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Providing Content in Canada's Official Languages
Please note that the Official Languages Act requires that government publications be available in both official languages.
In order to meet some of the requirements under this Act, the Commission's transcripts will therefore be bilingual as to their covers, the listing of CRTC members and staff attending the hearings, and the table of contents.
However, the aforementioned publication is the recorded verbatim transcript and, as such, is transcribed in either of the official languages, depending on the language spoken by the participant at the hearing.
TRANSCRIPT OF PROCEEDINGS BEFORE
THE CANADIAN RADIO‑TELEVISION AND
TELECOMMUNICATIONS COMMISSION
TRANSCRIPTION DES AUDIENCES DEVANT
LE CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
Various broadcasting applications further to calls for
applications for licences to carry on radio programming
undertakings to serve Chilliwack and Vancouver, British Columbia /
Plusieurs demandes en radiodiffusion suite aux appels de demandes
de licence de radiodiffusion visant l'exploitation d'une
entreprise de programmation de radio pour desservir Chilliwack et
Vancouver (Colombie-Britannique)
HELD AT: TENUE À:
The Empire Landmark The Empire Landmark
1400 Robson Street 1400, rue Robson
Vancouver, B.C. Vancouver (C.-B.)
February 25, 2008 Le 25 février 2008
Transcripts
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
Contents.
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Transcription
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès‑verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
Canadian Radio‑television and
Telecommunications Commission
Conseil de la radiodiffusion et des
télécommunications canadiennes
Transcript / Transcription
Various broadcasting applications further to calls for
applications for licences to carry on radio programming
undertakings to serve Chilliwack and Vancouver, British Columbia /
Plusieurs demandes en radiodiffusion suite aux appels de demandes
de licence de radiodiffusion visant l'exploitation d'une
entreprise de programmation de radio pour desservir Chilliwack et
Vancouver (Colombie-Britannique)
BEFORE / DEVANT:
Helen del Val Chairperson / Présidente
Rita Cugini Commissioner / Conseillère
Elizabeth Duncan Commissioner / Conseillère
Peter Menzies Commissioner / Conseiller
Ronald Williams Commissioner / Conseiller
ALSO PRESENT / AUSSI PRÉSENTS:
Jade Roy Secretary / Secretaire
Joe Aguiar Hearing Manager /
Gérant de l'audience
Carolyn Pinsky Legal Counsel /
Conseillère juridique
HELD AT: TENUE À:
The Empire Landmark The Empire Landmark
1400 Robson Street 1400, rue Robson
Vancouver, B.C. Vancouver (C.-B.)
February 25, 2008 Le 25 février 2008
- iv -
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PHASE I
PRESENTATION BY / PRÉSENTATION PAR:
0785330 B.C. Ltd. 5 / 22
Touch Canada Broadcasting Inc. 62 / 365
Newcap Inc. 102 / 573
Vista Radio Ltd. 168 / 871
Harvard Broadcasting Inc. 225 / 1204
Vancouver, B.C.
‑‑‑ Upon commencing on Monday, February 25, 2008
at 0930 / L'audience débute le lundi 25
février 2008 à 0930
LISTNUM 1 \l 11 THE SECRETARY: We will start the hearing. Madam Chair.
LISTNUM 1 \l 12 THE CHAIRPERSON: Good morning, ladies and gentlemen, and welcome to this public hearing.
LISTNUM 1 \l 13 My name is Helen del Val, and I am the CRTC Regional Commissioner for the B.C. and Yukon regions. I will be presiding over this hearing.
LISTNUM 1 \l 14 Joining me on the panel are my colleagues, Rita Cugini, Regional Commissioner for Ontario; Elizabeth Duncan, Regional Commissioner for the Atlantic; Peter Menzies, Commissioner; and Ron Williams, Regional Commissioner for Alberta and the Northwest Territories.
LISTNUM 1 \l 15 The Commission team assisting us includes Hearing Manager, Joe Aguiar, who is also the Manager of English Radio Operations; Carolyn Pinsky, legal counsel; and Jade Roy, our Hearing Secretary. Please speak with Ms Roy if you have any questions regarding the hearing procedures.
LISTNUM 1 \l 16 At this hearing, we will begin by considering 15 applications to operate a new English‑language FM commercial radio station in Vancouver. At the same time, the panel will review applications to convert two radio stations serving Vancouver from the AM to the FM band.
LISTNUM 1 \l 17 The first application for conversion is by the Jim Pattison Broadcast Group Limited Partnership and concerns CKBD Vancouver. The second conversion application is by the Canadian Broadcasting Corporation, which is proposing to convert CBU Vancouver and to establish a new FM transmitter at Gabriola Island. We will also hear an additional application by the Canadian Broadcasting Corporation to amend the licence of radio station CBCV‑FM Victoria, to add an FM transmitter at Nanaimo.
LISTNUM 1 \l 18 The panel will then examine an application to operate a new English‑language FM commercial radio station in Port Moody. In addition, we will hear four applications to operate a new English‑language FM commercial radio station to serve Chilliwack.
LISTNUM 1 \l 19 Those radio applications will be followed by applications to renew the licences of radio stations CKCR Revelstoke and CFRO‑FM Vancouver. It appears that both these licencees may have failed to comply with certain regulations relating to the broadcast of Canadian content for category 2 music as required by the 1986 radio regulations.
LISTNUM 1 \l 110 Consequently, the Commission expects the licensees to show cause as to why a mandatory order should not be issued requiring them to comply with the regulations.
LISTNUM 1 \l 111 Finally, after all of the radio matters, we will examine an application by Rogers Broadcasting Limited to acquire from Multivan Broadcast Limited Partnership the assets of the ethnic television station CHNM‑TV Vancouver and the digital television station CHNM‑TV Vancouver, as well as their respective transmitters in Victoria.
LISTNUM 1 \l 112 I will now invite hearing secretary Jade Roy to explain the procedures we will be following. Ms Roy, please.
LISTNUM 1 \l 113 THE SECRETARY: Thank you, Madam Chair.
LISTNUM 1 \l 114 Before beginning I would like to go over a few housekeeping matters to ensure the proper conduct of this hearing.
LISTNUM 1 \l 115 When you are in the hearing room we would ask that you please turn off your cell phones, beepers, and BlackBerries, as they are an unwelcome distraction and they cause interference on the internal communications systems used by our translators. We would appreciate your cooperation in this regard throughout the hearing.
LISTNUM 1 \l 116 We expect the hearing to take approximately eight days, starting today until Wednesday of next week.
LISTNUM 1 \l 117 Starting tomorrow we will begin each morning at 8:30 a.m. We will take an hour for lunch and a break in the morning and in the afternoon. We will let you know of any schedule changes as they occur.
LISTNUM 1 \l 118 Pavilions 1 and 2 will serve as the examination room, where you can examine the public file of the applications being considered at this hearing. As indicated in the agenda, the telephone number of the examination room is 778‑327‑4194.
LISTNUM 1 \l 119 There is a verbatim transcript of this hearing be being taken by the court reporter sitting at the table on my right. If you have any questions on how to obtain all or part of this transcript, please approach the court reporter during the break. Please note that the full transcript will be made available on the Commission's website shortly after the conclusion of the hearing.
LISTNUM 1 \l 120 Now, Madam Chair, we will proceed with item 1 on the agenda, which is an application by 0785330 B.C. Limited for a licence to operate an English‑language FM commercial specialty radio programming undertaking in Vancouver.
LISTNUM 1 \l 121 Please introduce yourself and your colleagues, and you will then have 20 minutes for your presentation. Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 122 MR. BADH: Thank you. Good morning, Madam Chair, members of the Commission, Commission staff. Welcome to Vancouver, home of the 2010 Winter Olympics.
LISTNUM 1 \l 123 Before we begin our presentation for a new FM licence to serve Vancouver, which we are calling The Planet 104.1, I would like to introduce our team.
LISTNUM 1 \l 124 My name is Sukhvinder Badh, although everyone calls me Suki. I'm an economist, an educator, currently teaching economics at Simon Fraser University and Douglas College. I am deeply involved in the community. My most recent contributions include serving as Chair of the Richmond Hospital Foundation and the Advisory Committee on Environmental Issues to the City of Richmond.
LISTNUM 1 \l 125 On my left is my partner, Jim McLaughlin. I have known Jim for many years and he has guided me in putting this application together. Mr. McLaughlin has had significant experience in all aspects of radio and was head of Moffat Communications group of radio stations. Jim chaired the CAB's radio board for four years, chaired the BBM radio board for an additional four, and was one of the original founders of FACTOR.
LISTNUM 1 \l 126 Beside Jim is David Oakes of Oakes Research. David has over 30 years' experience researching Canadian, U.S. and international radio markets, and he undertook the research that led to our format choice.
LISTNUM 1 \l 127 Next to David is Liz Janik. Liz is one of the pioneers of alternative radio. From her beginnings as an announcer on CFNY‑FM in Toronto, she has worked as a programmer and consultant in alternative radio in both Canada and the United States for many years, most recently programming the 100 per cent Canadian channel on Sirius Satellite Radio. She has served on the board of the Canadian Women in Communications. She will be our Vice‑President Programming.
LISTNUM 1 \l 128 Next to Liz is Jaspreet Gill. Jaspreet speaks English, French, Italian, Spanish, Punjabi and Hindi. She currently works as the marketing manager of The Source/La Source, B.C.'s only English‑French newspaper, dedicated to cultural diversity. Jaspreet has served as our liaison with the local music community, and will be responsible to oversee our CCD implementation and produce The Planet's magazine, our daily magazine program.
LISTNUM 1 \l 129 To my right is Don Kay. Don has a long history in the radio industry, starting as a junior announcer and working his way up in the programming stream. Then he saw the light and realized that there was more money in sales and he re‑launched his career in sales, ending up in station management. He has served on the boards of many industry associations and has advised us on our research to sales and marketing of the station.
LISTNUM 1 \l 130 On the very right is our legal counsel, Robert Buchan of Fasken Martineau.
LISTNUM 1 \l 131 Madam Chair and Commissioners, we are a new broadcasting company so I would like to tell you a bit more about our genesis. Jim will talk about the Vancouver market. David will outline the research that led to our format choice. Liz will tell you about the sound of The Planet. Jaspreet will describe our spoken word initiatives and our CCD. Finally, I will sum up ‑‑ and all in 20 minutes.
LISTNUM 1 \l 132 I am an academic involved in what they call the dismal science ‑‑ economics. I have also had time to become involved in many community activities within Metro Vancouver. These include the CKNW Orphans Fund, as well as a recent joint appointment from the Department of Canadian Heritage and Public Safety to the national Cross Cultural Round Table on Border Security.
LISTNUM 1 \l 133 In 2001, I purchased a 20 per cent interest in a U.S. AM station. The station brokered time to various entrepreneurs who provided South Asian programming aimed at northern Washington and the Lower Mainland. This allowed me to try my hand on air, where I co‑hosted a public affairs show with Minister de Jong, who was the Minister of Labour. When the Commission called for applications for ethnic services in Vancouver, I threw my hat in the ring. I learned a lot from that experience, probably from making every possible mistake in the book, as my friends insist on telling me all too frequently.
LISTNUM 1 \l 134 My friend, Jim, convinced me that English‑language radio was as much fun, if not more. So we decided to pursue opportunities in English‑language media, and I sold my minority interest in KRPI. We looked at buying a station in Vancouver, but were outbid by a larger company. We were aware that a frequency might become available in Vancouver and started to work on our application. And so, here we all are. And now to talk about our Vancouver application, here is Jim McLaughlin.
LISTNUM 1 \l 135 MR. McLAUGHLIN: Thank you, Suki, and good morning, Commissioners.
LISTNUM 1 \l 136 My experience in Vancouver radio started in 1978. This is a great radio market and a booming economy. In our application, we outlined a number of economic indicators that give us confidence that the market can sustain new radio choices. I would like to highlight a few salient facts.
LISTNUM 1 \l 137 One, the population continues to grow about 1 per cent per year, largely fueled by immigration.
LISTNUM 1 \l 138 Two, the city's per capita income indexes fully 25 per cent higher than the Canadian average. Overall income is expected to grow at that same 25 per cent from 2007 to 2012.
LISTNUM 1 \l 139 Retail sales are robust and expected to grow 36 per cent in that same period.
LISTNUM 1 \l 140 Radio local and national sales are growing at over 5 per cent per year. Radio profit margins exceed the national averages.
LISTNUM 1 \l 141 Vancouver is a great place to do business.
LISTNUM 1 \l 142 We now have a large immigrant population that is moving into second, third and even fourth generations. People like Suki have a foot in their own communities, but also are active in the larger community. They cheer, and suffer, with the Canucks and the Lions, enjoy dim sum, pad thai, Indian candy, sushi, pasta, curry. They bring a very cosmopolitan and eclectic taste to their radio choices, and they influence the rest of us who, because of them, have a wider menu of choices available to us.
LISTNUM 1 \l 143 This cosmopolitan community has two kinds of commercial radio choices: Ethnic radio in third languages largely focus used on the specific needs of those groups, and English‑language radio that is not much different than what you would hear in Toronto, Halifax, Edmonton or Winnipeg. We believe that it is time to bring a new, inclusive popular music‑based station that reflects today's Vancouver, including a focus on being green.
LISTNUM 1 \l 144 But to find the largest unmet need, we knew we needed research and we asked David Oakes to undertake detailed and comprehensive research in the Vancouver market. David.
LISTNUM 1 \l 145 MR. OAKES: Thank you, Chairman. Good morning, Commissioners.
LISTNUM 1 \l 146 We undertook comprehensive phone out research of 600 Vancouverites aged 18 to 64. This gives us a worst‑case reliability of plus or minus 4.1 per cent, 19 out of 20 times.
LISTNUM 1 \l 147 We looked at people's current listening habits, including which radio stations they listen to and their use of other media to get their favourite music.
LISTNUM 1 \l 148 We tested their interest in 29 different individual styles of music, as well as whether there was a station currently known for playing each style. Then we asked respondents how likely they would be to listen to each of the seven formats. Analyzing the music demands of the audiences for each of the seven formats showed the adult alternative format to be the clear missing choice in the market.
LISTNUM 1 \l 149 The adult alternative audience exhibited an usually strong demand for alternative rock, along with the specialty music styles, blues, folk, reggae and world beat. In fact, Vancouver has the strongest demand for these specialty styles compared to any other Canadian city that I have researched. And yet there is no station providing these sounds to any extent.
LISTNUM 1 \l 150 Now to describe the sound of the station, here is Liz Janik.
LISTNUM 1 \l 151 MS. JANIK: Thank you, David, and good morning Commissioners.
LISTNUM 1 \l 152 The Planet's format is Vancouver's adult alternative. It has been completely customized to suit Vancouverites. The adult alternative format is sometimes referred to as Triple A, Americana or progressive FM, but regardless of the label used, there are four key common characteristics behind every successful adult alternative format.
LISTNUM 1 \l 153 First, they play a wide variety, very eclectic mix of music. Their listeners are passionate and adventurous music fans and, although older, they are still interested in exploring new music, both from heritage artists and from emerging new artists. They also want to hear more than one song from an album.
LISTNUM 1 \l 154 Two, the tone and presentation of the station is friendly, personable and intelligent. These listeners are tired of hype and useless chitchat. They want someone to talk to them as a real person one to one, and they have a higher need for news and information.
LISTNUM 1 \l 155 Three, this format appeals equally to both male and female music fans. These listeners are typically more individualistic and they're not comfortable with the gender bias found on most formats. The adult alternative format is the one format which makes both men and women feel welcome. The common denominator is their passion for music.
LISTNUM 1 \l 156 Fourth, each alternative station must be fully customized to its market. Every market has unique music histories and unique competitive issues which shape the sound of the station. The Planet's format has been completely customized for Vancouver's music fans. There is no other radio station which sounds like The Planet anywhere in North America. So, to give you a sample, we've prepared a video, and on the bottom left you will find the artists' names.
‑‑‑ Video presentation / présentation vidéo
LISTNUM 1 \l 157 It is our belief that in order for The Planet to be successful, it must play a mix of mainstream music with specialty music styles. Therefore, The Planet will commit to 40 per cent specialty music from the blues, jazz, folk and world beat categories. In addition The Planet will play 40 per cent Canadian content. Fully half, 20 per cent, will be from Canadian emerging artists.
LISTNUM 1 \l 158 Now to describe our news and information and our CCD is Jaspreet Gill.
LISTNUM 1 \l 159 MS GILL: Thank you, Liz, and good morning, Commissioners.
LISTNUM 1 \l 160 The research told us that our audience wants local news and public affairs, with an emphasis on arts and culture, the environment, health and lifestyle, and our four‑person news department and our public affairs producer will deliver just that, over six hours of news per week, including ten newscasts per day during the week and seven per day on the weekends, and a daily one‑hour news magazine every day of the week, including Saturday and Sunday. Our spoken word will total more than 22 hours per week.
LISTNUM 1 \l 161 Included in this total are daily features on the environment, current high tech information, artist profiles and culture and entertainment in Vancouver, as well as a full range of surveillance information. All of these efforts will culminate in our daily magazine program, The Planet Magazine, where we will have the time to go behind the headlines.
LISTNUM 1 \l 162 Canadian content development is another area where we decided to put a lot of effort and investment: A total of $4,375,000 over the term of the licence. Suki, Jim, Liz and I made the rounds of educational institutions and the music community to see what they felt would be most helpful. In addition to our annual contribution of $125,000 to FACTOR, we developed strong local initiatives. I will be responsible to work year round with four main focuses.
LISTNUM 1 \l 163 The Planet independent music awards, $165,000 per year. These will celebrate the best local artists in 12 categories of music, with cash awards, a local showcase event and a CD compilation.
LISTNUM 1 \l 164 Two, The Planet Music and Green Festival, $110,000 per year. A weekend long event highlighting best practices in recycling, reusing and reducing, with opportunities to see how new green technologies can actually make a difference, along with concerts from independent local artists.
LISTNUM 1 \l 165 Three, Music B.C., with an annual cash contribution of $100,000.
LISTNUM 1 \l 166 Four, our educational initiatives, $125,000 per year. We initially proposed providing scholarships to educational institutions. Then we met with the schools and we asked for their input on how the funds could best be utilized. Each school proposed ideas that would benefit hundreds of students and give them the chance to perform before thousands of listeners.
LISTNUM 1 \l 167 In our reply to deficiencies, we included letters from each of the five educational institutions, detailing how each will best utilize our annual contributions. They proposed very creative and innovative approaches.
LISTNUM 1 \l 168 These cash initiatives will be supported by our on‑air program, Pick of the Week, which will turn the spotlight on a different independent Canadian artist each week.
LISTNUM 1 \l 169 Here to sum up is Suki.
LISTNUM 1 \l 170 MR. BADH: Thanks, Jaspreet.
LISTNUM 1 \l 171 Commissioners, this is an incredibly diverse city, a Pacific Rim community that is a mosaic of East and South Asian cultures, European immigration, first nations peoples, and people from many other corners of the world. It has a unique flavor where aboriginal art is celebrated in public buildings, private galleries and on the streets, with several Chinatowns, little Indias, and other ethnic communities, and Robson Street and Commercial Drive where they all come together.
LISTNUM 1 \l 172 The Planet will reflect this diversity, with women making up at least 50 per cent of our staff, including on‑air, with hiring policies encouraging visible minorities, aboriginal staff and persons with disabilities. Our on‑air programming will include a strong presence of world music, aboriginal music, including, but not limited to our weekly show Planet PowWow and blues, reggae and folk. Our CCD will aim at world beat and other diverse music communities, and our scholarship activities will promote all new talent, including special initiatives for visible minority and aboriginal students.
LISTNUM 1 \l 173 Madam Chair, we believe that our application more than meets your criteria for evaluation.
LISTNUM 1 \l 174 One, we will provide a strong new, locally based voice.
LISTNUM 1 \l 175 Two, we are well financed.
LISTNUM 1 \l 176 Three, we have a strong broadcast managerial expertise in Jim and Don. Our programming will be crafted by Liz, a recognized leader in alternative formats. And we will bring a bright and fresh approach to working on CCD with Jaspreet.
LISTNUM 1 \l 177 Four, experience tells us that our business plan is realistic with a format based on comprehensive, high quality research.
LISTNUM 1 \l 178 Five, we have the courage of our convictions with a commitment of 40 per cent category 3 music.
LISTNUM 1 \l 179 Six, our Canadian content at 40 per cent exceeds the Commission's requirements.
LISTNUM 1 \l 180 Seven, fully half of our Canadian music will be from emerging artists.
LISTNUM 1 \l 181 Eight, our CCD initiatives are creative, aimed at the local independent music community, not only substantial cash contributions, but a daily commitment to independent and emerging artists.
LISTNUM 1 \l 182 We have crafted The Planet specifically to meet the needs of this unique city. I am excited to be part of this new project. It will reflect the new Vancouver.
LISTNUM 1 \l 183 Thank you for your time and attention, Commissioners. We are ready to answer any questions you may have.
LISTNUM 1 \l 184 THE CHAIRPERSON: Thank you, Mr. Badh, and to your fellow panelists.
LISTNUM 1 \l 185 I have a few questions on your application.
LISTNUM 1 \l 186 Firstly, on your minimum level of local programming, from the application and also from the presentation this morning, can you clarify what is that minimum level out of the broadcast week of 126 hours, what would be your minimum commitment?
LISTNUM 1 \l 187 MR. McLAUGHLIN: At present, Madam Chair, it's the full 126 hours. One of our programs, the aboriginal program, Planet PowWow, it is being produced for us, but once it is produced, it may be sold elsewhere. When that occurs, then it will no longer qualify if it is not produced specifically for us.
LISTNUM 1 \l 188 So, while our current position is 126 hours, that may drop to something around 120, if some of the other special programs lose their qualification if they get additional exposure.
LISTNUM 1 \l 189 THE CHAIRPERSON: So, would you commit to about 120 hours?
LISTNUM 1 \l 190 MR. McLAUGHLIN: I have no problem with that.
LISTNUM 1 \l 191 THE CHAIRPERSON: What amount of your regulated broadcast week will be live‑to‑air programming?
LISTNUM 1 \l 192 MR. McLAUGHLIN: We are planning on 100 per cent 6:00 a.m. to midnight, and we hope to do better than that once we get established.
LISTNUM 1 \l 193 THE CHAIRPERSON: So, you are not planning to have any voice tracked programming?
LISTNUM 1 \l 194 MR. McLAUGHLIN: That is not in our plans, no.
LISTNUM 1 \l 195 THE CHAIRPERSON: I think you mentioned a bit earlier about maybe syndicated programming. Are you planning to have any of that at this point?
LISTNUM 1 \l 196 MR. McLAUGHLIN: I am going to ask Liz to get involved in that. At the moment we don't have any syndication, but you never know when some might appear that fits our format very well.
LISTNUM 1 \l 197 Liz, would you like to add to that?
LISTNUM 1 \l 198 MS. JANIK: Presently all of the programming that is being created is going to be created specifically for The Planet. So there will be no syndication as far as I can see at this time.
LISTNUM 1 \l 199 THE CHAIRPERSON: Following Mr. McLaughlin's line, if you were to look at syndicated programming, what would be the sources that would interest you?
LISTNUM 1 \l 1100 MS. JANIK: I am not aware of any syndicated programming that would be the perfect fit for the Vancouver audience. I imagine if The Planet PowWow gets syndicated it would fall back into that category, but presently what we have planned is completely comprehensive to meeting our audience's needs.
LISTNUM 1 \l 1101 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 1102 On the spoken word, in your presentation today you mentioned 22 hours. That is on page 10 of your presentation. I believe that in your supplementary brief and the application, at that time it was 15.5 hours. I know that you also have a handout on the break down of your spoken word.
LISTNUM 1 \l 1103 Maybe you can walk me through this. Of the 22 hours, how many hours is newscasts?
LISTNUM 1 \l 1104 MR. McLAUGHLIN: Jaspreet is just grabbing her copy of that. I will start out with it.
LISTNUM 1 \l 1105 There are 64 newscasts per week, ten per day, Monday to Friday, seven per day Saturday and Sunday. That totals six hours and 24 minutes of newscasts, of which 75 per cent is news and 80 per cent of our news will be Lower Mainland and B.C. legislature.
LISTNUM 1 \l 1106 As you know, politics is a blood sport here.
LISTNUM 1 \l 1107 THE CHAIRPERSON: Seventy‑five per cent is what we would call pure news; right?
LISTNUM 1 \l 1108 MR. McLAUGHLIN: That is correct.
LISTNUM 1 \l 1109 THE CHAIRPERSON: And then 25 per cent would be other spoken word?
LISTNUM 1 \l 1110 MR. McLAUGHLIN: Yes, surveillance, sports, weather, that sort of thing.
LISTNUM 1 \l 1111 THE CHAIRPERSON: And you won't have a break down right now of the 25 per cent of spoken word, other. What would be the break down between, say, weather, and general surveillance.
LISTNUM 1 \l 1112 MR. McLAUGHLIN: Liz.
LISTNUM 1 \l 1113 MS. JANIK: In addition to the usual surveillance material that we would hear from our announcers throughout the broadcast day, in our feature programming, because The Planet Blues, Planet PowWow and Earth Song, these hosts are especially knowledgeable about the topics that they are presenting, and we are estimating approximately eight minutes for each hour of that particular kind of programming.
LISTNUM 1 \l 1114 Also, we have a program on Sunday nights, the Music B.C. Evolution, which is two hours showcasing all of independent artists' releases from the Vancouver area and from British Columbia. Again, there would be extensive dialogue and talk throughout that particular program.
LISTNUM 1 \l 1115 Then, when we talk about special events and concerts, you will find that we will give ourselves more time to bring these issues into the full light for our listeners. So, it is in these extended programs that we will have the additional talk quotient.
LISTNUM 1 \l 1116 THE CHAIRPERSON: I see. When you have the other spoken word and you list The Planet magazine, et cetera, that is supposed to be equivalent to 25 per cent of ‑‑
LISTNUM 1 \l 1117 MR. McLAUGHLIN: I am sorry, you are asking about in the news package, what is news and what is other issues?
LISTNUM 1 \l 1118 THE CHAIRPERSON: Exactly.
LISTNUM 1 \l 1119 MR. McLAUGHLIN: I am sorry, I misunderstood the question.
LISTNUM 1 \l 1120 Weather is about a 15 to 20 second portion of that, and then there will be about a 60 to 90 second sports cast and perhaps some traffic, depending on time of day. That is what will make up the rest of that package.
LISTNUM 1 \l 1121 My apologies.
LISTNUM 1 \l 1122 THE CHAIRPERSON: No, I probably wasn't clear enough in my question.
LISTNUM 1 \l 1123 Of your 22 hours of spoken word, could you break it down into approximately what is structured and what is unstructured spoken word?
LISTNUM 1 \l 1124 MR. McLAUGHLIN: Out of the 22 hours, five hours and 36 minutes, or approximately three minutes per hour in the regular flow programming would be unstructured.
LISTNUM 1 \l 1125 THE CHAIRPERSON: Just to confirm, then, the 22 hours and four minutes includes all structured and unstructured spoken word?
LISTNUM 1 \l 1126 MR. McLAUGHLIN: That is correct. Commissioner, just before we leave that, so I don't mislead you, when we say that, we are talking about spoken word with value as against just disc jockey patter, et cetera.
LISTNUM 1 \l 1127 THE CHAIRPERSON: So, the unstructured disc jockey banter is in addition to ‑‑
LISTNUM 1 \l 1128 MR. McLAUGHLIN: Correct.
LISTNUM 1 \l 1129 THE CHAIRPERSON: Moving on to Canadian content, I note that you have said you would commit to 40 per cent Canadian content. I understand it to be overall.
LISTNUM 1 \l 1130 As you probably know, the requirement for category 2 music is 35 per cent weekly and for category 3 is 10 per cent. Is your 40 per cent Canadian content for both of the category 2 and category 3 music combined?
LISTNUM 1 \l 1131 MS. JANIK: Yes, 40 per cent of category 2 will be Canadian artists and 40 per cent of category 3 will come from Canadian artists.
LISTNUM 1 \l 1132 Vancouver has such an amazing supply of independent recording artists from every imaginable music genre, including some that we have yet to put a label to.
LISTNUM 1 \l 1133 THE CHAIRPERSON: So, you would commit to 40 per cent of all category 2 music will be Canadian, and 40 per cent of category 3?
LISTNUM 1 \l 1134 MS. JANIK: That is correct.
LISTNUM 1 \l 1135 THE CHAIRPERSON: I know that you have asked that there not be any specific commitments to each sub‑category of category 3 music, even though you have identified the three sub‑categories that you would draw from would be jazz and blues, world beat and also folk.
LISTNUM 1 \l 1136 As you know, the jazz and blues, that sub‑category also has a requirement of a minimum being 20 per cent Canadian content. Within the confines of what you have described, the 40 per cent of cat 2 will be Canadian, 40 per cent of cat 3 will be Canadian. Would you also commit to that 20 per cent of the jazz and blues music that you will play will also be Canadian?
LISTNUM 1 \l 1137 MS. JANIK: Yes, we would certainly commit to that.
LISTNUM 1 \l 1138 THE CHAIRPERSON: And you would be willing to accept those as conditions of licence?
LISTNUM 1 \l 1139 MR. BADH: Yes, we would.
LISTNUM 1 \l 1140 THE CHAIRPERSON: Moving on to your CCD contributions, in your August 7th deficiency response, you had increased your over and above annual contribution by $100,000, I believe, so that the overall would be $600,000.
LISTNUM 1 \l 1141 The numbers from your application to what you submitted today don't really correspond. Can you explain that, please?
LISTNUM 1 \l 1142 MR. McLAUGHLIN: Is my face red? It is entirely my fault and let me explain how this came about.
LISTNUM 1 \l 1143 When we were going through and answering the questions from the Commission at the time we first submitted our licence, we realized we had made an error in our totals in what we wanted to do, so we added $100,000. At the time we made that addition, I neglected to remember the 20 per cent commitment that must go to FACTOR. I am a founder of FACTOR and it is my baby and I am the guy that forgot the number.
LISTNUM 1 \l 1144 In order to make the commitment to FACTOR match with the other work that we are doing, we have to add an additional $25,000 to be directed to FACTOR.
LISTNUM 1 \l 1145 THE CHAIRPERSON: I understand that. Not a problem.
LISTNUM 1 \l 1146 The only thing is based on the calculation and what you had increased as your over and above contribution in your August 7th letter, the contribution to FACTOR would be $120,000, not $125,000.
LISTNUM 1 \l 1147 MR. McLAUGHLIN: The problem is, if we go over $600,000 we have to give some of that overage to FACTOR as a percentage. So, it works out to an additional $25,000.
LISTNUM 1 \l 1148 In other words, Commissioner, 20 per cent of $625,000.
LISTNUM 1 \l 1149 THE CHAIRPERSON: I can't figure out where you got the extra $25,000, because you increase your original annual contribution from $500,000 by $100,000, which makes the total $600,000.
LISTNUM 1 \l 1150 MR. McLAUGHLIN: Correct, but we did not alter the FACTOR number at that time. It didn't occur to us.
LISTNUM 1 \l 1151 THE CHAIRPERSON: Yes, but 20 per cent of $600,000 is $120,000, isn't it?
LISTNUM 1 \l 1152 MR. McLAUGHLIN: I am sorry. I apologize for being slow today. Yes, your math is correct.
LISTNUM 1 \l 1153 THE CHAIRPERSON: The problem is we need to stick with the August 7th commitment because otherwise it is going to look like there is a further increase on hearing day.
LISTNUM 1 \l 1154 MR. McLAUGHLIN: We have no problem with that and we understand that position. We have no problem with that, Commissioner. The fact is we are likely going to spend that money, but we understand the position.
LISTNUM 1 \l 1155 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 1156 Maybe this is where you can walk me through. The additional 20 per cent, then, that you are contributing to FACTOR, is it coming out of any of your other identified initiatives?
LISTNUM 1 \l 1157 MR. McLAUGHLIN: It won't in the sense that we will spend the money necessary, but in the sense that the total must be $600,000 for the Commission's purposes, that is the only place to get it, if you will.
LISTNUM 1 \l 1158 THE CHAIRPERSON: How will this impact the other initiatives? How will it change the numbers there, then?
LISTNUM 1 \l 1159 MR. McLAUGHLIN: We can go in and just reduce by just a tiny bit here and there and we can certainly make it work. It certainly won't eliminate or substantially change any of the other commitments.
LISTNUM 1 \l 1160 THE CHAIRPERSON: It is not a big amount.
LISTNUM 1 \l 1161 MR. McLAUGHLIN: No.
LISTNUM 1 \l 1162 THE CHAIRPERSON: Could you please file an undertaking to show the revised allocation?
LISTNUM 1 \l 1163 MR. McLAUGHLIN: Certainly. No problem.
LISTNUM 1 \l 1164 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 1165 On the training and support initiatives, you had identified several organizations that will be receiving the funding, and I acknowledge the letters that you have filed from Capilino College and certain institutions.
LISTNUM 1 \l 1166 But I think the only confirmed partnership was with the Harris Institute for the Arts. The others were, at that point, more letters of support.
LISTNUM 1 \l 1167 Have more of them evolved into confirmed partnerships?
LISTNUM 1 \l 1168 MR. McLAUGHLIN: We have confirmed with each of those institutions that, should we be licensed, they will get that support from us, but until such time as we are fortunate enough to get a licence, we can't really do a memo of understanding and do all the details because we can't provide the funds. It is kind of a chicken and egg thing, Commissioner.
LISTNUM 1 \l 1169 THE CHAIRPERSON: So, if all of those institutions that you have identified are on board, what would you estimate would be the number of scholarships and awards that you would disperse?
LISTNUM 1 \l 1170 MR. McLAUGHLIN: We had started out planning to do scholarships. But when we went to the institutions themselves, they said scholarships would be great and we would happily love to have scholarships, but we said to them, well, obviously you are hedging a little bit; what would you like? Every single item that has come back has come from them rather than us.
LISTNUM 1 \l 1171 If we go the scholarship route, we can involve a couple or three students at each individual college. But if we go with what they need, we can involve literally hundreds of students and the public as well.
LISTNUM 1 \l 1172 So, the actual scholarships, it ends up that ‑‑ I will ask Liz to speak to it ‑‑ the Harris Institute is the only one where we are actually doing scholarships.
LISTNUM 1 \l 1173 MS. JANIK: The Harris Institute is based in Toronto and is internationally recognized as one of the top schools for producing people ready for the music industry.
LISTNUM 1 \l 1174 They have two program streams. One is for management of music artists, and the second one is for the production of music. The program itself is exceptionally expensive. So, there would be two scholarships each valued at $12,500 allocated for the Harris Institute. Those scholarships would be directed towards local Vancouver and British Columbia residents.
LISTNUM 1 \l 1175 THE CHAIRPERSON: For those participating institutions, would you be able to file with us the letters indicating that they will disperse the funds in accordance with our commercial radio policy?
LISTNUM 1 \l 1176 MR. McLAUGHLIN: Absolutely, that is not a problem.
LISTNUM 1 \l 1177 THE CHAIRPERSON: Your projection of audience shares looks very, very optimistic, particularly with a format of triple A which isn't really proven in Canada yet. I think your own forecast is that you will have an audience share of 5.5 per cent in year 3, growing to 8 per cent by year 7.
LISTNUM 1 \l 1178 Perhaps maybe just on the audience share, could you explain why your projection is so optimistic?
LISTNUM 1 \l 1179 MR. McLAUGHLIN: Certainly, I am happy to.
LISTNUM 1 \l 1180 I am going to turn this over to David Oakes who is far more expert than I, but I just wanted to outline to you, before I do that, that when it came to the research our brief to David was that we wanted research on the entire market and we wanted to find the unmet need in the market. We didn't go in with any pre‑conceived ideas as to what direction we might go with the station.
LISTNUM 1 \l 1181 We were extremely happy with the results when David came back to us. David.
LISTNUM 1 \l 1182 MR. OAKES: In doing the projections, I set them up so the initial projections were higher and I whittled them down for a number of reasons. My original projection for audience share was 25 per cent. The hours tuned share was a bit higher, and I took that down to 8 per cent based on any impacts we would have with other stations.
LISTNUM 1 \l 1183 THE CHAIRPERSON: So, your answer is that you believe your research substantiates your conclusion that you could reach 8 per cent audience share by year 7?
LISTNUM 1 \l 1184 MR. OAKES: Yes, and perhaps before that.
LISTNUM 1 \l 1185 THE CHAIRPERSON: Then on revenue growth, in Vancouver I think the compound annual growth since 2003 is 5.3 per cent. Then in your own supplemental brief you assumed a growth rate in Vancouver market of 3 per cent.
LISTNUM 1 \l 1186 Yet, I think you have projected a growth rate between years 4 and 7 of 14.5 per cent in revenue. That is five fold of what you have projected. Could you explain that, please?
LISTNUM 1 \l 1187 MR. McLAUGHLIN: Yes. I am going to get Don Kay to add to this, but that is a combination of things. As the station matures, we can increase our rates, as well as increase our sell through, in other words the number of units sold, while the market grows around us. So, we have a rising tide that takes all ships up with it at the same time, plus we are gaining more audience and more strength in the marketplace and so we can increase our rates and sell more spots.
LISTNUM 1 \l 1188 So, it compounds the growth. Having done this before, it is a rather euphoric effect, actually.
LISTNUM 1 \l 1189 THE CHAIRPERSON: And you are confident that the compound effect will result in a growth that is at least three times what the market growth is?
LISTNUM 1 \l 1190 MR. McLAUGHLIN: Right now the market is growing at over 5 per cent a year. We use 3 per cent for all these calculations. So, yes, when we are able to increase our rates as our audience grows and we are able to sell more commercial time, again as our audience grows, it does have that multiplying effect very quickly.
LISTNUM 1 \l 1191 THE CHAIRPERSON: On that basis, you believe that your projection of revenue growth of 14.5 per cent between years 4 and 7 is realistic?
LISTNUM 1 \l 1192 MR. McLAUGHLIN: I think it is conservative. I have done that in this market before.
LISTNUM 1 \l 1193 THE CHAIRPERSON: What if your projections are not met? How would you meet the resulting losses?
LISTNUM 1 \l 1194 MR. McLAUGHLIN: I will ask my partner to answer that.
LISTNUM 1 \l 1195 MR. BADH: Commissioner, Mr. Oakes' research is very conservative. He only counted the most likely, and our revenue growth is relatively modest compared to the market in the first few years. We are a well‑financed organization, and we believe that Vancouver is the engine for the B.C. economy and B.C. is the engine for the Canadian economy, and I think it is a wonderful place to do business, and as an owner entrepreneur, I am willing to take that risk, Commissioner.
LISTNUM 1 \l 1196 THE CHAIRPERSON: How would you fund that risk?
LISTNUM 1 \l 1197 MR. BADH: It is on the financial sheets that I have handed. It is in there.
LISTNUM 1 \l 1198 THE CHAIRPERSON: So you would be prepared to personally underwrite the ‑‑
LISTNUM 1 \l 1199 MR. BADH: Definitely. I have full confidence in my team, Commissioner.
LISTNUM 1 \l 1200 THE CHAIRPERSON: Would you resort to, say, program changes, program cuts to meet any losses?
LISTNUM 1 \l 1201 MR. McLAUGHLIN: We don't believe that would be necessary. This is a major market and we believe we have to provide a major market service at all times to be successful.
LISTNUM 1 \l 1202 THE CHAIRPERSON: I have a couple of questions ‑‑ don't hold me to a couple ‑‑ some questions arising from your presentation.
LISTNUM 1 \l 1203 First, your target skews a bit older in the demographics. Does your market research, Mr. Oakes, show that the older demographics in Vancouver are underserved?
LISTNUM 1 \l 1204 MR. OAKES: In the sense of there are some things missing: Alternative rock and the four specialty styles.
LISTNUM 1 \l 1205 I just want to point out, I have the feeling that with most broadcasters and commissioners, they look at specialty music and think we are pushed to put that on radio, but we don't really believe in it. Quite frankly, I have never seen a higher demand for those styles. I have seen these styles, the demand for them in other markets go up and I have seen it in Vancouver go up, but I have never seen it this big before. Blues is the number five style out of the 29 styles I chose to run by the respondents.
LISTNUM 1 \l 1206 THE CHAIRPERSON: How would you explain that you see such a demand here in Vancouver?
LISTNUM 1 \l 1207 MR. OAKES: Two reasons. The baby boomers are getting older, loving the music that they have and wanting to get back to their roots.
LISTNUM 1 \l 1208 Classic rock is still a very big format. I like classic rock, but I have heard a lot of those songs a lot of times.
LISTNUM 1 \l 1209 The blues has been growing gradually through the years. The world beat is fairly new because of immigration driving it and it is really second generation, third generation, fourth generation producing music and it rubs off in the markets.
LISTNUM 1 \l 1210 THE CHAIRPERSON: Mr. Badh or Mr. McLaughlin, in response to one of the interventions, in your reply you stated that you would accept a condition of licence not to broadcast in any South Asian language. Is that still true?
LISTNUM 1 \l 1211 MR. BADH: That is true.
LISTNUM 1 \l 1212 THE CHAIRPERSON: So you would be prepared to accept such a condition of licence?
LISTNUM 1 \l 1213 MR. BADH: Yes, Madam Chair.
LISTNUM 1 \l 1214 THE CHAIRPERSON: In your presentation today ‑‑ and it is a reality that Vancouver is one of the most culturally diverse cities in Canada ‑‑ are you going to be targeting the ethnic communities in your station in the programming?
LISTNUM 1 \l 1215 MR. BADH: Commissioner, this is a mainstream English‑language station. People like myself, Jaspreet and others in the audience, English is the common thread that weaves everyone together.
LISTNUM 1 \l 1216 This is not an ethnic station. This is an English mainstream station. We will be going after English mainstream audiences.
LISTNUM 1 \l 1217 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 1218 Do you plan on broadcasting any of the spoken word part in language other than English?
LISTNUM 1 \l 1219 MR. BADH: No, but Planet PowWow is the only program that might, but even that is emphasized in English.
LISTNUM 1 \l 1220 THE CHAIRPERSON: On one of the CCD initiatives that you mentioned on page 11 of your presentation today, which is The Planet Music and Green Festival, a weekend event highlighting best practices in recycling, reusing, reducing, et cetera, along with concerts from independent local artists, how are you going to ensure that the funding for an initiative like that is one that would meet the CCD criteria of production of music, spoken word rather than spending the funds on the go green initiative?
LISTNUM 1 \l 1221 MR. McLAUGHLIN: I will start with an answer to that, but then I am going to ask Ms Janik to contribute.
LISTNUM 1 \l 1222 First of all, in all our projects that we outlined in our CCD, the station itself is responsible for the organizing and funding of each project. None of that is included in the CCD.
LISTNUM 1 \l 1223 In that particular one, it allows us to accomplish two things at the same time. It allows us to put on a green festival and the station is going to spend a lot of time in that area, but it gives us a platform for the artists, and that money is almost 100 per cent for the artists.
LISTNUM 1 \l 1224 Liz.
LISTNUM 1 \l 1225 MS. JANIK: The funds that we have set aside for that are specifically to pay the artists for the performances and to provide the staging, lighting and technicians that they need to put on the show. So, this would be a showcase opportunity for Canadian artists.
LISTNUM 1 \l 1226 The rest of the cost, the green side of the costs will come from the participants on that side of the project, and so that would come from sponsorships from the green community.
LISTNUM 1 \l 1227 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 1228 Unlike some of the other applicants, you have not identified or given any indication as to whether there is an alternate frequency that would be suitable for your station. Do you have any comment on that or do you have an alternate frequency identified?
LISTNUM 1 \l 1229 MR. McLAUGHLIN: We did not identify an alternate frequency. However, if there is one out there that the Commission would like us to use that works, we would be happy to consider it.
LISTNUM 1 \l 1230 Let me say that at the time this was the only frequency any of us were aware of. It is over a year ago now that we actually first started dealing with this frequency. So, other people have had some time to develop some other issues.
LISTNUM 1 \l 1231 The other thing is that a couple of those frequencies that are kind of floating around out there at the moment don't really serve Vancouver particularly well; they may work for a specific area. And then the CBC has identified that one particular frequency, 88, I am sorry, I don't remember, point ‑‑
LISTNUM 1 \l 1232 THE CHAIRPERSON: 88.1.
LISTNUM 1 \l 1233 MR. McLAUGHLIN: .1, I apologize. Although why they would want to walk away from one of the best AM signals I have ever seen for the troubles we all have with FM in this community, I have no idea.
LISTNUM 1 \l 1234 THE CHAIRPERSON: How many licensees do you think Vancouver, this market, could sustain?
LISTNUM 1 \l 1235 MR. McLAUGHLIN: As many as you have frequencies to give.
LISTNUM 1 \l 1236 THE CHAIRPERSON: If you were to be licensed, which other applicant do you think will compliment you the best?
LISTNUM 1 \l 1237 MR. McLAUGHLIN: Obviously someone like one of the religious applicants would be furthest away. But let me be very clear.
LISTNUM 1 \l 1238 We are the only applicant proposing to play 40 per cent of our music from category 3. That alone sets us a long ways apart from any other applicant.
LISTNUM 1 \l 1239 We have no concerns about any of the other applicants that you might licence. We would welcome whatever the Commission felt was the best route to go.
LISTNUM 1 \l 1240 THE CHAIRPERSON: I think you have answered the next question.
LISTNUM 1 \l 1241 I will ask my other colleagues if they have any questions. I believe Commissioner Cugini has some.
LISTNUM 1 \l 1242 COMMISSIONER CUGINI: Thank you.
LISTNUM 1 \l 1243 Ms Janik, I can't have you in the room and not ask you questions because I did listen to you a lot on CFNY, and if that dates us, everybody else can do the math.
LISTNUM 1 \l 1244 MS. JANIK: Let's hope they're as good at math as Mr. McLaughlin.
LISTNUM 1 \l 1245 MR. McLAUGHLIN: You're obviously very young.
LISTNUM 1 \l 1246 MS. JANIK: Where does that leave me, Jim?
LISTNUM 1 \l 1247 COMMISSIONER CUGINI: I'm looking at your appendix 8‑c where you file your sample playlist. You do obviously have quite a number of genres listed of music. What I am wondering is what is the common thread that is going to tie adult rock, blues, 80s, alternative and so on, on this station?
LISTNUM 1 \l 1248 MS. JANIK: If you listened to CFNY back in the day you probably were a listener that loved music. It didn't matter what kind of music, if it was fresh, interesting and exciting to you, you probably enjoyed it.
LISTNUM 1 \l 1249 Your personal library or your iPod, just like mine, is filled with all kinds of music. So, the common denominator is people who love music and, even though regardless of age, they are still interested in exploring music.
LISTNUM 1 \l 1250 So, among some of my colleagues, they have moved on to explore world beat, they love ambient music, they have jazz, they have blues, they still like some of the newer artists like Brett Dennen that came up during the video, which is reminiscent of Paul Simon's sound. So the common denominator is a love of music and an environment where you can listen to the music as individuals with different backgrounds and tastes and preferences, but you have a common love of music.
LISTNUM 1 \l 1251 COMMISSIONER CUGINI: Obviously your position is that no other radio station in the market offers first of all this kind of mix of music?
LISTNUM 1 \l 1252 MS. JANIK: Definitely. In the radio industry in general, we have gotten so used to pigeonholing music styles with certain genders. There is a certain kind of limited approach to how radio can be done. One of my clients in the United States, we created an alternative format for them that you would have recognized as sounding very similar to what CFNY sounded like during its hay‑day years in the mid 80s.
LISTNUM 1 \l 1253 COMMISSIONER CUGINI: The spirit of radio.
LISTNUM 1 \l 1254 MS. JANIK: The spirit of radio. It created a great controversy in the United States, that how could this radio station play grunge and dance, that simply could not happen.
LISTNUM 1 \l 1255 But we had the benefit of research that said to us the largest group of alternative fans were equally in love with grunge as they were with the new dance music. It is that kind of passion for music that somehow falls off the plate with most of the mainstream formats.
LISTNUM 1 \l 1256 COMMISSIONER CUGINI: Thank you. Thank you very much. Those are all my questions.
LISTNUM 1 \l 1257 MR. McLAUGHLIN: Commissioner, if I could jump in there. That's the same passion that we so obviously found in the research that gives us our substantial level of confidence about our share of tuning.
LISTNUM 1 \l 1258 The audience is telling us, we are out here, bring us the station, we are ready for you. That is why we crafted the station the way we did. So, we are highly confident about our share numbers.
LISTNUM 1 \l 1259 MS. JANIK: If I may add one more point. That particular station that I was referring to became the number one alternative station in the United States among 120 other stations in the format with a 10.9 share 12 plus.
LISTNUM 1 \l 1260 COMMISSIONER CUGINI: Thank you.
LISTNUM 1 \l 1261 THE CHAIRPERSON: Commissioner Duncan.
LISTNUM 1 \l 1262 COMMISSIONER DUNCAN: I just had a couple of questions, and it may well be in your research and I just didn't have a chance to go through it.
LISTNUM 1 \l 1263 In your comments this morning you mention that you tested 29 different individual styles of music. Then you go right on to say then you asked how likely they would be to listen to each of seven formats. I just wondered how you picked the seven and why you picked seven, not five, not nine?
LISTNUM 1 \l 1264 MR. McLAUGHLIN: I will ask David to answer that. David.
LISTNUM 1 \l 1265 MR. OAKES: Those seven styles, what I did, the first step is to look at what already exists in the way of formats in the market, and then from past experience I look at formats that are formats that are not in the market, and then I picked out seven.
LISTNUM 1 \l 1266 It wasn't a magical number or anything. It is just of the inventory of formats I have and the ones that exist in the market, I just subtracted them and came up with the seven.
LISTNUM 1 \l 1267 COMMISSIONER DUNCAN: There are seven not in the market or not predominant in the market?
LISTNUM 1 \l 1268 MR. OAKES: Right.
LISTNUM 1 \l 1269 COMMISSIONER DUNCAN: There are triple A format, we authorized a signal for a new cat in Calgary, triple A, and I think there may have been some other conversions to that format in Canada in recent years.
LISTNUM 1 \l 1270 I am wondering if you considered their success when you were considering this format or is your particular version of triple A so different that it is irrelevant?
LISTNUM 1 \l 1271 MR. McLAUGHLIN: Liz.
LISTNUM 1 \l 1272 MS. JANIK: This format is made especially for Vancouver. While the name of the format is used here and there throughout Canada and the United States, there really isn't much parody between one station and another because of the market influences. It depends on the history of the market, what music styles are played; it depends on the competitive issues that are in the market and also the character of the market.
LISTNUM 1 \l 1273 While it is of interest to me particularly to look over the fence and see what everybody else is doing, it would be a mistake on my part to take what other people are doing and assume that it would work in Vancouver.
LISTNUM 1 \l 1274 Perhaps another example of some of the successful progressive stations, you could look at early CHUM‑FM of the late 60s and 70s, CHOM‑FM in Montreal during the same time period, and the very earliest days of CHEZ‑FM. Those three heritage formats were called progressive FM and were successful. They are probably more in keeping with the feel and the commitment to music that we are considering for The Planet.
LISTNUM 1 \l 1275 MR. OAKES: If I can just finish off the question, initially in those seven formats there was no triple A. It came out of the analysis.
LISTNUM 1 \l 1276 COMMISSIONER DUNCAN: My understanding was that the most successful stations tried to appeal to the broadest audience and that to do that there had to be a consistency within their music so that the listener wanted to listen and always know they were going to get that type of music. They weren't interested in this five or six or this great variety.
LISTNUM 1 \l 1277 Am I wrong in that, that is how it was and now the world has changed and this is where we are headed?
LISTNUM 1 \l 1278 MS. JANIK: I would not say that you are inaccurate. There are some audiences that prefer rock and rock only and some audiences that prefer urban and urban only. But most music fans, whether they are top 40 and enjoying the mix of blues, pop, rock and urban on a top 40 station or if they are a little bit more developed in their music taste and are looking for something along the alternative lines, they are very comfortable with the mix of music.
LISTNUM 1 \l 1279 The music you heard as the bed to the video this morning, I am not sure how your ears heard it, but for me it was a blend of music that picked me up and carried me along and made me want to tap my toes and sing along. It is that quality of how you put the music together so that you have this flow that carries you through each hour. That is what the appeal is.
LISTNUM 1 \l 1280 So, yes, there are still audiences out there that are niched into this sound or that sound, but when you get to music fans, they are definitely very interested in a wider variety of music styles.
LISTNUM 1 \l 1281 MR. OAKES: Once again, just to finish off, my analysis really shook out the adult alternative audience. Originally, it came out of a format I called adult rock, and once I took a look at the audience and their music demands of the 29 styles, sure, they liked adult rock, but they had all these specialty music styles that they liked as well.
LISTNUM 1 \l 1282 So, the first thing I do after that is I test to see if they fit in with the mainstream styles. Not only did they fit in, many of them were as popular as the mainstream.
LISTNUM 1 \l 1283 COMMISSIONER DUNCAN: Just a question for Mr. McLaughlin, then.
LISTNUM 1 \l 1284 Is it your thought that you would get a listener and that listener would stay just on your station all the time or would they move around? What do you expect from the listener?
LISTNUM 1 \l 1285 MR. McLAUGHLIN: We are obviously going to have a core audience that hopefully loves our radio station a lot, and hopefully that is a big audience. But realistically we will have a core that will use our station more than any other, but we will also have a number of listeners who will use us at different times of the day, depending on what they are looking for in their listening.
LISTNUM 1 \l 1286 They may use us in the evening when they are interested in the music that we are playing at that time, and use a news talk station on their drive to work in the morning, for example.
LISTNUM 1 \l 1287 It is really a variety. What we do know is that the people who love music really showed up in huge numbers in David's research, which is what gives us such a high level of confidence in our numbers.
LISTNUM 1 \l 1288 COMMISSIONER DUNCAN: Just one last question. In the market, in looking at the market, a number of the companies have three, four stations, two stations, so do you anticipate any particular problem as a stand‑alone? Do you have synergies elsewhere?
LISTNUM 1 \l 1289 MR. McLAUGHLIN: We do not. We are a small stand‑alone company. Are we afraid of the big guys? No. And let me tell you why. Because we are here in Vancouver, and this is where it happens and this is where the listeners are. We don't need decisions from Toronto. When we fail, we have to pick ourselves up and go forward. It is nobody else's fault but ours. We are ready to go to work and do the job. It doesn't concern us in the least.
LISTNUM 1 \l 1290 MR. BADH: If I may add, Jim, there are other stand‑alone successful stations in Canada. Yes, there would be advantages to us being larger and I think it did show up in the CCD numbers. If I look at some of the larger companies that have more than $1 million a year on CCD, and yet they project to be losses, no, we are not that big. Hopefully we will get that big one day, but for the time being I think our business plan is realistic and attainable and our financial resources can sustain this business plan. As an owner I am willing to take that risk, Commissioner.
LISTNUM 1 \l 1291 COMMISSIONER DUNCAN: Thank you very much.
LISTNUM 1 \l 1292 THE CHAIRPERSON: Commissioner Menzies.
LISTNUM 1 \l 1293 COMMISSIONER MENZIES: Thank you. I just want to touch on something regarding your plans for news.
LISTNUM 1 \l 1294 It struck me that while your core is obviously the music, that one of the features you emphasized was that you would have a different approach to news, with an emphasis on arts, culture, the environment and health and lifestyle; that with a four‑person news department, plus producer, you're going to do 64 news casts a week, plus seven one‑hour daily summaries.
LISTNUM 1 \l 1295 I guess my questions are twofold. The first one is how much of that daily one‑hour program will be local? Secondly, given that journalists or news gatherers tend to travel in packs and you are moving off the beaten path a little, or aren't you? My read of it is that you are moving off the beaten path a little bit with your focus, which I think is great, but it is hard work for a four‑person department. Isn't that too much to ask for a small department? Won't it get watered down eventually?
LISTNUM 1 \l 1296 MS. JANIK: One of the common characteristics of this audience is that they are very vital and very active in the world around them. A lot of radio stations have, over the past decade or so, identified a news talk station in the market and have determined that if people really want news, they are definitely going to go to that news and talk station, so they tend to give news headlines.
LISTNUM 1 \l 1297 We are looking for a more comprehensive approach to the format where we will be the one station where these adults, and I think 82 per cent of our listeners are over the age of 30, will be the one station in the market where they can tune in in the morning and get everything they need to know, in addition to the music mix that we have described, and the same thing in the afternoon.
LISTNUM 1 \l 1298 With weekends, I think it would be a competitive advantage for us to give news coverage even on the weekends. Yes, we have a very small news department, but with careful scheduling and planning, I have no doubt that we will be able to meet these commitments that we have outlined.
LISTNUM 1 \l 1299 COMMISSIONER MENZIES: My fault for asking too complicated a question. How much of that one‑hour program each night will be local?
LISTNUM 1 \l 1300 MS. JANIK: The content of the show will be directed to the local audience. So, we are anticipating at least 80 per cent of it would have that local focus, would focus on issues that are relevant to Vancouver today. If you like, Jaspreet could give you an itemization, if that show is on the air today, what are some of the topics that would be of interest to our listeners.
LISTNUM 1 \l 1301 MS GILL: Also to add a little bit to that, 80 per cent of the news would also encompass the legislation from Victoria. That will be also in there.
LISTNUM 1 \l 1302 For a sample show program, say at 1:00 o'clock we will have the mayoralty election that is going on right now as part of our ongoing coverage of the upcoming civic elections. So, we would be interviewing a candidate, for example, Peter Ladner, asking a polster what she is seeing so far.
LISTNUM 1 \l 1303 At 1:12 approximately, Tambura Rasa. It is one of the bands that was in our video there. So they can talk about their CD release that is coming up, and they will be playing live at Lime on Commercial Drive. We can play a clip and also have them in a small interview.
LISTNUM 1 \l 1304 At 1:24 we can talk about the carbon tax story that is going on right now and how B.C. is taking a lead on proposing legislation to enact that carbon tax. We can talk to Minister Penner.
LISTNUM 1 \l 1305 Also, at 1:36 there was just a recent multi‑cultural health fair that was held at the Croatian Cultural Centre. We can go over the various kiosks, interview various people and what they found that was beneficial there and also add to The Planet.
LISTNUM 1 \l 1306 At 1:48 first nations people at the Urban Reserves in Vancouver want to put on signs at Lion's Gate bridge. We can talk about that and how they feel about having those signs on their land and how it is ruining their view and everything like that.
LISTNUM 1 \l 1307 MR. McLAUGHLIN: The magazine is not a news show, but may have some news content in it.
LISTNUM 1 \l 1308 COMMISSIONER MENZIES: But it is local, is it? That is really what I am trying to understand.
LISTNUM 1 \l 1309 MR. McLAUGHLIN: Yes, predominantly local. Everyone on the station is responsible for contributing to it.
LISTNUM 1 \l 1310 COMMISSIONER MENZIES: You?
LISTNUM 1 \l 1311 MR. McLAUGHLIN: Absolutely.
LISTNUM 1 \l 1312 COMMISSIONER MENZIES: Good. Just to clarify. Just so I understand it fully, because when you talk about treating arts and culture as news, which I really find an engaging concept, are you moving that far away from the beaten path? Are you going to do cops and courts or are you ‑‑
LISTNUM 1 \l 1313 MR. McLAUGHLIN: I think the simple answer is no. In the newscasts, the ten newscasts a day and that sort of thing, that will be similar to what I think you envision as news. It is in the other areas and in the magazine show that we will move more towards the arts and culture side of things.
LISTNUM 1 \l 1314 COMMISSIONER MENZIES: I understand that. Thank you.
LISTNUM 1 \l 1315 THE CHAIRPERSON: Some follow‑up questions.
LISTNUM 1 \l 1316 The audience that you are targeting, you have identified a broad group of 60 to 64, with a median age of 43. What is your core audience group?
LISTNUM 1 \l 1317 MR. OAKES: When I hear of core audience, to me that is a listener who says this station is the one station I listen to most often.
LISTNUM 1 \l 1318 Looking at that type of a listener, it narrows the age range and it is more like 35‑54. But when it comes to musical styles that they like, they are not that different from the rest that I call cross‑tuners; the other ones would be listening more to another station. They will listen to you, they will tune to you, but they won't give you as many hours tuned as another station. But their musical style demands are pretty close to the cores, and it is balanced male and female as well.
LISTNUM 1 \l 1319 THE CHAIRPERSON: It just looks like a pretty wide range.
LISTNUM 1 \l 1320 MR. McLAUGHLIN: I think the issue here that may be a little bit confusing is that our core audience is people who like music, and that is not an age; it is a different measurement.
LISTNUM 1 \l 1321 For instance, as a generality, we know the young people like the latest new musical styles and so we can categorize them as teen to 24 or something like that particular station. What we are going to do with our station, it is for people who like music and they are not a specific age.
LISTNUM 1 \l 1322 MS. JANIK: I sometimes refer to the alternative format as a format about attitude. It is a youthful vital attitude that is the common characteristic between these listeners. It is a wide age range, but it is interesting to me how various people that I played samples of the station for between the ages of 30 and 64 all respond to it based on the feel and the sound.
LISTNUM 1 \l 1323 MR. OAKES: If you look at a classic rock audience, they are probably wider than we are.
LISTNUM 1 \l 1324 THE CHAIRPERSON: I would like you to comment on this. I think we all know real music lovers, and from what I see, these real music lovers who have very eclectic tastes in music or are more adventurous in the music that they listen to don't tune to radio. You can say that it is a chicken and egg situation, it is because there is nothing on conventional radio for them.
LISTNUM 1 \l 1325 With new media, a lot of these music lovers have gone to new media or their iPods and all. How do you plan to bring this group back to radio?
LISTNUM 1 \l 1326 MR. OAKES: This is not an easy question to answer. Maybe I can answer it this way.
LISTNUM 1 \l 1327 About 98 per cent of the people in Vancouver already listen to radio. So, you are not talking to somebody that is not listening to radio at all period. You are talking about somebody who is spending a lot less hours tuned.
LISTNUM 1 \l 1328 If you look at younger listeners now, teens up to 25, the iPod and the internet is taking a lot of time away. For years the Commission didn't allow CHR on FM, and that also took a lot away. But even then teens still listened to radio.
LISTNUM 1 \l 1329 I am not exactly sure ‑‑ do you want to talk about this?
LISTNUM 1 \l 1330 MS. JANIK: I think it is important to emphasize that the research was done with radio listeners. So what music fans tend to do, if there is not their very own station, is that they will skip from one station to another to find a song that they are interested in or a style of music that they are interested in at the moment.
LISTNUM 1 \l 1331 We are actually talking to radio listeners and it was radio listeners who sent back a very clear message that they love world beat and they love folk music and they love blues, and when answering the question, would you agree that the new FM should play this kind of music, we had an exceptionally high number of people who agreed to that, in some cases better than 40 per cent.
LISTNUM 1 \l 1332 MR. OAKES: In my research, I estimated that about one‑third of our hours tuned to the station will come from new hours tuned in the market.
LISTNUM 1 \l 1333 MR. BADH: If I may add Commissioner, one of the successes behind a successful radio station is being local in the community and I think that is what we represent. With us being local grassroots, we will reach out, we will be in the community and we will be building these bridges.
LISTNUM 1 \l 1334 THE CHAIRPERSON: The two‑thirds that are from the existing stations, listeners, did you have an idea of which stations you will be drawing them from?
LISTNUM 1 \l 1335 MR. OAKES: Yes. Basically what I did was I took a look at what our audience was currently listening to. In keeping with their wide music styles, not only was it just about every station in the market, including country and classical, but it was also news talk, sports. So, the two‑thirds are going to come from a vast array of radio stations, and from my estimates I can't see any one station being hurt by us.
LISTNUM 1 \l 1336 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 1337 The last question is: This is your pitch of why do you think you are the best?
LISTNUM 1 \l 1338 MR. BADH: Thank you, Madam Chair, Commissioners.
LISTNUM 1 \l 1339 Diversity has become a major issue in our society over the past few years and has been at the forefront in broadcasting as well. Whether it is the Commission's policies to encourage cultural diversity or your recent proceedings to encourage diversity of voices in broadcasting, diversity has become a watch word for the industry. We believe that diversity is a factor that distinguishes our application from others.
LISTNUM 1 \l 1340 Diversity of ownership. We will be a new and distinct voice in the Vancouver radio community. We will be locally owned with a new group of owners, but we are also a group with a wealth of broadcast experience and the financial resources necessary to succeed in this competitive market.
LISTNUM 1 \l 1341 Diversity in programming. Our research has identified an eclectic format that provides a wide range of compatible music styles not currently available in Vancouver. We have made strong commitments in this regard.
LISTNUM 1 \l 1342 One, 40 per cent category 3 music as a condition of licence, and reasonably distributed throughout the week.
LISTNUM 1 \l 1343 Two, 40 per cent Canadian content in both category 2 and category 3 music.
LISTNUM 1 \l 1344 Three, 20 per cent of our weekly spins will be from emerging Canadian artists.
LISTNUM 1 \l 1345 Four, our approach to Canadian content and development reflect with our local roots.
LISTNUM 1 \l 1346 Cultural diversity.
LISTNUM 1 \l 1347 Number one, in ownership, if licensed, I will be the only visible minority owner of a mainstream radio station in Vancouver.
LISTNUM 1 \l 1348 Two, in employment practices, we will hire a work force reflective of the new Vancouver, with 50 per cent women and a proactive policy to reach out to visible minorities, aboriginal Canadians and persons with disabilities.
LISTNUM 1 \l 1349 Three, in music, with a strong presence of world beat music, reggae, blues, as well as aboriginal music.
LISTNUM 1 \l 1350 Commissioners, we are the newcomers to the broadcasting community as a company, but we bring a wealth of experience to the table. We will bring a new sound to Vancouver, one designed to meet the new face of Vancouver, diverse, eclectic: The Planet.
LISTNUM 1 \l 1351 Thank you for your attention and your questions.
LISTNUM 1 \l 1352 THE CHAIRPERSON: Thank you. I believe legal counsel has a question.
LISTNUM 1 \l 1353 MS PINSKY: I would like to set out some deadlines for the filings of the two undertakings that you made.
LISTNUM 1 \l 1354 In the first place, you undertook to file some revised allocations for the CCD. Could you file that, please, by the end of Wednesday of this week?
LISTNUM 1 \l 1355 MR. McLAUGHLIN: Yes, no problem.
LISTNUM 1 \l 1356 MS PINSKY: Secondly, you undertook to file some letters from various institutions in relation to your CCD commitments. When do you think you would be in a position to file those?
LISTNUM 1 \l 1357 MR. McLAUGHLIN: Before the end of this hearing process.
LISTNUM 1 \l 1358 MS PINSKY: Thank you very much.
LISTNUM 1 \l 1359 THE CHAIRPERSON: Thank you, panel.
LISTNUM 1 \l 1360 Let's take a break now for 15 minutes and be back at 11:25.
‑‑‑ Upon recessing at 1108 / Suspension à 1108
‑‑‑ Upon resuming at 1127 / Reprise à 1127
LISTNUM 1 \l 1361 THE SECRETARY: Please take a seat.
LISTNUM 1 \l 1362 We will now proceed with item 2, which is an application by Touch Canada Broadcasting for a licence to operate an English‑language FM commercial specialty radio programming undertaking in Vancouver.
LISTNUM 1 \l 1363 Please introduce yourself and your colleagues, and you will then have 20 minutes for your presentation.
LISTNUM 1 \l 1364 Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 1365 MR. ALLARD: Thank you very much.
LISTNUM 1 \l 1366 Madam Chair, Commissioners and CRTC staff, my name is Charles Allard and I am a Director and President of Touch Canada Broadcasting 2006 Inc., the general partner of Touch Canada Broadcasting Limited Partnership, the applicant.
LISTNUM 1 \l 1367 It is a pleasure to be back in Vancouver where I was raised through my elementary to university school years and where I still own and maintain a residence.
LISTNUM 1 \l 1368 We are very excited to be here today to have the opportunity to apply for this very unique and scarce FM frequency for a contemporary gospel music radio station.
LISTNUM 1 \l 1369 I would like to introduce our panel here with me today. On my right is Allan Hunsperger, founder and Director of Development for Touch Canada and its predecessor entities. Next to him is Bev Karbonik, our Business Manager. To my left is Malcolm Hunt, Network Programming Director, and next to him is Richard Burrows, Retail Sales Manager.
LISTNUM 1 \l 1370 Behind me, to my right is Maureeta Percy, Vice‑President of Ipsos‑Reid. To the left of Maureeta is Brandon Wall, a well‑known local Vancouver adult contemporary recording artist. For ease of identification, we have attached a seating chart at the end of these remarks.
LISTNUM 1 \l 1371 We would like to note up front that in our application in section 6.1 we showed the market share at 7 per cent, but our revenue numbers were based on our experience in Edmonton and Calgary which, in the past, have always been between 2 and 4 per cent market share. Our experience in starting up stations and the fact that we will be launching with two American broadcasters with similar formats, one of whose signals has been impaired but is still present in the Vancouver market. Our estimate of actual revenues is based on a market share of between 2 and 3 per cent.
LISTNUM 1 \l 1372 MR. HUNSPERGER: With the introduction of adult contemporary gospel music in Edmonton over 14 years ago in the AM format, we have been pleased with the growth of and the general awareness and acceptance we are starting to see in western Canada, especially in Alberta. This is starting to show up in our marketing studies, and it was overwhelmingly apparent when we initially spoke with businesses and the general public who asked us to start a radio station in Grande Prairie, Alberta, in 2005 after listening to our existing stations. We received a licence for Grande Prairie on December 22, 2006 (Decision 2006‑623) and that station commenced operation on November 28, 2007.
LISTNUM 1 \l 1373 We closely watched the CRTC's proceedings in 2006 when the CRTC licenced a new FM radio station for Greater Vancouver which significantly limited the existing praise and worship station, Praise 106.5 crossing the border, which many of us listened to while visiting the Vancouver and Victoria areas. Touch Canada made a commitment to ourselves that we would submit an application for gospel radio, and we advised our engineering firm to let us know when the 104.1 frequency for Vancouver was available, as we were determined to apply in order to restore the gospel music format by a Canadian broadcaster in Vancouver and repatriate some of the lost listeners. We found out about the release of the frequency in February of last year and promptly set to work to determine if there was still the demand for a gospel format.
LISTNUM 1 \l 1374 There is no question in our minds, given the Ipsos‑Reid report and our own discussions with parties involved in gospel music in Vancouver, that there would be a positive response for a gospel radio station here. The demand for such a service is evident given the numerous letters of support for the application and the 7,000‑plus letters of opposition received by the CRTC in 2006 to the licensing of a new station because of the resulting impairment to the signal of the American station, Praise 106.5, which had a significant audience in the Lower Mainland.
LISTNUM 1 \l 1375 If we were to be successful in obtaining a licence for Greater Vancouver, it would also improve our company's synergies and enhance the long‑term viability in Canada for this gospel music format.
LISTNUM 1 \l 1376 In addition to diversity in programming, our proposed station would bring more diversity in advertising. By this, we mean we would actually increase the amount of advertising dollars spent on radio in the Vancouver area. Our experience at our existing stations in Edmonton and Calgary and especially with our sister station in Grande Prairie is that this genre attracts businesses that do not typically advertise on mainstream radio. Many of these advertisers are business people who enjoy gospel music and are willing to utilize radio advertising to ensure that the format has a base of revenue in order for it to succeed and flourish.
LISTNUM 1 \l 1377 This genre of music not only provides an alternative format by a Canadian broadcaster, but also fills a need according to those polled in our market research study. To further explain our survey results, I would like to call upon Maureeta Percy, Vice‑President of Ipsos‑Reid. Maureeta.
LISTNUM 1 \l 1378 MS PERCY: Thank you, Allan.
LISTNUM 1 \l 1379 Ipsos‑Reid was commissioned by Touch Canada to conduct a survey with a random sample of 400 adults from the Vancouver area to determine the market potential for a contemporary Christian music radio station. Telephone interviews were conducted between April 20th and May 6th, 2007.
LISTNUM 1 \l 1380 Interest in such a station in Vancouver is strong and encouraging. Based on a brief description of the potential new station, a total of 26 per cent of respondents indicated they would listen to it either regularly or occasionally.
LISTNUM 1 \l 1381 Eighty‑six per cent of those who expressed interest in the new station were likely to become daily listeners for an average of almost 44 minutes per day. Additionally, almost one‑quarter of those who would listen to the new station say their radio listening habits would increase if the station were to be licensed.
LISTNUM 1 \l 1382 The audience for gospel music in Vancouver closely mirrors the level of support for a new Christian music radio station. Presently, 30 per cent of Vancouver area residents say they listen to Christian music programming, but almost three in ten of those, 28 per cent, are not satisfied with the amount of this type of music available to them, indicating a further demand for this format.
LISTNUM 1 \l 1383 If this station existed today, it would likely become a popular radio station in the Vancouver area. Assuming that the 26 per cent of Vancouver residents who indicate they would likely listen to the new station do so at least occasionally, it has the potential to attract more listeners than 106.5 KWPZ currently broadcast from Lynden, Washington.
LISTNUM 1 \l 1384 The new contemporary Christian music radio station is likely to have broad appeal, skewing somewhat to females and to households with children in them under the age of 18.
LISTNUM 1 \l 1385 MR. HUNSPERGER: Thank you, Maureeta.
LISTNUM 1 \l 1386 Richard Burrows, our retail sales manager will now share with you our view of the market in Vancouver.
LISTNUM 1 \l 1387 MR. BURROWS: Thank you. With a population of approximately 2,200,000, Greater Vancouver is the nation's third largest metropolitan area and its rate of growth was tenth among the Canadian census 33 metropolitan areas in 2006. The city's vibrant retail and commercial base attracts a vast trading area of residents and attracted 8.6 million of visitors in 2006, which will accelerate dramatically in 2010, being the portal for the Olympic games. Vancouver will be the biggest beneficiary of this event.
LISTNUM 1 \l 1388 Vancouver's economy is firing on all cylinders with all the contracted building for residential and commercial space and with all the significant infrastructure development that is being undertaken for the Olympic games. We see continued growth and expansion in 2008. Employment is up overall, despite job losses in the forest industry sectors. Robust job growth will lead to higher levels of immigration, and Vancouver is always one of the most desirable places for people to live in as shown in most surveys conducted throughout the world from time to time.
LISTNUM 1 \l 1389 Although traditionally reliant on the resources sector, Vancouver has diversified over time and has an ever growing tourist industry. It is also the home of the third largest film production centre in North America.
LISTNUM 1 \l 1390 According to the Financial Post retail sales survey, the total estimated retail sales for 2008 are expected to be approximately $31 billion. These sales are forecast to continue to increase over the next several years.
LISTNUM 1 \l 1391 Competition for media dollars in Vancouver is significant for a market serving 2 million people. There are two major English‑language daily newspapers and two English‑language national newspapers, three daily Chinese newspapers, and numerous daily, weekly and bi‑weekly neighbourhood newspapers. There are three main news radio stations: CBC Radio One, CKNW and News 1130, as well as over 20 FM radio stations.
LISTNUM 1 \l 1392 The cornerstone of our start‑up marketing strategy consists, quite simply, of pre‑selling packages with 20 to 30 parties that are interested in hearing a Canadian gospel radio station in the Greater Vancouver area. This strategy worked extremely well with our start up in Grande Prairie. In fact, our pre‑selling of our packages to mostly non‑traditional radio advertisers resulted in our budget being within 5 per cent of our original projections.
LISTNUM 1 \l 1393 Revenue estimates are based on a start‑up radio station scenario, our experience in Calgary and Edmonton and are pro‑rated to Vancouver's population and Shine FM's realistic estimated market share and also discounted for signals with similar formats coming across the border. We believe the Vancouver market will be able to handle an additional radio station with an adult gospel contemporary format without adversely affecting the existing market.
LISTNUM 1 \l 1394 MR. HUNSPERGER: Thank you, Richard.
LISTNUM 1 \l 1395 There is no one else in this country that has had more experience in programming gospel music radio than our Network Program Director, Malcolm Hunt. Malcolm.
LISTNUM 1 \l 1396 MR. HUNT: Thanks, Allan.
LISTNUM 1 \l 1397 Having recently assisted the launch of 96.3 Shine FM in Grande Prairie, I have to say how excited I am to be a part of this team applying for a new gospel radio station here in Vancouver.
LISTNUM 1 \l 1398 The steady growth of Canadian gospel music artists and our industry as a whole is directly impacted by the increase in the number of radio stations that are licensed. If we look at the artists that feed the secular formats, I am sure you will agree their successful growth was largely attributed to how many radio stations were playing their music. Our industry is no different. Canadian gospel music artists need radio to be viable.
LISTNUM 1 \l 1399 British Columbia, along with other provinces like Saskatchewan, is seriously underserved with respect to gospel radio. The Vancouver market was once mainly serviced by an American radio station out of Lynden, Washington, and is now partially serviced but significantly impaired. 104.1 Shine FM will fill the void left by the Lynden service.
LISTNUM 1 \l 1400 When Shine FM signs on in Vancouver, it will have four full‑time and three part‑time programming staff. Our morning show and drive home show will each have one full‑time host and a full‑time news anchor. Weekend and midday programming will be voice tracked by our Vancouver staff, and we will also hire a part‑time weekend news anchor. Evenings will feature a program called Today's Family with Beth Warden, a Canadian syndicated program that airs of all of our FM stations. Touch Canada produces this program.
LISTNUM 1 \l 1401 An extremely important aspect of our programming is Canadian content. We continue to exceed our licence requirement of 10 per cent at our existing operations. For example, last week, Shine FM in Edmonton aired 19.3 per cent Canadian content. We will continue to exceed the required level in Vancouver, should we obtain a licence, and we will be able to achieve 20 per cent by the end of our first licence term.
LISTNUM 1 \l 1402 Shine FM Vancouver will provide a weekly total of nearly 30 hours of spoken word programming. This will include close to four hours of news, weather and sports, approximately seven hours of local reflection and announcer content, just over an hour of comedy and human interest features and 15 hours of brokered programming.
LISTNUM 1 \l 1403 News is an area that Touch Canada continues to improve upon. We continue to expand our news departments and feel with the addition of 2.5 news staff, we can adequately report the stories and information our Vancouver listeners need to know about, at the same time increasing our reporting capabilities with the other markets we serve.
LISTNUM 1 \l 1404 We are very proud of our Canadian content development initiatives. A total after $105,000 will be allocated to CCD during the licence term. Due to the new CCD calculations, Touch Canada will be allocating $30,000 to FACTOR and $75,000 to the Canadian Gospel Music Association. Please note that this is updated from the figures previously identified in our appendix 8‑a.
LISTNUM 1 \l 1405 GMA Week is an annual event including a conference, talent showcase, awards show and artist competition designed to train, encourage and network artists and the gospel music industry coast to coast. The GMA portion of our CCD commitment will be devoted to three areas: The competitions, the training sessions and the Covenant Awards Show.
LISTNUM 1 \l 1406 The GMA Canada Covenant Awards gives out 38 awards each year for albums, artists and the industry in a variety of genres of music. The number of awards and attendance has grown over the years. This year saw over 1200 in attendance with artists from across Canada, as well as Canadian artists who have centered their operations out of Nashville, including Hawk Nelson and Downhere.
LISTNUM 1 \l 1407 We should mention last fall Shine FM was recognized as the Radio Station of the Year industry award at the GMA week. That is an honour we are very, very proud of.
LISTNUM 1 \l 1408 Leroy Harder from GMA Canada is on our panel today, and will explain the importance of their organization.
LISTNUM 1 \l 1409 MR. HARDER: Thank you, Malcolm.
LISTNUM 1 \l 1410 GMA Canada exists to foster and promote Canadian gospel music. They do this through this annual GMA Canada week, which consists of the training sessions in songwriting and artist development, the Shine FM cross‑Canada talent search and the Covenant Awards, now in its 30th year. This week also provides opportunities for artists and industry to network.
LISTNUM 1 \l 1411 GMA Canada has contracted Slyngshot Productions to produce and promote this annual event, and through the CCD funding from Shine FM, GMA Canada has been able to assist artists from across Canada in establishing their careers in the following ways.
LISTNUM 1 \l 1412 The Shine FM cross‑Canada talent search. As a Canadian Idol style competition with over 250 entries this past year, Slyngshot Productions and GMA Canada was able to give out prizes valued at over $20,000. These prizes make an impact in artists' lives, including development deals with Canadian labels, showcase opportunities in front of labels, managers and agents and other practical prizes such as photo and design, instruments and recording equipment. Having Shine radio stations in Edmonton, Calgary and now Grande Prairie has been a key component in this competition, both attracting and informing the core demographic interested in the competition and resulting in submissions more than doubling last year.
LISTNUM 1 \l 1413 Canadian Christian Music Conference (CCMC). The CCD fund enabled the CCMC to double its lineup of speakers and clinicians without creating unreasonable costs for the conference attendees. This allowed the conference to absorb approximately $120 per attendee for registration while, at the same time, registrations doubled this year.
LISTNUM 1 \l 1414 MR. HUNSPERGER: Thank you, Leroy.
LISTNUM 1 \l 1415 For the Commission to get a feel for the effect of gospel radio, we would ask Brandon Wall, band member and gospel artist to express his experience. Brandon.
LISTNUM 1 \l 1416 MR. WALL: After ten years in a gospel rock band we have learned some very important details relating to the success of the independent artist. If we look at what it takes to get your music out there ‑‑ booking agents, live venues, internet presence and word of mouth ‑‑ all play a crucial part in the life of an artist. We did all these things and achieved some level of success. This list had one more thing added after the release of our most recent album, Radio Play. As our song was played, we saw a marked increase in orders for our music from the same region that the radio support was coming from.
LISTNUM 1 \l 1417 Until this point we knew that radio was a big part of any music's success, but we would have never guessed this big. Shine FM in Edmonton, Calgary and Grande Prairie have been so good to independent artists, and my hope as a west coaster would be to have the same opportunity in my own home market. We do not get the same chance to be heard on American stations, but thanks to genre‑specific radio and Canadian content regulations we have a chance to keep our art alive in a market dominated by major label machines from our southern neighbours.
LISTNUM 1 \l 1418 A gospel music station in Vancouver would be an incredible addition to the musical mosaic of our great city.
LISTNUM 1 \l 1419 MR. HUNSPERGER: One of the other areas that we are very proud of in our existing operations is our work with local charities. Bev Karbonik, our Business Manager, will share some details concerning how we have helped charities in the cities that we are now broadcasting in.
LISTNUM 1 \l 1420 MS KARBONIK: As Allan mentioned, Touch Canada is very proud of its partnerships with very deserving charities in the markets it currently serves. In Edmonton and Calgary, we have raised over $5 million for these charities. Many of these organizations tell us that our radio‑thons, for them, are their biggest fundraising events of the year.
LISTNUM 1 \l 1421 For example, our initial radio‑thon for the Mustard Seed Ministries in Calgary raised $175,000 in 2003 and that has grown to $425,000 in 2006. With the help of many volunteers, these radio‑thons have helped meet the needs of these charities, which have helped many who have nowhere else to live but the streets. These monies help them get off the streets and change their lives. We now have many success stories and these people in turn are now helping others find a better life.
LISTNUM 1 \l 1422 If licensed in Vancouver, we fully intend to search out worthy charities, including a street mission, to assist in a similar fashion.
LISTNUM 1 \l 1423 MR. ALLARD: Thank you, Bev.
LISTNUM 1 \l 1424 Madam Chair, Commissioners, with your approval and our ability to provide the infrastructure, including personnel, programming, marketing and the financial backing to sustain such a station, we are confident that we can establish a successful gospel voice in this market, thereby satisfying the needs of the 26 per cent of Vancouver and area residents who desire our kind of format which will restore and increase the diversity within this market.
LISTNUM 1 \l 1425 Touch Canada has been committed to the gospel format since we started broadcasting in April of 1994 on AM 930 CJCA in Edmonton, Alberta. We have no plans or intentions of changing to other formats, as we believe there is a market for today's gospel music.
LISTNUM 1 \l 1426 Thank you for allowing us this opportunity, and we will be happy to answer any questions you might have.
LISTNUM 1 \l 1427 THE CHAIRPERSON: Thank you, Mr.Allard and your panel.
LISTNUM 1 \l 1428 I will ask Commissioner Menzies to lead the questions.
LISTNUM 1 \l 1429 COMMISSIONER MENZIES: Thank you for the presentation. Just a few particulars first and then some more particulars.
LISTNUM 1 \l 1430 Your application indicated that you would be producing 34 hours and 41 minutes of spoken word, of which three hours and 32 minutes would be news, weather and sports. But in your reply in November, you said your weekly average would be 36 hours, 28 minutes of spoken word, and that would include six hours and four minutes of news, sports, weather, traffic and entertainment.
LISTNUM 1 \l 1431 Can you clarify which total you are going with, the 34/41 or 36/28?
LISTNUM 1 \l 1432 MR. HUNT: It would be the 34.
LISTNUM 1 \l 1433 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 1434 Of that 34, how much of that will be pure news broadcast per week?
LISTNUM 1 \l 1435 MR. HUNT: It would be approximately six hours of that through the week.
LISTNUM 1 \l 1436 COMMISSIONER MENZIES: How much of that news would be dedicated to local news and ‑‑ well, answer that one first.
LISTNUM 1 \l 1437 MR. HUNT: Sure. It is approximately 60 per cent local and 40 per cent national and international.
LISTNUM 1 \l 1438 COMMISSIONER MENZIES: How would that news be different from the news that is available in the marketplace now? What would make it unique?
LISTNUM 1 \l 1439 MR. HUNT: Having been able to do this for almost 14 years now, we have been able to develop newscasts that are somewhat more family oriented than what is on the air today. We would tend to cover many of the same stories, but the wording that we use would slant more to, we have kids in the cars of the families that are listening to our radio station and we don't slant to the sensational side of the news.
LISTNUM 1 \l 1440 We still report the facts, but we do it in such a way that is more family friendly.
LISTNUM 1 \l 1441 COMMISSIONER MENZIES: I don't want to put you on the spot, but can you give me an example? You don't have to right now. We can come back to that one if you want to take some time.
LISTNUM 1 \l 1442 MR. HUNT: Sure.
LISTNUM 1 \l 1443 COMMISSIONER MENZIES: How much of your news content would be what we would call enterprise reporting, that you would be creating on your own and how much of it would be offwire services and what you would call rip and read, I guess?
LISTNUM 1 \l 1444 MR. HUNT: Again, because the wording of how we prepare our newscast is going to be different from many of the other radio stations, if they are ripping and reading, we basically rewrite everything.
LISTNUM 1 \l 1445 COMMISSIONER MENZIES: Your core demographic is described as a 33 to 35 year old, but then your application goes on to say, and your business plan, that 80 per cent of your audience will be over 35, which just confuses us a little bit as to how that would balance. I just wanted to clarify on that.
LISTNUM 1 \l 1446 MR. HUNT: Can you tell me where that is located?
LISTNUM 1 \l 1447 COMMISSIONER MENZIES: In your application.
LISTNUM 1 \l 1448 MR. HUNT: It says 80 per cent?
LISTNUM 1 \l 1449 MS PINSKY: It is in your 16 November response to the deficiency. It may be that your arrow is pointing the wrong way, in response to number 5.
LISTNUM 1 \l 1450 MR. HUNT: I am going to ask you to repeat the question now I that I found it.
LISTNUM 1 \l 1451 COMMISSIONER MENZIES: It describes your core audience as a 33 to 35 year old, but then it said that the vast majority, or we read it as the vast majority of your audience, 80 per cent would be over 35.
LISTNUM 1 \l 1452 MR. HUNT: I believe the arrow was pointing the wrong way. It is under 35. It would be 35 and less.
LISTNUM 1 \l 1453 COMMISSIONER MENZIES: So, if I am an advertiser and you are selling it to me, you are still selling me a median of a 33 to 35 year old?
LISTNUM 1 \l 1454 MR. HUNT: Yes.
LISTNUM 1 \l 1455 COMMISSIONER MENZIES: Likely being younger?
LISTNUM 1 \l 1456 MR. HUNT: Somewhat slightly, but, yes.
LISTNUM 1 \l 1457 COMMISSIONER MENZIES: To help, is the 33 to 35 more or less in the middle of your audience?
LISTNUM 1 \l 1458 MR. HUNT: Yes.
LISTNUM 1 \l 1459 COMMISSIONER MENZIES: I am curious about your marketing plan in terms of the 20 to 30 prior commitments and how that would work. Part of that comes from when I was reading up on the area, I read an article on line on actually canadianchristianty.com, that was describing the Vancouver market or British Columbia market in a roundabout way. It was from a Stats Can report. It showed that in British Columbia 35 per cent, the highest number in Canada, of people identified themselves as having no faith connection at all. I think the numbers are 32 per cent Protestant and then 17 per cent Roman Catholic, and with the fastest growing faith populations being Muslim and Sikh.
LISTNUM 1 \l 1460 I am just trying to figure out where in that you are going to market yourself. I don't have the statistics for Vancouver in particular, but typically urban communities have even lower faith orientations than rural communities. I am curious about your confidence in your marketing plan, given that you mentioned Grande Prairie and your success there, and the likely demographic differences between Grande Prairie in terms of faith commitment and orientation and, therefore, interest in gospel and Christian music and Vancouver. Can you help me with that a bit?
LISTNUM 1 \l 1461 MR. HUNSPERGER: The amazing thing is that we make an assumption that people who listen to gospel music are people that attend a church or are from a faith group, and that is not necessarily true.
LISTNUM 1 \l 1462 What we find, first of all, is a lot of our listeners that tune in and want to listen to us are more interested in the family friendliness part of radio, and it is a song that their children can sing and enjoy and whatever. Many of them would not necessarily belong to a faith group or even attend a church. They just are enjoying the positive family friendly‑type style of music.
LISTNUM 1 \l 1463 We don't have any way to market this, but we have always said probably about 60 per cent of our audience are people who don't necessarily attend a local church or synagogue of anywhere. They are just people who are interested in their family; they are people who want to raise their kids in a very positive environment; and that is what they are looking for. That is where we get probably the majority of our listeners from.
LISTNUM 1 \l 1464 COMMISSIONER MENZIES: So, you are still confident that that marketing strategy for Grande Prairie would be effective here?
LISTNUM 1 \l 1465 MR. HUNSPERGER: Yes, we are.
LISTNUM 1 \l 1466 COMMISSIONER MENZIES: Have you done any advance work? Would you have any commitments from people?
LISTNUM 1 \l 1467 MR. HUNSPERGER: We don't have any contracts obviously signed, but there are a great majority of people that we have contacted here and feel that we are going to be heading in our projections and meeting what we have put down in the application quite freely.
LISTNUM 1 \l 1468 COMMISSIONER MENZIES: An additional part to that, part of what you indicated in your presentation was that the people who would support you ‑‑ this is the way I heard it anyway, and I just want you to clarify ‑‑ would do so because they want to support the whole idea of a gospel Christian music station in their community. I don't want to use the word "philanthropic," but it kind of came to mind. Actually, it is not the right word, but I can't think of the right one, that they are doing it out of a sense of commitment to the genre, rather than necessarily an expectation of large commercial return.
LISTNUM 1 \l 1469 Are they getting both or how does it work?
LISTNUM 1 \l 1470 MR. HUNSPERGER: I think our sales manager can answer that maybe a little better than I am, but I don't think we have any advertisers on that aren't expecting a return and aren't expecting customers to walk in the door. But we are getting them because they are excited about the format and they are wanting to come on board, but obviously we have got to do the job, just like any other advertiser, and bring people in the door or we don't keep them very long.
LISTNUM 1 \l 1471 MR. BURROWS: That is very true. We do have clients, specifically in Calgary that I am thinking of, one of our major home builders, that supports the radio station and has been for a number of years. But we happen to sell a lot of houses for him with our audience.
LISTNUM 1 \l 1472 He likes the bigger picture of what we are trying to do, the positive sound. He is a family guy and he has one of our stickers in his window because he turns on the radio and he feels confident that his kids are listening to music that is safe and fun.
LISTNUM 1 \l 1473 COMMISSIONER MENZIES: Are you ready to answer that question I was going to give you some time to think about?
LISTNUM 1 \l 1474 MR. HUNT: Sure.
LISTNUM 1 \l 1475 COMMISSIONER MENZIES: Before I forget.
LISTNUM 1 \l 1476 MR. HUNT: No problem. I am not a news guy, so I can't really describe any of the news today because I have been so concentrating on this.
LISTNUM 1 \l 1477 But anyway, if, for example, a bomb explodes in Iraq or something like that, the description on many radio stations now oftentimes would be very detailed and very graphic in a lot of the words that they would use. We wouldn't go that graphic and that detailed but still explain to the people that this had happened because I think it is important to them. But I don't think we would go ‑‑ I know we wouldn't go ‑‑ as in detail as many of the mainstream stations.
LISTNUM 1 \l 1478 Does that give you a bit of a glimpse?
LISTNUM 1 \l 1479 COMMISSIONER MENZIES: Yes, that's helpful.
LISTNUM 1 \l 1480 In your presentation you clarified right off the beginning, I was going to ask about the 7 per cent versus 3.2 per cent. Are you still looking at 1.2 million hours for the business plan, because we had calculated that out on the BBM as 1.2 million hours of listener share per week at about 3.7 per cent, and your business plan ‑‑
LISTNUM 1 \l 1481 MR. ALLARD: No, we probably should divide that to get to the 2 per cent.
LISTNUM 1 \l 1482 COMMISSIONER MENZIES: Sorry, what I had looked at originally was that you had said 7 per cent and I thought that is kind of big and compared to BBM, the 1.2 million hours worked out at 3.7.2 per cent. Should that 1.2 million be depressed to 2.5 per cent, then, and what sort of impact would that have on your business plan then?
LISTNUM 1 \l 1483 MR. HUNSPERGER: First of all, we brought it down to 2 and 3 per cent because that is what our business plan is. The 7 per cent was gathered the same way as almost the other friends before us, where you take this huge percentage that you have with your market survey and then you divide it by 3 and you try to get it down to what looks similar, and of course that is where they came up with this 7 per cent.
LISTNUM 1 \l 1484 But we knew from our business plan, what we are doing in Calgary and Edmonton, that is way out of whack. So that is why Mr. Allard did that beginning statement.
LISTNUM 1 \l 1485 COMMISSIONER MENZIES: So your business plan, your revenue forecasts are unchanged?
LISTNUM 1 \l 1486 MR. HUNSPERGER: Unchanged.
LISTNUM 1 \l 1487 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 1488 I just want to talk about KWPZ in Lynden for a minute. My latest information is that they still have a 2.2 per cent share in this market. You mentioned that they were quite badly impaired. Is that 2.2 per cent your understanding of their market share right now?
LISTNUM 1 \l 1489 MR. HUNSPERGER: No, our understanding was their market share was between 3 and 4 per cent in what we saw, and they are now down to the 2.
LISTNUM 1 \l 1490 COMMISSIONER MENZIES: The 2.2 is the latest?
LISTNUM 1 \l 1491 MR. HUNSPERGER: Yes.
LISTNUM 1 \l 1492 COMMISSIONER MENZIES: What is your strategy going to be in terms of repatriating those people, because there is obviously an opportunity there, as you described, the 7,000 letters of protest, but on the other side, 7,000 letters of protest also mean that people were quite committed and that the audience that they maintain is very committed there. I want to know how much of that audience you think you can repatriate and how you are going to do it.
LISTNUM 1 \l 1493 MR. HUNSPERGER: The interesting thing about that is that within the last three months they have basically changed their format to almost sound exactly what we are playing in Edmonton or in Calgary. What we have been in contact with is a lot of the people who would be in association with those people who helped organize those letters to go to the Commission, and many of those people are now either getting a scratchy signal or can't get it where they are located at all.
LISTNUM 1 \l 1494 What we will be doing obviously is marketing, then, to those people to let them know that what they were used to for the last 20 years or so is now coming back in full power here in the Vancouver market.
LISTNUM 1 \l 1495 COMMISSIONER MENZIES: In terms of advertising rates, according to In‑House's application, which I will just mention is coming up, KWPZ is only charging $68 a minute for advertising and you plan to charge $104 a minute. That seems like a pretty big spread particularly for a challenger. I am just curious to know how you might make that up or if you agree with those numbers?
LISTNUM 1 \l 1496 MR. ALLARD: No, we don't agree with their numbers. I think their spot rate is about $55 and we are close to that $55. I think we are $52.
LISTNUM 1 \l 1497 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 1498 In terms of your audience share projections, your application indicates that you will very rapidly build your audience when you first come in and then essentially rely on maintaining and nurturing it with not much growth forecast. Isn't that a little risky, not forecasting any growth in a market this dynamic?
LISTNUM 1 \l 1499 MR. HUNSPERGER: We are trying to go by experience. We seem to be able to get anywhere from a 2 to a 4 per cent share and that kind of levels off at that. To go higher would be not realistic when we are trying to project what is going to happen from the economic point of view.
LISTNUM 1 \l 1500 In Calgary or in Edmonton, where we have been the longest, we have a good audience. It is a sustaining audience, it is a faithful audience, it is a loyal audience. In fact, we find that our audience is probably the most loyal in the market, but it doesn't necessarily grow by leaps and bounds. It kind of stays steady.
LISTNUM 1 \l 1501 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 1502 You are projecting about $200,000 a year in brokered programming. Do you have firm commitments on that?
LISTNUM 1 \l 1503 MR. HUNSPERGER: We have talked to the agencies that are involved in those programming, companies, and we have assurances that they are interested in the Vancouver market, but obviously no contracts are signed.
LISTNUM 1 \l 1504 COMMISSIONER MENZIES: Can you clarify a little bit on your contra revenue projections, how that exactly ‑‑ well, not exactly, but generally will be arrived at? Any examples would be helpful, and where it is offset, in other words, what the exchange is.
LISTNUM 1 \l 1505 MS KARBONIK: Our exchange is almost 100 per cent goes into our sales expenses promotions, the contra in and the contra out is an exchange for anything promotional.
LISTNUM 1 \l 1506 COMMISSIONER MENZIES: Promo time on there?
LISTNUM 1 \l 1507 MS KARBONIK: No, it depends what kind of promotional company we mean. The revenue will be, say, some kind of T‑shirt company will have their advertising on the radio, and in exchange for T‑shirts.
LISTNUM 1 \l 1508 COMMISSIONER MENZIES: How will that articulate itself in terms of revenue or offset expenses for you?
LISTNUM 1 \l 1509 MS KARBONIK: It is under the sales.
LISTNUM 1 \l 1510 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 1511 MR. HUNSPERGER: If I can also add, it is also under promotion, which is what she was talking about, you know, billboards or advertising or that kind of thing.
LISTNUM 1 \l 1512 COMMISSIONER MENZIES: You will be exchanging for ‑‑
LISTNUM 1 \l 1513 MR. HUNSPERGER: Yes.
LISTNUM 1 \l 1514 COMMISSIONER MENZIES: Your projected losses over the course of the first licence term and the amount of financing you indicated you have in place are almost equivalent. If you don't meet your revenue projections, that could appear on the face of it as presenting you with a problem. What I am trying to do is explore your ability and level of commitment to shore it up if you don't meet those revenue projections.
LISTNUM 1 \l 1515 MR. ALLARD: Commissioner Menzies, maybe I should answer that. I have been in this since 1994.
LISTNUM 1 \l 1516 COMMISSIONER MENZIES: I thought you might be the guy.
LISTNUM 1 \l 1517 MR. ALLARD: Often we don't meet our projections and we have always sustained ourselves and I have always put in the cash. I have got one application right now, the Commission is involved with it, it is actually four times the original budget that we had filed. But I have always made sure that I have lived up to my commitments with the CRTC.
LISTNUM 1 \l 1518 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 1519 Just give me a moment. There was a couple other items.
LISTNUM 1 \l 1520 I just want to clarify on your update in your presentation on the Canadian content initiatives. I was trying to call up appendix 8‑a, I believe it was, and I am challenged. Can you just clarify for me there that you will be allocating $30,000 to FACTOR and $75,000 to the Gospel Music Association, for a total of $105,000, and that is updated from the previous figures. Can you describe the difference?
LISTNUM 1 \l 1521 MS KARBONIK: The total value is still the same. It is just the 60/40 split for the basic and then the 80/20 split on the over and above contribution has been revised.
LISTNUM 1 \l 1522 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 1523 Just one last question. I just want you to go over again to give me a brief example of where you believe the core difference is between you and the other applicant in this genre, In‑House. What thought would you want me to focus on in assessing the difference between the strengths of your application and the strengths of theirs?
LISTNUM 1 \l 1524 MR. ALLARD: We think they have a good application. We think they have over estimated the revenues. I think we have a little bit more experience there. Just because of our experience, we think the revenues are a little on the high side. That is basically it. Their rate is low; $25 spot rate is too low.
LISTNUM 1 \l 1525 Those are really only the two major things. Revenue is too high and the rate is a little bit low.
LISTNUM 1 \l 1526 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 1527 THE CHAIRPERSON: Commissioner Cugini, please.
LISTNUM 1 \l 1528 COMMISSIONER CUGINI: Thank you.
LISTNUM 1 \l 1529 Those of you who know me by now always know I like to take advantage of artists when they are in the room. So, Mr. Wall, I am going to ask you just a couple of questions.
LISTNUM 1 \l 1530 Is your music played on other radio stations? I ask that because U2 started off as a Christian rock band. So is your music played on other radio stations?
LISTNUM 1 \l 1531 MR. WALL: We have kind of been limited to the western Canada market for the last ten years, played almost every small town.
LISTNUM 1 \l 1532 COMMISSIONER CUGINI: Why is that? Why are you limited to western Canada?
LISTNUM 1 \l 1533 MR. WALL: It is nearly impossible without an agent in the U.S. to be able to get down there and get your start in a market that is huge comparatively. The cost of traveling and playing music and travel between Canadian cities and so on.
LISTNUM 1 \l 1534 Basically what has happened in Edmonton and Calgary has given us a chance to be heard even when we are not out playing live.
LISTNUM 1 \l 1535 COMMISSIONER CUGINI: Have you approached other radio stations with your music or has your agent or manager?
LISTNUM 1 \l 1536 MR. WALL: Being independent for the last several years, the whole grid work is different between when you have somebody who has a vested interest. They have financially backed you. Being independent we are financially backing ourselves. So, we are limited to the contacts and the money that we have at the time.
LISTNUM 1 \l 1537 Saying that, I am sure if somebody was to request our song enough times on any station that was reasonable ‑‑ even internet radio now has gotten very difficult to get played on. We are getting responses when we say we will submit to an open submission. We have enough responses from the major label bands, we don't even have time to look at independent artists, especially from Canada.
LISTNUM 1 \l 1538 COMMISSIONER CUGINI: If it wasn't for Shine FM in Edmonton you wouldn't be anywhere on the map is what you are saying?
LISTNUM 1 \l 1539 MR. WALL: They are definitely raising our profile.
LISTNUM 1 \l 1540 COMMISSIONER CUGINI: Thank you very much. Those are all.
LISTNUM 1 \l 1541 THE CHAIRPERSON: I have a question on the CCD. I am not understanding yet the discrepancy between your appendix 8‑a and what you have pointed out in your presentation this morning.
LISTNUM 1 \l 1542 MS KARBONIK: Appendix 8‑a has a total 60/40 split for the entire term, whereas the revised figures have a 60/40 split for the basic and then an 80/20 split for the over and above.
LISTNUM 1 \l 1543 THE CHAIRPERSON: What is your over and above, please?
LISTNUM 1 \l 1544 MS KARBONIK: The numbers are different for each year because they are based on the revenue from the preceding year. So, I can supply those figures. But the overall amount is still the same, still the 105. It is just the split between the GMA and the FACTOR that has to pertain to your regulations.
LISTNUM 1 \l 1545 THE CHAIRPERSON: Thank you. I believe our legal counsel has some questions.
LISTNUM 1 \l 1546 MS PINSKY: Thank you.
LISTNUM 1 \l 1547 I just have one question relating to your target audience and the marketing further to the discussion that you just had with Commissioner Menzies.
LISTNUM 1 \l 1548 You were saying that in terms of your listeners that you are finding that about 60 per cent of your listeners actually either don't attend any kind of religious institution, either church, synagogue, whatever, temple, nor would they necessarily be affiliated with any religious faith. Is that what I understand?
LISTNUM 1 \l 1549 MR. HUNSPERGER: Yes.
LISTNUM 1 \l 1550 MS PINSKY: You are proposing 95 per cent Christian music, and I note that when you look at your surveys, a lot of them are asking specifically about listeners to Christian music. So I wanted to clarify in terms of who your audience is, whether you think it is a cross‑faith audience.
LISTNUM 1 \l 1551 MR. HUNSPERGER: Very definitely. If you have never heard the music, if you don't pay really close attention, you would not know that it was from this genre. It is rock bands, very contemporary, it is definitely not music that you would hear in any church for the most part.
LISTNUM 1 \l 1552 MS PINSKY: Just to clarify, when you said that about 60 per cent of your audience, I believe you mentioned that you don't necessarily have a survey to support that, but what is that figure based on?
LISTNUM 1 \l 1553 MR. HUNSPERGER: That is based on comments of people either sending us e‑mails or calling us on the telephone thanking us for the station. When we have remotes live on locations, people come up to us, talk to us. When we are in community event kind of scenarios, we have people coming. That is kind of the feel we get.
LISTNUM 1 \l 1554 MS PINSKY: Thank you.
LISTNUM 1 \l 1555 Then just to clarify, in terms of filing the additional over and above CCD figures, would you be in a position to do that by Wednesday?
LISTNUM 1 \l 1556 MS KARBONIK: I think they are already filed in one of our deficiency letters, but I will get back to you.
LISTNUM 1 \l 1557 MS PINSKY: We would like a clarification of precisely to separate out the over and above versus the basics and the specific over and above figures.
LISTNUM 1 \l 1558 MS KARBONIK: Sure, no problem.
LISTNUM 1 \l 1559 MS PINSKY: Thank you.
LISTNUM 1 \l 1560 THE CHAIRPERSON: The standard question. How many licensees do you think the Vancouver market can sustain, and who, in addition to you, would you feel is the most compatible and who would be the most detrimental?
LISTNUM 1 \l 1561 MR. HUNSPERGER: I don't think there would be any station that you would add. Because we are so specific in the genre with gospel music, as many stations as you want to add or whatever I don't think will change our business plan at all.
LISTNUM 1 \l 1562 THE CHAIRPERSON: Your last minute pitch on why you feel you are the best.
LISTNUM 1 \l 1563 MR. ALLARD: Thank you, Madam Chairman.
LISTNUM 1 \l 1564 Since this will be the last FM frequency available in Vancouver for the foreseeable future, we believe the Commission should give strong consideration to licensing our niche gospel music format rather than a more conventional format, which would garner a larger audience. There is a clear demand for gospel music in Vancouver as evidenced by the over 7,000 letters you received in 2006 protesting the loss or impairment of the signal of the American station, Praise 106.5.
LISTNUM 1 \l 1565 We can repatriate these listeners to a Canadian source, providing a truly local service, exposing Canadian gospel artists to a new audience, as well as contributing significant CCD funding.
LISTNUM 1 \l 1566 Further, the revenue requirements for our niche format are relatively low and much of our advertising will come from new sources. So, we will have minimal impact on existing stations in Vancouver. Touch Canada's motto is safe and fun for the whole family. Our stations never play songs that demean young women or anything else or encourage violence, promote drug use or other anti‑social behaviour.
LISTNUM 1 \l 1567 Our family‑oriented service will provide diversity to the Vancouver market from a Canadian source and give an alternative to conventional radio to a relatively small but deserving segment of the Vancouver population. These people deserve and have a right to be served within the Canadian broadcasting system as mandated by the Broadcasting Act.
LISTNUM 1 \l 1568 Maybe just one more thing. If there was another frequency, we would certainly be willing to take it, but we will told there was only one. I just want to get that on the record. Thank you.
LISTNUM 1 \l 1569 THE CHAIRPERSON: Thank you, Mr. Allard, and thank you, panelists, for your time.
LISTNUM 1 \l 1570 We will take a lunch break now and be back at 1:30, please.
‑‑‑ Upon recessing at 1220 / Suspension à 1220
‑‑‑ Upon recessing at 1330 / Reprise à 1330
LISTNUM 1 \l 1571 THE SECRETARY: We will now proceed with item 3, which is an application by Newcap Inc. for a licence to operate an English‑language FM commercial radio programming undertaking in Vancouver.
LISTNUM 1 \l 1572 Please introduce yourself and your colleagues, and you will then have 20 minutes to make your presentation. Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 1573 MR. STEELE: Thank you.
LISTNUM 1 \l 1574 Madam Chair, members of the Commission, the Commission staff, thank you for considering this application from Newcap for a new FM radio station to serve Vancouver, British Columbia.
LISTNUM 1 \l 1575 I am Rob Steele, President and Chief Executive Officer of Newcap Radio. Joining me today, starting on my left are Glenda Spenrath, Director of Newcap Operations; Steve Jones, VP of Programming; David Murray, Chief Operating Officer for Newcap Radio; Josie Geuer, Program Director of Ottawa's HOT 89.9; Gerry Phelan, News Directors, Newfoundland; Scott Broderick, Director of Central Canada Operations. Seated in the back row are Mark Kassof, President of Mark Kassof & Company, and Prem Gill, our Vancouver liaison.
LISTNUM 1 \l 1576 All of us at Newcap are extremely excited about this application.
LISTNUM 1 \l 1577 A new licence in Vancouver would be a privilege for any applicant, and no less so for us, as approval would mark the evolution of Newcap to that of a truly national broadcaster with stations from coast to coast.
LISTNUM 1 \l 1578 From our base and origins in Canada's east over the past few years, we have sought to extend our national presence and demonstrate our commitment to community, through acquisitions and new licence applications in large and small markets right across the country. We have acquired and successfully turned around stations in financially troubled markets where other operators simply gave up. And we have applied for and launched new services in smaller markets that larger broadcasters have ignored.
LISTNUM 1 \l 1579 Most important, we have sought out new and innovative ways of serving our local audiences, reflecting their diversity and contributing to Canadian music and new talent. We have attracted and built a team of radio professionals who are as passionate about serving their communities as they are about local radio, and we have worked to earn your trust as stewards of Canada's public interest by meeting and exceeding our commitments.
LISTNUM 1 \l 1580 This application for Vancouver has been researched and designed to meet both the demonstrated audience demand of Vancouverites as music listeners and their diverse needs as residents and citizens.
LISTNUM 1 \l 1581 Now to speak to you is our VP of Programming, Steve Jones.
LISTNUM 1 \l 1582 MR. JONES: Thanks, Rob.
LISTNUM 1 \l 1583 Vancouver is an exceptionally vibrant and dynamic city, with natural beauty and a thriving business climate. Indeed, over the last few years, Vancouver has consistently been ranked as one of the finest places in the world to live.
LISTNUM 1 \l 1584 Vancouver is the third largest metropolitan area in Canada, with a CMA population of 2.3 million, and that is expected to increase by 7.3 per cent over the next five years, a rate higher than that of either Toronto or Montreal.
LISTNUM 1 \l 1585 But what truly sets Vancouver's populace apart is its diversity. More than half of the residents of the city of Vancouver have a first language other than English, and roughly 50 per cent are visible minorities.
LISTNUM 1 \l 1586 The cultural richness of Vancouver is woven into every day life. From multilingual street signs to hundreds of ethnic restaurants, the Vancouver of 2008 is a city where the world meets. Yet there is still a sense of community and localism amidst the diversity. The diverse communities are intertwined and connected and have an interest in local media that fosters these connections.
LISTNUM 1 \l 1587 As we have discussed in previous hearings, at Newcap research is the foundation of our business.
LISTNUM 1 \l 1588 We commissioned a survey of 500 Vancouver radio listeners from 18 to 64, studying their satisfaction with present stations, their interest in various potential formats, and their feelings about other programming elements. We studied nine different formats as diverse as smooth jazz, alternative rock, triple A, adult urban and oldies.
LISTNUM 1 \l 1589 Our survey indicates that an adult urban radio station would be the best opportunity for a new Vancouver station.
LISTNUM 1 \l 1590 Adult urban scores well in positive interest (those who score the format of 4 or 5 on a 5 point scale) with 19 per cent expressing a positive interest in the format. Adult urban also has a solid per cent of format void. Fully one in ten Vancouverites expressed a positive interest in the format and could not identify a radio station that plays that type of music. Listeners are also less satisfied with radio choices compared to the market average and correspondingly they spend less time listening to the radio. An adult urban station in Vancouver will help bring these dissatisfied listeners back to radio.
LISTNUM 1 \l 1591 This clear and committed passion for the unique format of adult urban means that we would carve out a strong audience in Vancouver. Our proposed adult urban station will attract an audience that is primarily 25‑44 and will skew about two‑thirds female.
LISTNUM 1 \l 1592 Adult urban stations came into being in the late 1980s when programmers and researchers began to take an adult approach to urban and R&B. These stations have a softer and more mature feel than their traditional urban counterparts, providing a great deal of gold music from Motown to contemporary R&B, avoiding rap and hip hop in favour of ballads and soul music.
LISTNUM 1 \l 1593 Given the format's success in other cosmopolitan diverse cities, adult urban's fit for the Vancouver marketplace is not surprising. Moreover, the 25‑44 skew will be a good match for the demographics of the city core.
LISTNUM 1 \l 1594 The essence of the 10.1 KISS‑FM musical experience will be new and classic R&B music.
LISTNUM 1 \l 1595 We propose a minimum of 40 per cent Canadian content.
LISTNUM 1 \l 1596 Our analysis shows that there is a wealth of format‑compatible Canadian music available to accomplish this. Current hits by Jully Black, Cornielle, Eva Avila and Jann Arden are just the beginning of a long list of Canadian artists who are making adult urban and compatible music for the format.
LISTNUM 1 \l 1597 Approximately 60 per cent of our music will be gold, including the early Motown classics by Marvin Gaye and The Supremes, and 80s classics by Anita Baker and Lionel Richie, and 40 per cent will be newer music by artists like Alicia Keys and Canadians Gregory Charles and Jacksoul.
LISTNUM 1 \l 1598 We believe that with a radio station in Vancouver aggressively playing this music, we will experience an increase in adult urban music being created and promoted to radio.
LISTNUM 1 \l 1599 Musical features will also provide important opportunities to interact with and reflect Vancouver. For example, the connection between Caribbean music and adult urban is undeniable. Each Sunday evening KISS‑FM will present Island Fever, profiling the unique music of the Caribbean, including reggae, Latin, soca and calypso.
LISTNUM 1 \l 1600 But to give you a real flavor of KISS‑FM, we have prepared this sample.
‑‑‑ Audio presentation / présentation audio
LISTNUM 1 \l 1601 MR. PHELAN: Madam Chair and members of the Commission, as you have just heard, while KISS‑FM will be a music‑driven station, news and spoken word programming will be an integral part of our programming and our relationship with our listeners.
LISTNUM 1 \l 1602 All of our spoken word programming will be inclusive and reflect Vancouver's cultural diversity.
LISTNUM 1 \l 1603 Our news agenda will be broad and include community concerns, personal finance, health, education, immigration and will focus on Vancouver newsmakers. This is the kind of news an adult audience demands.
LISTNUM 1 \l 1604 KISS‑FM will provide a strong and fresh local news and community presence. We will present 125 weekly newscasts, all of them sourced and presented by our staff in Vancouver for a total of 10.7 hours per week.
LISTNUM 1 \l 1605 Our newscasts will aim to provide at least 75 per cent local news information, and the remaining 25 per cent being relevant news and information from British Columbia, Canada, and the rest of the world.
LISTNUM 1 \l 1606 Major hourly six‑ and seven‑minute newscasts will include news, weather and sports reporting, while our shorter four‑minute newscasts will update the hour's news on the half hour. These traditional newscasts will be supplemented by information updates dropped into the program flow through the week, a combination of news bulletins, traffic and weather updates and sports information.
LISTNUM 1 \l 1607 To deliver on our commitments of news and spoken word, Newcap will employ a minimum of five newscaster reporters.
LISTNUM 1 \l 1608 KISS‑FM will also collaborate with local ethnic communities and media to not only build bridges, but offer our listeners more in‑depth stories and points of view about issues of the day.
LISTNUM 1 \l 1609 For the 25 per cent of news content that is regional, national, and international KISS‑FM will be able to take full advantage of Newcap news resources in other parts of the country.
LISTNUM 1 \l 1610 Commensurate with our new status as a coast‑to‑coast broadcaster, Newcap will appoint a new national news coordinator whose role it will be to not only ensure our stations have access to appropriate national and international stories, but also specifically to find local stories of relevance to our other stations. In this small but unique way, Newcap believes that the addition of KISS‑FM to our system of stations across the country will help us serve all our listeners better.
LISTNUM 1 \l 1611 MS GEUER: Non‑news spoken word programming on KISS‑FM will be a combination of music‑based and other features designed to give a voice to members of the community.
LISTNUM 1 \l 1612 Community reflection will be the cornerstone of our information‑based programming such as:
LISTNUM 1 \l 1613 Voices from Van ‑ a successful part of our Halifax morning show for many years under the name of Citizen Q, every day a new topical question will be posed to our audience, and they will be invited to call and leave their comments or e‑mail their input to our news team.
LISTNUM 1 \l 1614 Then we have Express Yourself, where every week on KISS‑FM we will feature a two‑our news and public affairs program to highlight important community issues. This program will feature longer‑form in‑depth interviews with local leaders and newsmakers, as well as profiles of community events and call‑in segments for listener opinions and view points.
LISTNUM 1 \l 1615 Then we have Change The World. Every day KISS‑FM will give its listeners the chance to share their thought on how they would make life better in this great city.
LISTNUM 1 \l 1616 Together, newscasts, information updates and informed non‑news spoken word programming about music, community events and local happenings will bring our total spoken word programming to over 23 hours a week.
LISTNUM 1 \l 1617 KISS‑FM's online presence will also be a natural extension of the radio station, playing a key role in communicating with the community and making the radio station an integral part of Vancouver. Our interactive activities will include everything from streaming and podcasting of popular programming, to helping build and connect community through SMS/texting, social networking and events postings.
LISTNUM 1 \l 1618 MS SPENRATH: Metro Vancouver represents a spectrum of opinions, ideas and cultural perspectives. From employment equity strategies to programming to community involvement, KISS‑FM will connect and represent today's Vancouver.
LISTNUM 1 \l 1619 Our commitment to cultural diversity on KISS‑FM will stem from our systematic approach to employment equity and specific measures to ensure reflection in our on‑air talent and programming.
LISTNUM 1 \l 1620 Both on and off the air, our staff will be representative of the demographics of Vancouver. Our staff will be well‑versed in corporate policies designed to support cultural diversity in the work place and the reflection of the diverse groups in our programming.
LISTNUM 1 \l 1621 Particular attention will be paid to our on‑air personalities. Our announcers and reporters will be representative of the ethnic mosaic of Vancouver. Indeed, our aim will be to ensure that at least three of our five newscaster reporters are drawn from visible minority or aboriginal communities.
LISTNUM 1 \l 1622 Most important, our news and non‑news programming will reflect the cultural diversity of our audience. News stories will reflect the reality of Vancouver's cultural, ethnic, racial and aboriginal diversity. Our other spoken word will contain elements that appeal to our ethnic and aboriginal audience. And specific initiatives like internships, newscaster exchanges and our national news coordinator will strengthen our ability to deliver relevant and timely stories.
LISTNUM 1 \l 1623 MR. BRODERICK: We have proposed a package of significant Canadian content development initiatives totaling $7 million over the term of the licence, with spending of $1 million in each year.
LISTNUM 1 \l 1624 FACTOR will receive 20 per cent of our proposed CCD contribution, a total of $1.4 million during the first seven years. We will ask that FACTOR direct these funds toward artists and groups residing in British Columbia.
LISTNUM 1 \l 1625 A further 20 per cent of our proposed CCD contribution, a total of $1.4 million during the first seven years, will go to music education initiatives implemented by MusiCan. Our choice of music education is in recognition of the sad reality that other education priorities mean talented young performers and musicians have fewer and fewer opportunities for recognition and mentoring. We believe that such early stage seed money is crucial to encouraging and developing the next generation of music artists. After looking at alternatives, we also concluded that MusiCan is the ideal organization to implement these initiatives.
LISTNUM 1 \l 1626 Based on MusiCan's recommendation, the majority of this contribution will go to Band Aid musical instrument grants to public schools, both elementary and secondary, in Vancouver and British Columbia.
LISTNUM 1 \l 1627 Fully 60 per cent of our CCD contribution, or $4.2 million over seven years, will go to the KISS‑FM B.C. Breakout, an annual series of live concerts, culminating in the awarding of a grand prize to one artist who will get the chance to break out on the national music scene. This program, based on a template that Newcap Radio has successfully created for LIVE 88.5 in Ottawa, is unique because it actually results in new Canadian music being created, recorded, played live and played on the radio.
LISTNUM 1 \l 1628 104.1 KISS‑FM will solicit entries from Vancouver and area artists and bands to participate in weekly live concerts. Listeners will be invited to see the artists perform and vote for the artist they feel deserves to move on during the ongoing competition. After a number of months of live performances and airplay of all artists on KISS‑FM, one grand prize winner will receive $300,000 in cash support from Newcap, designed to make the band into a recognized group with a record that will be sold, a touring act that will be of high quality and solid management to ensure good decision making. Additional cash prizes totaling $300,000 each year will be paid out to the four artists receiving the most votes from listeners to assist with the costs of recording, instrument purchases and equipment purchases.
LISTNUM 1 \l 1629 In Ottawa, this initiative has led to the regular playing of over 100 songs from 90 different independent, local bands. Without this type of opportunity, these songs would never be played on radio; the bands would continue to play their music to small groups with little fanfare. The KISS‑FM B.C. breakout will bring the music to the fans and get innovative and exciting new music played on the radio. That is because this initiative goes way beyond the cash funding.
LISTNUM 1 \l 1630 Newcap Radio's airplay and promotional pledge is the important second part of this initiative. While touring and video play are crucial aspects of the development of a new band, without airplay such efforts can be for naught.
LISTNUM 1 \l 1631 Newcap Radio will work with the band and its management to ensure that tours coincide with a radio airplay push to develop the band. Newcap Radio will guarantee A list rotation to two singles from the CD on all of its format compatible radio stations. This will ensure exposure in Vancouver on KISS‑FM, and across the country, attracting the attention of national programmers and record companies.
LISTNUM 1 \l 1632 We will combine this airplay support with tour promotion and support in every market in which Newcap Radio has a station, representing an additional indirect expenditure of close to $4 million over the licence term.
LISTNUM 1 \l 1633 MR. MURRAY: Madam Chair, Commissioners, with our expertise and track record, we believe Newcap is uniquely positioned to provide a new radio voice to Vancouver, and will fill a clear format void of adult urban with KISS‑FM.
LISTNUM 1 \l 1634 There is no doubt that 104.1 KISS‑FM can be readily and easily absorbed into the Vancouver market with minimal negative impact on incumbent stations.
LISTNUM 1 \l 1635 With radio revenue at $117 million, growing at a rate of 5 per cent annually, the Vancouver market with grow by almost $6 million each year, excluding the new revenue generated by KISS‑FM, significantly more than our projected first year revenues of $3.4 million.
LISTNUM 1 \l 1636 The bigger issue is whether a new entrant with a stand‑alone station on an impaired frequency will survive and thrive in the highly competitive Vancouver marketplace.
LISTNUM 1 \l 1637 We believe adding a new editorial voice to this market is important, and adult urban is the ideal format.
LISTNUM 1 \l 1638 We also believe that if you want a successful new entrant in this fiercely competitive market, it needs to be a strong national company. With this proposal, Newcap is that company.
LISTNUM 1 \l 1639 We would be pleased to answer any questions you might have.
LISTNUM 1 \l 1640 THE CHAIRPERSON: I will ask Commissioner Williams to lead the questions here, please.
LISTNUM 1 \l 1641 COMMISSIONER WILLIAMS: Good afternoon, Mr. Steele and Newcap panelists. Welcome to Vancouver.
LISTNUM 1 \l 1642 Your application has been very complete; however, a few questions still remain. I will work through them in some order, beginning with local programming and news, and then maybe spend a bit of time on synergies, music format, the quality of your business plan and your company's impact on the market, and perhaps a question or two in the Canadian talent development initiatives.
LISTNUM 1 \l 1643 Vancouver has been described as the best city in the Americas by Condé Nast magazine, the number three livable city in the world by a Mercer survey, the world's most desirable place to live by Economist magazine. It is one of the fastest growing urban centres in the world, the third fastest in Canada. It is a gateway to Asia and North America and it is a centre of diversity.
LISTNUM 1 \l 1644 It has a very healthy economy, capable of absorbing as many commercial stations for which frequencies are available. These are things that we have all heard.
LISTNUM 1 \l 1645 I see in your opening remarks you talk about Newcap's evolution to becoming a truly national broadcaster.
LISTNUM 1 \l 1646 We know why Newcap is interested in entering the Vancouver radio market. My first question is: Is the expansion of Newcap limited to Vancouver or is part of your strategic focus to expand throughout British Columbia as you have done in other Canadian provinces? If so, how important is it for Newcap to obtain a Vancouver licence?
LISTNUM 1 \l 1647 MR. STEELE: Maybe I will just start, David.
LISTNUM 1 \l 1648 Our strategy really is to try to grow our company across Canada, not just Vancouver. Our primary focus has always been sort of mid sized and small markets. We see ourselves as kind of consolidators of those kinds of market and we think we do a good job in those markets. When the opportunity avails itself, we want to segue into the major metropolitan markets like Vancouver, which is I guess the third largest market in Canada.
LISTNUM 1 \l 1649 I would have to say our overall strategy is not focused on major metro markets, but like I say, wherever the opportunity presents itself to expand into there, we will; we will certainly try. But we certainly want to grow and by growing, of course, we are able to do a number of things. We are able to attract people to our organization, talent within the industry. That sends a very positive message to the company.
LISTNUM 1 \l 1650 Also, I think, just as an aside, we see ourselves as very much like an artist friendly company, i.e. we are pro music. We have a lot of musicians on the panel here. We are music fans and we like to give exposure to artists. We sponsor a lot of musical initiatives and whatnot that probably don't make a lot of business sense, commercial sense, but it is near and dear to our hearts and giving exposure to artists from the east coast or the west coast, radio play is critical for them.
LISTNUM 1 \l 1651 Certainly Vancouver is a huge market for other artists to get exposure to, and we would love to have that opportunity to do that.
LISTNUM 1 \l 1652 COMMISSIONER WILLIAMS: If you achieve a licence in Vancouver, then I guess we can look to perhaps future expansions within British Columbia.
LISTNUM 1 \l 1653 MR. STEELE: Absolutely, yes.
LISTNUM 1 \l 1654 COMMISSIONER WILLIAMS: If you were not to achieve a licence in Vancouver, would that limit your move into British Columbia?
LISTNUM 1 \l 1655 MR. STEELE: Not at all. It is not necessary to have a beach head, so to speak, in a major metro market. We more or less did that in Alberta, and of course now we are in the major markets. But from a commercial perspective, if you are able to consolidate in an area, like say a northern part of a province or something like that with a string of stations, that is perfectly acceptable to us. As a matter of fact, that is kind of the things that we target, areas where we focus. But this would certainly not be the end of our growth strategy, that is for sure.
LISTNUM 1 \l 1656 COMMISSIONER WILLIAMS: Thank you.
LISTNUM 1 \l 1657 In your supplementary brief, one of our opening remarks pointed to the fact that giving Newcap a licence would provide a new editorial voice for Vancouver. I guess I would like to spend a bit of time on your programming, to begin with, to try and flesh that out a bit.
LISTNUM 1 \l 1658 In your application you indicated you would offer nine hours and 20 minutes to news, sports and weather. Of that total, what would be the amount of hours devoted to pure news, excluding any surveillance material?
LISTNUM 1 \l 1659 MR. MURRAY: I think I will pass that on to Gerry Phelan.
LISTNUM 1 \l 1660 MR. PHELAN: Thank you, Mr. Commissioner.
LISTNUM 1 \l 1661 In excess of 90 per cent would be pure news, be it made up of local, national and international news.
LISTNUM 1 \l 1662 We regard local as king, content of all of our newscasts in our successful stations across the country is made up predominantly of local news.
LISTNUM 1 \l 1663 In my own case, as you may know, I come from Newfoundland, the news talk station, VOCM, where 80 to 90 per cent of our daily newscasts, all of them, are local news, with just a semblance of national and international news.
LISTNUM 1 \l 1664 The Vancouver market is a little different. Because of the make up and the cultural diversity of this market, major international stories are in fact local stories. So, every story does become, to some degree, and can be made a local story.
LISTNUM 1 \l 1665 COMMISSIONER WILLIAMS: Your demographic that you are targeting, are there special considerations given to providing spoken word programming to your target audience?
LISTNUM 1 \l 1666 MR. PHELAN: We are making some special efforts ourselves to see that, as far as news coverage goes, we are taking that into account.
LISTNUM 1 \l 1667 As I said, local is king. So, most of our stories, which are going to be sourced locally, of course, will be developed and will be local stories, but we have also taken the opportunity already to open dialogue with some special interest groups, some diverse groups and some local ethnic media to see in what ways we can share things, in what ways we may be able to complement what they are doing, not only in Vancouver but across the country.
LISTNUM 1 \l 1668 If you don't mind, I would ask our Vancouver liaison, Prem, to speak to that.
LISTNUM 1 \l 1669 MR. GILL: Thanks, Gerry.
LISTNUM 1 \l 1670 I can give you an example of some of the things we have been talking to in terms of the local ethnic press. The concept of the news exchange provides a fantastic opportunity to do something really unique.
LISTNUM 1 \l 1671 We have had some preliminary discussions with one of the local English‑language ethnic newspaper called The Asian Post. This newspaper is a local independent newspaper. It is in the English language. It caters to the Asian and South Asian communities, but crosses over into the mainstream by virtue of the English language. They are known for often breaking local news stories, as are many of the other ethnic press. These stories, sometimes they make it to the mainstream press a little bit later.
LISTNUM 1 \l 1672 One of the proposals by Newcap for a spoken word program, Express Yourself, would be a great venue where a story breaks in let's say The Asian Post, and we invite that reporter on to the show Express Yourself to bring that perspective and broaden and deepen the understanding of whatever the issue is to more mainstream audience.
LISTNUM 1 \l 1673 Certainly from my experience, you often get a really limited view of issues that are so‑called ethnic issues within the mainstream media, but when you open up a dialogue between the so‑called mainstream and the ethnic communities, you get a broader understanding.
LISTNUM 1 \l 1674 MR. PHELAN: Mr. Commissioner, if I can add just one more point to that, from a national perspective, I see a giant advantage to this. Because of the make up of Vancouver and the ethno‑cultural stories that we would get from here, Newcap's ability to share those stories across the country from Vancouver to Calgary to Edmonton, right across to Fredericton and to my own province and to St. John's, to create what in fact could be an ethnic wire service of a conduit of information flowing from one end of the country and back the other way, so that the ethnic community, for example, in Newfoundland is sharing its stories back here and vice versa.
LISTNUM 1 \l 1675 It is a wonderful opportunity for us not only to share those stories with the rest of Canada, but to also serve the local Vancouver audience as they find out what is going on from similar communities across the country.
LISTNUM 1 \l 1676 COMMISSIONER WILLIAMS: Your application is targeting a female audience. How will your spoken word differ from other applicants that are also targeting a similar audience?
LISTNUM 1 \l 1677 MR. JONES: We are targeting an audience that skews about 65 per cent female. So all of our content would be designed to appeal best to that particular individual, be it music or spoken word.
LISTNUM 1 \l 1678 Josie can elaborate on some of the specific spoken word programs that may not necessarily be designed to reach just that one listener, that one target listener, but our overall target audience in Vancouver as a whole.
LISTNUM 1 \l 1679 MS GEUER: I think what happens when you are skewing to a more female audience, and I know this because HOT 89.9 in Ottawa skews to a female audience, that is your filter for everything you do. So, you may be covering the same story that other radio stations within your city are covering, but you are going to be covering it coming from a female's perspective perhaps. So, that is what is going to make it a little bit different.
LISTNUM 1 \l 1680 Also, in some of our features, like for example, Voices From Van, where we are going to ask our audience to call in or e‑mail their response to a question that is posed to them, if we have more female listeners, then obviously we are going to be having more of them call in. Then we are going to be mirroring back their opinions on the radio station through this feature, for example.
LISTNUM 1 \l 1681 COMMISSIONER WILLIAMS: Given the fact that your programming format is primarily music driven, could you explain why you have chosen to offer nine hours of news per week? Why would you be offering this much news?
LISTNUM 1 \l 1682 MR. JONES: Vancouver, as we have discussed and has been well documented, is a very diverse metropolitan, cosmopolitan city that is on a fast growth track, and there is a lot going on here that needs to be talked about.
LISTNUM 1 \l 1683 Great music radio stations are great radio stations because they are local. We can play local music, but ultimately being local means talking about the issues and concerns and day‑to‑day lives of your listeners in the community they exist in.
LISTNUM 1 \l 1684 So, we have put together an aggressive spoken word component to our programming, knowing that it is probably the best way to cement ourselves in the community and be a truly local broadcaster.
LISTNUM 1 \l 1685 MR. PHELAN: If you don't mind, again, Mr. Commissioner, 31 years in this business, mostly at News Talk or VOCM before we were bought by Newcap, and I thought I was going to have to be convinced that any non‑talk station, that a music‑driven station would have any semblance of news credibility. I quickly was convinced of that in fact over the last five years, but more particularly since I was involved in my last appearance before the Commission, which was for an application for Fredericton, that as well is a music‑driven station, which we promised a huge news commitment.
LISTNUM 1 \l 1686 One of the programs that we promised at that particular point was something called The Capital Report. It is a newscast that originates from any of the four capitals in Atlantic Canada, be it Charlottetown, Fredericton, St. John's or Halifax. It is a daily recap of the top stories from that particular area. We promised at that particular hearing, and I don't mind telling you that it was a bit of will this ever happen that I spoke about it to the Commission, but was I ever so delighted that it was put in my lap to make sure we followed through in that commitment and that in fact today, years after the hearing, The Capital Report does air and we do have the top stories from Atlantic Canada airing on not only on my news talk station, but on the music‑driven stations as well.
LISTNUM 1 \l 1687 We share stories in a way that is a little different than most people might realize. One of the stories that always comes to mind to me was a story I would never have known about or perhaps even cared about if I had just read it in the paper. It was a story of the first black hockey player in Canada, Willie O'Ree. They were naming a stadium after him in Fredericton. I would never have known about that story because it did not pick up in our local newspaper if our Fredericton station had not included it in The Capital Report. They talked about how he had played with the Boston Bruins and how his first game was against the Montreal Canadians in 1958. I won't tell you who won.
LISTNUM 1 \l 1688 It was a special game; it was a special point in history. That kind of story then came back to my town and aired in our town. Again, it airs on a music‑driven station in other markets. In mine it is a news talker. That kind of commitment, the resources that I am seeing that we are doing in our other Newcap stations is to me proof in the pudding that that is there.
LISTNUM 1 \l 1689 One final note, and I will leave it at this ‑‑ I am sorry I talk a lot ‑‑ in Red Deer, Alberta, our Newcap station which is not a news talker, unfortunately for my news talker has beaten me for best newscast in Canada on one occasion and I am not really happy about it. That in itself is a music‑driven station, but again they are doing something right. I think our company is too.
LISTNUM 1 \l 1690 MR. MURRAY: Before we close that point, even though Gerry is a bit surprised, Newcap does keep all of its commitments to the Commission.
LISTNUM 1 \l 1691 COMMISSIONER WILLIAMS: Well said.
LISTNUM 1 \l 1692 Tell me a bit about VOCM, the Voice of the Common Man, what is that program?
LISTNUM 1 \l 1693 MR. PHELAN: That is what it stands for. We have been around in excess of 60 years. It was originally a pre‑Confederation station before Newfoundland joined Canada. It has always been a predominant news voice in Newfoundland and Labrador. We have expanded over the years, of course, and now we have three talks shows a day. We have live newscasts 23 of 24 hours a day. We do record one. Our newsroom is staffed 23 of 24 hours a day.
LISTNUM 1 \l 1694 I am looking over to make sure they are not listening too much. We have four news vehicles with two people on call for news 24 hours a day, seven days a week, and we are very proud of what we do.
LISTNUM 1 \l 1695 We have in excess of 100 news awards, including three Edward R. Murrow awards, and our claim to fame is that we serve our audience and we try and serve our audience well. We believe that by delivering to our audience, everything else follows, and so far it has made good business sense.
LISTNUM 1 \l 1696 COMMISSIONER WILLIAMS: In your application you talk of the Voice of the Common Man programming also being implemented into this new station. How and to what degree and what type of content do you envision going?
LISTNUM 1 \l 1697 MR. PHELAN: I think we have to be careful how we word this. I will word it the way I would word it. All of a sudden we become a national broadcaster. I don't know if you want to think about that. Terry Fox started in St. John's; he didn't start in Halifax. Steve Fonyo, Rick Hanson, these people started in St. John's. If we get a Vancouver licence we are in fact coast to coast, and the only private radio station who will in fact be coast to coast.
LISTNUM 1 \l 1698 If we get us over to Victoria, it will be Capital Report across the country too, but let's not go there yet.
LISTNUM 1 \l 1699 Because we have the ability then to share resources ‑‑ you will notice in our application one of the things that we have said is a national news coordinator. We don't mean that person to be a national news director. There is a big difference in that because then I would be working for somebody else too. A national news coordinator will reach out to our stations across the country and be able to identify stories, for example, in St. John's that would be of local interest to the Vancouver audience and local stories in Vancouver that would be of interest to our stations in Calgary or Edmonton, and share those stories, given our services today.
LISTNUM 1 \l 1700 The big story today in Vancouver today, one of many, is the candidates for mayor. Some would say what difference does that make to the guy sitting on the rock today in his kitchen? The person who is elected mayor of Vancouver is going to be the face of our country in two years time when the Olympics are here. That has a significance to my audience and it is what I would identify in a news story and be able to talk about in a way that would make that relevant to my own audience.
LISTNUM 1 \l 1701 What we are talking about really is being able to reach out and touch our other stations. All of us have the wonderful service called Canadian Press. By the way, I am chairman of the National Editorial Committee just appointed in January. They mean a lot to me, the former Broadcast News. They got the broadcast and made it Canadian Press again. But in reality wouldn't it be great to have a new voice, a new editorial voice because it is our people, it is the Newcap people who are then providing and putting their mark on the stories and their research into the stories and our way of doing things in a national perspective as opposed to just the CBC or just the Canadian Press. It gives us the advantage to be able to do it for ourselves and to provide that to our audience.
LISTNUM 1 \l 1702 MR. MURRAY: If I could just circle back and answer your question that you asked originally, why do we have ten hours of news on this music‑driven station? What we learned from VOCM is that VOCM is almost always the number one station in St. John's and, from that and for many other reasons, we know how important news is to the local audience. Newcap has been dramatically increasing its news content in all of its stations and beefing it up in all of our applications because it is so critical and so important in today's world.
LISTNUM 1 \l 1703 COMMISSIONER WILLIAMS: Mr. Murray, would you be reworking this news? Is VOCM skewed towards a female audience, much like Ms Josie Geuer said earlier, is the news presented in a similar format that it can seamlessly move back and forth between these stations or would the basic information be reformatted to fit the target audience in Vancouver?
LISTNUM 1 \l 1704 MR. MURRAY: I am going to ask Steve to talk about that, but clearly Vancouver is very unique. If we were fortunate enough to be granted a Vancouver licence, Vancouver is so unique and the news content would be very unique. We learn things from VOCM and we learn things from our stations in Halifax and our stations in central Canada and we would apply many of those things. But the station that would be designed here for Vancouver would be very unique to Newcap and would serve Vancouver in a very full and unique way.
LISTNUM 1 \l 1705 MR. JONES: I think that captures it well. All of our news is rewritten, whether it is fed to us from Canadian Press or from other stations. The Capital Report is a good example of that sharing.
LISTNUM 1 \l 1706 If a story came out of Vancouver, as Gerry suggested, the mayoral election, the audio clip of the mayor accepting his title may be the centre piece of the story but how it is written and presented may differ on each radio station across the country because in no market can you just accept what works there will work where you are.
LISTNUM 1 \l 1707 COMMISSIONER WILLIAMS: Thank you for that.
LISTNUM 1 \l 1708 We have talked about some of the synergies in the last couple of minutes from a news perspective. Could you indicate if your proposed station would experience other synergies from an administrative, technical or any other point of view? Are there any other synergies that could be enjoyed by a proposed Vancouver station?
LISTNUM 1 \l 1709 MR. MURRAY: Certainly. Radio is a very local business, so the synergies that exist ‑‑ our station in Vancouver would operate very independently and very locally and would be 100 per cent local, et cetera.
LISTNUM 1 \l 1710 The synergies that I think you are asking about are things that a national broadcaster would bring to the table in terms of back office practices, centralized payroll, centralized payables and also best practices, having qualified experts in, you mentioned technical, programming, news. We would lend those best practices and apply those in Vancouver, but in a very local, unique way, with full‑time staff in Vancouver.
LISTNUM 1 \l 1711 COMMISSIONER WILLIAMS: Have you quantified these synergies and taken them into account in your financial projections? I don't need the specific amount.
LISTNUM 1 \l 1712 MR. MURRAY: I will ask Glenda. She has quantified those.
LISTNUM 1 \l 1713 MS SPENRATH: Yes, that is part of our administrative section. It is really a very small part but it represents the people that are at the head office, helping out day to day, whether it be by telephone or by visits and then providing consulting services, but it is taken into consideration, yes.
LISTNUM 1 \l 1714 COMMISSIONER WILLIAMS: Moving into the area of your music format, I would like to discuss with you your choice of music format for your proposed radio station, given the presence of the Astral, Pattison and CTV stations, CISC, CKBD and CHQM, these stations of course are targeting a similar market to what you propose.
LISTNUM 1 \l 1715 Why do you believe your format will provide the greatest degree of programming diversity and represent the best choice of format to serve this portion of the adult population in Vancouver?
LISTNUM 1 \l 1716 MR. JONES: As we noted in our presentation earlier, research is the cornerstone for a lot of those decisions. I will ask Mark Kassof to jump in as he quarterbacked that project.
LISTNUM 1 \l 1717 These other radio stations that exist have their own unique format, their own unique target. Even though on paper a radio station targeting 25 to 44 year old adults may appear to compete with another radio station targeting that same demographic, we all know that no two 25 to 44 year old adults are the same. Everyone has very different tastes and desires.
LISTNUM 1 \l 1718 So, the radio stations you mentioned owned by those companies are very different from what we are proposing. For example, The Beat is very much a top 40 radio station. QM‑FM is very much a softer AC station. All these stations have dramatically different formats from what we are proposing with adult urban. Maybe Mark can jump in and talk about the numbers that got us to that decision.
LISTNUM 1 \l 1719 MR. KASSOF: Sure. What we do when we look at format opportunities to evaluate format opportunities is look at two things. One is interest in the format and, secondly, the perceived availability of the format.
LISTNUM 1 \l 1720 So, in terms of the adult urban format, what we found is that 19 per cent of all 18‑64s rated this format a 4 or a 5 on a 5 point scale, where 5 means I would listen to the station all of the time I would listen to radio.
LISTNUM 1 \l 1721 But then we also asked them, is there a station like this in the market? To show how different this format is from the existing ones, three‑quarters of the 18‑64s in this market could not name a station like the one we described to them as adult urban. But what matters most, of course, is the opinions of people who really care about it.
LISTNUM 1 \l 1722 So, we have a statistic called per cent of format void. What that is is the per cent of listeners who are both interested in the format, have positive interest, a 4 or 5, and also cannot identify/associate any station with that existing format. The per cent of format void for this particular format is 10 per cent. So, what we are saying is one in ten of Vancouver's 18‑64s are interested in this, don't think they get it.
LISTNUM 1 \l 1723 Compared to other formats we looked at, there were two formats that were slightly but not significantly higher than that in terms of per cent of format void. One was Classic Hits at 12 per cent; the other 60s‑70s Oldies, also at 12 per cent. That is not a significant difference.
LISTNUM 1 \l 1724 There is a big difference in terms of a much higher percentage of listeners can already associate a station with those formats as opposed to adult urban.
LISTNUM 1 \l 1725 We also had one other format we looked at that equaled the per cent of format void for adult urban, which was triple A, also 10 per cent, but we found a big difference in terms of the passion for triple A versus the passion for this format. When we look at the people who say that I would listen to this format all of the time I listen to radio, 7 per cent say they would listen all the time to adult urban, only 3 per cent said they would listen all the time to triple A, even though they end up with the same format void.
LISTNUM 1 \l 1726 That consideration, the passion for format, is important in any format decision, regardless of the situation because passion is what really drives ratings, but we have a situation here that we have a format and a frequency that is somewhat disadvantaged compared to the others in the market.
LISTNUM 1 \l 1727 If you have a disadvantaged frequency, a frequency that is more limited than the ones it is going to compete with, then the passion becomes even that more important, because as people drive in and out of the signal, they are going to have to really love that radio station to want to keep coming back to that radio station.
LISTNUM 1 \l 1728 So, here the edge that adult urban has over triple A, more than two to one is enormous consideration.
LISTNUM 1 \l 1729 Based on all those considerations and factors, my suggestion to Newcap was that this would be the best format choice.
LISTNUM 1 \l 1730 COMMISSIONER WILLIAMS: Thank you, Mr. Kassof.
LISTNUM 1 \l 1731 So, adult urban that is gold, Motown and rhythm and blues and a combination thereof, can you discuss with us the challenges to meet the hits policy based on the reliance of this gold and contemporary rhythm and blues in pre‑1980 music. How will you be able to achieve that?
LISTNUM 1 \l 1732 MR. JONES: We don't envision any significant challenge to the format to accomplish what you are speaking of. While we do propose 60 per cent of our playlist to be gold, a good proportion of that will be 80s based. So, our pre‑1981 programming will be significant, but not in excess of regulations.
LISTNUM 1 \l 1733 Another consideration is that some of that music that maybe was recorded before 1981 may not have been a hit as defined by the current regulations but may have been a significant hit in the format to the listeners we are attracting.
LISTNUM 1 \l 1734 COMMISSIONER WILLIAMS: Thank you.
LISTNUM 1 \l 1735 Let's move towards your business plan. We have noticed in your audience share projections that you are projecting zero growth in listening hours and audience share over the licence term. What is the basis for this?
LISTNUM 1 \l 1736 MR. JONES: The basis is that we have seen in the past in our experience a new format that is one that listeners are very passionate about come into a market and achieve their ratings goals relatively quickly.
LISTNUM 1 \l 1737 So, the ratings projections that we have made, we believe we will reach relatively quickly and sustain, and we don't believe that we will reach a three share and then that will be into a nine share miraculously. Our vision is that we will sign on and relatively quickly achieve those goals, and our goal is to sustain them and we have built a business plan around that.
LISTNUM 1 \l 1738 That three share may be a 2.5 one book and a 3.5 the next. It is a best guess estimate as to how we will do.
LISTNUM 1 \l 1739 COMMISSIONER WILLIAMS: I have a question in that area. We note the 3 per cent audience share projection that you have indicated in your application. In dividing your projected total listening hours of 450,000 by the actual number of hours tuned in Vancouver market using the fall 2007 BBM, the audience share works out to be just over 1 per cent as opposed to 3 per cent. Can you clarify how your audience share projections were arrived at?
LISTNUM 1 \l 1740 MR. JONES: I can clarify how our audience share projections were arrived and Mark would be able to speak to some of that. But actually, going back to the BBM, I would have to refer back to some addition resources and get back to you to confirm it with BBM.
LISTNUM 1 \l 1741 MR. KASSOF: As far as projecting share, what we do is try to isolate, predict who will be the potential P‑1 listeners for our radio station, the people who say, that is the station I listen to most. We found that that is a really good correlation with ratings projection is P‑1, you know, that is my favourite radio station. To project a P‑1, what we do is we look at people who rate the format a 4 or 5 on our 5 point scale, but also do not rate any of the other formats we tested very highly. In other words, they are not passionate about another format, because even if they like this, if they are passionate about another format, they are not necessarily going to be a P‑1 listener to the station.
LISTNUM 1 \l 1742 So, we identify the P‑1 listeners that we project our best case scenario is going to be for this particular format. Then we look at how much time they spend listening to radio right now and compare that to the average for the total market and use that as a multiplier to say, let's say for example in this case the projected listeners to this format are right now lighter than average listeners to radio. I think that is going to change if they get their station, but being conservative, we are going to say, they are going to continue listening at that level so that they get multiplied by the ratio of their listening to total market listening. We identify them. They are our share essentially. That is where we get our share.
LISTNUM 1 \l 1743 In terms of the impact on other stations, what we do is if they are a potential P‑1 to our format, then we take them from whatever station they are saying now is their favourite station and move them into the column 4 adult urban in this case. Actually what we got is a 4.3 18 to 64 and a 4.9 25 to 54, but again there were single considerations that caused the stations to discount that, because apparently the signal does not cover the entire CMA.
LISTNUM 1 \l 1744 MR. MURRAY: If I can perhaps clarify that.
LISTNUM 1 \l 1745 COMMISSIONER WILLIAMS: Please proceed, Mr. Murray.
LISTNUM 1 \l 1746 MR. MURRAY: If you look at page 13 in our supplementary brief, the share schedule that shows there that we took from the research shows the 4.9 that Mr. Kassof just talked about, and it shows which stations our share would come from.
LISTNUM 1 \l 1747 Then on page 14, we didn't do it through the research, because of course the research is research of the entire market. But this proposed signal only covers 56 per cent of the population of Vancouver. So, we assumed that 4.9 would be 2.7, 56 per cent, and that schedule on page 14 was simply there to show the difficulty that this 104.1 frequency would present and that anybody who had it would be pretty close to the bottom, give or take, in the market.
LISTNUM 1 \l 1748 If you take that and go back to your question, if the 2.7 does not equate to the 450,000 hours based on BBM, then we have made a mistake because the 2.7 is right and the 4.9 is right, if that answers the question.
LISTNUM 1 \l 1749 We may have made a math error on the 450,000 hours and we would have to check through that, but clearly we are quite comfortable with the shares with our experience over many, many, many research studies and many, many, many stations and literally hundreds of BBMs compared to them. So, we are pretty comfortable with around 3 per cent.
LISTNUM 1 \l 1750 COMMISSIONER WILLIAMS: We will take your 2.7 per cent answer and if our staff needs some more clarification, legal counsel will clean that up at the end of the questioning.
LISTNUM 1 \l 1751 Moving into the area of projected revenues and profitability, we note in your application that you are projecting an average PBIT of 1.4 per cent between year 4 to 7, reaching a high of 3.8 in year 7. Given that the Vancouver market PBIT has trended at or above 20 per cent for the last five years, why do you expect your PBIT to perform well below that market even into year seven of your application? Does it have to do with this reach within the CMA that we were just discussing?
LISTNUM 1 \l 1752 MR. MURRAY: Yes, that is a significant factor or a huge factor. We are a new station coming in. What we would have that most of the existing stations would not have would be $7 million of CCD, which would dramatically reduce our percentage, and then from year 8 onward we would expect to have much better percentages.
LISTNUM 1 \l 1753 Then in addition to that, coming in and only reaching 56 per cent of the audience, not knowing how that really is going to affect us, maybe worse than we think, maybe it doesn't affect us only by 56 per cent, because like Mark alluded to there, people who live outside of our coverage area and drive into it, if they don't have us for a period of time, they are going to have to really like us to tune us in once they get into our coverage area, and there are 20 other choices or thereabouts.
LISTNUM 1 \l 1754 It is going to be a huge challenge to get a sustained audience.
LISTNUM 1 \l 1755 COMMISSIONER WILLIAMS: Given your relatively modest PBIT projections, if profitability should happen to be lower than expected, what is your level of commitment to funding unexpected losses over and above those estimated? Would you anticipate expense cuts or major changes in such areas as programming to make up for any shortfall?
LISTNUM 1 \l 1756 MR. MURRAY: Absolutely not. Newcap has operated in many markets across the country, as you are aware. We lost $17 million in Newfoundland before we broke even and turned the corner and did not reduce programming.
LISTNUM 1 \l 1757 We know that Vancouver is a major market. You have to invest heavily and significantly and believe in it for the long term and we are in this for the long term.
LISTNUM 1 \l 1758 COMMISSIONER WILLIAMS: Mr. Murray, thank you.
LISTNUM 1 \l 1759 Given that the new media industry in Vancouver is estimated to be about $2 billion a year and growing at a very rapid pace, could you please describe in a bit more detail some of the interactive features that you would propose with KISS‑FM, and is there an opportunity to monetize some of these things that you are doing?
LISTNUM 1 \l 1760 MR. MURRAY: I am going to ask Scott Broderick to talk about the interactive opportunities that we might see because I think it will relate very closely to what you are experiencing in Ottawa.
LISTNUM 1 \l 1761 MR. BRODERICK: In Ottawa we have two stations, HOT 89.9 and Live 88.5, which look at the profile of the audience being a little younger, very similar profile, 25‑44 core. We do a lot of interactive web‑based initiatives.
LISTNUM 1 \l 1762 One in fact we just finished. We gave a car away this morning with a program we call Dancing with the Cars. It was a five‑week contest. HOT 89.9 has one of the most active websites in the company. We got over 3 million hits last year on our site doing various interactive programs.
LISTNUM 1 \l 1763 Just as an aside, VOCM has 50 million hits a year, far beyond anything else in the country. HOT is equal to some of the other big stations that we have in Edmonton and Calgary.
LISTNUM 1 \l 1764 In five weeks we did 2.1 million hits on our website. Basically what it was is we had listeners submit a video and upload it to YouTube and display it on our site. We had I think 270 entries, as I said, over two million hits in a five‑week period. I think we embrace the new technology.
LISTNUM 1 \l 1765 The other thing I can tell you about Live 88.5 specifically is ‑‑ there has been seismic changes to the music industry and I think specific to production and distribution of music. A quick story, and it is not about our use of the media, but it is about the listener's use of the media.
LISTNUM 1 \l 1766 I was having a dinner with a friend before a hockey game and the waiter overheard our conversation. He said, "Do you work at Live 88.5?" I said, "Yeah." He says, "Do you have a card?" So I gave him my card. He said, I'll be right back. He scribbled on a napkin a website. He said, "I play in a band and this is our website. Could you do me a favour, could you listen and tell me what you think?" I said, "Sure." I mean, I am not directly involved in the music.
LISTNUM 1 \l 1767 So I stuffed the napkin in my pocket and I emptied my stuff on the bureau that night, and then next morning I took that to work with me. I gave it to our music director, didn't think about it again. My phone rang about three days later and he says, "It's me, Trevor." I am trying to think, who's Trevor, who's Trevor. Trevor was the waiter. He says, "Are you guys playing our song?" I said, well, I don't know, let me check.
LISTNUM 1 \l 1768 So I went down the hall and I said, "What did you do with that napkin?" He said, "I went to the website. It was pretty awesome, so we added the song." So, that actually happened. That never happens, by the way. I called this guy back and just made his day. That band actually entered our big money shot, our Canadian talent initiative. They didn't win, but they ended up getting $5,000. They were one of the round winners.
LISTNUM 1 \l 1769 That is all about the technology and embracing the technology. I see it not as a threat whatsoever, but a real asset in terms of marketing and targeting that audience.
LISTNUM 1 \l 1770 Those are just some examples.
LISTNUM 1 \l 1771 MR. MURRAY: Mr. Broderick, what Mr. Williams asked you was how you are going to make money with the web, and that is what I want to know as well.
LISTNUM 1 \l 1772 COMMISSIONER WILLIAMS: Thank you for repeating my question, Mr. Murray.
LISTNUM 1 \l 1773 MR. BRODERICK: Making money with the web, honestly, we are in the radio business and one of the things that I have sort of trumpeted within our company is it is not incremental revenue because they are the same people. We have access to their eyes through our website. We have access to their ears through the airwaves. They are the very same people.
LISTNUM 1 \l 1774 So I don't look it as incremental revenue. I see it as using all the tools available to build a relationship with the audience. I think that is the wrong answer for my boss over there, but it is one in the same because they are the same people. Whether we access their eyes or their ears, I think we need to embrace the technology and build relationships.
LISTNUM 1 \l 1775 COMMISSIONER WILLIAMS: So, forget their eyes; you are really after their ears is what you are saying?
LISTNUM 1 \l 1776 MR. BRODERICK: Well, let's be honest. They are wallets.
LISTNUM 1 \l 1777 MR. MURRAY: And we definitely want some of that $2 billion.
LISTNUM 1 \l 1778 COMMISSIONER WILLIAMS: You talk here about podcasting, streaming, SMS/texting, social networking, community connections. How big a part of other Newcap stations is this interactivity with your radio station?
LISTNUM 1 \l 1779 MR. JONES: The internet and technology plays a huge role in all of our stations. Scott has mentioned a couple of examples being the recent promotion on HOT. Another one would be the promotion last year on Live where we asked our listeners to create our TV commercial, and stumbled across a guy, he is not a TV producer but he is now because he created the winning entry and he was so good, we went back and bought more from him. VOCM getting millions of hits from around the world.
LISTNUM 1 \l 1780 I was in an elevator in Los Angeles last week and had a name tag on for a convention. He said, "You're from Nova Scotia." He said, "I am a pilot with an airline out of Hong Kong. My wife is from Newfoundland and has VOCM as her bookmark when we wake up every day and check the weather." That kind of technology is very big for us.
LISTNUM 1 \l 1781 Podcasting is a big deal at KROCK in Charlottetown. We recently started podcasting our local music program so that listeners can download it on demand when the content is suited to their lifestyle.
LISTNUM 1 \l 1782 COMMISSIONER WILLIAMS: Thank you, Mr. Jones.
LISTNUM 1 \l 1783 You, I am sure, have read the applications of those that are competing for this frequency. Which would be the most complementary or least harmful to your business plan and, then the next part of that, of course, is which would be the most threatening or least complementary if we were to licence more than one?
LISTNUM 1 \l 1784 MR. MURRAY: Mr. Kassof made the point, I think, quite clearly and accurately, that adult urban is a much better fit for this market than triple A. There are several triple A frequencies available. Adult urban is also very complementary with triple A, and Steve can talk in more specifics about that.
LISTNUM 1 \l 1785 Just to answer your question directly, from our analysis of all of the applications and from the information we are receiving from our technical experts is that 104.1 really is the only viable frequency for most of the applicants. 100.5, I think it is, is an application that Pattison could use because it interferes with their signal in Victoria, and if they are prepared to accept that, then they could do that for their AM/FM conversion. So I think that is perhaps a logical one to approve.
LISTNUM 1 \l 1786 The other frequencies do not appear to be viable. The information that we are getting is that they interfere with Rogers, they interfere with the CBC or Industry Canada is just saying that is simply not a viable frequency.
LISTNUM 1 \l 1787 So, although some people think they do exist, we don't. We think 104.1 is the only frequency that virtually most of the applicants here could use.
LISTNUM 1 \l 1788 Does that answer your question?
LISTNUM 1 \l 1789 COMMISSIONER WILLIAMS: Yes.
LISTNUM 1 \l 1790 MR. JONES: Specifically to format, none of the other formats are a formattic threat to us. If we were to be awarded 104.1, whatever else was licensed would, from a format perspective, not danger our business plan one bit. We are proposing what we believe is an entirely unique format that can co‑exist quite peacefully with triple A. They are very, very different targets. Triple A is, as I am sure you will here numerous times over the next few days, a rock‑based format, encompassing all different kinds of rock, but it is guitar and drums and rock based.
LISTNUM 1 \l 1791 What we are proposing in adult urban is very much about rhythmic music and soul music and it is about R&B ballads. It is a format that has become incredibly popular in many American cities. It is yet to make a footprint here in Canada, but we believe from our research this is the market to do it in.
LISTNUM 1 \l 1792 We looked at many markets that have huge cultural diversity markets like Los Angeles and New York and Chicago and Detroit and Dallas. These markets are each different from each other in terms of their ethnic make up.
LISTNUM 1 \l 1793 Vancouver is one of those markets where that same cosmopolitan air exists. Those stations and those markets have become top five, top three radio stations. We believe that we can make a great radio station here in Vancouver with that three share.
LISTNUM 1 \l 1794 COMMISSIONER WILLIAMS: Is that similar format available in Seattle?
LISTNUM 1 \l 1795 MR. JONES: There would be an urban AC, I believe, available in Seattle. I can check which station it is.
LISTNUM 1 \l 1796 COMMISSIONER WILLIAMS: Vancouver and Seattle being the two larger communities in the Pacific northwest.
LISTNUM 1 \l 1797 It is that time of the day where you get two minutes to tell us why you are ‑‑ I am sorry, I defer to my Chair.
LISTNUM 1 \l 1798 THE CHAIRPERSON: I am still having some difficulty understanding what exactly is the adult urban format. Let me explain my concern and then maybe you can comment on it and then clarify what the format is.
LISTNUM 1 \l 1799 When I looked at your playlist in your supplementary brief, the question I had that immediately popped into my mind was that it really is the same songs that are played on 103.5, which is QM‑FM, some of it on The Beat and the CISL. I do listen to the Vancouver stations a lot. That was one of the questions that had come to my mind when I was just looking at your playlist.
LISTNUM 1 \l 1800 Today, the sound clip of your station sounded very, very, very much like those stations that I do listen to. So, I still don't appreciate the diversity that it will introduce into the market.
LISTNUM 1 \l 1801 The other thing when I was thinking through your market study and you were saying there were two formats, and I believe you said it is triple A and then the adult urban that the audience seemed to say they could not identify an existing station to those formats, I could be wrong, and then I was thinking, well, when I look at the nine formats that you examined, classic rock, classic hits, oldies, could it be that to the layman they haven't heard of adult urban or they haven't heard much triple A in Canada, and that is why they say that there is no station associated with that kind of music when, in fact, when you look at the substance of what makes up the format, it is very similar to what we have already.
LISTNUM 1 \l 1802 MR. JONES: There are a couple of questions in there. I will try and address some of those points one by one and maybe Mr. Kassof may like to jump in at certain points.
LISTNUM 1 \l 1803 The adult urban format is very different in its make up from QM‑FM, from Clear, from the other stations you have mentioned. Those radio stations are AC radio stations and, you are right, they do play certain songs, certain artists that do cross over.
LISTNUM 1 \l 1804 The difference with this format is rooted entirely in R&B and soul and ballads, and it doesn't have the other elements of AC as those stations do.
LISTNUM 1 \l 1805 We did do some estimates of overlap and it looked like about 70 to 80 per cent of our playlist was unique on any given hour. Now, that may change hour to hour and day to day, depending on what kind of hits are out there at the time.
LISTNUM 1 \l 1806 Another consideration is that a lot of the music that you may hear on those radio stations that overlaps with our proposal, may be played in specialty programs, it may be played sporadically. It may be what programmers would refer to as a spice category that would come up every once in a while to add some dynamic to the radio station.
LISTNUM 1 \l 1807 We are making a commitment to play it all the time. From our research, our audience has definitely suggested that they want to hear it all the time. There is a significant audience for it out there.
LISTNUM 1 \l 1808 To demonstrate the lack of overlap with some of those radio stations, you can see in our ratings projections that we would have an impact on QM‑FM. We would also have an impact on The Beat, one of the more popular Vancouver radio stations, even though The Beat's playlist, I think you would agree, is very far removed from that montage. So, I don't believe the duplication is quite as much as may be perceived.
LISTNUM 1 \l 1809 To one other point, Mark may address, how we describe these formats was more than just saying would you listen to an adult urban radio station? There was a lot more in the research that Mark may address.
LISTNUM 1 \l 1810 MR. KASSOF: Actually, we should clarify that. We don't use the lingo. Here we say triple A, adult urban, all those things, but those words are never used with the listeners we speak to in terms of surveys. What we do is we describe the format in terms of artist examples. In this case, for adult urban we think of a radio station that plays performers like Luther VanDross, Mary J. Blige, R. Kelly and Musiq Soulchild.
LISTNUM 1 \l 1811 But then we said, it would sound like this. And then they heard it. So we described it, they heard it. The term "adult urban" was never exposed to them whatsoever.
LISTNUM 1 \l 1812 It is true that some of this music will be played by an adult contemporary station like QM, no doubt about it, but really what makes formats different is what is around it, what else are they playing, and they are playing a lot of things that would never fit on adult urban. Also, they would play the very big urban crossover hits, whereas this station would go much deeper into the urban genre.
LISTNUM 1 \l 1813 As far as the difference between this and, say, a rhythmic CHR station or a straight CHR station, they too would play the very biggest, but they would also play hip hop.
LISTNUM 1 \l 1814 This is an adult urban station. This station would play no hip hop whatsoever. So it really is a very different kind of radio station than anything, although I can understand that certainly there are songs, you are going to certainly hear songs in common, just like you will hear songs in common between the classic rock station and QM that I am sure that they have in common as well.
LISTNUM 1 \l 1815 THE CHAIRPERSON: Thank you for your help.
LISTNUM 1 \l 1816 I have one question for Mr. Phelan. In your presentation you said that we will appoint a new national news coordinator. Then you go down two lines, also specifically to find local stories of relevance to our other stations. I am not clear on how that would work. How would the national news coordinator find the local stories?
LISTNUM 1 \l 1817 MR. PHELAN: The idea of a national is really the term to describe the position because they will be dealing with all of the Newcap stations across the country.
LISTNUM 1 \l 1818 Perhaps a good example will be tomorrow's federal budget. The national news coordinator will be able to reach out to all of the Newcap stations and suggest, having listened to the budget, some different angles that they might take and approach that they might take in researching a story idea in budget reaction, but it would be a local story for that particular station.
LISTNUM 1 \l 1819 Let me bring it back to the Vancouver example, if I can, using the same thing. Perhaps there is some measure in the budget tomorrow regarding funding being taken away from or given to for cultural purposes. The national news coordinator could suggest to the Newcap station in Halifax that perhaps they talk to the local multicultural organization and see what their reaction would be. That becomes a local story there that can be shared then with our Vancouver station. So they are getting a taste of what other cultural communities across the country are feeling and vice versa.
LISTNUM 1 \l 1820 It becomes a coordinating position where this person is actually reaching out with ideas and seeing the follow through, the follow up that these stories can be brought together and then shared among the Newcap stations.
LISTNUM 1 \l 1821 THE CHAIRPERSON: Thank you. I believe our legal counsel has a question. Then I will turn it back to Commissioner Williams for the wrap.
LISTNUM 1 \l 1822 MS PINSKY: Thank you.
LISTNUM 1 \l 1823 I just have a question of clarification with regard to the news, the amount of news that you intend to broadcast. In the handout that you gave this morning, you indicate that the total amount of news, which would include news, weather, sports and traffic, would be 10/41, ten hours and 41 minutes, and I believe you said approximately 90 per cent would be pure news.
LISTNUM 1 \l 1824 Then in your deficiency response dated 23 November, you indicated that the news, including sports and weather together would total about nine hours and 20 minutes. I would just ask if you could clarify the specific amount.
LISTNUM 1 \l 1825 MS SPENRATH: Yes, I can actually. I went through all of the application and compared the application to the deficiency letter and the correct amount is in the actual supplementary brief. So, the ten hours, 41 minutes is the correct amount. It was an error on the deficiency letter.
LISTNUM 1 \l 1826 MS PINSKY: Sorry, the ten hours ‑‑
LISTNUM 1 \l 1827 MS SPENRATH: The ten hours, 41 minutes is the correct amount.
LISTNUM 1 \l 1828 MR. MURRAY: Do you have the handout that we provided with our list?
LISTNUM 1 \l 1829 MS PINSKY: Yes, that is what I am looking at. I am just comparing that.
LISTNUM 1 \l 1830 MR. MURRAY: We just completed that yesterday or today and it is the absolutely most up to date one. We realize that we did make a mistake in the reply to deficiency.
LISTNUM 1 \l 1831 MS SPENRATH: Yes, the reply to deficiency was light.
LISTNUM 1 \l 1832 MS PINSKY: You indicated approximately 90 per cent of that amount would be pure news. Do you have the specific amount that we could identify?
LISTNUM 1 \l 1833 MS SPENRATH: I don't have it right now, but I can get it to you by the end of the day.
LISTNUM 1 \l 1834 MS PINSKY: Thank you.
LISTNUM 1 \l 1835 THE CHAIRPERSON: I believe Commissioner Duncan has a question to add.
LISTNUM 1 \l 1836 COMMISSIONER DUNCAN: Just a quick question, Mr. Murray. I don't have it right here at my fingertips, but I have it somewhere. Did you in answer to the question, did you have a second frequency, I take it from your earlier comments that you don't. It is either 104.1 or nothing?
LISTNUM 1 \l 1837 MR. MURRAY: That is right. If there was another frequency, we would certainly consider that, but we absolutely believe our application is the best use of 104.1, and we believe that is really the only viable frequency, and it is quite impaired.
LISTNUM 1 \l 1838 COMMISSIONER DUNCAN: And that is 56 per cent of the market? This is the first time I had heard that.
LISTNUM 1 \l 1839 MR. MURRAY: Yes. If you look at our coverage map, the coverage map, and I am sure you have this, but the normal .3 and .5 or .3 millivolt and .5 are sort of the outside service. I am not sure if you can see that. But there is only a small amount of coverage that doesn't have interference.
LISTNUM 1 \l 1840 So, of the two point whatever million population that live in Vancouver, only 1.4 million are in our coverage area.
LISTNUM 1 \l 1841 COMMISSIONER DUNCAN: Thank you very much for that.
LISTNUM 1 \l 1842 COMMISSIONER WILLIAMS: Thank you, Madam Chair.
LISTNUM 1 \l 1843 I just have a couple of questions left. In your supplementary brief, you state that Newcap prides itself on a reputation of effecting significant, unequivocal contributions to the Canadian broadcasting system wherever you hold licences and that you are committed to providing substantial aid to Canadian content development through a number of initiatives designed to support and promote new emerging artists in Vancouver, British Columbia, and also to foster new employment and career opportunities for aboriginal people.
LISTNUM 1 \l 1844 Then I guess earlier today in your opening remarks on page 8 you said that particular attention will be paid to our on‑air personalities. Our announcers and reporters will be representative of the ethnic mosaic of Vancouver. Indeed, our aim will be to ensure that at least three of five newscast reporter are drawn from visible minority or aboriginal communities.
LISTNUM 1 \l 1845 When you talk about fostering new employment and career opportunities for aboriginal people, are there specific initiatives that Newcap has other than the one that was mentioned in your presentation during your opening remarks?
LISTNUM 1 \l 1846 MR. MURRAY: Yes, there are. I will ask Glenda to give us some details and examples.
LISTNUM 1 \l 1847 In the case of Vancouver, Vancouver is so rich with diversity and there is such an incredible talent pool from all ethnic and cultural backgrounds, that Vancouver will be a pleasure to operate in. We realized many, many years ago that in order to be successful in radio, we increased our news. We also very much increased our cultural diversity approach because that is what our local audience wants.
LISTNUM 1 \l 1848 So, maybe, Glenda, you can talk about aboriginal initiatives.
LISTNUM 1 \l 1849 MS SPENRATH: Yes, absolutely. There is a couple of organizations that I have been regularly contacting now. One is NARIA, the National Aboriginal Recording Industry Association, to get suggestions on recruiting from the aboriginal population, and as well the Canadian Society of Recording Arts, which is based in Calgary and Kelowna. So, I have had discussions. We have actually sent some of our CCD money in the past year specifically to scholarships for aboriginal students.
LISTNUM 1 \l 1850 COMMISSIONER WILLIAMS: Thank you.
LISTNUM 1 \l 1851 I had a few other comments on your Canadian content contribution initiatives, but your opening remarks have detailed them quite well, so we don't need to go through them.
LISTNUM 1 \l 1852 It is your opportunity now to go ahead with the two minutes to explain why Newcap should be the company chosen for 104.1 and licensed in Vancouver.
LISTNUM 1 \l 1853 MR. STEELE: Thank you for that opportunity.
LISTNUM 1 \l 1854 Thank you, Madam Chair. There are a variety and number of applications before you today. It is a telling indicator of the vibrancy and the vitality of the Canadian radio market in Vancouver, in particular. It is a very desirable radio market here. It is also a unique one, calling for the right combination of being able to compete with strong incumbents, while at the same time making a contribution that reflects Vancouver's character and diversity. We strongly believe that our application for KISS‑FM provides the best possible use of 104.1 for the following reasons.
LISTNUM 1 \l 1855 First, a new independent editorial voice in the market.
LISTNUM 1 \l 1856 Second, an adult urban musical format, which our research proves will have a broad appeal. And I hope, Madam Chair, we were able to explain the uniqueness of the format. I know it is tough sometimes trying to figure out these formats. It is like describing shades of blue or something. We go through the same process when we are sitting down with programmers and research and trying to get a feel of what the station will sound like.
LISTNUM 1 \l 1857 But I think the overall feel of this station, its presentation, its news content and presentation will be unique.
LISTNUM 1 \l 1858 Third, 23 hours a week of spoken word programming, including 11 hours of local news.
LISTNUM 1 \l 1859 Fourth, specific initiatives to reflect Vancouver's cultural diversity and work with local ethnic media.
LISTNUM 1 \l 1860 Fifth, a contribution to the development of Canadian content of over $7 million, including significant well‑designed and proven support for music education and emerging local talent.
LISTNUM 1 \l 1861 Sixth, a minimum of 40 per cent Canadian content.
LISTNUM 1 \l 1862 Seventh, we have the desire and we have the passion necessary to successfully compete with this constrained frequency against the large broadcasters who dominate the radio landscape here. As Commissioner Williams asked earlier, it is a challenge. This frequency is restricted, and I just want to assure you we have the resources and the commitment to stick with this for the long term. We take a very long‑term view of these things on all our commitments that we present to you today.
LISTNUM 1 \l 1863 Finally, being granted the privilege of being Canada's first coast‑to‑coast radio broadcaster will allow us to bring our style of locally oriented, locally managed and locally committed radio to this fantastic city and in a meaningful way will enhance our coverage of new and support for Canadian talent across the country, and no other new entrant would give Vancouver artists the cross‑Canada exposure that we will with out breakout initiative, similar to what we are doing in Ottawa. No other new entrant will take relevant Vancouver news stories across the country and vice versa.
LISTNUM 1 \l 1864 Therefore, we greatly appreciate the opportunity that you gave us to present to you today, and we look forward to the subsequent phases.
LISTNUM 1 \l 1865 Thank you very much.
LISTNUM 1 \l 1866 THE CHAIRPERSON: Thank you very much. Thank you for your presentation and your time.
LISTNUM 1 \l 1867 We will take a break now and be back at ten past 3:00.
‑‑‑ Upon recessing at 1453 / Suspension à 1453
‑‑‑ Upon resuming at 1510 / Reprise à 1510
LISTNUM 1 \l 1868 THE SECRETARY: Please take a seat.
LISTNUM 1 \l 1869 We will now proceed with item 4, which is an application by Vista Radio Limited for a licence to operate an English‑language FM commercial radio programming undertaking in Vancouver.
LISTNUM 1 \l 1870 Please introduce yourself and your colleagues, and you will then have 20 minutes to make a presentation.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 1871 MS MICALLEF: Thank you.
LISTNUM 1 \l 1872 I am Margot Micallef, the Chair and CEO of Vista Radio Limited and a founding shareholder of the company. To my right is Paul Mann, Executive Vice‑President Sales for Vista and also a founding shareholder. To my immediate left is another of our founding shareholders, Jason Mann, our Vice‑President Programming. Next to Jason are the newest additions to the Vista team: Bob Robertson and Linda Cullen. Bob and Linda will be our morning team on Sea FM, and Bob will also take on the role of Program Director.
LISTNUM 1 \l 1873 Behind me is Ingrid Vaughan, who is Director of Human Resources and Diversity. To Ingrid's left is John Yerxa, who has been researching Canadian radio since the mid 1980s.
LISTNUM 1 \l 1874 Madam Chair, before we begin our presentation, Paul Mann, whom I have just introduced as our Executive Vice‑President and who is going to be demoted shortly by me, is going to explain a clerical error in our application. Paul.
LISTNUM 1 \l 1875 MR. PAUL MANN: In the interest of preventing that demotion, the detailed financial spreadsheets that were initially filed with our application are correct. However, these numbers were transferred by staff from the spreadsheets to section 7.1 of the application form, and it is obvious that the final line of 7.1 of the CRTC form clearly does not flow from the information above it, nor does it match our detailed spreadsheets.
LISTNUM 1 \l 1876 We have corrected that final line of 7.1. I have handed it to the secretary and filed a sufficient number of corrected pages for the panel and any other interested parties. You each have a copy in your files as well.
LISTNUM 1 \l 1877 We want to be clear that throughout the process the detailed financial projections on file were correct.
LISTNUM 1 \l 1878 MS MICALLEF: Thank you, Madam Chair. We are now ready to begin our presentation.
LISTNUM 1 \l 1879 Vista operates 22 radio stations, 20 of which are in British Columbia.
LISTNUM 1 \l 1880 Given the tremendous consolidation in the broadcasting industry, the opportunity for Vista to acquire additional radio stations is now severely limited. Yet, if Vista is to remain strong and able to continue to provide the excellent service it currently provides to 20 smaller communities in British Columbia, to introduce new technology and new ideas and to continue to adapt to the ever changing landscape, it must, like other broadcasting companies, grow.
LISTNUM 1 \l 1881 Vista is a BC‑based regional broadcaster. Therefore, Vancouver signifies a unique opportunity for Vista to evolve. A Vancouver station will form part of the foundation on which Vista can continue to grow and bring its brand of radio to western Canada.
LISTNUM 1 \l 1882 MR. PAUL MANN: Canada's radio broadcasting industry has indeed become increasingly consolidated. Today, there are six operators who control 55 per cent of all national tuning and almost 75 per cent of all English radio revenues.
LISTNUM 1 \l 1883 At the Diversity of Voices proceedings last September, the CRTC Chairman emphasized:
"The issue of media concentration is an important one, and the presence of a diversity of voices is essential to the proper functioning of a democracy."
LISTNUM 1 \l 1884 No where is the need for diversity more evident than in Vancouver, where the radio market is dominated by five of the largest radio operators in Canada who, together, own all of the 14 English‑language commercial stations.
LISTNUM 1 \l 1885 Further, Vancouver is underserved as a market in terms of FM service. It has seven mainstream FM commercial radio stations. By comparison, Calgary has 11 and Edmonton has eight, and, yet, Vancouver has twice the population of Calgary or Edmonton.
LISTNUM 1 \l 1886 MS MICALLEF: Who, better than Vista, with a proven track record as a B.C. broadcaster, can bring that important diversity to Vancouver while strengthening a continued capacity to bring radio service in so many smaller B.C. communities.
LISTNUM 1 \l 1887 Vista will not only bring a credible ownership alternative to Vancouver but a credible fresh, new consumer option for local 45‑plus radio listeners. Its 70s based format is a format which the existing offerings in Vancouver, and the research, have shown to be absent in the market, although in great demand.
LISTNUM 1 \l 1888 Vista is a strong company with a highly experienced team. Its management team brings significant prior experience in large market broadcasting in Calgary, Edmonton, Toronto, Victoria and Vancouver. And, of course, Vista is no stranger to start ups. We successfully launched our first new radio station in Grande Prairie last year where, under winter conditions, with construction trades in short supply, we were able to get FREE FM on the air in just 90 days from our licensing decision.
LISTNUM 1 \l 1889 More importantly, Vista has already exceeded its first year business plan in Grande Prairie. In fact, we are successful in all of our markets and we attribute this success to our passion, our drive and our understanding of radio. Our 173 employees are devoted to high quality radio. They are all superstars.
LISTNUM 1 \l 1890 Vista is also a well capitalized company. Over the last two and a half years, it has invested roughly $20 million to acquire, launch, re‑launch and upgrade its 22 stations. It has a committed shareholder base, which includes 50 of its employees. In fact, Vista has implemented an employee share purchase program. It is proud to say that 100 per cent of its senior management and 25 per cent of its general employee population are shareholders of the company.
LISTNUM 1 \l 1891 This may seem like a lot of shareholders, but Vista's stability is ensured because ten of us together hold over 58 per cent of the shares of the company. Adding senior management to the group increases the percentage to 68 per cent.
LISTNUM 1 \l 1892 While we are confident in our business plan and in the profitability of SEA‑FM, we are also confident that the commitment from our shareholders will enable Vista to withstand any surprises or downturns in the economy.
LISTNUM 1 \l 1893 MR. PAUL MANN: Vista's team has strong ties to Vancouver. Our proposed SEA‑FM morning team, Bob Robertson and Linda Cullen, are long‑time Vancouver residents, with history at the CBC, CTV, as well as commercial radio operations such as CKNW, and as Program Director with Moffat Communications in Calgary. Bob and Linda are comedy legends in Vancouver and known national wide from their years as hosts of Double Exposure.
LISTNUM 1 \l 1894 Bob and Linda are deeply connected to this city and Bob will serve as SEA‑FM's Program Director, and Bob and Linda will, as mentioned, become shareholders of Vista.
LISTNUM 1 \l 1895 In addition, our CEO also is a Vancouverite, having been schooled here and spent the majority of her adult life here. She established herself as a preeminent communications lawyer in Vancouver, while serving on a number of community boards, including the HR McMillan Planetarium and the Endeavour Society, which is an umbrella organization that raises funds for 11 local charities in Vancouver. And just last year she raised 200,000 for the Corpus Christi College Library on the UBC campus.
LISTNUM 1 \l 1896 MR. JASON MANN: The 45‑plus age group now represents almost 850,000 inhabitants or 40 per cent of the total Vancouver CMA population.
LISTNUM 1 \l 1897 Furthermore, Vancouver's 45 to 64 age demographic now includes the bulk of the baby boomers and will continue to expand as the population ages further.
LISTNUM 1 \l 1898 There is no existing FM station in Vancouver that primarily targets radio listeners aged 45‑plus.
LISTNUM 1 \l 1899 No FM station in the Vancouver market currently offers a 1970s‑based AC format, which many of today's 45‑plus audience listened to during their formative years.
LISTNUM 1 \l 1900 SEA‑FM's music programming will therefore fill a huge void on the Vancouver local FM radio dial.
LISTNUM 1 \l 1901 Last spring, well before the Commission's call for Vancouver radio applications, we commissioned Banister Research to work with John Yerxa in determining the best format opportunity in Vancouver.
LISTNUM 1 \l 1902 MR. YERXA: In early June of 2007, we tested four different format options: Two targeted at the older end of the age spectrum, and two targeted at the younger end of the age spectrum.
LISTNUM 1 \l 1903 The research produced the following results.
LISTNUM 1 \l 1904 In terms of popularity, 1970s‑based AC clearly ranked highest, followed by HOT AC, alternative rock, and classic country.
LISTNUM 1 \l 1905 However, in terms of availability, 1970s‑based AC and classic country clearly emerged as the two most difficult music types for listeners to locate on the dial.
LISTNUM 1 \l 1906 Therefore, given its high popularity with a significant segment of the population, and its low availability, 1970s‑based AC was selected by Vista as the best new FM format option.
LISTNUM 1 \l 1907 While a 70s‑based AC may skew slightly more towards women, SEA‑FM will specifically target adults 45 to 54 years of age, with a primary focus on someone who is 50 years of age today, and who was between 13 and 22 years of age during the great musical decade of the 1970s.
LISTNUM 1 \l 1908 The research also demonstrated that a new 1970s‑based AC would draw its core listeners from no less than 13 existing Vancouver stations, while attracting no more than 16 per cent of its total partisanship from any particular incumbent.
LISTNUM 1 \l 1909 Moreover, at least one‑fifth of a new 1970s‑based AC core audience would be repatriated from out‑of‑market stations and by attracting radio listeners who currently do not have a favourite radio station.
LISTNUM 1 \l 1910 Of all the applicants before you, Vista is targeting the highest percentage of 35‑plus listeners. No other applicant is putting a greater concentration on those 45‑plus years of age, which now account for 40 per cent of the Vancouver CMA.
LISTNUM 1 \l 1911 MR. JASON MANN: The artists and groups on our playlist receive little airplay on Vancouver FM stations, and will appeal most directly to local radio listeners who fall within the 45 and 54 age demographic, and whose formative listening years spanned the musical decade of the 1970s.
LISTNUM 1 \l 1912 On page 20 of the supplementary brief, Vista described how distinct its musical sound is from existing broadcasters in Vancouver. To quickly summarize, we reported that none of the top five stations SEA‑FM could draw listeners from was currently playing any more than 18 per cent of its music from the 1970s. SEA‑FM will play 60 per cent of its music from this decade.
LISTNUM 1 \l 1913 In a follow‑up BDS analysis, we would like to again report that amongst those stations SEA‑FM could marginally impact, there is very little music cross‑over.
LISTNUM 1 \l 1914 For example, only 16 per cent of Vista's total share will be drawn from CHQM because approximately 90 per cent of CHQM's repertoire extends from 1980 to 2007, and only 9 per cent falls within the 1970s decade.
LISTNUM 1 \l 1915 While 13 per cent of Vista's overall share will come from CKLG or JACK‑FM, only 18 per cent of the music it plays is 1970s‑based and almost all of it is clearly rock or rock‑based pop.
LISTNUM 1 \l 1916 Of the three AM stations SEA‑FM could marginally impact, CKNW, CBC One and CISL, NW and CBC One are both positioned as a full‑service information talk station and rarely play any music. However, 11 per cent of Vista's share could come from CKNW and 6 per cent from CBC One because they and Vista target the 45‑plus listeners who appreciate the kind of news and spoken word package SEA‑FM is proposing.
LISTNUM 1 \l 1917 With respect to CISL‑AM, which does play music from the 50s, 60s, 70s and 80s, only 6 per cent of Vista's overall share would come from it.
LISTNUM 1 \l 1918 Even Clear‑FM, to the extent that it reaches Vancouver, plays only 30 per cent of their music from the 70s. And no more than 4 per cent of Vista's total share will be drawn from Clear‑FM.
LISTNUM 1 \l 1919 Vista's music format will not only highlight starts of the 1970s, but Vista will also play a role in giving airplay to new and emerging Canadian artists. These new and emerging artists will make up the bulk of the more recently played music.
LISTNUM 1 \l 1920 And of the music we will play which is more recent than the 70s, our commitment is that SEA‑FM will play 35 per cent Canadian music weekly. However, at least one‑third of it Cancon, or a minimum of 12 per cent of SEA‑FM's overall music playlist, will be devoted to emerging Canadian talent. In particular, B.C.‑based artists, as identified by a star in the sample playlist in our supplementary brief. These artists will complement the overall mood and texture of the radio station. Both our Canadian content and our emerging artists will be distributed evenly throughout the week, including between 6:00 a.m. to 6:00 p.m. Monday to Friday.
LISTNUM 1 \l 1921 MR. PAUL MANN: Our proposal is distinct from every other existing station in both music and spoken word.
LISTNUM 1 \l 1922 While our target audience has clearly indicated its desire for the distinct music concept proposed, SEA‑FM will also offer a minimum 18 hours of spoken word programming weekly.
LISTNUM 1 \l 1923 On pages 16 and 17 of our supplementary brief, we outlined our commitment to maintaining a strong news presence in the local community, with 93 news packages per week and at least 90 per cent local and regional news content.
LISTNUM 1 \l 1924 As local politics, environmental concerns, cultural topics, entertainment events and lifestyle issues are vitally important to the mature demographic, Vista will produce and air a daily one‑hour magazine style program between noon and 1:00 p.m. Monday to Friday anchored by the station's News Director. It will feature interviews with politicians, business people, community leaders and local experts on a wide variety of subjects. It will also delve deeper into stories that are attracting attention, while highlighting other issues of interest or concern to the station's audience.
LISTNUM 1 \l 1925 SEA‑FM will slot a two‑hour lifestyle magazine each Sunday morning, featuring experts and practitioners in areas such as health and wellness, adult education, travel, wine, fine food, gardening, security, home improvement and sports and leisure.
LISTNUM 1 \l 1926 SEA‑FM will dedicate one hour to a financial program each Saturday morning, strictly dealing with topics related to retirement, estate planning, investing and money management.
LISTNUM 1 \l 1927 Also, because Vancouver offers its residents hundreds of community and cultural events on an annual basis, SEA‑FM will present a 90 second cultural events calendar, four times per day, seven days per week in each time slot totaling 42 minutes weekly.
LISTNUM 1 \l 1928 MR. JASON MANN: In support of this unique approach to local programming, SEA‑FM will commit that 100 per cent of its entire broadcast week will be live and locally produced.
LISTNUM 1 \l 1929 Vista Radio is particularly excited about bringing true world‑class entertainment to Vancouver with Bob Robertson and Linda Cullen as the SEA‑FM Morning Show. The city of Vancouver recently recognized Bob and Linda's unique brand of current affairs‑based humour by inducting them into the B.C. Entertainment Hall of Fame, and here is why.
LISTNUM 1 \l 1930 MR. ROBERTSON: Thank you, Jason, and while the rest of the Vista management team prepares for the bathing suit competition, we just want to tell you that mornings on SEA‑FM will be filled with a lot of vital information that our listeners will needs. We have, for example ‑‑
LISTNUM 1 \l 1931 MS CULLEN: Sorry, Bob, sorry, but we have some breaking news right now. Vancouver NPA councilor Peter Ladner has decided to run for mayor of Vancouver against Sam Sullivan. Observers say that Ladner should get more votes because his ancestors settled the city of Ladner. Mr. Sullivan immediately changed his name to Sam Kitsilano. Bob.
LISTNUM 1 \l 1932 MR. ROBERTSON: Yes, interesting. While I was speaking and listening to you there, I was about to say that the mornings on SEA‑FM will be filled with weather and traffic and all the vital news and things that listeners need ‑‑
LISTNUM 1 \l 1933 MS CULLEN: I'm sorry to interrupt again, Bob, but we have Don Cherry on the line to discuss the Vancouver Canucks. Hello, Don.
LISTNUM 1 \l 1934 MR. ROBERTSON: Let me tell you people something out there and you kids write this down because I can't. All right, beauty stuff, beauty like that, like that, and like that.
LISTNUM 1 \l 1935 MS CULLEN: Okay, Don, right, I understand. But can Vancouver make the NHL playoffs?
LISTNUM 1 \l 1936 MR. ROBERTSON: Vancouver? Geez, have they got a team now?
LISTNUM 1 \l 1937 MS CULLEN: Thank you, Don. Enlightening as always. Bob.
LISTNUM 1 \l 1938 MR. ROBERTSON: Yes, well, we are going to have fun with politics, as is our wont, but today I thought we would bring in an expert on federal politics from the CBC's At Issue panel, here is columnist Chantelle Hébert.
LISTNUM 1 \l 1939 MS CULLEN: Well, Peter, thank you and I'm thrilled to be here. Really, I have not been this excited since Maxipads got wings, but really, you know, I think the chances of having a federal election this year are about as good as Steven Harper throwing an I love the media party.
LISTNUM 1 \l 1940 MR. ROBERTSON: Thank you, Chantelle. And, of course, Finance Minister Carol Taylor, as you know, has introduced carbon tax to reduce toxic emissions.
LISTNUM 1 \l 1941 MS CULLEN: I don't know why people just don't stop eating at Taco Bell. I know that would reduce my toxic emissions.
LISTNUM 1 \l 1942 MR. ROBERTSON: We are talking about different toxic emissions.
LISTNUM 1 \l 1943 MS CULLEN: Well, there's no time for that now because we have another breaking news story. We have a statement from President George Bush.
LISTNUM 1 \l 1944 MR. ROBINSON: Some people have suggested that I'm a lame duck. I'm not lame. I'm sitting president of the United States. Therefore, I'm a sitting duck.
LISTNUM 1 \l 1945 MS CULLEN: Thank you, Mr. President.
LISTNUM 1 \l 1946 And last but not least, police say yet another severed right foot has washed up on a Saltspring Island beach.
LISTNUM 1 \l 1947 MR. ROBERTSON: Yes, and, you know, I think it's directly connected to this hearing, because you know what they say.
LISTNUM 1 \l 1948 MS CULLEN: Yeah, I'd give my right foot to get a radio licence in this city.
LISTNUM 1 \l 1949 MR. ROBERTSON: Exactly, yes.
LISTNUM 1 \l 1950 Well, thank you, Commissioners for indulging a little comedy in our presentation this morning, a small example.
LISTNUM 1 \l 1951 But seriously, let me tell you why I think this format represents the best choice for Vancouver.
LISTNUM 1 \l 1952 Although residents over 45 years of age now make up 40 per cent of the area population, the music programming heard on local FM stations, even stations like QM‑FM which seeks to cater to more mature listeners, is primarily derived from the 80s, 90s and today. In fact, we heard it repeatedly from our interveners. They simply cannot hear the music they want to hear in the quality and context they are searching for.
LISTNUM 1 \l 1953 SEA‑FM will give mature radio listeners their familiar favourites, along with album cuts from the past, and provide an element of freshness from new and emerging Canadian artists whose music is similar to its core programming in texture, feel and temperament.
LISTNUM 1 \l 1954 An examination of Vista's extended sample playlist also reveals that Vista can deliver this format, while comfortably adhering to the CRTC's current hit/non‑hit policies and rules.
LISTNUM 1 \l 1955 MS VAUGHN: Vista has a strong commitment to workplace diversity. The Commissioners and CRTC staff may be aware that Vista, in partnership with SUCCESS, has recently launched an internship program aimed at foreign‑trained broadcasters who can't find work in Canada because they lack experience, need retraining and an understanding of the Canadian broadcasting system or otherwise lack the necessary Canadian credentials to work in this industry.
LISTNUM 1 \l 1956 SUCCESS is a not‑for‑profit organization which promotes the wellbeing of Canadians and immigrants and encourages their full participation in the community. It also assists in the settlement and integration of immigrants in Canada.
LISTNUM 1 \l 1957 When these interns graduate, they will have the opportunity to either join the Vista team, or to seek employment as a qualified applicant with another broadcaster in Canada.
LISTNUM 1 \l 1958 In addition, Vista's board has approved a comprehensive diversity business case to develop a three‑year diversity plan that addresses how it intends to grow and maintain a diverse workforce culture. This plan will empower our area managers to fulfill and enhance our current commitment to workplace diversity.
LISTNUM 1 \l 1959 Our commitment to strong human resource and diversity practices will positively impact the Vancouver marketplace.
LISTNUM 1 \l 1960 MS MICALLEF: The following are what Vista considers to be the key considerations why its application represents the best choice for Vancouver.
LISTNUM 1 \l 1961 Vancouver's economy is one of the most dynamic in Canada and its mature residents are eager for, and deserving of, a new radio choice.
LISTNUM 1 \l 1962 The licensing of SEA‑FM will fill a demand sought on the local FM dial by providing a unique music format specifically targeted at 45 to 54 year old listeners and the local businesses attempting to reach them.
LISTNUM 1 \l 1963 No applicant, and no existing Vancouver FM station emphasizes this unique format which Vista developed targeting 45 to 54 year old listeners. Vista is able to introduce this unique format and comply with the Commission's expectations regarding emerging artists and its hit/non‑hit rules by selecting specific music from emerging artists which complements its 70s format.
LISTNUM 1 \l 1964 Through a significant emphasis on news and spoken word programming, Vista will introduce a new and independent editorial voice to Vancouver and increase the diversity of news voices in that market.
LISTNUM 1 \l 1965 Vista will make a substantial contribution to Canadian content development in the amount of $7 million in direct cash contributions to FACTOR during its initial licence term.
LISTNUM 1 \l 1966 Vista will make a significant contribution to the objectives of the Broadcasting Act by giving substantial exposure to emerging Canadian artists.
LISTNUM 1 \l 1967 Vista already has strong ties to the Vancouver market.
LISTNUM 1 \l 1968 Vista is committed to diversity, as evidenced by its company‑wide internship program aimed at facilitating the re‑entry of foreign‑trained broadcasters into the broadcasting industry.
LISTNUM 1 \l 1969 Vista has picked a great format opportunity and has the resources necessary to provide a strong competitor to the incumbents. However, Vista will not unduly impact any one existing station in the market, instead drawing its core audience from no less than 13 stations, while repatriating at least one‑fifth of its partisanship from out‑of‑market stations and radio listeners who currently do not have a favourite radio station.
LISTNUM 1 \l 1970 Finally, let me leave you with this.
LISTNUM 1 \l 1971 History has shown that a mix of large and small markets is the best recipe for overall sustainability for radio broadcasters, a recipe that has worked for others, with the Commission's blessing. Owning a station in Vancouver is a natural progression for Vista. And increasing Vista's overall sustainability with a licence in Vancouver would ensure that a strong independent player will remain in business in B.C. continuing to provide excellent radio in all of our markets.
LISTNUM 1 \l 1972 Our founders group has more than 166 years of experience in the broadcasting business and we have achieved tremendous start‑up success in both large and small markets.
LISTNUM 1 \l 1973 We know what is needed to be a good Vancouver broadcaster and our numerous positive interveners have confirmed their view that Vista's track record in its existing markets will bode well for its ability to connect to and benefit the Vancouver market.
LISTNUM 1 \l 1974 Vista has strong ties to the Vancouver market, as do I, and as to Bob Robertson and Linda Cullen. If Vista is awarded this licence, I commit to the Commission that I will move back to Vancouver from Calgary to help oversee the start up of SEA‑FM and to ensure its ongoing success.
LISTNUM 1 \l 1975 I wish to thank the Commission for this opportunity to explain our proposal, and we would welcome your questions at this time.
LISTNUM 1 \l 1976 THE CHAIRPERSON: Thank you, Ms Micallef and panel.
LISTNUM 1 \l 1977 Commissioner Duncan will lead the questions.
LISTNUM 1 \l 1978 COMMISSIONER DUNCAN: Thank you for the good presentation. I must say that your application was very good.
LISTNUM 1 \l 1979 I do have a number of questions, though, and I want to start talking about programming. Obviously diversity is a big issue here because we only have very limited frequency available.
LISTNUM 1 \l 1980 I notice that in your brief you refer to 1970s‑based AC, although I notice today that you seem to more consistently be referring to that. But you also refer to oldies‑based AC and gold‑based AC. We are just wondering first of all which of these you are proposing or are you proposing a blend of them?
LISTNUM 1 \l 1981 MS MICALLEF: I am going to let Jason Mann, our VP Programming answer that for you.
LISTNUM 1 \l 1982 MR. JASON MANN: Indeed, we thought we should specify the message a little bit more clearly. It is clearly a 1970s‑based format with 60 per cent of our music being drawn from that era and that decade. Only 5 per cent really from the 60s. So it more accurately would be described as a 1970s‑based AC.
LISTNUM 1 \l 1983 COMMISSIONER DUNCAN: Thank you.
LISTNUM 1 \l 1984 I noticed again, referring to your brief on page 6, I see that Pattison station CKBD shows a 1.7 per cent share of the 35 to 64 audience, and CISL shows 2.4 per cent, Astral's station. Again, I'm understanding that their audience is 35 to 64, and that their format would include an oldies type music.
LISTNUM 1 \l 1985 I am just wondering why you were forecasting 7 per cent weekly share given the success that these stations have been able to achieve?
LISTNUM 1 \l 1986 MR. YERXA: Madam Commissioner, I will try and handle that question.
LISTNUM 1 \l 1987 I think the issue is really one of AM versus FM, and the fact is that some people simply are not inclined to want to listen to AM any more. Given the option to listen to FM with the kind of music that they grew up with, they will gladly accept that invitation.
LISTNUM 1 \l 1988 When you look at the impact that we will have on those stations, for example, you will see that, for example, looking at the Pattison station, only 4 per cent of our entire projected share is going to come from that station, and looking at CISL it is only 6 per cent of our projected share. So that, I think, supports the contention that there is a vast difference here in terms of what is being offered on those stations because they are not exactly the same as certainly what we are proposing, and also the difference between AM and FM.
LISTNUM 1 \l 1989 COMMISSIONER DUNCAN: Do you agree that those two stations are oldies‑based?
LISTNUM 1 \l 1990 MR. YERXA: No, not necessarily. Jason, do you want to take that?
LISTNUM 1 \l 1991 MR. JASON MANN: I would point out to begin with that in the case of CKBD‑AM it really is an adult standards and they would play Percy Faith and Frank Sinatra and so forth.
LISTNUM 1 \l 1992 COMMISSIONER DUNCAN: What decade would that be from then, Percy Faith and Frank Sinatra; the sixties are you saying?
LISTNUM 1 \l 1993 MR. JASON MANN: Yes, and even fifties. They do play contemporary music that mixes with those artists as well, but the feel is quite a bit different.
LISTNUM 1 \l 1994 COMMISSIONER DUNCAN: You are not agreeing that it is similar?
LISTNUM 1 \l 1995 MR. JASON MANN: No, not at all. With respect to CISL, again, the format maybe at first blush might be considered similar. It really isn't inasmuch as a lot of the music that they play from the 70s ‑‑ and the 70s decade does perform a fairly large percentage of the music that they play ‑‑ if I could explain it this way, I suppose, the 70s is only one way of classifying music. Music can be further segmented into various formats and even styles of music.
LISTNUM 1 \l 1996 In the case of SEA‑FM, Vista proposes to play the softer pop R&B roots and folk leaning music of the 1970s, core artists including James Taylor, Neil Diamond, Dan Hill, Carol King, Barbra Streisand and Abba, and CISL would play, in addition to that, as a part of their mix, significant music from the harder edged and even experimental sounds of the late 60s and 70s like Stepennwolf, the Guess Who, BTO, the Rolling Stones, and correspondingly CISL's audience also skews male in BBM analysis because of the music segments that they pick from.
LISTNUM 1 \l 1997 COMMISSIONER DUNCAN: Thank you. That is helpful.
LISTNUM 1 \l 1998 I am just wondering too, as I looked at this same page, I notice that the table of course lists 18 stations. Six of them have an audience share greater than 7 per cent and only 4, if you eliminate the news and talk format. Yet, you are proposing that you will achieve 7 per cent in year 1, 7.5 in year 2, leveling out at 8 per cent for years 3 to 7.
LISTNUM 1 \l 1999 I am just wondering are you confident that that is realistic?
LISTNUM 1 \l 11000 MR. YERXA: First of all, I just want to clarify, are you looking at page 9?
LISTNUM 1 \l 11001 COMMISSIONER DUNCAN: I am looking at page 6, adults 35 to 64, that comment.
LISTNUM 1 \l 11002 MR. YERXA: It is important to remember that approximately one‑fifth of our partisanship is going to be drawn from people who presently listen to other radio stations, is going to be repatriated from stations south of the border, from stations coming from Victoria and the Island, and there is also a percentage that is going to come from those who currently do not have a favourite radio station.
LISTNUM 1 \l 11003 COMMISSIONER DUNCAN: So you feel confident that the 7 per cent is reasonable?
LISTNUM 1 \l 11004 MR. YERXA: Yes.
LISTNUM 1 \l 11005 COMMISSIONER DUNCAN: I am just looking at the numbers. I would expect that perhaps some of these existing systems might try to get their numbers up by doing the same thing.
LISTNUM 1 \l 11006 At any rate, I have asked the question and you have answered it. Thanks.
LISTNUM 1 \l 11007 MR. YERXA: Again, if I can just clarify, you again were talking about the 4.5 per cent overall share or the 35 ‑‑
LISTNUM 1 \l 11008 COMMISSIONER DUNCAN: No, I am talking about the 35 to 64.
LISTNUM 1 \l 11009 MR. YERXA: That is what I thought.
LISTNUM 1 \l 11010 COMMISSIONER DUNCAN: How will you go about attracting those people that are currently not listening to the radio or listening out of the market? Do you have a specific campaign or approach in mind? Twenty‑one per cent is a lot.
LISTNUM 1 \l 11011 MR. PAUL MANN: What would be easily seen in our financial planning documents that were submitted is that we did, in our pre‑launch costs, put a very sizable sum of marketing money comparative to some of the other applications, at least. We just want to be clear that we recognize that a significant marketing launch is required in a market like Vancouver. We have made that commitment. It is recognized in the level of marketing money that we have committed right up front and ongoing within the operational budgets as well.
LISTNUM 1 \l 11012 MR. JASON MANN: In addition to that, I might add that we have also invested and made partnership agreement with a marquee set of talented entertainers as well.
LISTNUM 1 \l 11013 MS CULLEN: And we are prepared to go door to door.
LISTNUM 1 \l 11014 COMMISSIONER DUNCAN: Thank you. I did notice your budget. It is substantial, yes.
LISTNUM 1 \l 11015 You say in your remarks here today that you don't expect having any problem reaching the hits level that is required or not exceeding it.
LISTNUM 1 \l 11016 I am just wondering what would be the size of your on‑air playlist and what would be the repeat factor, for example?
LISTNUM 1 \l 11017 MR. JASON MANN: When you say the size of our playlist, you mean the active number of distinct titles at any given time?
LISTNUM 1 \l 11018 COMMISSIONER DUNCAN: Yes.
LISTNUM 1 \l 11019 MR. JASON MANN: There are different ways of achieving that. Some people would maybe philosophically suggest that you play as many as you possibly can. In a format like this we are anticipating in the number of 1200 titles active, but those 1200 titles are not the exclusive titles that the station would play. There are many other titles that would be available, but we would platoon, is sort of the industry term, troops or songs out of the 1200 and then refresh with some music that has been sitting there resting.
LISTNUM 1 \l 11020 It is a gold‑based format, so there won't be a lot of repeat factor. The most current category would be somewhere in the neighborhood of four times a day, but that would be a very small slice or segment of the overall music playlist.
LISTNUM 1 \l 11021 COMMISSIONER DUNCAN: I was informed that most oldies stations would have no more than 300 songs. But that is a far cry from what your experience is then.
LISTNUM 1 \l 11022 MR. JASON MANN: I don't know if I would necessarily agree with the statement that it would be 300. We operate most of our stations somewhere in the neighborhood of 800 to 1200, and we have been successful doing that.
LISTNUM 1 \l 11023 COMMISSIONER DUNCAN: What is the next largest system you have compared to Vancouver, next to Vancouver what would be the ‑‑
LISTNUM 1 \l 11024 MS MICALLEF: It would be Grande Prairie.
LISTNUM 1 \l 11025 COMMISSIONER DUNCAN: I want to switch now to the CCD. But first of all, I wanted to just make sure that I understood the correction that Mr. Mann made first of all on the projection, just to make sure that I am looking at the right information.
LISTNUM 1 \l 11026 Was it the application that you were correcting in just the last line?
LISTNUM 1 \l 11027 MR. PAUL MANN: Yes, the last line in 7.1, yes.
LISTNUM 1 \l 11028 COMMISSIONER DUNCAN: I ignored it anyway.
LISTNUM 1 \l 11029 First of all, on the CCD, then, if you look at your November 23rd response, question 9.
LISTNUM 1 \l 11030 MS MICALLEF: Sorry, Commissioner Duncan, could you refer to it ‑‑
LISTNUM 1 \l 11031 COMMISSIONER DUNCAN: It is your November 23rd deficiency response and it is reply number 9. It is on page 4 of that letter.
LISTNUM 1 \l 11032 MS MICALLEF: Yes.
LISTNUM 1 \l 11033 COMMISSIONER DUNCAN: First of all, I just wanted to point out, I can see how you calculated the basic CCD for each year.
LISTNUM 1 \l 11034 MS MICALLEF: Yes.
LISTNUM 1 \l 11035 COMMISSIONER DUNCAN: Except that it doesn't add across to 193. It adds to 159,992. You can probably tell just at a glance that it is added incorrectly. It is just an addition.
LISTNUM 1 \l 11036 MS MICALLEF: Right, we will correct it.
LISTNUM 1 \l 11037 COMMISSIONER DUNCAN: Then you would have to make a corresponding change on the over and above line ‑‑ this is heading somewhere ‑‑ because obviously if it is less in that total it has to be more in the over and above to stay at the $7 million.
LISTNUM 1 \l 11038 MS MICALLEF: Correct.
LISTNUM 1 \l 11039 COMMISSIONER DUNCAN: The other adjustment I would mention to you is that in year 1 you would only be required to pay $500 not $1,000, because you have no prior year, so you would just pay the minimum in the first year.
LISTNUM 1 \l 11040 With that, you would be paying 159,492 based on your projections if they were exactly that for basic and 6,845,008 in over and above to total $7 million.
LISTNUM 1 \l 11041 MS MICALLEF: Correct, yes.
LISTNUM 1 \l 11042 COMMISSIONER DUNCAN: What you gave us was a total that you would pay over and above and basic of $7 million.
LISTNUM 1 \l 11043 Could you revise your annual CCD expenditure to provide the minimum amount of over and above CCD contributions you are willing to adhere to as a COL?
LISTNUM 1 \l 11044 MS MICALLEF: Yes, we will.
LISTNUM 1 \l 11045 COMMISSIONER DUNCAN: That is not including the basic.
LISTNUM 1 \l 11046 MS MICALLEF: We will fix that.
LISTNUM 1 \l 11047 COMMISSIONER DUNCAN: In addition to that, I wanted to know if you would be willing to accept as a condition of licence that the total of your annual basic and over and above CCD contributions will equal $1 million?
LISTNUM 1 \l 11048 MS MICALLEF: Yes, we will.
LISTNUM 1 \l 11049 COMMISSIONER DUNCAN: I want to go to FACTOR. You are proposing to give all of this money annually to FACTOR. In response to your request that the funds be directed to B.C. artists, FACTOR confirmed in their letter dated November 20th that the total contribution of $7 million over seven years would be reserved for B.C. artists.
LISTNUM 1 \l 11050 So I have two questions for you. Are you confident that there is a sufficient pool of qualified B.C. artists or B.C. artists that would qualify to support your plan to direct $1 million each year to B.C. artists?
LISTNUM 1 \l 11051 MS MICALLEF: Yes, we are.
LISTNUM 1 \l 11052 COMMISSIONER DUNCAN: Are you willing to let FACTOR exercise its discretion regarding their plan to direct Vista's contributions to the general fund if there are no qualifying B.C. artists in a particular year? That is what they say in their letter.
LISTNUM 1 \l 11053 MS MICALLEF: We are prepared to do so. We are confident, however, that we will have no shortage of B.C. artists.
LISTNUM 1 \l 11054 COMMISSIONER DUNCAN: But of course the decision will be up to them?
LISTNUM 1 \l 11055 MS MICALLEF: Yes.
LISTNUM 1 \l 11056 MR. JASON MANN: I would add that we will work very hard to ensure that our audience and people in British Columbia are aware of those funds availability, as well.
LISTNUM 1 \l 11057 COMMISSIONER DUNCAN: And that FACTOR is aware as well.
LISTNUM 1 \l 11058 MR. JASON MANN: Yes. We are doing a fair bit actually right now in working with emerging talent in British Columbia. We are in a partnership with B.C. Musician magazine where every edition we have a full‑page ad that is describing how people can access funds that we already have committed to with our other licences and transactions and so forth, plus an on‑air campaign.
LISTNUM 1 \l 11059 I am quite actually surprised by the number of people who we have come in contact with that weren't aware of FACTOR or Radio Starmaker and how to access those funds. So, are quite excited to be making a material difference in the lives of many emerging musicians, and this would help us even further.
LISTNUM 1 \l 11060 COMMISSIONER DUNCAN: You have committed to 100 per cent live and locally produced. You said that again today here in your comments. I just wanted to be clear. You won't be using any voice track then?
LISTNUM 1 \l 11061 MS MICALLEF: No, we won't.
LISTNUM 1 \l 11062 COMMISSIONER DUNCAN: Referring to the money side of things, I notice in the letter from your financial institution that is dated October the 9th ‑‑ I think it came with your application; it did ‑‑ they don't mention a dollar amount. So it is open ended. I can't tell if they are willing to support you to the tune of $100,000 or $100 million.
LISTNUM 1 \l 11063 MS MICALLEF: A hundred million would be nice.
LISTNUM 1 \l 11064 COMMISSIONER DUNCAN: I know. It would be.
LISTNUM 1 \l 11065 MS MICALLEF: We actually have substantial liquidity under our facility, so we won't have any problem meeting the $2 million that we have targeted under that facility.
LISTNUM 1 \l 11066 COMMISSIONER DUNCAN: Do you think that you could ask them to re‑issue the letter so they could just mention that?
LISTNUM 1 \l 11067 MS MICALLEF: Absolutely.
LISTNUM 1 \l 11068 COMMISSIONER DUNCAN: They don't have to mention the whole amount.
LISTNUM 1 \l 11069 MS MICALLEF: Sure.
LISTNUM 1 \l 11070 COMMISSIONER DUNCAN: As long as it covers that. Thank you.
LISTNUM 1 \l 11071 You had what you called a depreciation schedule and that accompanied your application. There are just a couple of things I wanted to talk to you about it.
LISTNUM 1 \l 11072 If I look at section 5.3a) of your application ‑‑
LISTNUM 1 \l 11073 MS MICALLEF: I am sorry, what section was that?
LISTNUM 1 \l 11074 COMMISSIONER DUNCAN: 5.3a. You show debt there of $2 million. Yet, if you look at that schedule entitled "Depreciation Calculation," the debt is $3,133,520, and the interest is calculated on that amount, at 235, which I see didn't change on your revised schedule.
LISTNUM 1 \l 11075 So I can see that you calculated interest. What I can't see is where that debt shows up because, as I say, in question 5.2 you answered $2 million in debt.
LISTNUM 1 \l 11076 MR. PAUL MANN: We have our Vice‑President of Finance in Vancouver with us, not up at the panel at the moment. We can get the answer to that and supply a follow‑up for you.
LISTNUM 1 \l 11077 COMMISSIONER DUNCAN: All right. Then maybe this other question as well because I am curious to know, did you find that schedule, the depreciation schedule I was referring to?
LISTNUM 1 \l 11078 MR. PAUL MANN: Yes.
LISTNUM 1 \l 11079 COMMISSIONER DUNCAN: See that amount, it is called tax deductible, $123,200 and it is included in the amount that the interest is calculated on, and I was just curious to know what that is.
LISTNUM 1 \l 11080 MR. PAUL MANN: We will get her to respond on that one as well.
LISTNUM 1 \l 11081 COMMISSIONER DUNCAN: If the debt is higher than the $2 million shown on 5.2, I guess you should explain to us, you want to have your bank, your lending institution confirm that they would lend up that amount of moony, depending on what you find there.
LISTNUM 1 \l 11082 MR. PAUL MANN: Indeed, we shall answer that.
LISTNUM 1 \l 11083 COMMISSIONER DUNCAN: Thank you.
LISTNUM 1 \l 11084 You are proposing ‑‑ this is looking at your revenue ‑‑ you are proposing $4.8 million in year 1, increasing to $6.1 million in year 3, and you explain that 40 per cent of the revenue will come from incumbents and 30 per cent from new advertisers and other media, and the remaining from increased advertising budgets.
LISTNUM 1 \l 11085 You are proposing a positive cash flow at the end of year two.
LISTNUM 1 \l 11086 MR. PAUL MANN: That is correct.
LISTNUM 1 \l 11087 COMMISSIONER DUNCAN: I thought that seemed ‑‑ let me ask you the question. Would you describe that as realistic, conservative or overly optimistic?
LISTNUM 1 \l 11088 MR. PAUL MANN: We would call it banker conservative. In our experience, it is not an unrealistic plan.
LISTNUM 1 \l 11089 The other thing that is perhaps a bit different in this is that we recognize that we have kept, for a market the size of Vancouver, the national proportion of revenue to local lower than one might expect to see simply because it is quite often easier to control where you go with locally driven sales, regardless of where a particular book comes in. So we have been conservative on that side of the revenue plan as well.
LISTNUM 1 \l 11090 COMMISSIONER DUNCAN: On the national side?
LISTNUM 1 \l 11091 MR. PAUL MANN: On the national side.
LISTNUM 1 \l 11092 COMMISSIONER DUNCAN: Is that probably realistic as well because you are primarily located in Alberta and British Columbia? Would that be a reason for being more conservative?
LISTNUM 1 \l 11093 MR. PAUL MANN: In terms of what we see the national potential doing. I think what we have really just done is taken and pared back what could happen, but put the focus on where we think the dollars can go on the local side, knowing it is an area that we have much more control over regardless of where a particular book goes.
LISTNUM 1 \l 11094 Do I think it is capable of generating more than that on the national side? Yes, absolutely.
LISTNUM 1 \l 11095 COMMISSIONER DUNCAN: If the results aren't exactly as anticipated, what course of action would you take?
LISTNUM 1 \l 11096 MS MICALLEF: Firstly, we have, as I mentioned, significant liquidity under our existing facilities with our bank. So, meeting shortfalls is not going to be a problem in that regard. We also have a commitment from our shareholders in the event that we require additional funding to do so as well.
LISTNUM 1 \l 11097 We are also profitable in all of our other markets.
LISTNUM 1 \l 11098 COMMISSIONER DUNCAN: Those other markets, did you mention as well ‑‑ how fast were you to turn a market in those markets? I am not sure, did you say that earlier?
LISTNUM 1 \l 11099 MS MICALLEF: We owned or have been operating those stations now, the longest one for three years, and most recently then the balance for just over two and a half years. The bulk of the stations that we acquired were either losing money or under performing.
LISTNUM 1 \l 11100 Since we look over those stations, we have doubled the revenues and we have tripled the EBITDA. We have done that not by cutting expenses, but in fact we have increased staff; we have increased spending in the local markets; we have improved the programming; we have reformated a number of stations; we have improved the quality of the technical requirements in many of our markets. So, we have done it by investing in the communities and investing in the station and investing in the product, not by cutting.
LISTNUM 1 \l 11101 The answer would be that we would continue to invest in the business plan and believe that we would see it through to fruition.
LISTNUM 1 \l 11102 COMMISSIONER DUNCAN: You probably were here when the Newcap people were up just ahead of you. They were talking about, because of the technical limitations with this frequency, only being able to reach 56 per cent of the population in Vancouver. I notice in your answer, the 6.2 in one of the deficiencies, I think you had given the whole population of Vancouver as your market. I am just curious to know what your comment would be on that 56 per cent.
LISTNUM 1 \l 11103 MS MICALLEF: We are aware of the limitations of this signal, and we have taken that into account in our projections.
LISTNUM 1 \l 11104 COMMISSIONER DUNCAN: Let's go back, then. The 7 per cent that I was initially having a concern about is actually discounted ‑‑ and I am comparing you to the other 18 on that list. Those stations, I am assuming do not have that same impairment. They are reaching a full market.
LISTNUM 1 \l 11105 MS MICALLEF: That is right. Their 5 millivolt signal would go beyond what ours does.
LISTNUM 1 \l 11106 COMMISSIONER DUNCAN: But only four of them are getting an audience share greater than 7 per cent and they are reaching the whole market.
LISTNUM 1 \l 11107 MS MICALLEF: Correct.
LISTNUM 1 \l 11108 COMMISSIONER DUNCAN: So you are thinking that you are going to get 7 per cent and only reaching 56 per cent?
LISTNUM 1 \l 11109 MR. JASON MANN: In the 12‑plus demographic, it is actually 4 per cent.
LISTNUM 1 \l 11110 COMMISSIONER DUNCAN: I am not talking 12.
LISTNUM 1 \l 11111 MR. JASON MANN: We would do our projections based on the full audience size.
LISTNUM 1 \l 11112 COMMISSIONER DUNCAN: I don't think that changes my question. Let me just turn to your brief again.
LISTNUM 1 \l 11113 My question is: How confident are you in your numbers, given that you are only going to reach 56 per cent of the population? You have taken that into consideration?
LISTNUM 1 \l 11114 MR. PAUL MANN: Yes, ma'am, we have.
LISTNUM 1 \l 11115 COMMISSIONER DUNCAN: Thank you.
LISTNUM 1 \l 11116 I was surprised ‑‑ well, maybe not surprised. Forget my comment. I am not supposed to make a comment. I just want to ask a question actually.
LISTNUM 1 \l 11117 In your application, and part of the 2006 Radio Policy talks about finding out what operator's plans are going forward to do with new media. It is blank on your application. I was just wondering if you had any comments on what your plans might be.
LISTNUM 1 \l 11118 MR. PAUL MANN: I think we could state reasonably at this point that as a fairly new company that has spent a lot of time in our first couple of years fixing products and growing them, that working on a new media strategy, web strategies and so on, has come along frankly just in our past six to eight months of operation. Jason Mann is leading our web strategy and related new media strategies, and we do have a company wide one under development at this time. We just didn't feel it was appropriate to speak to it in that application given where we are at.
LISTNUM 1 \l 11119 COMMISSIONER DUNCAN: I can understand.
LISTNUM 1 \l 11120 MS MICALLEF: We do anticipate being able to launch something in the next six months.
LISTNUM 1 \l 11121 COMMISSIONER DUNCAN: I am just wondering, then, if we were to licence more than one applicant, in your view, which applicant would be most likely to compete with your application, your market and which would be the least likely?
LISTNUM 1 \l 11122 MS MICALLEF: I would like to answer the question this way.
LISTNUM 1 \l 11123 Firstly, there is a limit to the number of frequencies available in this market. We fully embrace the approach that Pattison took in seeking an alternative frequency for their AM to FM swap, seeking 100.5 as the alternative frequency. We also think that that programming is also compatible with ours. That programming would skew a little bit more male than ours would, so the two formats would do very well side by side in this market.
LISTNUM 1 \l 11124 We also embrace the CBC's 88.1 frequency as well for Vancouver, and that again would add an additional signal in Vancouver. If the Commission was to allow Pattison's flip, the CBC on 88.1 and us at 104, we would add three new stations to the Vancouver market, which is tremendous in a situation where we have so much congestion in a market like this.
LISTNUM 1 \l 11125 COMMISSIONER DUNCAN: Thank you for your comments.
LISTNUM 1 \l 11126 Madam Chair, those are all my questions.
LISTNUM 1 \l 11127 THE CHAIRPERSON: Thank you, Madam Commissioner.
LISTNUM 1 \l 11128 Everyone has questions, so I will go with Commissioner Menzies first, please.
LISTNUM 1 \l 11129 COMMISSIONER MENZIES: I will try to make it as quick as I can. On your overall business plan, I am curious about defining the older demographic as opposed to the demographic that most advertising agencies and media target in terms of being of interest to advertisers. It is usually the 25 to 40 year old high consumption area.
LISTNUM 1 \l 11130 How would you sell this to advertisers and wouldn't you think this demographic, which after all the baby boom is turning 62 this year ‑‑ does that work for advertisers still for your business plan?
LISTNUM 1 \l 11131 MR. PAUL MANN: I will take that one, thank you.
LISTNUM 1 \l 11132 The short answer is yes, we really believe it does. I guess as someone who is 58, I think I am the new 38 and I think that is where society is at. It is a significant chunk of the Vancouver market, over 40 per cent of it at 45‑plus, and it is a monied category. In fact, it is a monied category that is not being chased by a number of media outlets that are skewing further down that demo, as you just pointed out, at least not to the same extent.
LISTNUM 1 \l 11133 There is a wealth factor, and more often than not now also a lifestyle factor that goes with that disposable income.
LISTNUM 1 \l 11134 COMMISSIONER MENZIES: What are they buying?
LISTNUM 1 \l 11135 MR. PAUL MANN: Luxury cars, vacations, financial investments, fine dining, fine wines, fitness, spas and on and on.
LISTNUM 1 \l 11136 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 11137 This is my other point. I don't want it to sound the wrong way, but how long are you going to chase this crowd in terms of that, because if a licence was granted, by the time it comes up for renewal ‑‑
LISTNUM 1 \l 11138 MS CULLEN: They will all be dead, is that what you are saying?
LISTNUM 1 \l 11139 COMMISSIONER MENZIES: It is not growing. The top end is going to be pushing 70, right, the bottom end will be 55. What I am trying to get at, is this sort of Sergio Mendes Brazil 66, it becomes 77, it becomes 88. So, does it become an 80s format later on?
LISTNUM 1 \l 11140 MR. JASON MANN: Radio has always had this challenge. No format is immuned from an aging populace, and their audience tends to age as well. Over time, you will see markets adjust and shift and change and operators will tend to make changes in reflection of that. But for the foreseeable future, certainly the bulk of our audience is going to be on this side of the grass.
LISTNUM 1 \l 11141 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 11142 MR. JASON MANN: I might suggest too, just to add to the serious side of the financial debate and discussion, that a significant percentage of our audience is actually going to be under 55, 45 to 55, which is a prime money demographic as well.
LISTNUM 1 \l 11143 THE CHAIRPERSON: Commissioner Cugini, please.
LISTNUM 1 \l 11144 COMMISSIONER CUGINI: Thank you.
LISTNUM 1 \l 11145 I understand fully that it is absolutely at your discretion as to where you want to direct the CCD. So I am very curious, however, with such a sizable amount of CCD, why have you decided that the entire $7 million go to FACTOR as opposed to FACTOR plus Vista‑initiated projects to promote local B.C. artists as opposed to relying solely on FACTOR to support B.C. artists? Usually we see this kind of thing with fewer dollars.
LISTNUM 1 \l 11146 MR. JASON MANN: I think the past intervention by CIRPA, they made a case against duplicating the same efforts and services that FACTOR provides. We had a very ambitious plan at the outset of our company called Front and Centre which was discouraged and we ultimately abandoned it.
LISTNUM 1 \l 11147 We became assertive, I guess, and aggressive and wanted to build this Vista program, if you will, out of a passion for the music and a passion for the artists. But in reading the CIRPA intervention, it really struck us that the administrative costs that we would incur in staging events like that to reach these artists just was truly a duplication and better served by a better organized group, and with FACTOR's commitment to allocate those funds to B.C. artists, we felt that that would be acceptable.
LISTNUM 1 \l 11148 Certainly, we will do everything we can to ensure that B.C. artists are made aware of the funds and that they are spent wisely, appropriately and benefit the system.
LISTNUM 1 \l 11149 COMMISSIONER CUGINI: And you don't see this as an opportunity to put the Vista name on the map in a cluttered market like this one?
LISTNUM 1 \l 11150 MS MICALLEF: We actually have plans, as Paul identified, to promote ourselves. We see the CCD commitment as being a commitment to the broadcasting industry as a whole and not something that we are entitled to use for promotional purposes. So, our commitment to FACTOR is a genuine commitment to the enhancement of the broadcasting system, and we felt early on, as Jason says, that the programs that replicated FACTOR were programs that promoted the broadcaster more than they assisted the artist. So, we felt that in partnering with FACTOR, we were really assisting the artist more than we were assisting Vista, but we felt that was the right thing to do.
LISTNUM 1 \l 11151 COMMISSIONER CUGINI: Thank you for that additional information. I was just very curious about it because it was such a large amount.
LISTNUM 1 \l 11152 I don't, for a moment, doubt your sincerity and your confidence in FACTOR. But thank you, thank you very much.
LISTNUM 1 \l 11153 THE CHAIRPERSON: Commissioner Williams.
LISTNUM 1 \l 11154 COMMISSIONER WILLIAMS: Thank you and good afternoon, Ms Micallef and panelists.
LISTNUM 1 \l 11155 Is Vista B.C.‑based, Alberta owned or an Alberta/B.C. owned company?
LISTNUM 1 \l 11156 MS MICALLEF: It is Alberta and B.C. owned. Our primary focus is in B.C. Twenty of our 22 stations are in B.C.
LISTNUM 1 \l 11157 COMMISSIONER WILLIAMS: In reply to Commissioner Duncan, you stated that Grande Prairie was the largest market that Vista currently serves.
LISTNUM 1 \l 11158 MS MICALLEF: Grande Prairie and then followed by probably Prince George. But our experience outside of Vista is in both large and small markets, and of course we would get the benefit cohesively of that.
LISTNUM 1 \l 11159 COMMISSIONER WILLIAMS: How is your Grande Prairie station doing? I don't need specific information, but are you hitting the targets that were in your application in terms of market share and financial performance?
LISTNUM 1 \l 11160 MS MICALLEF: We wake up every day and say thank you to the Commission for giving us the Grande Prairie licence. It is doing very well.
LISTNUM 1 \l 11161 COMMISSIONER WILLIAMS: Grande Prairie is a wonderful place, but it is not Vancouver. Why do you think Vista is now ready for a major market like Vancouver?
LISTNUM 1 \l 11162 MS MICALLEF: Two reasons. Firstly, our philosophy of how we run radio will not be any different in Vancouver than it is in any of the smaller markets. Truth be told, it is actually more difficult to run small market stations than it is to run large market stations. The economics of the larger markets gives us a lot more leeway to make mistakes. In the smaller markets you have to get it right because there is not a lot of flexibility if you don't get it right.
LISTNUM 1 \l 11163 The other reason why we believe that it is our turn to get a licence in a major market is because we have made a significant commitment in the markets that we serve and in so doing we have made a significant commitment and enhancement to the broadcasting system as a whole.
LISTNUM 1 \l 11164 We feel that by having a station in Vancouver, we do diversify our economic risks somewhat by having a large market, as well as small market stations. We also see the Vancouver market as working hand in hand in some respects with the smaller markets. The smaller markets always have an interest in Vancouver, and while our programming is, of course, completely local in every market we serve and will be completely local in the Vancouver market, there is an interest in the smaller markets and what is going on in Vancouver, not from a news perspective but because they come to Vancouver for entertainment, they come to Vancouver for health and medical assistance in many cases, they come to Vancouver for education.
LISTNUM 1 \l 11165 So, we see ourselves being stronger in terms of being able to serve all of our markets by having the economic diversification that a large market station gives us and having the connection to Vancouver.
LISTNUM 1 \l 11166 COMMISSIONER WILLIAMS: Thank you, Ms Micallef, for your answer. Those are my questions.
LISTNUM 1 \l 11167 THE CHAIRPERSON: Thank you, Ms Micallef.
LISTNUM 1 \l 11168 One question on format. I was looking at your supplementary brief on the format options, and I see that you had picked four. How did you settle on those four to test?
LISTNUM 1 \l 11169 MS MICALLEF: I will ask John Yerxa to answer that. John.
LISTNUM 1 \l 11170 MR. YERXA: In any market that Vista approaches, generally we will approach it from either a demographic standpoint or in terms of what the biggest music hole might be. However, it all is dependent upon whether or not we are dealing with a small and medium market or, in this case, a large market like Vancouver.
LISTNUM 1 \l 11171 If we are dealing with a small to medium market, then it is pretty straight forward because there is usually one or perhaps even two mainstream holes that are available, and of course that is what we then seek out because those tend to be the most favourable formats for the advertisers in those communities.
LISTNUM 1 \l 11172 THE CHAIRPERSON: I am sorry to interrupt here, so did you target the demographic first here?
LISTNUM 1 \l 11173 MR. YERXA: That is where we started in a market like this because what you will notice in a major market like Vancouver is that there tends to be a congregation in the middle. Consequently, if you want to really truly offer diversity, you end up looking at either the higher or lower end of the age spectrum. So, that is why Banister presented two formats for older listeners and two formats for younger listeners.
LISTNUM 1 \l 11174 Does that help?
LISTNUM 1 \l 11175 THE CHAIRPERSON: Yes, thank you, that does.
LISTNUM 1 \l 11176 I believe legal counsel has a question now.
LISTNUM 1 \l 11177 MS PINSKY: Just for the record, would you be willing to commit to a condition of licence with respect to your 100 per cent commitment of CCD monies towards FACTOR?
LISTNUM 1 \l 11178 MS MICALLEF: Yes.
LISTNUM 1 \l 11179 MS PINSKY: With respect to the undertakings that you have made to file information, I just want to set out the deadlines. You have committed to provide the total over and above contributions as a separate breakout number. Could you provide that by end of day Wednesday?
LISTNUM 1 \l 11180 MR. PAUL MANN: Yes, we will.
LISTNUM 1 \l 11181 MS PINSKY: With respect to the other undertakings for a letter from the bank and additional financial information, when would you ‑‑
LISTNUM 1 \l 11182 MS MICALLEF: We shouldn't have any trouble getting that to you by Wednesday.
LISTNUM 1 \l 11183 MS PINSKY: Thank you very much.
LISTNUM 1 \l 11184 THE CHAIRPERSON: So, Ms Micallef, and your panel, this is your two‑minute pitch.
LISTNUM 1 \l 11185 MS MICALLEF: Thank you. You have heard from your today why we are the best application for a licence in Vancouver. We have told you we are the right format. We told you we have the right demographic. We told you that we are excellent operators, and we have also told you that we are well capitalized.
LISTNUM 1 \l 11186 We have also explained the need for a Vancouver licence, a major market licence to sustain our ability to provide the excellent service that we provide in all of our markets.
LISTNUM 1 \l 11187 I want to talk to you a little bit about what some of our supporters have said in their interventions and tell you why they think that we should be getting this licence.
LISTNUM 1 \l 11188 The first one is from Peter C. Newman, who is a well known author and journalist, and he says:
"But surely there ought to be space reserved for music that has understandable and often meaningful lyrics and a station ready to broadcast adult programming in its best meaning of that word."
LISTNUM 1 \l 11189 He continues:
"We need them..."
Referring to Bob and Linda.
"As a veteran journalist who has chronicled the Canadian psyche in my 24 books, I highly recommend this application for your consideration."
LISTNUM 1 \l 11190 B.C. former Liberal leader Gordon Gibson also wrote in support. He wrote:
"Most importantly, my support is because of knowledge of a very high regard for the involvement of Linda Cullen and Bob Robertson, two people who have done a great deal for Canadian broadcasting and should have an opportunity to do more as per this proposal."
LISTNUM 1 \l 11191 He also cites the many good things we are doing in other communities.
LISTNUM 1 \l 11192 Deborah Gray, retired member of Parliament says:
"I think this is a terrific idea. As a baby boomer, I wholeheartedly support cool older hits. Also, Linda Cullen and Bob Robertson will rock SEA‑FM. Their Morning Show will be an instance and ongoing hit. Three cheers for Vista, the CRTC and Linda and Bob."
LISTNUM 1 \l 11193 Sarah Morgan‑Silvester, who is the Chair of the Vancouver‑Fraser Port Authority and also Chair of the Blue Ribbon Council on Vancouver's Business Climate. She says:
"I'm basing my support on two factors: Vista's history of commitment to the communities it serves and Vista's track record of successful operations in other markets. I believe the Vancouver market will benefit from the diversity and enhanced competition provided by a strong independent radio broadcaster such as Vista."
LISTNUM 1 \l 11194 She continues:
"Vancouver needs more organizations like Vista, actively demonstrating corporate commitment in a way that benefits their industries and builds communities."
LISTNUM 1 \l 11195 Lastly, Jeff Plant, former Attorney General for British Columbia says:
"I'm aware of Vista's commitment to its communities and I believe Vista's approach in these other communities has shown real sensitivity to regional and local interest and needs and positions it well to bring its broadcasting vision and its strong sense of corporate social responsibility to the Vancouver market. As a member of its target demographic who frequently turns the radio dial in vain, looking for something interesting to listen to, I also look forward to the blend of programming content that it proposes to offer."
LISTNUM 1 \l 11196 I think, Bob, you have a bulletin.
LISTNUM 1 \l 11197 MR. ROBERTSON: We are all surprised politicians actually like us, but I guess it is true.
LISTNUM 1 \l 11198 I would sum it up best in the words of I would say politics contribution to comedy, Jean Chrétien, who said only last week, "You know, now that I have the Order of Canada hanging around my neck, I would say you give these guys the station, they will really spread their legs and fly. Thank you very, very much."
LISTNUM 1 \l 11199 Thank you so much.
LISTNUM 1 \l 11200 THE CHAIRPERSON: Thank you for your time.
LISTNUM 1 \l 11201 We will take a break and come back at 4:30, please.
‑‑‑ Upon recessing at 1617 / Suspension à 1617
‑‑‑ Upon resuming at 1630 / Reprise à 1630
LISTNUM 1 \l 11202 THE SECRETARY: We will now proceed with item 5, which is an application by Harvard Broadcasting for a licence to operate an English‑language FM commercial radio programming undertaking in Vancouver.
LISTNUM 1 \l 11203 Please introduce yourself and your colleagues, and you will then have 20 minutes to make your presentation. Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 11204 MR. COWIE: Good afternoon, Madam Chair, members of the Commission, Commission staff.
LISTNUM 1 \l 11205 My name is Bruce Cowie and I am the Vice‑President of Harvard Broadcasting of Regina. To my right is Michael Olstrom, the Harvard station group manager. Michael, who is originally from Vancouver, has been with us for a decade and oversees our existing radio properties. He has managed the expansion of Harvard's radio holdings from development of the applications through to launch. To Michael's right is Valerie Hochschild. Valerie has held positions with radio stations in both the United States and Canada and is credited with putting together our triple A playlist and developing the programming paradigm.
LISTNUM 1 \l 11206 To my left is Jennifer Smith. Jennifer is both a resident and a native of Vancouver. She has worked in the market in both radio and television in air time sales, marketing and operations for the last 17 years. Jennifer was formerly Vice‑President and General Sales Manager for The Beat 94.5 FM here in Vancouver. She was instrumental in the successful launch of The Beat and has helped craft the JANE FM concept and facilitated market feedback on our proposal.
LISTNUM 1 \l 11207 Next to Jennifer is Karen Broderick, National Sales Manager for Harvard Broadcasting. Karen has been with Harvard for over 22 years and oversees national sales for our radio group.
LISTNUM 1 \l 11208 In the back row, seated on my far left and your right, we have Debra McLaughlin from Strategic Inc., who was responsible for our consumer research and the economic profile of Vancouver.
LISTNUM 1 \l 11209 Next to Debra is Paul Hill, President and CEO of Harvard Broadcasting Inc.
LISTNUM 1 \l 11210 Beside Paul is Tina Svedahl, Vice‑President of Investments for Harvard Developments. Tina is responsible for the financial oversight and strategic support through her senior role at Harvard Broadcasting's parent company.
LISTNUM 1 \l 11211 And finally, next to Tina is Rob Malcolmson, our legal counsel from Goodmans LLP.
LISTNUM 1 \l 11212 Madam Chair, Michael will take you through the concept for JANE FM, Valerie will address the programming philosophy, and Jennifer will discuss our spoken word programming. Karen will speak to the demand by advertisers, and I will describe our CCD commitments. Finally, Paul will address how Vancouver is a fundamental component of Harvard's western regional growth strategy.
LISTNUM 1 \l 11213 Michael.
LISTNUM 1 \l 11214 MR. OLSTROM: Thank you, Bruce.
LISTNUM 1 \l 11215 JANE FM is a concept that was developed by residents of Vancouver so it is uniquely west coast. In particular, it reflects the interests and programming requirements of disenfranchised listeners who are spending diminishing amounts of time with radio. While neither a triple A format nor an emphasis on local news and information are exactly new ideas, what makes JANE so different is how these elements are assembled into a single radio service. For example, local news and information will be programmed like talk radio with fixed times for traffic updates and news reports. The typical DJ banter in the morning will be replaced by intelligent, information‑based discussion, and our news will be completely locally produced with a clear emphasis on Vancouver stories. Our discussions will present topics with a greater female sensibility, but at the same time reflect issues that are of broad interest to women and their families.
LISTNUM 1 \l 11216 Because music is of such primary importance to our target audience, women 35 to 54, our playlist will feature artists and tracks that cannot be heard either sufficiently or at all in the market. A recent comparison of our two‑day playlist against the market revealed that 90 per cent of our proposed tracks would be exclusive to JANE. While less repetition and more artists have become a marketing line for many stations, at JANE it is the cornerstone of our programming philosophy.
LISTNUM 1 \l 11217 Valerie Hochschild will take you through our programming guidelines and proposed playlist.
LISTNUM 1 \l 11218 Valerie.
LISTNUM 1 \l 11219 MS HOCHSCHILD: Thanks, Michael.
LISTNUM 1 \l 11220 JANE FM is a music station that will fill a gap left in this market by current services. In Vancouver, there are some very successful stations. However, despite both the number of services and their combined reach, the syndicated research indicated that there was a real gap in service to women. Our custom research confirmed that there wasn't a single service that satisfactorily addressed the broader interests of many women and, by extension, the families to which they belong.
LISTNUM 1 \l 11221 One of the most noticeable holes in the programming spectrum was in the area of music and, in particular, the range of music being played. Dissatisfaction over the high level of song repetition, both within and across stations' playlists and disappointment in the growing number of artists that were not being heard on Vancouver radio, directly contributed to our choice to test interest in triple A. Respondents to our studies reported finding competing services indistinguishable from each other and agreed that there was insufficient variety of music overall, and a lack of new music in particular.
LISTNUM 1 \l 11222 It is to this group that JANE will hold the highest appeal. The core audience to JANE report seeking out new sounds and new talent and priding themselves on being informed of what is happening on the music scene, both locally and on a more global scale. JANE will dedicate 50 per cent of its Canadian content, representing fully 20 per cent of the broadcast week, to new and emerging Canadian artists, addressing both the interest in new music and Vancouver's pride in homegrown talent.
LISTNUM 1 \l 11223 Significantly, our audience does not define themselves as having interest in a single genre of music. Triple A is perhaps the only format where this desire to hear multiple genres of music can be successfully and compatibly accommodated. So who will be played on JANE FM? If licensed today, a sample hour would include the new Kathleen Edwards song, The Cheapest Key, John Mayer's acoustic track, I'm Gonna Find Another You, India Arie, Hot Hot Heat, vintage Elvis Costello, and Madeleine Peyroux covering Leonard Cohen. The artists I have just named represent multiple genres including rock, alternative country, new wave, alternative and jazz. This list of artists also represents new artists and emerging Canadian acts, a cornerstone component of our playlist.
LISTNUM 1 \l 11224 By playing alternate tracks, multiple genres and new artists, JANE can create a truly new musical offering and provide a unique and unduplicated listening experience.
LISTNUM 1 \l 11225 To discuss how our spoken word programming will address the disenfranchised listeners, I will turn to Jennifer Smith.
LISTNUM 1 \l 11226 Jennifer.
LISTNUM 1 \l 11227 MS SMITH: Thanks, Val.
LISTNUM 1 \l 11228 Our research told us there wasn't a service in Vancouver that met the needs of women and families in terms of presentation and the coverage of subjects. There was a clear interest in having a listening option that placed less emphasis on celebrity gossip and DJ banter and it offered more focused discussion. While there was no expectation that a music station could address all of the information needs, there was a desire for spoken word to have more relevance and more meaning.
LISTNUM 1 \l 11229 Respondents described being interested in having something more in depth than headlines but less comprehensive than talk radio, and there was a clear appetite for spoken word that intelligently addressed the more gender‑specific and lifestyle topics.
LISTNUM 1 \l 11230 JANE will meet these needs. For example, in the context of our morning show, we would dedicate an entire program to discussing key issues of concern to women like health and relationships, drawing on in‑studio experts to provide a perspective and analysis. Because music is a key driver of the format, elements of our morning and afternoon drive shows would also be devoted to discussions around the local and national music scene, covering hot topics such as which female artist is most likely to win a Juno award in 2008.
LISTNUM 1 \l 11231 Our research also shows that the target audience wants us to pay close attention to language and topic selection. Repeatedly, we heard that radio tries to shock listeners or entertain with humour that is offensive. Respondents reported not being comfortable listening with their children or members of the opposite sex. They complained of discussions that were sexist, racist, exhibited intolerance and were both inappropriate for the time frame and the public airwaves.
LISTNUM 1 \l 11232 JANE's language of choice will be lively, intelligent, and, above all, respectful. In fact, JANE's voice will be backed up by a listener Bill of Rights to ensure that all programming is appropriate for our audience.
LISTNUM 1 \l 11233 Michael.
LISTNUM 1 \l 11234 MR. OLSTROM: Thanks, Jennifer.
LISTNUM 1 \l 11235 As an information source for women and families, JANE will be unrivaled in Vancouver.
LISTNUM 1 \l 11236 To ensure we meet the needs of all listeners and in recognition of the busy lifestyle of our audience, we will use the internet to provide programming, offer additional references on subjects presented and incorporate listener feedback. Our schedule of guests, artists profiled in our music features and topics will be promoted on myjanefm.com, providing listeners with a guide so that they can plan their listening. In‑studio guests will be profiled and links for further information to their websites will be posted.
LISTNUM 1 \l 11237 In addition to streaming our broadcast live, we will upload an edited version of the spoken word segments complete with interviews and then post them on the website. Our music features and drive home spoken word series will also be made available where rights have been cleared.
LISTNUM 1 \l 11238 Myjanefm will be a portal with links to community resources and associations that are connected to our core audience and related to the subjects we cover. We will offer advertisers an opportunity to be profiled in our on‑line marketplace and provide the background material on consumer trends, helping to clear away some of the noise surrounding products and services.
LISTNUM 1 \l 11239 The website will address the core interest of our listeners, that is music. In the JANE FM artist catalogue, we will offer background information on the artists and the tracks that JANE plays. We will highlight Canadian talent and create a JANE FM Introduces section that will bring special attention to our new and emerging artists. Myjanefm will collect input from listeners either by way of feedback directed to the programmer, responses from polls or broader consumer surveys. More than merely an opportunity for distribution of a signal, myjanefm will be an integral part of the station's programming.
LISTNUM 1 \l 11240 Karen.
LISTNUM 1 \l 11241 MS BRODERICK: In addition to receiving an enthusiastic response in the consumer research, JANE FM was given the endorsement of local, regional and national advertisers. Found amongst the many intervention letters filed on behalf of this application are interventions from every level of advertiser supporting the licensing of JANE FM.
LISTNUM 1 \l 11242 Our business plan is based on a maximum of ten minutes of advertising per hour and our in‑market discussions with businesses concluded that this reduced commercial load would be of significant value to them, as well as providing less clutter for listeners.
LISTNUM 1 \l 11243 Because our core audience of women 35 to 54 is the target group for many advertisers across several categories, JANE will not have to spend any time developing interest in our audience. Rather, we will be able to focus our efforts on demonstrating the strength of our brand, the opportunities that arise from this distinctiveness and the promotional value of our airtime.
LISTNUM 1 \l 11244 Bruce.
LISTNUM 1 \l 11245 MR. COWIE: Madam Chair, we have discussed the contribution JANE FM will make on a consumer level, and I would like to now turn to the contributions that we will make to the Canadian broadcasting system by way of Canadian content development.
LISTNUM 1 \l 11246 Harvard Broadcasting has consistently addressed three aspects of artist development in all of its applications: Discovery, exposure and support. Through JANE FM we have continued with this tri‑level approach recognizing the importance of each.
LISTNUM 1 \l 11247 We have committed money to Grrrls, with Guitars and New Music West. Both of these forums are engaged in the discovery of new artists. Grrrls with Guitars has been a leader in the discovery and advancement of female performers and has been credited by many as being the sole opportunity they had for getting started. When female artists were not deemed necessarily sellable by the industry, Grrrls with Guitars knew better. They offered the stage, the audience and the recording opportunities.
LISTNUM 1 \l 11248 New Music West is the west coast music forum, attended by an international contingent of music executives and fans. With Harvard's financial support, New Music West has agreed to create a stage that will showcase new talent and, in particular, talented female performers, exposing them to decision makers and consumers.
LISTNUM 1 \l 11249 The programs at UBC, both in journalism and music, as well as the course at Langara College represent opportunities for training. Funding by way of an endowment will ensure that the benefits of the JANE FM investment will be realized well beyond the term of the first licence. The funding of the aboriginal media education fund also will provide advancement and, in particular, opportunities for aboriginal youth.
LISTNUM 1 \l 11250 And finally, Canada Blast will provide exposure opportunities for Canadian artists in international forums, allowing them to expand their fan and revenue bases. Developing audiences outside of Canada has long been recognized as necessary for commercial success and this initiative by CIRPA and the federal government is in need of funding to expand the number of artists that can be showcased at these events. The money will be used to directly cover the costs associated with travel.
LISTNUM 1 \l 11251 Licensing Harvard in Vancouver, a market rich in new and emerging Canadian talent, will also provide us with a platform to showcase and promote new and emerging Canadian artists throughout the markets where we are licensed. We plan to create an electronic library of new and emerging Canadian music and feature programming that will be used to promote and showcase these artists each time they appear in the western markets we serve.
LISTNUM 1 \l 11252 In total, including the funding allocated to FACTOR, Harvard is proposing an investment of $5.5 million in direct CCD initiatives. Our proposal covers both local and national programs and provides funding at all levels of artist development.
LISTNUM 1 \l 11253 Paul.
LISTNUM 1 \l 11254 MR. HILL: Thank you, Bruce.
LISTNUM 1 \l 11255 This application represents an essential next step in the development of Harvard Broadcasting. From our initial position as a Saskatchewan‑only broadcaster, Harvard has, with the encouragement of the Commission, expanded into a mid‑sized regional broadcaster with stations in Regina, Saskatoon, Calgary and Fort McMurray. Most recently we acquired stations in Yorkton, Saskatchewan and we are in the process of seeking the Commission's approval of this transaction. Our goal of becoming a strong western voice is now being realized and Vancouver is at the very core of this plan.
LISTNUM 1 \l 11256 Vancouver is western Canada's largest market. It is essential that we establish a presence here to cement our regional coverage and expertise. In addition to being important to advertisers, it will provide Harvard employees with three levels of operations through which to progress and the means by which they can advance their careers without leaving the company they helped to build. It will also provide us with the critical mass from which to weather economic cycles in each of the markets we serve.
LISTNUM 1 \l 11257 Vancouver is an important market for the future of Harvard Broadcasting and we are proud to offer JANE FM to its residents, who include my daughter Shannon, her husband Greg, and three grandchildren.
LISTNUM 1 \l 11258 Bruce.
LISTNUM 1 \l 11259 MR. COWIE: And now, Madam Chair, members of the Commission, it is my pleasure to introduce you to JANE FM.
‑‑‑ Video presentation / Présentation vidéo
LISTNUM 1 \l 11260 MR. COWIE: In summary, JANE is new music, unduplicated by existing services and of greatest interest to those least satisfied with current choices. These are the people whose daily use of radio is in decline. JANE represents a real opportunity to bring listeners back to radio and increase hours spent with radio.
LISTNUM 1 \l 11261 Madam Chair, members of the Commission, Vancouver is clearly a radio market in need of diversity. Twelve of the 15 English‑language stations are owned by four of the largest radio operators in Canada: CTV‑CHUM, Corus, Rogers and Astral. Another large operator, the Pattison Group, owns an AM/FM combo, as well as print, outdoor advertising and television. Vancouver's last remaining independent radio voice, The Beat, was recently swallowed up by CTV‑CHUM.
LISTNUM 1 \l 11262 Licensing Harvard will add a new western voice to the market, a voice that has the expertise and the financial resources to make a lasting contribution to editorial diversity in this city. Our innovative format and unprecedented commitment to new and emerging Canadian artists will make an important contribution to programming variety and artist development in Vancouver. In doing so, we will assist in achieving the objectives of the Broadcasting Act in one of Canada's most important markets.
LISTNUM 1 \l 11263 We thank you very much for your attention and we will be pleased to answer any of your questions.
LISTNUM 1 \l 11264 THE CHAIRPERSON: Thank you, Mr. Cowie and panel.
LISTNUM 1 \l 11265 Commissioner Cugini will lead the questions.
LISTNUM 1 \l 11266 COMMISSIONER CUGINI: Thank you, Mr. Cowie and to your colleagues, good afternoon and welcome.
LISTNUM 1 \l 11267 I am going to start my questioning with the format and the selection of music that will be on this playlist. I am just going to preface that by saying that I have a 26‑year old niece and if you ask her what is her first memory of Auntie Rita, it will be driving in her Honda Civic listening to UB40's Red, Red Wine. It may be for different reasons than just the music, but that is her first memory.
LISTNUM 1 \l 11268 By the same token, I am the one who, for example, introduced her to Pearl Jam because it is the type of music that, because of what I listened to in my early 20s, Pearl Jam appeals to me.
LISTNUM 1 \l 11269 With your playlist and with your format is there more of a gap that you are looking to fill, rather than just your target audience so you get both me and my 26‑year old niece?
LISTNUM 1 \l 11270 MR. OLSTROM: Commissioner Cugini, if I could start with that.
LISTNUM 1 \l 11271 COMMISSIONER CUGINI: I knew it would be you.
LISTNUM 1 \l 11272 MR. OLSTROM: I am not stoked yet, but...
LISTNUM 1 \l 11273 There is a differentiation with JANE FM. The music is a vital cog of that, and I would like to have Valerie Hochschild speak to that in just a moment. Valerie has extensive radio background in both U.S. and Canada. This is a format that is appealing to a demographic that is disenfranchised. Again, as I said, I will turn to Valerie. She can speak a little bit more thoroughly to that.
LISTNUM 1 \l 11274 MS HOCHSCHILD: Thanks very much.
LISTNUM 1 \l 11275 First I want to lay a little groundwork about the format itself. It has obviously been mentioned earlier in the day. I wanted to lay down what our perspective on it is and how we take it from there. I think that might address what you are talking about as far as the ‑‑ can we say ‑‑ possibly disenfranchised of the future, along with those who are here.
LISTNUM 1 \l 11276 Triple A is actually adult album alternative. We like all of those elements. It combines the maturity level we feel of adult contemporary, a not quite mainstream attitude of alternative ‑‑ I think we can relate to that ‑‑ and we think possibly most importantly a much larger music pool which is associated with AOR or the progressive stations of a couple decades ago, which opens up a station to various genres like pop, rock, folk, alternative country, world, blues, but also going deeper into the albums that we do play and deeper into the catalogues of the artists. That is at least the basics on triple A.
LISTNUM 1 \l 11277 We found through talking to we believed to be these disenfranchised listeners, female 35 to 54, from talking to them and what they wanted and what they are missing, it all sort of started to add up to triple A, at least as a starting point.
LISTNUM 1 \l 11278 Where we are taking it further, which will, I think, address possibly a younger market, would be a focus on more new music, on more new artists, on more Canadian artists, not surprisingly, then, more new and emerging Canadian artists.
LISTNUM 1 \l 11279 We said a couple of times 50 per cent of our 40 per cent Canadian content being new and emerging. And being able to put that in terms also of fewer commercials and having more relevant and intelligent spoken word with more respectful language. Music is a big piece, but it is a piece, along with spoken word, making it a full complete format.
LISTNUM 1 \l 11280 I think as long as we stay current we are going to play 40 per cent current. As long as we keep digging deep into these catalogues, as long as we keep our Cancon high, and our new and emerging high, as long as we keep the conversation going with our listeners ‑‑ like I am saying triple A is a starting point ‑‑ we keep the conversation going with the listeners who will be telling us what different ways we could evolve, what other genres maybe we could incorporate more into a programming day. As long as we keep our ear to the ground that way in terms of our listeners and what is going on in Vancouver and the country, I think not only will we address the needs that were expressed to us of females 35 to 54, but also to those women and others in the future who are either disenfranchised now or may very well be soon.
LISTNUM 1 \l 11281 I think that is how we are distinguishing ourselves here.
LISTNUM 1 \l 11282 MR. OLSTROM: I was going to add, we did not necessarily pick triple A. We came to the market, we did our research, and we allowed the market to tell us what was missing. What it did is it replicated a triple A format. But we are not taking a format that is built in the United States or anywhere else. It is a format musically with the input of Vancouverites that has built this actual format, and the description of it, I guess, is closest to triple A with the various genres.
LISTNUM 1 \l 11283 COMMISSIONER CUGINI: You did include in your application the Wikipedia definition, and your playlist is pretty close to that Wikipedia definition, would you not say?
LISTNUM 1 \l 11284 MS HOCHSCHILD: Yes, I would agree with that, sure.
LISTNUM 1 \l 11285 COMMISSIONER CUGINI: When you say "disenfranchised," are you talking about primarily women who are simply just not listening to the radio or they're radio surfers? How are you identifying disenfranchised?
LISTNUM 1 \l 11286 MR. OLSTROM: They are listening to radio, but they are more of a secondary tertiary in terms of their choice of radio stations, and they are flipping around looking for something that is appropriate.
LISTNUM 1 \l 11287 What came out in the research was very astonishing in our focus groups in particular. As we have stated couple of times, they didn't like the language, they didn't like where the content was, and that is as big a part of what JANE is as the music is. This is a music driven format, there is no question, but it is what comes out in the talk and the spoken word as well and how it relates to that. Jennifer, hopefully at some point in time, will get an opportunity to address that.
LISTNUM 1 \l 11288 That is part of what is going to bring this audience that doesn't have a "this is my radio station" on their dial.
LISTNUM 1 \l 11289 MR. COWIE: Commissioner Cugini, just briefly, I attended an evening here, a full house, of people who were invited to come and tell us what they thought of the JANE FM idea to begin with and then discuss music with us. We found a variance in attitudes towards the current fare in the marketplace now that led us to believe that this disenfranchising of some people was real.
LISTNUM 1 \l 11290 I talked to one person who said that she quit listening to radio five years ago. She has an iPod or she has some other device of doing it, the internet, whatever else, because of the number of things. We don't speak to all of them here, but there were concerns about the duplication of music on the radio stations in the centre of the marketplace.
LISTNUM 1 \l 11291 So, our new music approach ‑‑ we have one of the lowest duplication outlooks against the formats currently in the marketplace of something around 10 per cent. Duplication by other applicants, and without naming them, I don't want to get in trouble here, is as high as the high 80s. So, that was a key issue for them, was they wanted to hear new music, they wanted to hear fresh music. They already spoke clearly to us about respect for women that was not always heard on radio stations; safety and comfort for their families, in terms of what they were hearing, and all of these things.
LISTNUM 1 \l 11292 The conclusion from all of that was that they really felt disenfranchised. So, what we tried to do was have JANE speak to them in the way they wanted to be spoken to in the current context. That is kind of the philosophy as to how we arrived at the format, and it turned out to be triple a.
LISTNUM 1 \l 11293 COMMISSIONER CUGINI: Is the duplication factor based on tracks or artists?
LISTNUM 1 \l 11294 MR. COWIE: If I could go to Debra McLaughlin for a second or two on that. I think it is an important point.
LISTNUM 1 \l 11295 MS McLAUGHLIN: I would just like to explain in research terms what disenfranchised means because that is something that came out of it.
LISTNUM 1 \l 11296 There is three groups. There are people currently not listening. These are the people that radio has lost. There are people who are describing their listening as in decline. These are the people who are on their way out. And there are people who are rating their satisfaction with radio low, which is 2 or 1 on a scale of 1 to 5.
LISTNUM 1 \l 11297 So, we are addressing ‑‑ and all of these people were present at the design meetings ‑‑ we are addressing all of their needs. What does it take to bring people back? What does it take to have people tune more? What will it take to have people not tune out and to actually say, I really like a station, as Michael said, having my station on their dial.
LISTNUM 1 \l 11298 In terms of the duplication analysis, we obviously provided one within our research and our supplementary brief to show what was happening in the market. What we were able to do post‑filing was to take the playlists that were submitted as part of everyone else's application, and taking that two days, compare it to the most recent BDS. We found that the range was really, as Mr. Cowie had said, fairly significant. We are at about 10 per cent. There is an incumbent, Pattison is I believe at 81. I don't have the paper in front of me, but there is a huge range when you simply look at what is being played.
LISTNUM 1 \l 11299 Oh, I have the paper now coming in front of me. Sorry, I misspoke. Astral is at 81.6 per cent, and Jim Pattison's service is just over 40, 44.4 per cent, and it goes through it all. We would be happy to provide this. It is BDS. It is data that is available, I think, to the Commission, if you would like that.
LISTNUM 1 \l 11300 COMMISSIONER CUGINI: Thank you, that is very thorough.
LISTNUM 1 \l 11301 Did you want to add something, Mr. Cowie?
LISTNUM 1 \l 11302 MR. COWIE: No.
LISTNUM 1 \l 11303 COMMISSIONER CUGINI: Some of the music on your playlist could be considered category 3. Do you have an estimate as to what percentage of your playlist will come from category 3?
LISTNUM 1 \l 11304 MR. OLSTROM: No, we don't.
LISTNUM 1 \l 11305 COMMISSIONER CUGINI: Could it be as high as 30 per cent?
LISTNUM 1 \l 11306 MR. OLSTROM: I don't believe so, no.
LISTNUM 1 \l 11307 COMMISSIONER CUGINI: As low as 5?
LISTNUM 1 \l 11308 MR. OLSTROM: I would have to get that number for you.
LISTNUM 1 \l 11309 COMMISSIONER CUGINI: We would appreciate that, because it goes to obviously music diversity in the market, and because other applicants in the triple A format are proposing some level of category 3, it just would help us in the comparison of all of the applicants if you could provide us with that information.
LISTNUM 1 \l 11310 That does go to the question of the other triple A format applicants in these proceedings, and I am sure you have had a moment to examine those applications, and if you could outline for us what you feel are the similarities or differences between your application and those of the other triple A formats.
LISTNUM 1 \l 11311 MR. COWIE: With your permission, I will have Debra McLaughlin do that.
LISTNUM 1 \l 11312 COMMISSION CUGINI: Please.
LISTNUM 1 \l 11313 MS McLAUGHLIN: I am not usually one to do this, but I think Ms Hochschild, who put together the playlist, would be in a better position to do that.
LISTNUM 1 \l 11314 MS HOCHSCHILD: Thanks, that's okay. Yes, we have looked at the others. It is nice to see that triple A, at least as a basic format, is pretty popular in this hearing.
LISTNUM 1 \l 11315 But JANE is mainly distinct we think from the other triple A applications based on three elements, we think: Our demo, the exclusivity of our music, as previously mentioned, and our commitment to new and emerging Canadian artists.
LISTNUM 1 \l 11316 To go through it, The Shore and The Planet who you heard from earlier today, will attract roughly equal numbers of male and female, while JANE has a distinctly female skew, as I think has been made clear. The Peak, meanwhile, the Pattison effort, while serving a female audience, is aiming for a much narrower age range of 35 to 44, while JANE will serve 35 to 54. Also, I think The Shore and The Planet have a greater representation of older eras of music, while again, as I have said, JANE will play 40 per cent current.
LISTNUM 1 \l 11317 As for The Planet, going by their submitted sample playlist, which you have seen, The Planet did mention are committed to 40 per cent specialty in cat 3.
LISTNUM 1 \l 11318 On the playlist they mentioned 11 different genres of music on their regular schedule, which is clearly very eclectic. JANE, not a specialty service, will give more thorough coverage to at least five genres, and cover the remaining genres through our feature programming. We think this is going to result in a more cohesive sound through the day and a more focused delivery of lesser played genres. This is something, as with everything we are doing, that our market research found listeners in Vancouver wanted, and we will keep listening to them about that and adjust accordingly as to what more may come in.
LISTNUM 1 \l 11319 The Shore we found has an emphasis on AOR in their gold. JANE intends to be more varied in genre in their gold and current.
LISTNUM 1 \l 11320 The Peak has chosen to emphasize a softer acoustic triple A. We respectfully don't think that this addresses a demand from females for rock. We don't think programming to females means programming soft and mellow. We want to give them what they want and it goes beyond that, we feel.
LISTNUM 1 \l 11321 The Peak's playlist also has a duplication with stations currently in the market of almost 50 per cent, as Debra referred to earlier.
LISTNUM 1 \l 11322 JANE will dedicate 20 per cent of its broadcasting week, as we said, to new and emerging artists. The Shore we found will dedicate 15 and The Peak will offer 10. So, we believe it is a combination of all these elements that gives us a balance that makes us distinct in the market as compared with the other triple A applicants before you.
LISTNUM 1 \l 11323 MR. OLSTROM: If I could add to that, Commissioner Cugini, another big differentiation is within the spoken word elements, and it comes down to perspective, presentation and predictability.
LISTNUM 1 \l 11324 I would like to turn to Jennifer Smith to speak a little bit about that.
LISTNUM 1 \l 11325 MS SMITH: Madam Chair, I would beg for your indulgence because this is such a very important answer. I would ask your permission if I could read the answer so that it does get on the record.
LISTNUM 1 \l 11326 COMMISSIONER CUGINI: As long as it is okay if I read some of my questions later on. Please do.
LISTNUM 1 \l 11327 MS SMITH: Absolutely, a tooth for a tooth.
LISTNUM 1 \l 11328 As Michael mentioned, we call them the three Ps and they are very important: Perspective, presentation and predicability.
LISTNUM 1 \l 11329 This is important based on news and spoken word because it is part of our program offering. At JANE we don't view this as filler between the songs and the commercials but, rather, as a vital element of what we have to offer our listeners.
LISTNUM 1 \l 11330 Let me begin by giving you an overview of how we differ from competing applicants and from what is available in the market today, starting with some general observations.
LISTNUM 1 \l 11331 Off the top, we are going to have a female News Director, and given a female News Director, we will have a female perspective. We clearly see that there are four differences.
LISTNUM 1 \l 11332 One, JANE will differ from its current offering in the market based on the applicants because we will focus on providing spoken word to a core female audience, which means we will be representing that female perspective.
LISTNUM 1 \l 11333 Number two, we will differ from some of the applicants because we will represent a new voice in the market and a fresh perspective on events and issues that specifically shape Vancouver.
LISTNUM 1 \l 11334 Three, we will differ from all music formats existing and proposed in that we will create predictability around our news and information programming that will combine the efficiency of talk radio with the entertainment value of a music format.
LISTNUM 1 \l 11335 Four, we will differ from applicants targeting female audience because our spoken word will focus on music and focus on lifestyle. We will also differ inasmuch as we will be committed to providing spoken word programming that is respectful, and this will be demonstrated in the topics we explore and the language we choose.
LISTNUM 1 \l 11336 The summary of our commitments to respect can be found in our listeners' Bill of Rights, where we will outline what a JANE listener can expect from our station.
LISTNUM 1 \l 11337 Those are the basic differences, and now I would like to take you through how that will translate into what you hear on JANE and give you specific examples.
LISTNUM 1 \l 11338 Let's start with the morning show. Rather than present topics typically provided on stations targeting female audiences, such as typical celebrity gossip, DJ banter and, quite frankly, elementary language, JANE will present information that is relevant to our listeners reflecting their interest in topics such as health, finance, family relationships and, yes, even fashion. We will use language and in depth discussion that reflect the intelligence of our audience. We will speak to them rather than down to them.
LISTNUM 1 \l 11339 To this, JANE will invite guests to appear live on air or in a pre‑taped interview that will not exceed three minutes in length but will provide informed commentary on topics and subjects that we cover. These topics can be as far ranging as profiling a local artist or showcasing the most recent release from someone like Britt Black, or in fact interviewing Sherry Cooper from BMO/Nesbitt Burns, Canada's answer to Suzie Orman in terms of financial advice for women.
LISTNUM 1 \l 11340 With this important information and these elements, it will also be in a music presentation format, which will provide a JANE listener entertainment she seeks and news and information that in fact she needs.
LISTNUM 1 \l 11341 In the evening time, we will have a similar blend of news and information, but we will focus the spoken word and we will shift it slightly. Instead of getting everybody ready for the day, we will help them wind down their day and help them plan their evenings. So instead of focusing on live interviews, JANE will provide features in a series we call Going Home.
LISTNUM 1 \l 11342 For example, on Monday, we will feature Monday moxie mentoring, and on Tuesdays we will feature Tuesdays financial fitness. These fixed features will attract listeners and become part of JANE's commuter experience as they look forward to the end of their day.
LISTNUM 1 \l 11343 Again, with your permission, I would like to take you through our news programming and, in particular, what differs.
LISTNUM 1 \l 11344 We will cover news headlines and, in fact, we believe that they will not have an appreciable difference between our lead stories and what will be reported by our incumbents. We will differ here in the perspective and in the attention that we give it.
LISTNUM 1 \l 11345 For example, while many stations in the market recognize the importance of the case of women being excluded in the Olympic jumping competition, the fact that that story died for all stations died because the headline died. However, on JANE, we would follow that story as a case before the Human Rights Tribunal and talk about the progress.
LISTNUM 1 \l 11346 We will also spend more time presenting stories that affect women and, with a female News Director, we inevitably will have a different implication on many of the headlines as they would be viewed through that female perspective.
LISTNUM 1 \l 11347 Our listener feedback will be used to direct your attention to stories that mainstream wire services may not pick up or in fact deem important, stories such as recent developments in diet and its relationship to breast cancer. We agree that many services will present the headlines, but JANE will discuss the implications of them to our audience.
LISTNUM 1 \l 11348 Many times in these hearings we do hear of programming strategies that involve the word "inclusive." JANE will be that. In fact, more to the point, JANE will be focused.
LISTNUM 1 \l 11349 Back to Michael's original point in summary to reiterate. On the onset, our biggest differentiation and what we think clearly separates us from the other competitors in the triple A space is: Perspective, presentation and predictability.
LISTNUM 1 \l 11350 COMMISSIONER CUGINI: Nothing like being prepared. Thank you very much, Ms Smith. That was very thorough and really shed quite a bit of light on the proposal.
LISTNUM 1 \l 11351 If I take those two answers together and I look at all of the triple A applicants that we have before us, if we license you, can you co‑exist with any of the other applicants if we were to licence one of them, two of them, as well, just taking the triple A applicants. You know you are going to get the big question later on, but if we just look at those, can we license you and somebody else?
LISTNUM 1 \l 11352 MR. COWIE: The answer is yes and no.
LISTNUM 1 \l 11353 COMMISSIONER CUGINI: You have done this to me before, Mr. Cowie.
LISTNUM 1 \l 11354 MR. COWIE: I know.
LISTNUM 1 \l 11355 COMMISSIONER CUGINI: Let me hear both.
LISTNUM 1 \l 11356 MR. COWIE: The answer is yes. However, it would lead us to suggest that it would be more difficult if one of them was an incumbent with other opportunities and financial resources from another station or more in the marketplace. But otherwise, we believe that JANE can stand alone on her own two feet and compete very well.
LISTNUM 1 \l 11357 COMMISSION CUGINI: We will now move on to your business plan. You are obviously very confident in the format. It is obvious from both your presentation and your answers here this afternoon. But you also project that your audience share numbers will exceed that of the number one and number two stations currently in the market, admittedly by year 6, but at that time your share number is forecast to be 8.8, increasing to 9.2 the following year.
LISTNUM 1 \l 11358 Why do you think you will do better than the number one and number two station in the market?
LISTNUM 1 \l 11359 MR. OLSTROM: Commissioner Cugini, if I could turn to Debra McLaughlin to speak to that.
LISTNUM 1 \l 11360 MS McLAUGHLIN: We don't make that determination per se. We look at it. We rely strictly on the research. I would like to tell you that there is some other magic to it, but it is really very formulaic. We ask the respondents two very specific questions: How interested are you in the music and how likely is it that you would listen to the service if licensed?
LISTNUM 1 \l 11361 The first one describes exclusively the type of music that will be played, because in a music format that is the driver. The second question adds the spoken word component.
LISTNUM 1 \l 11362 The numbers that we got were some of the highest that I have seen in quite a while because, as you know, in many of these markets there is a lot of services. It is hard to find a format that gets people in large numbers saying they are going to listen because they have choices.
LISTNUM 1 \l 11363 But I think it has to do with other research that we have done that showed the high amount of duplication in services, the high repeat factor, and I think people were responding to that. So, we took those numbers and we applied actually greater discounts than we normally would. We asked people to qualify their degree of interest in the format on the intention to listen, and in a definitely listen response, I would typically only discount that to 60 per cent, so I would take away 40. I discounted it even more to take into consideration the impairment of the signal.
LISTNUM 1 \l 11364 When you look at it and you add it up, that is what the numbers come to.
LISTNUM 1 \l 11365 We even presumed, because of the interest in news and information amongst this audience, that their hours of tuning wouldn't be as high as we see in some situations. We use other markets as proxy, we use the U.S., so we discounted those. Those are the numbers.
LISTNUM 1 \l 11366 I don't know how the market will shift, but I do know that JANE, in terms of the description, in terms of the focus groups, represents something that isn't available. When I put that ranking in, the eight against the rest of the market, that is presuming a mature share against what they are currently doing. It is just to give perspective.
LISTNUM 1 \l 11367 I suspect if a JANE‑like format is introduced into this market, then in fact you will see adjustment in other stations because it is going to be a format to be contended with, largely because it addresses all of the issues that people are complaining about and are problematic to radio.
LISTNUM 1 \l 11368 This is a very long answer to your question. We are not as aggressive as research paradigms would allow us to be, but we have to be honest in what we find. This is a fairly middle of the road approach to what the respondents in this market told us that they would do if this station was licensed.
LISTNUM 1 \l 11369 COMMISSION CUGINI: That is okay, we don't mind long answers as long as they give us the information that we require to make a valued assessment of all the proposals in front of us.
LISTNUM 1 \l 11370 In terms of your ad revenues, you are essentially forecasting that 40 per cent is new money in this market because you say 20 per cent from advertisers new to radio and 20 per cent from radio advertisers increasing their budgets. If I combine the two, essentially this is new money that would be attracted to JANE.
LISTNUM 1 \l 11371 We are always being told that advertising is moving away from traditional media in favour of new media. How do you plan on convincing these advertisers otherwise that it is still worthwhile to advertise on traditional media?
LISTNUM 1 \l 11372 MR. OLSTROM: Commissioner Cugini, what we are finding is that ‑‑ I will actually turn to both Jennifer and Karen to speak a little bit about this, but there is a need and want for this focused targeted demographic of 35‑54 year old females. Maybe I could have Karen speak to that for just a moment.
LISTNUM 1 \l 11373 MS BRODERICK: Sure. Thanks, Michael.
LISTNUM 1 \l 11374 We did as we always do, and that is to go into the marketplace, speak with advertisers and advertising agencies to basically gauge their level of interest in our format. This time the response was extremely positive, that it would be of great interest to them. It confirmed for us that there is also a strong demand for efficient advertising inventory to reach our core demographic.
LISTNUM 1 \l 11375 It is also important to note that of the numerous letters of intervention that we received for this application, many were from local retailers and agencies. This was the highest level in terms of quantity and quality that we received for any application in any market that we have ever applied in.
LISTNUM 1 \l 11376 Some of the largest agencies in Canada that are here in Vancouver have weighed in on this format and spoke to the fact that the demand for audience and the need to reach efficient advertising was there.
LISTNUM 1 \l 11377 MS SMITH: There was sort of, Commissioner, a two‑part question, the new advertisers as well as taking from existing stations. I would like to address both of those.
LISTNUM 1 \l 11378 I am from this market and have worked in this market for 17 years and most recently launched The Beat 94.5.
LISTNUM 1 \l 11379 What we see in Vancouver is just continued economic growth, and certainly the hype of 2010 on a retail level has been pretty substantial. We look at the number of 20 per cent and say it is definitely achievable.
LISTNUM 1 \l 11380 A few examples I want to give you of that is you look at new businesses that are coming into the market like Taco Time and Sherwin Paints. They traditional advertise on radio because it is a medium that is very quick. It doesn't have a lot of production stumbling issues that other mediums do have. It is also measurable as opposed to new media is still trying to find its way in the metric.
LISTNUM 1 \l 11381 So, we definitely think that 20 per cent is a realistic number for new advertising because there is so much new business out there in the land of retail.
LISTNUM 1 \l 11382 As far as taking from existing stations, some of the letters we had for support were really interesting. One that I will draw your attention to is Wasserman and Partners. They represent ICBC, London Drugs, White Spot, just to name a few clients. This is the Vice‑President of Media for the agency, and for her to write a letter is abnormal. They don't tend to do that for obvious reasons, but she was excited at the possibility of having a radio station that targets a little bit older versus a 25‑54 because, in her mind, that is not being serviced efficiently, effectively in this market today. When she looks at what she pays for the cost per thousand, it is too expensive. So, she is looking for an alternative to have service to her clients because, at the end of the day, the better she services her clients, the better the agency looks. That was just one of the examples.
LISTNUM 1 \l 11383 The last one I will give you that I think is important is for years Burger King has done business in this market, and they have traditionally been a younger skewed type of advertiser. They have realized their business is changing and that they want to target a tertiary client and that would be the mother. Normally they were targeting the tween and the tween audiences and now they have become, okay, we want a second target because we know that if we speak to the mothers that are in a hurry driving their kids to every soccer game known to man, they have to grab something to eat, this is what they want to do.
LISTNUM 1 \l 11384 So, we had absolutely overwhelming support and we think that that number is very conservative.
LISTNUM 1 \l 11385 COMMISSION CUGINI: To go on that Burger King example, because you have actually added a tertiary element to the question, because the question was, yes, new advertisers to radio, but also increasing the budgets of existing advertisers to radio. So, the Burger King example might be an example of that second group, right, where they would increase their budgets as opposed to taking their budgets away from one radio station to advertise on JANE.
LISTNUM 1 \l 11386 If they are going to reach the mother, they might want to still reach the teen and you are saying they will increase their budgets in order to get the JANE audience?
LISTNUM 1 \l 11387 MS SMITH: Yes and no because in this particular example the client ‑‑ yes, sorry, yes, that is correct. I was going to refer to the client's quote. The answer to your question is yes.
LISTNUM 1 \l 11388 MS BRODERICK: Incremental spending.
LISTNUM 1 \l 11389 COMMISSION CUGINI: Ms McLaughlin.
LISTNUM 1 \l 11390 MS McLAUGHLIN: I think the best way to look at this is if you take the specialty service situation that happened in television. No one thought that specialty services could create that much new revenue, and they did take some from other conventional television, and there is no debate about that. But the single biggest hit was realized by magazines, and the reason that was is because specialties branded. They branded very tightly; they focused in. They weren't a general service.
LISTNUM 1 \l 11391 That is a critical element to JANE. It will be critical in terms of attracting and retaining the audience. But it is even more critical to the advertisers in terms of where they are going to place it because this is going to be enormously efficient.
LISTNUM 1 \l 11392 They are going to want to co‑brand; they are going to want to be part of that excitement around a truly female radio station. So, that 40 per cent, in combination from the two different places, is new advertisers. The economy is doing great in the market and it is going to continue to grow, as Jennifer said, but they are also going to find that they now truly have an option. So, they might increase, but they might take it from other media as well.
LISTNUM 1 \l 11393 COMMISSIONER CUGINI: Some might say that you have really set yourselves up; you have a hard road to hoe ahead of you. You are going after disenfranchised radio listeners, so you have to convince those people that JANE FM is worth turning their radio back on, and you have quite a large component of your revenues coming from new advertisers. How are you going to accomplish all this, both getting to those disenfranchised listeners and convincing those advertisers that radio is still a really good buy?
LISTNUM 1 \l 11394 MR. COWIE: Maybe I could take a bit of this. We have always gone out of our way to talk to retail advertisers, particularly in any application we have brought before you. I have never seen a response like the one here in Vancouver. Pages and pages and pages of retail advertisers saying, we like the idea of the radio station, but equally important we like the demo that you are talking about, 30‑54 is right in the middle of all the action.
LISTNUM 1 \l 11395 We just had a quick look at this in the last couple of days, and of the entire population of Vancouver, 51 per cent are women; 17 per cent of those are aged 35‑54. That is an enormous number of people. And the median age is 39.9 years of age, and very much in the consumer fold.
LISTNUM 1 \l 11396 As we said in Calgary, if you recall, that we were fishing in the shallow end of the pond. In this case, we are where we need to be to succeed with this radio station. If you look at it one step farther, that number of people, there is about 370,000 potential listeners in that group, and the reception we have had to JANE so far ‑‑ focus groups and other things ‑‑ if we are not being misled by our own enthusiasm, you are right, this is a very competitive market; we are going to have deep pockets to get to where we want to go, but we will get there. The potential to serve JANE, to feed the JANE format, so to speak, is there.
LISTNUM 1 \l 11397 Radio is not failing. Some formats are failing, and some perspectives in terms of what people want to hear have changed and radio has to catch up. We think in this case we have caught up and hopefully we are right.
LISTNUM 1 \l 11398 MS BRODERICK: Can I just add one point to that because you brought up the advertisers.
LISTNUM 1 \l 11399 Based on a little bit of research that we have in this demographic, women are considered by advertising agencies and advertisers as the primary decision makers in households where it comes to many products and services. Thirty‑five to 54 are primary spending years, and then when you add the female gender, it actually makes our demographic the richest group in the country.
LISTNUM 1 \l 11400 Primary categories of advertisers that would be of interest: Household items, women and children's apparel, furniture, automotive, pharmaceutical ‑‑ the list goes on and on. Women are viewed as the primary decision makers in the work force, so, business and office supplies, travel organizations, hotels, airlines and restaurants, they all are keenly interested in this female demographic of 35‑54. We are pretty confident, having done the research that we have done, as well as the research from Debra, our revenue projections, I think, are easily achievable.
LISTNUM 1 \l 11401 MR. COWIE: Commissioner Cugini, I erred slightly on the median age. The median age is 43.3.
LISTNUM 1 \l 11402 MS SMITH: Commissioner, may I just add, back to your question about advertisers, I did most of the in‑market research as far as talking specifically to the advertisers and interveners.
LISTNUM 1 \l 11403 I have a list that I won't read you because you might be up until about 2:00 in the morning, but there was an overwhelming list of people, and we look at this as a term called "advertisers in waiting." They are waiting for JANE to come alive. Some of those advertisers that would be at the top of my mind, just to name a few, would be Sleep Country, the GM dealers, Ford Canada. They are looking to target that sophisticated radio listener because they know that efficiently they are one of the largest consumer spending groups and they are going to spend the money.
LISTNUM 1 \l 11404 COMMISSION CUGINI: Thank you very much.
LISTNUM 1 \l 11405 My final line of questioning, and it is only a couple of questions, has to do with your spoken word programming and the level of spoken word, because we have heard your answer on the content of the spoken ward.
LISTNUM 1 \l 11406 I have the charts here that you submitted with your application or it may have been a reply to deficiencies. But the total is 17 hours and 38 minutes, of which seven hours and 33 minutes are news only; is that correct?
LISTNUM 1 \l 11407 MR. OLSTROM: We have the benefit of the previous questions earlier, but breaking it down, if I could, total spoken word is 17 hours, 38 minutes; news and surveillance, seven hours, 32.5 minutes or 7/33.
LISTNUM 1 \l 11408 COMMISSION CUGINI: So the 7/33 includes surveillance?
LISTNUM 1 \l 11409 MR. OLSTROM: Yes.
LISTNUM 1 \l 11410 COMMISSIONER CUGINI: If I take out surveillance from that 7/33, how much is pure news?
LISTNUM 1 \l 11411 MR. OLSTROM: Sorry, that is news.
LISTNUM 1 \l 11412 COMMISSIONER CUGINI: News only?
LISTNUM 1 \l 11413 MR. OLSTROM: Yes.
LISTNUM 1 \l 11414 COMMISSIONER CUGINI: How much surveillance material would you add to that amount?
LISTNUM 1 \l 11415 MR. OLSTROM: Overall there is 80 minutes over the course of the week; 80 minutes of that seven hours and 32 minutes is the weather and traffic surveillance.
LISTNUM 1 \l 11416 COMMISSIONER CUGINI: That I would add to 7/33?
LISTNUM 1 \l 11417 MR. OLSTROM: I would like to have Debra just ‑‑ I think I have my numbers messed up here.
LISTNUM 1 \l 11418 MS McLAUGHLIN: I am the only one that brought the calculator, that is why this has happened.
LISTNUM 1 \l 11419 Total spoken word is, as you said, 17 hours and 38 minutes; news and surveillance is seven hours and approximately 33 minutes; weather and traffic surveillance is 80 minutes, and you would subtract that from the seven hours and approximately 33 minutes.
LISTNUM 1 \l 11420 COMMISSIONER CUGINI: And once I do that, that will give me the number of pure news hours per week?
LISTNUM 1 \l 11421 MR. OLSTROM: Correct.
LISTNUM 1 \l 11422 COMMISSIONER CUGINI: Those are all my questions. Thank you very much; thank you, Madam Chair.
LISTNUM 1 \l 11423 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11424 Legal counsel has a question.
LISTNUM 1 \l 11425 MS PINSKY: I just wanted to confirm that you had undertook to provide the percentage of category 3 programming, and if you could do that by Wednesday, the end of day?
LISTNUM 1 \l 11426 MR. OLSTROM: Yes.
LISTNUM 1 \l 11427 THE CHAIRPERSON: How many licensees do you think the market here, and given the frequencies, could sustain?
LISTNUM 1 \l 11428 MR. COWIE: The market could sustain more than one licence. Whether or not the frequency is there to do it is another question. But it is a very robust market and we think it could manage more than one.
LISTNUM 1 \l 11429 THE CHAIRPERSON: If you were to be licensed, who else do you think would be the most compatible with you for this market?
LISTNUM 1 \l 11430 MR. COWIE: Certainly not one of the other triple A applicants, but any of the other applicants other than that. Those the farthest from us would make the introduction of JANE that much easier over time, and certainly the Christian station or some of the specialties who have applied for licences and so on.
LISTNUM 1 \l 11431 THE CHAIRPERSON: Mr. Cowie, do you want to give us your last pitch?
LISTNUM 1 \l 11432 MR. COWIE: I very much do. Thank you.
LISTNUM 1 \l 11433 Madam Chair, members of the Commission and staff, we have not had the advantage of hearing all of the presentations that will be made in these proceedings, but having carefully studied all of the applications before you, I think if you would allow us, we would narrow the issues down to three in total.
LISTNUM 1 \l 11434 How important is diversity in voices? In a market as heavily concentrated as Vancouver, how important is diversity? It is a question that we think about very much.
LISTNUM 1 \l 11435 Which declining tuning demographic is most important to address with the last viable frequency?
LISTNUM 1 \l 11436 Finally, which applicant offers the right combination of resources, experience and editorial perspectives for Vancouver?
LISTNUM 1 \l 11437 We believe those are the three issues.
LISTNUM 1 \l 11438 First, I would like to address the diversity of voices. We presented some facts in our written submission that bear repeating. Seventy per cent of all hours of tuning to radio in Canada is controlled by five major broadcasters; 70 per cent by only five companies. In Vancouver, this concentration of control has resulted in 12 of the 15 commercial licences being owned by major companies, many of whom have majority ownership of other media outlets in the city. Pattison, Astral, Rogers, Corus and CTV/CHUM control 73 per cent of the hours of tuning in this city. It is therefore, not a surprise that, despite having multiple music formats, Vancouver is not described by residents as having a diversity of voices or being rich in perspectives.
LISTNUM 1 \l 11439 Should this matter? We think the answer to that is yes.
LISTNUM 1 \l 11440 We heard quite clearly that diversity in the music being offered was important to disenfranchised female listeners. Diversity in funding options for content development was important to artists, and diversity in news and information is important to everyone in Vancouver. Clearly this can be addressed by licensing a group not already in the market.
LISTNUM 1 \l 11441 The second issue we have identified is which demographic and which audience should be served by the market's sole remaining frequency? We recommend that it be women and, in particular, women 35 to 54 years of age. Women represent 51 per cent of the population, and women 35‑54, our target demo, represent the single largest population cohort. This is a group of 370,000 people.
LISTNUM 1 \l 11442 This group, which is larger than the entire populations of each of Halifax, Saskatoon and Victoria, is dissatisfied with radio, as has been reported by BBM and confirmed by the declining trend in per capita tuning.
LISTNUM 1 \l 11443 Radio, as it exists in the market, has no chance of recovering those lost hours. This lost tuning must be put into context. Women and, in particular, women 35 plus have historically and consistently used radio more than any other group in the population. Traditionally they have been the cornerstone of tuning, but in Vancouver, they are leaving radio because it no longer speaks to them.
LISTNUM 1 \l 11444 Madam Chair, Commissioners, we think it is imperative to address the decline in tuning amongst this largest tuning base, particularly where there is but one remaining via frequency.
LISTNUM 1 \l 11445 While the consistently strong PBIT numbers confirm radio is healthy, we believe this is a very competitive market. An operator will need deep pockets and experience to succeed here. We recently witnessed what happens when a new entrant is licensed and decides to sell. An independent voice is silenced and concentration of ownership increases.
LISTNUM 1 \l 11446 There is only one viable frequency that we know of, although we did hear about another possible one today, and we think it should go to an independent broadcaster that proposes to serve the largest disenfranchised audience and combines the financial resources and operating experience with a genuinely western editorial voice.
LISTNUM 1 \l 11447 Members Chair, Members of the Commission, the last opportunity to put an independent voice into this market is through 104.1. Harvard has the format, the resources and the right editorial perspectives to bring JANE to life. We respectfully ask that we be given the chance to bring a service designed by women, for women to a market decidedly in need of the diversity we offer.
LISTNUM 1 \l 11448 Thank you very much for your time. We appreciate it very much.
LISTNUM 1 \l 11449 THE CHAIRPERSON: Thank you, Mr. Cowie and your panelists. Thank you for your time and your presentation.
LISTNUM 1 \l 11450 We will adjourn today and be back tomorrow. Tomorrow we are starting at 8:30 in the morning.
‑‑‑ Whereupon the hearing adjourned at 1745, to
resume on Tuesday, February 26, 2008 at 0830 /
L'audience est ajounée à 1745 pour reprendre
le mardi 26 février 2008 à 0830
REPORTERS
____________________
Barbara Neuberger
- Date modified: