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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 26, 2008 Le 26 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 26, 2008 Le 26 février 2008
- iv -
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PHASE I (Cont.)
PRESENTATION BY / PRÉSENTATION PAR:
Astral Media Radio Inc. 278 / 1454
6851916 Canada Inc. 336 / 1763
Rock 95 Broadcasting Ltd. 406 / 2116
In House Communications Inc. 465 / 2403
Evanov Communications Inc. (OBCI) 506 / 2641
The Coast 104.1 FM Inc. 588 / 2990
Vancouver, B.C. / Vancouver (C.‑B.)
‑‑‑ Upon resuming on Tuesday, February 26, 2008
at 0830 / L'audience reprend le mardi 26 février
2008 à 0830
LISTNUM 1 \l 1 \s 14511451 THE CHAIRPERSON: Good morning.
LISTNUM 1 \l 11452 THE SECRETARY: We will now proceed with item 6, which is an application by Astral Media Radio for a licence to operate an English‑language FM commercial radio programming undertaking in Vancouver.
LISTNUM 1 \l 11453 Please introduce yourself and your colleagues, and you will then have 20 minutes to make your presentation. Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 11454 MR. PARISIEN: Madam Chair, members of the Commission and Commission staff, my name is Jacques Parisien, President of Astral Media Radio. Before we begin our presentation, I would like to introduce the members of our panel.
LISTNUM 1 \l 11455 On the far left first row, your right, is Eric Samuels, Operations Manager, Vancouver, and also Vice‑President Programming CHR and HOT AC, Astral Media Radio GP.
LISTNUM 1 \l 11456 To my left is Ross Davies, Vice‑President Programming, Astral Media Radio.
LISTNUM 1 \l 11457 To my right is Claude Laflamme, Vice‑President, Corporate and Regulatory Affairs, Astral Media Radio, and on her right is Brad Phillips, Vice‑President and General Manager, Astral Media Radio, Vancouver.
LISTNUM 1 \l 11458 Behind him in the second row is Rob Braide, Vice‑President and General Manager, Astral Media Radio, Montreal, and also Canadian Content Development Coordinator for Astral Radio.
LISTNUM 1 \l 11459 Continuing along the row, we have Diane Morris, Director of Finance, British Columbia and Alberta, then Julie Charest, Research Director for Astral Media Radio, and Glenn Chalmers, General Sales Manager, Vancouver, and also Vice‑President Sales, Astral Media Radio.
LISTNUM 1 \l 11460 And at the end of the row is Rhona Raskin, a well‑known Vancouver broadcaster who helped us design the programming of the new station.
LISTNUM 1 \l 11461 Madam Chair, the Commission recently gave Astral Media Radio the opportunity to become a leader in private radio broadcasting in Canada. We are proud of this achievement and we are determined to fully assume that leadership role.
LISTNUM 1 \l 11462 Our goal is still to make the Canadian radio industry more dynamic and better equipped to face the increasing competition from other media and new platforms, while continuing to be the music industry's ally.
LISTNUM 1 \l 11463 Our new roots across all regions of Canada give us strength and a new boost of energy to achieve that goal.
LISTNUM 1 \l 11464 As you know, Madam Chair, at Astral we are passionate about radio and music. We are also extremely sensitive to the needs and aspirations of our listeners, and we are convinced that radio is by essence a local medium.
LISTNUM 1 \l 11465 All that strength, all that energy, all that passion, all of these convictions have helped us put together what we strongly believe is the best proposal for a new FM station in the Vancouver market.
LISTNUM 1 \l 11466 Developed around a newly created active AC format, with very rich, relevant and high‑qualify spoken word components, Active EZ Rock will be unique and unlike anything you hear in Vancouver today. It will fulfil the needs of women with active lifestyles, mostly aged 35‑44, that are now clearly under‑served in this market.
LISTNUM 1 \l 11467 Our strength, our expertise and our passion also helped us to design a very carefully crafted $9 million Canadian content development package, a package that will make a difference for many young artists and students in the Vancouver area and in Canada.
LISTNUM 1 \l 11468 Madam Chair, we are here today to convince you, and the other members of the Commission, that our EZ Rock proposal meets all the criteria set out in your call for applications in the most attractive and the most balanced manner.
LISTNUM 1 \l 11469 With that, we will begin by focusing on the quality and originality of EZ Rock's underlying concept, which I will ask Ross to present.
LISTNUM 1 \l 11470 MR. DAVIES: Thank you, Jacques.
LISTNUM 1 \l 11471 Active EZ Rock Vancouver will be an uplifting niche radio format targeting women with active lifestyles in the 35 to 44 age group. EZ Rock will feature a unique blend of both music and spoken word elements, making the station unique not only in Vancouver but also in Canada.
LISTNUM 1 \l 11472 On the spoken word side, EZ Rock will offer lifestyle‑oriented programming, integrated throughout the broadcast day, designed to enrich the lives of women in the Vancouver area. Programming will include:
LISTNUM 1 \l 11473 Local, national and international news tailored to our target audience.
LISTNUM 1 \l 11474 An innovative breakfast show, EZ Rock Cafe, broadcast from a special storefront studio with a live audience, the radio equivalent of Canada AM or The Today Show.
LISTNUM 1 \l 11475 Regular contributions from a wide array of specialists, including a nutritionist, a chef, a child psychologist, a financial adviser, a beautician, and a life coach to help women deal with their day‑to‑day concerns.
LISTNUM 1 \l 11476 A provocative new program, EZ Love, the Rhona Raskin show, focusing on sensuality and relationships, among other things, hosted by well‑known Vancouver broadcaster, Rhona Raskin, whom we are pleased to have on our panel today.
LISTNUM 1 \l 11477 Regular coverage and promotion of local events and causes that are important to the daily lives of Vancouver women, including a strong multicultural emphasis.
LISTNUM 1 \l 11478 Our spoken word components will be the radio equivalent of the Oprah Winfrey show.
LISTNUM 1 \l 11479 On the music side, EZ Rock will feature an all new active AC format with a blend of easy music designed to stir up emotions and generate a feeling of fun, escape and energy.
LISTNUM 1 \l 11480 The music will draw from a wide range of sources, from the 70s to today, connecting with women and fitting their active lifestyles.
LISTNUM 1 \l 11481 And, most importantly, the music will be selected based on the feelings that the songs evoke, not simply on their hit status.
LISTNUM 1 \l 11482 Taken together, our music and spoken word components will define a new niche format unlike anything on the air in Vancouver today. EZ Rock will be innovative, energetic and inspirational.
LISTNUM 1 \l 11483 To give you a feeling of the station, in a concrete way, we invite you to watch and listen to this short video.
‑‑‑ Video presentation / présentation vidéo
LISTNUM 1 \l 11484 MS RASKIN: This is the station that I would listen to. As an experienced broadcaster, a native in Vancouver, and as a woman, I am thrilled to be associated with EZ Rock, and I am sure that Vancouver's active women will be as excited as I am to discover this fresh, new uplifting format.
LISTNUM 1 \l 11485 They will not be disappointed and they will stay, because they will have found what they are looking for: A radio station that has been created with a single purpose: To connect with the spirit of Vancouver women.
LISTNUM 1 \l 11486 This will be accomplished by:
LISTNUM 1 \l 11487 Spoken word components that focus on finding solutions to the challenges every woman wakes up to each morning.
LISTNUM 1 \l 11488 A great music environment that will bring relaxing and stimulating moments, laughs, tears and all kinds of emotions.
LISTNUM 1 \l 11489 And also a lot of great shows, like mine, but also like EZ Rock Cafe and EZ Drive.
LISTNUM 1 \l 11490 There is no doubt in my mind that Active EZ Rock will meet the needs and aspirations of an important and under‑served demographic segment in Vancouver, which is women aged 35 to 44.
LISTNUM 1 \l 11491 MR. SAMUELS: Thank you, Rhona.
LISTNUM 1 \l 11492 Active EZ Rock will distinguish itself from all other radio stations in the market, developing a well‑defined and loyal audience.
LISTNUM 1 \l 11493 Our market study reveals that Vancouver women between the ages of 35 and 44 spend less time listening to radio than their counterparts in the rest of Canada. EZ Rock is designed specifically to address this need.
LISTNUM 1 \l 11494 As demonstrated by the chart on your right on the easel, EZ Rock will fill a niche that is not being fully served by existing Vancouver radio stations. It will, thus, complement, rather than compete with, the programming currently available in the market.
LISTNUM 1 \l 11495 EZ Rock will be a distinctly Vancouver radio station, providing local, live and exclusive programming during almost all of the broadcast week.
LISTNUM 1 \l 11496 EZ Rock will broadcast 151 minutes of news each week, specifically tailored to meet the needs of women, with a strong emphasis on Lower Mainland local stories.
LISTNUM 1 \l 11497 We intend to broadcast a wide range of high quality, spoken word features, most of which are unprecedented in Canadian radio. We will also provide our listeners with free access to all of our many specialists, both through the airwaves and our highly interactive website.
LISTNUM 1 \l 11498 EZ Rock will broadcast 40 per cent of Canadian musical selections in category 2. The station's musical mosaic will provide exposure to a broad variety of established and up and coming local Canadian artists, performers like Michael Behm, Finding Friday and Christine Evans, among many others.
LISTNUM 1 \l 11499 In addition, each month, a specific performer will be showcased as the Canadian artist of the month. This feature will raise the profile and awareness of Canadian music, including emerging, developing, as well as well‑established artists. Further, our weekly EZ Talk program will feature many Canadian performers in a much more in‑depth format.
LISTNUM 1 \l 11500 Another showcase for developing talent is our groundbreaking live morning show: The EZ Rock Cafe, which Ross alluded to. This program will be the first of its kind with a live house band featuring local musicians, and regularly scheduled guest performers, including emerging artists.
LISTNUM 1 \l 11501 Based on these programming features, Active EZ Rock will be a strong and distinct contributor to both local programming and Canadian content.
LISTNUM 1 \l 11502 MR. PHILLIPS: As you know, Madam Chair, the Vancouver market is currently served by 19 commercial radio stations, including four multicultural stations, and three CBC/Radio‑Canada stations.
LISTNUM 1 \l 11503 All of the major national radio broadcasting groups are already represented in the Vancouver market. CTV and Corus operate the maximum authorized number of four stations each per market. Rogers operates three stations, while Astral operates two.
LISTNUM 1 \l 11504 By granting Astral a new licence, the Commission will ensure a better competitive balance between the four leading national radio groups in an extremely dynamic market that ranks as Canada's third largest urban area.
LISTNUM 1 \l 11505 Moreover, it would mark the first time that the Commission granted Astral a licence for a new radio station.
LISTNUM 1 \l 11506 So far, Astral's growth has been exclusively fuelled by the acquisition of existing stations. This would be our first opportunity to oversee the development of a brand new station, from the concept and design stage to roll out, and we are very eager to take on this challenge.
LISTNUM 1 \l 11507 No doubt, other applicants will point out that the Commission would also be contributing to competitive balance and to ownership diversity by granting a new licence to an independent or to a smaller media group. We cannot deny that fact.
LISTNUM 1 \l 11508 But we should emphasize that in a constantly evolving media universe, as well as in a market as ferociously competitive as Vancouver, granting a licence to a less experienced or financially solid stakeholder means risk and uncertainty.
LISTNUM 1 \l 11509 All too often in recent years, we have seen less experienced stakeholders brimming with goodwill, who had to ask the Commission to be released from certain obligations and undertakings they made. Some even requested authorization to sell their station to a larger media group, only a few years after having been granted a licence.
LISTNUM 1 \l 11510 This brings us to another criterion set out by the Commission in its call for applications: Whether applicants have the financial resources required to carry out their business plan and comply with their conditions of licence and commitments.
LISTNUM 1 \l 11511 We feel confident in stating that the Commission would have no concerns in this regard as far as Astral is concerned. But in addition to financial stability, Astral offers relevant knowledge and expertise that will serve as the cornerstones of EZ Rock's success.
LISTNUM 1 \l 11512 With the acquisition of Standard Radio, Astral inherited an expert team of broadcasters, including people with in‑depth knowledge of the Vancouver market acquired over the past 20 years.
LISTNUM 1 \l 11513 Astral has well‑established experience in the development, and the successful operation, of programming concepts that target primarily female audiences.
LISTNUM 1 \l 11514 Astral has an enviable reputation as a media group that exceeds its licensing conditions and commitments. We have also demonstrated a sincere willingness and ability to work closely with the Canadian music industry.
LISTNUM 1 \l 11515 Rob.
LISTNUM 1 \l 11516 MR. BRAIDE: Thanks, Brad.
LISTNUM 1 \l 11517 We designed our CCD package, Madam Chair, to ensure that our $9 million of funding commitment would be allocated across a diversified and carefully targeted range of initiatives tailored to well‑identified needs.
LISTNUM 1 \l 11518 The initiatives that we intend to support include: Promoting and facilitating the professional development of emerging local artists; boosting the regional and national influence of emerging artists who have yet to achieve provision or national recognition; supporting non‑profit radio broadcasting across Canada focusing on children and first nations culture; and providing funding for music and journalism scholarships, a number of which would be reserved for aboriginal students.
LISTNUM 1 \l 11519 This package also includes an enhanced contribution to FACTOR, totalling $1.875 million over seven years, based on our financial projections.
LISTNUM 1 \l 11520 We planned our commitments aimed at emerging artists to facilitate their career development from local, to regional and national artists.
LISTNUM 1 \l 11521 To this end, the First Time Big Time initiative will discover, encourage and present emerging local songwriters and singers from Vancouver to Vancouver audiences.
LISTNUM 1 \l 11522 Imagine the excitement of an annual event featuring new talents that have not appeared in front of more than 100 people before, who have a chance to perform on one of the most prestigious stages in Vancouver.
LISTNUM 1 \l 11523 For its part, the Emerging Artist B.C. Tour Program will allow emerging local artists from around the province to perform in four B.C. regions: Okanagan, Vancouver Island, northern B.C. and the Lower Mainland/Fraser valley. This will introduce new artists to regional audiences while promoting awareness of B.C. music province wide.
LISTNUM 1 \l 11524 Going one step further, the B.C. Music Nights initiative will introduce emerging and regionally established B.C. artists to a national audience, with tour dates in five major Canadian cities: Calgary, Winnipeg, Toronto, Montreal and Halifax.
LISTNUM 1 \l 11525 Astral will invest more than $5.4 million in these three carefully designed programs over a seven‑year period. We strongly believe that it will make a difference by providing major career momentum for a large number of B.C. artists.
LISTNUM 1 \l 11526 Through the Astral Media Radio New Artists Fund, Astral will also provide financial support for 35 concerts in B.C. by new and emerging Canadian jazz artists. This initiative will enrich the cultural life across B.C., while supporting the development of young Canadian artists working in this specialized music format.
LISTNUM 1 \l 11527 Claude.
LISTNUM 1 \l 11528 MS LAFLAMME: Astral will support two non‑profit organizations that bring diversity to the Canadian radio landscape: Aboriginal Voices Radio and Radio‑Enfant. Both of these broadcasters are in clear need of funding. We hope that the support we are prepared to provide will help them to meet the challenges that lie ahead and to achieve the important public‑policy objectives.
LISTNUM 1 \l 11529 Astral also proposes to offer six scholarships for $5,000 each per year: Three for music students and three for journalism students, as part of our CCD package.
LISTNUM 1 \l 11530 Astral is aware of the difficulties that Canadian radio broadcasters generally face when recruiting aboriginal talent. Consequently, we plan to increase the support we already give to the National Aboriginal Achievement Foundation by providing five scholarships of $5,000 per year to aboriginal students in the classroom module on radio broadcasting.
LISTNUM 1 \l 11531 We firmly believe that this Canadian content development package is one of the most compelling proposals, not only because of its broad scope, but also because of its balanced local, regional and national initiatives dedicated to musical and spoken word talent.
LISTNUM 1 \l 11532 MR. PARISIEN: Madam Chair, members of the Commission, we have identified a clearly under‑served demographic in the Vancouver market: Women aged between 35 and 44. We propose an innovative and dynamic active AC format tailored to answer the musical tastes of these women. We propose ground‑breaking spoken word to answer their needs, including a unique morning show, broadcasting from a storefront studio, with its own local band and a live audience.
LISTNUM 1 \l 11533 We promise $9 million in Canadian content development, with an emphasis on emerging artists. We offer financial stability, as well as relevant knowledge and expertise to make EZ Rock a success.
LISTNUM 1 \l 11534 Finally, we give the Commission an opportunity to ensure a better competitive balance between the four leading national radio groups in Vancouver by granting Astral a licence for a new radio station for the first time.
LISTNUM 1 \l 11535 For all these reasons, we firmly believe that our application best meets the Commission's licensing criteria. We hope that we have convinced you in this regard. We would be pleased to address any concerns or questions that you may have.
LISTNUM 1 \l 11536 THE CHAIRPERSON: Merci, monsieur Parisien. French (Mark).
LISTNUM 1 \l 11537 MR. PARISIEN: We are very happy you ask our questions in English because our answers have been prepared in English.
LISTNUM 1 \l 11538 THE CHAIRPERSON: I will have to do it in English, thank you.
LISTNUM 1 \l 11539 Before we start, I am wondering if the hotel can adjust the air conditioning. It feels like a regular typhoon up here.
LISTNUM 1 \l 11540 Going to your presentation first, I will touch on the format and your target demographic first.
LISTNUM 1 \l 11541 Why do you feel that your target group of female 35 to 45 is particularly under‑served in Vancouver?
LISTNUM 1 \l 11542 MR. PARISIEN: I will let our research expert answer that question in detail, but I will give you a top line answer first.
LISTNUM 1 \l 11543 It is a format that we know very well, that we operate in many other Canadian markets with success, and we have established a need in this market for that format through what is conventionally regarded as state‑of‑the‑art research. I will let Julie Charest take you through the different steps that we proceed with to get there.
LISTNUM 1 \l 11544 MS CHAREST: Good morning. To establish our target, the first thing we did is we worked with Cara, which is a well‑known marketing research firm. They have offices in 63 countries and they are really recognized, and their executives are asked to give their opinion when there are marketing issues in the market. So, we worked with them.
LISTNUM 1 \l 11545 The first step of this strategic process was to create the mapping that you can see over there, which positioned all the radio stations of the Vancouver markets. The data used to position those stations is the BBM data. So, they used BBM data because it is the best survey we can have about radio. I mean, it is a sample of over 5,000 people in Vancouver. So, this is a very reliable survey.
LISTNUM 1 \l 11546 What they did is they positioned the stations according to the gender and the age. When we look at the mapping, what we see is that the stations targeting 40 year old people are really male oriented. We see that with CFMI, which is Rock 101. We see also CKLG, which is JACK‑FM. Those are really male oriented.
LISTNUM 1 \l 11547 If we look at the female side, what we see is there are younger stations, there are stations like The Beat, CBFT and then CKZZ, which is crave, they are targeting women about 30 years old. Other stations are targeting older women about 50 years old. That is the case of QM and that is the case of CKCL. That is the first thing we saw.
LISTNUM 1 \l 11548 Then we thought that, well, it seems there is a hole for women 35 to 44, because no stations are really aimed at that core target group. That was the first thing.
LISTNUM 1 \l 11549 But I would like to add something to that, because we wanted to know more about that data. So we did the chart that is attached to the oral presentation. If you want to go there, it is the last page.
LISTNUM 1 \l 11550 What we have on this chart is the time spent listening per capita. There is the time spent listening for the top five Vancouver, the top five Canadian market, and the average Canadian is there as a reference. What we see, for instance, is in the 12‑plus demo, like the first column, we see that people in Vancouver listen an average of 16.7 hours of radio, while the Canadian average is 18.3.
LISTNUM 1 \l 11551 That means that the Vancouver market index 91 compared to the national average. Among women 25‑54, there is a quite low index and the worst one is among women 35‑44 with 85. So, it just confirmed that there was a need for a radio station aimed at that core group.
LISTNUM 1 \l 11552 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11553 Yet I believe it is in your brief that you are expecting 90 per cent of your tuning to be coming from the existing stations.
LISTNUM 1 \l 11554 I cannot put my hands on them right away. Perhaps you can point me to the place where it has the breakdown from which stations you are expecting the tuning from, please.
LISTNUM 1 \l 11555 MS CHAREST: Yes, sure. It is page 42 of the Cara study. So it is table 12.
LISTNUM 1 \l 11556 Are you looking for the chart with the impact on each station or the chart with the 90 per cent ‑‑
LISTNUM 1 \l 11557 THE CHAIRPERSON: Both. I want to see how you came up with the 90 per cent, where the 90 per cent in aggregate is going to ‑‑
LISTNUM 1 \l 11558 MS CHAREST: For the 90 per cent, that will be page 40. So you mean the general number, not each station?
LISTNUM 1 \l 11559 THE CHAIRPERSON: That is right. Then each station. So I go to table 12. I see number 3 there, that is QM‑FM and they are losing .5.
LISTNUM 1 \l 11560 MS CHAREST: Yes, QM is losing .5, that is correct.
LISTNUM 1 \l 11561 THE CHAIRPERSON: Whereas The Beat is number 4.
LISTNUM 1 \l 11562 MS CHAREST: The way the stations are affected is related to their market share among women 25‑54 group. So, that is how we project the impact on the existing stations.
LISTNUM 1 \l 11563 THE CHAIRPERSON: I am trying to make the correlation between your statement that they are under‑served and, yet, you are actually drawing such a large percentage of audience from audience who are actually listening to these stations already. So that doesn't really jibe for me right now.
LISTNUM 1 \l 11564 MS CHAREST: The assumptions that Cara did is that 90 per cent will come from the existing station. They also assumed that 5 per cent will come from stations out of the Vancouver market, and 5 per cent is realistic because the tune in factor I mean among the Vancouver market, the listening is 93 per cent for the Vancouver stations. So it is already very high.
LISTNUM 1 \l 11565 That is why they said just 5 per cent for the out‑of‑market stations, and for the new listening, obviously directly in our core target we hope it is going to be more than 5 per cent. But when you look at the wider demo, then they expect it to be 5 per cent, this is conservative but quite realistic to start by getting audiences that have already radio habits, but if it is more, we will be very happy.
LISTNUM 1 \l 11566 THE CHAIRPERSON: Maybe you can explain to me a bit more about the format. I am not sure whether you were able to attend yesterday when Harvard was presenting JANE‑FM. Let's start with that. What would be the difference between your station and JANE?
LISTNUM 1 \l 11567 MR. SAMUELS: JANE is being presented as a different format. Let me just clarify first the distinction between active AC and traditional AC radio, which I think is a good starting point. There is a comparative here because active AC is an offshoot of AC in much the same that triple A is traditionally an offshoot of the rock music format.
LISTNUM 1 \l 11568 Specifically in the case of active AC, it is much more of an interactive and foreground approach to programming AC, whereas traditional AC is much more of a background music format. Traditional AC would be much more focused on playing established hit songs, whereas we are going to pursue songs in terms of matching the mood and the overall feel of the radio station, not focused on watching the chart specifically.
LISTNUM 1 \l 11569 There will be certainly shared artists, particularly the core artists, but the active AC format will play those songs much sooner, not waiting for them to first of all appear on the charts and certainly go deeper than just the hit single by a specific artist.
LISTNUM 1 \l 11570 One of the great distinctions to the active AC format as compared to the traditional AC format is our spoken word component, which is really the backbone to this radio station. It provides, for instance, our on‑air staff with the opportunity to provide live compelling introductions to the lesser known songs, whereas a more traditional AC station would have produced station IDs introducing these components.
LISTNUM 1 \l 11571 That is best demonstrated by our morning show, which will be entirely different from what a traditional AC radio station would provide. In fact, the active AC station will have bookends of very different programming in the morning, with the Active EZ Rock Cafe in the evening, with EZ Love with Rhona Raskin. Both are very rich in spoken word. In fact, that is really the main frame of these programs, whereas traditional AC, the main component would be the music, which isn't to say that music is not a key component, but we are providing a much richer spoken word component.
LISTNUM 1 \l 11572 THE CHAIRPERSON: Just from JANE's application, I see you are targeting the same demographic group. Maybe you can describe to me what type of 35 to 44 year old women would tune to JANE rather than to you or would find your station more appealing than, say, JANE?
LISTNUM 1 \l 11573 MR. SAMUELS: I wouldn't want to be so presumptuous as to identify who their exact audience is. But I would suggest, based on traditional, the distinction between triple A and what we are proposing is triple A, if you look at how it indexes in terms of things like educational background, it tends to be more post‑secondary education. We are really targeting a very mainstream appealing radio station, identifying an under served niche.
LISTNUM 1 \l 11574 To go back to your earlier question, and you raised an excellent point about 90 per cent of this audience coming from other radio stations, our intention is to build time spent listening, not only to have these listeners listening to our radio station but for a longer period of time, bringing up the total hours tuned in the marketplace with this demographic specifically.
LISTNUM 1 \l 11575 To answer that directly, our audience is extremely mainstream across all social and economic levels in the marketplace. We really want to cater to women in that demographic for whom the station will musically and in terms of the spoken word content appeal.
LISTNUM 1 \l 11576 THE CHAIRPERSON: That answer would apply to the difference between your format and any of the other triple A formats, whether or not those triple A formats are targeted to women or not; is that correct?
LISTNUM 1 \l 11577 MR. SAMUELS: Yes, by definition of the two formats, yes.
LISTNUM 1 \l 11578 THE CHAIRPERSON: What would be the difference between your format and Vista's? Vista's is the oldies. In terms of the appeal, in terms of the audience appeal, in your mind, could the two of you co‑exist or are you aiming at the same people? Would the people who tune to your station likely to be the same people who would tune to the oldies format, the 70s?
LISTNUM 1 \l 11579 MR. SAMUELS: There would invariably be some shared audience, but our emphasis musically first of all would be more contemporary than their presentation, which is, from my understanding, more of a 70s gold‑based format. That would be the first point.
LISTNUM 1 \l 11580 Secondly, I would reiterate that our spoken word component, which is really the backbone of this radio station, is significantly different from any other proposal, in fact any other radio station that exists in Canada. Our view there is with the competition we are facing, not just from radio, from out‑of‑market tuning, but all the many other media that are entering into the mix and the options for people, we need to provide local content that is compelling and that is different. That is why we built this radio station with that perspective in mind.
LISTNUM 1 \l 11581 MR. DAVIES: Madam Chair, one clear point of distinction is that the format you are just referring to is really a music driven hit format. Oldies makes its living on playing familiar songs and hits. We have an oldies station here on our AM station, and we know how that operates. You have to play hit music to make it work with the audience.
LISTNUM 1 \l 11582 Our emphasis is not so much on the hit music as much as it is on music that fits the mood of that woman in the age group of 35 to 44, coupled with blended carefully the spoken word elements, and I can't emphasize that enough as Eric said. That is a really integral part of this unique format that we have created, which will clearly set us apart from those music intensive radio stations.
LISTNUM 1 \l 11583 MR. CHALMERS: Madam Chair, one further point of differentiation between our format and the one proposed by Vista. Yesterday there was a concern by members of the panel about the long‑term viability of the health of that group of listeners. They are considerably older. We expect our audience to live this decade.
LISTNUM 1 \l 11584 THE CHAIRPERSON: That is reassuring to me.
LISTNUM 1 \l 11585 MR. CHALMERS: From a sales perspective it is reassuring to me.
LISTNUM 1 \l 11586 THE CHAIRPERSON: I looked at your playlist actually last night when I tuned to some of the stations I had in mind. 103.5, and I am looking at QM‑FM and I am looking at your playlist, will the sound be the same?
LISTNUM 1 \l 11587 MR. SAMUELS: As I said earlier, there will certainly be shared artists. There are really two important distinctions that will distinguish us from any existing AC station in the market.
LISTNUM 1 \l 11588 The first is that at least 25 per cent of the music we play will be entirely different, and that is to say developing artists, artists who are not receiving airplay in this marketplace, Canadian artists like Matt Dusk, Kathleen Edwards. There are internationals like Brandy Carlyle and Damien Rice. There are many opportunities to introduce the market to new artists.
LISTNUM 1 \l 11589 The second and I think important distinction is that because we will not be watching the charts constantly, a lot of this music, by its nature, as Ross pointed out, will be considered for playlist long before a station such as QM would consider playing it, which is to say before it reaches the chart. So, there could be a difference of six, nine months in when these songs are playlisted on Active EZ Rock as opposed to a traditional radio station. That, in itself, will present a significant difference in terms of the sound of the radio stations musically.
LISTNUM 1 \l 11590 MR. DAVIES: Madam Chair, you being from Vancouver, and I actually started my career here in Vancouver, I am quite familiar with that particular radio station because I worked for CHUM for 23 years and had an active role in CHQM.
LISTNUM 1 \l 11591 It is a really well‑programmed, broadbased AC radio station and they have done very well at that. There has really been no direct competition to them, and you could argue that maybe Clear came in and tried to do that. But unless you offer a distinct difference in your formatic approach, the listener is going to say, well, why am I going to go over there? They tried that with maybe Fred and Kathy and they had some marginal success with Fred and Kathy, but unless you point a clear difference in your programming, you are not going to be QM‑FM.
LISTNUM 1 \l 11592 So, it doesn't make sense for us to come and propose a format that is going to be duplicating CHQM.
LISTNUM 1 \l 11593 This is why we have carved out a very narrow focused audience, which is clearly under‑served here in the market. We have seen that. We knew that we had to create a radio station that would be seen as distinctly different from a station like CHQM. That is why we blended the spoken word elements into the programming. We have the Rhona Raskin show and our breakfast show, which will be quite unique. So, those are the things that we realized we had to make a point of difference, and it is very important that we make that clear.
LISTNUM 1 \l 11594 MR. PHILLIPS: At the risk of piling on to this answer, I think another key thing is that the QM‑FM brand has been around for decades and is well established in the market, and they can, for lack of a better way of saying it, get away with being a wall‑to‑wall music machine. That is what people expect, and that is what people will come to them for.
LISTNUM 1 \l 11595 When you are launching a new service in 2008, you have to offer more because people can get wall‑to‑wall music from their iPods and from all kinds of different sources where they don't need radio stations. We have crafted this radio station so that it makes a difference and is a solution and is relevant to the challenges facing the industry right now.
LISTNUM 1 \l 11596 THE CHAIRPERSON: Mr. Davies, you are very accurate in naming those three stations: 103.5, 104.9 and then JACK‑FM. If you are looking at demographics when I am in the car alone, that is usually what I would listen to, and then when the kids are in the car and they see me tune to 103.5 or 104.9, they always say, oh, mom is stressed out. Those are the stress out stations.
LISTNUM 1 \l 11597 I think what difficulty I have right now is that I still can't hear the difference between what you are proposing for your format. I know it is coming out more and more. You say the spoken word, but if you were to name five elements of what is different about your station and the existing ones that are operated, what would they be?
LISTNUM 1 \l 11598 MR. DAVIES: First of all, the spoken word, which you have heard me mention already, the CHQM morning show with Terry and Tara, and I remember when we worked on that format because at that time we were up again Fred and Kathy on KISS‑FM here, and we couldn't beat those guys because Fred at that time was in his prime, and we realized that the thing we have to do there with QM is to make it the more music morning show. They have done very well at doing that. They play a lot of music with very little personality or spoken word elements built into it. It is a music intensive morning show.
LISTNUM 1 \l 11599 Ours will not. It will be the exact opposite. We think music plays a secondary role on our morning show. You have heard us talk about the Oprah Winfrey show or Canada AM or the Today Show. That morning show, from a storefront studio, will be utterly unique here in Vancouver, where we expect to have numerous guests and personalities coming in and talking about issues to women in that age group. There will be some music, but the proportion of talk to music will be radically different from what you would hear on, say, QM and Clear.
LISTNUM 1 \l 11600 So, that is one.
LISTNUM 1 \l 11601 We have programs like the Rhona Raskin evening show. Rhona has had some success in these type of shows previously, but this one, when we met up with Rhona, we developed this exclusively for our radio station which will be unlike anything else that has ever been done before. It will be a combination of provocative talk with the right appropriate music put in there, which might be a little bit perhaps sensitive to some ears, but it will be very customized to that woman 35 to 44. That in itself will be unique, never been done before.
LISTNUM 1 \l 11602 I am going to ask Eric to help out here a little bit more, but those two are kind of like cornerstones of the things that we have got going for the show.
LISTNUM 1 \l 11603 We have also built in Canadian interview shows that it will be long format in its structure on weekends to provide awareness in depth to these Canadian artists that will be unique. In other words, we are not just rolling the music. We are going to sit down and talk to these people. You don't hear that on traditional AC radio stations.
LISTNUM 1 \l 11604 We have the Easy Lounge show that is going to be running on Sunday evenings, which will be introducing category 3 music jazz and blues, again just trying to give our audience something different from the same old, same old. QM and Clear make a great business. It is just playing those carefully researched 400 songs over and over and over again. That is fine. We have done that in our other markets. We know that that works. We know that that won't work here. We have to be different, and these are some of the features that we are building into the station.
LISTNUM 1 \l 11605 Last I will add, just before I give it to Eric, is our news will be customized particularly to that audience. It is not necessarily news in the traditional sense, although obviously we will cover things like the budget today, but we will take the budget and we will apply it to these women and how it will directly affect their lives.
LISTNUM 1 \l 11606 So, those are some of the things that will point us in a different direction.
LISTNUM 1 \l 11607 THE CHAIRPERSON: Before you turn over the mike, I know I will forget if ‑‑ I might already have. The playlist, you were saying they play about 400 songs and, in your opinion, there will be a greater repeat factor. What do you anticipate would be your playlist and what would be the repeat factor?
LISTNUM 1 \l 11608 MR. DAVIES: Madam Chair, I will let my colleague, Eric, answer that one.
LISTNUM 1 \l 11609 MR. SAMUELS: Our playlist will start at at least 800 titles and will grow from there as music is added to the playlist. You asked for five points. I believe Ross gave four. My fifth dovetails nicely with your question, and that is to no repeat work day, which is a key component of our broadcast day.
LISTNUM 1 \l 11610 I think that emphasizes one of the important distinctions, and something I think you have heard from several other applicants are the negative feedback from Vancouver listeners, there is too much repetition on the radio. That is hard wired into our programming. It provides us with the opportunity to have more depth in terms of the music we play. It also avoids one of the pitfalls of radio.
LISTNUM 1 \l 11611 It is essential for us to build a loyal audience. We said off the top that this will be not only loyal, but we don't expect this to be as wide appeal in mainstream as QM‑FM, and partly that is because this is a frequency that is somewhat technically limited. So, we recognize that we need to build a loyal relationship with our audience, beginning with our performers, our performers, our spoken word component and the music will match up with that as well.
LISTNUM 1 \l 11612 MR. DAVIES: Madam Chair, one of my colleagues just reminded me that I forgot one of the more key components. I can go into six and seven and eight now.
LISTNUM 1 \l 11613 We are going to have a nutritionist. We are going to have a life coach. On Fridays we are going to have a chef in our morning show, getting people set up for the weekend and what to make for that weekend for relaxing time. So, we are going to have a lot of these different kind of experts, and you just don't hear that on music‑based AC radio stations today. So, I think we are up to about seven or eight now.
LISTNUM 1 \l 11614 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11615 Ms. Raskin, I don't know whether you had a chance yesterday, when Harvard was presenting the JANE‑FM, and their description of what their talk would be, how there would be more emphasis on lifestyle and respect. I am just interested in hearing your comment on their spoken word programming, and also, if you can, draw the distinction between their spoken word programming and yours.
LISTNUM 1 \l 11616 MS RASKIN: Thank you, Madam Chairman.
LISTNUM 1 \l 11617 I can't say I am an insider to all of their thinking in terms of their programming for their talk, but my understanding from listening to their presentation would be that much of what they propose is in short segments as opposed to an evening. I think of EZ Rock, EZ Love as kind of a clubhouse where every night you can come and hang out with me and my friends and participate and do those sorts of things.
LISTNUM 1 \l 11618 I think what I heard from their proposal was that they would have shorter kinds of segments. I am not really sure if they would be regular kinds of people. With respect, I think their difference is that we believe that women have many voices as opposed to one point of view. Mine, of course, being very important, but other people, we will let them have their say.
LISTNUM 1 \l 11619 Women do have many voices and many points of view and we have to accommodate that. Maybe some of it you wouldn't want to, on my show, have your child sitting on your knee while we discuss some adult issues. I think that would be somewhat of a difference.
LISTNUM 1 \l 11620 In terms of style, because I can speak for myself, I think that we learn things and we need to learn things. Women have a lot of things in common and we have a lot of things that are not in common. We come from different places, and we can learn from each other.
LISTNUM 1 \l 11621 So, the lecture style doesn't really work, not for me anyways. If I want to learn something, I want to use something that is lighthearted, that has humour in it, that is open‑ended, and again not just my opinion, but other people's as well.
LISTNUM 1 \l 11622 So, I see what we offer at night is a clubhouse, an airwave neighbourhood, if you like, where you can drop in with your jammies and perhaps with your child on your knee or perhaps not, depending on the content, to look at problems that we share or we have friends who share that isn't about whining and criticism but is solution oriented.
LISTNUM 1 \l 11623 So, you tell me there is a spider on the floor and you don't know how to get rid of it. I have a solution for that, which by the way is the long hand of the vacuum cleaner. It puts four feet between you and it. It makes for a nice evening.
LISTNUM 1 \l 11624 One of the things that women do differently is that we like to talk. We like to talk about our lives. We like to share experiences, and we will do this in line ups at the grocery store with perfect strangers. This is an opportunity to do that in an anonymous but personal kind of format to basically deal with life 101.
LISTNUM 1 \l 11625 I hope that answers your question.
LISTNUM 1 \l 11626 THE CHAIRPERSON: That does. That is very helpful. Thank you.
LISTNUM 1 \l 11627 I guess we can go on to the more boring stuff, just my housekeeping things. But we are on spoken word, so I need to clarify and understand better your spoken word commitment. I understand from your submissions that it is 19 hours and eight minutes per week; is that correct?
LISTNUM 1 \l 11628 MR. DAVIES: Yes.
LISTNUM 1 \l 11629 THE CHAIRPERSON: Is that the total spoken word, including structured and non‑structured?
LISTNUM 1 \l 11630 MR. DAVIES: Yes. In the application you have that includes the total commitment. However, I would like to add that as this process evolved over the last four or five months, from the time that we submitted the original application and the follow ups, one of the elements of the station that has kind of changed significantly is the spoken word levels. So that amount of 19 hours will be the bare minimum. In fact, at that time we didn't have the details of the Rhona show worked out. So, as we worked with Rhona over the last couple of months, we quickly came to realize that the spoken word elements are going to increase significantly.
LISTNUM 1 \l 11631 So, we actually see that level right now going forward more realistically in the 30 hours per week.
LISTNUM 1 \l 11632 THE CHAIRPERSON: So, your spoken word commitment has now gone to, can I say that it is a commitment of 30 hours per week?
LISTNUM 1 \l 11633 MR. DAVIES: I am sorry, what was that?
LISTNUM 1 \l 11634 THE CHAIRPERSON: Your spoken word commitment, can we now adjust it to 30 hours per week?
LISTNUM 1 \l 11635 MR. DAVIES: Yes, that is where it is right now.
LISTNUM 1 \l 11636 THE CHAIRPERSON: Then of that, how much is the pure news, the sub‑category 11, spoken word, just news?
LISTNUM 1 \l 11637 MR. DAVIES: The news is 151 minutes, pure news.
LISTNUM 1 \l 11638 THE CHAIRPERSON: And then the remainder would be the sub‑category 12, which is other?
LISTNUM 1 \l 11639 MR. DAVIES: Yes.
LISTNUM 1 \l 11640 THE CHAIRPERSON: Your local programming commitment, from what I see, is only 42 hours, which is the minimum; is that correct?
LISTNUM 1 \l 11641 MR. DAVIES: Yes, again at the filing we put the minimum in. I believe we even stated that at that time we are putting in the minimum because that is what is required, but we anticipated that to increase as the process evolved.
LISTNUM 1 \l 11642 So, it is in fact right now in the neighbourhood of about 90 per cent; we anticipate local programming to be in the neighbourhood of 90 per cent.
LISTNUM 1 \l 11643 THE CHAIRPERSON: That would be important to clarify because at 42 it is the lowest. It is lower by a mile than the next, so maybe you can give us some better numbers.
LISTNUM 1 \l 11644 MR. DAVIES: In fact, it is probably roughly in the neighbourhood of 112 hours over the course of a week. This is now, Madam Chair, taking into considerations things like Rhona's show, that EZ Rock Cafe morning show and how we place all these components throughout the day.
LISTNUM 1 \l 11645 When we filed the original application, we wanted to put in the minimum, but as we stated at that time, we anticipated increasing them, and I am here to tell you now, as I say it is 90 per cent.
LISTNUM 1 \l 11646 THE CHAIRPERSON: As your local programming grows, what is the source of the other portion of the programming which is not local?
LISTNUM 1 \l 11647 MR. DAVIES: We had this discussion the other day. I actually think it is probably closer to 100, but we want to have some leeway in there. On weekends, for example, if there is a show that we want to purchase that is a syndicated show, for example, that might be something ‑‑ I don't think it will be, but we wanted to have some room in there just in case something came alone and we said, well, this may be a pretty good show that we should incorporate because it might involve stories of Canadian women all across the country, and this may be some relevance here to our station.
LISTNUM 1 \l 11648 It is really kind of like a buffer, but for the most part, as I say, it will be 90, closer to 100 per cent local.
LISTNUM 1 \l 11649 THE CHAIRPERSON: But you don't have any syndicated programming identified at this point?
LISTNUM 1 \l 11650 MR. DAVIES: That is right. Again, this is just that buffer area. So, we don't anticipate it, but I want to hedge my bet a little bit and say just in case on weekends if something does come along, we wouldn't want to preclude that.
LISTNUM 1 \l 11651 THE CHAIRPERSON: On your CCD, and I know you have addressed it in your deficiency letter and in your supplementary brief, I believe the total CCD is $9 million over seven years.
LISTNUM 1 \l 11652 Could you provide a breakdown of what portion of that is over and above?
LISTNUM 1 \l 11653 MR. LAFLAMME: Yes, we will provide. We heard the question yesterday as well to the others. So, we will provide to the Commission this chart by the end of the week.
LISTNUM 1 \l 11654 THE CHAIRPERSON: Is the end of the week early enough?
LISTNUM 1 \l 11655 MS PINSKY: Could you provide it by the end of tomorrow?
LISTNUM 1 \l 11656 MR. LAFLAMME: Sure.
LISTNUM 1 \l 11657 THE CHAIRPERSON: When you provide the breakdown of the over and above, can I still assume that it is 20 per cent to FACTOR or Music Action.
LISTNUM 1 \l 11658 MR. LAFLAMME: Yes, it was definitely like this.
LISTNUM 1 \l 11659 THE CHAIRPERSON: On pages 16 to 23 of your supplementary brief, you had given different allocations to the different initiatives, and I suspect that when you redo your over and above allocation and your basic CCD, those allocations may have to be refined. If there are any changes resulting from your identification of the portion to be allocated to over and above, could you identify them on the same ‑‑
LISTNUM 1 \l 11660 MR. LAFLAMME: Sure, we will give you complete information.
LISTNUM 1 \l 11661 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11662 You have also identified a number of educational institutions whose students could be potential recipients of scholarships. I know that you have a letter from BCIT. But aside from BCIT, do you have any other institutions who are committed now?
LISTNUM 1 \l 11663 MR. LAFLAMME: We have identified some others as beneficiaries in the supplementary brief. We don't have letters from them yet, but it will come if we ever have the licence.
LISTNUM 1 \l 11664 THE CHAIRPERSON: Thank you. And you will file those letters from them confirming that they will disperse the funds in accordance with the CCD policy as in the commercial radio policy?
LISTNUM 1 \l 11665 MR. LAFLAMME: Yes.
LISTNUM 1 \l 11666 THE CHAIRPERSON: You will also be able to confirm that the schools and institutions to receive the funding will all be accredited provincial authorities?
LISTNUM 1 \l 11667 MR. LAFLAMME: Yes.
LISTNUM 1 \l 11668 THE CHAIRPERSON: And that they will use the money to specifically benefit students of music or journalism?
LISTNUM 1 \l 11669 MR. LAFLAMME: Yes.
LISTNUM 1 \l 11670 THE CHAIRPERSON: By way of scholarships or purchase of musical instruments?
LISTNUM 1 \l 11671 MR. LAFLAMME: Yes, according to the policy.
LISTNUM 1 \l 11672 THE CHAIRPERSON: Your initiative that is earmarked for AVR, you said that you propose to contribute $100,000 annually to AVR and that this funding could be used by AVR to introduce local programming. When you direct the funds to AVR, how will you do that? Will you actually ask them to use that money only for developing local programming for Vancouver, or how do you plan to achieve that?
LISTNUM 1 \l 11673 MR. LAFLAMME: I would like to ask Bob to address that.
LISTNUM 1 \l 11674 MR. BRAIDE: AVR is an operation which, Madam Chair, Astral has supported actively over the years. In CRTC 2006‑158 at paragraph 129, which is cultural diversity, the Commission states how important it is for broadcasters to increase the representation of aboriginals in the Canadian broadcasting system.
LISTNUM 1 \l 11675 Our presentations to the Commission over the past while have been full of those kinds of initiatives. We see AVR as being a valid recipient. We feel that by giving this money, we contribute to their national infrastructure. Clearly we would love to see dollars earmarked for this marketplace pumped into the local stations, but I think it is terribly important that this organization have a strong war chest to allocate the way they see fit, again according to the policy.
LISTNUM 1 \l 11676 THE CHAIRPERSON: Just to clarify, do you work with them in developing this local programming?
LISTNUM 1 \l 11677 MR. BRAIDE: No, we do not. Again, we trust their judgment as we trust the recipients of our other benefits to handle those themselves and to spend the money the way they best see fit.
LISTNUM 1 \l 11678 THE CHAIRPERSON: You may have answered this already, but when you give them the funds, do you actually tell them that these funds must be used to produce local programming?
LISTNUM 1 \l 11679 MR. BRAIDE: No, we do not. It would be in each individual market, but, again, we don't attach requirements to the recipients as specific as that. When we are dealing with the National Aboriginal Achievement Foundation, for which we have created a large in‑class module where a movie is played to aboriginal students in schools across the country, obviously we work closely with NAAF on that one. As one of our initiatives in this application, we are doing an add on, which would give scholarships to aboriginal students who have seen that module, who have decided to become involved in broadcasting, and it is likely that those dollars would be spent towards putting aboriginals from this area into job situations in this area.
LISTNUM 1 \l 11680 THE CHAIRPERSON: Going back to just the 90 per cent of the tuning will be from existing stations and also I believe your submission is that 80 per cent of your year 2 revenues will also be from the existing stations who you identify as CTV and Rogers and you believe will be able to sustain the impact.
LISTNUM 1 \l 11681 If that 90 per cent tuning and your audience share and your revenue projection turns out to be overly optimistic, what would you do?
LISTNUM 1 \l 11682 MR. PARISIEN: If it were overly optimistic?
LISTNUM 1 \l 11683 THE CHAIRPERSON: Yes.
LISTNUM 1 \l 11684 MR. PARISIEN: We would hang in there and we would continue working to make it work, definitely, and continue investing to make it work.
LISTNUM 1 \l 11685 THE CHAIRPERSON: Thank you. I believe that Commissioner Menzies has questions.
LISTNUM 1 \l 11686 COMMISSIONER MENZIES: Just a couple of things.
LISTNUM 1 \l 11687 I would like to hear your perceptions on how this market gap or market opportunity for the female 35 to 44 demographic has evolved in this market. I find it surprising considering how attractive that demographic is to advertisers that in a market with 19 stations it, of all demographics, would be under‑served. I would just like to get your perceptions on how that came about.
LISTNUM 1 \l 11688 MR. DAVIES: Commissioner Menzies, I too found that interesting. I was quite surprised when we saw that chart up there, which is a BBM chart, that shows in that particular demographic the market under indexing.
LISTNUM 1 \l 11689 So, why is that? I can only think that, again, going back to the big horse in town, being in that format CHQM, being such a broad based AC and doing very, very well at it, they have a wide spread. So it is difficult to be all things to all people in some cases, and I think that might identify that there is a certain segment of that audience that they are not really super serving.
LISTNUM 1 \l 11690 So, when we saw that, that is when we decided there is an opportunity for us to go and be very laser like in programming because you can't be all things to all people like that without affecting some parts of that wide demo. I think that is part of the situation that exists.
LISTNUM 1 \l 11691 So, more competition in the market will start satisfying those individual pockets, in this case the 35 to 44. That is just one big huge music machine over there.
LISTNUM 1 \l 11692 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 11693 My other question is in other applications that we have heard, we heard a lot of talk about the nature of Vancouver's cultural and ethnic diversity and that sort of stuff. I am curious to know your perception, and I didn't hear as much of that in your presentation.
LISTNUM 1 \l 11694 My only question is from a commercial point of view, in terms of attracting a female audience, is cultural and ethnic diversity overstated, do you think, in some of the other applications?
LISTNUM 1 \l 11695 MR. PHILLIPS: I don't think it is overstated. I think that it is a big part of our business plan. Perhaps we haven't articulated it at the same level as the others have so far in our presentation, but the multicultural changes that this market has gone through and will go through over the coming years are significant. We plan to actively pursue English‑speaking ethnic audience, both in how we research the station and how we tailor the playlist. We plan to really factor that into virtually everything that we do.
LISTNUM 1 \l 11696 Of course we plan to factor it into the hiring that we plan to do as far as our staff is concerned. We have an employment equity plan in place already corporately that we will continue to follow, and we will continue to staff accordingly. We think it is just good business to make sure that this station is completely representative of the changing multicultural face of Vancouver.
LISTNUM 1 \l 11697 COMMISSIONER MENZIES: I didn't mean to present it as something that I thought was a shortfalling or anything. I was just kind of curious.
LISTNUM 1 \l 11698 Just to follow up on that, Rhona said something about there is no single voice for women and many voices and that sort of stuff. I am interested in your take on how you see that programming happening within the conversation we just had in terms of ethnic and cultural diversity?
LISTNUM 1 \l 11699 MR. DAVIES: Commissioner Menzies, if I may, as you may have seen in that short video, we mentioned this issue a number of times in that video, so we are extremely aware of that reality here in Vancouver. The spoken word elements that we have incorporated into the radio station will clearly reflect on some of those particular aspects that are unique to Vancouver.
LISTNUM 1 \l 11700 The one I was thinking of is the cooking show. I think we have even said somewhere in our brief that we will have cooking shows that are designated for particular ethnic communities that represent the make up of this market.
LISTNUM 1 \l 11701 So, the spoken word elements will really drive that a lot. I think maybe we just thought that was implied in our spoken word elements. We are acutely aware of the make up of this city. Brad, who has been here for about 19 years and the same with Glenn, they know this Vancouver community inside out because they have worked in radio for that period of time.
LISTNUM 1 \l 11702 MR. SAMUELS: If I may, perhaps an assumption on our part, that our responsibility role is to reflect to community in which we broadcast, and our existing operation in Vancouver in terms of staffing is quite culturally diverse and that is reflected in terms of the point of view that is shared with audiences over the airwaves. We expect that to very much be hard wired into Active EZ Rock as well.
LISTNUM 1 \l 11703 COMMISSIONER MENZIES: I didn't doubt that you were good operators in this market and that you would be well aware of the market in terms of that, so I will just leave you with that. I was just curious about a couple of items.
LISTNUM 1 \l 11704 MR. DAVIES: Thank you.
LISTNUM 1 \l 11705 THE CHAIRPERSON: Commissioner Duncan has a question.
LISTNUM 1 \l 11706 COMMISSIONER DUNCAN: Just two quick questions. You mentioned that you operate this format in many other markets. It is not so easy to find a comparable size unless it is Montreal, but can you give me some type of idea of the audience share that you capture in those markets and which markets they would be?
LISTNUM 1 \l 11707 MR. PARISIEN: As a matter of fact there is that format in Montreal and it is called Rock Détente in French. It is a very important station. It is the third biggest in the market and it has a market share of over 15 per cent.
LISTNUM 1 \l 11708 MR. DAVIES: I can add that in some of our English markets, and don't quote me on those numbers, but EZ Rock in Toronto is in the top 12 plus radio stations in that market. In Hamilton our station is number 1 in the market. It is called KLITE, and it is a similar type of format. It is not the same as Active EZ Rock, but it is that kind of AC format.
LISTNUM 1 \l 11709 COMMISSIONER DUNCAN: Focused on women, you mean?
LISTNUM 1 \l 11710 MR. DAVIES: Yes. These are all focused on women. Same thing in London and in Edmonton. So we have a lot of expertise in this format.
LISTNUM 1 \l 11711 But I want it to be clear that those stations would be more perhaps comparable to CHQM. But this station that we are talking about is not that. It is a unique customized format to meet the market needs here in Vancouver.
LISTNUM 1 \l 11712 MR. SAMUELS: In fact, each of our EZ Rock stations across the country is quite distinct in order to fit its own market. They are all programmed autonomously within the market to fit the needs of that market.
LISTNUM 1 \l 11713 COMMISSIONER DUNCAN: Is there format similar to yours in that there is a great deal of emphasis on spoken word as well? Is that a consistent thread through them all?
LISTNUM 1 \l 11714 MR. SAMUELS: The Active EZ Rock model has been developed strictly for Vancouver and this opportunity.
LISTNUM 1 \l 11715 COMMISSIONER DUNCAN: I see then you also operate a HOT AC here.
LISTNUM 1 \l 11716 MR. SAMUELS: Yes.
LISTNUM 1 \l 11717 THE CHAIRPERSON: And that is an FM?
LISTNUM 1 \l 11718 MR. SAMUELS: Yes.
LISTNUM 1 \l 11719 COMMISSIONER DUNCAN: So those comments that you made earlier about the QM‑FM might play to that station as well, would it, the type of music?
LISTNUM 1 \l 11720 MR. SAMUELS: CKZZ has a target of 30 year old; Active EZ Rock will have a target of a 40 year old. So there is a significant difference.
LISTNUM 1 \l 11721 COMMISSIONER DUNCAN: The other thing I am interested to know about, you mentioned 800 titles to start and no repeats.
LISTNUM 1 \l 11722 MR. SAMUELS: During the work day, yes.
LISTNUM 1 \l 11723 COMMISSIONER DUNCAN: Sometimes I think that people like to hear a song that is popular in the day more than once a day.
LISTNUM 1 \l 11724 MR. SAMUELS: It doesn't mean you won't here, for instance ‑‑
LISTNUM 1 \l 11725 COMMISSIONER DUNCAN: The next day.
LISTNUM 1 \l 11726 MR. SAMUELS: No question. In fact, it is a bit of a misnomer the no repeat work day. It means we will be playing the popular selections but you won't hear them three hours later. So, you may hear it during the week day and you might hear it again in the early evening or in the morning. But during the work day when people are at their desk, for instance, we find it to be an irritative hearing the same songs repeated every few hours.
LISTNUM 1 \l 11727 COMMISSIONER DUNCAN: So, no repeat is not exactly ‑‑
LISTNUM 1 \l 11728 MR. SAMUELS: You caught us there.
LISTNUM 1 \l 11729 COMMISSIONER DUNCAN: With respect to the 800 titles, I guess I would just like to be sort of educated a bit. What would be on HOT AC, for example, your HOT AC station, what would be the number of titles you would have there?
LISTNUM 1 \l 11730 MR. SAMUELS: It would be less than that. It would be closer to 500 or 600 with feature programming, different titles though, entirely. There may be some shared artists, but they would really be in the minimum.
LISTNUM 1 \l 11731 COMMISSIONER DUNCAN: I was just actually more interested in the quantities. I was just trying to understand that. That is fine. Thank you very much.
LISTNUM 1 \l 11732 MR. SAMUELS: You're welcome.
LISTNUM 1 \l 11733 THE CHAIRPERSON: You had estimated that you would reach 8.4 of the total Vancouver population in year 1. I am thinking of the questions on your contour and the frequency and what you will cover. So, the total population, you are thinking about the 2.2 million population in year 1?
LISTNUM 1 \l 11734 MS CHAREST: May I answer that question?
LISTNUM 1 \l 11735 THE CHAIRPERSON: Yes, please.
LISTNUM 1 \l 11736 MS CHAREST: To do a reach projection, Cara used a coverage factor to adjust to that reality. They took the interference free zone and the population of this interference free zone is 1.366 million, and out of the total population of the CMA, then they come out with a coverage factor of 65 per cent and they adjust to reach according to this factor. So, it is taken into account in the reach projection.
LISTNUM 1 \l 11737 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11738 How many do you think we should licence in Vancouver?
LISTNUM 1 \l 11739 MR. PARISIEN: We trust the Commission's judgment on this more than ours, but our view is that if you allow Pattison to flip, you should create a level playing field for the major players, and we would be at a disadvantage if we were not licensed.
LISTNUM 1 \l 11740 THE CHAIRPERSON: Do you think there should be a total of two?
LISTNUM 1 \l 11741 MR. PARISIEN: Yes.
LISTNUM 1 \l 11742 THE CHAIRPERSON: If you were one of the licensees, any comments on who would be compatible, who would not be?
LISTNUM 1 \l 11743 MR. PARISIEN: No, we don't. My only comment was on the Pattison file.
LISTNUM 1 \l 11744 THE CHAIRPERSON: This is the opportunity for your two‑minute pitch then and why you think you are the best.
LISTNUM 1 \l 11745 MR. PARISIEN: Thank you, Madam Chair and members of the Commission.
LISTNUM 1 \l 11746 In my view, there are two fundamental reasons why you should give a licence to Active EZ Rock. First, the quality and the relevance of the application itself. Second, the strength and the expertise of the applicant.
LISTNUM 1 \l 11747 During the last 90 minutes or so, we did our pitch about our ground‑breaking spoken word features, as well as our vibrant active AC format. We explained why they offer the perfect mix to answer the unfulfilled needs of Vancouver women.
LISTNUM 1 \l 11748 But as convincing and compelling as a programming concept could be, it is still just words on paper. The true challenge is to bring that concept to life, to sustain its growth and keep it active and alive as long as possible and as long as necessary to achieve maturity and success. It is not an easy task in the highly competitive universe of today's radio. So, the broadcaster entities behind the concept is also very important, and we think we are the best company to effectively deliver that concept in the Vancouver market for many reasons.
LISTNUM 1 \l 11749 First, we have a proven programming expertise acquired through the operation of numerous broadcasting services targeting female audiences such as we just discussed, the EZ Rock and the Rock Détente radio stations we have across the country. Recognizing this one is specific to this market, it is still our expertise to manage radio stations that are targeting women.
LISTNUM 1 \l 11750 We clearly know what we are doing with Active EZ Rock and how we are doing it.
LISTNUM 1 \l 11751 Secondly, we are a very decentralized company. We are convinced that the best way to succeed in any given market is to concentrate most of the decision powers in the hands of the local team. We have general managers, musical directors, sales managers and news directors in every market. They are the ones who know the market best and take the decisions for the market.
LISTNUM 1 \l 11752 Third, we have a well‑established Vancouver infrastructure and a very experienced team in this market who has developed long‑standing relationships with listeners and community organizations, as well as local advertisers. We are more locally grounded than most of the other applicants. We know perfectly well the rules, the players and the challenges that lie ahead.
LISTNUM 1 \l 11753 I personally will also volunteer to move to Vancouver if we get this licence.
LISTNUM 1 \l 11754 Finally, as a national leader, we have an industry‑wide vision and the financial strength to support our local stations in providing them with both the tools for stand‑alone that cannot generally afford. Those tools include long‑term investment in the streaming of all of our stations located in large‑ and medium‑sized markets, the resources of our national sales agency, and the expertise of our research services, a unique internet service that allows our 125 journalists across Canada to access all news bulletin interviews and background research that have been produced by their colleagues in any of our local stations, and many other services.
LISTNUM 1 \l 11755 Madam Chair, Active EZ Rock is the right project for the Vancouver market and Astral Media Radio is the best to deliver it. In addition, our $9 million CCD package is not only impressive by its size, but also by the carefully designed strategy behind it. It will make a difference and strongly support Canadian emerging artists.
LISTNUM 1 \l 11756 For all those reasons, I hope the Commission will say yes to Astral for the first time in the context of an application for a new station. Thank you.
LISTNUM 1 \l 11757 THE CHAIRPERSON: Thank you very much. I too would love to see all the broadcasters move to Vancouver, and hopefully the CRTC headquarters will also be here.
LISTNUM 1 \l 11758 Thank you very much for your time and thank you for your presentation.
LISTNUM 1 \l 11759 We will take a ten‑minute break and be back at 10:00, please.
‑‑‑ Upon recessing at 0948 / Suspension à 0948
‑‑‑ Upon resuming at 1000 / Reprise à 1000
LISTNUM 1 \l 11760 THE SECRETARY: Please take a seat.
LISTNUM 1 \l 11761 We will now deal with item 7, which is an application by 6851916 Canada Inc. for a licence to operate an English‑language FM commercial radio programming undertaking in Vancouver.
LISTNUM 1 \l 11762 Please introduce yourself and your colleagues, and you will then have 20 minutes to make your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 11763 MR. HENNESSY: Thank you. Good morning.
LISTNUM 1 \l 11764 My name is Roy Hennessy. I am the President, General Manager and a shareholder of SHORE 104 FM. I have had over 30 years broadcast management experience at several of Canada's leading and legendary radio stations from Toronto to Vancouver. I am also the past President of FACTOR, a former member of the BBM Radio executive committee, and I founded the Amber Alert Program in Ontario on behalf of the Ontario Association of Broadcasters.
LISTNUM 1 \l 11765 Our Director of Sales is Sherri Pierce. Sherri has 17 years of Vancouver radio sales experience, and most recently was the Director of Sales for the Corus Radio Group of stations in Vancouver. Prior to her radio career, she was the National Media Director for a major Vancouver advertising agency, and she is the past Vice‑President of the Vancouver Media Directors Council.
LISTNUM 1 \l 11766 Jennifer Ouano is the Director of New Media. Jennifer is a recognized leader in the Canadian new media industry and she is the co‑creator and producer of Z on CBC‑TV.
LISTNUM 1 \l 11767 Erin Garrity is our Canadian Content Development Coordinator. She has more than a decade of broadcast experience. She was producer of a national televised arts program showcasing emerging western Canadian artists of all disciplines.
LISTNUM 1 \l 11768 Cheryl Araki, CGA, is the Director of Finance and Administration. We have imported her from Hope, B.C. where she grew up. She is the former manager of finance for PI Financial and Haywood Securities.
LISTNUM 1 \l 11769 Our shareholders. Mr. Sam Feldman. Sam is recognized as one of the top music impresarios in the world and a seminal figure in the establishment and dramatic international growth of the Canadian music industry. Sam guides the careers of such revered artists as Joni Mitchell, Diana Krall, Norah Jones, The Chieftains, Elvis Costello, Ry Cooder and a long, long list. His experience and knowledge of the entertainment industry provided a pivotal voice in the design of SHORE FM and the initiatives that we are proposing to you today to assist in the development of Canadian talent.
LISTNUM 1 \l 11770 Over the years Sam has contributed his time and fundraising abilities to a wide variety of local, national and international charitable causes and campaigns.
LISTNUM 1 \l 11771 Next we have Sean Morrison, C.A. Sean Morrison is a partner at Capital West Partners, a mid‑market investment banking firm located in Vancouver. Mr. Morrison has advised companies across Canada with capital raising for a senior debt, subordinated debt, private equity, IPOs, debt restructurings, asset sales, acquisitions, valuations and fairness opinions. In 2005 Mr. Morrison managed the recapitalization of Lululemon Athletica and Aritzia.
LISTNUM 1 \l 11772 Next we have David Aisenstat. David is the Chairman, President and CEO of The Keg, a company which operates nearly 100 restaurants and employees close to 8,000 Keggers. Mr. Aisenstat is also very active in community affairs. He is a trustee of the Vancouver Art Gallery. He is also a member of the Ottawa based Canadian Council of Chief Executives.
LISTNUM 1 \l 11773 Bob Mackowycz, Maco, as we call him, has an outstanding career programming some of Canada's leading radio stations in various formats. For over 35 years, Bob has been the visionary of such legendary stations as Q107‑FM classic rock in Toronto, the Fan 590 FM all sports radio, CFRB‑AM news talk radio and many others. Bob was the point person and the driving force behind designing the programming you will hear about today on SHORE FM.
LISTNUM 1 \l 11774 And we have Bob Mackowycz, Jr., a former independent musician who knows a great deal about emerging artists. Bob was the head writer and the producer of the CBC TV program called The Hour. He is currently the co‑host of a nationally syndicated radio program which focuses on new music.
LISTNUM 1 \l 11775 Michael Landsberg, the sports host with TSN, is unable to join us today due to a family emergency.
LISTNUM 1 \l 11776 Our advisers, we have David Bray for Research and Marketing. David is one of the country's leading radio analysts. His articles have and do appear in most of the major media publications in Canada. He served as Chair and Vice Chair on a number of BBM committees and was instrumental in the development of some of the audience research being used in Canada today. In addition, he is a musician who has produced written and recorded, with a variety of artists, including Colin Linden, Daniel Lanois, Jeff Healey, and Michael Burgess, and he will not let me sing.
LISTNUM 1 \l 11777 And Kerry Pelser is with us from the technical side. He is with D.E.M. Allen & Associates in Winnipeg, our consulting engineer, who was the point person for the presentation of the technical aspects of our application.
LISTNUM 1 \l 11778 Finally, Mark Lewis, legal counsel. Mark Lewis is a senior partner at Lewis Birnberg Hanet, LLP.
LISTNUM 1 \l 11779 To begin our presentation, I would like to tell you what a personal honour this is. I grew up in Vancouver, I interned in radio with the legendary Red Robinson in CFUN; I hosted the morning show on CKLG for a number of years and eventually created the Vancouver radio station CFOX.
LISTNUM 1 \l 11780 In the radio business, it is very rare to come out of the announcing ranks and to find yourself here today to become an owner. Being a shareholder of SHORE 104 and making this presentation is a career pinnacle.
LISTNUM 1 \l 11781 SHORE 104 strongly believes that we have the winning application, and we believe we have it for three reasons.
LISTNUM 1 \l 11782 Number one is the format. SHORE 104's triple A format will bring listeners who have turned to the internet and other markets back to Vancouver radio by playing music that is currently unavailable in the market. Our research indicates that our format will generate a strong interest and will support a financially viable station without negatively impacting existing licence holders.
LISTNUM 1 \l 11783 Number two is diversity. SHORE 104 will fill a local gap and a large gap in the local airplay. Established and emerging Canadian triple A artists who don't currently have access to Vancouver radio will find a home with us.
LISTNUM 1 \l 11784 To this end, as a condition of licence, we will dedicate 15 per cent of our playlist to our entire broadcast week to emerging artists. Moreover, we commit as a COL 15 per cent emerging artists from 6:00 a.m. to 6:00 p.m., Monday to Friday. This will ensure they are front and centre, and not ghettoized in non‑peak hours.
LISTNUM 1 \l 11785 SHORE 104 will also invest $7 million in Canadian content development, the CCD plan. The CCD plan is designed to create content for broadcast, and over $1 million will be used to support spoken word artists in the Vancouver area.
LISTNUM 1 \l 11786 Number three is balance. SHORE 104 offers a unique combination.
LISTNUM 1 \l 11787 We have experience in station building, operations, programming, and in artist development.
LISTNUM 1 \l 11788 Independence. Our team represents a new voice, with new ideas in an overly consolidated marketplace.
LISTNUM 1 \l 11789 Local focus. The station will be built on radio's fundamental pillars: Live and local broadcasting. We believe cultivating hyperlocalism is radio's greatest strength. Furthermore, the majority of the station is owned by prominent Vancouver business people with a track record of success and community building.
LISTNUM 1 \l 11790 In summary, we believe we have selected a format which is being demanded by listeners and Canadian triple A artists and we have assembled a team with the radio and business acumen and the financial resources to make SHORE 104 a success.
LISTNUM 1 \l 11791 To discuss how SHORE 104 will have a powerful impact on Vancouver's artistic community and radio listeners is Sam Feldman. Sam's close relationship with Canadian artists for over 36 years and his deep understanding of the radio industry in the Vancouver market are the foundation of our application.
LISTNUM 1 \l 11792 Sam.
LISTNUM 1 \l 11793 MR. FELDMAN: Thanks, Roy. There is a world of great triple A talent across Canada, and especially in Vancouver. Right now almost none of it is available on Vancouver commercial radio. These artists need access to our local airwaves.
LISTNUM 1 \l 11794 A long time ago when I was a very young man, one of the first things I did in this business was to promote a concert. That was back in 1970. There was a local band called Seeds of Time that had a song on the radio. It was a very big deal. The concert sold out and I thought I had found the secret to success.
LISTNUM 1 \l 11795 I tried it again a couple of months later with some great bands that didn't have their music on the radio. I learned an obvious lesson very quickly. I delivered a lot of pizzas paying for that lesson.
LISTNUM 1 \l 11796 Radio is the foundation to an artist's career. It was true then and it is true today. The triple A talent is out there. Singer/songwriter Norah Jones' latest CD was the number one album on the billboard charts and the number one downloaded album only iTunes in Canadian history. Yet, when we wrote the application, the first single on this new CD had never been played on Vancouver radio.
LISTNUM 1 \l 11797 There are culturally relevant and developing local artists that deserve to have their music heard. The New Pornographers, who are often described in the American press as a Vancouver supergroup, only received one spin of their first single in Vancouver. This single charted on triple A stations right across America.
LISTNUM 1 \l 11798 It is the same story for such local acts as Jeremy Fisher, Tegan and Sara, and many others. Through my work in the U.S. I see the impact that triple A stations has had on this segment of Vancouver artists. The fact is they get more radio support in America and abroad than at home. It is an unfortunate situation. It drives artists to leave, the very scenario Cancon was created to prevent.
LISTNUM 1 \l 11799 This lack of exposure is shockingly true of our heritage artists as well. In my own experience, Order of Canada, Rock and Roll Hall of Fame inductee, and B.C. resident Joni Mitchell, recently won a Grammy for her new album and it never received a single spin on Vancouver radio. The truth be told, Joni is one of the greatest artists this country ever produced, and you almost never hear any of her music on the radio. The same is true for Leonard Cohen, Daniel Langlois and the list goes on and on.
LISTNUM 1 \l 11800 It is interesting, I was at a meeting for the Olympics recently. I serve on the opening/closing ceremonies board. A woman, a well‑known book publisher, came up to me and said, you know, you represent Joni. I have to tell you, her music saved my life ‑‑ and I am being mellow dramatic ‑‑ when I was in college, and I don't think that we are hearing any singer/songwriters on the radio today that are saving any lives.
LISTNUM 1 \l 11801 The solution is to have a triple A radio station in Vancouver to solve this exposure disparity. It is a proven format in many of America's biggest cities, and Vancouver and its artists and audience are deserving of the same cultural experience. The talent is here.
LISTNUM 1 \l 11802 And so is the audience. We found this in our research and I see it in my business.
LISTNUM 1 \l 11803 In my opinion, there is a perfect storm here. There is a huge market demand for a format that will give much needed exposure to Canada's burgeoning triple A music community, including our own local emerging artists. It will also help to bring listeners back to local radio.
LISTNUM 1 \l 11804 I believe strongly that SHORE 104 is a new kind of commercial radio for Canada, and Vancouver is the perfect market to introduce it.
LISTNUM 1 \l 11805 Leonard Cohen once described his songs as letters, that he hopes some people are hearing. It is kind of time to reopen the post office.
LISTNUM 1 \l 11806 Thank you.
LISTNUM 1 \l 11807 MR. HENNESSY: Thank you, Sam.
LISTNUM 1 \l 11808 To discuss our programming, here is Bob Mackowycz Senior.
LISTNUM 1 \l 11809 MR. BOB MACKOWYCZ SR.: And how do I follow that? Thanks, Roy.
LISTNUM 1 \l 11810 SHORE's programming is built on diversity and balance. We believe we can super‑serve a disenfranchised community of Vancouver listeners with a playlist that is progressive, commercially viable and currently unavailable in the marketplace.
LISTNUM 1 \l 11811 Our programming highlights include:
LISTNUM 1 \l 11812 Forty per cent Canadian content that balances emerging artists, more established current artists and music legends in our format.
LISTNUM 1 \l 11813 Fifty per cent new music, that is, music released within the last 24 months. The goal here to create format hits that may even cross over into even more mainstream formats. In this way, we will be the market leader for the most compelling new music.
LISTNUM 1 \l 11814 Diversity. Seventy‑five per cent of the people we surveyed said they wanted "more than just the hits." As such, our music that is older than 24 months will come from the non‑hit deeper album tracks of our format's icons.
LISTNUM 1 \l 11815 Format depth. By playing 50 per cent older music, we can draw upon the rich tradition of triple A performers. We also offer older music by artists who are just now becoming successful. Let me give you an example here.
LISTNUM 1 \l 11816 Multiple Grammy nominee Feist, Leslie Feist from Calgary, is the fastest rising star in North America. But her 2004 single Mushaboom has played only 17 times in Vancouver. It is worth noting that this particular song, which helped establish her career everywhere else, played over 2,000 times across Canada and almost 9,000 times to date on triple A stations in America.
LISTNUM 1 \l 11817 We will play more songs. Each week we will play nearly 700 distinct songs. This exposes listeners to a wide variety of music in peak listening hours. We also offer a low repeat factor. A current hit song on Vancouver radio receives about 30 to 40 spins a week, sometimes even more. Heavy rotation on SHORE FM is closer to 18 spins a week. This allows us to put more different songs into rotation.
LISTNUM 1 \l 11818 SHORE FM balances category 2 music with under represented category 3 genres such as folk, world, blues and aboriginal. Approximately 20 per cent of the music we play will be from category 3. This will be featured in a number of specialty shows, but more importantly, even, we will play cat 3 music in peak hours when the most listeners can actually hear it.
LISTNUM 1 \l 11819 Emerging artists are an integral part of SHORE'S programming. In fact, SHORE has committed as a condition of licence, as you heard, 15 per cent of our broadcast week will be dedicated to emerging artists. We also commit to playing 15 per cent emerging artists in the 6:00 a.m. to 6:00 p.m. Monday to Friday peak listening period. This means that a new Canadian folk artist can be heard on the morning show, and an unsigned Canadian roots artist can be heard in the afternoon drive home. We agree with CIRPA and CIRAA, who have stated that effective exposure means emerging artists have to be front and centre and not buried in non‑peak listening hours. To that end, we are the only Vancouver applicant to make such a specific emerging artist COL commitment.
LISTNUM 1 \l 11820 MR. HENNESSY: Thanks, Bob.
LISTNUM 1 \l 11821 Support for local artists is what drives our Canadian content development plan. Our $7 million CCD commitment will support our industry's value funding institutions, as well as other causes that are sometimes overlooked. Here is Erin Garrity to outline some of these other initiatives.
LISTNUM 1 \l 11822 Erin.
LISTNUM 1 \l 11823 MR. GARRITY: Thanks, Roy.
LISTNUM 1 \l 11824 Our approach to Canadian content development takes the content aspect very literally.
LISTNUM 1 \l 11825 For example, we are creating and sponsoring a new all‑Canadian day at the Burnaby Blues and Roots Festival. It will produce hours of broadcast content each year. This includes our all‑day live broadcast of the event and recorded individual performances in regular rotation and specialty programs. Artists will receive recorded copies of these performances for their own commercial and career use.
LISTNUM 1 \l 11826 Another content‑focused CCD recipient is VAMS, the Vancouver Adapted Music Society. VAMS is dedicated to developing Vancouver's physically challenged musicians. Rather than simply making a donation, we will provide VAMS artists with a regularly scheduled appearance on B.C. Barometer in peak hours as a showcase for their content. This will be VAMS first commercial local radio exposure.
LISTNUM 1 \l 11827 SHORE 104 is also creating an annual talent contest that will be the first of its kind in Vancouver for our emerging triple A artists. The contest will produce a compilation CD that will be featured prominently on our station. We support grassroots artists with more than airplay. For example, SHORE is working with Vancouver's Rogue Folk Club to create a series of concerts for triple A artists. We are dedicating $500,000 over seven years to promote, stage and record these shows. Local artists have told us that the live music scene in Vancouver is shrinking each year. This money addresses that problem. Playing in your home town builds an artist's initial fan base and we will be there to support this crucial first step.
LISTNUM 1 \l 11828 SHORE 104 is giving Vancouver spoken word artists also special CCD consideration. We are recording local poets and spoken word artists for broadcast. The Canadian League of Poets is supporting our initiative, adding that Vancouver's local scene is especially vibrant.
LISTNUM 1 \l 11829 We are also recording and broadcasting material for Vancouver's comedy community. This material will be prominently featured on our specialty comedy show and in daily peak hours as short form segments.
LISTNUM 1 \l 11830 MR. HENNESSY: Thank you, Erin.
LISTNUM 1 \l 11831 One of SHORE 104's distinguishing characteristics is our commitment to spoken word and spoken word content. At a time when stations advertise less talk, we would like to push in the other direction and strive for better talk. SHORE 104 listeners want to be engaged, whether it is discussing B.C. politics or the latest release from Blackie and the Rodeo Kings. It is also an audience that values an independent Vancouver news voice.
LISTNUM 1 \l 11832 We have 14 and a half hours of weekly spoken word and news content. Our daily newscasts will put a priority on local news, covered by local journalists. Our commitment to intelligent coverage and discussion of local current events will be a hallmark of this station. We have been supported by some of Vancouver's leading print and broadcast journalists.
LISTNUM 1 \l 11833 To outline why spoken word content is so important to SHORE 104 here is Jennifer Ouano.
LISTNUM 1 \l 11834 MS OUANO: Thanks, Roy.
LISTNUM 1 \l 11835 SHORE 104 believes radio is more than just music. People tune in to hear their favourite music. But radio is the soundtrack to a community, and spoken word consent is a vital part of that soundtrack. Without locally rooted conversation, a station could be broadcast from anywhere. This turns a radio station into a jukebox, and that is not radio's greatest strength. If people want to hear a hit song, they can get it on the internet, without having to wait for it. What radio does best is to build a world of context around people's favourite music, and the key here is quality spoken word content.
LISTNUM 1 \l 11836 For example, B.C. Barometer is our daily hour‑long flagship magazine program about Vancouver's public affairs and cultural life. A sample show might combine music with a long‑form artist interview, discussion of current civic topics, a movie or theatre review and an open line dialogue with the audience. This kind of programming was once common on music stations before the era of hit‑driven playlists reduced spoken word content to the bare minimum.
LISTNUM 1 \l 11837 We will also have a twice daily editorial feature in morning and afternoon drive time, spotlighting opinions on local matters by Vancouver journalists, writers, academics and other civic and community figures.
LISTNUM 1 \l 11838 Our strategy is to complement this kind of programming with a strong internet presence. Our website will act as a digital town square, where listeners can participate directly in the current on‑air dialogue by sharing their comments and thoughts. If they want to respond to an editorial, we can upload their comments, and in some cases air the response. SHORE 104's website will be a way to engage the audience, both locally and beyond through interactivity.
LISTNUM 1 \l 11839 To take this idea of community further, we are building an online social networking platform that unites local musicians, poets and other artists, with an eye to developing new connections and collaborations that might otherwise never happen.
LISTNUM 1 \l 11840 This is only the beginning. The internet is here and if radio continues to treat it as a problem, instead of a medium with a common strength, it will continue to lose listeners to what the net offers. But I personally believe that the net can actually help build a station's audience, and it begins by offering thoughtful spoken word content and diverse voices that encourage dialogue.
LISTNUM 1 \l 11841 MR. HENNESSY: Thank you, Jennifer.
LISTNUM 1 \l 11842 Now let's go where the rubber hits the road, Sherri Pierce, our Sales Manager to outline our business plan.
LISTNUM 1 \l 11843 MS PIERCE: Thanks, Roy.
LISTNUM 1 \l 11844 SHORE 104's programming will appeal to adults aged 25 to 54 with a slight female skew and particular emphasis on the 35 to 44 year old segment. Our format offers music currently unavailable in the market. We are confident that we can win back listeners who are currently disenchanted with the existing music mix in Vancouver. As such, the station will increase overall radio tuning levels and will repatriate some out‑of‑market and internet listeners.
LISTNUM 1 \l 11845 We project that by the end of the first year of operations SHORE 104 will secure a 4 per cent share of hours tuned for all people 12 plus, a 4.4 share for females 25 to 54 and a 4 per cent share for males 25 to 54. It is important to note, thought, the share impact on any one station will be negligible as we will draw moderate audiences from a variety of sources.
LISTNUM 1 \l 11846 SHORE 104 will blend into the Vancouver radio spectrum and work to become the first choice of our target group. Given that it plays far more album cuts, the format is not reliant on hits. The music will constantly be rejuvenated and will not experience the same degree of listener burnout. From a sales perfective, a lower audience turnover is an attractive environment for advertisers.
LISTNUM 1 \l 11847 As you know, an adult 12‑plus share point currently delivers an average of $1.2 million in Vancouver. Of course, this index is somewhat higher for stations delivering the most sought after demos. Given that SHORE 104 will be the new presence in the market, it will encounter the normal challenges as it works to fully establish its awareness with advertisers. As such, we conservatively project that we will deliver 65 per cent of the average share point value in year 1, resulting in revenues of $3.1 million.
LISTNUM 1 \l 11848 In the second year of operation we project a revenue increase as our marketing presence is established. Instead of delivering 65 per cent of the average return of a share point, we anticipate achieving an 80 per cent average return. In subsequent years we will capitalize on the fact that the 25 to 54 demographic with a female skew is a highly sought after buying demographic in the market. Given our projected costs for infrastructure and marketing, we anticipate being cash flow positive in the fourth year.
LISTNUM 1 \l 11849 Our business plan is based on pragmatic realism. There are approximately 75,000 to 80,000 businesses in Vancouver. With the current list of commercial stations, only 10 per cent of all the businesses advertise on radio. We are confident that we will be able to attract new advertisers to our station. Much like listeners seeking the music within a triple A format, we will also find a variety of advertisers in search of this unique environment for their message.
LISTNUM 1 \l 11850 Without adversely affecting the market incumbents, we are certain that our business plan is realistic and SHORE 104 is a viable format in Vancouver.
LISTNUM 1 \l 11851 MR. HENNESSY: Thank you, Sherri.
LISTNUM 1 \l 11852 In conclusion, we appreciate that the Commission has a very difficult decision. However, we strongly believe that SHORE 104 is the best option for a number of reasons.
LISTNUM 1 \l 11853 It is a winning format. It satisfies consumer demand and fills a gap in local airplay. It will repatriate listeners from other markets and other media, like the internet.
LISTNUM 1 \l 11854 Diversity. It satisfies the Broadcasting Act's call for diversity through our music, news, spoken word and our staffing.
LISTNUM 1 \l 11855 The unprecedented 15 per cent condition of licence commitment to supporting Canadian emerging talent during the entire broadcasting week and during the prime 6:00 a.m. to 6:00 p.m. Monday to Friday. This music will not be ghettoized.
LISTNUM 1 \l 11856 Our CCD contributions of $7 million will make a meaningful impact on the city and generate broadcast content for our station and local artists, with a special focus on spoken word.
LISTNUM 1 \l 11857 And balance. It is a unique combination when you get the experience of station building, operations programming and artist development, combine that with independence, a new voice with new ideas and local focus, live and local broadcasting that is locally owned.
LISTNUM 1 \l 11858 In summary, we believe we have selected a format which is being demanded by the listeners and the Canadian triple A artists and we have assembled a team with the radio and business acumen and financial resources to make SHORE 104 a success.
LISTNUM 1 \l 11859 For those reasons, we have submitted an application to be licensed as SHORE 104.1‑FM.
LISTNUM 1 \l 11860 Thank you. We would appreciate your questions.
LISTNUM 1 \l 11861 THE CHAIRPERSON: Thank you, Mr. Hennessy and your colleagues.
LISTNUM 1 \l 11862 Commissioner Cugini will lead the questions.
LISTNUM 1 \l 11863 COMMISSIONER CUGINI: Thank you and good morning to all of you.
LISTNUM 1 \l 11864 Just for the record, you have added some charts to your oral presentation. Is this new information that you are submitting to us today?
LISTNUM 1 \l 11865 MR. HENNESSY: No, it is not. It is contained in the application. We decided to attach this because yesterday in the discussions, it is easy for numbers to become confused when we are talking about condition of licence. So, by assembling it into a simple chart it is easy for us to refer to it and we don't embarrass ourselves.
LISTNUM 1 \l 11866 COMMISSIONER CUGINI: Thank you very much. I like things that we can refer to easily.
LISTNUM 1 \l 11867 You may be happy to know that you have answered a number of my questions in my oral presentation, and just by glancing through these charts some of the questions have been answered in these charts as well. So, this may be quick.
LISTNUM 1 \l 11868 MR. HENNESSY: Would you like to come to the opening of the station?
LISTNUM 1 \l 11869 COMMISSIONER CUGINI: Don't get ahead of yourself, Mr. Hennessy.
LISTNUM 1 \l 11870 What a good way to start.
LISTNUM 1 \l 11871 We have heard much discussion over the last day and a bit about the triple A format. So my first question to you is going to be based on what we have heard so far. What are the differences and/or similarities between this proposal and the others in the triple A format?
LISTNUM 1 \l 11872 MR. HENNESSY: The differences between our interpretation of triple A and the others?
LISTNUM 1 \l 11873 COMMISSIONER CUGINI: Yes.
LISTNUM 1 \l 11874 MR. HENNESSY: Our programming guru will guide you through it. Bob.
LISTNUM 1 \l 11875 MR. BOB MACKOWYCZ SR.: And you don't have to chant "ohm."
LISTNUM 1 \l 11876 Last night at 4:00 a.m. in the morning it kind of occurred to me that we might in fact be the only true textbook triple A being proposed to you. I am not going to be cynical and suggest that the others have come kind of in the guise of triple A, but there is a certain degree that they are a fragmentation of the triple A format which is yet to be introduced to Canada. Let me explain.
LISTNUM 1 \l 11877 The Planet, they are 40 per cent category 3 music. We are 20 per cent category 3 music and that is a big difference, especially when you are talking about commercial viability. In their triple A format you may have noticed there is a real emphasis on world beat music. I would say the emphasis at SHORE FM is on the singer/songwriter. We believe that is more commercially viable. It doesn't mean that world beat isn't a part of our blend. You have heard today we have a specialty show, and indeed we are supported by the Vancouver World Music Collective, and they have already agreed to work with us on the show. So, we are plugged into that because it is part of the eclectic blend.
LISTNUM 1 \l 11878 We also strongly believe, and David Bray on the research side can speak to this more clearly than I can, but ask him how unrealistic an A chair is in this format, and you hear him chuckling in the background.
LISTNUM 1 \l 11879 I would say in terms of The Planet, that is the difference there.
LISTNUM 1 \l 11880 In terms of The Peak, they are an acoustic based triple As but they kind of skew more towards a soft rock vibe or feel. Forgive me, I am in Vancouver, I have to use phrases like that. It is the soft rock vibe. In a way, they almost reflect a fragmentation of the triple A format towards adult contemporary. As well, they only have a 10 per cent emerging artist quotient and it is not a condition of licence, so you kind of get the feeling that emerging artists aren't as fundamental to their core and to their essence as a radio station.
LISTNUM 1 \l 11881 In terms of both scenarios being proposed by the Pattison organization, much lower staffing. I believe one of them has as few as eight new positions being created, and the other one is 18. We are full pledged.
LISTNUM 1 \l 11882 We are local. We are talking probably three dozen jobs. That is a major difference.
LISTNUM 1 \l 11883 As well, they have 25 hours of spoken word programming; we have 14.5 hours. With all due respect, I believe ours is much more realistic as a goal. You heard about how we intend to blend it in and quality talk, intelligent audience, all that. Everybody has told you the same thing, and it is true. It is a core value of the station, but it is not a talk format. Twenty‑five hours is a tremendous amount of talk for a music‑oriented station to bear.
LISTNUM 1 \l 11884 In terms of JANE‑FM, they don't have a slight skew towards the female, it is female dedicated. Our balance is 52/48, and when you look at the marketplace itself, that is a true reflection of the marketplace itself. Our slight skew is because that is the way the music kind of tilts a little bit, not entirely.
LISTNUM 1 \l 11885 Despite what our colleagues at JANE‑FM said yesterday, SHORE actually plays more new music than they do. They actually misstated the situation, saying that they played more. We play 50 per cent new music. I believe they said they play 40 per cent.
LISTNUM 1 \l 11886 Once again, I am going to invoke David Bray and you really should speak to him about this. The 9.2 share is just stratospheric. It is just an unrealistic figure. In terms of Port Moody, the signal doesn't reach Vancouver so it is not really an issue.
LISTNUM 1 \l 11887 I think that kind of summarizes the differences.
LISTNUM 1 \l 11888 COMMISSIONER CUGINI: Before we move on to the share point and into the dangerous field of perhaps intervention, let's just stick to the format for a second, because you did bring up a number of issues that I would like to delve further into. One of them is the emerging artists component of your proposal.
LISTNUM 1 \l 11889 You do in various places throughout your application refer to emerging artists both in terms of how you will dedicate time to the airplay of emerging artists, as well as through your CCD contributions, how you will contribute to the area of emerging artists, but you don't provide us with your definition of what is an emerging artist.
LISTNUM 1 \l 11890 MR. BOB MACKOWYCZ SR.: We would follow the CAB. It is a very complex term. The terrain and the dialogue is very robust. Every organization is advocating their own definition. We think being at the heart of emerging music and the format perhaps most suited for that ongoing dialogue, we would like to be involved in that dialogue. That would of course assume we would be licensed. But for the purposes of our structuring and our working through, we use the CAB definition, which is ‑‑ would you like me to repeat it?
LISTNUM 1 \l 11891 COMMISSIONER CUGINI: No, we have it on the record. Thank you very much.
LISTNUM 1 \l 11892 MR. BOB MACKOWYCZ SR.: So that is the working model.
LISTNUM 1 \l 11893 MR. HENNESSY: As we indicated in the application, should you come out with a formal definition that varies from the CAB, we would adopt that when it came into effect.
LISTNUM 1 \l 11894 COMMISSIONER CUGINI: You have said it repeatedly in your application if we chose to impose the condition of licence that you have proposed in your application, you would accept that as a condition of licence?
LISTNUM 1 \l 11895 MR. HENNESSY: Yes, absolutely.
LISTNUM 1 \l 11896 COMMISSIONER CUGINI: For the airplay.
LISTNUM 1 \l 11897 On to the area of category 3 music. In your application you stated that this would constitute 15 per cent of your playlist. Today in your oral presentation you said approximately 20 per cent. Is it somewhere in between?
LISTNUM 1 \l 11898 MR. BOB MACKOWYCZ SR.: You know what, it is a flexible number. We live quite naturally with category 3 music. At the risk of sounding like Emeril Lagasse, you are talking a bit of a gumbo here and you are talking about a bit of a blend. It is a vital important part of the mix. It lives comfortably. I don't know that I would nail it down to a specific number.
LISTNUM 1 \l 11899 When we were programming the station and made up our music list ‑‑ and when you go through the music list, you will see that we are pretty careful and at the core of what we are doing is blending that music in an environment of more familiar mainstream artists and that is the best showcase for this.
LISTNUM 1 \l 11900 MR. BOB MACKOWYCZ JR.: Madam Commissioner, may I add to that?
LISTNUM 1 \l 11901 COMMISSIONER CUGINI: Please do.
LISTNUM 1 \l 11902 MR. BOB MACKOWYCZ JR.: We found as we were building the playlist as well that we tried to be very careful to be respectful to what category 3 music actually is. Because it is a singer/songwriter‑based format and there is an awful lot of acoustic music, it is very easy to pass music off as category 3 and then, therefore, fill up your quotas with stuff that really isn't getting to the heart of what a category 3 definition music should be. So, we tried to go very, very vigilant to sticking to what we believe is a true definition of a category 3, for example like the bands, Acadian Driftwood which ends with a nice mandolin solo as opposed to a singer/songwriter who just happens to be using an acoustic guitar.
LISTNUM 1 \l 11903 As we scheduled it, we found that this fits very comfortably within the 15 to 20 per cent range that we were projecting. But to go much higher than that, I think now you are talking about diminishing the actual definition of category 3.
LISTNUM 1 \l 11904 COMMISSIONER CUGINI: What are the implications if we were to impose a level of category 3 music as a condition of licence? For your benefit, let's use 15 per cent.
LISTNUM 1 \l 11905 MR. BOB MACKOWYCZ SR.: We would embrace it.
LISTNUM 1 \l 11906 COMMISSIONER CUGINI: You would embrace it. You would accept that as a condition of licence?
LISTNUM 1 \l 11907 MR. BOB MACKOWYCZ SR.: Absolutely.
LISTNUM 1 \l 11908 MR. HENNESSY: Yes.
LISTNUM 1 \l 11909 COMMISSIONER CUGINI: I just glassed at your charts. The issue of Canadian content, in your application you are committing to 40 per cent Cancon overall?
LISTNUM 1 \l 11910 MR. HENNESSY: Forty per cent, balanced presentation, no ghettoizing.
LISTNUM 1 \l 11911 COMMISSIONER CUGINI: If we were to impose 15 per cent category 3, would 40 per cent Cancon apply to that as well, even though the regulatory requirement for category 3 is 10 per cent, because I see that in your chart right here that you submitted today, 40 per cent category 3 music.
LISTNUM 1 \l 11912 MR. BOB MACKOWYCZ SR.: Are you asking whether 40 per cent ‑‑
LISTNUM 1 \l 11913 MR. HENNESSY: Forty per cent of emerging?
LISTNUM 1 \l 11914 COMMISSIONER CUGINI: No, Canadian content.
LISTNUM 1 \l 11915 MR. HENNESSY: Forty per cent of Canadian content would be emerging?
LISTNUM 1 \l 11916 COMMISSIONER CUGINI: No, category 3.
LISTNUM 1 \l 11917 MR. BOB MACKOWYCZ SR.: No, category 3. We would like to get back to you on that. We will have a discussion about that, but off the top of my head I don't think that would be necessary. We will get back to you. You are asking us whether we will accept ‑‑ if you could just restate that so I can be clear about it.
LISTNUM 1 \l 11918 COMMISSIONER CUGINI: Radio licensees who are proposing category 3, the regulatory requirement for Canadian content is 10 per cent of category 3 must be Canadian. You are committing to 40 per cent Canadian content.
LISTNUM 1 \l 11919 The question, therefore, is if we are to impose a 15 per cent of your schedule to be category 3 music, will you accept a condition of licence that, is it 40 per cent of category 3 or will you comply with the regulatory requirement of only 10 per cent of category 3 only?
LISTNUM 1 \l 11920 MR. BOB MACKOWYCZ SR.: And we can get back to you on that?
LISTNUM 1 \l 11921 COMMISSIONER CUGINI: Bearing in mind that your chart says 40 per cent Canadian content of category 3 music.
LISTNUM 1 \l 11922 MR. BOB MACKOWYCZ SR.: Right. We just had a programming department meeting and ‑‑
LISTNUM 1 \l 11923 MR. HENNESSY: The consensus is.
LISTNUM 1 \l 11924 MR. BOB MACKOWYCZ SR.: We had a quorum and, yes, that would be acceptable as a condition of licence, yes.
LISTNUM 1 \l 11925 COMMISSIONER CUGINI: Forty per cent?
LISTNUM 1 \l 11926 MR. BOB MACKOWYCZ SR.: Yes.
LISTNUM 1 \l 11927 COMMISSIONER CUGINI: Okay, terrific. Thank you.
LISTNUM 1 \l 11928 MR. HENNESSY: You are a good negotiator.
LISTNUM 1 \l 11929 COMMISSIONER CUGINI: And this level will be applied weekly and between 6:00 a.m. and 6:00 p.m. Monday to Friday?
LISTNUM 1 \l 11930 MR. BOB MACKOWYCZ SR.: I hope you got the impression that that is what we are all about, peak hour exposure because it really does not make sense. You have to stand up for the music.
LISTNUM 1 \l 11931 This music for it to cut through, again, it is all about balance and it is about the proper context. It is the framing of this music. It means, as well, whether it is emerging or category 3 you will see an element like Remember This Name is a feature that we have, and it is to introduce the emerging artist. There is a bit of an art to breaking new music. You just can't throw it willy‑nilly into the mix and expect listeners to absorb it, and especially when the format hasn't existed in the country.
LISTNUM 1 \l 11932 COMMISSIONER CUGINI: I believe it was the Harvard application that provided the Wikipedia definition of triple A. One of the things that was included was it is artistcentric and that it tends to play the deeper cuts of tracks from albums. Is that your experience? Is that your interpretation of this definition?
LISTNUM 1 \l 11933 MR. BOB MACKOWYCZ SR.: Exactly. The audience here, even if you look at our rotation figures, and they are about 50 per cent of what is the norm, and even though you might want some flexibility, if there is like KT Tunstall is a very interesting Scottish singer/songwriter who had a massive top 5 hit with Hold On. By the way, it received no spins in the Vancouver market.
LISTNUM 1 \l 11934 But an artist like that deserves that airplay, yes.
LISTNUM 1 \l 11935 MR. BOB MACKOWYCZ JR.: Madam Commissioner, may I add to that?
LISTNUM 1 \l 11936 COMMISSIONER CUGINI: Please.
LISTNUM 1 \l 11937 MR. BOB MACKOWYCZ JR.: Just in terms of adding to the depth of artists and the airplay gap that I believe you are referring to, if you take a quintessential Canadian singer/songwriter who is triple A through and through like Sarah Harmer, who has had a substantial amount of Canadian success and is at the forefront of this movement of new Canadian triple A content, some of her songs get played and some of them don't, and that is at the heart of really how you create balance in this.
LISTNUM 1 \l 11938 If there are two or three songs by an artist that tend to be focused on and yet they have an entire back catalogue of dozens and dozens of songs, this artist tends to be defined by those two or three songs, which isn't really a fair representation and it is not really career building.
LISTNUM 1 \l 11939 For example, her song Don't Get Your Back Up, which was released in the mid‑nineties, was spun in Canadian almost 29,000 times, but in Vancouver since its release in the mid‑nineties only 95 times.
LISTNUM 1 \l 11940 In this regard, you can provide a great deal of flexibility and airplay gap by supporting artists and the stuff that isn't being played from their back catalogue, and these are great songs.
LISTNUM 1 \l 11941 COMMISSIONER CUGINI: How do you account for that difference between the national average and isolating the Vancouver market?
LISTNUM 1 \l 11942 MR. BOB MACKOWYCZ JR.: My personal opinion is that there is a particular quota of these kind of artists that will fit on, and you don't want to go too hard on them because they don't really represent your adult contemporary format or don't represent necessarily your micro‑niche format. So, if your song does cross over ‑‑ there is a Feist song that got radio play here. It was called Inside and Out and it is very much an adult contemporary song, but her first song, Mushaboom, which was extremely quirky, got almost no airplay whatsoever. So, you can see it is almost a case‑by‑case judgement: Do you fit our format? People aren't championing artists necessarily or the entire body of their work. They are championing specific songs that may or may not fit their micro‑niche.
LISTNUM 1 \l 11943 So, if you are going to champion a triple A artist, you have to be dedicated to their back catalogue. In that regard we address the airplay gap, and we still bring music by people that we know the market loves.
LISTNUM 1 \l 11944 MR. HENNESSY: One other concept that came into the development of the programming. First of all, fundamentally radio, in particular the big block of stations clustered around the centre of the bank of the 25 to 54 demographics, they are in the tune out business. They do everything they possibly can to have you not hit that button. They don't play a song that is risky, they do commercial clusters at the times that are least likely to be filled in on the BBM diary so you don't reflect that you have moved. I mean, this has been practised, rehearsed, ground down to the basic fundamentals of formatic radio.
LISTNUM 1 \l 11945 We are going to tend to be in the tune in business, that you will come to us, and I mean this about artists because you will know that you will go beyond hearing that one track, that there will be more diversity and more range in what they are hearing.
LISTNUM 1 \l 11946 That will extend through to the topics that are on Barometer, the editorialists who will make you cranky and make you get on the internet and tell us what you really think. It is a philosophy of the station which is counter to what is typical.
LISTNUM 1 \l 11947 MR. BOB MACKOWYCZ SR.: If I could just add a couple of things, in terms of your question about Vancouver, it is an exceptionally conservative music market, and I think that our charts emphatically prove that. I don't think we need to go over that. It is there. It is in black and white. This is a conservative radio market.
LISTNUM 1 \l 11948 In terms of depth, it is a core value. If you notice our research in fact underscores that empirically. As we mentioned 75 per cent want more than the hits.
LISTNUM 1 \l 11949 If you feed this audience, and when you see the successful radio stations ‑‑ and maybe Sam wants to comment about that ‑‑ you will see that if you play even the songs that they like too many times, it is just another version of a hit machine except with a tune that they kind of like more than one that they would get on a conventional commercial mainstream radio station.
LISTNUM 1 \l 11950 MR. FELDMAN: On the rare occasion when I hear a new song that I like on the radio as I am hurting my fingers pushing dials desperately trying to hear something good I like, I never hear who that artist is. I never hear it named, and I think that that is why Bob alludes to the context.
LISTNUM 1 \l 11951 On the face of it, I come at this more from the live music side than the radio side, but there is a direct correlation to the live music arena to what is happening in radio.
LISTNUM 1 \l 11952 If I look at a station in America called KCRW, it is a preeminent triple A station out of Santa Monica, as much as I like to say I did it, I know for a fact they had everything to do with establishing Norah Jones' career because they didn't just play some of her music and move on to something else, but they talked about her, they talked to her, they talked about her music. In a time period when people can just get whatever song they want on the internet and create their own records of hits it is really, really getting difficult to establish careers and careers are what establish a small economy for an artist. That means that they can hire people that they can not only pay, but teach how to move on and up in their own career.
LISTNUM 1 \l 11953 To me, it is absolutely critical to have a station that is embraced by this community that local artists and Canadian artists can feel like there is an involvement there, there is a station that kind of cares about not just the next song that is going to sell them an advertisement but actually has a legitimate hand in developing their career and all that goes with it.
LISTNUM 1 \l 11954 COMMISSIONER CUGINI: And this is what is going to happen with the three hours of emerging spoken word that you have identified in your application?
LISTNUM 1 \l 11955 MR. BOB MACKOWYCZ SR.: Yes.
LISTNUM 1 \l 11956 MR. HENNESSY: I just wanted to make another quick link here, if I could.
LISTNUM 1 \l 11957 We talked about having the emerging artist 15 per cent condition of licence throughout the programming. One thing, and perhaps Sam could make a comment on this, we regard the emerging artist segment in a half hour or whatever, that emerging artist is like the opening act for Bruce Springsteen. You are going to see Springsteen, but there is an opening act. You can't have too many opening acts or they don't show up. But if you are that opening act, that sets the stage for you and you are compared to the quality that people expect from Bruce Springsteen. So, if you are good, they will say, he's as good as Bruce. That is the concept of the emerging artist.
LISTNUM 1 \l 11958 MR. FELDMAN: Hearing the technical description of what is an emerging artist is kind of interesting to me. To me an emerging artist is someone who can't make a living and is trying very, very hard. I happen to know a lot of emerging artists that are really qualified and really good and have a lot to say.
LISTNUM 1 \l 11959 It seems to me ever since Canadian content came in, you just felt like this evil obligation that radio stations had to kind of put up with to get their licence. I could never understand it because, having travelled to Australia and having sent artists to Australia, they are so incredibly proud of their local artists and they have many days where they play just Australian artists. It is a pretty small country. I don't get the whole notion that this is just some evil condition that is placed upon them.
LISTNUM 1 \l 11960 To me the emerging artist program is a sales tool. It is not just something that we have to do. If you qualify these things properly, then you draw attention to your emerging artists program. You get people very keen and interested.
LISTNUM 1 \l 11961 I know that my 17 year old son who is like every 17 year old son is in a band and plays guitar and all that stuff, and I am amazed at the amount of music knowledge that he has going back in time, and this is a result of him surfing the net and all those technical things that these kids do.
LISTNUM 1 \l 11962 Why can't we get that on the radio? We should be exposed to different kinds of music.
LISTNUM 1 \l 11963 COMMISSIONER CUGINI: That is what we are hoping that between the radio industry and us we can change some of those perceptions when it comes to emerging artists.
LISTNUM 1 \l 11964 There were a number of things that of course again were just said that is going to bring up a couple more questions for me.
LISTNUM 1 \l 11965 Have you had an opportunity to compare your playlist with what is currently available in the market, and have you been able to establish if there is any duplication or how much duplication both in terms of artists and tracks?
LISTNUM 1 \l 11966 MR. BOB MACKOWYCZ SR.: From a statistical point of view, we did a career plays to date analysis, and that is what we have termed the airplay gap. I know the other day you got a two‑day BDS survey. You really can't get a feel for it over a two‑day span, with all due respect.
LISTNUM 1 \l 11967 But a career analysis of a song, the life span of a song, you can get a feel for it. What we found was that there is ‑‑ well, in fact the widest play gap in all of Canadian radio exists in the Vancouver market.
LISTNUM 1 \l 11968 A good example of that is Blue Rodeo; iconic Canadian band, last quarter of a century. I am proud to say that they often acknowledge that I was the first individual to play them on Canadian radio when they were a rocking little teen combo called the HiFi's, but that aside we've both got roots, Sam.
LISTNUM 1 \l 11969 The new single off their latest album released in 2007, Come On it is called, played at the time of our submission 560 times across Canada in all formats, zero times, Blue Rodeo, zero times in Vancouver.
LISTNUM 1 \l 11970 My son, who you probably have heard is the good version of me, mentioned Sarah Harmer. As you go through that list, you can see a song‑by‑song analysis, and that is the way we approach the duplication. From that you can see that there is a vast difference between what we are proposing and what has empirically been played in this market, and I think you can extrapolate from that.
LISTNUM 1 \l 11971 Do you want to add to that, kid?
LISTNUM 1 \l 11972 MR. BOB MACKOWYCZ JR.: I would just like to say that of all the charts that we submitted, all of those songs represent a substantial, substantial airplay gap, which is indicative of the ratios that you are seeing. There was nothing included in any of these charts that in any way indicated any kind of substantial commercial overlap for these songs.
LISTNUM 1 \l 11973 I really want to stress that the ratios that seem so wildly disproportionate in some of the charts that you are looking at is true of everything we listed. The reason that we did that was because we really did want to establish that one of the commercial formulas for the success of this format in Vancouver will be the fact that it is not duplicating music. If the market is saying that they want new music, then you can't fudge it. You know what I mean? You are slitting your own throat as a business enterprise.
LISTNUM 1 \l 11974 I think that is where you get people who maybe want to go micro‑niche. It's got to be new, and that doesn't necessarily mean bands that you have never heard of. It means going deep into the vault.
LISTNUM 1 \l 11975 Statistically we believe that the airplay gap that we have put out there, and there are dozens and dozens of more examples of this, it is just simply how many charts can you hand in at any one time. But this pattern is repeated over and over again, and the charts that we gave that we believe represented a very commercial selection of these things and a flow where you could see this new music actually makes sense as a radio station. I covers a whole bunch of variety and it is commercially viable.
LISTNUM 1 \l 11976 So, to answer your question, the study was done specifically with the mind of career spins and air gap play in mind.
LISTNUM 1 \l 11977 COMMISSIONER CUGINI: Bearing that in mind, bearing in mind that you have used the term "disenchanted" ‑‑ others have used disenfranchised ‑‑ you have just told us that the Vancouver market is a very conservative market. I am going to ask you the same question I asked Harvard. You have a really tough road to hoe here.
LISTNUM 1 \l 11978 You have people who aren't listening to radio any more or simply don't like what is currently available on the radio. It is a conservative radio market and, yet, you are primarily introducing new music, however you choose to define it.
LISTNUM 1 \l 11979 How are you going to get these people back to radio and how are you going to convince advertisers that this is the way to go?
LISTNUM 1 \l 11980 MR. BOB MACKOWYCZ SR.: I will let Sherri speak to the advertising, but it is just a question of outstanding content and providing something that the people want that doesn't exist. In terms of the disenfranchised audience, the data on that is 13 per cent out‑of‑market tuning is the highest for any major market across the country from BBM, and our research indicated that our core audience is getting music it wants from other sources: 40 per cent from CDs, 19 per cent from MP3s. The different there being the slightly older audience we are still attached to our CDs or, in my case, vinyl albums.
LISTNUM 1 \l 11981 COMMISSIONER CUGINI: Good thing you didn't say 8‑tracks.
LISTNUM 1 \l 11982 MR. BOB MACKOWYCZ SR.: Hey, they were cool.
LISTNUM 1 \l 11983 But taking it from the statistical realm, I think it might be worthwhile if we heard from two individuals who are the core audience and are the disenfranchised Vancouver listener and ask them. They happen to be on our panel on the right, and perhaps Jenny and Erin can address that.
LISTNUM 1 \l 11984 MS OUANO: Sam mentioned KCRW, which is a station out of Santa Monica in California. It is a triple A station, an MPR station. For me I haven't stopped listening to radio, but I listen to that station because I can't get that kind of music or spoken word locally.
LISTNUM 1 \l 11985 Driving is a very frustrating experience because my favourite button is the scan button and I will try to find, just like Sam, something that will appeal, and I don't.
LISTNUM 1 \l 11986 KCRW provides eclectic music which I am very keen to listen to, intelligent and respectful spoken word, and it is the place where I discover new artists. Besides Norah Jones, they were the ones to champion Cold Play into North America, which is now mainstream, and they tend to do that a lot where, you know, six months, nine months before these people make it big, I get to hear them first on this station. I would love an opportunity to get that locally.
LISTNUM 1 \l 11987 MR. GARRITY: I don't know how much more I can add. I think the point is being well made.
LISTNUM 1 \l 11988 When we were first talking about KCRW because it is true I listen to it as well, and my husband and I both turn it on in the morning and it on all day on our computer, and speaking from a new mom's perspective because I have two little ones and I often feel quite trapped at home, which I guess is fairly common with new parents, so when I can listen to KCRW or a station that offers that kind of music that keeps me somewhat current with the type of music that I like and, frankly, in touch with the past life that I felt I have somewhat lost with kids, it means a lot to me.
LISTNUM 1 \l 11989 What is lacking, of course, on KCRW is representation of my community, which is why we think we have what I personally, as a disenfranchised listener, would listen to.
LISTNUM 1 \l 11990 MS OUANO: Also one quick point. I hear more new Canadian music in the station in LA than I do on a local level.
LISTNUM 1 \l 11991 MR. BOB MACKOWYCZ JR.: I don't mean to interrupt this, but I kind of want to just play with the question a little bit because we do have a bunch of emerging artists and that is certainly true, but in our playlist I think we have also shown that we have a number of really successful commercial artists and they are not in the market.
LISTNUM 1 \l 11992 It is not that this tripe A format doesn't have successful artists like KT Tunstall has a top 10 album on Billboard and that song was never played here. Robert Plant and Alison Krauss had the number one album on Billboard, their lead single, Gone, Gone, Gone, never played here. Paolo Nutini, who had probably one of the breakout songs of 2006 and it got thousands of airplay spins across North America, played twice in this market.
LISTNUM 1 \l 11993 It is not just that we are going to emerging artists and we are pushing. We try to say that we are diversity and balance, and we are very aware of that tough uphill battle, but the way you make this work is integrating very successful commercial music that this conservative market just doesn't have a format for. They hear it, it might be a little bit quirky. They don't have to go that far with it because they have their format. I mean, I am making value judgements for them, I guess, but I am wondering why would you not play Paolo Nutini's New Shoes or the new single from Crowded House, which got two spins here but thousands in America.
LISTNUM 1 \l 11994 It is just a question of what commercial music you choose to champion, but I think the sales stats are there, that within this format there are plenty of format leaders in the commercial world.
LISTNUM 1 \l 11995 MR. FELDMAN: If I may, in a funny kind of way I was listening to your question closely, and your question was really answered by your question.
LISTNUM 1 \l 11996 You said that people were disenfranchised or not liking radio, so how could we be successful? I think that is the exact reason that we can be successful.
LISTNUM 1 \l 11997 This example, KCRW exists in probably the toughest, unregulated radio market maybe in the world, in Los Angeles. There are a lot of options for very commercial radio in every genre down there, and yet they are extremely successful. What they have done is something that I would really like to see happen for us, is they become tastemakers so that people look to them to have that stamp of approval to buy into and get involved with an artist.
LISTNUM 1 \l 11998 MR. BOB MACKOWYCZ SR.: Would you also like to hear from the sales point of view?
LISTNUM 1 \l 11999 COMMISSIONER CUGINI: We will move on to the business plan in just a moment. I just have one final question just to close this area.
LISTNUM 1 \l 12000 Again, it is the same question I asked Harvard. If you look at only the triple A applications in this process, if we were able to licence more than one commercial station in this market, could you co‑exist with any of the other proposals? If we were to licence you, could we also licence any one of the other triple A formats that have been applied for during these proceedings based on your comparison with your proposal and those of the others?
LISTNUM 1 \l 12001 MR. HENNESSY: The definition of triple A is not absolute, as has become very obvious.
LISTNUM 1 \l 12002 COMMISSIONER CUGINI: Exactly.
LISTNUM 1 \l 12003 MR. HENNESSY: Our interpretation we believe goes to the true core of what a triple A station is.
LISTNUM 1 \l 12004 In putting this together, Bob was the point person on defining our triple A and we have had a chance to look at the others, and I think you can ‑‑
LISTNUM 1 \l 12005 MR. BOB MACKOWYCZ SR.: The simple answer there is we would be happy to co‑exist with any of the other applicants outside of the triple A format. There are obviously major differences. Many of them are micro‑niches that kind of live within us, but we don't feel that that would prevent us from making a good living here.
LISTNUM 1 \l 12006 The key question, could SHORE‑FM co‑exist with another triple A station, and we do feel we could co‑exist with them. I hope I pointed out that there are significant differences between the other triple A formats and what we are proposing, significant differences in programming philosophy and, given what we have underscored as realistic sales and audience projections, we think we could make it work. So, yeah, we think we could co‑exist.
LISTNUM 1 \l 12007 MR. HENNESSY: Boston now has three triple As, but, again, that's the American market where you have higher competition. You can live on a two share in Boston. It would be slim pickings here.
LISTNUM 1 \l 12008 With the reduced size of the advertiser base, that does have to be a consideration. But, yes, bring 'em on.
LISTNUM 1 \l 12009 COMMISSIONER CUGINI: Nothing like competition.
LISTNUM 1 \l 12010 MR. HENNESSY: That is right.
LISTNUM 1 \l 12011 COMMISSIONER CUGINI: We will move on to your business plan.
LISTNUM 1 \l 12012 In your share rationale revenue projections document filed with your application, you say that the impact on any station will not be dramatic, so obviously on any of the incumbents. You also say that the average year of the increase of revenue coming into the market, fuelled by the rapid population growth forecast, should offset any financial impact.
LISTNUM 1 \l 12013 So you are really saying two things here. You are saying that even if the yearly increase of revenue coming into the market, plus the rapid population growth weren't happening, you still wouldn't have an impact or you wouldn't have a major impact on the incumbents. But then when you couple those two things, it is completely negligible. Have I interpreted that correctly?
LISTNUM 1 \l 12014 MR. HENNESSY: You have, and I think to explain it from both perspectives, first of all I would like to have David Bray explain the research of how we arrived at these share numbers and the growth that we will have, et cetera. Then I will ask Sherri to comment on it from the perspective of dollars.
LISTNUM 1 \l 12015 David.
LISTNUM 1 \l 12016 MR. BRAY: Thank you.
LISTNUM 1 \l 12017 There are a couple of factors involved in projecting audience share for a given format. We look at both our independent music preferences research and BBM audience trend analysis.
LISTNUM 1 \l 12018 It is impossible to look at the music preference data and extrapolate minute‑by‑minute listener behaviour. In other words, the number of hours tuned, music preference research, which is very general in nature, can in no way be sufficiently detailed to project specific hour‑by‑hour, day‑by‑day behaviour. This requires a much more disciplined complex examination of BBM diary data and the trends exhibited.
LISTNUM 1 \l 12019 Based on our decades of experience and our look at multi‑year trends in Vancouver, as well as audience reaction to the format in a number of markets, we prepared the concise overview entitled "Vancouver Radio Projected Tuning" which you have in your binders and which was left with you today.
LISTNUM 1 \l 12020 Here we list not only the specifics with regard to SHORE‑FM's projected share performance, but the way in which the dominos will fall. In other words, the specific moderate impact, if any, that the new station will have on the share of each and every other station in the Vancouver marketplace.
LISTNUM 1 \l 12021 I will let Sherri address the sales issue.
LISTNUM 1 \l 12022 MS PIERCE: From a revenue perspective, you will see in our chart 7.4 we indicate that in total approximately 45 per cent of the revenue will come from other stations. That is the variety that David was referring to.
LISTNUM 1 \l 12023 You couple that with the growth in the market, and it does mitigate the revenue that comes overall or affects those stations. Another sort of business look at it is that at any one time a solid FM station has approximately 400 active clients, and a really good AM station has about 600 active clients.
LISTNUM 1 \l 12024 If you take the combination of stations that we have here in the Vancouver market and you do the math on that, that is where we come to the conclusion that really only 10 per cent of the businesses are using the radio medium and, from that perspective, you also see how we can be approaching businesses that aren't being called on in the medium by other stations.
LISTNUM 1 \l 12025 COMMISSIONER CUGINI: Thank you.
LISTNUM 1 \l 12026 I am now going to move on to your CCD commitments and, more specifically, your application includes $70,000 salary for a CCD coordinator who is here today. I hate to put you on the spot, Ms. Garrity, but not every application includes the salary of a CCD coordinator.
LISTNUM 1 \l 12027 MR. GARRITY: Right.
LISTNUM 1 \l 12028 COMMISSIONER CUGINI: What I want to understand more fully, first of all, is why did you include the salary of a CCD coordinator in your total, and what are going to be the duties and responsibilities of Ms. Garrity over the course of a year to justify including it in the CCD?
LISTNUM 1 \l 12029 MR. BOB MACKOWYCZ SR.: We did answer that in terms of our deficiency responses, but I would be glad to go over it again.
LISTNUM 1 \l 12030 As you see with our CCD initiatives, they are numerous, they are complex, we believe they are really meaningful to the community at many levels, and this is the antithesis of cutting a cheque. If you take a look at something like the emerging talent contest, which, as we pointed out, has never been done for the triple A community, even though Roy was the architect of the Seeds Project on CFOX and he can tell you how difficult it is, in the past, the Commission has allowed the CCD coordinator, back in the day, of course, CTD coordinator and you had, when you felt that the expanse of the job required that kind of attention.
LISTNUM 1 \l 12031 This is not something that you pass off to your promotions department. This is something that is, as we say, meaningful for the community. It is complex. You can imagine something like the first all Canadian day at the Burnaby festival, and what kind of work that takes. It is answering ‑‑ this is like the staff meeting, isn't it? Does that explain?
LISTNUM 1 \l 12032 It is really the expanse and the scope of the initiatives and the kind of role‑up‑the‑sleeves effort it takes to execute this kind of meaningful CCD vision.
LISTNUM 1 \l 12033 COMMISSIONER CUGINI: I just want to be sure that, first of all, it is a 50 week a year job. You are giving her two weeks of vacation, I assume, at a minimum. Negotiate more.
LISTNUM 1 \l 12034 MR. BOB MACKOWYCZ SR.: Absolutely.
LISTNUM 1 \l 12035 MR. HENNESSY: No, we will stay with that, that is fine.
LISTNUM 1 \l 12036 MR. BOB MACKOWYCZ SR.: Now she has an agent.
LISTNUM 1 \l 12037 COMMISSIONER CUGINI: Is the coordinator only responsible for fulfilling the CCD obligations, or will the coordinator have other responsibilities that are not covered by ‑‑
LISTNUM 1 \l 12038 MR. HENNESSY: You are talking in promotions? No.
LISTNUM 1 \l 12039 MR. BOB MACKOWYCZ SR.: I will tell you my vision of a radio station and a great radio station. It is when your receptionist is the star in the marketplace. It is an organic vision. All the parts interrelate.
LISTNUM 1 \l 12040 I actually got a little chill as I was speaking to you, remembering the days on the shop floor. That is when a radio station is in full flight. It is a band, it is a great rock and roll band is what it is. So, that is my vision of a radio station.
LISTNUM 1 \l 12041 Does that answer your question?
LISTNUM 1 \l 12042 COMMISSIONER CUGINI: Not really, but go on.
LISTNUM 1 \l 12043 MR. BOB MACKOWYCZ JR.: I think the answer is that the job is so demanding that, yes, 50 weeks a year, that the person who takes this job, Erin, is going to have to concentrate on this. It really is very demanding. We have other things like VAMS and that is going to take coordinating. When you want to start up something new like the Music Camp program here, you want to do it right and you need somebody who can wake up in the morning and say this is my job and this is what I am there to do.
LISTNUM 1 \l 12044 That said, I think it is important to stress that Erin is multi‑talented. I mean, she has started up news room in Africa; she has done all kinds of television production. A voice like that inside your team is unbelievably valuable. You want to keep someone like that there 50 weeks a year with two weeks vacation.
LISTNUM 1 \l 12045 MR. GARRITY: Or more.
LISTNUM 1 \l 12046 MR. BOB MACKOWYCZ JR.: Because everybody fees into everybody. Hey, Erin, we are building a new station, you built a new station, what are your thoughts? But at end of the day, the responsibilities demarcated by this position are specifically more than enough to fill her time, and I am sure she will probably hate us for it in a year.
LISTNUM 1 \l 12047 MR. HENNESSY: Just one second to briefly explain what this philosophy is like.
LISTNUM 1 \l 12048 I was managing two radio stations, and we were re‑energizing, re‑philosophizing, re‑purposing, trying to pay the bills, and you pull together a team of managers and teammates to do this and then you start recruiting and hiring.
LISTNUM 1 \l 12049 One of the things we did, and I will openly admit it and I stole it from Disney, is take the typical management triangle where you have the big guy on top and the next layer and the next layer, and their purpose in life is to get up in the morning and come to the office and make life hell for everybody down here because you are going to do what I know is absolutely right.
LISTNUM 1 \l 12050 We adopted the philosophy that none of us were that bright, but we had a lot of bright people with us. So we flipped it around and we said we were going to build a dynasty. Eighteen months later we were number one AM, number one FM. Profits were up I believe about 50 per cent, but I spent a little more than I should have, but we accomplished that.
LISTNUM 1 \l 12051 The whole mission was when you hired somebody, you told them when you get up in the morning I want you to be so excited about coming to work here, that you don't get up saying, I have to go to work; you get up and you say, this is what I want to do today, and my job is to help you do it. That is the philosophy.
LISTNUM 1 \l 12052 MR. GARRITY: If I may, just one final word on it.
LISTNUM 1 \l 12053 COMMISSIONER CUGINI: I think you should.
LISTNUM 1 \l 12054 MR. GARRITY: Yes, thank you.
LISTNUM 1 \l 12055 Because we are talking about a very large portfolio of content essentially, and a liaison is clearly needed, at least that is how I felt as well when I looked through the description of what was all involved, I mean, we are talking about a liaison between the artists, the music community, the station, production companies, the organizations in which we are supporting and essentially, and most importantly, providing a lot of content for the station.
LISTNUM 1 \l 12056 I see that it is really important to have an ongoing ‑‑ that this is an ongoing responsibility and an important role, a crucial role in this station and what makes it really unique.
LISTNUM 1 \l 12057 COMMISSIONER CUGINI: If in our deliberations, once we take a look again at the transcript and we take a look again at your answer in deficiencies and we decide, you know what, the $70,000 is not an eligible CCD initiative, how would you redirect that $70,000, or the other side of that is would you simply decrease your total CCD contribution?
LISTNUM 1 \l 12058 MR. BOB MACKOWYCZ SR.: We are comfortable with that level. We would be disappointed, but obviously the CCD initiative vision, if you will, is at the very core of what this station is about. We would still go forward. We would re‑distribute the money. I couldn't tell you exactly where right now.
LISTNUM 1 \l 12059 We were really moved by Cara's music camp program which, for the people in the room that may not be familiar with it, it is music education for disadvantaged youths and with a particular emphasis on first nations. It is really going to the east side and, at the risk of sounding like Bruce Springsteen on stage, we do believe that music can save your immortal soul.
LISTNUM 1 \l 12060 There is that element, that music is one element that can pull people out of trouble and music education is vital in that regard. So, we would continue forward. If you ruled that way, I hope that we convinced you that the portfolio is significant and big enough in scope that it does take that kind of dedicated individual.
LISTNUM 1 \l 12061 COMMISSIONER CUGINI: Mr. Mackowycz and to your colleagues, thank you very much.
LISTNUM 1 \l 12062 Madam Chair, those are all my questions.
LISTNUM 1 \l 12063 MR. BOB MACKOWYCZ SR.: Thank you.
LISTNUM 1 \l 12064 THE CHAIRPERSON: Thank you. I believe Commissioner Menzies has a couple of questions.
LISTNUM 1 \l 12065 COMMISSIONER MENZIES: Hopefully a quick question.
LISTNUM 1 \l 12066 I was very interested in your description of an industry market with a very low risk tolerance and the tales of Feist and the New Pornographers, et cetera, not getting any airplay. I was really interested in your terms "hyperlocal" and "opposition to ghettoization."
LISTNUM 1 \l 12067 Just one little thing getting in my way here and I just want to give you the chance to clear it up so that it doesn't unnecessarily linger. Because when I was reading the supplementary brief with your ideas about some original programming, the Folk Roots Canadiana with Jim Byrnes, Streets of Vancouver aboriginal music, plus aboriginal program and world music programs, I was looking at the placement of those in your supplementary brief and the Jim Byrnes program was at 6:00 a.m. to 10:00 a.m. on Sunday and The Streets of Vancouver was 6:00 p.m. Sunday, Aboriginal Music 7:00 to 8:00 p.m. Saturday, and World Music I think it was Sunday at 10:00 to 11:00 p.m.
LISTNUM 1 \l 12068 It left me with the impression that that wasn't as risk tolerant necessarily as everything I had seen today. I don't want to reach any conclusions on that, but I wanted to give you the opportunity to address that while the thought was lingering.
LISTNUM 1 \l 12069 MR. BOB MACKOWYCZ SR.: I appreciate that. You are going to be hearing from Jim Byrnes, as he intervenes on our behalf later this week. He can speak from his own personal experience. A great talent behind both microphones, live on stage.
LISTNUM 1 \l 12070 Those weekend shows are really a springboard into those worlds because really at the core of the station is the fact that this music is mixed into our rotation and again, I will stress, in peak hours. So, those shows are almost in addition to, as I say, a springboard, but radio at its finest is a soundtrack to the day, and Sunday morning ‑‑ I am going to quote Kris Kristofferson here ‑‑ Sunday Morning Coming Down. There is kind of a vibe and a feel and a texture to Sunday morning, so the show lives there.
LISTNUM 1 \l 12071 Saturday night we may well roll up the carpet into a kind of rootsy Saturday night stomp and that will fit the groove there. The other shows ‑‑ I programmed this kind of radio station. There is an element of back to the future with what we are doing in terms of what worked and, quite frankly, what guys like Roy and I and individuals built with progressive FM radio. We took those lessons.
LISTNUM 1 \l 12072 This is why, for example, we are doing B.C. Barometer. People would say why would you do a news magazine or an arts/news magazine combination show in the middle of the day? You could be playing 12 more hits.
LISTNUM 1 \l 12073 There is something more to building a brand than that. In my experience, that kind of show in the past served the brand and the station and the audience exceptionally well. But to specifically answer your question, the main focus is on those genres in the overall mix. Those shows are in addition to, and they springboard and they cross reference.
LISTNUM 1 \l 12074 MR. HENNESSY: Again, it has to do with lifestyle. You couldn't feature a 45‑minute or a one‑hour category 3 program at 4:00 to 5:00 in the afternoon when the average drive home here, with luck, is 45 minutes. It is the logic of matching the program to the lifestyle.
LISTNUM 1 \l 12075 MR. BOB MACKOWYCZ JR.: Commissioner, I got into show business because I failed math, so I don't want to necessarily want to become a computer that is kicking out punch cards, but the number of spins for these shows also in terms of the overall week balance, it doesn't ghettoize this music.
LISTNUM 1 \l 12076 My father makes a good point which is the Tequila Sunrise show is really designed to be kind of a hit show because you could see people on Sunday mornings loving to get up and get their coffee and just settle right into that and there is a real sales potential to that show and that is great.
LISTNUM 1 \l 12077 But in terms of the 15 per cent overall commitment to emerging artists, and the 20 per cent commitment to category 3, there is still enough room and this is why we have stressed balance in our programming day. It is the right level so that even throughout the peak of the week, then, you can still get a song or two of this nature that you are speaking of during the hour, every hour. It is not overcommitting to it during the week so you make your week‑to‑commercial, but it is also not burying it all in the weekend.
LISTNUM 1 \l 12078 I mean, we feel that we found the right balance to push forward this as a measured vision of the station, and we really do believe that fundamentally if you are selling a new format, your format has to sound like your format.
LISTNUM 1 \l 12079 COMMISSIONER MENZIES: Thank you very much for clearing that up. No more questions.
LISTNUM 1 \l 12080 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 12081 I just have one question. I found our discussion about the Vancouver music market being very conservative and especially your comparison of how your triple A compares with the other applicant's triple A's very, very helpful.
LISTNUM 1 \l 12082 I just need to clarify one thing, though. When you were comparing it to Pattison's triple A, I am just talking about what we hear on air right now. I am not going to talk about staffing and all. So, what we hear on air, the difference between Pattison's triple A and yours is Pattison's is more spoken word; is that the main difference?
LISTNUM 1 \l 12083 MR. BOB MACKOWYCZ SR.: Yes, they have 25 hours of spoken word and we have 14.5.
LISTNUM 1 \l 12084 THE CHAIRPERSON: In terms of the music, is there any significant difference?
LISTNUM 1 \l 12085 MR. BOB MACKOWYCZ SR.: It is obvious that the music is more acoustic based. It is more on the folk‑soft rock side.
LISTNUM 1 \l 12086 THE CHAIRPERSON: Yours is?
LISTNUM 1 \l 12087 MR. BOB MACKOWYCZ SR.: No, Pattison's is.
LISTNUM 1 \l 12088 Ours is, as I said, I believe strongly it is the only true, if you will, textbook triple A that has been proposed to you.
LISTNUM 1 \l 12089 MR. HENNESSY: From the demographic point of view, the population is 51/49 female, and we believe our format will be 52/48. So, we in everything we do, we are going to represent the community.
LISTNUM 1 \l 12090 MR. BOB MACKOWYCZ JR.: Madam Commissioner, if I may, one of the things that really stood out to me as we were going over the different applications of play was that Pattison prominently featured Sarah McLachlan as an example of someone that they would be championing. And I think that in our own conception of things it is not that Sarah McLachlan isn't a great artist, but she doesn't necessarily represent what the triple A community best needs as a sort of format icon.
LISTNUM 1 \l 12091 There were other songs that were played that were sort of softer rock and you could hear more on adult contemporary, and I am not sure we would go there. I mean, they get a lot of play already and it probably wouldn't sit right in our music mix because people who wanted a little bit more edge would hear that and go, they're blowing it, and we don't want to go there.
LISTNUM 1 \l 12092 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 12093 Do you want to add any more to your response to Commissioner Cugini on how many you believe can be licensed and who else in addition to you, if you were to be licensed?
LISTNUM 1 \l 12094 MR. BOB MACKOWYCZ SR.: I think we answered that. Would you like me to restate it?
LISTNUM 1 \l 12095 THE CHAIRPERSON: No.
LISTNUM 1 \l 12096 MR. BOB MACKOWYCZ SR.: Perhaps it is time to sum it up.
LISTNUM 1 \l 12097 THE CHAIRPERSON: I believe legal has a question.
LISTNUM 1 \l 12098 MS PINSKY: I just have one question of clarification for the record.
LISTNUM 1 \l 12099 You have committed to 126 hours of local programming. What percentage of that would constitute live‑to‑air programming?
LISTNUM 1 \l 12100 MR. HENNESSY: A hundred and twenty‑five.
LISTNUM 1 \l 12101 MR. BOB MACKOWYCZ SR.: There is one repeat of B.C. Barometer Saturday morning at 6:00 and other than that it is 125 live local. They are the two pillars of SHORE‑FM.
LISTNUM 1 \l 12102 MS PINSKY: Thank you.
LISTNUM 1 \l 12103 THE CHAIRPERSON: Would you like to do your last minute pitch now, please?
LISTNUM 1 \l 12104 MR. HENNESSY: Thank you for this interesting discussion.
LISTNUM 1 \l 12105 We really do believe that triple A is the best format to introduce into Vancouver radio at this time. Our market research shows that it is popular and so does everyone else's, apparently. It has the potential to best address the community's needs and that includes local artists and listeners too. So we wish to articulate why we feel that we have the right formula for making the most out of this triple A format in the Vancouver area.
LISTNUM 1 \l 12106 Our balanced programming vision will give unprecedented exposure for local and national emerging artists. We have built a playlist that is also commercially viable. Our audience share projections and the revenue flowing from them are realistic and sustainable. We have a financial plan and the backing that allows us to build this business and grow as the format becomes more familiar in the market.
LISTNUM 1 \l 12107 The CCD plan is designed to create new audio content for broadcast wherever possible, and we put a premium on the spoken word content, which will make for a station that has a real personality, a real character.
LISTNUM 1 \l 12108 Our team is new, it is local, it is independent, but it is made up of leaders in the field of radio, music and business. This station is all about live and local broadcasting.
LISTNUM 1 \l 12109 I know that Sam and David would probably not want to hear this about themselves, but this team is also led by people who are an integral part of Vancouver life and culture. They have dedicated their time, energy and support to dozens of local institutions and many of this city's community leaders have written letters of support of this bid because of this station's potential and because of this team's abilities, its track record and its character.
LISTNUM 1 \l 12110 For all these reasons, we have the right format and we have the right plan moving forward to make the most of this important opportunity and we thank you.
LISTNUM 1 \l 12111 THE CHAIRPERSON: Thank you, Mr. Hennessy and your panel. Thank you for your time and your presentation.
LISTNUM 1 \l 12112 We will take a ten‑minute break, and come back at 11:40 for the next application, please.
‑‑‑ Upon recessing at 1130 / Suspension à 1130
‑‑‑ Upon resuming at 1140 / Reprise à 1140
LISTNUM 1 \l 12113 THE SECRETARY: Please take a seat.
LISTNUM 1 \l 12114 We will now proceed with item 8, which is an application by Rock 95 Broadcasting for a licence to operate an English‑ language FM commercial radio programming undertaking in Vancouver.
LISTNUM 1 \l 12115 Please introduce yourself and your colleagues, and you will then have 20 minutes to make your presentation. Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 12116 MR. BINGLEY: Thank you very much.
LISTNUM 1 \l 12117 My name is Doug Bingley. I am President of Rock 95 Broadcasting and I would like to introduce my panel.
LISTNUM 1 \l 12118 To my left is Mr. Larry Campbell on the far left. He is President of Campbell Media Research.
LISTNUM 1 \l 12119 Beside Larry is Linda Dawe. Linda is President of Music Solutions and she has many years' experience working directly with indie artists.
LISTNUM 1 \l 12120 To my immediate left is Dave Carr, our Program Director.
LISTNUM 1 \l 12121 To my right is Cathy Buller, our Comptroller.
LISTNUM 1 \l 12122 Beside Cathy is Linda McGregor, our Aboriginal Programs Coordinator.
LISTNUM 1 \l 12123 Finally, on my far right is Tom Manton, our Vice‑President of Sales.
LISTNUM 1 \l 12124 Commissioners before I begin the presentation that you have in your hands, I would like to tell you a short story. When I was a boy, my parents owned a cottage on Georgian Bay, which is part of the Great Lakes. Like most kids I liked to fish. I caught lots of fish, but usually they were little perch or bass. Sometimes, though, my dad would pull out old pictures taken in the 1940s and in the 1950s showing gigantic lake trout that they used to pull out. But by the time I came along, all the lake trout were gone.
LISTNUM 1 \l 12125 It was always a mystery what happened to the lake trout. There were lots of theories: Maybe eels coming up the St. Lawrence killed them off; maybe it was overfishing, but no one ever really knew for sure.
LISTNUM 1 \l 12126 A few years ago I read a magazine article that finally explained what happened to those fish. The amazing thing is the answer was always in those pictures that my dad showed me. Let's take a look. If you look closely, you can see it is right there. I don't know if you can see it. The fact is there is only big fish in that photo. No one noticed that they weren't catching any little fish, but the fact was in the 1930s pollution and DDT killed off the hatcheries. So in the 40s and 50s, when the fishing looked like it could never get better, the lake trout were already extinct in Georgian Bay.
LISTNUM 1 \l 12127 You are probably wondering why am I telling fish stories in a CRTC hearing? There is a lot to be learned from that story because today Canadian radio stations are deriving wonderful revenues as we deliver to advertisers the baby boom generation, but at the lower end we are not replacing listeners and tuning levels are dropping.
LISTNUM 1 \l 12128 Younger people are rejecting conventional radio in favour of MP3 players and streaming via the net and, unfortunately our industry isn't paying much attention. The fishing is just too good. It hasn't happened yet, but if radio does not address the problem of reduced tuning by younger listeners, we are doomed to becoming irrelevant to an entire generation, at which point radio effectively does become extent.
LISTNUM 1 \l 12129 Could it happen? Well, let's take a look at some statistics. According to the BBM, over the last ten years radio's overall reach has dropped by almost 3 percentage points. Even more alarming, among teens reach has dropped by almost 10 percentage points.
LISTNUM 1 \l 12130 I am not talking about hours tuned here. I am talking about turning on the radio. Twenty per cent of teens never listen to the radio at all. Commissioners, I don't care what industry you are in, those types of statistics could only be described as frightening. Twenty per cent of your replacement market has just disappeared.
LISTNUM 1 \l 12131 It is in the face of that reality that the CRTC has called for applications for a new Vancouver radio station. We believe that it is time for a new format, a format that will engage younger listeners, a format that will benefit the entire radio industry and ultimately the Canadian music industry. It is called the indie format.
LISTNUM 1 \l 12132 We would like to further establish the need for this format and Linda Dawe will explain to you why an indie station in Vancouver is so important to emerging Canadian talent.
LISTNUM 1 \l 12133 MS DAWE:: Thank you, Doug.
LISTNUM 1 \l 12134 As a radio song promoter, I have worked with emerging and established artists. Occasionally I have managed to break through the tomorrow 40 charts and launch a career in the Canadian music industry.
LISTNUM 1 \l 12135 Emerging artists are those who pay for their own CD and pay for their own promotion. They are known as independent artists as opposed to established artists who have the support of the corporate major labels.
LISTNUM 1 \l 12136 The best way to demonstrate the critical need of the indie format is to describe to you the process that I go through every day while promoting indie emerging artists.
LISTNUM 1 \l 12137 A current example is a band called Secret Suburbia, who were voted the number one indie band in Toronto via the internet. They have toured the Scandinavian countries and were playing dates in Toronto and Montreal. The band's music had been licensed to film and television, including Fox's hit series 24, MTV's The Real World/Road Rules, and a new movie Path To Nine‑Eleven. My job was to help them achieve their dream, which was to be heard on radio.
LISTNUM 1 \l 12138 For me as a song promoter it seemed reasonable that the band might be able to get the attention of the music directors. They had a track record, a good album and they were committed. We started out with their first single last September entitled "See." Here is the reaction that we got from radio programmers, and by the way, these are typical comments no matter what the project is: We need numbers; we are not a leader; let's see who else adds it; we only have a couple of slots for new Canadian bands; we have to put in the established artists first; we are watching it. One of my personal favourites.
LISTNUM 1 \l 12139 The excuses are just endless. We were in a catch 22 situation that most emerging artists suffer from. No one will add it unless someone else has already added the song. After ten weeks of promoting a song to radio, the response was, well, this is an old single, there is more current music coming out, so now we have to move on. Then radio adds another song by an established artist like Nickelback.
LISTNUM 1 \l 12140 So, here is the question? How can we break the vicious cycle of who plays the artist first? I believe that an indie station in Vancouver will do just that. It will break the cycle. It will provide enormous benefits to Canadian talent across the country.
LISTNUM 1 \l 12141 There is great Canadian talent out there that cannot get on the radio. The dream of emerging artists to be given a fair chance to be heard on radio, and that is why we need an emerging indie format like V104.1.
LISTNUM 1 \l 12142 Members of the panel, I am sure that this is not the first time that you have heard about the problems facing emerging artists, but now is a time when you can do something about it.
LISTNUM 1 \l 12143 MR. BINGLEY: Thanks, Linda.
LISTNUM 1 \l 12144 I would now like to call on Dave Carr, our VP of Programming to give you some specifics about the station.
LISTNUM 1 \l 12145 MR. CARR: Thank you, Doug.
LISTNUM 1 \l 12146 Commissioners, there is one key point that I would like to make. The indie format is a legitimate format, and although a new idea, it is something we believe in five years will be just as recognized as any other format. An indie station is a culmination of music and spoken word that relates to an entire lifestyle.
LISTNUM 1 \l 12147 First, the music.
LISTNUM 1 \l 12148 By definition, most indie‑based music is new music, generally performed by emerging artists. Indie artists are independent. They pay all the freight. They don't have to report to anyone. They control the creative output and this leads to an incredible amount of diversity.
LISTNUM 1 \l 12149 The target audience is interested in the new, the unique and welcomes a variety of musical styles. The one thing they have in common, though, is the rejection. They can't get their music on what they would call corporate‑based radio.
LISTNUM 1 \l 12150 For an indie station to be successful, it has to be true to that reality. It must be very responsive to listener tastes at the local level as opposed to national, chart‑based programming.
LISTNUM 1 \l 12151 With our proposed format, approximately three‑quarters of the overall music is from indie or emerging artists, and a minimum of 40 per cent of the music will be from Canadian artists.
LISTNUM 1 \l 12152 The core of the format is rock based, but the eclectic nature of indie will allow us to play a wide variety of styles. The spoken word is equally important in this audience. Indie is not simply a music style or a category. The fans do more than listen. They become involved in an entire indie music scene. In order to relate to our audience, our announcers must become involved as well.
LISTNUM 1 \l 12153 Our market research identified a very strong demand for an indie station in Vancouver, not surprising with the strong indie scene here in the city. If we could please start the video and let's take a look at what the station will mean for our listeners.
‑‑‑ Video presentation / présentation vidéo
LISTNUM 1 \l 12154 Let's turn for a moment to our CCD programs.
LISTNUM 1 \l 12155 While it is not part of the CCD program, I would like to point out that the biggest benefit that we bring to the table is airplay for emerging artists in Canada's third largest market. It is a huge benefit that quite simply cannot be quantified.
LISTNUM 1 \l 12156 In addition to that, we are proposing over $4 million in direct benefits. They include support of New Music West, development of a second Vancouver indie festival, recording funds for independent artists, and direct financial support for artists through our website.
LISTNUM 1 \l 12157 But two of our programs are truly unique and we would like to talk about them in greater detail.
LISTNUM 1 \l 12158 Our youth at risk music program will be developed in association with the Boy's and Girl's Clubs of Greater Vancouver. We view this project as a pilot that will lead to other such programs across Canada.
LISTNUM 1 \l 12159 This one initiative inherently provides enormous leverage. It provides three major benefits.
LISTNUM 1 \l 12160 First, it has been shown that the best way to keep young people on the right path is to involve them in positive group activity. One of the most universal interests of young people is music. So we now that this will be a powerful program for social change.
LISTNUM 1 \l 12161 Second, and this relates more directly to the traditional definition of CCD donations, the majority of the funding for this project will flow directly to Canadian musicians simply because they will be providing the musical training.
LISTNUM 1 \l 12162 And finally, a key objective of the program is to develop young Canadian talent. This program will help young people develop the skills and discipline which are necessary for them to succeed in the Canadian music industry.
LISTNUM 1 \l 12163 And that is the final benefit. One day there will be an internationally recognized artist who will credit his or her start to this initiative.
LISTNUM 1 \l 12164 When that happens, I hope we all remember this day.
LISTNUM 1 \l 12165 MR. BINGLEY: Thank you, David.
LISTNUM 1 \l 12166 Linda McGregor will now address our CCD benefits for native broadcasting.
LISTNUM 1 \l 12167 MS McGREGOR: Thank you.
LISTNUM 1 \l 12168 As you are all aware, the Broadcasting Act specifically recognizes the importance of native radio. You have licensed a number of aboriginal stations and the CRTC is to be commended for that. But, the challenge has been and continues to be the lack of funds and training.
LISTNUM 1 \l 12169 Commissioners, one of the best predators for future performance is past actions and Rock 95 broadcasting has been a leader in the development of native raider for over two decades. With your indulgence I would like to briefly review Rock 95's record.
LISTNUM 1 \l 12170 Back in the 1980s, we were the first to propose support for native broadcasting as a CTD commitment, and this concept was quickly picked up by other broadcasters across the country, which brought considerable resources to aboriginal radio. In fact, recently, the CRTC changed their policies to recognize these initiatives as a full CCD benefit.
LISTNUM 1 \l 12171 When Rock 95 launched in 1988, funds and training were provided for the development of a weekly native show, Spirit Winds. That commitment was for one licence term, but when the original seven‑year term ended, the company continued to run the show and it continues to this date. As an aboriginal broadcaster, I have had the privilege of acting as host and producer of the show for over 16 years.
LISTNUM 1 \l 12172 In 1997 we applied for a Toronto licence. As a CTD benefit we committed funding to set up a national native radio network. We worked with Gary Farmer on this concept and that is when Aboriginal Voices Radio was born. In the end, the frequency was awarded to CBC, but the experience served as a springboard for Gary who moved forward and eventually launched the AVR network.
LISTNUM 1 \l 12173 When we applied for another licence to serve Barrie in 1999, we adapted our plans, proposing funding and training to develop radio stations for four local first nation communities. As a result, the native owned and operated stations have successfully launched and are a focal point in their respective communities.
LISTNUM 1 \l 12174 That is our history, and with B.C. being home to Canada's second largest aboriginal population, here is what we are proposing as part of this application.
LISTNUM 1 \l 12175 First, we will provide funding for native radio serving six communities on Vancouver Island. We will supply and install all transmitting and studio equipment, as well as operating grants for each station over a period of seven years.
LISTNUM 1 \l 12176 Secondly, we are proposing to provide an annual broadcast journalism scholarship to BCIT, with preference for aboriginal applicants.
LISTNUM 1 \l 12177 Third, we believe from the start that a strong national native network would be an important resource for community stations, so we have pledged support for Aboriginal Voices Radio.
LISTNUM 1 \l 12178 Finally, we have committed to provide training at the local station level, as well as internship and other training positions for local native broadcasters.
LISTNUM 1 \l 12179 Among the many benefits that flow from this proposal, community‑based stations support native language, culture and they engage local youth who become involved in their operation.
LISTNUM 1 \l 12180 An added benefit is the fact that these stations attract tuning by non‑native listeners from surrounding communities because of their unique format, thereby acting as a bridge between two cultures. That is what our proposals can achieve.
LISTNUM 1 \l 12181 Finally, Commissioners, I want you to know that these are very real benefits and they are important to the native community. As a result of our work, the Rock 95 staff have been recognized with numerous awards, including an eagle feather, which is one of the highest honours one can receive and we bring this same commitment to the development of aboriginal radio with the application before you.
LISTNUM 1 \l 12182 MR. BINGLEY: Thank you, Linda.
LISTNUM 1 \l 12183 Commissioners, I am sure that you can see the many benefits of our plans, but we are proposing something new, and as is the case with any new idea, the opening questions have to be will it work and can we deliver. Those are very fair questions, and I would like to address them at this time.
LISTNUM 1 \l 12184 As Linda mentioned, I put together the concept that became Barrie's Rock 95 over 20 years ago. At that time, conventional wisdom held that smaller markets could not support a rock station. Most felt that the concept just wasn't practical.
LISTNUM 1 \l 12185 Although there were many sceptics, the CRTC could see the vision and they approved our application. It was a very brave decision by the Commission and by the panel of that day, but it paid off.
LISTNUM 1 \l 12186 The format was enormously successful, and other broadcasters saw that success, and the next thing you knew they were following our lead. Today rock is a common format in markets of all sizes and listeners everywhere have benefitted as a result of that one licensing decision.
LISTNUM 1 \l 12187 Now we are here to do it again, and I want you to know that we understand the challenge of developing something new. To ensure our success, we have built a business plan that is based on conservative revenue projections and tightly controlled budgets, with a reserve fund in excess of $3 million to cover unexpected expenses or revenue shortfalls.
LISTNUM 1 \l 12188 In fact, the low cost, high innovation nature of the indie format is a perfect match for an independent broadcaster.
LISTNUM 1 \l 12189 Now one other big question: Are we up to the challenge of the Vancouver market? Do we have the necessary experience? Well, in addition to our success in Canada, we are the majority partner in a joint venture based in St. Petersburg, Russia. That is a market similar in size to Vancouver. In 1998 we launched cheets diui nusto e shest, which for the benefit of the stenographer is Radio Hits 90.6. That is a Hot AC radio station and the station is profitable and it has grown into a network of eight radio stations across northwest Russia.
LISTNUM 1 \l 12190 When you consider the logistics of that project, I believe you can safely conclude that we do have the necessary management skills to succeed here in Vancouver.
LISTNUM 1 \l 12191 Commissioners, you have held up the challenge to support emerging artists. You have asked for new ideas to ensure that radio continues to thrive. We all want radio to remain relevant to the Canadian public. We are responding to that challenge and now we are asking for your support to help make this a reality.
LISTNUM 1 \l 12192 Thank you for your attention.
LISTNUM 1 \l 12193 THE CHAIRPERSON: Thank you, Mr. Bingley. I will ask Commissioner Williams to lead the questions.
LISTNUM 1 \l 12194 COMMISSIONER WILLIAMS: Good afternoon, Mr. Bingley and panellists. Welcome to Vancouver. Fishing is still quite good here, from what I understand.
LISTNUM 1 \l 12195 MR. BINGLEY: I had salmon for dinner last night.
LISTNUM 1 \l 12196 COMMISSIONER WILLIAMS: Your proposal and your application have been very complete and have answered many of the questions that I prepared, but I still have a couple of pages that we will have to work our way through.
LISTNUM 1 \l 12197 Just from your opening presentation this morning, tell me a bit about the Spirit Winds program. What was the content of it, describe the program, educate us.
LISTNUM 1 \l 12198 MR. BINGLEY: Linda.
LISTNUM 1 \l 12199 MS McGREGOR: Commissioner Williams, Spirit Winds is a weekly one‑hour program that broadcasts on Rock 95. It airs in central Ontario.
LISTNUM 1 \l 12200 COMMISSIONER WILLIAMS: What time of the day does it come on?
LISTNUM 1 \l 12201 MS McGREGOR: It comes on on Sunday evening from 11:00 p.m. until midnight. As many specialty programs air at that time of the evening when they are part of a specific station, such as Rock 95, then that was the time slot that we started out.
LISTNUM 1 \l 12202 So, the content grew as the aboriginal music industry grew. But it started out a basic format, a combination of interviews, whether it be with musicians, political leaders around issues of the day, a combination of taking from the native newspapers that are available or also that are from out in this area, to give a news glimpse of not only our local news, our regional news, but also our national news.
LISTNUM 1 \l 12203 I was given the creative freedom to provide music that was reflective of the native community, and so it represented a combination of powwow music, blues music, rock and roll, and many of it had the aboriginal I think story telling element or songs. Whether they be blues or rock and roll, they still had a message about aboriginal identity, who we are as a people.
LISTNUM 1 \l 12204 That has evolved over time with the popularity of the program in both the native and the non‑native community, growing to a point where people were sending their music CDs to me. I would receive calls about wanting interviews to take place. Interestingly, I also received a number of requests from the non‑native community to come and speak to whether it was a class or their rotary club or a woman's group or any number of groups to come and speak about the aboriginal community.
LISTNUM 1 \l 12205 So, music presented that bridge to link the two cultures. So, it has been actually an evolution that even surprised me because during that 16‑year period, I saw the introduction of the Juno category, Best Music of Aboriginal Canada, then the Grammys followed suit with a similar category, Best Music of Aboriginal Canada, and many aboriginal music festivals and, of course, now we have the Canadian Aboriginal Music Awards and a number of local music festivals, aboriginal music festivals happening.
LISTNUM 1 \l 12206 Actually, Rock 95 sponsors one that happens in our region called Res Dock to showcase what started out as local artists, but interestingly we also had an aboriginal artist from B.C. at the first concert. So, it has really evolved into something beyond my wildest dreams and I am very proud to have been a part of it.
LISTNUM 1 \l 12207 COMMISSIONER WILLIAMS: Thank you, Ms McGregor.
LISTNUM 1 \l 12208 Another comment in your presentation that intrigued me was your involvement and the majority ownership of eight stations in Russia, with the first one being in St. Petersburg. What type of market share do you enjoy in St. Petersburg?
LISTNUM 1 \l 12209 MR. BINGLEY: Commissioner, there is 24 commercial radio stations in the market, and we are ranked mid in the market. We are ranked number 12 in the market. As a consequence, we are profitable. The station alone actually generates about $250,000 a year in profits, which we have reinvested into growing this network.
LISTNUM 1 \l 12210 COMMISSIONER WILLIAMS: Thank you.
LISTNUM 1 \l 12211 My questions are similar to other similar categories to what other applicants have received, and in your particular case we are going to focus a bit on the economic analysis and then move into the programming and some of your CCD initiatives.
LISTNUM 1 \l 12212 I have noted that a large part of your strategy rests on your ability to repatriate younger listeners who have moved away from radio in favour of other mediums such as internet streaming and MP3s. What elements of your proposal do you feel will make it highly compelling to these listeners to modify their current listening habits in order to tune to your proposed station?
LISTNUM 1 \l 12213 MR. BINGLEY: Commissioner, back to the fishing analogy again.
LISTNUM 1 \l 12214 COMMISSIONER WILLIAMS: Sure.
LISTNUM 1 \l 12215 MR. BINGLEY: Fish are endangered. Fortunately they are not gone yet. The majority, of course, of these people are still somewhat engaged with Canadian radio. But I want you to consider for a moment, think for a moment about your three favourite radio stations and imagine that they were taken away. Imagine how your feeling would be. You would feel, I am sure, totally rejected by the broadcasting system. In fact, that is how these groups of listeners feel. They feel disenfranchised.
LISTNUM 1 \l 12216 So it is no wonder that they are shifting to iPod and other technologies. That is really a solitary experience. An iPod is not part of a community. Radio's real strength is the fact that it is a community of listeners. I like to think of it almost as a third dimension. So, a third dimension to Vancouver is radio; it is something that people connect together and form a community around.
LISTNUM 1 \l 12217 It is still show business; it is still relevant for people. So, how we win is by ensuring that we have relevant music, relevant content, and telling their stories in talking directly to these people, making them become involved and making them feel part of it.
LISTNUM 1 \l 12218 COMMISSIONER WILLIAMS: You have indicated in your supplementary brief on schedule 1, page 15 that your revenue projections are based on a conservative growth rate of 4 per cent for the Vancouver market. However, your financial projections indicate that you are projecting compound annual growth of 18 per cent between years 4 and 7. What is your basis for estimating that you can grow at a rate that is four times over your own growth estimate of 4 per cent for the Vancouver market?
LISTNUM 1 \l 12219 MR. BINGLEY: Sorry, are you talking about our revenue growth?
LISTNUM 1 \l 12220 COMMISSIONER WILLIAMS: Right.
LISTNUM 1 \l 12221 MR. BINGLEY: Let me pass that to Tom Manton, please, to address that.
LISTNUM 1 \l 12222 MR. MANTON: Thank you, Doug.
LISTNUM 1 \l 12223 Commissioner, on a percentage basis, when you look at that, if we put it in absolute numbers, I think our growth is approximately $547,000 a year, which with a sales force of six people on the street is less than $100,000 each, breaking down to less than $2,000 a week each. So it certainly isn't an unrealistic target.
LISTNUM 1 \l 12224 COMMISSIONER WILLIAMS: It sounds like you have too many sales people.
LISTNUM 1 \l 12225 In the area of programming, you offer what you have termed an indie independent artist format, which appears to be rooted in new or alternative rock, alternative pop and rock. How do you distinguish yourself from CFOX, given your share of rock orientation? Do you see any overlaps in terms of artists or selections, and how much of an overlap do you see, if any?
LISTNUM 1 \l 12226 MR. BINGLEY: Commissioner, I am just going to pass that to Mr. Carr in a moment, but the general answer to that is very little overlap. Dave, perhaps you can elaborate on that.
LISTNUM 1 \l 12227 MR. CARR: Absolutely. Indie rock and indie pop are the most common groupings that conform to the overall indie sound and both styles will be blended throughout the station. We will also be able to work with other individual styles. A feature example would be a two‑hour feature called The Chill Out Lounge, which is more mood‑based eclectic music. This is music you wouldn't hear on any stations that are in the market like CFOX. They are mainstream radio stations and we are independent of the mainstream.
LISTNUM 1 \l 12228 MR. BINGLEY: I think the differentiator would be they are very much chart based, they are very much hit based, whereas we are really the exact opposite of that.
LISTNUM 1 \l 12229 COMMISSIONER WILLIAMS: So, that is how you see yourselves bringing diversity to the marketplace, is that key difference?
LISTNUM 1 \l 12230 MR. BINGLEY: Absolutely.
LISTNUM 1 \l 12231 COMMISSIONER WILLIAMS: I note in your application that you intend to provide a total of four hours and 43 minutes of news, weather, traffic and sports coverage in each broadcast week. Of that, 50 per cent will be locally focused, while 20 per cent will be regional. The rest will be split evenly between national and international stories.
LISTNUM 1 \l 12232 The Commission has a fairly strict definition of news, which is separate from weather, traffic, sports and entertainment. When you talk about news in your application how are you framing it? A second part to this question: How much of your information packaging will therefore be devoted to pure news as it is defined by the Commission?
LISTNUM 1 \l 12233 MR. BINGLEY: Commissioner, most of our newscasts, we actually have on schedule 1, page 22, a breakdown of those casts. We have majors and minors. They will be either three minutes or two minutes in length, as I am sure you have noticed is the news component.
LISTNUM 1 \l 12234 When it comes to the actual content of the news, what is very important is that it is relevant to our target market. That means that many of the stories have to be written and skewed in such a way that the target group can relate to it. So, it doesn't mean we are not going to have hard news there. It is more a matter of writing style and the story line up.
LISTNUM 1 \l 12235 COMMISSIONER WILLIAMS: Thank you, Mr. Bingley.
LISTNUM 1 \l 12236 I would like to clarify a few points with you regarding your CCD initiatives. In particular, I would like to talk to you about your funding for the Vancouver Indie Festival, your funding reserved for a recording package and the money you set aside for web support of emerging talent. I also want a little more information on your support for the Youth At Risk program and your proposed support for first nations community radio stations.
LISTNUM 1 \l 12237 Beginning with the indie festival, you have noted you intend to provide certain amounts to the funding of a talent coordinator. Can you tell me about this talent coordinator? If it is helpful, will this position be full or part time? Will the employee have other duties in addition to this at the station? Will the individual in question be devoted exclusively to overseeing and distributing funds or again will they have other duties?
LISTNUM 1 \l 12238 MR. BINGLEY: To my understanding we haven't filed a talent coordinator position as a direct contribution, Commissioner.
LISTNUM 1 \l 12239 COMMISSIONER WILLIAMS: Typically the Commission has accepted funding for talent coordinators in the past. So, if you have not filed and if we decide that funding of this type is in fact ineligible, how will this impact the rollout of the indie festival?
LISTNUM 1 \l 12240 MR. BINGLEY: In terms of the indie festival, the funding that we are going to be providing is going to be going to New Music West. Actually, one of the intervenors who will be appearing later on in the hearing manages and runs that festival. But it is our understanding that that funding will be going directly to the artists. So, it will really not be going to a talent coordinator.
LISTNUM 1 \l 12241 COMMISSIONER WILLIAMS: Let's talk a little bit about the recording package you intend to offer. You know that the CCD funding should flow to third parties, but you have indicated that some of the funding involved be set aside for studio time. Can you confirm that the studio in question will indeed be that of a third party and not that of your own station?
LISTNUM 1 \l 12242 MR. BINGLEY: Absolutely, that is correct.
LISTNUM 1 \l 12243 COMMISSIONER WILLIAMS: It seems that the recording package is intertwined with a music club‑based competition. Can you tell me a bit about that?
LISTNUM 1 \l 12244 MR. BINGLEY: We have run a similar type of program in Barrie in the past. We call it Local and Loud. Dave, maybe you could just describe how that works in Barrie because it is a good descriptor of how we would run it here in Vancouver.
LISTNUM 1 \l 12245 MR. CARR: It is actually on right now in the Barrie market, and we do have basically bands go up against each other every week and after ten weeks the top ten bands go up against each other. The winner then gets a full recording package, airplay on the station, the works.
LISTNUM 1 \l 12246 Actually, I was just judging last week, and it has such a huge impact because one of the mothers of the band actually came up to me, of the band from last year, just to thank me and say what an impact it had on their children. They were getting a little discouraged about what to do with their music. They are really, really talented. So now they have the CD. Now it is being played on rock 95. They are actually being tracked by Linda Dawe and doing very well. So it is really nice to see.
LISTNUM 1 \l 12247 The buzz that it created in their community just outside of Barrie is staggering. So, it is a great program.
LISTNUM 1 \l 12248 COMMISSIONER WILLIAMS: Thank you, Mr. Carr.
LISTNUM 1 \l 12249 Mr. Bingley, you have proposed something of a novelty with your web‑based support initiative. I have noted that infrastructure costs of this website will be funded separately from your CCD contributions. I would like to get a few more details about that.
LISTNUM 1 \l 12250 Sites like these will face incredible competition from established players like iTunes and others. What happens if the website isn't as popular as you hoped?
LISTNUM 1 \l 12251 MR. BINGLEY: Commissioner, we view a website and the internet really as an extension of the radio station. We view the internet as just one other transmitter. So, you talk about AM/FM. Well, we talk about AM/FM and the internet. Particularly with this format, we very much plan to incorporate the website into all aspects of the programming. So, we will be talking about the site quite a bit. We will be driving people to the site. There will be blogs on the site. There will be the ability to interact with other listeners. We are going to have the ability to do music testing and so on.
LISTNUM 1 \l 12252 So, there is going to be a lot of interaction with the site. So, we are not competing directly with them. I think we have a lot of value we are adding, and there is going to be a lot of hits on that, as there is on our current site in Barrie.
LISTNUM 1 \l 12253 COMMISSIONER WILLIAMS: Do you hope to profit from this venture in any way?
LISTNUM 1 \l 12254 MR. BINGLEY: It is not in our immediate plans, but certainly in the long run that would be great.
LISTNUM 1 \l 12255 COMMISSIONER WILLIAMS: How much station promotion will be done on this website? Will it linked directly to the station website?
LISTNUM 1 \l 12256 MR. BINGLEY: If I could just address your previous question, just to clarify, would we profit from it. It will be the station website I was referring to, not the talent portion of the website.
LISTNUM 1 \l 12257 COMMISSIONER WILLIAMS: Do you hope to profit from the talent portion of the website?
LISTNUM 1 \l 12258 MR. BINGLEY: No, not at all, sir, and it is going to be integrated with the station website. That is why we have not shown the development of that as a CCD benefit. It is an indirect benefit because it is integrated with our website.
LISTNUM 1 \l 12259 COMMISSIONER WILLIAMS: How do you plan on choosing the artist for exposure on the website? What other artists will be featured on the website? Will they all be Canadian? If you could also in your answer explain how this initiative is more than just a normal cost of doing business?
LISTNUM 1 \l 12260 MR. BINGLEY: Yes, Commissioner, to answer your last question first, as I mentioned, the indirect portion, things like band width and the ability to download, we are not showing that as a direct benefit.
LISTNUM 1 \l 12261 The direct contribution is actual money that will be paid directly to the artists. So that is very distinct for our day‑to‑day operation.
LISTNUM 1 \l 12262 I am sorry, could you restate the question there? That is what happens when you answer the second half first.
LISTNUM 1 \l 12263 COMMISSIONER WILLIAMS: We are interested in how you will choose the artist for exposure on the website and will they all be Canadian and are there other artists on the site?
LISTNUM 1 \l 12264 MR. BINGLEY: I will make that simple, then. I will pass that to Mr. Carr.
LISTNUM 1 \l 12265 MR. CARR: That is simple. Of course, all the artists that we feature that are on play on the station will be streamed live, but as far as individual podcasting, for example, certainly when we are doing interviews with local bands that this audience really feels passionately about and likes to support, those would be the ones featured on the website as far as podcasting and of course contests and local bands. They would be featured most on the website, the Canadian emerging artists for sure.
LISTNUM 1 \l 12266 COMMISSIONER WILLIAMS: Moving into the area of your Youth At Risk program, you have indicated that you will hire musical talent to act as instructors and coordinators.
LISTNUM 1 \l 12267 Typically when the Commission has accepted this kind of initiative in the past, it has been done through a third party. Astral, for instance, when it bought Standard Radio funnelled some funding through the Dixon Music Hall in Toronto as part of its benefits package.
LISTNUM 1 \l 12268 Have you investigated the possibility of establishing this initiative through a third party educational institution, and will any of the artists be affiliated with your station?
LISTNUM 1 \l 12269 MR. BINGLEY: We approached the Boy's and Girl's Clubs of Greater Vancouver, who have some experience with this type of initiative. They have run this sort of thing in the past, but they have had lack of funding to do this. So, it is going to be administered and operated by that group. No one associated with the station will be receiving any funding nor any payments as a result of this.
LISTNUM 1 \l 12270 COMMISSIONER WILLIAMS: Moving into the area of your proposed support for first nation community radio stations, I would like to clarify a few points. Which communities will receive support? Have you had any discussions with any specific communities or these communities to date?
LISTNUM 1 \l 12271 MR. BINGLEY: Yes, we have, and I will pass that to Linda McGregor.
LISTNUM 1 \l 12272 MS McGREGOR: Thank you, Doug.
LISTNUM 1 \l 12273 Commissioner Williams, the groundwork has very much been established and a foundation laid out to build native radio with first nation communities on Vancouver Island. They represent two tribal affiliates. One being the Cosalish tribunal group, and the other the Nuchatlaht tribal group.
LISTNUM 1 \l 12274 The Nuchatlaht tribal groups are located in the northern part of Vancouver, the Mowachaht First Nation and the Hesquiaht First Nation. These are, by their own definition, remote communities, as remote as you can be and still have road access. At the present time one community in particular has no internet access, no cable TV, not that personally I would see that as a bad thing. Currently they are able to receive two radio frequencies that intermittently fade in and out depending on where you are travelling along the one windy road that goes in and out of their community.
LISTNUM 1 \l 12275 COMMISSIONER WILLIAMS: What is the name of the community?
LISTNUM 1 \l 12276 MS McGREGOR: Hesquiaht First Nation and the Mowachaht First Nation. This would provide them with a first level service that the majority of Canadians take for granted.
LISTNUM 1 \l 12277 The other tribal groups associated with the Cosalish are the Malahat First Nation, Tsartlip, Pququachin, and Tseycum. They are located, of course, at the southern portion of Vancouver Island, the most densely populated area. So, their plan is to work together to resource their pool there, financial resources, the financial commitment made through this initiative and to meet their needs together as a group. Of course, that will be determined by the topography. But because they are smaller communities, they are looking to work together and also because there is a heavily populated area, they feel it would be to their advantage to work together to provide programming that they know would be also accessed by non‑native listeners.
LISTNUM 1 \l 12278 COMMISSIONER WILLIAMS: These Cosalish communities are on Vancouver Island?
LISTNUM 1 \l 12279 MS McGREGOR: Yes, they are.
LISTNUM 1 \l 12280 COMMISSIONER WILLIAMS: So, between Victoria and Campbell River?
LISTNUM 1 \l 12281 MS McGREGOR: The ones that are remote are north of Campbell River and the four Cosalish groups are towards the more heavily populated southern tip of Vancouver Island.
LISTNUM 1 \l 12282 What is unique about this is that the aboriginal benefit is a very comprehensive package. It not only supports the development of aboriginal radio, of course it promotes the development of aboriginal broadcasters, but in very meaningful ways. The initiatives are all very complementary, starting with the broadcasting scholarship, building into the opportunity to be on air with the native owned and operated radio stations on Vancouver Island, training and internship for native broadcasters at the main station in Vancouver, and also the opportunity to build into the national native network.
LISTNUM 1 \l 12283 One of the principles that has always impressed me, and I think it is unique about this application when I look at other commitments that support native radio ‑‑ and they are all honourable, and as we said earlier, we see that trend growing since our initial commitment ‑‑ Mr. Bingley bases this on the principle that also is supported in the Broadcasting Act that says:
"Programming that reflects the aboriginal cultures of Canada should be provided within the Canadian broadcasting system as resources become available for that purpose."
LISTNUM 1 \l 12284 What is unique about this application is not only is the applicant proposing to make those resources available, Mr. Bingley has a track record of the belief that who is better able to tell those stories of aboriginal cultures than aboriginal people themselves, or in this case, ourselves.
LISTNUM 1 \l 12285 One of the things I have experienced as an aboriginal person is that we are a group in North America who is the most studied. There are many initiatives that are well intentioned, developed to do things for us or to us and many of those have had some good benefits. I know I am not telling you anything you don't already know, but Mr. Bingley's guiding principle has been very much in the belief of empowerment. We provide the resources, we provide the training and then we are able to do that ourselves. It goes along with the analogy of rather than feeding someone fish, teach them how to fish and then they can fish for themselves.
LISTNUM 1 \l 12286 It is very much about not only taking a place within the Canadian broadcast system; it is about taking a place within Canadian society.
LISTNUM 1 \l 12287 I hope that answers your question. If there are any other financial aspects, I will turn that over to Mr. Bingley.
LISTNUM 1 \l 12288 COMMISSIONER WILLIAMS: I have a few more questions, Ms McGregor. I can run through Mr. Bingley, and he can redirect them.
LISTNUM 1 \l 12289 If support would flow to a community who would set up a station within the contour of an existing commercial radio station, their application would be subject to a licensing process at the Commission which could take several months. How would this affect your funding structure?
LISTNUM 1 \l 12290 MR. BINGLEY: Commissioner, we have anticipated that. With the four stations in Ontario, we actually assisted them in writing and filing their application. That delayed the process. So, what we have done, as you may see, when we show our financial injections, we are staggering that over a couple year period the start date. In fact, if it is delayed, it would extend past the seven‑year period. We would be contacting the Commission and explaining that and requesting an extension because obviously these communities would want the funding.
LISTNUM 1 \l 12291 COMMISSIONER WILLIAMS: What happens in the case that, despite everyone's best efforts, a particular station does not commence operations? How will you redirect your funding? How do you plan to deal with that situation?
LISTNUM 1 \l 12292 MR. BINGLEY: Our first step, as Linda mentioned, we are dealing with both the Cosalish and the Nuchatlaht tribal groups. Our first step was to go talk to the economic development officers for both of those groups. These offices look after on average about 15 to 17 first nations. So, in the event that one first nation did not come through or it didn't work out, there are a number of others who would step forward and we would be able to meet that commitment.
LISTNUM 1 \l 12293 MS McGREGOR: Actually, Commissioner, if I may add to that, since we have been involved in this process and I have been one of the contacts for the aboriginal delegates in this region, I have received additional phone calls from first nation communities who are interested and want to know how they can become involved. So, they certainly seem to be lining up should one feel they are not ready at this time.
LISTNUM 1 \l 12294 COMMISSIONER WILLIAMS: Thank you, Mr. Bingley and Ms. McGregor.
LISTNUM 1 \l 12295 Mr. Campbell, can you give us an overview of how your research efforts have suggested that this format is needed and will be successful in the Vancouver market?
LISTNUM 1 \l 12296 MR. CAMPBELL: I would be glad to, Commissioner. I have been waiting to do that.
LISTNUM 1 \l 12297 COMMISSIONER WILLIAMS: I understand.
LISTNUM 1 \l 12298 MR. CAMPBELL: I want to say before I do that, I have owned and run research companies, market research firms for 27 years. We have done work throughout the United States, Canada, Europe for stations large and small. In my memory in the 27 years that I have been doing the type of study that we just did last year for Mr. Bingley, I don't recall seeing a sizable market opportunity for a new format as we found here. We have looked at thousands of different projects in that time period.
LISTNUM 1 \l 12299 To measure the demand for the format, we were first of all working with the sample of 520 respondents. It was quoted for age, gender and area in the Vancouver CMA, just like BBM does. We didn't quote it for ethnic groups but we recorded ethnicity, and we have that information as a part of our study.
LISTNUM 1 \l 12300 But when we got to the format susceptibility questions, and these are questions we have developed many years ago and have perfected over the years and use in all of our format search studies, and in this study, which was really a format hypothesis study, where we were engaged to either prove or disprove the hypothesis that there was an opportunity in Vancouver for an indie emerging artist format, we didn't look at any other formats. I urged Mr. Bingley to do that, but he had his sights set on this particular format in this particular market situation.
LISTNUM 1 \l 12301 So, we had to be very precise about the format. We described the format in the study as a station that would play a lot of new songs from the many emerging and talented Canadian artists mixed in with new songs from established Canadian artists, such as Broken Social Scene, Arcade Fire, Pink Mountain Tops, New Pornographers, all established acts for you folks, I am sure. Matt Costa, Feist, Modest Mouse, and Tokyo Police Club.
LISTNUM 1 \l 12302 After we described that format by the artist that this station would feature, we played quite a long montage of samples of the music by these artists. Normally we would have five to seven formats in a study, but in this instance, since we had a bit more time, we made longer hooks of a song so that the respondents in this study had a very clear picture of what the format was by the artists that were described and then a good sample of the music.
LISTNUM 1 \l 12303 After that was completed, we asked the respondents if they would listen often, once in a while, or almost never to this particular format.
LISTNUM 1 \l 12304 This format base was 16 to 34 year olds. There was no point in us looking at 45 plus or 55 plus because we didn't feel that this new music would have much of an application to older listeners.
LISTNUM 1 \l 12305 We found that 25 per cent of the 16 to 34 year olds in the Vancouver CMA say they would listen often to this format, often as opposed to once in a while or never. There was an additional 49 per cent of the respondents who said they would listen once in a while.
LISTNUM 1 \l 12306 So, since most of a station's hours tuned come from first preference and second preference listeners, as you know, that is a huge base of a particular demographic who say they would listen often or once in a while to the format as opposed to never, and there were, what, 25 per cent of the folks said I would never listen to it, and only 1 per cent said don't know. So, there wasn't a lot of misunderstanding with respect to the format.
LISTNUM 1 \l 12307 We then ask the folks who said this format could be one they would listen often to, if it could be their very favourite radio station to listen to for music, their second choice or their third choice. We found that 28 per cent of the people who said they would listen often to the format said this could be my first choice.
LISTNUM 1 \l 12308 Now we ask a third question to kind of gauge the ease with which we might be able to get those people, and that question is: Is there a really good station like this available now in Vancouver? We found that 73 per cent of those people said no, there isn't. So, if you move back to the often and once in a while information, the P1 and P2 support, potential P1 and P2 support for the format, you have 74 per cent of the 16 to 34 year olds saying they would listen often or once in a while, and you have 73 per cent of them saying there isn't one.
LISTNUM 1 \l 12309 A lot of times with our clients in the United States we talk about marketing warfare because a lot of times in the United States we are directly attacking another station to take away their listeners. In this instance that is not the case. These are listeners who are using their iPods and their MP3 players and going over to satellite radio and all these alternative audio sources because they are not being served. This market also has a very huge, as you heard on the video, a very large underground independent artist scene, and it is big. I happen to live in Seattle and people come up here from Seattle all the time to engage in this lifestyle.
LISTNUM 1 \l 12310 There isn't an indie emerging artist format in Seattle either. So it is one of the biggest opportunities ‑‑
LISTNUM 1 \l 12311 COMMISSIONER WILLIAMS: Why would a marketplace like Seattle not have an indie ‑‑
LISTNUM 1 \l 12312 MR. CAMPBELL: I don't think anybody has looked at this format. I have had over 350 clients ask me to do these studies, and I have never been asked to do this study before. This is a new genre, and Doug, in his vision, I believe sees the opportunity. Doug, in his vision, is really concerned about the loss of younger listeners to other forums.
LISTNUM 1 \l 12313 Going back to the lake trout analogy, which I think is a great analogy, the loss of the lake trout is really confirmed in the United States by a study that Arbitron just did and released in the late fall of 2007. It is the persons using radio report which they publish quarterly. It is based on a quarter of a million diaries from the 94 largest markets in the United States.
LISTNUM 1 \l 12314 In terms of average quarter hour ratings in the United States, the ratings are down with listeners 12 plus by 16 per cent over the last eight years. But with teens, it is down by 28 per cent, almost 30 per cent over the last eight years, and by 18 to 34 year olds, it is down by 21 per cent. The folks are going away.
LISTNUM 1 \l 12315 Unless more broadcasters take a look at what the younger listeners want, because there is plenty of choices for adult listeners out there in almost any market, then radio is going to be, as Doug said, effectively extinct.
LISTNUM 1 \l 12316 I want to point out also that in our study, as opposed to some of the other ‑‑ I have only really looked at one other study that has been presented to you; I haven't looked at the others. But in that instance that study included people who listened for as little as 15 minutes a day. The people who got into our study had to listen for seven hours a week or an hour a day. That is pretty normal time spent listening for almost any radio station.
LISTNUM 1 \l 12317 So, the ratings projections that we have set forth in our application are based on fish in the lake. They are still there. But I truly believe that as the station launches and as word of mouth starts to engage and as people start telling their friends, there is an indie emerging artist format in Vancouver and it is really hot, some of these folks who are listening to their iPods and other sources are going to come back and listen to commercial radio. I am not sure they are ever going to leave their iPods or their other sources of audio, but I am confident they will come back.
LISTNUM 1 \l 12318 I want to point out one other thing that I think is really supportive of the format susceptibility information.
LISTNUM 1 \l 12319 We ask a number of statements in the study. We just made a statement and we asked the folks if they would agree or disagree on a scale of 1 to 9, where 9 means strongly agree and 1 means strongly disagree.
LISTNUM 1 \l 12320 One statement was I listen to music on my iPod/MP3 player because I can't hear the kind of music that I like on Vancouver's radio stations. One‑third of the 16 to 34 year olds said agree to strongly agree. Of the people who are the prime prospects for this format that we are talking about, 62 per cent agree to strongly agree. I think perhaps even more illustrative are the loss of people from commercial radio. The statement on listening to music more these days using my iPod/MP3 player and other media and less to Vancouver area radio stations, 40 per cent of the 16 to 34 year olds agree to strongly agree, and 68 per cent of the prime prospects for this format agree to strongly agree.
LISTNUM 1 \l 12321 So, there is huge opportunity here, and in crafting our ratings, transferring this information to BBM, which is long and complicated and I won't go through it, and I don't believe the detailed analysis is in the application, just a summary, but if you want to see the detailed information I would be glad to work that up for you today and give it to you later. We simply took a look at the existing cume for 18 to 34. We looked at the existing population and cuming patterns among 18 to 34 year olds. We took a very conservative range of cume rating from 20 to 25 per cent, given the fact that 68 per cent said they would listen often or once in a while.
LISTNUM 1 \l 12322 We went with 20 or 25 per cent and we worked from there in terms of using very conservative turnover ratios for a well‑programmed format with no direct format competitor to calculate average quarter hour persons, to calculate, then, share.
LISTNUM 1 \l 12323 Based on my experience, this station has an opportunity to be a quick success. We have not really projected that out because it has been much more conservative because that is the way Doug likes to do his projections. But when you have that level of demand with the perception that the product isn't available, it happens fast. If there was a big perception there are several stations doing this and we were going to try to achieve these ratings goal by taking it away from someone else, there would be a lot of television advertising required, a lot of money spent in order to do that, and that is not necessary here. This is a flanker opportunity in terms of marketing warfare kind of dialogue as opposed to an offensive attack or a guerilla attack. It is we are going over to an uncontested area to serve a big group of people who are important to Vancouver radio and important to radio in general.
LISTNUM 1 \l 12324 COMMISSIONER WILLIAMS: Thank you, Mr. Campbell.
LISTNUM 1 \l 12325 Ms. Dawe, do you have anything to add in your role as an indie specialist?
LISTNUM 1 \l 12326 MS DAWE:: In my experience, what Mr. Bingley has decided to do is so exciting and so refreshing and will bring such great opportunity to Vancouver artists, as well as Canadian artists all over this country. It is cutting edge; it is brand new and that is what is so exciting about it. It has never been done, which is like existing with a new emerging artist, when I work with a new emerging artist. They are in the embryonic state of their career. They have very little, if no, financing. Mom and dad are helping them pay for the CD. They have done it in their basement. No one else is doing this. They have no gigantic support, no systems, no agents, no bookers, no managers, no record label because what they are doing has not been defined.
LISTNUM 1 \l 12327 I think that this young generation, and the reason we cannot any longer tell them what they want to listen to, we cannot dictate these things to them, they feel that they are excluded. Actually within their core of their social existence they feel they are excluded.
LISTNUM 1 \l 12328 So, when I go out with these artists and I explained to you about suburbia, and they had accomplished many things on the required list to try to launch within the independent sector of the industry, this emerging artist format is very reflective of what the emerging artist goes through, because we are starting where nobody else has started before. I believe this format could be successful and create the opportunity for Canadian artists, because their dream is to be heard on the radio; it is their dream. You can't make another step further in your career until that actually occurs.
LISTNUM 1 \l 12329 I think that if we could do this, what we will see is we will see many, many radio stations in the future embracing the independent emerging artist format.
LISTNUM 1 \l 12330 COMMISSIONER WILLIAMS: Thank you, Ms. Dawe.
LISTNUM 1 \l 12331 Mr. Campbell, you talked about the fish, I guess, to use your analogy, were leaving, particularly in the 12 to 18 age bracket.
LISTNUM 1 \l 12332 MR. CAMPBELL: It was 16 to 18.
LISTNUM 1 \l 12333 COMMISSIONER WILLIAMS: Sorry, 16 to 18. But then you also said that possibly they would be coming back. At what age do they come back?
LISTNUM 1 \l 12334 MR. CAMPBELL: I believe, Commissioner, that for the people who are not listening to radio today, the people who have gone away, who are really into this music genre of emerging independent ‑‑ and in this case Canadian artists, because of all the music types we tested, highest testing was for emerging Canadian artist ‑‑ I believe that they won't be able to miss the fact that this radio station is available because we are going to be asking our listeners on the air if we are granted this licence if they like what they hear to please tell their friends; we would really like to have their help. If they have friends who know folks who like this kind of music, here it is.
LISTNUM 1 \l 12335 On our website we are going to be inviting people to become ‑‑ we haven't got a great name for it yet ‑‑ to become members of a listener advisory panel so that we can make our news relevant, find out issues of importance to these folks, regular weekly listener panel sessions where, over the course of a year, we will have 52 groups of 20 people into the station.
LISTNUM 1 \l 12336 That database will be so helpful to the station and its spoken world programming, not only in news but also in what the disc jockies talk about in the morning show and the other day parts. But I think the folks who are gone are going to hear about it through word of mouth and through their pals and they are going to sample it, and if it is programmed properly, which I am confident it will be, they are going to like it and listen to it in their car, where it is a little dangerous to wear the headphones, they are going to listen to it at work, they are going to listen to it at home, they are going to listen to it on the beach, and I think that is what will happen.
LISTNUM 1 \l 12337 COMMISSIONER WILLIAMS: Thank you, Mr. Campbell.
LISTNUM 1 \l 12338 Mr. Bingley, the salmon often go away here, but they always come back to spawn. So, there may be some hope for the fish.
LISTNUM 1 \l 12339 That concludes my questions, Madam Chair.
LISTNUM 1 \l 12340 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 12341 I have a couple of questions, one along the same lines. Listening to music is a habit. I have young children as well, and you listen to music when you associate with activities. A lot of the target audience that you are aiming at have already formed the habit of, when they do their activity, they have their iPods on. If they are running, they have got their running playlist; if they are reading, they have their reading playlist.
LISTNUM 1 \l 12342 So, not only do you have to break them of the habit they have already formed, you also then have to teach them to form a new habit of them turning on the radio. I can see where, when you get to the point that they have turned on the radio, they like the music, there is a chance. But I would like to hear more about what is it that you are going to do to actually break them of that habit and form a new habit?
LISTNUM 1 \l 12343 MR. BINGLEY: Sure, Commissioner.
LISTNUM 1 \l 12344 First, what we provide is value added, and I don't think we can over emphasize the importance of all of the things that radio stations do, all the spoken word content, all those interactions. So, that is the first thing.
LISTNUM 1 \l 12345 The second component, though, is we are going to be involved in Face Book; we are going to be involved with a community on our website. So, all of these things tap into the habits that this group already has. So, we are going to take their habits and shift them. I think that is the short answer. That is what we are going to do. We are going to take a lot of existing habits and shift them.
LISTNUM 1 \l 12346 The other reality is studies have shown that the average person has 500 songs on their iPod. Mr. Carr here spent quite some time in indie clubs ‑‑ I have the receipts ‑‑ and when he showed people the playlists they said, hey, this is what we have on our iPod. We are going to provide much of what they already have on their iPod, plus we are going to provide new and cool music that they don't know about now, plus all these other good things that go along with the package.
LISTNUM 1 \l 12347 THE CHAIRPERSON: So, the short answer is the internet will be your key tool to make them think of you?
LISTNUM 1 \l 12348 MR. BINGLEY: That is one of the tools, but I think the key tool is going to be the word of mouth, just that the other people talk about it.
LISTNUM 1 \l 12349 The other thing that we do very successfully, and I believe this is very important, is have listeners on the air. For example, if someone calls in with a traffic report on our existing stations, we put that person right on air.
LISTNUM 1 \l 12350 All of these things, a well run station can take a market the size of Vancouver and make it seem almost like a small town, and that is how you do that.
LISTNUM 1 \l 12351 THE CHAIRPERSON: I have noticed that your revenue projections ‑‑ I am not talking about the expense side. I see that your programming expenses and total expenses are also quite high, indicating your willingness to invest, but your revenue is considerably higher than the other applicants who are targeting the under 34 age group.
LISTNUM 1 \l 12352 MR. BINGLEY: Sorry, these are the applicants targeting the under 34?
LISTNUM 1 \l 12353 THE CHAIRPERSON: Under 34.
LISTNUM 1 \l 12354 MR. BINGLEY: I believe our actual, relative to the entire group, I think our revenue forecasts are actually quite conservative. They are about 50 per cent of all the applicants here today.
LISTNUM 1 \l 12355 If I remember correctly ‑‑ I am trying to think of the applicant here.
LISTNUM 1 \l 12356 THE CHAIRPERSON: I am thinking of, say, Pataria, their target is 18 to 24, and their year 7 revenue is $2.7 million. You are at $5 million, and then the Alberta group is at $2.8 million.
LISTNUM 1 \l 12357 If I am wrong, please correct me.
LISTNUM 1 \l 12358 MR. BINGLEY: That is not my understanding. Perhaps what we could do, with your indulgence, maybe I could take a look at that and provide a follow‑up response to that question.
LISTNUM 1 \l 12359 THE CHAIRPERSON: Sure, that would be good. If I am wrong, please do correct me.
LISTNUM 1 \l 12360 I have also been in hearings with a station in difficulty who has targeted the younger group, talking about the difficulties of attracting them ‑‑ we have addressed those here ‑‑ and talking about the difficulties of attracting advertising. Can you address that?
LISTNUM 1 \l 12361 MR. BINGLEY: Sure, I can, and I will pass that to Mr. Manton.
LISTNUM 1 \l 12362 MR. MANTON: Thank you, Doug.
LISTNUM 1 \l 12363 Obviously the 18 to 34 is a very lucrative demo with a lot of money and very active with their lifestyle. We had the opportunity to come out and speak to a cross‑section of retailers, my colleague, Dave Carr and I, and I won't say astounded, very pleased I guess with the reaction that we got from them that they felt that this was a demographic that they couldn't currently reach and were very much interested in what we were doing.
LISTNUM 1 \l 12364 We didn't ask for commitments obviously for a station that wasn't on the air yet, but certainly got the definite opinion that this was something that they thought was very viable and they would be very interested in.
LISTNUM 1 \l 12365 THE CHAIRPERSON: Then my standard question of how many do you think we should licence and if one were to be you, who else?
LISTNUM 1 \l 12366 MR. BINGLEY: Commissioner, in terms of the relative robustness of the market, you could certainly issue licences, I believe, for all the available frequencies.
LISTNUM 1 \l 12367 When you take a look at the applicants here, I am not sure if you are including CBC in this as well, but of course there is the issue of Nanaimo. I believe if they were to recycle their AM frequency, you could certainly satisfy that need.
LISTNUM 1 \l 12368 CBC on 88.1, it is my understanding they are the only broadcaster who can use that because of an agreement with regard to channel 6.
LISTNUM 1 \l 12369 Then at the other end of the band you have Pattison, also it is a frequency that only they can use. So that kind of makes sense to me that that would be a good choice.
LISTNUM 1 \l 12370 THE CHAIRPERSON: Thank you. I believe legal has a question and then we will come back for your two‑minute pitch.
LISTNUM 1 \l 12371 MS PINSKY: I just have a few questions of clarification to follow up from the discussion that you have just had.
LISTNUM 1 \l 12372 Firstly to clarify the point of the amount of pure news that you would intend to broadcast, we have a figure of four hours and 43 minutes for news, weather and sports. Do you have a specific number for news only?
LISTNUM 1 \l 12373 MR. BINGLEY: Yes, I do. Monday to Friday, news 135 minutes; Saturday, Sunday, 34 minutes apiece, for weekly totals of 169 minutes of news, which is 2.82 hours.
LISTNUM 1 \l 12374 MS PINSKY: Thank you.
LISTNUM 1 \l 12375 Then you did discuss with Commissioner Williams the issue of your level of projections for revenue. What would be the impact on your business plan if your projections were not met? How would you respond?
LISTNUM 1 \l 12376 MR. BINGLEY: We have a considerable reserve fund in place. Ms Buller can take you through that if you wish, but we do have a sizable fund in place, so it would have no impact on our commitments.
LISTNUM 1 \l 12377 MS PINSKY: Thank you. The issue is more what would the impact be on your programming, for example.
LISTNUM 1 \l 12378 Then I just want to follow up on a few issues relating to CCD. With regard to the position of the coordinator for the indie festival, when I look at your chart on page 4 of the appendix 8‑a, I don't know if you necessarily have to look at it, but you have broken down for the indie festival the commitments for each year. You have indicated that for the first two years you would allocate $5,000 for the coordinator. I will let you get to that page first if you like.
LISTNUM 1 \l 12379 MR. BINGLEY: Okay, just bear with me. What page is that?
LISTNUM 1 \l 12380 MS PINSKY: It is page 4 of the appendix 8‑a entitled "Description of CCD Commitments."
LISTNUM 1 \l 12381 MR. BINGLEY: Oh, yes, I am sorry, and I apologize, Commissioner. I thought you were referring to the indie showcase of music west when that question was occurring before.
LISTNUM 1 \l 12382 Yes, we are budgeting fees towards that, $5,000, and that is necessary because an event of this size, we do need someone to coordinate that.
LISTNUM 1 \l 12383 MS PINSKY: Would that coordinator be a staff person for the station or that would be a third party?
LISTNUM 1 \l 12384 MR. BINGLEY: That would be a contract third party, yes.
LISTNUM 1 \l 12385 MS PINSKY: Would you be able to break out the amount of that money for the following years? You have indicated $5,000 for the first two, but we don't have how much you expect ‑‑
LISTNUM 1 \l 12386 MR. BINGLEY: Yes, it would be $5,000 and we would keep it at $5,000 in subsequent years.
LISTNUM 1 \l 12387 MS PINSKY: This would be a separate person not otherwise employed by the station whose specific duty would be to coordinate the indie festival; is that it?
LISTNUM 1 \l 12388 MR. BINGLEY: Absolutely. I do apologize, Commissioner Williams, to answer your question earlier directly, if you did rule that this was not an eligible CCD benefit, we would re‑direct that funding directly into the talent appearing at this festival.
LISTNUM 1 \l 12389 MS PINSKY: Okay, that answered my last question. Thank you very much.
LISTNUM 1 \l 12390 THE CHAIRPERSON: Here is your opportunity to do a last minute pitch.
LISTNUM 1 \l 12391 MR. BINGLEY: Thank you, Madam Chair.
LISTNUM 1 \l 12392 Commissioners, at the risk of torturing you with one final fish analogy, it is time to restock the pond. If we do not innovate, radio will be in serious trouble.
LISTNUM 1 \l 12393 Our proposal will re‑invigorate Vancouver radio. It will provide a new format to disenfranchised listeners, Canadian citizens to whom radio no longer has relevance. It will provide a new venue for emerging artists, a venue which will have impact that extends well beyond Vancouver.
LISTNUM 1 \l 12394 Our CCD programs will aid emerging artists, Vancouver's youth and native broadcasting.
LISTNUM 1 \l 12395 At the most recent radio review there was one common thread. Canadian musicians said that the best thing the CRTC could do for them was to ensure more airplay for emerging artists. The radio policy now states that wherever possible, decisions by the Commission will ensure that support.
LISTNUM 1 \l 12396 So, Commissioners, we believe that our application does just that. It addresses both of those challenges. I guess the best thing I can say is if not here, where; and if not now, when?
LISTNUM 1 \l 12397 Thank you very much for your time.
LISTNUM 1 \l 12398 THE CHAIRPERSON: Thank you for your time and your presentation.
LISTNUM 1 \l 12399 We will now take a lunch break and Ms Roy will tell us how much time she is going to allow us to have.
LISTNUM 1 \l 12400 THE SECRETARY: We will come back at 2:15.
‑‑‑ Upon recessing at 1310 / Suspension à 1310
‑‑‑ Upon resuming at 1415 / Reprise à 1415
LISTNUM 1 \l 12401 THE SECRETARY: We will now proceed with item 9, which is an application by In House Communications for a licence to operate an English‑language FM commercial specialty radio programming undertaking in Vancouver.
LISTNUM 1 \l 12402 Please introduce yourself and your colleague, and you will then have 20 minutes for your presentation. Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 12403 MR. PAT LOUGH: Madam Chair, Commissioners, my name is Pat Lough, President of In House Communications. With me today is my wife and business partner, Dulaine Lough. It is with regret that we are informing you that our third presenter today, Carolyn Arends, is not able to be with us due to the flow of today's hearing.
LISTNUM 1 \l 12404 It is with great enthusiasm and excitement that we appear before you again today to present our application for refine fm, a new Christian music station to serve Vancouver and the Lower Mainland. If licensed, refine fm will complement the existing radio market with an appealing mix of contemporary Christian music.
LISTNUM 1 \l 12405 This application was submitted in response to the over 7,000 supporters of Christian radio who wrote a letter of intervention expressing their concern about losing a clear reception of American‑based Praise 106, as noted in the CRTC Decision 2006‑258. In addition to those 7,000 letters that you have on your file, our application received over 350 letters from individuals and businesses who wanted to publicly express their support for our application. Currently 31 per cent of Vancouver's population falls into our target audience, aged 18 to 35, which is skewed slightly more female than male. As Vancouver is a large and densely populated region, our proposed coverage area will encompass nearly 2.5 million people.
LISTNUM 1 \l 12406 The absence of a Canadian choice for Christian music has many would be listeners tuning out of market to the internet, satellite radio and to American stations like Praise 106 in search of quality Christian music. If they continue to do so, we will lose an irreplaceable opportunity to promote Canadian music and will lose the opportunity to showcase local talent and emerging artists.
LISTNUM 1 \l 12407 Vancouver is the largest Canadian market without a Christian radio station, and yet it is a market that has demonstrated very strong support for the American‑based Praise 106. We believe that we can repatriate Praise 106 listeners back to Vancouver's radio market by offering a fresh new sound with a clean signal and great Canadian music, local news, sports, traffic and weather.
LISTNUM 1 \l 12408 In House Communications desires to bring quality Christian programming to communities in western Canada. Last October, we appeared before the Commission requesting a similar licence for Kelowna. In January we purchased a struggling, albeit talented, low‑powered Christian station. This transaction is currently waited for CRTC approval. The licensing of this application for Vancouver will form a synergy with our newly acquired station and potentially with a new station in Kelowna. This synergy will benefit all three stations in terms of management, administration and national sales.
LISTNUM 1 \l 12409 We trust that you will see throughout our application and again in our presentation today that refine fm is all about diversity; diversity in ownership, programming, advertisers and CCD initiatives.
LISTNUM 1 \l 12410 MS DULAINE LOUGH: The licensing of this application as a specialty station ensures that the radio market is reflective of the incredible diversity of our Canadian culture. Our spoken word will provide listeners with a balance of news, entertainment and community information.
LISTNUM 1 \l 12411 Our spoken word programming is something that will clearly set us apart from American broadcasters penetrating the market and streaming on the internet. Notably absent from our programming schedule is American‑style talk programs, as we feel that there is an adequate supply from American stations over the air.
LISTNUM 1 \l 12412 Content is incredibly important for a new radio station in Vancouver and refine fm focuses on the need for strong, local, Canadian programming with content that will be safe for all members of the family throughout the entire day.
LISTNUM 1 \l 12413 Our spoken word commitment is 17 per cent, totalling 21 hours and 43 minutes per week. This includes meaningful DJ commentaries and local reflection, news, sports, traffic, weather, a music calendar, business reports and various community and public service updates.
LISTNUM 1 \l 12414 A listener feedback line will be another source of spoken word, which will provide our audience an opportunity to leave messages and commentary on a variety of subjects. These messages will then be produced and scheduled as on‑air programming content, covering topics like the possibility of a strike, input for an upcoming City Hall decision, or local reaction to the day's top news story. This interactivity will also be carried through to our website, generating an enhanced level of input and participation from our audience.
LISTNUM 1 \l 12415 Topics raised on the listener feedback line will also give us direction for our weekend talk program, Vancouver This Week. This one‑hour program will be locally produced and will look at current events from our listeners' perspective. Guests on this program may be a local member of Parliament, the provincial health minister, a city planner or a director of a drop‑in centre.
LISTNUM 1 \l 12416 MR. PAT LOUGH: Refine fm will provide a fresh and unique perspective on local news. We will air 75 newscasts totalling 375 minutes of news each week as a minimum. Seven part‑time reporters will make up our news team and will maintain 75 per cent local news; with the remaining 25 per cent focusing on national and international news.
LISTNUM 1 \l 12417 We recognize that a number of our listeners may not always be able to listen to the radio, perhaps they are at work, or if they are outside of our limited coverage area. Alternate media that we will utilize to deliver breaking news will be through our e‑mail distribution list. By tying our news department directly to our e‑mail distribution list, we will keep our audience better informed and enhance our listeners' overall experience.
LISTNUM 1 \l 12418 As a station that invites family listenership, we will make every effort to be sensitive to our entire audience. Parents will know that they can listen to the news on our station without their children being potentially frightened by our news content. Refine fm will also try, when possible, to give a positive human‑interest element to our news items.
LISTNUM 1 \l 12419 MS DULAINE LOUGH: There are many ways that a radio station can support Canadian artists, most notably through airplay, SOCAN fees and CCD commitments. This application for refine fm not only exceeds the requirements identified by the Canadian Association of Broadcasters, it also focuses on the community that is being served.
LISTNUM 1 \l 12420 Canadian music will be prominently featured in refine fm's programming. In House Communications has chosen to double the CRTC's category 3 requirement of airing Canadian content to a full 20 per cent. In addition, 50 per cent of the Canadian songs aired will be released in the year 2000 or later to ensure significant airplay of newer Canadian music.
LISTNUM 1 \l 12421 Refine fm wants to see Canadian artists succeed. A clear demonstration is with the production and marketing of Totally Canadian. Totally Canadian will be a pre‑recorded 60‑minute program devoted entirely to Canadian artists and will air each night from 6:00 to 7:00 p.m. This program may from time to time include interview style commentaries with Canadian musicians, highlighting their accomplishments and recordings. Totally Canada will promote artists when they are performing in the area. In addition to the 60‑minute time slot, we will provide extensive on‑air promotion of this unique and exciting program throughout the day to encourage our audience to tune in.
LISTNUM 1 \l 12422 This application also recognizes the need for a significant financial investment to strengthen British Columbia's Christian music industry. Refine fm's CCD initiatives are double that of stations in other major cities like Calgary, Edmonton, Winnipeg and Ottawa. The seven‑year investment totalling $262,500 in over and above direct funding, and an additional $105,000 in indirect support will go a long way in supporting the underfinanced Christian music industry.
LISTNUM 1 \l 12423 Refine fm's CCD initiatives are substantial for a Christian broadcaster. They are intended to discover talent in British Columbia through a songwriter's competition and then to champion artists on to a national scale.
LISTNUM 1 \l 12424 The refine songwriters competition will create a fantastic opportunity for refine fm and industry experts to scout for new and emerging talent. Artists throughout British Columbia will be invited to submit their works to our station for review. A panel of judges made up of listeners, music teachers and professional artists will analyze the songs for quality, flow, and likability. The entries will be narrowed down to ten finalists. The artists will perform in a live environment, where the panel will gauge the audience response and the artist's stage presence. The top five artists will have their songs recorded and compiled on a CD.
LISTNUM 1 \l 12425 The station will promote the artists and the compilation CD at various events throughout the city. The five artists, along with their runner‑ups, will also gain valuable exposure in a public environment. In addition to the station promoting the CD locally, station personnel will distribute the compilations nationally to other Christian radio stations.
LISTNUM 1 \l 12426 Refine fm has a goal to strengthen the entire Christian music industry and will support emerging artists on a national scale by financially contributing to the Gospel Music Association of Canada. Five thousand dollars per year will be allocated to the GMAC's annual Covenant Awards. Our investment will give Canadian artists in other communities, who might not otherwise have access to CCD funding, the ability to record their works.
LISTNUM 1 \l 12427 We believe that the initiatives identified in this application will jumpstart the Christian music industry in B.C. Refine fm's plan is designed to find and support local talent through airplay, promotions and sponsorship, and to give them national exposure.
LISTNUM 1 \l 12428 MR. PAT LOUGH: In conclusion, In House Communication is proposing to offer Vancouver area listeners their very own local destination for Christian music. They deserve it. Radio listeners in the Vancouver area shouldn't have to rely on American broadcasters to provide quality, Christian programming in their own community.
LISTNUM 1 \l 12429 We believe that no other format provides as many loyal listeners as a Christian‑based station. As you may have observed through the interventions received on our application, we have been in dialogue with the community and we believe that our application is in this under‑served demographics' best interest.
LISTNUM 1 \l 12430 As you and the CRTC staff contemplate a new radio service for Vancouver, we would like to point out that because our application is for a specialty license, we guarantee the format that we will be going to air with.
LISTNUM 1 \l 12431 This format for refine fm is the only application before you that has committed to doubling Canadian content requirement. We have proposed a higher commitment of Canadian content because we believe in Canadian artists. Furthermore, we have made a significant contribution to the development of Canadian music through CCD initiatives.
LISTNUM 1 \l 12432 We want to thank you for your time and we will gladly entertain questions.
LISTNUM 1 \l 12433 THE CHAIRPERSON: Thank you, Mr. and Mrs. Lough.
LISTNUM 1 \l 12434 Commissioner Duncan will lead the questions.
LISTNUM 1 \l 12435 COMMISSIONER DUNCAN: Good afternoon and welcome.
LISTNUM 1 \l 12436 I want to start by referring first of all to your deficiency response from November 20th.
LISTNUM 1 \l 12437 MR. PAT LOUGH: All right.
LISTNUM 1 \l 12438 COMMISSIONER DUNCAN: Specifically starting with your response to question 10, where you provided a detailed breakdown of your spoken word programming. It actually starts at the bottom of the previous ‑‑ the pages aren't numbered. It starts at 10‑a and continues on to the next page. It indicates the total spoken word commitment is 1303.5 minutes.
LISTNUM 1 \l 12439 But when you add those numbers listed, it actually adds to 1387.5 minutes, 84 minutes more than the total. I am just wondering should it be the higher number? You perhaps missed an 84 when you added it.
LISTNUM 1 \l 12440 MR. PAT LOUGH: Maybe I am not very good at math.
LISTNUM 1 \l 12441 COMMISSIONER DUNCAN: So will you take our word for it? We have added it.
LISTNUM 1 \l 12442 MR. PAT LOUGH: If you guys added it up and if it comes to 1387 minutes ‑‑
LISTNUM 1 \l 12443 COMMISSIONER DUNCAN: 1387.5.
LISTNUM 1 \l 12444 MR. PAT LOUGH: Then that is what we have committed to on paper.
LISTNUM 1 \l 12445 COMMISSIONER DUNCAN: As long as the detail is right, then it is correct, the total.
LISTNUM 1 \l 12446 MR. PAT LOUGH: Yes, exactly.
LISTNUM 1 \l 12447 COMMISSIONER DUNCAN: That actually equates then to 23 hours and seven minutes.
LISTNUM 1 \l 12448 MR. PAT LOUGH: Right.
LISTNUM 1 \l 12449 COMMISSIONER DUNCAN: Just following along on that page, in your response to question 10 you talk about Vancouver This Week, the 60‑minute program. Down at the bottom in response to question 11 you refer to Vancouver Today. In response to question 11 re: open line programming, you described your proposed one‑hour local current affairs program Vancouver Today. Are you proposing to air that show ‑‑ first of all I want to know, I guess, is it the same? Is Vancouver Today and Vancouver This Week the same show?
LISTNUM 1 \l 12450 MR. PAT LOUGH: That is the same show, yes.
LISTNUM 1 \l 12451 COMMISSIONER DUNCAN: It doesn't show on your chart that you submitted. So, I was just wondering if that is the one‑hour time slot Monday to Friday? On Monday to Friday you show mid‑day there is a live hour show. Would that be where it goes?
LISTNUM 1 \l 12452 MR. PAT LOUGH: Yes, so Vancouver This Week would start at 8:00 a.m. and runs till 9:00 a.m. on Saturdays. So, that was on the new schedule that we submitted. It was actually on the original schedule as well.
LISTNUM 1 \l 12453 COMMISSIONER DUNCAN: So, Vancouver Today I am not going to see there because it is actually Vancouver This Week; right?
LISTNUM 1 \l 12454 MR. PAT LOUGH: Yes. Sorry about that.
LISTNUM 1 \l 12455 COMMISSIONER DUNCAN: The show that is on Monday to Friday between 12:00 and 1:00 that is showing as live, what is that show?
LISTNUM 1 \l 12456 MR. PAT LOUGH: Between 12:00 and 1:00, that would just be a lunch hour program. That is part of our live‑to‑air commitment.
LISTNUM 1 \l 12457 COMMISSIONER DUNCAN: Thank you.
LISTNUM 1 \l 12458 I just want to go to your response to question 5(a) and 6(a) in the same letter. In 5(a) you state you are not proposing any religious programming, and in 5(c) you say you will not be airing non‑Canadian spoken word religious programming. Maybe a bit of a qualification because it makes me wonder is it Canadian.
LISTNUM 1 \l 12459 Then you say:
"Should we decide that we would like to introduce religious spoken word programming, we will apply to the Commission for an amendment to our licence."
LISTNUM 1 \l 12460 I am wondering if you are proposing religious programming?
LISTNUM 1 \l 12461 MR. PAT LOUGH: The reference in (c) was actually in reference to the application's question (b) about non‑Canadian spoken word programming. We are not proposing any spoken word religious programming, Canadian or American.
LISTNUM 1 \l 12462 COMMISSIONER DUNCAN: So, the second part of that question, "Should we decide that we would like to introduce religious spoken word programming, we will apply."
LISTNUM 1 \l 12463 MR. PAT LOUGH: Basically when I answered that question, it was in response to the hearing for Kelowna, where we made the same statement that we don't have an interest in airing the religious talk programming because it is available here; it is available through American channels and such.
LISTNUM 1 \l 12464 I think the Commission just wanted a clear indication that if we were to, five years down the road, decide we want to air that, then we would have to come back to the Commission and request that.
LISTNUM 1 \l 12465 COMMISSIONER DUNCAN: So, your position is that, no, you are not, period for the seven years?
LISTNUM 1 \l 12466 MR. PAT LOUGH: Correct.
LISTNUM 1 \l 12467 COMMISSIONER DUNCAN: If the Commission were to decide that we should put a mention in the decision if you were granted the licence that would be a condition of licence that is normally applied to religious programming, you wouldn't object to that?
LISTNUM 1 \l 12468 MR. PAT LOUGH: We wouldn't object to that because we wouldn't be airing that.
LISTNUM 1 \l 12469 COMMISSIONER DUNCAN: Thank you very much, then.
LISTNUM 1 \l 12470 Can you just describe for me the similarities and differences between your proposed format and that proposed by Touch Canada?
LISTNUM 1 \l 12471 MR. PAT LOUGH: I made a few notes here. I don't think I want to go through it all. It is a lot more than what I probably need to say.
LISTNUM 1 \l 12472 In terms of syndication programs, we are looking at six hours of Canadian programs. Touch has looked at American programs. We are not looking at the brokered Christian talk programming. Touch is. We have a higher commitment to live‑to‑air programming at 72 hours. The biggest one is we are committing in writing to a 20 per cent Canadian content, and their commitment is 10 per cent.
LISTNUM 1 \l 12473 COMMISSIONER DUNCAN: On this syndicated program, so you won't be carrying any syndicated programs or you might?
LISTNUM 1 \l 12474 MR. PAT LOUGH: We will carry some syndicated programs. I believe we identified them on the schedule, but ours are from Canadian sources. CT‑20 comes out of LIFE‑FM out of Barrie, Ontario, and Mad Christian Radio is another fabulous program.
LISTNUM 1 \l 12475 An American program would be 20 The Countdown Magazine.
LISTNUM 1 \l 12476 COMMISSIONER DUNCAN: So you purchase those programs, do you?
LISTNUM 1 \l 12477 MR. PAT LOUGH: I would have to go back and look. The Mad Christian Radio show is available free of charge. CT‑20 I believe there is a commitment of one of the stop sets is theirs. Do you view that as contra, do you view that as brokered? I don't know how the Commission views that.
LISTNUM 1 \l 12478 COMMISSIONER DUNCAN: You are not paying for it? It is an exchange.
LISTNUM 1 \l 12479 MR. PAT LOUGH: We are not paying for that, no. In exchange they get one commercial per hour type thing.
LISTNUM 1 \l 12480 COMMISSIONER DUNCAN: I just wanted to pick up on something here that you said today.
LISTNUM 1 \l 12481 I notice in your remarks today just at the outset you refer to that you are going to be delivering a clean signal to Vancouver's radio market, which you see as an advantage over what they get from the States which I gather is impaired.
LISTNUM 1 \l 12482 But what we have heard at the proceeding today is that the signal on 104.1 is not a clean signal, well, at least it is only 50 per cent, 6 per cent available in the market. I am wondering, since you stated your market was the full Vancouver CMA, are your projections based on the full or have you accounted for the fact that the signal might be impaired?
LISTNUM 1 \l 12483 MR. PAT LOUGH: Our projections are based on the full CMA. Looking at our map from our engineer, I think coverage is pretty attractive. We are willing to live with it.
LISTNUM 1 \l 12484 COMMISSIONER DUNCAN: So you haven't had to discount your projections to allow for it? You feel the signal is going to be adequate to serve your market?
LISTNUM 1 \l 12485 MR. PAT LOUGH: We haven't revised our projections for any impairment on that signal.
LISTNUM 1 \l 12486 COMMISSIONER DUNCAN: Were you aware that the signal might be impaired?
LISTNUM 1 \l 12487 MR. PAT LOUGH: You know, I wasn't aware of that, again, going by the map that our engineer used. I am not sure which engineer indicated that the signal would be impaired. I am not sure if it is from the same source of origination as well. Ours is from the CHUM tower. But, yes, it looks like New West, Port Coquitlam, Port Hardy, North Van, that is all within a three millivolt contour. It looks relatively good. Beyond that they are showing interference from 104.3 out of the U.S.
LISTNUM 1 \l 12488 COMMISSIONER DUNCAN: That was filed with your application?
LISTNUM 1 \l 12489 MR. PAT LOUGH: Yes.
LISTNUM 1 \l 12490 COMMISSIONER DUNCAN: As long as we have it on the record, that is fine.
LISTNUM 1 \l 12491 MR. PAT LOUGH: You do, perfect.
LISTNUM 1 \l 12492 COMMISSIONER DUNCAN: You made a point of saying, Mrs. Lough, actually that noticeably absent from your programming schedule was American‑style talk programs. I just wondered what you refer to by that, American‑style talk programs?
LISTNUM 1 \l 12493 MS DULAINE LOUGH: What we were talking about there is just the Charles Stanley and the teaching/preaching kind of programs that are available.
LISTNUM 1 \l 12494 MR. PAT LOUGH: Those programs that typically require the balance.
LISTNUM 1 \l 12495 COMMISSIONER DUNCAN: Thank you.
LISTNUM 1 \l 12496 I want to just refer again, still on your November 20th letter, in response to question 16(b), and this is in response to what if that frequency isn't available, 104.1. In (b) you suggest a number of other options, I gather, specifically a low‑powered station augmented with a number of low‑powered FM repeaters, a digital repeater or an AM repeater. I am just curious to know the economic implication of those alternatives, if you have worked that up, both from a capital cost point of view and on your bottom line.
LISTNUM 1 \l 12497 MR. PAT LOUGH: I haven't explored those opportunities or those technologies to great detail simply because I ideally we want 104.1.
LISTNUM 1 \l 12498 However, the CBC has been a champion, my understanding, in developing the on‑air testing and that type of stuff of the digital format. I haven't talked to them recently, but this is discussions from a couple of years ago. I think that most logically everyone would actually combine in with them. In terms of the distribution, they would provide the infrastructure. It is a lot cheaper, my understanding, to introduce the digital transmitters than it is to do the analogue.
LISTNUM 1 \l 12499 So, we haven't explored that in any great detail. As we were brain storming, we thought ideally we want 104.1, but there are other options should you feel 104.1 should go to someone else.
LISTNUM 1 \l 12500 COMMISSIONER DUNCAN: So you don't have any idea what effect cost‑wise it would be?
LISTNUM 1 \l 12501 MR. PAT LOUGH: We didn't look at a capital cost component to that. Low power is very cheap and easy to introduce. The problem with that, though, is you have a lot of frequencies in use already in this valley. But low power, short spacing from that perspective can be introduced a lot easier.
LISTNUM 1 \l 12502 The inconvenience, though, is someone driving from whatever, Abbotsford to Vancouver might have to jump to four different stations to hear that signal all the way through. It is tough to make a solid business case on that. But we also recognize that frequencies are saturated here. So, we want to think a little bit outside of the box if we have to.
LISTNUM 1 \l 12503 COMMISSIONER DUNCAN: Did you have engineering advice on this, then? Did you have professional advice on that?
LISTNUM 1 \l 12504 MR. PAT LOUGH: No, I didn't seek any additional advice on that.
LISTNUM 1 \l 12505 COMMISSIONER DUNCAN: All right, I just wanted to understand. Thank you.
LISTNUM 1 \l 12506 MR. PAT LOUGH: Unfortunately, there is a significant cost every time you have an engineer doing another document for you.
LISTNUM 1 \l 12507 COMMISSIONER DUNCAN: That is fine. I appreciate that.
LISTNUM 1 \l 12508 In your projected income statement that is also attached to that letter, I notice that your basic CCD calculation from year 3 out looks to be incorrect. I just wondered if you could recalculate that and resubmit it.
LISTNUM 1 \l 12509 MR. PAT LOUGH: Sure. That would be 7.4; is that right?
LISTNUM 1 \l 12510 COMMISSIONER DUNCAN: It is appendix 7.1. It wasn't on it, but ‑‑
LISTNUM 1 \l 12511 MR. PAT LOUGH: You bet, we can resubmit that. That is not a problem.
LISTNUM 1 \l 12512 COMMISSIONER DUNCAN: I was also wondering in section 5.2 of your application, you show total funding of $535,000, all of which you said would be in equity and no debt. Yet I notice on the projected income statement that you are showing interest expense totalling $106,000 plus over the seven years and loan repayments of $160,000 over the seven years.
LISTNUM 1 \l 12513 I am trying to reconcile that with section 5.2 on your application where there was no debt indicated.
LISTNUM 1 \l 12514 MR. PAT LOUGH: I use a standard spreadsheet that I built over the years and probably should have deleted the interest component of it.
LISTNUM 1 \l 12515 I would like to leave that interest expense in there just in case we incur the debt, then that is still shown as a line item. Obviously, if we are not drawing debt, then that charge would not show through.
LISTNUM 1 \l 12516 COMMISSIONER DUNCAN: The only thing that we would need to see, then, is normally we are asking for a letter from the financial institution to show that they are willing to extend that line of credit.
LISTNUM 1 \l 12517 MR. PAT LOUGH: Right, okay. I have the letter of net worth from there.
LISTNUM 1 \l 12518 COMMISSIONER DUNCAN: I saw that, yes.
LISTNUM 1 \l 12519 MR. PAT LOUGH: If you would prefer us to show then not being share capital, we could do that.
LISTNUM 1 \l 12520 COMMISSIONER DUNCAN: But the interest is not ‑‑ if I understood you to say it is there more by accident. It is not intended to pay yourself back on your equity investment because that would not be equity?
LISTNUM 1 \l 12521 MR. PAT LOUGH: Right.
LISTNUM 1 \l 12522 COMMISSIONER DUNCAN: So it is an equity investment; there is no debt?
LISTNUM 1 \l 12523 MR. PAT LOUGH: Exactly.
LISTNUM 1 \l 12524 COMMISSIONER DUNCAN: I notice that you were showing negative cash flow and I was wondering how you were going to make your interest and loan repayments, but you won't have to make interest and loan repayments if there is no debt.
LISTNUM 1 \l 12525 MR. PAT LOUGH: Sorry, did you want appendix 7‑a re‑submitted without the interest line?
LISTNUM 1 \l 12526 COMMISSIONER DUNCAN: I don't think it is necessary because you have it here on the record, that is okay. If you could just re‑submit your calculation of the CCD basic, that would be fine.
LISTNUM 1 \l 12527 So you are going to have negative cash flow even if you don't have interest and loan payments for the first couple of years. I gather, then, you would just fund that out of your own resources, because I did see your letter that you had there.
LISTNUM 1 \l 12528 MR. PAT LOUGH: Correct, yes.
LISTNUM 1 \l 12529 COMMISSIONER DUNCAN: So you are not intending on using a bank line of credit or any other line of credit like that?
LISTNUM 1 \l 12530 MR. PAT LOUGH: We are not intending to. We have that available. I guess that will be one of those business decisions you make if it is required, it is available and you will draw on that.
LISTNUM 1 \l 12531 COMMISSIONER DUNCAN: So you have a bank line available or your own personal funds available?
LISTNUM 1 \l 12532 MR. PAT LOUGH: Personal funds available for the capital cost.
LISTNUM 1 \l 12533 COMMISSIONER DUNCAN: I notice it was in excess of the capital cost, so I just wondered if you might use that excess to fund any operating shortfall?
LISTNUM 1 \l 12534 MR. PAT LOUGH: We would not use that for funding shortfall. No, I think we would be using our credit facilities for any shortfall.
LISTNUM 1 \l 12535 COMMISSIONER DUNCAN: But you have not arranged specifically with the bank for a line of credit for this project, or have you?
LISTNUM 1 \l 12536 MR. PAT LOUGH: We have not, no.
LISTNUM 1 \l 12537 COMMISSIONER DUNCAN: I don't want to beat it to death. That is fine.
LISTNUM 1 \l 12538 MR. PAT LOUGH: It is difficult to get the bank to say we will give you this line of credit without having something substantial. I don't have a licence, so it is tough to get them to commit, I guess.
LISTNUM 1 \l 12539 COMMISSIONER DUNCAN: Referring to your December 6th letter, your deficiency response, December the 6th, you were asked to give a breakdown of your refine songwriters competition, so you did. You gave us the breakdown, the $169,000.
LISTNUM 1 \l 12540 I just wanted to make sure that all of those monies are going to independent arm's length third parties. That was the second last page of that deficiency response. It is the table there. Do you see it? $169,000 investment over seven years.
LISTNUM 1 \l 12541 MR. PAT LOUGH: Right. Yes, that is all arm's length CD productions costs, local recording studios.
LISTNUM 1 \l 12542 COMMISSIONER DUNCAN: Paid to third parties?
LISTNUM 1 \l 12543 MR. PAT LOUGH: Yes.
LISTNUM 1 \l 12544 COMMISSIONER DUNCAN: With respect to your comment at the bottom of the fourth page of this letter, you know where you talk about FACTOR, and I guess when I read it first I thought FACTOR is not willing to go along and support the Christian music industry, that is how I read it.
LISTNUM 1 \l 12545 What I specifically wanted to ask you is if you specifically asked FACTOR if they would support that and they said no?
LISTNUM 1 \l 12546 MR. PAT LOUGH: I had a conversation with the girl at FACTOR. Basically I was looking for a letter indicating that FACTOR would invest the monies into the development of Christian music. We are asking for a licence for a Christian music station, and with a high Canadian content, I would like to know that I can draw from a larger pool of Canadian talent.
LISTNUM 1 \l 12547 The response I got back is Christian music is not a genre. Country is a category, folk is a category. Christian is not a category. I guess she invited me to make the request to FACTOR about developing or including Christian artists in the various genres specifically as they make their policy changes I guess in the spring.
LISTNUM 1 \l 12548 So, we have that option to still submit that. At the time of this writing that was not an option to us. It was set in stone, no, we cannot guarantee that it will go towards a Christian artist.
LISTNUM 1 \l 12549 COMMISSIONER DUNCAN: Do you think you will take the initiative and do what she suggested that you do? She wants you to ask if they will consider Christian music as a genre on its own?
LISTNUM 1 \l 12550 MR. PAT LOUGH: They won't consider it as a genre, so we would have to break it down and go Christian country, Christian folk, Christian contemporary, and I don't know if they would want to take on that administrative burden, but we are more than willing to try to champion that.
LISTNUM 1 \l 12551 We talked to Martin Smith at the GMA, Gospel Music Association, and he has talked about how much of a burden it is for a Christian artist to try and qualify for FACTOR funding. I think our initiative would definitely help other Christian artists, would help other radio stations.
LISTNUM 1 \l 12552 The other way I guess I look at it is the Gospel Music Association of Canada is an organization that specifically focuses on Christian artists. That is all they do is focus on Christian artists. To me, I would prefer to pursue the Gospel Music Association as the association for that. I recognize the change recently. The whole FACTOR funding is now a different calculation. I respect that, and if the Commission requires us to follow that route, we are fully prepared to follow that route.
LISTNUM 1 \l 12553 Ideally, we would like to see it go to the GMA.
LISTNUM 1 \l 12554 COMMISSIONER DUNCAN: Will the GMA take any initiative to try to get FACTOR to recognize Christian music or have you had discussions of that?
LISTNUM 1 \l 12555 MR. PAT LOUGH: I think they have. I think artists come to them in a lot of cases after trying to get FACTOR funding and saying, you know, we have tried this and it is just a big burden. I am not an artist, I haven't gone through that avenue, but that is my understanding.
LISTNUM 1 \l 12556 We just see that the GMA Association is a lot more friendly towards Christian artists because that is the industry that they are in. They are not doing mainstream country funding and that type of stuff.
LISTNUM 1 \l 12557 But, again, we are more than willing to follow the funding if the Commission requires that.
LISTNUM 1 \l 12558 COMMISSIONER DUNCAN: That is fine. That is what would be required, thank you.
LISTNUM 1 \l 12559 At page 5 of your brief ‑‑ I am just going to turn to that myself ‑‑ at the bottom of page 5 you indicate the programming of KLYN‑FM which now has changed its call letters, but at any rate, Bellingham, Washington is targeted to the 35‑plus demographic. Given your target demo is 15 to 40 and your core audience 20 to 34, is it realistic to expect that 40 per cent of your second year revenue will come from advertisers currently advertising on the American stations when it would appear those advertisers are trying to reach an older audience?
LISTNUM 1 \l 12560 MR. PAT LOUGH: Those advertisers are trying to reach an older audience.
LISTNUM 1 \l 12561 COMMISSIONER DUNCAN: They are or aren't?
LISTNUM 1 \l 12562 MR. PAT LOUGH: They are, yes. I think a lot of their advertisers, and I don't have a percentage as to how many advertisers they have from Canadian sources versus American sources, I think a lot of those advertisers would definitely prefer a Canadian station to advertise on.
LISTNUM 1 \l 12563 The reality is mom drives a car, dad drives a car, the kids are in the car. If you are trying to advertise to the overall family, you have it right there. Specifically, maybe when mom drops the kids off at school, she will be on Praise 106, but when the kids are in the car, kids want to be engaged as well. Not really wanting to hear the Dobson coming home from school or not wanting to hear praise music coming home from school, they want to hear Starfield.
LISTNUM 1 \l 12564 I think it is a realistic goal that we have to attract advertisers from Praise 106, given the large number of advertisers they secure from Canada.
LISTNUM 1 \l 12565 I don't think we are going to see American advertisers pursuing our format.
LISTNUM 1 \l 12566 COMMISSIONER DUNCAN: Have you done any type of research to convince you that there will be local advertisers to support your format?
LISTNUM 1 \l 12567 MR. PAT LOUGH: We didn't engage Ipsos‑Reid. We did our own research. We had a number of letters from people willing to put that business name on and saying that we are interested in advertising on this type of station.
LISTNUM 1 \l 12568 We also saw from the CRTC letters, the 7,000, we went to Edmonton and viewed them ‑‑ that was a full day job ‑‑ but there were a lot of businesses associated there as well. If you are willing to put your business name on the line, there is a very good opportunity that you want to pursue advertising on our station.
LISTNUM 1 \l 12569 COMMISSIONER DUNCAN: What kind of a strategy do you have in mind to repatriate those listeners, especially considering that KLYN does have a solid audience share of 2 per cent, I understand, in the Vancouver market. How are you proposing to go about getting those listeners to tune into your station?
LISTNUM 1 \l 12570 MR. PAT LOUGH: Just some thoughts that I jotted down earlier today. Offering listeners a quality station with a signal that is not all staticky I think will be one of the biggest benefits in repatriating listeners. Providing a comprehensive source for Canadian news, sports, traffic, weather, that type of stuff.
LISTNUM 1 \l 12571 Praise 106 does touch on the very surface, on the top level, so I think offering more detail.
LISTNUM 1 \l 12572 A strong involvement with the promotion of Canadian artists, whether it is at one of our live on‑air advertising campaigns or just through call‑in programs, that type of stuff.
LISTNUM 1 \l 12573 COMMISSIONER DUNCAN: One of the applicants had proposed that they were going to spend in excess of $1 million in pre‑start up costs. Those in large part were in relation to promotion. Do you have that type of budget?
LISTNUM 1 \l 12574 MR. PAT LOUGH: We are not budgeting for that.
LISTNUM 1 \l 12575 COMMISSIONER DUNCAN: You are not? What you have to do, I gather, is you have to get the listeners tuned to your station so I am wondering how you are going to get the message out.
LISTNUM 1 \l 12576 MR. PAT LOUGH: Word in the Christian community does travel fast. We also have 350 people that initially gave us letters of support. So there is 350 people right off the bat, and just seeing the domino effect.
LISTNUM 1 \l 12577 We will do a small amount of advertising. We are very unique. We are not proposing a triple A format that is going to go head to head with Clear FM or Jack FM. We don't need to advertise to take listeners from that audience. I just think our audience is very unique.
LISTNUM 1 \l 12578 COMMISSIONER DUNCAN: Do you already have your internet site operating? Are you in touch with these people on line at this point?
LISTNUM 1 \l 12579 MR. PAT LOUGH: We do have a website up. We also have a Face Book page that we didn't do. It was one of our supporters said, hey, can I do a Face Book page and me being a bit ignorant on that said yes.
LISTNUM 1 \l 12580 COMMISSIONER DUNCAN: I notice that you are forecasting your audience share flat, 4.5 per cent from years 1 through 7. That is in section 6.1 of your application.
LISTNUM 1 \l 12581 I just wondered if you had given that any more thought or if you were still feeling that you would achieve 4.5 per cent share in year 1 and not see any change in that. That is in your application at 6.1.
LISTNUM 1 \l 12582 MR. PAT LOUGH: That was in the application, yes. Did I revise that? No. I guess just in terms of our deficiency process, we responded to the November 20th letter. Question 70 just asked us to refine a little more question 14. Our 25‑54 overall audience, we had a 2.2 share is what we projected versus the statement we made in the application, which is larger.
LISTNUM 1 \l 12583 COMMISSIONER DUNCAN: In the application you are referring to ages 12 plus, and over here it is 25 to 54?
LISTNUM 1 \l 12584 MR. PAT LOUGH: Yes, because specifically the question was total weekly hours of listening for persons 25 to 54. So that is a smaller share because we are not looking at extending well beyond the age 35. I think our target of 4.5 per cent for what we are targeting I think is realistic in terms of there not being youth Christian programming.
LISTNUM 1 \l 12585 I guess your question was related to the growth.
LISTNUM 1 \l 12586 COMMISSIONER DUNCAN: It is two parts. We can address the growth part now if you like. You have some growth built in here in your reply November 20th.
LISTNUM 1 \l 12587 MR. PAT LOUGH: We did a little bit of growth on that.
LISTNUM 1 \l 12588 COMMISSIONER DUNCAN: Your core audience, though, is 20 to 34, and your target audience is 15 to 40. So, even this answer here to the question is referring to 25 to 54 and not really fitting your window, is it?
LISTNUM 1 \l 12589 MR. PAT LOUGH: Correct.
LISTNUM 1 \l 12590 COMMISSIONER DUNCAN: Let me ask the question this way. What would you project your per cent share to be for your target audience?
LISTNUM 1 \l 12591 MR. PAT LOUGH: Per cent share of our target audience 18 to 35.
LISTNUM 1 \l 12592 COMMISSIONER DUNCAN: I thought your target is 15 to 40 and your core is 20 to 34, so I want to know what share of the market you are expecting to get.
LISTNUM 1 \l 12593 MR. PAT LOUGH: I don't know.
LISTNUM 1 \l 12594 COMMISSIONER DUNCAN: We will leave it at what you have answered here in the 25 to 54 then.
LISTNUM 1 \l 12595 MR. PAT LOUGH: Yes, we will stick with that share.
LISTNUM 1 \l 12596 COMMISSIONER DUNCAN: The information I have is that according to BBM, the Christian music station in Ottawa has an audience share of 0.8 per cent, in Belleville 2.6 per cent and in Kitchener 2.1 per cent. I just wondered if you were aware of those statistics or considered them when you were preparing your projections in your application?
LISTNUM 1 \l 12597 MR. PAT LOUGH: I am actually not privy to BBM information other than what I can find on the internet. So, that makes that a challenge. Generally Christian stations don't pay for the BBM service, so they don't tout, I guess, the ratings. They get lumped into the other category.
LISTNUM 1 \l 12598 COMMISSIONER DUNCAN: So, if your actual results are less than you projected, do you have access to additional committed sources of funding to offset any unexpected losses?
LISTNUM 1 \l 12599 MR. PAT LOUGH: Just the credit facilities that we can get I guess personally or through our established In House Communications.
LISTNUM 1 \l 12600 COMMISSIONER DUNCAN: I notice in your letter you didn't specify, you said you have an application in. You mentioned Kelowna, but you say that you are waiting for Commission approval. Do you mind saying where that station is? You say you have recently purchased one.
LISTNUM 1 \l 12601 MR. PAT LOUGH: If we could, we would like to keep that confidential just because of the employees. The staff don't know at this point. I can offer you the application number.
LISTNUM 1 \l 12602 COMMISSIONER DUNCAN: That is okay. I am sure staff has it. That is okay. I can find it. I just wasn't aware of it. It wasn't in the information I had.
LISTNUM 1 \l 12603 So you do feel that you have additional funds available to you and that there wouldn't be a necessity to cut programming expenses?
LISTNUM 1 \l 12604 MR. PAT LOUGH: No, I think any changes that we would do, we would bear those costs. We would not be cutting programming, would not be cutting staff. I think you have to have a reasonable amount of staff to have a product, right. We are not committing to a whole bunch of syndication. We want to do things locally.
LISTNUM 1 \l 12605 I think our audience will respect that.
LISTNUM 1 \l 12606 COMMISSIONER DUNCAN: I notice that you are living in Calgary and you have applied for Kelowna and now you are applying here for Vancouver. What would be your plans if ‑‑
LISTNUM 1 \l 12607 MR. PAT LOUGH: In the Kelowna hearing we committed to moving to Kelowna. That is where we intend to go. We believe Kelowna and Vancouver are relatively close together. It is very quick and easy to jump in the car, to jump on a plane and make it to Vancouver if we need to. We want to hire quality talent here, a good station manager.
LISTNUM 1 \l 12608 COMMISSIONER DUNCAN: Have you given any thought to how many licences you think should or could be granted for the Vancouver market?
LISTNUM 1 \l 12609 MR. PAT LOUGH: You have asked everyone that question. I don't think I have got the expertise of the Commission to determine how many you should issue.
LISTNUM 1 \l 12610 I applaud the Jim Pattison Group for finding a frequency that only they can use. To me that is a logical choice.
LISTNUM 1 \l 12611 One of the frequencies CBC is proposing is kind of exclusive to Saturna Island, being co‑located I guess with CHEK‑TV or near co‑location, minimizing the interference. I applaud that application.
LISTNUM 1 \l 12612 The two other frequencies, 104.1, which I hope we get, and 98.7 was one that we identified early on would have a lot smaller coverage area. To say specifically how many you should offer, I recognize there are four potential frequencies. 89.5 I guess was another.
LISTNUM 1 \l 12613 COMMISSIONER DUNCAN: I did ask you the difference and you explained the differences that you saw between you and Touch. Did you have anything you wanted to add to that statement why we should pick you over Touch?
LISTNUM 1 \l 12614 MR. PAT LOUGH: I think I probably offered a fair bit of detail there.
LISTNUM 1 \l 12615 COMMISSIONER DUNCAN: That is fine, you don't have to add anything more if you are satisfied.
LISTNUM 1 \l 12616 MR. PAT LOUGH: I guess the one other component is diversity amongst Christian broadcasters, we recognize that Touch has a station in Calgary, two stations in Edmonton, one in Grande Prairie, and I guess as a local Christian artist, if they are not in favour with Touch Canada, then when they own most of the market, how do they get championed, right? We believe that diversity is a very key component. In the west there is Golden West Broadcasting who has the Lethbridge station now and Touch Canada who has pretty much the rest of Alberta. We think diversity is important.
LISTNUM 1 \l 12617 COMMISSIONER DUNCAN: Thank you very much. Those are my questions, Madam Chair.
LISTNUM 1 \l 12618 THE CHAIRPERSON: I believe legal has a question.
LISTNUM 1 \l 12619 MS PINSKY: Thank you, Madam Chair.
LISTNUM 1 \l 12620 Just for the record, I would like to clarify, today you were speaking about your target audience as being 18 to 35.
LISTNUM 1 \l 12621 MR. PAT LOUGH: Right.
LISTNUM 1 \l 12622 MS PINSKY: In the application you referred to the target audience as being 15 to 40 and the core being 20 to 34. If you could just for the record clarify the broader target as well as the core.
LISTNUM 1 \l 12623 MR. PAT LOUGH: Our target audience will be the 15 to 40, with the core audience being 20 to 34.
LISTNUM 1 \l 12624 MS PINSKY: As in your application?
LISTNUM 1 \l 12625 MR. PAT LOUGH: Yes.
LISTNUM 1 \l 12626 MS PINSKY: Thank you.
LISTNUM 1 \l 12627 THE CHAIRPERSON: Mr. Lough, here is your opportunity for a last minute pitch on why you think you should be licensed.
LISTNUM 1 \l 12628 MR. PAT LOUGH: Our application has demonstrated very strong support for Canadian Christian artists both financially and through station‑oriented music programs that have been strategically placed in prime listening periods. The licensing of refine fm not only represents diversity of news and music, but it also represents a balance in western Canada's Christian radio industry. Diversity is needed in Vancouver's radio market. Diversity is also needed in this specialty category. Touch Canada and ourselves have submitted applications for the same type of station. We believe that our application better addresses the needs of the community as we are not looking to meet the minimum contributions in key aspects of the station but rather significantly exceeding them.
LISTNUM 1 \l 12629 Our application is designed to encourage the local Christian music scene, through a higher Canadian content commitment, more local programming and live‑to‑air commitment and with CCD initiatives that are local to the Lower Mainland. If you are hesitant to give a licence to a new entrant, let us assure you, that although we have not been granted a new radio licence as of yet, we are not new to broadcasting. I have been researching radio and the CRTC for over ten years.
LISTNUM 1 \l 12630 We have been doing our own independent research in our community, asking people in our target demographic why they do and why they do not listen to the local Christian station, getting feedback on how we can improve our very own Christian station.
LISTNUM 1 \l 12631 Furthermore, we have recently purchased a functioning low‑power Christian station, which will give us additional expertise as we plan and design stations in Vancouver and Kelowna. With our newly acquired station, there are a number of areas that are obvious to us to improve upon, some of which can be accommodated through the synergy with a larger station.
LISTNUM 1 \l 12632 Dulaine and I have experience in successful business ownership and valuable experience in managing staff. Most importantly, we are passionate about radio and faithful listeners in many genres of Christian music.
LISTNUM 1 \l 12633 We are not looking for our fifth, we not looking for our tenth, we are not even looking for our fiftieth licence. We are looking for our first. Every successful broadcaster in this room once came before you and asked for their first licence. We believe it is our turn.
LISTNUM 1 \l 12634 Close to 50 per cent of the population in the Vancouver area identified themselves with some type of Christian faith. It is time for these Lower Mainland residents to have their own Canadian Christian radio station.
LISTNUM 1 \l 12635 Furthermore, Canadian Christian artists deserve airplay and will benefit greatly when refine fm is licensed.
LISTNUM 1 \l 12636 Once again, we would like to thank you for your time.
LISTNUM 1 \l 12637 THE CHAIRPERSON: Thank you. Thank you for coming and thank you for your presentation.
LISTNUM 1 \l 12638 We will take just a short five‑minute break for the panels to switch over.
‑‑‑ Upon recessing at 1510 / Suspension à 1510
‑‑‑ Upon resuming at 1518 / Reprise à 1518
LISTNUM 1 \l 12639 THE SECRETARY: We will now proceed with item 10, which is an application by Evanov Communications, on behalf of a corporation to be incorporated, for a licence to operate an English‑language FM commercial radio programming undertaking in Vancouver.
LISTNUM 1 \l 12640 Please introduce yourself and your colleagues, and you will then have 20 minutes to make your presentation. Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 12641 MR. WILLIAM EVANOV: Thank you.
LISTNUM 1 \l 12642 Good morning, Madam Chair, Commissioners, Commission staff. My name is Bill Evanov, and I am the President of Evanov Communications.
LISTNUM 1 \l 12643 I just want to say that we are very excited to be here in Vancouver to present to you our concept for youth contemporary radio. With this proposal, we, as with all our operations, our mandate and philosophy are to build local radio stations that are able to compete in any size markets. Each has local staff, local management, local programming that make each station an integral part of that community. If awarded the licence, we are Vancouver.
LISTNUM 1 \l 12644 Over the years we have recruited and developed a large and dynamic staff. We are an innovative, creative, street smart, independent broadcaster. We list among our achievements a successful launch of two youth services each in highly competitive markets. Some of the team members who built those stations are with me today.
LISTNUM 1 \l 12645 Starting on my right Mr. Sean Moreman, our in‑house legal counsel. Next to him, Carmela Laurignano, our Vice‑President and Radio Group Manager. Beside her is Paul Evanov, Vice‑President of Programming for the radio group. Dan Barton, Program Director for CKHZ‑FM Halifax. Beside him is Scott Fox, the Morning Show host on CIDC‑FM in the Toronto CMA. Then Chris Edelman, our Regional Sales Manager, and to his right Ky Joseph, our Vice‑President of Sales.
LISTNUM 1 \l 12646 I will now ask Paul to begin the presentation.
LISTNUM 1 \l 12647 MR. PAUL EVANOV: When the call for Vancouver was announced, we looked at the market to see what was missing. What we found was that Vancouver is a well‑served market across most demos, but the one demo not being served is youth. We were alarmed at what we found. Youth tuning has declined by 25 per cent in the 12 to 17 demo and by 15 per cent in the 18 to 34 age group over the last three years. This situation presented a business opportunity for us, and an opportunity for us to serve the public interest by bringing youth back to radio.
LISTNUM 1 \l 12648 Although there was a recovery period when CFBT‑FM, The Beat launched in 2002, the situation did not last. At the time of the launch, the market saw a recovery in tuning in the demo, with an immediate 14 per cent increase in the per capita tuning.
LISTNUM 1 \l 12649 The Beat itself indexed well against 18 to 24s in hours tuned in the beginning, but by fall 2007, this index had dropped by a third. Conversely, the index of hours tuned against the older demographics has grown. Over half of The Beat's audience is now over the age of 25.
LISTNUM 1 \l 12650 Our conclusion from this is that, as The Beat is becoming more efficient in older demos, younger listeners have been displaced. In other words, it is radio that abandoned youth and not the other way around. When The Beat was launched, the internet and, in fact, Napster was fully operational and in the midst of a widespread adoption by teens. Despite the highly competitive environment, a youth targeted station did draw audiences back to radio from these alternate listening sources. We are proposing to do that again. By its very nature, YCR will never age. It will always be in the service of its 12 to 24 age core demographic and, as such, will be the medium that will always be available to those sampling radio the first time.
LISTNUM 1 \l 12651 Our belief in the attractiveness to youth of appropriately programmed radio is more than mere speculation as we have practical first‑hand experience in achieving this goal. The response in tuning shares in Halifax and the success of our YCR business model in that market confirm our assumptions for Vancouver. In order to retain listeners, you have to speak for and to them. I will ask Dan to explain how we are doing this.
LISTNUM 1 \l 12652 MR. BARTON: Our format is called youth contemporary radio or YCC. It is a format we have developed and implemented in Halifax and trademarked.
LISTNUM 1 \l 12653 Youth contemporary radio is the younger sibling of AC; music and talk designed to engage young persons in the community. Aside from the obvious difference in demographic, YCR is fundamentally different from AC in the absence of charts. There are no YCR charts already created from which to draw music. Consequently, we are programming primarily from the street, based on what the target audience wants.
LISTNUM 1 \l 12654 YCR is not a hit‑driven or high‑rotation format. There are hits played and there are repeats, but what and how often are a function of what is currently most popular with our target audience. We are mindful in creating our playlists that our audience places a premium on what is new and different. In this way, YCR is not a music genre format. It is a demographic‑driven format.
LISTNUM 1 \l 12655 Currently we draw music from several sources, including: Record companies, who serve all radio stations; record stores, who have their pulse on consumer demand and sales; existing charts, including Canadian and international sources; listener feedback, through telephone and internet surveys; programming and on‑air interactive features engaging listeners in the music selection; DJ pools which are invaluable in helping us form our dance and urban components; music conferences and forums around the world; monitoring the internet where we look at music discussions and items of interest; and, finally, our track record with Canadian new and emerging artists.
LISTNUM 1 \l 12656 We have a reputation in the music community as a broadcaster who has an open relationship with local artists and independent labels. As a strong supporter of new and emerging talent, ECI has become known as an outlet for artists who want their music to be heard. This relationship is evidenced in our many letters of support from new and emerging producers and artists, including Adam H and Elise Estrada, both of whom will be appearing before the Commission in support of our application. With Halifax YCR, for example, this policy has resulted in a major boost for such artists as Classified, Jordan Croucher, Chad Hatcher and Jamie Sparks.
LISTNUM 1 \l 12657 Our commitment to new and emerging talent is also reflected in this application. We will commit a full 30 per cent of our Canadian content, or 12 per cent of our overall playlist, to new and emerging artists.
LISTNUM 1 \l 12658 The research was important in terms of how we refined our format. Young audiences want diversity in their music. Over 85 per cent of the target audience wants to hear a large variety of music. They want to be part of what is new. As consumers, they are experimental and like to be on the edge of the trends. This applies to their choices in music, and they do not generally stick with a single style of music either. The 15 to 24 age group showed an interest in urban, hip hop, rock, and R&B, alternative rock, top 40 and pop.
LISTNUM 1 \l 12659 Music is critically important to their lives and almost 90 per cent across our demographic stated that they want more music and relevant talk.
LISTNUM 1 \l 12660 When we put our proposed blend of these different music types to respondents in our survey, we found that those who said they would definitely or probably listen, 91 per cent of 15 to 17 year olds and 85 per cent of 18 to 24 year olds have expressed a high level of interest in listening to our YCR service.
LISTNUM 1 \l 12661 Our programming goal is not to be all things to all people but, rather, to satisfy the wide range of interests that exist in the youth market. Part of this interest is, of course, in having access to current news and information. I will turn to Scott Fox to discuss our approach to spoken word.
LISTNUM 1 \l 12662 MR. FOX: Our many years in serving the youth market have taught us how to deal with the challenge of presenting news and information to this active and demanding listeners. Simply put, you have to present these in a way that suits their ears and their sensitivities. For the most part, news is news and the stories must be told. There is, however, a lot in the telling.
LISTNUM 1 \l 12663 So, in addition to presenting stories of interest to a young audience that our other services understandably would give low if any priority to, we will present news items in both a headline and non‑headline manner.
LISTNUM 1 \l 12664 The key to success in radio is local, local, local, and our research confirmed this. The most in‑demand information programming is stories originating in Vancouver ‑‑ weather, school, what is happening in the city. Nine out of ten respondents to the survey identified Vancouver stories as most important to them. Eight out of ten persons aged 15 to 17 thought local stories were most important, and nine out of ten aged 18 to 24 thought so. The second most important element was news and information from across Canada with an only slightly lower ranking in terms of importance.
LISTNUM 1 \l 12665 Vancouver youth want news and information they can use. This means, in addition to headlines, they want club and entertainment listings, coverage of events that cater to young adults and to either mature adults or children. They want sports updates that include coverage of collegiate and school play.
LISTNUM 1 \l 12666 News and information will be delivered in regularly scheduled news segments, but also incorporated into segments showcasing the music. So, when our on‑air staff is talking, we will be delivering information and, in particular, providing insight into what is happening in the community and how it might affect them. From something as simple as which concerts are taking place, to more complex issues like how decisions in municipal governance might affect their parents, their schools and ultimately themselves.
LISTNUM 1 \l 12667 News gathering will be accomplished by a variety of methods. We will have access to syndicated providers of news such as BN and we will collect our own through a full complement of news reporters. However, one of the ways to expand our coverage and, in fact, engage our audience is to make them part of the news gathering process. We will invite, encourage and fairly quickly develop audience participation. Through direct communication they will provide direction on stories that are of importance to them. This is particularly relevant for coverage of local school, concert, event and venue scenes. Through our website, a text messaging option and a news tip hotline, we will create a dialogue with our listeners.
LISTNUM 1 \l 12668 All journalistic standards will be observed, including verification, confirmation and balanced presentation. However, besides just expanding our coverage of the market beyond what a news staff can provide, our approach to news gathering will engage and challenge our listeners to be more involved and more aware of their surroundings, of the impact events have on the community and of the role they can play in shaping the world.
LISTNUM 1 \l 12669 Commissioners, we should be concerned if the younger members of our community are not presented with the information and stories about the community in which they live in a way that is easily accessible and relevant to them. Especially during these crucially important years where youth will develop life habits, it is important that we strife to include and not alienate youth.
LISTNUM 1 \l 12670 Chris.
LISTNUM 1 \l 12671 MR. EDELMAN: For the purposes of understanding the potential for our youth service in Vancouver, we need to review some important facts. First, Vancouver is a younger city. The median age is less than that of Canada and B.C. Secondly, there is a large concentration of the population in our primary and secondary demographics. Just over 36 per cent of the population is in the 12 to 34 age group.
LISTNUM 1 \l 12672 In addition to this resident population, there are several colleges and universities located in Vancouver which means that for most of the year, the percentage of the population in the 12 to 24 age group is even larger.
LISTNUM 1 \l 12673 When we first started to serve the youth demographic, we had two challenges. We needed to prove that the demographic was worthwhile advertising to, and once we had consensus on this point, we had to prove we were the medium and the station of choice to do so. Less and less we find that we have to spend time showing businesses the spending power of this demographic, particularly in retail where they know firsthand who is standing at their cash registers and checkouts. They also know the volume of expenditures and how this demographic weighs in on family purchase decisions.
LISTNUM 1 \l 12674 With stations in other major markets who target youth like Edmonton, Calgary, Toronto, Ottawa and Halifax, national advertisers are catching on to what businesses who create products for this group have known for a long time ‑‑ this is an important and highly influential consumer group. We are confident that as we have in Toronto and Halifax, we can meet and exceed our sales objectives.
LISTNUM 1 \l 12675 MR. MOREMAN: Our approach to CCD reflects our commitment to the development of Canadian talent on both an educational and promotional level. We are local, local, local, but with a global impact. We are particularly proud of our CCD package and the contribution it will make to the success of artists at home and abroad.
LISTNUM 1 \l 12676 On the educational initiatives, we have arranged with the university of British Columbia to establish scholarships for students studying both music and journalism. As well, we have made an arrangement with the Aboriginal Media Educational Fund to provide monies to further its objectives.
LISTNUM 1 \l 12677 Our promotional initiatives include our Summer Rush Concert series that generates both additional investment in artist promotion and development and creates an unparalleled opportunity for new and emerging artists to be heard. Take for example the Halifax concert last year. One of the hottest artists in music today, Rihanna, took centre stage, selling out the venue in minutes of being announced. But in addition to hearing one of North America's currently most popular artists, concert goers also heard Jamie Sparks, Belly, and Elise Estrada, who comes from Vancouver. Each of these performers is strong in his or her own right, but has yet to really hit their stride and start selling out venues on their own.
LISTNUM 1 \l 12678 As a side benefit to performing alongside Rihanna, these Canadian artists were swept up in the promotional aspects of the event and their names had equal billing and exposure throughout the two‑month long campaign. We propose to bring that same buzz and the same level of excitement to Vancouver. The Halifax concert has an artist list unique from Toronto's, and this will also be the case in Vancouver. Our goal in Summer Rush is to reflect the musical interests of the community.
LISTNUM 1 \l 12679 Our second initiative is the funding of New Music West. We are pleased to be one of only three applicants to support this annual local initiative. Through New Music West, as you will hear from Jory Groberman later in this process, many of the west coast artists' success stories found their way to profitable careers through this event and it deserves all the support we can give it. It is local, it is west coast, and once a year, each year, the music industry from across North America and around the world descends on Vancouver to sample and search out west coast talent. We are proud to support this initiative and pleased that the connections we have with the independent and small labels led us to knowing the impact of this event.
LISTNUM 1 \l 12680 Our single largest contribution has been designed to promote local artists to the world. In 2010, the world and the world media will arrive in Vancouver to celebrate the Winter Olympic Games and Paralympic Games. Because of the timing of the games, ECI will contribute over $1 million to Canadian content development in our first year of operation. ECI, in cooperation with the Olympic Organizing Committee, will fund 20 Canadian artists to perform during the Olympic and Paralympic Games. The presence of the world's largest supporting event will provide worldwide exposure for local artists, both through international visitors attending the events live, and through the international media who will carry the events across the globe.
LISTNUM 1 \l 12681 The second aspect of our CCD project with the Cultural Olympiad is to produce a CD including 15 of these artists to be distributed to the Olympic family, including all competing athletes, international Olympic committees, volunteers and members of the public free of charge.
LISTNUM 1 \l 12682 Although the Olympic and Paralympic Games are primarily a sporting event, both of these initiatives will expose Canadian talent to the world in a lasting manner.
LISTNUM 1 \l 12683 MS JOSEPH: Madam Chair, Commissioners, and Commission staff, we are here before you again, asking for you to recognize the impact that not serving the youth market of today will have on audiences of tomorrow. This is not the first time we have advanced this position. We projected a ripple effect in declines of tuning that would reach beyond the youth demo into older groups eventually unless remedial steps are taken.
LISTNUM 1 \l 12684 Reach in radio is down nationally by 3.4 per cent between 1998 and last fall. Not only are fewer people tuning in, but time spent with radio is down from an average of 21.7 hours per week to 20.2 during the same period.
LISTNUM 1 \l 12685 If you break down the 12‑plus number, you can see that these declines spread upwards from youth ten years ago to the 25 to 34 demo. We would be disingenuous if we left you with the impression that these declines were solely based on not programming to youth ten years ago. Many factors have contributed to the loss. Consumer‑based issues, such as the lack of variety in formats, the homogenization of formats because of consolidation, a loss of local identity. But hand in hand with this has been that young people ten years ago and young people today find little, if anything, in the radio spectrum that speaks to them.
LISTNUM 1 \l 12686 Radio is no longer a key part of their day and, despite providing music that nine out of ten young people have described as extremely important to them, radio has failed to retain this lucrative market. As they move into other age groups and other consumer profiles, they take the media habits they have developed and increasingly radio plays a smaller and smaller role.
LISTNUM 1 \l 12687 MS LAURIGNANO: One might ask why is it so important we keep them listening? And to us the answer is simple. Radio reflects the community and helps people establish roots and identity. It can help one develop an identity as a person, a member of a community, or a citizen of this country. It can guide us in our expectations of the world around us and of ourselves. It is not the only medium doing this, but it has an opportunity to do so in a way not matched by any other. It does it with music and spoken word, and because of its portability, it does it where and when a consumer demands. All media, but in particular radio as it pertains to youth, can and should be treated as an exceptional opportunity to forge the future. If we stop speaking to youth, we squander this irreplaceable opportunity.
LISTNUM 1 \l 12688 Radio is more than entertainment and it is more than a profit margin. Those of us passionate about this medium understand the impact it has and the obligation we have to it to realize its potential.
LISTNUM 1 \l 12689 And so, we are before you again, presenting our case for service to a youth audience. It is not the easiest of endeavours nor, as we have said in the past, is it for the feint of heart. It is, however, a good and necessary idea and one we are particularly qualified to realize.
LISTNUM 1 \l 12690 We have the experience. We have the track record. We are new to the market and so we bring diversity to the voices heard. We have a moderate, achievable revenue stream, and we have the commitment demonstrated across all of our radio holdings to stick with our proposal. We offer the creativity of independent broadcasters, but we have the resources to compete in the multiple ownership playing field that is Vancouver. We can compete with the big boys and with what we now call YVR, youth Vancouver radio, we can bring a lost audience back to radio.
LISTNUM 1 \l 12691 MR. WILLIAM EVANOV: In summary, in our estimation there would be no better us of the last viable frequency in Vancouver than to address an under‑served demographic. It is a demographic that has been abandoned because of the opportunities that consolidation of ownership has created and the pressures on public companies to turn large profits. We believe that the time is now and opportunity is in Vancouver to make a real contribution. We ask that you allow us the opportunity to serve this market, this consumer by granting us a licence.
LISTNUM 1 \l 12692 I have before you a very qualified team to handle the hearing, and I am going to ask Carmela to field any questions, if you can direct them to her, and the team will respond.
LISTNUM 1 \l 12693 Thank you.
LISTNUM 1 \l 12694 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 12695 Commissioner Menzies will lead the questions.
LISTNUM 1 \l 12696 COMMISSIONER MENZIES: I have a bunch of ‑‑ well, not a big bunch, but some technical questions that I want to go through and then we will talk about some other stuff.
LISTNUM 1 \l 12697 As you are aware, the Commission is working on what we hope will be a more helpful definition of what constitutes an emerging artist. Given the content of your I think it is your $1.05 million contribution to Winter Pics and Cultural Olympiad, do you have the flexibility to adapt this to the Commission's new definition of emerging artist, if that should be required?
LISTNUM 1 \l 12698 MS LAURIGNANO: Yes, we have thought about it and we do have that flexibility, and we have left that opportunity possibility open so that we can accommodate whatever definition comes along.
LISTNUM 1 \l 12699 Just for your information, we have adapted the CAB and CRIAA definition in describing our content of new and emerging artists for on‑air.
LISTNUM 1 \l 12700 COMMISSIONER MENZIES: In your application you made it clear you would devote 100 hours to local programming, but I would like you to clarify, if you could, how you would use the remaining 26 hours. In your response you indicated those 26 hours would be used for syndicated or other specialty programming. Can you be more precise on that particularly in terms of local content?
LISTNUM 1 \l 12701 MS LAURIGNANO: Yes. I may have not understood the first question fully or may not have answered it.
LISTNUM 1 \l 12702 Were you asking about the number of new and emerging artists that would be included in the CD? Was that the question?
LISTNUM 1 \l 12703 COMMISSIONER MENZIES: No, that wasn't the question. I just wanted to know if you had the ability to adapt and still meet that commitment in terms of spending.
LISTNUM 1 \l 12704 MS LAURIGNANO: Yes, we do.
LISTNUM 1 \l 12705 With regards to the 100 hours versus 126, as we indicated in the deficiencies, we have no plans to use any hour for anything but live programming. So, our plans are to have the whole full 126 hours live programming. However, as a measure to allow us the flexibility over the seven years, it is just a condition that we would like to have available should an opportunity come along. Where there is opportunity for programming that does not necessarily originate from the Vancouver station or that is produced exclusively for the station, we would like to have the flexibility to be able to incorporate some of that programming.
LISTNUM 1 \l 12706 But at the outset and in any immediate plans, there is no plan to do any less than 126.
LISTNUM 1 \l 12707 COMMISSIONER MENZIES: So you hope to do 126, but you only want to commit to doing 100?
LISTNUM 1 \l 12708 MS LAURIGNANO: Yes. There is a lot of technology and a lot of things happening, especially in this format, that may become available that, as we said, are not necessarily produced by the station or for the station which qualifies it as local programming. We wanted to have that flexibility of 26 hours over the whole broadcast week should programmers deem that there is some good elements that could be introduced.
LISTNUM 1 \l 12709 COMMISSIONER MENZIES: If you exercised that, those 26 hours would be non‑local then?
LISTNUM 1 \l 12710 MS LAURIGNANO: That is right, under that current qualification.
LISTNUM 1 \l 12711 MR. BARTON: If I could just add, one of the beauties of the YCR format is that it is an interactive format with its audience. Because it doesn't have an actual chart, the programming is based on the feedback we get from our listeners. It is not a music genre‑specific format. It is a demographic‑driven format.
LISTNUM 1 \l 12712 So, based on the feedback we get from our listeners through the internet, through phone calls, through the e‑mail requests that we get, we may find that there is some type of programming they feel is complementary with our format, so we are allowing ourselves that flexibility to reflect what the demographic wants.
LISTNUM 1 \l 12713 MS LAURIGNANO: Again, there is nothing in the plan and nothing immediate, but there might be an opportunity to string some programming on a national basis. We do have a station in Halifax in this format; we have one in the Toronto CMA that serves a young audience. There might be other things, and it may be time, for example, for a few hours a week to have a cross‑country interactive program where youth from Halifax can speak to Vancouver, et cetera, and it may not be produced necessarily from the Vancouver studio. It could be done from the Halifax studio.
LISTNUM 1 \l 12714 Again, it is just a measure that will allow us flexibility.
LISTNUM 1 \l 12715 COMMISSIONER MENZIES: Sure. We just need to be clear on what that is.
LISTNUM 1 \l 12716 There have been a lot of attempts in all media, and as you have described at a couple of your own stations, to reach the audience that you are after. You indicated that about a quarter of your spoken word will be dedicated to pure news, I think was the term.
LISTNUM 1 \l 12717 Can you help us more fully understand how you will shape the content of your news to serve the audience that you are looking for?
LISTNUM 1 \l 12718 MS LAURIGNANO: Absolutely. I will ask Scott just to do that.
LISTNUM 1 \l 12719 MR. FOX: The goal in the newscasts that we are presenting is to make the news and information relevant to this younger demo. We know that we need to speak to them the way they want to be spoken to, and we have to make the information as relevant as possible. We know specifically that they are interested in local. That was one of the things that we found in our research, and we have made that reflective in the way we intend for our newscasts to flow. They will be made up 60 per cent local headlines, 20 per cent regional headlines, and 20 per cent national headlines.
LISTNUM 1 \l 12720 Traditional news is 24.1 per cent of our spoken word content. It is 3 hours, 23 minutes and 30 seconds of the broadcast week.
LISTNUM 1 \l 12721 In delivering the news to the youth, it needs to be read a different way than it is being read right now and it needs to have a different focus. It is more of a headline‑driven format. It is faster stories presented in more of a young and hip way that is more appealing to the youth audience. Our goal is that when they tune in, they feel as though they are part of it. We even have opportunities for them to submit news tips and be interactive with our on‑air DJs and with our newsroom.
LISTNUM 1 \l 12722 So, it is very inclusive of the audience; it is very inclusive of the demo; and it is being presented to them in the way that they want to be spoken to.
LISTNUM 1 \l 12723 COMMISSIONER MENZIES: Can you give me a bit of a for instance? I don't know, ferry hits dock in Tsawwassen. How would you make that different?
LISTNUM 1 \l 12724 MR. FOX: I am sorry, could you repeat that?
LISTNUM 1 \l 12725 COMMISSIONER MENZIES: Say, the ferry hits the dock at Tsawwassen. How would you present that news differently to your audience versus what everybody else would do?
LISTNUM 1 \l 12726 MR. FOX: Like we said in our opening presentation, there is a lot in the telling and it is all about the angle you take. Our goal is to make that effective to create the angle that is appealing to the youth audience, and specifically how does that appeal to them. We will look for the local angle. Is that going to affect their transit to work or to school? Is that going to have an economic impact on them whether it be from the stores that they shop at or the items that they expect to be available. There is so many different ways that we can look for a local angle that is appealing to the youth audience.
LISTNUM 1 \l 12727 If I could just give you a couple of examples here. There is a lot of news that is specific to the youth audience that doesn't get top of mind priority coverage in the news today. There is a story in yesterday's 24 Hours Vancouver edition that is discussing the club district and such. They are having a problem with unruly behaviour after hours and such, big discussion about whether or not the fines should be increased, for example.
LISTNUM 1 \l 12728 Whereas most stations would present the fines angle, we know that this young demo is active in that entertainment scene and the direct impact it has on them. In fact, something like that would even become a major story in our spoken word programming throughout a day, since it does have a direct impact on them.
LISTNUM 1 \l 12729 We know that video game culture is huge. Guitar Hero and Rock Band were the single biggest must have Christmas gift items this year and, by and large, there is not a lot of focus put on video game type information, electronic release type information in the media. Yet, there is a big initiative right now, it is a charity initiative, this was covered this morning in the paper, to get kids playing video games to raise money for charity.
LISTNUM 1 \l 12730 Those are stories that would take priority in a newscast, for example, that is of local relevance to the youth audience.
LISTNUM 1 \l 12731 COMMISSIONER MENZIES: What I got from that is that your news production in that sense has to do more with the stories you choose to do and not do rather than the way you might do a traditional story or is it a blend of both?
LISTNUM 1 \l 12732 MR. FOX: Like we said, news is news. It is just in the telling and it is about the angle you take. It is very easy to take an adult‑themed approach to those stories, but what our news people do and what our on‑air DJs try to do when they weave these things into their spoken word programming is look for the youth angle, how it affects the youth. That also in turn makes the news more relevant and more usable to the younger demo.
LISTNUM 1 \l 12733 COMMISSIONER MENZIES: What do you think would be your major challenge in shaping that or do you have experience in that area?
LISTNUM 1 \l 12734 MR. BARTON: In shaping the news?
LISTNUM 1 \l 12735 COMMISSIONER MENZIES: Actually, in shaping news for that particular demographic. I mean, if this demographic were easy to get, people would have got it, right? Or maybe they just don't want it.
LISTNUM 1 \l 12736 MR. FOX: That is probably the more likely.
LISTNUM 1 \l 12737 COMMISSIONER MENZIES: Then there is a different question there. But there have been efforts over the years in all media to try to grab this audience, and it has not been really successful.
LISTNUM 1 \l 12738 I am not saying it can't be done. What I am trying to get at is you must have been able to target what your key challenges would be and have a strategy to overcome them.
LISTNUM 1 \l 12739 MR. BARTON: I can agree with you that a lot of broadcasters don't take on this demographic, and I think it is for a couple of reasons, one, that perhaps many don't understand it and partly because some are just afraid to go outside the norm.
LISTNUM 1 \l 12740 A lot of attempts that have been made to get the younger demographic have been narrow cast formats, taking one specific genre and saying young people like rock or young people like dance music and we are going to get the younger audience with this format. Unfortunately, it rarely succeeds because what they fail to see is the spectrum of music that this demographic enjoys and the spectrum of interest that we have in our spoken word, it is the same idea.
LISTNUM 1 \l 12741 I can give you a Halifax example because we have a YCR format in Halifax that does target 12 to 24 and has been very successful in bringing them back to radio and continuing to attract that demographic again with the variety of genres that we play, but in terms of news over the past year and a half in Halifax, public swarmings have been a huge issue, and these are young people who do just what it sounds like, who will swarm someone who is travelling through the park at night. The angle that other radio stations are taking on this is for God's sake, don't go into the park at night or you will get swarmed. The youth angle that we are taking is how do we cure this, how do we stop this, how do we get together as a community and really claim back the position face of youth because they are being painted with this brush that they are swarmers.
LISTNUM 1 \l 12742 We don't want the City of Halifax to be terrified to see teenagers at night that they may get swarmed. So, we are taking a different angle on it and really reflecting what the youth community feels as opposed to what the newspaper will print about it.
LISTNUM 1 \l 12743 MR. FOX: If I could just add to that. That was a big story in Halifax, like Dan said, and I don't know if you heard or not, but yesterday the B.C. government declared that tomorrow is going to be a day against anti‑bullying, where people are encouraged to wear pink in support of this.
LISTNUM 1 \l 12744 This would be something that would be naturally woven into our spoken word throughout the day. It would be a big subject matter that we would encourage feedback from the audience on.
LISTNUM 1 \l 12745 One more note to that, to how you make it usable and effective for that younger demo is that our announcers live the lifestyle. They are young people, they are doing the things that our demo does. They are out and about in the community. They are talking to people. They are in the clubs. They are at the libraries, they are where young people congregate. Like I said, they live the lifestyle. It is very much an active part of them too. That not only helps them to gain perspective on a story, but it also helps them to tell the story effectively to the people that they are speaking to, this young demo.
LISTNUM 1 \l 12746 COMMISSIONER MENZIES: That segues into another question that I was going to do later but we might as well do it now.
LISTNUM 1 \l 12747 In terms of being able to integrate your staff and being new to this market, it is a really interesting market obviously, a very attractive one to a lot of people, but how would you develop the institutional memory that is required to pick up all the nuances that are different, that are significantly different in Vancouver from markets elsewhere in the country?
LISTNUM 1 \l 12748 There is party politics at the civic level, for instance, regional district politics, very diverse and lively provincial politics, school board, et cetera, Fraser Valley different stream, et cetera, et cetera.
LISTNUM 1 \l 12749 What are your plans to access the staff who would have that memory?
LISTNUM 1 \l 12750 MS LAURIGNANO: I can start there. The plans would be to, as we said, this will be a Vancouver local station so we would begin by hiring local staff, being extremely sensitive to the multicultural, multiracial make up of Vancouver, and we are no strangers to that as well, both in terms of being broadcasters who serve in markets that are very diverse and as ethnic broadcasters ourselves. So we make sure that part of our hiring is inclusive of that, that we do encourage minorities and all the other designated groups to make applications and we promote ourselves as an equal opportunity employer.
LISTNUM 1 \l 12751 I think that fundamental to anything that we do, when we say that we are going to reflect the local market, then you have to be of the market to understand it, although there are a lot of common elements and a lot of common things in between places.
LISTNUM 1 \l 12752 The programming decisions are made locally as well, so the News Director will direct those decisions for programming, which stories to cover, what issues are important, will be made locally.
LISTNUM 1 \l 12753 The audience, as we have said, will have some contribution as to what is important to them, what is an issue, what should be delved into further.
LISTNUM 1 \l 12754 Furthermore, we have found really that these groups of consumers, often all we have to do is give them a chance. It is amazing what happens. Often this demographic gets painted with broad strokes with a big brush, but they are savvy, they are intelligent, they are discerning, they are conscientious, they are altruistic. A lot of times it is not that they are fickle, it is just that their tastes are above what is offered in the mainstream.
LISTNUM 1 \l 12755 For example, with our station in the Toronto CMA where there is a very young skew, just this past Christmas we raised $200,000 for the Children's Wish Foundation. This is from young people. We don't discount their ability to be engaged if you offer something that is important to them, and what is important is the perspective from their side as well, keeping in mind, as Scott and Dan have said, that the news is important and it is important in varying degrees. I mean, the stock market report is not really that relevant. However, if there is a market crash and their parents have large investments, then that would be covered from that sort of perspective.
LISTNUM 1 \l 12756 MR. BARTON: If I could just add to what both Scott and Carmela are saying, if you take a look at our YCR radio station in Halifax, the bulk of the staff are in that demographic. They are in their early 20s. They live the lifestyle. I try to keep up with them. I can't always. They say you are only young once but you can always be immature, so I try.
LISTNUM 1 \l 12757 But the thing is that they are very savvy and they do live that lifestyle. They understand how to speak to this demo, and they understand what a lot of broadcasters don't understand is that you do not communicate with 12 to 24 by talking down to them or dictating them. You communicate with them by reflecting what their interests are.
LISTNUM 1 \l 12758 So we make sure that our staff is very much in tune with the demographic and with the area. Again, with Halifax being the model, we were very conscious when we were hiring to make sure we hired people from the region who knew the region, and that is our same intent for Vancouver.
LISTNUM 1 \l 12759 COMMISSIONER MENZIES: The core demographic there is described as 12 to 34; is that right?
LISTNUM 1 \l 12760 MR. BARTON: The core is actually 12 to 24. The broad demographic is 12 to 34.
LISTNUM 1 \l 12761 COMMISSIONER MENZIES: That includes a pretty wide range of life stages. I know it is only 12 years, you know, 42 to 54, big deal, but 12 to 24, you have people from puberty to marriage. There is a lot happens in there. Where would your typical listener, what age would he or she be if you were to nail it down to one year?
LISTNUM 1 \l 12762 MR. FOX: Like we said, specifically our core is 12 to 24. I don't even know that we could nail it down to a specific one‑year age. In our music and in our programming we target the 12 to 24 year olds and then the broad demo, of course, is 12 to 34.
LISTNUM 1 \l 12763 One of the things that our audience will expect from us and can expect from us is consistency. I agree with you that there might be some subjects that are not important necessarily to the young or to the older end of that 12‑24 or 12‑34 demo, but the consistency in the fact that it always has that youth theme, the consistency that it always has that young angle and that local angle, and the consistency in how that information is delivered does create a universal appeal. I think we will agree on any radio station, whether it be news or jock talk, there could be one story or not that it not relevant necessarily to one person or to another, but the consistency and the theme of reliability and information and the way it is delivered is what keeps you coming back for more and keeps you engaged.
LISTNUM 1 \l 12764 MS LAURIGNANO: Then also depending on the part of the day or the part of the year, there are tweaks and programming adjustments that are ongoing all the time. We are mindful of who is listening.
LISTNUM 1 \l 12765 So, Friday night, Saturday night is party time, so you are liable to direct more of those elements towards the 18 to 24 versus in the morning, for example, when the younger children are being driven to school by their parents and they insist on putting the radio on, as we know, in those markets we serve, it would be a different variation of that. Then in the summer when school is out and that kind of thing, there are little adjustments to that.
LISTNUM 1 \l 12766 But we have found no problem in addressing the whole group. We found, as well, that the younger ones want to be older anyway, so they like the cool music and all that stuff and the talk is never really above anybody's head. So it is relevant at all times.
LISTNUM 1 \l 12767 COMMISSIONER MENZIES: I know you addressed this in your presentation in terms of some of the statistics about the decline in listenership in this market. Was that research the key to determining that this was the market you wish to seek?
LISTNUM 1 \l 12768 MR. MOREMAN: There were two aspects of it. What we first did was looked at the market when the call was put out to see what demos were already being served based on how stations self‑identified. So we looked at and saw an obvious hole at the younger end.
LISTNUM 1 \l 12769 Then we commissioned the research to see whether the YCR format would in fact be a welcome addition to the Vancouver market. As Paul said, we were a little shocked to see how much the tuning had actually declined on the youth end, and we were also very pleased to see how high the level of interest was among youth for our proposed service.
LISTNUM 1 \l 12770 COMMISSIONER MENZIES: Another technical question. In your response you indicated that you would play 35 per cent Canadian content from 6:00 a.m. to 6:00 p.m. but you also indicated you would play 40 per cent Canadian content overall. What I wanted to get from this is I am assuming that you are going to make that 40 per cent number by playing higher levels of Canadian content beyond the 6:00 to 6:00 and that your commitment will be for the broadcast week 40 per cent Canadian content?
LISTNUM 1 \l 12771 MS LAURIGNANO: That is correct. The 6:00 to 6:00 is a minimum of 35, which means that we could exceed it at any time.
LISTNUM 1 \l 12772 COMMISSIONER MENZIES: Feel free.
LISTNUM 1 \l 12773 MS LAURIGNANO: And we will and we have been known. However, one thing I would like to add is that with this demographic, the after 6:00 p.m. is a peak time by the way. With YCR the important times are the non‑traditional times. The 18 to 24 are out partying Thursday night. They are not going to get up in the morning, but they will stay up all night and that is when they will get the high content.
LISTNUM 1 \l 12774 COMMISSIONER MENZIES: One of the questions was in some of the research I was reading that the groups inclusive between 15 and 24, there was almost 100 per cent ‑‑ I think the numbers were 97 and 98 per cent or something in those groups ‑‑ said they had turned to alternative sources, iPods, the internet, cable, cable radio, et cetera.
LISTNUM 1 \l 12775 What I am trying to get at is how would you respond to the suggestion that that age group is gone, that it can't be retrieved?
LISTNUM 1 \l 12776 MS LAURIGNANO: We don't believe it. We know it is not so. We know where they are, we know how to get them. It is that simple. They are there.
LISTNUM 1 \l 12777 We know what kind of lifestyle they are living. For example, that the internet is an integral part of their lifestyle, which is one of the cornerstones of how we market or we intend to promote and market the station and how to reach them.
LISTNUM 1 \l 12778 I think Paul will add something and maybe Scott can just give you some examples of the kind of successes we have had with the internet and other approaches.
LISTNUM 1 \l 12779 MR. PAUL EVANOV: You are correct in one aspect. It is hard to bring them back. I know the Chair discussed it before saying, how are you going to bring the youth back if they are forming these life habits early on in the year and they are inbred in those life habits, how are you going to break them from those habits and get them to radio? We feel, as Carmela said, we can 100 per cent and we have in Halifax. I will have Dan expand on that.
LISTNUM 1 \l 12780 But even for this application, in order to gain support, one of the huge elements is the internet. We set up a Face Book account and to gain support for this application we set up a website YCRVancouver.com. We didn't advertise it. We didn't buy TV advertising or billboards or any of that stuff. It was word of mouth and Face Book and then word spread like wildfire.
LISTNUM 1 \l 12781 Most of the letters of support we received from people for this application were via the internet and were via e‑mail, and we had over 700 of them and that was in a small time span as well during the gazetting period. Up until even last night and this morning we were still getting e‑mails from it. The Face Book groups are still on and people have created Face Book groups into different groups. They are still coming in now. Unfortunately, they don't understand the process that there is a cutoff date. But it was encouraging to still see that and see that it was from across the country.
LISTNUM 1 \l 12782 There was a lot from Vancouver. There was some from Calgary, Edmonton, all across the country to see that. So just by that small few week period we were able to reach that many people on a small basis. Launching in Vancouver and using technology to embrace that, we know we can bring them back. Yes, they are on the internet. We are not going to make them stop going on the internet. We are going to incorporate that in their every day lives. We are going to engage them. Rather than just going on the internet and clicking around, they might click around and visit Google and YouTube, but they might be listening to YCR Vancouver at the same time. Something new, we are going to have DJs live in the studio spinning and a webcam so they are going to be able to watch that kind of thing that they normally might not be able to watch, and that is something different on the internet.
LISTNUM 1 \l 12783 YouTube is so huge, having a webcam in the studio and seeing a DJ spin music and perform live is something of interest. So, again, it is incorporating it into their every day lives. With iPods, yes, they are still going to listen to their iPods. They are still going to have those certain songs on the iPods, but those iPods won't be able to deliver any news, any information, anything about weather, anything about the local trends or weather. They won't be able to tell you what groups are in town, what acts are performing at what clubs; you can't win concert tickets from it.
LISTNUM 1 \l 12784 It is all these elements that really go to the basic fundamentals of radio which make radio so incredible and why this industry has been able to last for so long and continues to last is because it incorporates all that together. TV can come out and internet can come out and iPods came out and MP3 players and cells phones and everything else, but radio is here and we are strong.
LISTNUM 1 \l 12785 Our working model in Halifax is a true test to that. We have incorporated all those things, and we are fortunate to have that working model where we have seen the success of that incorporated in there. So, we feel not to shy away from these things, but incorporate it in their everyday lives and make them through the spoken word, like Scott said, make them feel important, make it feel it is relevant, make it feel like we are there for them, not just pumping music over it.
LISTNUM 1 \l 12786 Even cell phones, my nine‑year old nephew, he texts me, which is unbelievable, he texts me, he goes, yo, Paul, what's going on? He said, good, how are you, I said, what are you doing? He said, oh, I'm just texting my friends listening to Z103.5, like, on his phone. So he is texting friends talking, but he is also listening to a radio station. Fortunately it is ours.
LISTNUM 1 \l 12787 I will ask Dan to give a couple of real life examples we have in Halifax.
LISTNUM 1 \l 12788 MR. BARTON: When the station was getting ready to launch in Halifax and the website was announcing it was coming soon, even at that point through the website the e‑mail feedback we were getting from the 12 to 24 demographic was we are so excited you are coming, so excited you are coming. The buzz on the street was enormous. We launched in the summer of 2006, so we were hearing all this buzz and really getting feedback from people on the street and especially after we got up and running that this is finally a radio station that gets us; it is a radio station for us that we can listen to.
LISTNUM 1 \l 12789 We only hoped and had our fingers crossed that our BBM figures would reflect that and they did. We were far and away number 1 12 to 24. We actually drove tuning up in the overall market 12 to 24 in that first BBM ratings period. So we knew that we had a lot of success in bringing them back.
LISTNUM 1 \l 12790 As far as how we bring them back off their iPods, if you have kids with an iPod like I do, you know you are not going to wrestle it away from them. But there is a radio component to that, and I am going to ask Scott, actually, to share a pretty interesting story.
LISTNUM 1 \l 12791 MR. FOX: Just today when I was on my way here, I got an e‑mail from one of our listeners in Orangeville. She said:
"Hi, Scott, I just wanted to thank you so much for the awesome Z103.5 website. I listen to you on line while I'm at work and I like to check your recently played list to see what songs you play. Then I go to YouTube and watch the video. It's so cool. I love you guys in the morning. I love the subjects you guys talk about. Thank you very much for being there. Amy in Orangeville."
LISTNUM 1 \l 12792 That is a great example of a function that radio can play in the internet lives of these young people. The fact that they go to our website for information and the fact that they click the "listen live" option means that they are multitasking and they are taking us with them if they do happen to go to another site.
LISTNUM 1 \l 12793 Our websites are designed to be incredibly interactive, and that is reflective in the hits.
LISTNUM 1 \l 12794 If I could just tell you the January statistics for the CIDC received 5 million hits. For YCR station in Halifax we received two million hits. Between two radio stations that is seven million hits. These are active internet users who have found our website and they use it. They vote in our web polls. They rate our new music. They make suggestions for our CDs that will be featured on our CD of the week features. They can request songs, and then the interactive component, how they can be part of our spoken word; how they can submit news tips; how they can weigh in on the subject of the day. There are so many different examples of how they use the internet and they interact with us directly.
LISTNUM 1 \l 12795 Then we in turn take that feedback and apply it directly to our programming strategies as well. As you know, YCR is programmed from the street up. We listen to our audience and we always try and make it as reflective as possible.
LISTNUM 1 \l 12796 When we take that feedback from the website, we can make necessary adjustments to make sure that we are always in touch with the audience and we are always reflective of what they are doing and where they are.
LISTNUM 1 \l 12797 COMMISSIONER MENZIES: You have created a live focus group.
LISTNUM 1 \l 12798 This next question I want a short answer to, not because you are talking too much, but because ‑‑
LISTNUM 1 \l 12799 MR. FOX: Are we?
LISTNUM 1 \l 12800 COMMISSIONER MENZIES: No, it is your dime. Just to focus on precision, your format appears in its application to have a fair number of similarities to the playlists, et cetera, that are already available in the market. What I am trying to get at is a kind of 25 to 50 words or less response that tells us what will happen in that demographic so that people sit up and say, wow, that is new, that is really different, that is something very special and God bless the CRTC for giving these people a licence.
LISTNUM 1 \l 12801 MS LAURIGNANO: I could do it in as little as two words, and that would be spoken word. You talk to this age demo differently than you speak with anybody else. That is really a huge difference and a huge way of getting people.
LISTNUM 1 \l 12802 The other thing is that if you build it, they will come. It is a two‑way street. Commissioner Duncan can check with the Dartmouth office, but when it was announced that Halifax was granted a YCR, there was some local coverage and a lot of the kids got involved. I think Commissioner Williams was at the hearing and we had a bunch of kids in the room who were saying, yeah, yeah, go.
LISTNUM 1 \l 12803 The Dartmouth office was swamped with calls. They wanted to know when the station was going on. They would call me and we were saying, we are getting this transmitter built and that kind of stuff.
LISTNUM 1 \l 12804 A lot of it will happen by itself. If you do build it, they will come and they will come because there is something in there that they don't have. Everybody wants a community and that community is interactivity, it is spoken word. That is why radio works. It is a two‑way street. That is why there were record players and there were turntables and 45s and LPs and all kind of stuff and that is okay, if you want some time alone but you don't live by that alone. Everybody wants a sense of belonging.
LISTNUM 1 \l 12805 Again, if you build it and it is their place and they are empowered and their perspective is front and centre, then they will be loyal, whether it is through the fundraising efforts that I mentioned or through the hours that they listen or their commitment to stick with what they know, and we know that.
LISTNUM 1 \l 12806 COMMISSIONER MENZIES: Essentially then it will be the spoken word?
LISTNUM 1 \l 12807 MS LAURIGNANO: Absolutely because, as you said, you probably get better quality music on an iPod.
LISTNUM 1 \l 12808 COMMISSIONER MENZIES: Yes, that is true.
LISTNUM 1 \l 12809 Your projections indicate that you intend to achieve an audience of almost 7 per cent, I think it is 6.9 by year 5 and 7.5 per cent by year 7. Given that The Beat is the market leader in the 12 to 17 category where they have 44.1 per cent, pretty clear leader, and they have 8.3 per cent overall, how would you respond to the suggestion that your projections might be overly optimistic?
LISTNUM 1 \l 12810 MR. MOREMAN: The Beat's share is what it is, but our research show that only 15 to 18 per cent of people who said they would listen to our service listed The Beat as their number 1 station, which leads us to the conclusion that the people who were surveyed and who would listen to our service aren't listening to anything.
LISTNUM 1 \l 12811 So, it is quite possible that our share will be what we project and we expect it to be what we project without having much impact on The Beat whatsoever. The fact that our programming is going to be focused on youth, whereas as Paul stated earlier, The Beat has shifted older, tells us that there is a lot of room at that lower demographic end to have the share targets that we have projected without impacting The Beat in any significant way.
LISTNUM 1 \l 12812 COMMISSIONER MENZIES: If it turns out that you can't reach your projections, for one reason or another economic downturn, et cetera, how much flexibility have you given yourself in your business plan to adapt and what sort of impact would that have on programming?
LISTNUM 1 \l 12813 MS LAURIGNANO: I can answer it. We believe that the projections are moderate and achievable. I can ask our sales experts here to expand on how we got to those, but you will see from the projections that we will start to make money after a few years. We are not projecting losses after seven years, but in any case we are a solid, strong company. We do have resources and we would make up any shortfalls over the licence term or any time.
LISTNUM 1 \l 12814 COMMISSIONER MENZIES: Would it have an impact on programming?
LISTNUM 1 \l 12815 MS LAURIGNANO: Absolutely not, no. We are committed to that programming.
LISTNUM 1 \l 12816 MR. WILLIAM EVANOV: I have been letting my team handle this, but we have the financial resources to keep the programming as we have committed to, absolutely.
LISTNUM 1 \l 12817 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 12818 I just have a couple more here. You talked about music and your support in the east and some of the artists and that sort of stuff. We heard a bit today about the nature of this market and the nature of markets perhaps everywhere in Canada, where some of these artists manage to emerge, but without ever getting any spins, without ever getting any airplay. Feist was mentioned earlier and that sort of stuff.
LISTNUM 1 \l 12819 Can you talk briefly about what your impact would be, what your positive impact would be hopefully on people in Vancouver's alternative rock scene and other areas looking for somebody to give them a chance?
LISTNUM 1 \l 12820 MS LAURIGNANO: I will start and then I think Dan will definitely give you some things there.
LISTNUM 1 \l 12821 One of the beauties we feel of what we offer is that it does offer a broader spectrum of music so that it is not drawn from one genre.
LISTNUM 1 \l 12822 YCR, as we said, is a demo‑driven format. It is not a music format per se. So we won't just do alternative rock, we just won't do urban or just world. Depending on what the tastes of the group are at any given time, depending on what music is coming, and as you know a lot of the music is cyclical. Sometimes a new genre is coming out or one is more popular than the other, then that is very flexible; it is very fluid.
LISTNUM 1 \l 12823 In that sense, we will be able to afford possibilities to emerging artists of any music genre.
LISTNUM 1 \l 12824 COMMISSIONER MENZIES: I guess what I am trying to get to is with your interactive nature and what you have described as a willingness to respond to the marketplace and that sort of stuff and from what I have heard so far this week about what sounds to be a very exciting and healthy music scene locally, if I am interacting with you on your website and I guess I would have to be 19 years old in B.C. and I send you an e‑mail and I say, dude, I saw this band last night and you absolutely have to play their music, are you going to respond to that and try to find the music?
LISTNUM 1 \l 12825 MR. BARTON: We have actually had a history with that in Halifax. Again, when the station was getting ready to launch, we found there was such a pent up demand from these artists who weren't getting airplay anywhere. It is a smaller market but a similar situation to what you see here in Vancouver.
LISTNUM 1 \l 12826 You talked about us having a similar playlist to what is available. In fact, when we paired our proposed playlist up against what is in the market, there wasn't any radio station that we had more than 25 per cent duplication with. In fact, only one station was actually that high. Others were 10, 5 per cent or less. The reason is because we play such a wide variety of music genres, because it is not just top 40. It is top 40 and hip hop and R&B, dance, urban, rock and pop from this wide variety of artists.
LISTNUM 1 \l 12827 So, in Halifax we were hearing from artists like Classified, who is a rap artist, from Jordon Croucher, who is a hip hop artist, who finally had this avenue for their music to be played. It was exactly as you are describing. We had CDs come in the door; we got e‑mails with MP3s; links to My Space pages, all of these artists, and there was a lot of incredible music out there that we were able to expose in the Halifax market.
LISTNUM 1 \l 12828 We anticipate, when we launch here in Vancouver, that we will hear from artists like Free Flow, who are a hybrid hip hop, funk R&B act. They don't have an avenue for their music right now to be played on radio. Girl Nobody is a Euro‑pop group from the area, again not receiving any airplay. Orchids and Vines are a rock and pop alternative band that again don't currently have an avenue.
LISTNUM 1 \l 12829 Because we cover such a wide breadth of music genres, they have that avenue to have their music heard. We made it happen in Halifax; we really want to make it happen here in Vancouver.
LISTNUM 1 \l 12830 COMMISSIONER MENZIES: Thanks. One last area for me. You talked about this demographic being a highly influential consumer group and talked about its apparently unknown power in terms of that.
LISTNUM 1 \l 12831 I know they do spend because I have two, but I need to know more about the power of that spending and its attractiveness to advertisers compared to, say, a 35 to 44 year old female demographic which buys lot of stuff, I mean big items cars, fridges, houses, home appliances and that sort of stuff. This demographic, some might argue, has traditionally been under‑served quite frankly because advertisers aren't all that interested in them because they don't have any money.
LISTNUM 1 \l 12832 You have indicated that they do and they have a spending power that people are missing. I just want to know more about that.
LISTNUM 1 \l 12833 MS LAURIGNANO: I will ask Ky to answer that. She does have some insight into it. I think some of you have heard her talk about the six‑pocket phenomena of this group in the past, but, Ky, I think you forget the aunt's pocket which is me. I think the pockets have grown.
LISTNUM 1 \l 12834 MS JOSEPH: Commissioner Menzies, you were right when you said that this demographic, the 12 to 24 demographic has really two separate life cycles, and a teenager that might be 15 is completely different from, for example, a 22‑year old.
LISTNUM 1 \l 12835 I am going to give you some factual information. It is kind of twofold, and then I am going to ask our Regional Sales Manager, Chris, to just speak about local spending with regard to this demographic.
LISTNUM 1 \l 12836 According to a report by Mentale, who is a worldwide leader of consumer intelligence of global trends of the youth market, indicated that teen spending, 12 to 17‑year olds, reached $180 billion 2006 in the U.S., with a forecast that the Canadian counterpart trailing second in the world at spending of $50 billion. In addition to this, families with teens, so those women that you were talking about, 35 to 54, they will spending over $100 billion on their teens. So, this teen market is very influential to their families.
LISTNUM 1 \l 12837 Today's teens are the most affluent generation of young people ever to date. Almost one‑third of teens work while going to school.
LISTNUM 1 \l 12838 Teen boys have shifted their spending habits and, for example, they spend $2.1 billion on products previously dominated by females. That would include the health and beauty category, gels, hair colour, moisturizers, cologne. This is a huge category now for advertisers to target not only the female, but the male market.
LISTNUM 1 \l 12839 Teen dollars are spent on themselves. Today's youth have been labelled, as Carmela mentioned, as the six‑pocket phenomenon. That is a result of unfortunately a lot of families being the result of divorce. So they are picking the pockets of their mother, and their mother's new spouse perhaps, their father, their father's new spouse, and grandparents. It is actually probably a 12‑pocket phenomenon really when you think about it.
LISTNUM 1 \l 12840 You said something that was very crucial in that retailers are not responding. That is absolutely incorrect. We have Halifax, which is a YCR format that is targeting the 12 to 24 demographic. We have a station in Toronto which, by default, is one of the number one teen stations in the market.
LISTNUM 1 \l 12841 Major retailers, so national retailers, have already responded to the economic trend of the youth spending. Canadian Tire and Wal‑Mart, these were generally advertisers that have a 25 to 54 budget. They have now included an 18 to 24, sometimes a 12 to 24‑year old budget as a secondary budget, and we are getting the dollars for that.
LISTNUM 1 \l 12842 Grocery chains have responded to that. The automotive industry, Toyota with Yaris, Suzuki, Kia, these are national advertisers with the target demographic of 18 to 24, sometimes 18 to 34.
LISTNUM 1 \l 12843 The travel industry has really focused their business on internet sales and, as a result, we see this with exit.ca, Transat, all of these advertisers are now targeting the 12 to 24 demographic.
LISTNUM 1 \l 12844 Cosmetic surgery, believe it or not, is a huge category for predominantly the female 18 to 24. Furniture stores, Ikea, they were traditionally a 25 to 54 national advertiser. They have now increased their budget to include an 18 to 24 demographic.
LISTNUM 1 \l 12845 Canadian demographer and media researcher, David Foot, revealed a 1994 study that children between the age of 2 and 12 influence $82.4 million in food and beverage alone.
LISTNUM 1 \l 12846 To give you an example of teen spending.
LISTNUM 1 \l 12847 Moving over now to young adult spending, young adults age 18 to 24 are still pursuing an education, may be living with their parents, have more discretionary income, enjoy shopping as a social activity and rely more and more on the internet for communication. The 18 to 24s are trying to find their place in the world. Part of that means following trends, trying to figure out who they are, spending money doing so.
LISTNUM 1 \l 12848 Then just leading into our broader demographic of 25 to 34s, in contrast, are beginning to shift lifestyles, and they are focusing more on perhaps better jobs, starting a family, buying a home, they have a mortgage, so not so much discretionary income.
LISTNUM 1 \l 12849 While some students do struggle to make ends meet, the stereotypical college experience of eating mac and cheese is, I think, in a huge part are days that have gone. The typical college student gets an average of $757 a month from jobs, parents and other sources.
LISTNUM 1 \l 12850 Aside from quoting the research, we have factual proof in markets in Canada. I would like to ask Chris Edelman to speak a little bit about that.
LISTNUM 1 \l 12851 MR. EDELMAN: There are so many reasons why the 12 to 24 year old is the most important demographic to speak to in any marketing effort. I myself have a personal experience in teaching retailers one at a time or at least bringing them to the light, so to speak.
LISTNUM 1 \l 12852 Simply put, their disposable income is through the roof, and that is really the epitome of what we are trying to get across here. Yes, the 16 to 23 year old only makes 200 bucks a week on a part‑time job, but 100 per cent of their money goes to just stuff. They have no responsibilities. It is just stuff: Cell phones, new jeans, shoes, perfume, the new trendy $200 sunglasses, rims for their car. I don't know what 35 year old has extra money for rims for their car. But this is the stuff that is taking place.
LISTNUM 1 \l 12853 Most importantly, the 12 to 24 demographic, they lack loyalty to any particular brand or product or service. That is another key point. They jump to the new hot and cool thing that they are told about or they heard through messaging and the media.
LISTNUM 1 \l 12854 The 12 to 34 year old, or more specifically, the 12 to 24 year old, is an impressionable consumer and many broadcasters in the U.S. have subscribed to this mentality as the thought is that the older demographic have already established their life trend, when they can head to the earlier demographic and establish trends. They are a learning or an adapting consumer.
LISTNUM 1 \l 12855 In preparation for today's hearing, part of the process was to assess retailer demand, one that we take very seriously. Personally myself I visited with many retailers in the City of Vancouver and extended areas to find out if, okay, what we are saying is in fact the truth.
LISTNUM 1 \l 12856 Overwhelmingly it was. I will give you a couple of examples. I sat down with Graham, who is the general manager of Tom Lee Music. I am not sure if you are familiar with that organization. It is a three‑level music store. They have lessons, instruments, all the rest of it. They currently do not use radio.
LISTNUM 1 \l 12857 When I told them about our proposed service and that we would be targeting the 12 to 24 year old, he said, okay, that is fantastic, I mean, that is the bread and butter of my business; we would most definitely give you a try. So, I said, well, hopefully I will be coming back in a year and a half to talk with you.
LISTNUM 1 \l 12858 Another example is I spoke with Fred at El Cartel. That is a clothing store for youth, and although not defined, it was very clear that their demographic would be the teen and young adults, so the 12 to 24 as we would put it.
LISTNUM 1 \l 12859 I then described our service. First of all, they don't use radio as a medium at all. They have used the Georgia Strait but are reluctant to because they feel it just services only a portion of their demographic. When I told them about the 12 to 24 demographic and that we would be able to service that, they got really excited and said of course we will give that a shot because that will be putting all my money into something that is the maximum return for my business, you know, like an ROI investment.
LISTNUM 1 \l 12860 I then noticed some turntables in the back of the store where a DJ spins on Saturday afternoons and through peak shopping times. In explaining for what we are proposing for a service in the City of Vancouver is that we would actually have DJs spin live on‑air, I then got a comment from the back of the room, with a guy saying, wow, that's cool; if you do that you'd make a million dollars.
LISTNUM 1 \l 12861 I wanted to quantify for him, but didn't, that we actually expect to make $3.6 million our first year. But I think we both understood the point.
LISTNUM 1 \l 12862 At the end of the day, it was a clear winner that, just as I have experienced in Halifax, just as I experienced in the extended City of Toronto, the 12 to 24 year old is an incredibly desired and profitable audience to attract for any advertiser.
LISTNUM 1 \l 12863 MS JOSEPH: If I may just add to that, the beauty of this demographic, as you had alluded to before, what if you don't achieve your audience share, this is not a number sell; this is a profile sell. For example, if you look at Halifax, we have been on the air 18 months, and on any given week, between 50 and 80 per cent of our revenues are generated from completely new advertisers to radio. It is a profit sell. It has nothing to do with numbers. We don't go in there with rankers; we don't go in there with anything. We go in there with a profile sell.
LISTNUM 1 \l 12864 This is the foundation of the sales model of the Evanov Radio Group, regardless of whatever demographic we serve. It is local sales selling on a profile. Sometimes if you live by the numbers, you die by the numbers, and especially when you are projecting coming into a market in the first place, it can be a little bit dangerous. But we have done our homework and, as you can see, 65 per cent of our revenue projections are really new into radio, and of that, only 20 per cent is national. So, that gives you a good indication as to our selling philosophy and how we are very confident that we will be able to achieve our business plan.
LISTNUM 1 \l 12865 MR. EDELMAN: I would like to add to that if you would give me the opportunity.
LISTNUM 1 \l 12866 We have been mentioning, from a business plan standpoint, it is very similar to what we have realized in the Halifax market. We started a sales department that was going to hit the streets in a market of only three owners when, in actuality, it consisted of two players. Newcap and both CHUM devised a strategic alliance that offered radio sales combos, essentially making them one big power over the City of Halifax.
LISTNUM 1 \l 12867 Our sales training and methods had to be very strategic in order to win in that market. We are getting closer to being on air for two year snow, and we have been winning ever since. Vancouver, yet very competitive, no question about that, still does not have the sense of monopoly that we have faced and beat in the past. Ky was talking about it is the very foundation of our sales protocol. Manuals, procedures to not take business from existing broadcasters. There are many stations in Vancouver with heritage that are simply not just going to hand over their business. They will alter, they will change and protect what is theirs.
LISTNUM 1 \l 12868 Our success lays in finding new advertisers that to date do not have an option to use radio due to current prices or, better yet, a lack of an option to communicate cost effectively to their target audience, as I demonstrated with a few examples.
LISTNUM 1 \l 12869 It is imperative that we find a revenue stream outside of current radio advertisers to survive.
LISTNUM 1 \l 12870 There was an example that I am actually on record with the CRTC quoting and the trend continues. Last week alone 80 per cent of our sales in Halifax, as Ky was mentioning, was from businesses that were new to radio after Halifax hit the airwaves. Our last month of sales trended at approximately 52 per cent.
LISTNUM 1 \l 12871 I guess what I am trying to do is justify the strength of our business plan and why we projected 65 per cent of our revenue flow to come from new advertisers, meaning new radio dollars to Vancouver.
LISTNUM 1 \l 12872 COMMISSIONER MENZIES: Thank you very much for your very comprehensive answer.
LISTNUM 1 \l 12873 Madam Chair, that concludes my questions.
LISTNUM 1 \l 12874 THE CHAIRPERSON: Thank you. I do have a few questions, but my computer where I had been typing my questions has just gone dead. I think I will remember them.
LISTNUM 1 \l 12875 Mr. Edelman, I have a 12 year old, a 14 year old, a 16 year old, so I know what you are talking about. The only thing I would correct you on is that cell phone does not fall into the category of stuff that they pay for themselves.
LISTNUM 1 \l 12876 MR. EDELMAN: Very good.
LISTNUM 1 \l 12877 THE CHAIRPERSON: Also, I believe that Tom Lee, which I think has its beginning in Hong Kong, where I grew up, I know I have seen them on Chinese TV and I think Chinese radio, but I think now that you mention it, I haven't heard their ads on English radio.
LISTNUM 1 \l 12878 MR. EDELMAN: To be specific on that, actually Graham was very forthcoming with me. We had a great engaging conversation. He went into the specifics of his plans and what is important to his business and how he markets. He had alluded to trying radio with other services. However, he had stopped because his return just wasn't there.
LISTNUM 1 \l 12879 There was a waste of his money that was not servicing who he wanted to and that, in his definition, was the lower end of the spectrum.
LISTNUM 1 \l 12880 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 12881 I have a few more disjointed thoughts, much like the thoughts of the 12 year olds that you will be targeting.
LISTNUM 1 \l 12882 I believe Ms. Laurignano, it was your answer when Commissioner Menzies was asking about the difference between, say, 94.5, The Beat and this. Did I understand you correctly to say, well, the key difference is the spoken word?
LISTNUM 1 \l 12883 MS LAURIGNANO: The key difference is the spoken word, but there would also be a difference in the music, very much of a big difference in the music in terms of both the number of selections that will be heard on air. Ours will be a lot wider because, by its very nature, this demographic wants to hear new and exciting things all the time. So you just can't take a record and spin it forever because that bores them and they want to move on. So, this demographic wants new and exciting things all the time. So there will be a difference there.
LISTNUM 1 \l 12884 I think those really would be the two key differences.
LISTNUM 1 \l 12885 THE CHAIRPERSON: Yours would be broader than the 94.5?
LISTNUM 1 \l 12886 MS LAURIGNANO: That is right. We would have more new much and more new emerging artists as well.
LISTNUM 1 \l 12887 MR. PAUL EVANOV: If I could just further elaborate to make it clear, with The Beat, CKFT, they are a CHR station and they have a smaller music universe and they spin their songs quite heavily. This past week and actually the last six months their highest spun songs are 87 times a week which works out to once every hour and 15 minutes you are hearing kind of the same songs.
LISTNUM 1 \l 12888 In our research and in our own personal experience we found that is not what the youth wants. Although they want to hear some of those hits and some of those songs obviously we will be playing to a certain degree, but what we do in Halifax currently is we have a smaller universe. Our highest spun song is 37 times a week. So the music universe is much, much larger and therefore the variety is much, much larger, and we draw from all those different genres that Dan was speaking of before with the urban and the dance and the alternative rock and the pop and everything else. So, we have all that.
LISTNUM 1 \l 12889 Then when we did the research here, it showed it as well. Yes, some of them do listen to The Beat and they like it to a certain degree, but we heard the complaints of too high repetition, it doesn't play enough songs I want to hear on the radio. So, the response was overwhelming when we did the much samples from this genre and this genre of music and this genre, and they said, we would love that because it offers a variety.
LISTNUM 1 \l 12890 Going back to the iPod thing, they put their variety on their iPod, so we are going to be right on the radio, which currently isn't being done. That is kind of the correlation with the music.
LISTNUM 1 \l 12891 When we did our sample playlist we submitted and we compared that with The Beat, we noticed only a 25 per cent duplication. Going back again, spoken word and music would be very different.
LISTNUM 1 \l 12892 MR. BARTON: I know that you are fond of us throwing in as many words as possible. I believe the number was 2500, wasn't it, or was it 25 words that you were limiting us to?
LISTNUM 1 \l 12893 As Paul has mentioned, the difference being that The Beat is a CHR radio station, smaller playlist, higher number of spins. We are drawing on much wider variety of genres of music. We are also drawing on a wider variety of new and emerging talent. As a CHR or top 40 radio station, you are playing the hits, the hits, the hits. Because we are so broad in our variety of genres, we are able to give this exposure to new and emerging talent.
LISTNUM 1 \l 12894 When we came up with our commitment for this Vancouver licence of 12 per cent of our overall playlist, it wasn't a random figure we drew out of the air. We took a look at what we were doing with YCR in Halifax, and that is what we are doing now and sometimes exceeding that number throughout our general playlist. Again, that is during all peak hours, we are servicing new and emerging artists with 12 per cent of our overall playlist.
LISTNUM 1 \l 12895 MR. PAUL EVANOV: Looking at our all the other stations, not to go through them, but all the other station in Vancouver as we said before are serving the older demos quite well. There is AC stations; there is classic rock and everything else. The only thing that is even within close to the same spectrum would be the station you were referring to before is The Beat. So, everything else was covering the older demo and covering it fairly well.
LISTNUM 1 \l 12896 THE CHAIRPERSON: There would be also overlap with The Crave, won't it?
LISTNUM 1 \l 12897 MR. PAUL EVANOV: We did a duplication analysis on them as well and we found that less than 10 per cent. So, there would be those key songs, as we said before, and the same theory as Summery Rush. You have a couple of hit songs, you draw some people, but then you put the new and emerging around them and the new artists around them.
LISTNUM 1 \l 12898 THE CHAIRPERSON: You said that with The Crave it is about 10 per cent?
LISTNUM 1 \l 12899 MR. PAUL EVANOV: Yes.
LISTNUM 1 \l 12900 THE CHAIRPERSON: With The Beat it was approximately how many per cent?
LISTNUM 1 \l 12901 MR. PAUL EVANOV: Twenty‑five per cent. Just to go on that, that is duplication in artists, not song titles, whereas The Beat will play the hits, like Chris Brown, play one song from him for a long time, we know we will go three or four songs deep on the CD. So, the duplication is artist not songs.
LISTNUM 1 \l 12902 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 12903 I am heartened to hear that your Halifax station seems to be doing so well and I note that you launched 18 months ago. Is it profitable yet?
LISTNUM 1 \l 12904 MS LAURIGNANO: In broad terms, yes, for sure.
LISTNUM 1 \l 12905 THE CHAIRPERSON: Thanks. I won't delve into it here.
LISTNUM 1 \l 12906 MR. WILLIAM EVANOV: And well ahead of projections.
LISTNUM 1 \l 12907 THE CHAIRPERSON: I hear quite a bit in how difficult it is to serve the demographic that you are targeting. I am looking at page 3 of your opening comments on, say, The Beat and you talked about how it didn't last and that its audience is now over 25. What do you think happened there?
LISTNUM 1 \l 12908 MS LAURIGNANO: It is actually very simple. The way radio stations garner audience is, one, you take an audience, you build it in whichever way and then you age with it. So, you age by one year and you take it with you.
LISTNUM 1 \l 12909 Then, the other thing is you find new listeners. It is a lot easier to find listeners among the converts than it is among those who have never heard radio. It is easier to go to the 18‑plus and the 30‑plus and the 45‑plus and soon to be the 55‑plus as it ages because that is people where people are; that is where they have been familiar with radio.
LISTNUM 1 \l 12910 It is a lot harder to engage those young people. That is the strength of the YCR. That is the fundamental difference of what that is. It is an endless, ageless supply of listeners. It is going to feed the system because, if we don't do that at that age, then we won't have them; we are not going to have AC stations and easy listening stations a long time from now or, at least, it will be a lot harder.
LISTNUM 1 \l 12911 THE CHAIRPERSON: That makes sense because as I was listening to it and you were talking about how you have ‑‑ it sounded like a lot of the music is driven by the demographics that were by request. Then my mind started to wonder. I was thinking about the Sanjia effect.
LISTNUM 1 \l 12912 Our old colleague, Commissioner Langford always used to refer to us as old geezers. What is to stop someone like me getting together a whole bunch of friends and keep making the requests of your station or, like you said, these people that you are serving grow up, they are used to communicating with you and then your music also grows older. What is to stop that from happening to you?
LISTNUM 1 \l 12913 MS LAURIGNANO: Well, there will always be 12 year olds. That is how we feed it. We may not get them at 12. We will get them at 13, 14, 15, but it is in those years where the habits get formed. So we will have radio listeners for the future.
LISTNUM 1 \l 12914 Again, we have evidence that if you build it, they will come because everybody wants to belong to something, and that age demo is no exception. I mean, they are chatting; they are text messaging. It is a way of communicating. Everybody is looking for a community and if you can build that community and that bridge with the airwave, then it will succeed and it does succeed and we do have evidence and proof.
LISTNUM 1 \l 12915 We know that when we start to sound like everyone else, they will abandon us and we have to do something else. In fact, we will never sound like anybody else because it is constantly turning and we are not stuck with a formula of music where we are going to to just alternative rock or just world urban or just dance music. It is whatever it is. It is very fluid; it will shift with the change. It is wide enough that it will attract a bunch of people.
LISTNUM 1 \l 12916 THE CHAIRPERSON: Everyone tells me that it is cheaper to keep a client than to try and win a new one.
LISTNUM 1 \l 12917 MS LAURIGNANO: Right.
LISTNUM 1 \l 12918 THE CHAIRPERSON: But you don't seem to be daunted.
LISTNUM 1 \l 12919 MS LAURIGNANO: Not at all. As we said, it is not easy. It is simple. I mean, it is very logical, but it is not easy. It is not easy for a lot, because it is easier to go down the middle. It is easier to go to the 18 to 54 or 18 to 49. There are larger numbers of people. There are, so far, larger numbers of national advertisers who commit, larger numbers of retail. Then with consolidation and all that, sometimes the bottom line is not enough for this demo for some. It is okay for us. We do very, very well, and we can carve not just a living, but we have grown our business with it.
LISTNUM 1 \l 12920 I mean, we are where we are because of the youth format, and that is because we are not relying on traditional ways of doing it, either in getting the audience or either in getting a format or in getting the revenue from the traditional sources, which is why we feel very confident that we will not only be here seven years from now, but we will be with that format.
LISTNUM 1 \l 12921 THE CHAIRPERSON: On the revenue, you have projected that 35 per cent of your revenue will be from the existing radio services. Of that 35 per cent, do you have a breakdown from which stations.
LISTNUM 1 \l 12922 MS LAURIGNANO: Yes. I am going to ask Ky to address it.
LISTNUM 1 \l 12923 MS JOSEPH: The best way to identify impact when you are applying for a new radio station is to find out who is going to listen to you and then ask them who their favourite radio station is.
LISTNUM 1 \l 12924 Our research revealed that there are over 11 stations with listeners that said they would listen to YCR. Of those 11 stations, only six have listeners with any significant impact on one specific station. Obviously The Beat would be the most affected. However, the impact is not dramatic, given that only 15 per cent said that they would listen to YCR that currently listed The Beat as their favourite or CFBT as their favourite.
LISTNUM 1 \l 12925 The second most affected station, interestingly enough, CJJR Country, with 9 per cent of perspective listeners rating it as their favourite that would listen to YCR, which again goes back to the fact that the younger demographic enjoys a wide variety of music. Their format differs dramatically from ours, obviously, so we don't think that the impact would be that significant.
LISTNUM 1 \l 12926 Also, all economic indicators lead to the fact that it is a very robust market, and we believe that based on the fact that, yes, it is 35 per cent or $1.2 million, but that is less than 1 per cent of the market, and as the market grows, we believe that really the impact is going to be absorbed by the growth of the market. So there will not be significant impact on any one station.
LISTNUM 1 \l 12927 MS LAURIGNANO: To add to that, we believe The Beat and CTV‑Globe Media will be very happy because once they are out of our demo, they can pick it up. So, as our demographic ages by one year, they will pick them up.
LISTNUM 1 \l 12928 THE CHAIRPERSON: Then the question that I have asked everyone, if you were to have a licence, how many others do you think we can licence and who do you think will be the most compatible?
LISTNUM 1 \l 12929 MS LAURIGNANO: We really don't have a reference per se. Obviously logic would dictate that you would stay away from similar formats or formats that would serve the same demographic. But other than that, our business plan is very solid. We are confident that we can deliver it, and we think that we will be complementary to any other ones that are licensed and those who are in the market already.
LISTNUM 1 \l 12930 THE CHAIRPERSON: Before I turn it over to legal, I just wanted to say that I was very disappointed in your answer to Commissioner Menzies that you will be hiring people in Vancouver and that you are not all going to be moving to Vancouver.
LISTNUM 1 \l 12931 MS LAURIGNANO: We are going to be doing that on the expense account, I think. But you can be sure you will see us as well.
LISTNUM 1 \l 12932 THE CHAIRPERSON: Mr. Pinsky.
LISTNUM 1 \l 12933 MS PINSKY: Thank you, Madam Chair.
LISTNUM 1 \l 12934 I just have one point of clarification. There was extensive discussion this afternoon about your core target audience and the broader audience. This afternoon you identified the core as 12 to 24 and the broader demo as 12 to 34. In your application, however, it was more broadly stated and the broad audience was 12 to 24 with the core audience 12 to 34.
LISTNUM 1 \l 12935 Given that difference, which could be important, which is your business plan developed on? Which should we be going by?
LISTNUM 1 \l 12936 MS LAURIGNANO: The business plan is 12‑24.
LISTNUM 1 \l 12937 MS PINSKY: And the broader is 12‑34?
LISTNUM 1 \l 12938 MS LAURIGNANO: And the broader is 12‑34.
LISTNUM 1 \l 12939 MS PINSKY: Thank you.
LISTNUM 1 \l 12940 THE CHAIRPERSON: My apologies to Commissioner Duncan who has a question.
LISTNUM 1 \l 12941 COMMISSIONER DUNCAN: That is not necessary, but I do have a question.
LISTNUM 1 \l 12942 I also, even though I am well outside your demographic, enjoy your station in Halifax.
LISTNUM 1 \l 12943 I noticed in what you are saying here you have mentioned the Halifax market a lot. Can you just describe for me your market in Toronto or in the Toronto area, where that is and is your experience the same? The reason I ask that is because you are referring to Halifax.
LISTNUM 1 \l 12944 MS LAURIGNANO: We refer to Halifax because as a YCR it is very similar in the format as it would be here. But with Toronto, we are definitely a youth station. The format would be described as a CHR there, but not even a pure CHR, a bit of a hybrid CHR. We do very, very well among the 12 to 24 as well.
LISTNUM 1 \l 12945 I think Paul can tell you how we rank there. In those terms, the experience is extremely similar in a lot of ways.
LISTNUM 1 \l 12946 MR. PAUL EVANOV: Just to expand on that, in the Toronto GTA area, it is a CHR station. Again to break it down a little more, compared to Halifax, it is a smaller universe. Our spins are a lot higher. To put it in context, as I was discussing before, our highest spun songs are 48 to 50 times a week. Our demographic is older in the Toronto area with CIDC.
LISTNUM 1 \l 12947 Most of our audience, actually our audience is getting older and older, the majority of it is 25 to 31. We are number 1 in that demographic there. We are CHR but a bit more, say, rhythmic so we play a little more dance music and everything else in there because of the culture of the area there and the club scene and the dance music scene there.
LISTNUM 1 \l 12948 Really it is broken down and CIDC is a CHR and Halifax is a YCR. The demographic is older in the CIDC, with a youthful touch, but Halifax is a YCR; it is solely youth.
LISTNUM 1 \l 12949 COMMISSIONER DUNCAN: It is distinctive, I gather, because of the way you communicate with your audience too?
LISTNUM 1 \l 12950 MR. PAUL EVANOV: Sorry, yes, the spoken word is geared to an older demographic as well on CIDC.
LISTNUM 1 \l 12951 COMMISSIONER DUNCAN: Do you have that interaction on the internet?
LISTNUM 1 \l 12952 MR. PAUL EVANOV: Yes, we do. As Ky mentioned before, the hits on the website, five million hits, so it is the same philosophy and the same interactiveness on there, which has helped us with our success. We do podcasts with the morning show and everything on there. It is the same level because the audience is still younger as well. But we have taken that experience there over the last 13 years of doing that and programming successfully there, taken that experience and adapted some of the things that have worked in Halifax.
LISTNUM 1 \l 12953 MS LAURIGNANO: Actually, the 18 to 24 cluster would be similar in the two formats. In other words, the YCR is 12‑24, whereas the CHR is 18‑34. So there is 18‑24 in there which is sort of a common element and that gives us a common experience and common lessons a lot of times that we can apply.
LISTNUM 1 \l 12954 COMMISSIONER DUNCAN: The reason you didn't pick the CHR, then, for Vancouver is you felt that was already served?
LISTNUM 1 \l 12955 MR. PAUL EVANOV: Yes, we came in here for the most under‑served, which is the demo, the 12‑24.
LISTNUM 1 \l 12956 MS LAURIGNANO: Yes, The Beat covers that and some of the other music that would be covered by CHR is covered by other services as well.
LISTNUM 1 \l 12957 COMMISSIONER DUNCAN: Thank you very much.
LISTNUM 1 \l 12958 MS LAURIGNANO: By the way, we would compliment you on your taste. Age is an attitude.
LISTNUM 1 \l 12959 COMMISSIONER DUNCAN: That is right. Thank you.
LISTNUM 1 \l 12960 THE CHAIRPERSON: Here is the opportunity for your last minute pitch on why you are the best.
LISTNUM 1 \l 12961 MR. WILLIAM EVANOV: Before I speak, I think our legal counsel wanted to mention something.
LISTNUM 1 \l 12962 MR. MOREMAN: Madam Commissioner, as counsel, I would be remiss if I don't go back to Commissioner Menzies first question about the Olympic obligation and the flexibility that is built in there.
LISTNUM 1 \l 12963 If I understand your question, you were asking whether there is flexibility in that initiative to dedicate all of that money towards new and emerging artists, if that was the definition that is decided by the Commission?
LISTNUM 1 \l 12964 COMMISSIONER MENZIES: Hang on a sec.
LISTNUM 1 \l 12965 MS PINSKY: Commissioner Menzies, I think the answer provided did respond to the question. The question, I believe, was asking should the Commission adopt a different definition, given your commitment to emerging artists, is it sufficiently flexible to conform to a variation?
LISTNUM 1 \l 12966 MR. MOREMAN: There was a reference to the $1.05 million, which is specifically the Olympic ‑‑
LISTNUM 1 \l 12967 COMMISSIONER MENZIES: It was specifically the $1.05 million which involved the production of the CD and the other Olympic cultural area.
LISTNUM 1 \l 12968 MR. MOREMAN: Which is what I thought.
LISTNUM 1 \l 12969 COMMISSIONER MENZIES: And that if that was found outside, that you would still be good for the $1.05 million and would find other ways to ‑‑
LISTNUM 1 \l 12970 MR. MOREMAN: The agreement we have struck with the Olympic committee is, in fact, there are two halves.
LISTNUM 1 \l 12971 As you aware, there is the CD commitment on one side and there is the concert series on the other side. The agreement we have with the Olympic committee gives them the final say on the Canadian talent that will perform during the concert series. So, the $346,000 that will be given for the concert series, we cannot dictate to them that it be to new and emerging talent. They have already told us that they will have final say on Canadian performers who perform during the games.
LISTNUM 1 \l 12972 On the CD side, which is the bulk of the money, approximately $750,000, the artists' selection will be collaborative between us and the Cultural Olympiad, in which case the flexibility to the CD performers is there.
LISTNUM 1 \l 12973 I just wanted to make that clear.
LISTNUM 1 \l 12974 COMMISSIONER MENZIES: That is fine. What I heard you say was that you might be boxed in on the $300,000.
LISTNUM 1 \l 12975 MR. MOREMAN: On the concert side they have told us in no uncertain terms the final selection of Canadian artists will be made by the Cultural Olympiad.
LISTNUM 1 \l 12976 COMMISSIONER MENZIES: Thank you for that.
LISTNUM 1 \l 12977 MR. WILLIAM EVANOV: I am allowed to speak.
LISTNUM 1 \l 12978 Madam Chair, Commissioners, we believe ours is the best use of the last available frequency in Vancouver for the following reasons, and they are very, very good reasons.
LISTNUM 1 \l 12979 One, we will have the least negative impact on incumbent broadcasters since we are not following the big money down the middle, both in terms of demographic and format. But we will have the greatest positive impact on the system by attracting new revenues to radio.
LISTNUM 1 \l 12980 Next, we have a proven track record in bringing disenfranchised youth back to radio, as well as bringing new listeners into the market. We will apply all that we know to ensure the success of YCR Vancouver. In providing a wide variety of music, we will attract the widest youth audience of all the applicants.
LISTNUM 1 \l 12981 We also have a proven track record in our commitment to new and emerging artists. Our programming policies and our CCD initiatives will provide a boost to artists looking to break into the scene.
LISTNUM 1 \l 12982 Just as Vancouver is the gateway to the Pacific, our CCD partnership with the Cultural Olympiad will see half of our total commitment being paid in the very first year. That will give these artists a gateway to the world.
LISTNUM 1 \l 12983 With the experience of our ethnic station and our already diverse staff that speaks over 30 languages, YCR Vancouver will contribute to and be sensitive to the culture of diversity of Vancouver. We have the resources and we have the drive to stay the course. In 25 years in the face of real competition in other markets, we have never flipped the format and we have never sold a radio station. All our stations are locally run. When we come to Vancouver, we will be Vancouver. We will offer a unique, independent voice in a sea of multiple owners. We will also have the ability to compete as a stand‑alone against the corporate giants in Vancouver.
LISTNUM 1 \l 12984 Finally, we leave this with you. A good broadcaster is a good broadcaster no matter where it broadcasts from. It can be a western broadcaster in the east or an eastern broadcaster in the west. That is what is wonderful about this country of ours. We don't want to be an eastern broadcaster; we don't want to be a western broadcaster; we want to be a national broadcaster from Halifax to Vancouver from sea to sea.
LISTNUM 1 \l 12985 Thank you very much.
LISTNUM 1 \l 12986 THE CHAIRPERSON: Thank you, Mr. Evanov and to your team. Thank you for your time and your presentation.
LISTNUM 1 \l 12987 We will take a 15‑minute break and resume at 5:15, please.
‑‑‑ Upon recessing at 1658 / Suspension à 1658
‑‑‑ Upon resuming at 1715 / Reprise à 1715
LISTNUM 1 \l 12988 THE SECRETARY: We will now hear the last application of the day. It is item number 11, Coast 104.1 FM for a licence to operate an English‑language FM commercial radio programming undertaking in Vancouver.
LISTNUM 1 \l 12989 Please introduce yourself and your colleagues and you will then have 20 minutes for your presentation. Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 12990 MR. KIRK: Good afternoon, Madam Chair, Commissioners and Commission staff, my name is Doug Kirk. I am the Chairman of The Coast 104.1 FM Inc., an exciting new radio service proposed for Vancouver. Before we present the highlights of our application, let me take a minute to introduce our panel to you.
LISTNUM 1 \l 12991 To my right, and your left, is my partner of many years, John Wright, who is controlling shareholder and President of K‑Rock which operates CIKR‑FM and KKXC‑FM in Kingston, Ontario. John is well known to you and will be President of The Coast 104.1.
LISTNUM 1 \l 12992 To John's right is Andrew Forsyth, our programming consultant. Andrew has worked with John and me for over 15 years.
LISTNUM 1 \l 12993 To my left and your right is Steve Kassay. Steve is VP Programming and Operations of the four Durham radio stations in Oshawa and Hamilton, and that is the group of which I am a major shareholder.
LISTNUM 1 \l 12994 However, the really talented people are the group sitting to Steve's left. They are Vancouver‑based artists who will be involved with The Coast. Immediately to my left of Steve is Dr. Liesa Norman. Originally from Victoria, Liesa has studied music at U of T and UBC. She is an accomplished flautist, keyboardist and vocalist, who has notably played with the Vancouver Symphony Orchestra. Liesa and her husband and partners will be the Vancouver shareholders who will own one‑third of The Coast.
LISTNUM 1 \l 12995 Next to Liesa is Juno award winner Gabriel Mark Hasselbach. Gabriel plays trumpet and flute and is well known to the Vancouver area music scene. He has recorded multiple albums which highlight his contemporary instrumental skills. We play many selections of his on The Wave in Hamilton. Gabriel will join the management team of The Coast to coordinate and produce our locally based Canadian content program.
LISTNUM 1 \l 12996 We are delighted to be here to articulate our plan to enhance radio service to Vancouver. I will ask John to mention our presentation.
LISTNUM 1 \l 12997 MR. WRIGHT: Thank you, Doug.
LISTNUM 1 \l 12998 The Coast will be a very different radio station, very different existing Vancouver stations and very different from those being proposed by the other applicants.
LISTNUM 1 \l 12999 The Coast will be built on a foundation of R&B and pop‑styled vocal selections, combined with pop instrumentals. We describe it and will market it as Vancouver's Groove.
LISTNUM 1 \l 13000 Vancouver is Canada's west coast metropolis and Canada's door to Asia. It is multicultural, laid back, lifestyle focused, sophisticated, very cafe, very different, very distinctive, very diverse. Imagine putting those descriptions into a sound. Think about how Vancouver sounds and you will hear the radio station we are proposing as Vancouver's Groove, The Coast 104.1.
LISTNUM 1 \l 13001 The Coast format is unique and, if licensed, we will guarantee this diversity through the licence term by both a condition of licence and the performance integrity of the broadcast partners.
LISTNUM 1 \l 13002 Approval of this application is in the public interest:
LISTNUM 1 \l 13003 It significantly increases musical diversity in Vancouver. It will have no material economic impact on existing local radio stations. It will provide substantial new support for Canadian content development, and in particular, for new and emerging Canadian artists. It will directly contribute to increased ownership and editorial diversity by allowing strong, successful smaller independent radio broadcasting companies to enter the market in partnership with local investors.
LISTNUM 1 \l 13004 Our association with The Wave in Hamilton brings us many benefits. We have a strong relationship with many fine young Canadian artists and, in particular, those that will contribute to a significant portion of our instrumental music. We will hear from a couple of them today. We have learned what is important to these emerging and indie artists.
LISTNUM 1 \l 13005 The Wave has developed one of Canada's finest music awards shows. The Canadian Smooth Jazz Awards is now in its fourth year. The Coast will be joining The Wave to enlarge and improve the show. Emerging and R&B categories will be added to broaden the show and recognize The Coast roots.
LISTNUM 1 \l 13006 Our at‑studio and on‑line store to benefit indie and emerging artists is now in beta development stage in Hamilton.
LISTNUM 1 \l 13007 The Coast will have elements from and lessons learned at The Wave in Hamilton but it will be different, as different from The Wave as Vancouver is from Hamilton.
LISTNUM 1 \l 13008 So what lead us to develop the application we are presenting today?
LISTNUM 1 \l 13009 MR. FORSYTH: John and Doug asked me to help develop the product design as a result of the research. The goal of their research was to determine a music format for Vancouver that was distinctive and diverse from current offerings.
LISTNUM 1 \l 13010 Firstly, John and Doug analyzed the last several years of BBM statistics. Both John and Doug have rock and country stations, but determined that neither of these formats would meet their criteria of being diverse. The same determination applied to AC.
LISTNUM 1 \l 13011 Being diverse and at the same time being popular enough to have a financially viable business is a challenge. Doug's smooth jazz station, The Wave, certainly fits the diverse criteria, but is it what Vancouver wants? R&B and folk are two other musical genres that are under served in Vancouver.
LISTNUM 1 \l 13012 Hendershot Research Consultants undertook the research for this application through a telephone survey of 450 people in Vancouver 25 to 64 years of age. The primary objectives were to determine Vancouver radio listening habits and the appeal of three music formats: Smooth jazz, rhythm and blues and folk.
LISTNUM 1 \l 13013 These three formats were chosen recognizing they were not programmed to any large degree by the incumbent stations.
LISTNUM 1 \l 13014 Smooth jazz is a metropolitan‑based format that is available in two of the three largest markets in Canada. Vancouver is the exception. We know from The Wave's experience in the Hamilton/Toronto market over the almost past decade that R&B is a complimentary music style to smooth jazz.
LISTNUM 1 \l 13015 As you know, there are many ways to interpret research. We found that the most committed numbers are the most important numbers to us. So, when we ask a respondent if they are very likely or somewhat likely to listen, the important answer to us is the very likely response. Similarly, responses to favourite station and most preferred format are key to our determinations. These are what we call the passion responses.
LISTNUM 1 \l 13016 Our table shows that of the respondents that said they were very likely to listen to one of the three musical styles, 32 per cent were referring to smooth jazz, 39 per cent to rhythm and blues and 29 per cent to folk.
LISTNUM 1 \l 13017 Of those respondents that said one of the three music styles would be their favourite, 42 per cent chose smooth jazz, 30 per cent rhythm and blues and 28 per cent folk.
LISTNUM 1 \l 13018 While there was some interest in folk music based on the passion rating and the compatibility of styles, Vancouver's Groove will be built on foundations of pop, R&B and pop instrumental smooth jazz.
LISTNUM 1 \l 13019 There were other findings the research that convinced us that an R&B smooth jazz hybrid would fill a void in the market. The rhythm and blue and smooth jazz formats are of greater interest to older listeners. Over six in ten respondents 45 to 54 indicated they would listen to these formats. In the research there was a high degree of interest in both rhythm and blue and smooth jazz from the adjacent demographic cells of 35‑44 and 55‑64. We were not alone in finding this interest for this style of music. Research submitted by other applicants also showed a strong response to the R&B format. Almost half of the 35‑44 year old respondents in the Evanov research chose R&B as the format they would listen to most. Smooth jazz was also confirmed as the preferred format amongst respondents 45 plus in other research.
LISTNUM 1 \l 13020 Over two‑thirds of the respondents felt there was no station playing smooth jazz in the market and over 80 per cent felt there was no station playing R&B in Vancouver. This research demonstrates there is an opportunity to increase musical diversity and fill a void with a musical menu that is presently not available in the market.
LISTNUM 1 \l 13021 MR. KASSAY: Comparing the music lists provided by the other applicants shows that our application has the least duplication of artists, songs and format with the incumbent FM stations.
LISTNUM 1 \l 13022 The triple A format shares rock and pop alternative style and artists primarily with CFOX and CFMI, and to a lesser degree Jack. The AC applicants share the same format as, and replicate both the artists and the repertoires of CHQM and Clear. The contemporary hit application mirrors the styles and artists already provided by The Beat and Crave, while the new rock proposal envelopes the same genre presently found at CFMI, CFOX and Jack.
LISTNUM 1 \l 13023 A majority of respondents in all age groups said that there currently is no radio service in the Vancouver market playing the type of music that would be offered on The Coast 104.1. There is currently no Vancouver radio service playing contemporary instrumental music. We have proudly indicated to the Commission our willingness to accept a condition of licence on the minimum 25 per cent instrumental music. As a category 2 applicant, we believe this COL speaks to The Coast's commitment to satisfy the Broadcasting Act's provision for diverse musical programming.
LISTNUM 1 \l 13024 In fewer than 12.5 per cent of all musical selections will be by emerging Canadian artists. The station will offer a hip and sophisticated sound, ideally suited to the west coast temperament and Vancouver's multicultural population. It will focus on music, news and information that address the needs and the interests of mature adults, with over 14 hours per week of spoken word programming.
LISTNUM 1 \l 13025 MR. WRIGHT: As the Commission knows from our previous appearances, working with emerging Canadian artists is a particular passion shared by Doug and me. We are very excited about our plans and even more so because of the people we have to help us execute those plans: Gabriel Mark Hasselbach Dr. Liesa Norman. Gabriel will assume the position as Director of Canadian Content Development for The Coast and Liesa will chair our Canadian Content Development Advisory Group.
LISTNUM 1 \l 13026 Gabriel will now take you through our plans.
LISTNUM 1 \l 13027 MR. HASSELBACH: Hello, my name is Gabriel Mark Hasselbach. I have bit of laryngitis, so please excuse that. I am a recording artist, producer, an event consultant. I have been in the music industry a long time. I am passionate about music and I still to this day struggle to stay in the music industry in this diminishing capacity.
LISTNUM 1 \l 13028 I have travelled and lived in various cities throughout North America and the world, always trying to develop my recording legacy. I have a pretty clear and comparative view of the music industry and from retail and online sales challenges, performance avenues and the hurdles present regarding radio exposure, format and playlist restrictions.
LISTNUM 1 \l 13029 Every major metropolitan area except Vancouver throughout North America has one station with a proposal or a format similar to this and usually two instrumental, pop jazz, mainstream or R&B stations which educates and enlightens audiences and provides a much needed form of programming. Vancouver is sorely lacking and can definitely support this format. This format really suits the west coast lifestyle.
LISTNUM 1 \l 13030 I am fully behind The Coast 104.1 proposal because it has so many areas to give back to the community in general, and emerging artists in particular, through concerts, seminars, recording grants and exposure to radio, which is very hard to come by.
LISTNUM 1 \l 13031 This is a viable and exciting business plan, and here are some of the details.
LISTNUM 1 \l 13032 It is a four‑phase plan. One, The Coast weekend concert series. Ten times per year The Coast will organize and stage a free admission concert as part of The Coast concert series to highlight established and, more importantly, emerging format artists.
LISTNUM 1 \l 13033 Through on‑air promotion, website announcements, et cetera, emerging artists will be encouraged to apply to perform alongside established artists at a Coast concert. I will prepare and organize the submissions and decide the pairings of established and emerging artists to form The Coast concert shows. The Coast Concert Series will be the cornerstone initiative to introduce established artists and develop emerging artists in the Vancouver area.
LISTNUM 1 \l 13034 The second phase, The Coast's artist development seminar. Once per year The Coast will organize and present a free development workshop for musicians in the Vancouver area providing professional insight into recording, artist management, music publishing and the FACTOR process.
LISTNUM 1 \l 13035 The third phase is The Coast music store. As you may know, the brick and mortar idea of music record stores is a long gone idea these days, and this addresses this in a very proactive way. The Coast will establish a music store physically in the station and on line. It is modeled after a concept developed now in beta development and which I understand is operational at The Wave in Hamilton.
LISTNUM 1 \l 13036 The music store will feature independent and emerging artists. It will serve as a place to acquire the music not widely available from music stores in Canada. Promotions on the radio will help drive traffic to these sites. All proceeds received from sales of music at The Coast music store will be paid to the artists for their product. We consider this a tremendous service.
LISTNUM 1 \l 13037 The fourth phase is the Canadian Smooth Jazz Awards show. The Canadian Smooth Jazz Awards show was conceived and nurtured by Mary Kirk of The Wave. In its fourth year now, the show has grown in stature and has become an internationally acclaimed format showcase for primarily Canadian artists, and in the Hamilton area has been broadcast on television and has quite a high stature.
LISTNUM 1 \l 13038 The Coast will help expand the show by adding emerging artists in R&B categories. The plans also include alternating the show between Hamilton/Toronto area and Vancouver. Now, I performed at the show last year and I can assure you it is a world class event and I think this will benefit Vancouver and the artists and the citizens in a great way.
LISTNUM 1 \l 13039 Thank you.
LISTNUM 1 \l 13040 DR. NORMAN: Hi, I am Liesa Norman and I am one of the shareholders of The Coast 104.1. I have also agreed to chair our advisory board on the Vancouver talent development. I look forward to working with Gabriel, Steve, Doug and John in this capacity.
LISTNUM 1 \l 13041 I am here because I have a passion for music, all music. If I can create more opportunity for new artists, emerging artists to have their voice heard, then I will feel that I have made a difference.
LISTNUM 1 \l 13042 As was stated earlier, I am originally a classically trained flautist. I have my first CD being launched this spring. I also have more recently become a singer/songwriter and have delved into the pop/rock genre of music.
LISTNUM 1 \l 13043 I have spent ten years in university acquiring a doctorate in university but, low and behold, although I have a lot of skill in music, no clue how to get my music heard and still five years later am struggling in this regard.
LISTNUM 1 \l 13044 The more time I spend in the music industry the more frustrated I get and the more I realize how hard it is and how difficult it is for new artists like myself to have their music heard.
LISTNUM 1 \l 13045 When the CRTC raised the Canadian content percentage a few years ago, I was hopeful that this would give myself and musicians like me more of an opportunity to have our music played. But what I realized is that actually it just gives well‑established artists more and more air time and has still been frustrating for someone like myself to be heard.
LISTNUM 1 \l 13046 When I released my album last year, that was probably my first exposure to trying to get on the radio. I released two singles and I was actually shocked at how few radio stations would pick up new songs and add my songs to rotation.
LISTNUM 1 \l 13047 The importance of giving emerging artists a voice cannot be overemphasized. In order for music and its listeners to retain freshness, we must make room for these artists that are still beginning their journey. They need these opportunities.
LISTNUM 1 \l 13048 The new developments that we at The Coast 104.1 are proposing today will give new artists an audience and hopefully the opportunity for music to renew and regenerate through this voice that we call radio.
LISTNUM 1 \l 13049 Thank you.
LISTNUM 1 \l 13050 MR. KASSAY: As you can see from your submitted seated chart, Tara Donald is not with us today. She works in the publishing business and it is deadline, deadline, deadline. Unfortunately she couldn't join us. We are very disappointed she can't be here. She is a wonderful R&B artist, and I wanted you to hear what she had to say.
LISTNUM 1 \l 13051 In lieu of her speaking, I would like to read a submission to us from our friend, Warren Hill, Canada's best‑selling contemporary jazz artist, and he tried to move some tour dates to be here today, but it just couldn't be possible.
LISTNUM 1 \l 13052 Warren says:
"I believe that Vancouver needs an adult‑oriented music that plays music other stations do not, including emerging artists from this area.
LISTNUM 1 \l 13053 I support the reference to create a radio listening environment that differs from the mostly rock and AC format stations in Vancouver. The applicants have a proven track record of developing and promoting Canadian music and artists.
LISTNUM 1 \l 13054 Canada has an incredibly long list of successful and highly respected entertainers in the pop and rock fields of music such as Céline Dion, Shania Twain, Neil Young, Nickelback. These artists had the advantage of having multiple pop and rock radio outlet's in every city across Canada to help cultivate their success and their growth in popularity.
LISTNUM 1 \l 13055 Another very important consideration is the example that Doug Kirk has set with The Wave 94.7. The station has introduced listeners to smooth and contemporary jazz, creating wonderful concert events throughout the year, culminating with the Smooth Jazz Awards every spring. Their success with this station should prove overwhelmingly that they can accomplish this in other markets. They have shown that adults are looking for alternatives to the mainstream pop and rock that continues to permeate and dominate the airwaves."
LISTNUM 1 \l 13056 Warren says:
"The refreshing sound they produce with The Wave, as well as opportunities it creates for local musicians to grow and earn a living is unsurpassed in any Canadian city."
LISTNUM 1 \l 13057 MR. KIRK: Thanks, Warren ‑‑ I mean Steve.
LISTNUM 1 \l 13058 Madam Chair and Commissioners, we have had an unprecedented increase in the number of new radio licences over the past five years. In fact, 223 new FM licences were granted between 2003 and 2006. This has brought diversity in programming and ownership to many cities. In this era of new licensing, we come from markets that have been diversified and are now going to markets where we actually may bring diversity.
LISTNUM 1 \l 13059 The current market conditions have bred a group of independent broadcasters ready for growth. And never before has it been more important than now to help us grow.
LISTNUM 1 \l 13060 Vancouver has 15 commercial radio stations and they are all owned by big broadcasting companies. It is a perfect time to bring a non‑big business independent station and independent editorial voice to Vancouver.
LISTNUM 1 \l 13061 This licence is very important to us for several reasons. Vancouver is a very prosperous and buoyant market and promises to be financially success. That is the prime reason why you see all of us here this week, lined up in the hallway and so on, looking for a licence.
LISTNUM 1 \l 13062 But from a personal and corporate viewpoint, a new licence in Vancouver is like winning an Olympic medal in 2010. A Vancouver licence would bring the result of the hard work, talent, experience and over 100 years of radio training sitting at this table and, of course, the result of having the right format for Vancouver.
LISTNUM 1 \l 13063 But there is a more important item. Much more importantly, licensing this format will have an impact on Canadian broadcasting well beyond Vancouver. Pop instrumental and R&B is an underdeveloped format in Canada that has the promise of bringing diversity of choice to many other Canadian cities. Vancouver is such a perfect fit for this west coast sound and Vancouver is critical to the development of the format across the country. Adding Vancouver to Calgary, Winnipeg, and the Hamilton/Toronto area, as well as Montreal will stimulate artist participation and increase the amount of quality Canadian product available for sale and airplay. It will also enhance and enlarge the internationally acclaimed awards show that honours the format musicians.
LISTNUM 1 \l 13064 We, meaning John and I, currently compete successfully with Canada's major broadcasters in our markets in Ontario. We now have the right format for the Vancouver market. We recognize the Commission's emphasis on diversity and the quality of business plan as two important criteria in judging new applications.
LISTNUM 1 \l 13065 While formats are not a condition of licence, they are the engine that drives both diversity and the quality of the business plan. By accepting conditions of licence relative to format elements, we are providing comfort to you that our promise of diversity and our business plan will be realized.
LISTNUM 1 \l 13066 We believe it takes a long‑term approach to really develop distinctive, diverse new formats in Canada. We have done that in Hamilton. The Wave will provide a real sustainable new format in radio for Vancouver.
LISTNUM 1 \l 13067 John.
LISTNUM 1 \l 13068 MR. WRIGHT: Madam Chair, Commissioners, in summary, our application will, number one, significantly increase musical diversity; number two, have no significant economic impact on existing local radio stations; three, provide substantial new support for Canadian content development and in particular for new and emerging Canadian talent; number four, directly contribute to increased ownership and editorial diversity in Vancouver; five, allow strong, successful independent radio broadcasting companies to enter the market in partnership with local investors; and, six, guarantee format diversity through COLs and our track record.
LISTNUM 1 \l 13069 Our proposed format will provide a unique product in Vancouver with broad enough appeal to generate an audience large enough to ensure commercial success.
LISTNUM 1 \l 13070 We thank you very much for listening to us and we welcome your questions.
LISTNUM 1 \l 13071 THE CHAIRPERSON: Thank you, Mr. Wright and panel.
LISTNUM 1 \l 13072 Commissioner Williams will lead the questions.
LISTNUM 1 \l 13073 COMMISSIONER WILLIAMS: Good afternoon, Mr. Wright and Mr. Kirk.
LISTNUM 1 \l 13074 Perhaps I will direct my questions through you, Mr. Kirk, and you can reassign them as required.
LISTNUM 1 \l 13075 MR. KIRK: I would be happy to.
LISTNUM 1 \l 13076 COMMISSIONER WILLIAMS: Your application, like others before, has been very complete and thorough. There are just a few areas that I have to go through and try and make it as pleasant as possible. I am mindful it is late in the day and Commissioner Menzies is anxiously awaiting the opportunity to view his beloved Calgary Flames on TV, but he probably will not see the first period.
LISTNUM 1 \l 13077 Let's begin by talking about The Coast weekend concert series. You say ten times a year. Have you identified what types of venues, the type of public response, how many people might be there either as participants or as audience? Maybe just give me a feel overall for what it would be like to experience this and how you would promote it, et cetera. A good overview of The Coast Weekend Concert Series.
LISTNUM 1 \l 13078 MR. KIRK: Sure, I will start and I will ask John and perhaps Gabriel to join in in a bit.
LISTNUM 1 \l 13079 The whole concept of the concert series was an idea that has really evolved out of The Wave in Hamilton and how we actually brought some emerging Canadian artists up into a higher spotlight, if you will. We think it has great applicability here.
LISTNUM 1 \l 13080 It would take place, we were thinking about having probably eight of the ten series in indoor facilities through many of the inclement weather months in Vancouver, and explore a couple of outdoor facilities to have summer events in an outdoor format.
LISTNUM 1 \l 13081 The whole idea is to have an acknowledged name, a popular artist, come and play and you would have some interest in that and bring a crowd to the facility, and then pair that with an emerging artist; in other words, bring that emerging artist into that spotlight.
LISTNUM 1 \l 13082 So, we were thinking of people like Warren Hill, for example, who is well known and has quite a following certainly in the Toronto area, or a Molly Johnson or someone who is format consistent, bring them into town and then have a local artist participate in the show.
LISTNUM 1 \l 13083 COMMISSIONER WILLIAMS: You said paired, so just one local artist with each of these established artists.
LISTNUM 1 \l 13084 MR. KIRK: It could be a single artist; it could be a band, and they could guest with the established artist, but also put on perhaps the opener of the show with their own half hour or 45‑minute show.
LISTNUM 1 \l 13085 So, that was how the whole thing worked. It has been successful for us in the Hamilton/Toronto area, where we have brought some Canadian artists together with some larger names. It has been a thrill. I can think of, for example, Chris Smith playing with Warren Hill and others in the Toronto area, and brought them into the spotlight and helped them raise their profile in the market.
LISTNUM 1 \l 13086 That is the idea. It is more than that. We would provide obviously the artist fees and the staging and the venue. We were thinking of some local theatres in the Vancouver market like I think the Orpheum Theatre is still available. It is about the right size, 500 to 1,000 seats, to have a successful show like that.
LISTNUM 1 \l 13087 In addition to that, we would provide the emerging artist with a $5,000 incentive to execute their highest priority project, if it was getting a CD recorded to get their career started or whatever, whatever they deem to be their highest priority to fulfil that.
LISTNUM 1 \l 13088 COMMISSIONER WILLIAMS: Just to get a measure of Dr. Norman and Mr. Hasselbach's involvement, where were they involved in helping develop this initiative?
LISTNUM 1 \l 13089 MR. KIRK: We brought them in after we filed the application, but we had thought about this addition.
LISTNUM 1 \l 13090 COMMISSIONER WILLIAMS: On a going forward basis, this would be an area of their interest?
LISTNUM 1 \l 13091 MR. KIRK: On a going forward basis, we have actually talked to Mark and he has agreed to be a contracted coordinator, obviously knowledgeable about the scene here, and would actually coordinate the process. Maybe, Gabriel, you would like to speak to that.
LISTNUM 1 \l 13092 MR. HASSELBACH: I have been in event production for a number of years. For the last ten years I have booked the Bentall Summer Concern Series, as well as Lonsdale Quay. I do mostly corporate events and festivals, concert series, entertainment along that line, so I am well versed in the mechanics of that.
LISTNUM 1 \l 13093 But being a performing artist myself in this genre, what we call pop jazz, I really have my finger on the pulse of the musicians in this area and outlining areas, and I do know two things. There is an audience that is all dressed up and no place to go, they are going to love this. Years ago when CJAZ radio was here, it may have been a small, underfunded radio, but it was a pivotal point for drawing audiences together, and because of that radio station's commitment to instrumental music ‑‑ I think they had an all instrumental format at the time, but it was well loved and because of their commitment, that actually galvanized Vancouver audiences. There were quite a few venues in this town that had that type of music. It was a real scene, and that hasn't been here for a number of years. I know audiences are crying out for that.
LISTNUM 1 \l 13094 Besides, like I say, knowing the mechanics of creating events like this, I am really well aware of the musicians that are forced ‑‑ quote/unquote ‑‑ underground here because they are passion about the music, they are as talented as any U.S. or world counterparts, but again they live in Vancouver and in many ways that is great, but they don't have the opportunities and the exposure that they get that helps the public realize what they really have to offer. Because I have my finger sort of on the pulse of what is going on, I think we will have top flight players, but we will have such an abundance of them I think this is going to be a tremendous success.
LISTNUM 1 \l 13095 COMMISSIONER WILLIAMS: Thank you, Mr. Hasselbach.
LISTNUM 1 \l 13096 Mr. Kirk, in the area of local programming, in your 30th of November 2007 clarification response, you stated that you would offer a minimum of 91 hours of live‑to‑air programming and the remaining 35 hours would consist of locally‑produced weekend program night tracks and possible syndicated programming.
LISTNUM 1 \l 13097 Would night tracks be produced as a voice track programming or would it be produced by a local third party for exclusive broadcast on The Coast FM? How many hours would be devoted to this program on average each week?
LISTNUM 1 \l 13098 MR. KIRK: Thank you for that question. I am going to ask Steve Kassay to comment in a moment.
LISTNUM 1 \l 13099 Just to clarify, the 91 hours that we had committed to was our 6:00 a.m. to 7:00 p.m. live programming seven days a week, the balance being we would include night tracks, and Steve can talk to that, and opportunities for some syndicated programming that are very format consistent with what we do.
LISTNUM 1 \l 13100 Steve.
LISTNUM 1 \l 13101 MR. KASSAY: Yes, thank you.
LISTNUM 1 \l 13102 Commissioner Williams, night tracks is locally produced in house. It is a live show. The plan is to have it live, I should clarify that.
LISTNUM 1 \l 13103 We want to have it live. We put 91 hours down as a minimum for the live programming, as Doug just explained, from 6:00 a.m. to 7:00 p.m. In designing this, I was stuck with a little block from 7:00 till 9:00, and kind of wondering what to do with it, whether I should start night tracks earlier or go later. Nine o'clock seems appropriate. It is a bit of a lower key program, just almost chill, if you will, and it would run from 9:00 until 12:00 or till 1:00. So, we had this block from 7:00 till 9:00.
LISTNUM 1 \l 13104 Upon looking at the grids and our staffing grids, I think we may be able to do it live. I would like to do it live, that is always the preference. But it is locally produced, to answer your question.
LISTNUM 1 \l 13105 COMMISSIONER WILLIAMS: Is it locally produced by a third party, by yourself or someone else?
LISTNUM 1 \l 13106 MR. KASSAY: By us, in house.
LISTNUM 1 \l 13107 COMMISSIONER WILLIAMS: One of our applicants was named In House as well.
LISTNUM 1 \l 13108 MR. KASSAY: Yes. In our house.
LISTNUM 1 \l 13109 COMMISSIONER WILLIAMS: In your house, okay.
LISTNUM 1 \l 13110 Given your clarification of night tracks, does your proposed minimum local programming commitment exceed the 91 hours confirmed in your clarification response? If so, how many hours of local programming would you offer on average each week? What is your total local programming offering?
LISTNUM 1 \l 13111 MR. KIRK: We established the 91 as a minimum.
LISTNUM 1 \l 13112 COMMISSIONER WILLIAMS: That is your minimum?
LISTNUM 1 \l 13113 MR. KIRK: That is our minimum. Right now we will be substantially over that with these programs. We are contemplating a couple of syndicated programs that could take four to eight hours a week.
LISTNUM 1 \l 13114 COMMISSIONER WILLIAMS: Four to eight in addition to the 91?
LISTNUM 1 \l 13115 MR. KIRK: No, that would be syndicated. At this point that would be the only non‑produced programming on the station.
LISTNUM 1 \l 13116 COMMISSIONER WILLIAMS: Non‑locally produced programming would be the four to eight syndicated?
LISTNUM 1 \l 13117 MR. KIRK: Four to eight hours.
LISTNUM 1 \l 13118 MR. WRIGHT: If I could just comment and clarify that. Ninety‑one hours is the live programming. Our local programming consists of that 91 hours, plus that 7:00 to midnight period which might be voice tracked but it is still local programming.
LISTNUM 1 \l 13119 So, our total programming is the 126 hours less the four hours that we are allocating for the syndicated programs.
LISTNUM 1 \l 13120 COMMISSIONER WILLIAMS: Thank you, Mr. Wright.
LISTNUM 1 \l 13121 Let's talk about your category 3 music. Mr. Kirk, in your November 30 clarification response you stated that you would offer between 15 to 20 per cent category 3 music as part of your weekly music mix to provide your proposed R&B smooth jazz and AC music mix with an element of diversity. However, you also indicated you would accept to operate under a conditional licence requiring a minimum of 15 per cent category 3 music as a means of ensuring musical diversity.
LISTNUM 1 \l 13122 Why 15 per cent and not 20 per cent, since you identified both figures in your clarification response and one would expect that the higher percentage would provide a greater level of diversity.
LISTNUM 1 \l 13123 MR. KIRK: I think there are a couple of issues we wanted to comment on.
LISTNUM 1 \l 13124 We have accepted a condition of licence of minimum 25 per cent instrumental music. That is the key element in ensuring diversity.
LISTNUM 1 \l 13125 Our estimate is that about 15 per cent of that would be partly the instrumental and some of the vocal music would be category 3, and that is our estimate of what a comfortable level of category 3 music would be.
LISTNUM 1 \l 13126 The key diversity in differentiating The Coast from others is the commitment to play 25 per cent instrumental music, and of that, some of that instrumental music will be category 3 and some of the vocal music, which is a much larger portion of what we play, will be that. So, combining the category 3 vocal and category 3 as some of the instrumental that we play, we committed to the 15 per cent minimum category 3.
LISTNUM 1 \l 13127 COMMISSIONER WILLIAMS: What category 3 sub‑categories would you draw from? Are we looking at sub‑category 34 jazz and blues primarily or some combination of other sub‑categories such as world beat or folk?
LISTNUM 1 \l 13128 MR. KIRK: The preponderance will be category 34. It will be jazz and blues. Maybe a few vocal selections would be blues oriented and some of the contemporary pop instrumental would fall into category 3.
LISTNUM 1 \l 13129 COMMISSIONER WILLIAMS: Focusing on the 25 per cent figure you mentioned earlier, you offered to operate under two conditions of the licence designed to ensure your proposed format would offer a continued level of musical diversity to Vancouver listeners, and they are to devote a minimum of 25 per cent of all music broadcast each week to instrumental music, as we were just speaking of, and, two, to draw a minimum 15 per cent of all music broadcast each week from category 3 special interest.
LISTNUM 1 \l 13130 I have a couple of follow‑up questions on the issue of musical diversity and instrumental music that will flow from this.
LISTNUM 1 \l 13131 Will your instrumental music be predominantly category 2‑based instrumental music or category 3‑based instrumental music, and referencing your submitted music lists, I am thinking of the smooth jazz component of your music list.
LISTNUM 1 \l 13132 So the question would be would it be predominantly category 2 or category 3?
LISTNUM 1 \l 13133 MR. KIRK: The instrumental music that we play will be a mix. It will be partially category 2 and partially category 3.
LISTNUM 1 \l 13134 Andrew, do you want to speak to that?
LISTNUM 1 \l 13135 MR. FORSYTH: I might pass this over to Mr. Kassay, who deals with category 2 and category 3 24/7 and has done for the last eight years or so.
LISTNUM 1 \l 13136 But I know that on the playlist submitted with the application, if we were to break that particular playlist out, the smooth jazz component would in fact be 28 per cent. However, ‑‑
LISTNUM 1 \l 13137 COMMISSIONER WILLIAMS: Smooth jazz would be 28 per cent?
LISTNUM 1 \l 13138 MR. FORSYTH: Twenty‑eight per cent of the total plays, but it is still within whatever boundary there would be. It is within the 30 per cent maximum allowable.
LISTNUM 1 \l 13139 Steve and I sat down and ran through three or four different hours of programming just trying to see what the proper mix would be, and over a period of time I think what you would find is pretty well what the applicant has applied for, and that is probably 15 per cent of this would be category 3 and the balance would be category 2.
LISTNUM 1 \l 13140 Steve, do you want to add to that?
LISTNUM 1 \l 13141 COMMISSIONER WILLIAMS: Maybe, Mr. Kassay, when you do add to it, if I can get you also to address how will this instrumental music component be incorporated into your music mix? Will it be blended throughout the broadcast day or featured in specialty style block programming, and to what degree will your instrumental music component promote Canadian instrumental artists?
LISTNUM 1 \l 13142 MR. KASSAY: Absolutely, I can address those questions, thanks for asking.
LISTNUM 1 \l 13143 Instrumental music is an integral component in what we do at The Wave and have done for more than one licence term because we are passionate about this and committed to do this. We get it. It is fun and it is fun to program, it is fun to listen to, it is fun to watch, it is fun to play.
LISTNUM 1 \l 13144 This music is interwoven throughout the programming day. It is what executing this format demands. I could share with you alternate playlists in addition to the one that you are looking at, just to help make the point that it is interwoven throughout the day.
LISTNUM 1 \l 13145 A morning playlist, perhaps a day time playlist would be a little longer. I have that as well if you are interested.
LISTNUM 1 \l 13146 The Canadian component is evident in the vocals; the Canadian component is evident in the instrumental music. We have wonderful talent to draw on on both sides of the coin, and they are interwoven into the programming day. It is what the format is is this cool R&B mixed with complementary instrumental music.
LISTNUM 1 \l 13147 I have got Canadian vocals, Canadian instrumentals. They are abundant. Just to address the 25 per cent issue, we wanted to make that commitment to show that indeed we are committed to playing this music and reflecting the level at which it would be programmed into the day.
LISTNUM 1 \l 13148 MR. FORSYTH: I was just going to take the opportunity, since you have put the playlist up, I know you have a small music sample of this.
LISTNUM 1 \l 13149 MR. KASSAY: Absolutely.
LISTNUM 1 \l 13150 COMMISSIONER WILLIAMS: Isn't that a wonderful break at this time of the day?
LISTNUM 1 \l 13151 MR. KASSAY: If you would indulge me. Even at the end of the day you can have a little fun.
‑‑‑ Audio presentation / présentation audio
LISTNUM 1 \l 13152 MR. FORSYTH: I think you get an idea from that. Steve, if you can put the list back up for a second that would be really helpful.
LISTNUM 1 \l 13153 I think you get a sense of the instrumental component is there and it is a part of the flow of this and it keeps the rhythm up and it keeps the station moving forward. The sample that Steve played for you is anchored by an old R&B hit record into the Boney James song which is a top 10 smooth jazz instrumental. It is not getting played at all in the market into certainly a classic Van Morrison song, Van the Man is a great sax player himself, into Carol Welsman, a Canadian pianist, who really has very, very low profile in mainstream radio; Al Jarreau, a great contemporary rhythm and blues singer, much in the style of Lou Rawls, that style of R&B. Cornielle, a young Canadian I believe from Montreal who has had some success at AC radio across Canada and also some of the smooth jazz stations, but we checked and it has never been played in Vancouver. An amazing young talent in the R&B field, and then finishing off with two very, very funky pieces to follow up.
LISTNUM 1 \l 13154 That, I think, gives you and idea of several things here, knowing it is the flow of the music, it is how the instrumentals are wrapped together into it, how the Canadian artists are mixed into it, and how the emerging artists get to stand out in the music itself. I hope this has been helpful.
LISTNUM 1 \l 13155 COMMISSIONER WILLIAMS: It has been helpful, Mr. Forsyth, thank you.
LISTNUM 1 \l 13156 In response to earlier questions you have indicated that your proposed music mix will include some category 3 music and more specifically some music drawn from sub‑category 34, jazz and blues as we have discussed.
LISTNUM 1 \l 13157 As you may be aware, the new commercial radio policy announced in Public Notice 2006‑158 specified increased weekly Canadian content requirements for music drawn from sub‑category 31 classical and sub‑category 34 jazz and blues. Do you envision any problem at all in meeting the new 20 per cent weekly minimum Canadian content requirement for sub‑category 34 jazz and blues?
LISTNUM 1 \l 13158 MR. KIRK: We don't anticipate any problem. You can see that we have already sort of built that in and that is what we do. In fact, we commit to do 35 per cent Canadian of both category 2 and category 3.
LISTNUM 1 \l 13159 COMMISSIONER WILLIAMS: So, would you commit to that as a condition of licence?
LISTNUM 1 \l 13160 MR. KIRK: Yes, we would.
LISTNUM 1 \l 13161 COMMISSIONER WILLIAMS: Thank you.
LISTNUM 1 \l 13162 In your clarification response dated 30th November, 2007, you clarified the proposed over and above CCD funding levels. Excluding the 20 per cent factor funding, the over and above CCD would be incremental starting at ‑‑ just give me a second while I get to that page ‑‑ starting at $331,000 in year 1, rising to $400,000 in year 7. Excluding your FACTOR funding, would you confirm your incremental funding levels for each year over the seven years?
LISTNUM 1 \l 13163 MR. WRIGHT: I would be glad to do that. Year 1 is $331,000, same as year 2. Year 3 is $364,000; year 4 is $364,000; year 5 is $400,000; year 6 is $400,000; and year 7 is $400,000.
LISTNUM 1 \l 13164 COMMISSIONER WILLIAMS: Thank you, Mr. Wright.
LISTNUM 1 \l 13165 The funding allocations on record for the jazz concert series, arts development seminar, The Coast music store and Canadian Smooth Jazz Awards total $300,000 in year 1. However, this is $31,000 less than the funding clarified in your 30th of November clarification response. Would you comment on the apparent difference between the year 1 funding levels?
LISTNUM 1 \l 13166 MR. WRIGHT: Yes, we did have in the supplemental brief mention of a coordinator of Canadian content development and we did allow $31,000 as a contract amount for this.
LISTNUM 1 \l 13167 COMMISSIONER WILLIAMS: Also, unless I misunderstand, your clarification reply seems that year 7 funding levels were not provided for The Coast music store initiative and Canadian Smooth Jazz Awards as part of your incremental funding. Could you provide us with a complete chart indicated on the incremental funding level for all initiatives beginning in year 1 through year 7, and the initiatives, I guess, would be the jazz concert series, the arts development seminar, The Coast music store, the Canadian Smooth Jazz Awards and the amount of funding allocated to each one of those.
LISTNUM 1 \l 13168 MR. KIRK: Yes, we can provide that.
LISTNUM 1 \l 13169 COMMISSIONER WILLIAMS: You can do it now or you can do it later, whichever is easier for you.
LISTNUM 1 \l 13170 MR. KIRK: We will do it as a separate table that will just clarify what we filed.
LISTNUM 1 \l 13171 COMMISSIONER WILLIAMS: And legal counsel will let you know when she needs it by.
LISTNUM 1 \l 13172 MR. KIRK: Sure, no problem.
LISTNUM 1 \l 13173 COMMISSIONER WILLIAMS: Thank you.
LISTNUM 1 \l 13174 Under the previous Canadian talent regime, the music store initiative undertaken at The Wave in Hamilton and similar to the one proposed in this application qualified as eligible CTD. However, under the new CCD eligibility guidelines, it is not clear if this initiative qualifies as CCD.
LISTNUM 1 \l 13175 In your 30th November, 2007 clarification response, you provided additional information on why you feel The Coast music store initiative should qualify as eligible CCD under the new funding guidelines. However, could you elaborate further on why you feel this initiative meets the new CCD eligibility requirements, please?
LISTNUM 1 \l 13176 MR. KIRK: I will let John comment on how we plan to fulfil it. I just wanted to give you a little bit of history on how this whole music store idea started.
LISTNUM 1 \l 13177 Sometimes it is just listening. When we started The Wave in Hamilton a number of artists approached us, and these were artists that we had discovered in the process of building the Canadian music that we had started to play on the station. They approached us and said, I've got no place to sell my CDs other than out of the trunk of my car when I go to a place where I am playing or whatever, and I am sure Gabriel Mark and Liesa can talk to that. They started to approach us and said, could you just keep some of these CDs at the station and sell them? We said, that is not a bad idea. That brings people into the station. It reenforces the format and so on.
LISTNUM 1 \l 13178 So, we started on a very small scale just stocking some of the artists. Now we have about 35 artists that we have stocked product at the station. We have moved it on to an online platform that we are just getting live. It should be live, but there is always something coming up with internet clearing and so on. But it is live now.
LISTNUM 1 \l 13179 It gives a venue for artists to actually get the product listed and a place for people, their fans who may be at their concert and want to buy their CDs, they can't find them at HMV because they are not stocked. This is the place where they are going to buy it. So, it is fulfilling the mechanism of distributing the product for the artist is basically the idea. It has grown from that very simple little idea into something that is now quite big.
LISTNUM 1 \l 13180 COMMISSIONER WILLIAMS: So, the sales revenue from this product, where does the sales revenue go?
LISTNUM 1 \l 13181 MR. KIRK: The sales revenue currently is something we get either by clearing a Visa or a credit card or some people come in and buy the product.
LISTNUM 1 \l 13182 COMMISSIONER WILLIAMS: Do you keep the money?
LISTNUM 1 \l 13183 MR. KIRK: Oh no, we pay the artist.
LISTNUM 1 \l 13184 COMMISSIONER WILLIAMS: Do you pay the artist all of the money or are there any deductions for overhead?
LISTNUM 1 \l 13185 MR. KIRK: We take a little bit of the money that we get because often we have to ship it. We pay either a courier or postage on it. The artists have set a price and we have agreed to a number. This is The Wave store.
LISTNUM 1 \l 13186 The Coast store will be substantially different, and John will talk about that.
LISTNUM 1 \l 13187 COMMISSIONER WILLIAMS: Mr. Wright.
LISTNUM 1 \l 13188 MR. WRIGHT: We have allocated $25,000 annually, and I think it is important to discuss where that money is going. Initially there will be $10,000 in capital to physically set up the store and set up the website and get it all ready for business, and then the additional $15,000 in year 1 is really marketing money for the store, not for the radio station, for the store. In years 2 and on, the entire $25,000 will be marketing the store.
LISTNUM 1 \l 13189 All of the funds that we get from the sale of these CDs will go to the artist. There will be no money that is kept by the radio station at all; no administration fee, no money at all.
LISTNUM 1 \l 13190 COMMISSIONER WILLIAMS: No rent, no utilities, or other overheads?
LISTNUM 1 \l 13191 MR. WRIGHT: Nothing. The artist will basically come to us and say, look, we have 50 CDs here and would you sell them at $14.95? We would say, yes, and as we sold them at $14.95, we would send the artist a cheque for X number of units times $14.95. So, all the funds will go to the artist.
LISTNUM 1 \l 13192 COMMISSIONER WILLIAMS: And the types of artists that you are playing on your radio station will make up some of the inventory within your store or all of the inventory within your store?
LISTNUM 1 \l 13193 MR. WRIGHT: Yes.
LISTNUM 1 \l 13194 MR. KIRK: As I mentioned, we have about 35 artists' CDs at The Wave in Hamilton. This is what started it. We would have any format‑related artists that wanted to get into this program with The Coast.
LISTNUM 1 \l 13195 COMMISSIONER WILLIAMS: I have actually bought CDs from an emerging artist and recognized how difficult it was. One of the former premiers in the Northwest Territories is an emerging artist and sells his CDs. In fact, I bought a couple off him for $20. He carries a few with him wherever he goes. So, I know it is difficult, unless you are a big star, to move your product.
LISTNUM 1 \l 13196 MR. KIRK: Just to add a little bit of flavour from I think Gabriel and maybe Liesa would like to comment on the process.
LISTNUM 1 \l 13197 DR. NORMAN: What is also great because if you don't have a car and a trunk to sell your CDs out of, now you have a store. So, it is an ongoing problem, as anyone remotely familiar with the music industry knows that selling your CDs and just have having a place for them in general is one more outlet that would help artists, any artists emerging or otherwise.
LISTNUM 1 \l 13198 MR. HASSELBACH: I would also like to add that we are all very proud of what FACTOR attempts to do, and I understand FACTOR probably has more money to play with now than every, but the big whole missing in their game plan is there is no brick and mortar place to sell CDs. They may be developing artists, but they ask for a business plan, they have all this, but there is an enormous hole where the marketing of the CDs is. That is just the way of the industry.
LISTNUM 1 \l 13199 So, I think the station here has done them one better in a tremendous way. Not only are they helping to get some of these artists recorded, but they are actually providing that pivotal point where they sell their product.
LISTNUM 1 \l 13200 For example, I have quite a few different CDs out, and I could not get them in, even in consignment, to the local stores here that do still remain and sell CDs, Chapters or HMV. I cannot get them in a store to save my life. I couldn't even give them to them and say, here, give them away as promotion; I couldn't do that because there is not a system that allows for that.
LISTNUM 1 \l 13201 This is quite a unique and viable opportunity that is going to really benefit the musicians in this city.
LISTNUM 1 \l 13202 DR. NORMAN: One more thing. With online sales, of course, you have to have a label to even get to iTunes or Amazon. So it is not like an independent artist can just call iTunes and get their music online either. I have resorted to phoning HMV to ask them if they have Liesa Norman in stock over and over again just to try and get it on the shelves.
LISTNUM 1 \l 13203 MR. KIRK: And how have you done?
LISTNUM 1 \l 13204 DR. NORMAN: Terrible.
LISTNUM 1 \l 13205 COMMISSIONER WILLIAMS: Is there an opportunity here for FACTOR to take some of that tremendous amount of money and franchise across the country and have stores featuring Canadian musical stars?
LISTNUM 1 \l 13206 MR. WRIGHT: There could be. We are certainly excited about transferring this on to the web as well. We have had some great success with our local radio stations on websites and just absolutely great response. Many of us have loyalty clubs and we have thousands and thousands of members of our loyalty clubs. So, combining this with a click through and an ability to buy the product, listen to the product and then buy the product right on the website we think will be a very exciting development for emerging artists.
LISTNUM 1 \l 13207 MR. KIRK: Just one final thing, and something we have noticed with the format, we think the same will happen here. People in this format, and the target, of course, is 45 to 64, people want the product. They may be savvy with computers and can download, but they still like to have the product in hand. They want to buy the CD; like you, I want to see the notes, I want to see all the information off the CD. This is why we sell the stuff out of The Wave.
LISTNUM 1 \l 13208 DR. NORMAN: Thank God someone is going to look at it.
LISTNUM 1 \l 13209 COMMISSIONER WILLIAMS: In the event the Commission determines that your Coast music store initiative does not qualify as eligible CCD, under the new guidelines would you redirect this annual funding or do you increase your annual and overall and above CCD contribution commitment by the amount set aside for this initiative?
LISTNUM 1 \l 13210 MR. WRIGHT: No, we would just reallocate.
LISTNUM 1 \l 13211 COMMISSIONER WILLIAMS: Reallocate it?
LISTNUM 1 \l 13212 MR. WRIGHT: Yes, we would.
LISTNUM 1 \l 13213 COMMISSIONER WILLIAMS: Thank you.
LISTNUM 1 \l 13214 In the area of economics, the Vancouver radio market was served by a station offering a blended AC and smooth jazz music mix from 2003 through 2006, at which point CKCL‑FM dropped much of its smooth jazz programming in favour of a greater AC music orientation. What elements of your proposal do you feel will allow your station to achieve audience share and financial success where other stations of similar format may have been highly challenged to do so, not only in Vancouver but in other Canadian markets as well?
LISTNUM 1 \l 13215 MR. WRIGHT: I think Andrew will have a comment on this in a moment, but it is my understanding that Clear FM, of course, is not a Vancouver radio station. It is from out of the market but gets into Vancouver. So, it is not quite the same as being the local Vancouver station. People want to listen to their local stations and we are local radio operators.
LISTNUM 1 \l 13216 When we are in a market, we are in the market and we are very involved in the market; we are very community oriented. That is part of building the audience.
LISTNUM 1 \l 13217 Clear was financially successful in its other format, in its other life, but I think the decision was they felt that they could do better and they changed their formats. But their shares were respectable for a station that was not a Vancouver station, but was in the Vancouver market, and we think that we can exceed that.
LISTNUM 1 \l 13218 I will ask Andrew to comment on the research in a moment, but as the other applicants were talking about, I think there is something special in the water in Vancouver because we had the same experience that I think the two or three other applicants that I was listening to were saying that the research numbers were extraordinarily high for their formats, and we got our research back here in Vancouver and we kept looking at it and we just couldn't believe how high the numbers were.
LISTNUM 1 \l 13219 When we actually did our share calculation, as Andrew was saying earlier, we deal with the passion index, we deal with the passion numbers, the very likely or it is my favourite radio station, and we took those numbers and when research comes in, let's say 20 per cent of the people say that they would be very, very likely to listen to that format, there is still a conversion rate that must be applied to that because it is one thing to say you are very likely to listen to the format when somebody speaks to you on the telephone for a survey; it is another thing to get you to put it on your dial. That is a real challenge. That is a challenge that takes marketing money, programming, awareness, all these things, and it builds over time.
LISTNUM 1 \l 13220 Initially the conversion factor is a number that we all look at and say can we achieve this conversion. We put a 40 per cent conversion in because we just felt the number is so high, how can we possibly get that big a share?
LISTNUM 1 \l 13221 Andrew, would you have a further clarification on that?
LISTNUM 1 \l 13222 MR. FORSYTH: Not that there is necessarily a set ceiling for putting a conversation on research data, but 40 per cent is the high end of the conversation rate for year 1. We felt that would at least bring the numbers back down to a realistic number. We certainly wanted to make sure that what this station was going to do was going to be achievable, and certainly knew the history in this marketplace of CJAZ and certainly knew the history in this marketplace of Clear, where I think that radio station generated an awful lot of passion for the style of music we are talking about today, although there would be a lot of technical differences between what Clear did at that point in time and what The Coast is proposing to do.
LISTNUM 1 \l 13223 But when we look at the conversation factors, John was saying, you know, 40 per cent for year 1, it ramps up through years 5, 6 and 7 to as high as 60 per cent, and that is just to keep the numbers, again, achievable and down. So, at the end of the day, we have really tried to pour some cold water on the boiling hot water we saw as a response to the format.
LISTNUM 1 \l 13224 This came across certainly when it was just the initial, would you listen to smooth jazz, and 17 per cent came back and said, yes, we would, and 17 per cent share is a pretty good place to start. Would you be like to listen to R&B, and that number, in fact, was higher; it was 21 per cent rounded up. We actually just said, let's take the lower one and again let's put in a pretty stringent conversation factor and keep the numbers down to a reasonable assessment.
LISTNUM 1 \l 13225 MR. HASSELBACH: Could I add something, just a personal thought?
LISTNUM 1 \l 13226 COMMISSIONER WILLIAMS: Absolutely.
LISTNUM 1 \l 13227 MR. HASSELBACH: I followed Clear FM quite heavily. That was the only game in town for a few years. It was the best that was available at the time. My personal impression is, though, that the station had the sound and feel of a more typical AC station and it was a little bit too hyper and didn't necessarily capture the Vancouver spirit. A lot of the instrumental music they played seemed a little bit like an afterthought.
LISTNUM 1 \l 13228 I think had they had a little more cohesive programming with a little more R&B and just got behind the development of the music and educated listeners a little more, I think they would have had better success.
LISTNUM 1 \l 13229 COMMISSIONER WILLIAMS: Mr. Kirk and partners, what is your level of commitment to funding unexpected losses over and above those estimated? Would you anticipate expense cuts or major changes in the areas of programming to make up any financial shortfalls?
LISTNUM 1 \l 13230 MR. WRIGHT: We put this together with a very strong investor group. We are well financed. We are well able to take care of any temporary downfalls or longer term downfalls.
LISTNUM 1 \l 13231 The critical thing is to stick to the plan from a programming and promotion point of view. We have put good resources behind our programming plan. We need to do that if we are going to be successful as a radio station.
LISTNUM 1 \l 13232 There is an old expression, you can't cut your way to success, and we certainly would not cut our way and try to be successful doing that. So, we would maintain all our plans. Usually our history too has been that our programming expenditures that we plan out end up being conservative. We always end up as we go, we always seem to end up spending more money on programming as we get into the market and we look at more opportunities and more things that we can be doing.
LISTNUM 1 \l 13233 I think if there is an expense side of the business that we are not good at managing it is the programming expense because it is so vital to the success of the radio station. So, no, we would not alter our expense side of our plans.
LISTNUM 1 \l 13234 COMMISSIONER WILLIAMS: Thank you, Mr. Wright.
LISTNUM 1 \l 13235 Mr. Kirk, in your opening remarks near the end you suggested a new licence in Vancouver is like winning an Olympic medal in 2010. In spite of what you heard about the pace of our licensing process, I want to assure you that this Olympic medal will be awarded in the form of a new radio licence to the successful applicants well before 2010.
LISTNUM 1 \l 13236 MR. KIRK: Good. We are ready.
LISTNUM 1 \l 13237 COMMISSIONER WILLIAMS: That concludes my line of questioning, Madam Chair.
LISTNUM 1 \l 13238 THE CHAIRPERSON: Thank you, panel.
LISTNUM 1 \l 13239 The question is how many do you think we should licence and who?
LISTNUM 1 \l 13240 MR. WRIGHT: I will attempt to answer the how many, and I will let somebody else answer the who.
LISTNUM 1 \l 13241 Vancouver is such a buoyant market really. As many stations as there are frequencies I think could be licensed without adverse effect on others, and I think it would add to the diversity of radio services available in the market.
LISTNUM 1 \l 13242 MR. KIRK: I think the key thing in the process is looking at formats that are not available in the market, that aren't variations of other formats but are providing some real diversity and offering music genres that are not available in the market now.
LISTNUM 1 \l 13243 THE CHAIRPERSON: If you were to be licensed, which other format do you think is the most compatible or would have the least impact?
LISTNUM 1 \l 13244 MR. WRIGHT: We wouldn't be concerned. We would be okay with whatever the Commission decided.
LISTNUM 1 \l 13245 THE CHAIRPERSON: I believe legal, Ms Pinsky, has some questions.
LISTNUM 1 \l 13246 MS PINSKY: Thank you, Madam Chair. I just have a few points of clarification.
LISTNUM 1 \l 13247 In your discussion with Commissioner Williams you mentioned that you would intend to have 35 per cent Canadian content for both category 2 and category 3. I just wanted to clarify whether that was separate 35 per cent for category 2 and 35 per cent for category 3 or whether that was 35 per cent for both together?
LISTNUM 1 \l 13248 MR. KIRK: It is for both categories. We would commit to 35 per cent Canadian for category 2 and category 3, separate commitments. I know it is 20 per cent, but we would commit to 35 per cent for the category 3.
LISTNUM 1 \l 13249 MS PINSKY: Thank you.
LISTNUM 1 \l 13250 Just to clarify, was that in your application at any point, the 35 per cent for category 3?
LISTNUM 1 \l 13251 MR. KIRK: I believe it was. We committed to 35 per cent overall.
LISTNUM 1 \l 13252 MS PINSKY: Overall, yes, and for category 3 specifically?
LISTNUM 1 \l 13253 MR. KIRK: I can't speed read it in ten seconds.
LISTNUM 1 \l 13254 MS PINSKY: Perhaps you could get back to me on that.
LISTNUM 1 \l 13255 MR. KIRK: We will confirm that to you, but what we are saying to you is we had intended to be 35 per cent overall, both category 2 and category 3. So, we will confirm that. That is what we will do.
LISTNUM 1 \l 13256 MR. WRIGHT: Are we misunderstanding something here?
LISTNUM 1 \l 13257 MS PINSKY: No, I don't think so. There is a difference between 35 per cent for category 2 and 3 combined versus 35 per cent for category 2 and a separate commitment for 35 per cent for category 3. And as I understood the application, it was 35 per cent overall for I think I saw category 2.
LISTNUM 1 \l 13258 MR. KIRK: I think I understand. You are saying we could play 37 per cent in category 2 and 20 per cent in category 3 which would give us 35 per cent overall.
LISTNUM 1 \l 13259 MS PINSKY: Yes.
LISTNUM 1 \l 13260 MR. KIRK: That is just the mathematical conclusion, right, but we will commit to the 35 per cent minimum for both and we will confirm that to you in writing.
LISTNUM 1 \l 13261 MS PINSKY: I might as well just clarify the deadlines with respect to that as well as the deadline for filing, as I understand, you are going to clarify the allocations per year for each of your 1 through 7 for each initiative. You could do that by the end of day tomorrow?
LISTNUM 1 \l 13262 MR. KIRK: Yes, we could.
LISTNUM 1 \l 13263 MS PINSKY: And, as well, if you could respond to my 35 per cent question?
LISTNUM 1 \l 13264 MR. KIRK: Yes, we will.
LISTNUM 1 \l 13265 MS PINSKY: Finally, I understood through your discussions with Commissioner Williams that the additional $31,000 a year, which we couldn't account for, you have said would be allocated toward a CCD local talent coordinator. Just to get a better idea of what this function would be, first of all, is this a full‑time position?
LISTNUM 1 \l 13266 MR. KIRK: No, it is not a full‑time position. It would be a part‑time third party contract.
LISTNUM 1 \l 13267 MS PINSKY: Part‑time third party contract.
LISTNUM 1 \l 13268 Can you just briefly describe what the specific responsibilities of this individual would be?
LISTNUM 1 \l 13269 MR. KIRK: It is intended to be Mr. Hasselbach, who will coordinate the whole local effort to find, identify emerging artists in the market, as well as constructing all the arrangements to stage and bring for our approval the arrangements for this concert series.
LISTNUM 1 \l 13270 MS PINSKY: Just to clarify, so he would not otherwise be employed by the station for other purposes?
LISTNUM 1 \l 13271 MR. KIRK: Correct.
LISTNUM 1 \l 13272 MS PINSKY: Finally, if this aspect of the CCD commitment were not accepted by the Commission as being eligible, would you redirect the $31,000 a year or would it be reduced by that amount?
LISTNUM 1 \l 13273 MR. KIRK: We would redirect it.
LISTNUM 1 \l 13274 MS PINSKY: Thank you very much.
LISTNUM 1 \l 13275 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 13276 Just to follow up on the Canadian content, because I am not very clear and my concern is that when you file your undertaking it still won't be clear. What we need you to be aware of is that the category 2 music has, I believe, a 35 per cent minimum requirement. The category 3 has a minimum 10 per cent requirement, and then within the category 3, if you play the sub‑categories, for example, jazz and blues, it also has I believe a 10 per cent requirement. If you add another sub‑group like concert, there is yet another minimum Canadian content requirement.
LISTNUM 1 \l 13277 So, that is why, if you tell us that overall 35 per cent, there is no assurance to us that within the sub‑groups under each category you will still meet. You cannot shift the excess of content in one category into another necessarily. So, when you file your undertaking, I just remind you to be aware of those minimum requirements in each sub‑category and to meet them, if that is your intention.
LISTNUM 1 \l 13278 MR. KIRK: Thank you.
LISTNUM 1 \l 13279 We understand that the category 3 commitments are at a lower percentage level, the regulation. But we will make it clear that we will commit to a minimum 35 per cent in both category 2 and all the category 3 elements.
LISTNUM 1 \l 13280 THE CHAIRPERSON: Thank you. I wish it were simpler like just 100 per cent Canadian.
LISTNUM 1 \l 13281 MR. KIRK: I think Gabriel and Liesa might like that too.
LISTNUM 1 \l 13282 THE CHAIRPERSON: Here is your opportunity for the last minute pitch on why you believe you are the best.
LISTNUM 1 \l 13283 MR. KIRK: I am going to let John give the two‑minute wrap up.
LISTNUM 1 \l 13284 MR. WRIGHT: Madam Chair, thank you for clarifying that Canadian issue too. It helps us very much.
LISTNUM 1 \l 13285 We are very ready for this licence and we are convinced that The Coast 104.1, Vancouver's Groove is the best choice for Vancouver. There is probably a three or a four share available out there for all the applicants, all the formats that have been applied for, and we all know Vancouver's economy is vibrant and can support and would benefit from additional radio services. Although formats are not a condition of licence, we believe in a market with 15 commercial radio stations that format is an issue.
LISTNUM 1 \l 13286 Every time we do research we get the same comments. All stations sound the same. Every time I punch around the dial, all I hear is rock and pop hits. Where is the station for me? This is why we researched format choices that are not currently in Vancouver. Our format will play 25 per cent pop instrumentals. This will make The Coast 104.1 very different from all other choices, and we have agreed to conditions of licences to ensure the diversity throughout the licence term.
LISTNUM 1 \l 13287 Much as we love rock music and run two very successful rock music stations, and much as we love country music and operate two successful country stations, licensing another version of rock or country in Vancouver would deprive Vancouver listeners of true listening alternatives. With no conditions of licence, how long will it be before applicants promising to play unknown cuts by U2 or the Rolling Stones or Sum 41, how long will it be before they decide that they can get more listeners by playing the hits by U2 or Sum 41 of the Stones. Format is one of the big differences between the applicants.
LISTNUM 1 \l 13288 Vancouver already has rock stations, several of them. Vancouver already has AC stations. Vancouver already has top 40, urban, country and adult hits. What Vancouver doesn't have is The Coast 104.1, Vancouver's Groove. Our pop R&B and smooth jazz station is decidedly different and guaranteed to remain so by our commitment and by COL. We offer diversity of format, diversity of ownership, a substantial commitment to CCD, and a sound business plan.
LISTNUM 1 \l 13289 For these reasons, we feel our application is in the public interest, and thank you very much for allowing us to speak to you today.
LISTNUM 1 \l 13290 THE CHAIRPERSON: Thank you very much, panel. Thank you for staying with us so late and thanks for your time.
LISTNUM 1 \l 13291 THE SECRETARY: We will start at 8:30 tomorrow morning. Thank you.
‑‑‑ Whereupon the hearing adjourned at 1836, to resume
on Wednesday, February 27, 2008 at 0830 /
L'audience est ajournée à 1836 pour reprendre le
mercredi 27 février 2008 à 0830
REPORTERS
____________________
Barbara Neuberger
- Date modified: