all over Northumberland County. And if you licence someone else on a different frequency, we know from the map on 102.5, it does come into Northumberland County. So it would have a serious impact on us.
LISTNUM 1 \l 14201 COMMISSIONER del VAL: Now, CTV's KRUZ right now, from what I remember yesterday, was that they want to maintain the same footprint. So right now, the KRUZ 980, is that all over Northumberland County?
LISTNUM 1 \l 14202 MR. CONWAY: It can be heard in Northumberland County. But if you look at their contours, their contours are to the northeast and their footprint for the FM proposed is to the direct south, which is coming into the two most populated towns in Northumberland County, so it is slightly different.
LISTNUM 1 \l 14203 COMMISSIONER del VAL: Thank you. Okay, let us go onto something a bit easier, your format.
LISTNUM 1 \l 14204 You may have covered it, I know you have given a lot more information here, how much of your regulated broadcast week would you devote to live‑to‑air programming?
LISTNUM 1 \l 14205 MR. CONWAY: I am going to let Joel speak to that.
LISTNUM 1 \l 14206 MR. SCOTT: We are looking at producing 120 hours. We allowed for 120 hours a week of local programming, that allows for a potential weekend countdown show or syndicated program. As far as being live to air, we have endeavoured to try and make it 99 hours a week, being life primarily 6:00 a.m. to 9:00 p.m. at a minimum, Monday to Friday, and then 6:00 a.m. to 6:00 p.m. on weekends as well.
LISTNUM 1 \l 14207 COMMISSIONER del VAL: Okay. Then so the balance would be voice tracked or automated?
LISTNUM 1 \l 14208 MR. SCOTT: Off‑peak times, from 9:00 p.m. and overnights, yes, voice tracking done on a local level.
LISTNUM 1 \l 14209 COMMISSIONER del VAL: Okay. Your plans regarding the newsroom staff. I know you have given us some information about the programming staff and there might be some overlap. Now, who will be responsible for the news content?
LISTNUM 1 \l 14210 MR. CONWAY: Well, our news team would make decisions on a day to day basis.
LISTNUM 1 \l 14211 I am going to let Jen say, just a little bit more, how we operate presently.
LISTNUM 1 \l 14212 MS HUDSON: Well, currently, the way that it works is in my position as news director I am also doing the morning on‑air newsrun as well as co‑hosting on The Breeze. So my job and my priority every morning is not only to just do that news and gather the news and present it, but it is also an assignment editor for our reporters.
LISTNUM 1 \l 14213 Our on‑air news personalities also are sent out to do some reporting. We have some part‑timers, some stringers, so we send those out as well in order to have really good coverage of Northumberland County, the people, the events that happen and that make it what it is. We would endeavour to do the same thing in Peterborough.
LISTNUM 1 \l 14214 COMMISSIONER del VAL: And will you have student interns in Peterborough as well?
LISTNUM 1 \l 14215 MS HUDSON: We are looking to do that. As well, we are looking to hire two summer interns ‑‑
LISTNUM 1 \l 14216 COMMISSIONER del VAL: Okay
LISTNUM 1 \l 14217 MS HUDSON: ‑‑ to come on into the newsroom so that we can help mentor them and guide them and bring them along and have them really get some hands‑on knowledge of the industry.
LISTNUM 1 \l 14218 COMMISSIONER del VAL: And who typically is charged with mentoring or overseeing the interns' work?
LISTNUM 1 \l 14219 MS HUDSON: That would be the news director.
LISTNUM 1 \l 14220 COMMISSIONER del VAL: The staffing plans for on‑air talent, I think you have gone through that a bit. Do you care to elaborate with respect to news or..?
LISTNUM 1 \l 14221 MS HUDSON: Well, again, as a small operation and really, in the long‑run, it makes you a much better broadcaster if you wear a number of different hats because you have an opportunity to experience the other parts of the station, it works much more cohesively that way. And instead of sitting there and not understanding why something works the way that it does, say in the programming department, you have a much better handle on it because you have been there.
LISTNUM 1 \l 14222 With our news department, we want to see everybody become embedded and entrenched in the community. And the more that we can send out our on‑air announcers to do some reporting as well, they are going to get to know the newsmakers, they are going to get to know the people in the community, not just the people that are heads of organizations or, you know, the mayors, but they are going to get to know the people, in general, of the community. And that is what a good radio station is supposed to do, it is supposed to reflect your community. So the more that we can do that, the more that our staff can get out and work in the community, then the better job we are going to be able to do.
LISTNUM 1 \l 14223 MR. CONWAY: I can just follow‑up with that, Madam Commissioner. We have, in the planned station, two fulltime and two part‑time. I give you an example about how community involved and how we talk about multitasking. Everyone of our staff is charged with letting the news department know what is happening in the community.
LISTNUM 1 \l 14224 So, for instance, I will give you an example. There was a horrendous crash last winter where it closed the 401, it closed the 401 for the better part of two days. And one of our staff happened to be returning from a sales call and was able to provide live‑to‑air reports from the scene. Their car ended up being stopped about half a kilometre away. And so they knew, call in, let us get to air right away with this and then continue to provide reports. So everyone is charged with helping the station broadcast events that are happening in the communities.
LISTNUM 1 \l 14225 COMMISSIONER del VAL: What about syndicated programming? Do you have any plans for that as matters now stand?
LISTNUM 1 \l 14226 MR. CONWAY: Joel?
LISTNUM 1 \l 14227 MR. SCOTT; We left room for it in our application, if possible. We would evaluate that at the time of launch. It wouldn't be a necessity. But if there would be something there that we could capitalize on from a programming standpoint and a revenue standpoint then, yes, we would evaluate it at the time.
LISTNUM 1 \l 14228 COMMISSIONER del VAL: You haven't yet offered a specific commitment regarding the weekly level of spoken word. And would you be prepared to do so?
LISTNUM 1 \l 14229 MR. SCOTT: Our spoken word commitment that we are looking at, above and beyond our proposed news coverage, is 12.3 hours per week. And the spoken word coverage that we have defined is broken down under categories outside of newscasts, like frequent weather coverage, additional sports coverage in the community, traffic reports in morning and afternoon drives, public service announcements by the announcers, background information on our artists, both new and emerging, an artist spotlight feature that would feature an artist once an hour through the daytime show and also, on weekends, community cruiser reports and, during the week, parent guide reports focusing on community events that families in our target demo would like to attend.
LISTNUM 1 \l 14230 COMMISSIONER del VAL: And ‑‑
LISTNUM 1 \l 14231 MR. CONWAY: Madam Commissioner, at the very last page, right before the back cover, is a summary of our application and you will see the breakdown there of the spoken word.
LISTNUM 1 \l 14232 COMMISSIONER del VAL: Yes. You know, I just remembered the sheets. Now, would you be prepared to commit to the overall level of spoken word as a condition of licence?
LISTNUM 1 \l 14233 MR. CONWAY: Yes, absolutely.
LISTNUM 1 \l 14234 COMMISSIONER del VAL: Now, going back to the frequency. If 96.7 were awarded to someone else, would you be prepared to accept a licence on, a partial approval, on the basis that you find another frequency? Would you accept such a licence?
LISTNUM 1 \l 14235 MR. CONWAY: Our first choice is 96.7 because of what I explained to you before about ‑‑
LISTNUM 1 \l 14236 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 14237 MR. CONWAY: ‑‑ people coming into Northumberland County. But 102.5 would be our alternate choice.
LISTNUM 1 \l 14238 COMMISSIONER del VAL: Okay. And outside of those two?
LISTNUM 1 \l 14239 MR. CONWAY: Nothing else really works, Madam.
LISTNUM 1 \l 14240 COMMISSIONER del VAL: Okay, thank you very much.
LISTNUM 1 \l 14241 MR. CONWAY: You are welcome.
LISTNUM 1 \l 14242 COMMISSIONER del VAL: Thanks for your time.
LISTNUM 1 \l 14243 Those are my questions, Madam Chair, thank you.
LISTNUM 1 \l 14244 THE CHAIRPERSON: Commissioner Menzies.
LISTNUM 1 \l 14245 COMMISSIONER MENZIES: I noticed that in your presentation that your expenses were low and your revenue predictions were lower than some of the other applicants. Is there anything that we need to know on that that you might not already have touched on?
LISTNUM 1 \l 14246 MR. CONWAY: Well, we know the market I think a little bit better than maybe some of the other applicants, and maybe I can let Dave speak to that.
LISTNUM 1 \l 14247 MR. HUGHES: With respect to the revenue, Mr. Commissioner, we also took into account that CKPT was moving to the Hot AC format. And it certainly is acknowledged, when the BBM results came out, that they had about a 22 share in adults 25‑54, which is substantial.
LISTNUM 1 \l 14248 When CTVglobemedia did their projections for revenue at their hearing in December of 2006 they projected first year sales of approximately $400,000. Well, with a 22.1 share of the market, adults 25‑54, one can assume that they are going to do a little bit better than $400,000.
LISTNUM 1 \l 14249 So we factored those things into our revenue projections. That, in addition to the fact that we have a presence in the market, we understand the market, and the market sets rates for individual commercial units, the market bears so much. We predict that the going I rate is about $15. When we did that and based our sell out rate at about 60 per cent for the first year, that is how we arrived at our first year revenue projections.
LISTNUM 1 \l 14250 COMMISSIONER MENZIES: Okay, thank you. I am curious on knowing, and I know you have talked about it a bit here, but your corporate culture of embedding yourself in the community ‑‑ which I think is an excellent idea, most people who stay in newsrooms just reflect newsrooms and not their community ‑‑ and your commitments to things like school councils and chambers of commerce, etc. that is excellent.
LISTNUM 1 \l 14251 It is a bit of an open‑ended question, but I want to know a bit more about your corporate culture, how you manage to do all that. Because you have an operation that is operating 24 hours a day, you have a small staff, you are a lean, efficient operation, how do you sustain yourselves at those levels of commitment for a long period of time and retain staff and community involvement?
LISTNUM 1 \l 14252 MR. CONWAY: I am there seven days a week.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14253 COMMISSIONER MENZIES: Okay, I want to know how you do that. Is anybody else there with you?
LISTNUM 1 \l 14254 MR. CONWAY: Actually, yes. Jen, on Saturday, there is a perfect example.
LISTNUM 1 \l 14255 MS HUDSON: This past weekend there was a terrible and tragic incident that happened on the highway just south of Peterborough. It is something that made not only local news, regional news, also went national as well in regards to the two people that police were following from London ended up just south of Peterborough, when police approached the vehicle the two were dead.
LISTNUM 1 \l 14256 I got a phone call at home, so I immediately said good‑bye to my children, my husband, said love you, and I got in the car and went straight to the station and started making some phone calls to see what I could find out.
LISTNUM 1 \l 14257 This is the kind of organization that it is and it takes special people in order to make it all work. And I think that Pineridge Broadcasting has done an excellent job of searching out ‑‑ they don't hire people based on the fact that I need somebody here next week. They hire people based on the fact that they are ready to make that kind of commitment to the communities in which they live and to the company in which they work.
LISTNUM 1 \l 14258 So when Pineridge hires somebody that is all part of the interviewing process, that is all part of, you know, when you come on board you know this. And you know that this is the way that it is going to be, but you are doing it because it is what you love, it is part of who you are and part of what makes you proud to be in your community.
LISTNUM 1 \l 14259 MR. SCOTT: If I can add to that further. When we go through the hiring process, as Jen mentioned, we traditionally may take longer to hire people than we normally do because we are looking for those kinds of people. We look for people that are community involved.
LISTNUM 1 \l 14260 For example, our promotion director, York Bell‑Smith, came to us as a part‑time guy on weekends, he was let go from another radio station, he fit our format, he fit the dedication to community, he was involved in Kiwanis, moreover just loved radio, wanted to do anything he could. So York has covered off ‑‑ when he first came to us he was doing part‑time on weekends, he was doing production, he was helping out in promotion, helped do a little bit in sales. And when the time came in our growth that we had to add another person York was the natural fit, because he could fill an on‑air shift for us competently, he could run our promotions department because he had experience in promotions.
LISTNUM 1 \l 14261 We have an evening announcer right now that has done production, promotion and he's done some music work, he even cut the grass this summer, so that is ‑‑
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14262 MR. SCOTT: And we tell people when they come in and say, listen, this is a little bit different operation, we encourage you to try every aspect of the radio station because, as the radio market changes and as the personnel changes, we don't know where our needs may fall. And if we have got someone internally we can put into those places right away to grow their career and move them up, then that is where we look first.
LISTNUM 1 \l 14263 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 14264 Your last comment, not your most recent one, but in your opening presentation, in the concluding sentence you made reference to serious issues for ongoing financial integrity.
LISTNUM 1 \l 14265 Now, I just want to make sure I heard accurately what you were saying. What I heard, more or less, was you think these other guys are trying to mow your lawn and ‑‑
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14266 COMMISSIONER MENZIES: ‑‑ and you need to have a bigger lawn if that is going to happen for you to compete.
LISTNUM 1 \l 14267 MR. CONWAY: I like your reasoning. We have been through the process for the last five years. Let me just spend sometime and take you back.
LISTNUM 1 \l 14268 In 2002 we applied for an FM radio station. We all thought it was going to be ‑‑ we applied for a Northumberland radio station, Contours Northumberland whatever.. I provided you with a topography because, as we have seen today and yesterday, the other applicants have no idea why there is only 13 per cent Toronto tuning in Toronto. The Oak Ridges Moraine prevents signals from Toronto getting into Peterborough, so they have got nobody to listen to other than the Peterborough radio stations.
LISTNUM 1 \l 14269 In 2002 we applied for and we launched Star 93.3. The second day we were on I got a call from a guy. He said, "Are you the owner?" I said, "Yes, sir." "Are you really the owner?" I said, "Yes, sir." "Not a big company?" I said, "No, sir, it's independent, this is it, you're talking to the guy that sits in the corner that signs the cheques." Fine.
LISTNUM 1 \l 14270 And I won't use the words he used, he says, "I came from Hamilton, Ontario," he says, "I now live in Peterborough, I could sit in my office and all of my employees could hear almost any radio station format they wanted to. I had to move to this," whatever, "community and," he says, "I have to sit here and listen to rock or country, thank ‑‑ that you guys are here with the format, because now I can listen to music." "And if you need 100 people in my office, because I own an insurance company, if you need 100 letters to the CRTC then we will right them for you in support."
LISTNUM 1 \l 14271 That was the second day we were on air on Star. Peterborough was starved for an adult contemporary radio station. And we are there by default, we didn't know we could get in there, we didn't know about the Oak Ridges Moraine either. But that is how this whole thing started.
LISTNUM 1 \l 14272 The Corus and CHUM absolutely had this little pie that they split up between themselves, they had four radio stations, the rates are low, they just split up the advertisers and all of a sudden we came in from outside. And as you go back over the various applications that we have had to increase our signal in our own little community, because we have got a very bad signal along the 401, they have fought us everyway they could.
LISTNUM 1 \l 14273 And this past week when the BBMs came out and the fact that they are in BBM in Northumberland County, there is only one reason, they want to take revenue right away from us. They just hate us. Thank you.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14274 COMMISSIONER MENZIES: Or they want your money.
LISTNUM 1 \l 14275 MR. CONWAY: Yes.
LISTNUM 1 \l 14276 COMMISSIONER MENZIES: So what I am getting a bit from this and, again, I don't want to put words in your mouth, this is what I am understanding and I want you to confirm or clarify for me; is that you are up to the task of competing with all the big boys and girls in Peterborough and Toronto, but it can't last forever.
LISTNUM 1 \l 14277 MR. CONWAY: Well, right now, we are okay. But we have just got a competitor who was on AM 1420, he has just flipped and has stolen where we felt we had ‑‑ you saw the research. The research showed CKSG was being listened to in the Peterborough market. Now, we are a Northumberland radio station, we promote ourselves a Northumberland radio station, but a lot of our people drive to Peterborough to study, to work, to be entertained, whatever. So we do put Peterborough news and information on, surveillance information.
LISTNUM 1 \l 14278 I lost my train of thought, sorry.
LISTNUM 1 \l 14279 MR. HUGHES: Do you want me to jump in?
LISTNUM 1 \l 14280 MR. CONWAY: Yes, go ahead, sorry.
LISTNUM 1 \l 14281 MR. HUGHES: As Don was saying, we went to Peterborough by default, that really was what happened. When we did our application for Star there was no letters of intervention from anyone. It was a non‑appearing item and we got a brand new radio station.
LISTNUM 1 \l 14282 Since that time the giants have woken up and they said, "Oh, my God, these guys are competition". And for 20 or 30 years they had no competition. It was a pretty cozy little setting.
LISTNUM 1 \l 14283 So now at every turn ‑‑ we needed to apply a few years ago to improve our technical on Star so that we could better serve the market that we are licensed to. They challenged us on that. They challenge us at any turn that they possibly can. I worked there five days a week and I have to wear some armoured clothing to get ‑‑ there is so much going on trying to get us.
LISTNUM 1 \l 14284 So this is just the final indication when they have taken and bought ‑‑ built coverage through BBM into Northumberland for The Wolf. I think they are just trying to get us out of the picture.
LISTNUM 1 \l 14285 COMMISSIONER MENZIES: Okay. I'm sorry. I didn't mean to light you guys up like this.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14286 COMMISSIONER MENZIES: But you are capable ‑‑ what I am trying to get at, you are capable of ‑‑ you are capable of fighting back.
LISTNUM 1 \l 14287 MR. CONWAY: We are. It's just it's going to get worse, though. That's where the line was going, is CTV has flipped; Corus will probably flip. So they are going to come down into our market. So it's going to get very much tighter.
LISTNUM 1 \l 14288 COMMISSIONER MENZIES: Okay.
LISTNUM 1 \l 14289 MR. HUGHES: Could I just add the geography?
LISTNUM 1 \l 14290 I think it's very, very important to make it clear that from the top end of Northumberland County to the City Hall in Peterborough is 20 kilometres. So we are virtually one market. The continuation of Northumberland just flows right into Peterborough.
LISTNUM 1 \l 14291 So you know we have to compete with the giants we have. And we have done it very successfully, not just with the launch of Star back in 2002. We had a standalone AM station, CHUC, that had to compete with at the time Power, Corus and CHUM regardless of having an FM.
LISTNUM 1 \l 14292 We didn't have an FM. We had an AM station. And there was many, many events that go on in our home market communities of Cobourg and Port Hope that were presented by the Peterborough radio stations for some of the festivals. That was very frustrating on our part that they would come into our market and present a festival.
LISTNUM 1 \l 14293 So those are the challenges that we have had not just for five years but for a number of years, frankly since the company was purchased at a bankruptcy in 1983. I guess that's when it really started.
LISTNUM 1 \l 14294 COMMISSIONER MENZIES: Okay. Thanks very much.
LISTNUM 1 \l 14295 THE CHAIRPERSON: Just a couple of follow‑up questions.
LISTNUM 1 \l 14296 In your oral presentation on page 13 where you talk about your revenue projections and of course it's in the context of you know the market and you know what is realistic and that all other applicants have projected a much higher revenue potential. The other side of the coin, however, of your revenue projections could be you have underestimated so that you could underestimate the impact on the incumbents.
LISTNUM 1 \l 14297 How would you react to that characterization?
LISTNUM 1 \l 14298 MR. HUGHES: I believe that the Peterborough market has been underdeveloped with respect to radio spend. Our estimates were based on 12 percent of radio share of radio dollars. In a lot of markets the size of Peterborough it's probably 15 percent share of radio spent in the marketplace.
LISTNUM 1 \l 14299 I did have to go by what the street level talk is. As I said earlier, the market sets the rates; the radio station doesn't. And we have a tremendous history, for five years specifically, selling Star 93.3 in that marketplace to Peterborough advertisers who want to reach the populace in Northumberland County.
LISTNUM 1 \l 14300 So we know the rates. We are up against every radio station in some of those instances and we know where the market trades.
LISTNUM 1 \l 14301 I did not want to inflate the rates and imply that we could do a million dollars in our first year of operation because I know we couldn't do that. It wasn't even conceivable to do that.
LISTNUM 1 \l 14302 THE CHAIRPERSON: What percentage of your revenue currently comes from your Peterborough market?
LISTNUM 1 \l 14303 MR. HUGHES: Our revenue in Peterborough, we have a 3 share for each radio station today and that is 12 plus. When you go to the 25‑54 breakout; the demo breakout, our share combined is 4.8. Our share in Peterborough is about $60,000. So you can see where our revenue would be.
LISTNUM 1 \l 14304 THE CHAIRPERSON: Yes, because in your revenue projections you don't include a line for out‑of‑market tuning.
LISTNUM 1 \l 14305 In terms of your advertising revenues do you have an idea as to how much out‑of‑market tuning you will be able to repatriate?
LISTNUM 1 \l 14306 MR. HUGHES: Well, a lot of the ‑‑
LISTNUM 1 \l 14307 THE CHAIRPERSON: Because it's a two‑sided question too, of course, because of cannibalizing yourself, right?
LISTNUM 1 \l 14308 MR. HUGHES: That's exactly true. There is going to be a lot of cannibalizing on our radio stations. So I think the out‑of‑market tuning ‑‑ out‑of‑market radio revenue is really split between five and six stations. So when we add this new station we are going to cannibalize ourselves, that's true.
LISTNUM 1 \l 14309 THE CHAIRPERSON: Okay. And what percentage of your total revenues do you think will come from out‑of‑market tuning?
LISTNUM 1 \l 14310 MR. HUGHES: About 35 percent, 40 percent.
LISTNUM 1 \l 14311 THE CHAIRPERSON: Okay. Well, let's go through this then because in your projections you say:
"Existing Peterborough radio service is 40 percent."
LISTNUM 1 \l 14312 THE CHAIRPERSON: 40 percent of your revenues will come from that. Are you including out‑of‑market ‑‑
LISTNUM 1 \l 14313 MR. HUGHES: Yes, I am.
LISTNUM 1 \l 14314 THE CHAIRPERSON: ‑‑ tuning in that?
LISTNUM 1 \l 14315 MR. HUGHES: Yes, I am.
LISTNUM 1 \l 14316 THE CHAIRPERSON: Oh, okay, great.
LISTNUM 1 \l 14317 The devil is in the details, gentlemen.
LISTNUM 1 \l 14318 Okay, final question. Please confirm your understanding that if licensed your station will have to contribute a basic annual CCD contribution imposed by a condition of licence until the regulations are amended based on the station's total annual revenues and in the amounts as set out in paragraph 116 of the new radio policy, Public Notice CRTC 2006‑158.
LISTNUM 1 \l 14319 MR. CONWAY: So confirmed.
LISTNUM 1 \l 14320 THE CHAIRPERSON: Please confirm your understanding that of this base annual amount no less than 60 percent of the station's basic annual CCD contribution must be allocated to either FACTOR or MusicAction and the remaining amount, if any, may be directed to any eligible CCD initiatives at your discretion.
LISTNUM 1 \l 14321 MR. CONWAY: So confirmed.
LISTNUM 1 \l 14322 THE CHAIRPERSON: You would think I would know these by heart by now.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14323 THE CHAIRPERSON: Legal counsel.
LISTNUM 1 \l 14324 MS SMITH: Yes, I have one question.
LISTNUM 1 \l 14325 You have mentioned news and spoken word. Can you please give us your total number of hours including news?
LISTNUM 1 \l 14326 MS HUDSON: The total number of hours including the news is 18 plus. We will have four hours and nine minutes of total core news, six hours and 10 minutes of complete newscasts and 12 hours and 20 minutes of other spoken word.
LISTNUM 1 \l 14327 MS SMITH: Thank you very much.
LISTNUM 1 \l 14328 THE CHAIRPERSON: Mr. Conway, you have your final two minutes to give us your best pitch.
LISTNUM 1 \l 14329 MR. CONWAY: Madam Chair, Commissioners, thank you for your patience and courtesy. I was informed correctly; you don't bite even though you are very thorough.
LISTNUM 1 \l 14330 Pineridge has presented an application whose approval will be fully in the public interest for a number of reasons.
LISTNUM 1 \l 14331 Our application assumes the conversion for CKRU to the FM band. Our format proposal takes into account the presence of an FM oldies/classic hits station as well as the re‑launched CTV FM station.
LISTNUM 1 \l 14332 We have chosen a format that will serve the largest unserved demographic group, women 35 to 54. While there are stations in the market providing programming for younger women and men, for much older women and men, for women who like to rock and men and women who like country, there is no one providing mainstream AC format that we propose.
LISTNUM 1 \l 14333 Other applicants propose various subsets of this format, some skewed a bit softer, others a bit harder but none are as broad as we are.
LISTNUM 1 \l 14334 We have provided a realistic and robust business plan. A new station in the market will face two of Canada's largest radio companies. We know the market. Our business plan mirrors the only applicant here with on‑the‑ground operational experience in Peterborough and that was Corus.
LISTNUM 1 \l 14335 We are a local area broadcaster rooted in community involvement. We already have community connections and credibility in Peterborough and we can hit the ground running with a strong local service.
LISTNUM 1 \l 14336 Awarding this licence to us will strengthen the small, independent regional broadcaster. We have worked hard to make our business a viable one through community service and involvement. An additional station will give us more scope and scale to meet the ongoing challenges of our market.
LISTNUM 1 \l 14337 And finally, if you award this licence to another broadcaster we will face additional challenges in our home market. We already face CTV and Corus with multiple stations and likely increased market share in our community with their FM conversions. Another new signal from a nearby market will further fragment our audience, making our job an even more challenging one.
LISTNUM 1 \l 14338 Thank you so much for your attention.
LISTNUM 1 \l 14339 THE CHAIRPERSON: Thank you, Mr. Conway, and to your colleagues.
LISTNUM 1 \l 14340 MR. CONWAY: Thank you.
LISTNUM 1 \l 14341 THE CHAIRPERSON: Before we break for lunch I just want to make a scheduling announcement.
LISTNUM 1 \l 14342 It's the panel's intention ‑‑ and this way you guys can plan the rest of your week ‑‑ it's the panel's intention to hear this afternoon the applications from K‑Rock, Evanoff and Frank Torres. We will then adjourn for the day and begin the day tomorrow with Andy McNabb and the Anderson Parish applications, followed of course by the intervention phases.
LISTNUM 1 \l 14343 I am going to ask you kindly, all applicants, to indicate to the hearing Secretary tomorrow at the end of hearing all applications, whether or not you intend to appear in Phase II, just to make things run as efficiently as possible. Of course, you will have to make that decision once you have heard all applications so please don't rush to poor Cindy's side now. But do that tomorrow.
LISTNUM 1 \l 14344 So we will now break for lunch and we will be back at 1:30. Thank you.
‑‑‑ Upon recessing at 1215 / Suspension à 1215
‑‑‑ Upon resuming at 1330 / Reprise à 1330
LISTNUM 1 \l 14345 THE SECRETARY: We will now proceed with item 11 which is an application by K‑Rock 1057 Inc. for a licence to operate an English‑language FM commercial radio programming in Peterborough.
LISTNUM 1 \l 14346 The new station would operate on frequency 96.7 MHz (channel 244B) with an average effective radiated power of 12,400 watts (maximum effective radiated power of 41,000 watts/antenna height of 116 metres).
LISTNUM 1 \l 14347 Appearing for the applicant is Mr. John Wright.
LISTNUM 1 \l 14348 Please introduce your colleagues and you will then have 20 minutes for your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 14349 MR. WRIGHT: Chairperson Cugini, Commissioner Menzies and Commissioner del Val, CRTC staff, I am John Wright. I am owner and operator of K‑Rock 1057 in Kingston.
LISTNUM 1 \l 14350 And with me today on the panel ‑‑ and I think they are not in the same order that you have them on here. So on my left is Andrew Forsythe and next to Andrew is Doug Elliott.
LISTNUM 1 \l 14351 Doug is our ‑‑ has started with us in August. He is Manger of Special Projects and has been responsible for product development for our Fresh FM application. And Doug came to us from Newcap in Thunder Bay where he was Operations Manager; prior to that he helped launch CKUE, which was talked about at the hearing in Windsor.
LISTNUM 1 \l 14352 Andrew is an Associate with Bond & Associates, Canada's foremost radio consultants, and Andrew has held various management and programming positions in radio and worked closely with Glenn Williams in the development of K‑Rock.
LISTNUM 1 \l 14353 To my immediate right is Glenn Williams. He is our Program Director at K‑Rock. He was the absolute first person we ever hired when we got the licence for K‑Rock. And Glenn is the architect of our product. He came to us after five years with The Bear in Ottawa where he was the Promotions Director.
LISTNUM 1 \l 14354 And next to Glenn is Kelly Spanton, and I have worked with Kelly for many, many years. Kelly started at CFJR in Brockville in sales. She is our Sales Manager, I think I said, and she spent 14 years at CHUM Regional Sales in Toronto where she developed new business for CHUM markets including the Peterborough market.
LISTNUM 1 \l 14355 My wife, Kim, was supposed to be here but she not only works at the station and handles all our agency business but she is also in charge of keeping balance in our lives. And we have a 13‑year old and Kim is at a Christmas recital with our 13‑year old.
LISTNUM 1 \l 14356 For Kelly, Doug and Glenn this is a first. It's their first time appearing before the Commission at a public hearing and they are the key members of our management team. Each of them is very excited about this application for reasons of their own, but what is common is the knowledge that our company has to grow to create more opportunities for all of us, and that Peterborough is almost a twin to Kingston and the perfect community for our growth.
LISTNUM 1 \l 14357 The Commission has identified the key criteria on which all applicants will be judged, and they are: In smaller markets under 250,000 it's the ability of the market to handle a new service; diversity of product and of ownership and the quality of the business plan along with Canadian content development.
LISTNUM 1 \l 14358 The challenge is clear for all of us. We have to show that Peterborough is ready for an additional radio service and then we have to show why our application is best of show.
LISTNUM 1 \l 14359 Peterborough is a city of natural beauty and culture. It's the heart of the Kawarthas and called often the "lift lock city". Somebody was mentioning lift lock yesterday. And it's reputed to be the world's highest lift lock, a true wonder of engineering. It shifts pleasure boats up and down at the height of a seven‑storey building.
LISTNUM 1 \l 14360 Peterborough has 116,000 people in the CMA and ranks 33rd in Canada. The Economic Development Commission says Peterborough has a healthy economy and a strong growth rate. They also say the population is expected to grow by 20,000 people over the next 10 years or just over 1.7 percent per year.
LISTNUM 1 \l 14361 The economy is a mix. It's a mix of government and it's a mix of manufacturing and tourism. And the tourism sector is fuelled by its position as Toronto's sort of growth cottage country area.
LISTNUM 1 \l 14362 General Electric, PepsiCo, Quaker Oats, Seimens lead the manufacturing sector while the Peterborough Regional Health Centre is the largest employer followed by school boards and local government.
LISTNUM 1 \l 14363 Retail sales, as we have heard before, are 9 percent above the national average.
LISTNUM 1 \l 14364 Is this local optimism and predicted growth enough to support an additional new FM radio service? Let's compare Peterborough to some other similar markets.
LISTNUM 1 \l 14365 Kingston has six commercial radio stations, Bellville has five, Moncton has six and Peterborough if a new licence is granted will have five. With this new licence there will be one radio station per 22,000 people in Peterborough, which is more people per station than either Bellville or Moncton.
LISTNUM 1 \l 14366 Retail sales tells a similar story. Peterborough has about the same retail sales per capita as Moncton and it's about 7 percent greater than Bellville.
LISTNUM 1 \l 14367 And finally let's have a look at profitability. Between the years of 2001 and 2005 Peterborough averaged 21.2 percent PBIT. During the same period Moncton was 23.1 percent and our home market of Kingston was a lowly 6.3 percent.
LISTNUM 1 \l 14368 The Peterborough we are looking at has a healthy economy, a population that's expected to grow by 20,000 people in the next 10 years, retail sales above the national average, a very healthy five year average PBIT in excess of 20 percent and with the addition of a new licence, a ratio of stations to people, if I can put it that way, similar to other markets.
LISTNUM 1 \l 14369 The two other broadcasters in Peterborough, CHUM and Corus, both have multimedia outlets and are well positioned to maximize their synergies and operate profitably after the addition of a new radio service to the market.
LISTNUM 1 \l 14370 Now, Peterborough and Kingston are very eerie in their similarities.
LISTNUM 1 \l 14371 MS SPANTON: CHUM Peterborough has two FM stations with a third that gets into Peterborough from Lindsay. CHUM Kingston is identical; two FM stations in Kingston and a third that gets into Kingston from Brockville. Corus in Peterborough has two radio stations and a TV station. Corus in Kingston has two radio stations and a TV station. The markets are twins.
LISTNUM 1 \l 14372 We believe Peterborough can support the addition of a new FM radio service. The question is can a new entrant compete against the formidable arsenal in the hands of CHUM and Corus?
LISTNUM 1 \l 14373 These are two very big and very good broadcasters. We are the only applicant that has successfully competed against CHUM and Corus in a very similar small market environment.
LISTNUM 1 \l 14374 The addition of Fresh FM to Peterborough will bring diversity to the market, a new news voice, a new format and a new independent owner headquartered in Eastern Ontario.
LISTNUM 1 \l 14375 Fresh FM will bring diversity to this dual owner, multi‑broadcasting outlet market. But even more important than just bringing diversity, we bring experience not only surviving but thriving in a similar market size against the same tough competition. We are currently number one, adults 25‑54, in Kingston.
LISTNUM 1 \l 14376 MR. FORSYTH: John retained our company, Bond & Associates, to determine a format choice. With country and rock already in the market, some form of adult contemporary was clearly the choice.
LISTNUM 1 \l 14377 CHUM stated in their application that CKPT would continue to operate as a soft oldies station offering music from such artists as Neil Diamond, Barry Manilow and Anne Murray.
LISTNUM 1 \l 14378 From the get go the Fresh FM format was designed to be different from CKPT. The opening for an adult station playing contemporary music was evident in the format search conducted prior to the conversion of CKPT to Energy 99.3. The format choice for Fresh FM is everything the name says. It is music that is new to Peterborough and it is designed for the 25 to 49 year old with particular emphasis on families.
LISTNUM 1 \l 14379 As I already mentioned, CHUM launched CKPT not as a soft oldies station but as Energy 99.3, a hot young station as the name implies. John commissioned Totum Research to determine how this impacted the application. The goal of the research was to determine; one, if there had been any change in the listening habits based on the launch of Energy 99.3; two, what effect does the launch of Energy have on the format proposed by Fresh FM and; lastly, to see if there is another format that would better meet the needs of the Peterborough audience since the launch of Energy.
LISTNUM 1 \l 14380 Totum tested four different music styles for respondents age 25 to 64. One montage was music presented in the Fresh FM application. The other music segments included a traditional soft adult contemporary, an older leaning gold based adult contemporary station and classic hits. The results show the most popular music style was the Fresh FM format with 76 percent of the respondents indicating they would listen often or occasionally.
LISTNUM 1 \l 14381 The research shows that there is no one station strongly identified with the proposed Fresh FM format. When asked if there was a station in the market already playing the music heard in the Fresh FM montage, only 15 percent of the respondents identified the music with Energy; 10 identified it with the rock station, The Wolf, and 13 percent named the out‑of‑market station Star 93.
LISTNUM 1 \l 14382 Interestingly, the classic hits format would have had the largest impact on the existing stations with 20 percent of the respondents identifying that music with The Wolf.
LISTNUM 1 \l 14383 The responses show that the proposed Fresh FM format would have a minimal impact on the existing stations.
LISTNUM 1 \l 14384 As a result of this additional research we determined that of the various adult contemporary format options our Fresh format was the preferred. This format was not strongly identified with any other station in the market and therefore there was no rationale for us to change the format or the business plan.
LISTNUM 1 \l 14385 MR. ELLIOTT: Our research also confirmed that Fresh will fall quite nicely between Energy, the format, and the format proposed by CKRU, the Corus conversion from AM to FM.
LISTNUM 1 \l 14386 Fresh FM is contemporary adult as opposed to adult contemporary and is different than any radio station that is in Peterborough right now.
LISTNUM 1 \l 14387 Based on our experience with K‑Rock in Kingston we can compete well with CHUM and Corus. It takes really good programming, top marketing and strong community involvement and we have great plans for Fresh in Peterborough.
LISTNUM 1 \l 14388 Fresh FM is Sarah McLaughlin and James Blunt, Rob Thomas, Bedouin Soundclash, Suzie McNeil, Tara Slone, Four80East, Hayley Sales. Fresh FM's music will add diversity and complement the music programmed in the market. Recent BDS monitoring tells us that 85 percent of Fresh FM's music is not played on any Peterborough radio station.
LISTNUM 1 \l 14389 Fresh FM will be distinctly different by design with music and spoken word, targeted to young parents that will engage in relevant conversation while still maintaining maturity and depth.
LISTNUM 1 \l 14390 Fresh FM is 40 percent Canadian content, 10 percent emerging Canadian artists. And based on our research we have concluded that the Fresh FM listener wants exposure to new local music. To put this into perspective how important it is, we have already determined that our listeners are parents of school‑aged children and they find that exposure to new local music almost as important as current information about school bus cancellations.
LISTNUM 1 \l 14391 At Fresh FM we will integrate ourselves with the local musicians, the producers and venues, like we have in Kingston so that we can play their music on the radio.
LISTNUM 1 \l 14392 Fresh FM is about supporting Peterborough musicians who receive no airplay like Chris Nettleton and working with local producers like Barry Haggarty.
LISTNUM 1 \l 14393 Fresh FM is the minivan station; soccer, baseball, 5:00 a.m. hockey practice, figure skating, dance lessons, gymnastics; almost interchangeable for the TV commercial for the Montana minivan with the Golden Lab lying down at their feet.
LISTNUM 1 \l 14394 The Fresh FM listener has a thirst for local news surveillance, mature engaging information that has relevance to their lifestyle. To that end we will commit to regularly‑scheduled news from our local team of three fulltime news people and will consist of 75 percent local news content. We may share regional stories with our Kingston newsroom. However, Peterborough newscasts will be produced in Peterborough.
LISTNUM 1 \l 14395 In addition to the consistent newscasts, Fresh FM will also provide extensive surveillance information that young families will need; school closures, bus cancellations, snow days, construction updates, the latest at the arenas, public parks.
LISTNUM 1 \l 14396 In addition to the surveillance information, Fresh FM will provide background information through relevant spoken word for young families that are handling life's challenges.
LISTNUM 1 \l 14397 Our programming features will be written and produced by our experienced team in programming and in use. For example, we envision a daily environmental report called "The Green Report" that will run in both drive times, be produced by our news director that not only discusses green issues like your home and global warming but also talks about the footprint our daily lives leave on the environment; also, to help translate the effect on our lives by our federal government's decision at the Bali climate summit on right now or the pressure our federal government is getting to protect the Canadian polar bear.
LISTNUM 1 \l 14398 In total over 13‑and‑a‑half hours weekly of spoken word, news, surveillance and features targeted specifically for active young parents and music played on a radio station by the artists that are listeners, are buying at the CD retailers or downloading and buying their concert tickets.
LISTNUM 1 \l 14399 MR. WILLIAMS: Madam Chair, Commissioners, CRTC staff, best of the season to you; talking about Canadian content development.
LISTNUM 1 \l 14400 You know our Kingston radio property has experienced incredible success over the close to seven years in operation. And our goal there was to really make a difference not only with our advertisers, our community, but developing Canadian talent was very, very important to us from the get go.
LISTNUM 1 \l 14401 The latter had a significant effect on our success for many reasons. First and foremost would be the goodwill from our listeners and our local artists being paramount. They hear the difference on the radio.
LISTNUM 1 \l 14402 The same strong commitment to build Canadian talent is planned for Peterborough ‑‑ regular programming to highlight new Canadian artists, both locally and nationally, and all focused on the end game for aspiring bands, a chance to hear their songs on the radio.
LISTNUM 1 \l 14403 Songs on the radio give aspiring Canadian artists a foundation to work from in their efforts to market themselves across the country.
LISTNUM 1 \l 14404 Our plan is pretty simply ‑‑ own your home market, then take over the world.
LISTNUM 1 \l 14405 Think of us as pre‑FACTOR ‑‑ out of the garage and onto a stage in their hometown, and with some hard work and the support of our radio station, onto the radio.
LISTNUM 1 \l 14406 The competition is tough on the national scale fighting for their piece of FACTOR pie. We like to work very hard to get them ready for that adventure.
LISTNUM 1 \l 14407 Some of our on‑air initiatives ‑‑ "Fresh and Live": We will be consistently supporting emerging artists through radio airplay and the opportunity for live acoustic performances.
LISTNUM 1 \l 14408 From our experience in Kingston, we have noticed that the feedback from our listeners has been incredible regarding the fact that we give this very unique opportunity to a lot of local and emerging Canadian artists to play their songs acoustically on our radio station and to tell their stories.
LISTNUM 1 \l 14409 "Fresh Online": Website applications that strongly tie our artist to their sites to give them instant credibility.
LISTNUM 1 \l 14410 "Lift, Lock and Load": Our fun, exciting, inde show that we have proposed. We will produce a one‑hour weekly program dedicated to emerging artists only, and each month produce a program that will be hosted and co‑produced by local artists themselves.
LISTNUM 1 \l 14411 "Fresh FM Presents": We will partner aggressively with local promoters and producers of live shows that highlight Peterborough and area talent.
LISTNUM 1 \l 14412 In our mission as the Pied Pipers, as we like to call ourselves, we will devote $20,000 annually toward the Fresh FM Idol Talent Search and the Fresh FM Music Festival.
LISTNUM 1 \l 14413 This area has been so successful in Kingston that we exceeded our commitment by 20 percent last year to get the job done, and we loved every minute of it.
LISTNUM 1 \l 14414 Our talent searches give us the opportunity to build relationships with the local artists. We average about 50 bands each year in Kingston that come in, and we begin that relationship. It is really a part of us making them shine.
LISTNUM 1 \l 14415 The greatest part is that, throughout the entire process, we involve our listeners in the process, which, of course, provides an opportunity for them to attach themselves emotionally to the artists. And, of course, we hope to have them as their future fans. That, of course, is our end game.
LISTNUM 1 \l 14416 We have prepared a short video from some of the bands and the community leaders that we have partnered with in Kingston, which we hope illustrates our commitment to our community and to Canadian talent.
‑‑‑ Video presentation / Présentation vidéo
LISTNUM 1 \l 14417 MR. WILLIAMS: As you can see, Madam Chair and Commissioners, we are very proud of our commitment to our community and to our local talent development, and we believe that we will hit the ground running in Peterborough with Fresh FM.
LISTNUM 1 \l 14418 MR. WRIGHT: Just a few comments regarding our business plan.
LISTNUM 1 \l 14419 The Commission has made it very clear that the quality of the business plan is a key criterion in determining the successful applicant.
LISTNUM 1 \l 14420 It is also clear that the Commission understands there is a big difference between small independent operators' business plans and those plans put together by the big regional independents and the publicly traded companies.
LISTNUM 1 \l 14421 Really, the biggest difference comes in the financing of individual market applications.
LISTNUM 1 \l 14422 The bigger independent and publicly traded companies finance individual markets with the strength of their overall company. We have to finance our Peterborough application based on our Peterborough business plan.
LISTNUM 1 \l 14423 This is a good thing. It brings a little bit of discipline to our financial planning.
LISTNUM 1 \l 14424 Our bankers have to be convinced that our business plan will succeed before they will sign off on the financing, and these guys focus on three main issues:
LISTNUM 1 \l 14425 Revenue ‑‑ How much revenue are you going to get, and is it a realistic, achievable figure?
LISTNUM 1 \l 14426 Then they focus on the product. In our case it's programming. They want to know if we are going to be able to compete.
LISTNUM 1 \l 14427 Then, the resources allocated to promotion and sales: Is it sufficient to make people aware of the new product and monetize the programming success?
LISTNUM 1 \l 14428 Let's have a look at the Peterborough market.
LISTNUM 1 \l 14429 We estimate that the current stations in launch year, when the new stations are launched, will average about $725,000 annually on programming, sales and promotion expenses. At an annual 3 percent increase, this will amount to about $5.6 million over the seven‑year period.
LISTNUM 1 \l 14430 In Peterborough right now there are only four commercial stations, so the fifth station will not be a niche format that can be operated at a lower cost, it is going to be a fully competitive station that will be competing to be the top station in the market.
LISTNUM 1 \l 14431 Our bankers and investors would not think it is logical for us to aspire to be the top station in Peterborough with programming, sales and promotion expenses well below the stations we are trying to beat.
LISTNUM 1 \l 14432 We have allocated over $6.3 million in programming, sales and promotion expenses over the term of the licence. That is about the same as Newcap, and well above all of the other applicants. And we haven't done this accidentally. We have planned this because of our experience competing with CHUM and Corus in a small market like Kingston.
LISTNUM 1 \l 14433 Our programming in Peterborough must be good enough that the target group will listen, and our promotion budget has to be big enough that we can get that target group to our position on the dial, and our sales department has to be strong enough that we can monetize our ratings against stations that have built up their relationships in the Peterborough market over many, many years.
LISTNUM 1 \l 14434 Madam Chair and Commissioners, that concludes our presentation. We welcome your questions.
LISTNUM 1 \l 14435 THE CHAIRPERSON: Thank you, Mr. Wright, and your colleagues.
LISTNUM 1 \l 14436 Mr. Wright, I am sorry that you are missing your daughter's Christmas recital. Hopefully your wife has a good camera.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14437 THE CHAIRPERSON: I would ask Commissioner Menzies to begin the questioning.
LISTNUM 1 \l 14438 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 14439 I will start a little differently this time, because I think our questions are becoming predictable.
LISTNUM 1 \l 14440 MR. WRIGHT: Oh, I had it all figured out!
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14441 COMMISSIONER MENZIES: In terms of the business community in Peterborough, what sort of advantage would K‑Rock bring to them?
LISTNUM 1 \l 14442 And I mean specifically in terms of what would a new station's ability be to stimulate retail growth, jobs, economic activity, and that sort of thing.
LISTNUM 1 \l 14443 MR. WRIGHT: When a new station joins the market, it adds another dimension to that particular market.
LISTNUM 1 \l 14444 When we came to Kingston, the first year there was a bump in the amount of dollars being spent on radio in general. In the second year there was a further big bump, before things started to flatten out a bit.
LISTNUM 1 \l 14445 But, really, a new entrant brings an enthusiasm, a new product, a new way of looking at things; and, generally, everybody brings new sales people to the market, as well, so there are more people selling the product of radio, and that increases the radio pie.
LISTNUM 1 \l 14446 COMMISSIONER MENZIES: But in terms of outside the radio pie, does it also ‑‑ if more people are buying ads, I am going to assume that more people are responding to ads and to the advertisers within the local market.
LISTNUM 1 \l 14447 Does that flow through, in that sense?
LISTNUM 1 \l 14448 Because people only buy ads if they sell stuff; right?
LISTNUM 1 \l 14449 MR. WRIGHT: They sometimes buy ads and they don't sell stuff, so they don't buy them again.
LISTNUM 1 \l 14450 COMMISSIONER MENZIES: That's right.
LISTNUM 1 \l 14451 MR. WRIGHT: We would certainly hope that it stimulates their business and that their business grows as a result of doing business with us, but I don't have any specific evidence of that.
LISTNUM 1 \l 14452 What we do in the communities is, we get terribly involved with the business community.
LISTNUM 1 \l 14453 As an example, right now ‑‑ I think you have all been reading about the Canadian dollar and its effect on local merchants. Kingston happens to be a community that is quite close to the border, and people can get to the shopping malls in Watertown pretty easily. They can get there in about 35 or 40 minutes, except for the crowds at the border, of course.
LISTNUM 1 \l 14454 Our local merchants ‑‑ we had discussions with them back in September, and we are looking at the biggest time of the entire year, leading up to Christmas. It is a very important part of their livelihood. They were quite nervous that people were going to start moving and spending far more dollars south of the border because of the impact of the Canadian dollar, and there was a lot of publicity that the pricing was quite different on the Canadian side.
LISTNUM 1 \l 14455 We started a "Shop Local" campaign. We put announcements on the radio station, telling people what was going on and why they should be shopping locally.
LISTNUM 1 \l 14456 We talked about the value of our merchants to the community, how our merchants support local hockey teams, they support charities, and they stand behind their products, so that when you buy something you know you are going to be taken care of.
LISTNUM 1 \l 14457 We had quite a campaign on "Shop Local".
LISTNUM 1 \l 14458 We then put a page or a button on our website and we invited the merchants to put items on our website that people could see on which the prices had been lowered because of the currency issues.
LISTNUM 1 \l 14459 We then started telling all of our people in Kingston that the merchants were trying very hard to reduce prices, that they were trying very hard to be competitive, and that "they deserve your support".
LISTNUM 1 \l 14460 The results have been absolutely amazing.
LISTNUM 1 \l 14461 That is the kind of thing that we are always looking at, and we are always trying to accomplish. We are trying to work as partners with the people we do business with.
LISTNUM 1 \l 14462 COMMISSIONER MENZIES: Your sources of revenue ‑‑ you have 32 percent for new radio advertisers and 32 percent for other media and out‑of‑market stations.
LISTNUM 1 \l 14463 In terms of the other media and out‑of‑market stations, how would you break that down?
LISTNUM 1 \l 14464 How much of that is other media, and how much of it is out‑of‑market stations?
LISTNUM 1 \l 14465 MR. WRIGHT: Kelly will have a comment on that. I haven't got the figure right here, but Kelly does have it, I think.
LISTNUM 1 \l 14466 MS SPANTON: From other media, including out‑of‑market stations, it is $250,000.
LISTNUM 1 \l 14467 COMMISSIONER MENZIES: No, I am trying to get an idea of, within that, how much of it is other media and how much of it is out‑of‑market stations.
LISTNUM 1 \l 14468 Out of the 250, is it a 125/125 split, or 150/100?
LISTNUM 1 \l 14469 MR. WRIGHT: The out‑of‑market number would be higher.
LISTNUM 1 \l 14470 The out‑of‑market number would be approaching $200,000 of the $250,000.
LISTNUM 1 \l 14471 COMMISSIONER MENZIES: Is that money that is coming from inside the Peterborough community and being spent on out‑of‑market media or ‑‑
LISTNUM 1 \l 14472 MR. WRIGHT: Correct.
LISTNUM 1 \l 14473 COMMISSIONER MENZIES: That's right?
LISTNUM 1 \l 14474 MR. WRIGHT: That's right, yes.
LISTNUM 1 \l 14475 COMMISSIONER MENZIES: The new radio advertisers, can you give me some idea of who they might be?
LISTNUM 1 \l 14476 That is a $250,000 number, too.
LISTNUM 1 \l 14477 I don't need to know names and addresses, but I do need to know ‑‑ is it the automotive sector, is it retail?
LISTNUM 1 \l 14478 MS SPANTON: When we refer to that, the new revenue from new advertisers, it is because there will be a new format in Peterborough that, maybe, advertisers who aren't currently using radio, or who are defaulting to another radio station because they thought it was close to their target, will now be able to use Fresh FM.
LISTNUM 1 \l 14479 COMMISSIONER MENZIES: These are people who haven't been advertisers before?
LISTNUM 1 \l 14480 MS SPANTON: Oh, no, they may have been advertising. They may have been, but they may not have been on radio.
LISTNUM 1 \l 14481 Maybe they have been using the newspaper, but now our format will fit the customers they are targeting.
LISTNUM 1 \l 14482 COMMISSIONER MENZIES: Okay. Give me an idea of what percentage of that group are current advertisers or people who simply haven't been advertising before and now have a good fit to advertise with.
LISTNUM 1 \l 14483 Because it seems to me that if they are current advertisers ‑‑
LISTNUM 1 \l 14484 MR. WRIGHT: No, they wouldn't be current advertisers with radio, they would be current advertisers in the market, but right now there is no station that is really targeting that female mid‑age group, that female 35 to 44.
LISTNUM 1 \l 14485 COMMISSIONER MENZIES: So if they are current advertisers, this is an increased spend rather than a redirection of money that is in the market?
LISTNUM 1 \l 14486 MR. WRIGHT: The ones that are not on radio that we are talking about, it could be an increased spend, or it could be that they reallocate some money that they are currently spending somewhere else.
LISTNUM 1 \l 14487 They could be spending it on television, or on flyers, or in print, but they haven't been using radio because radio wasn't strong enough in that particular area.
LISTNUM 1 \l 14488 A lot of that was going out of market, as well, so they decided, for whatever reason, not to advertise on out‑of‑market stations. So it's underdeveloped.
LISTNUM 1 \l 14489 COMMISSIONER MENZIES: Okay. I think I understand.
LISTNUM 1 \l 14490 If you want to make me understand more, I am open to it, but I will let you go for a bit.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14491 COMMISSIONER MENZIES: I need to clarify something on Canadian content development. You have $8,500 a year for the Fresh Idol Talent Search, and $7,500 for the Fresh Music Festival. Then there is $4,000 that is allotted as a contingency, which you indicated could go to FACTOR.
LISTNUM 1 \l 14492 The regulations state that it should go to FACTOR, and I want to clarify what your plans are for that $4,000.