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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 /
Diverses demandes de radiodiffusion
HELD AT: TENUE À:
Quartz Ballroom Quartz Ballroom
Matrix Hotel Matrix Hôtel
10001-107th Street 10001-107th Street
Edmonton, Alberta Edmonton (Alberta)
June 3, 2008 Le 3 juin 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 /
Diverses demandes de radiodiffusion
BEFORE / DEVANT:
Elizabeth Duncan Chairperson / Présidente
Rita Cugini Commissioner / Conseillère
Candice Molnar Commissioner / Conseillère
ALSO PRESENT / AUSSI PRÉSENTS:
Cindy Ventura Secretary / Sécretaire
Lyne Cape Hearing Manager /
Gérante de l'audience
Véronique Lehoux Legal Counsel
Conseillère Juridique
HELD AT: TENUE À:
Quartz Ballroom Quartz Ballroom
Matrix Hotel Matrix Hôtel
10001-107th Street 10001-107th Street
Edmonton, Alberta Edmonton (Alberta)
June 3, 2008 Le 3 juin 2008
- iv -
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PHASE I
PRESENTATION BY / PRÉSENTATION PAR:
Aboriginal Multi-Media Society of Alberta 1225 / 8138
Don Kay (OBCI) 1257 / 8370
Rogers Broadcasting Limited 1346 / 8959
John Charles Yerxa 1411 / 9369
Jim Pattison Broadcast Group Limited Partnership 1483 / 9801
Edmonton, Alberta / Edmonton (Alberta)
‑‑‑ Upon commencing on Tuesday, June 3, 2008 at 0905 /
L'audience débute le mardi 3 juin 2008 à 0905
8133 THE SECRETARY: Good morning.
8134 We will now proceed with Item 18 on the Agenda, which is an application by Aboriginal Multi‑Media Society of Alberta for a licence to operate an English and native language FM Type B native radio programming undertaking in Edmonton.
8135 The new station would operate on frequency 98.5 MHz, Channel 253B‑.1, with an effective radiated power of 9300 watts, non‑direction antenna height of 162 metres.
8136 Appearing for the applicant is Bert Crowfoot.
8137 Please introduce your colleague and you will then have 20 minutes to make your presentation.
PRESENTATION / PRÉSENTATION
8138 MR. CROWFOOT: Thank you very much.
8139 To my left is Allan Standerwick, the Director of Radio for Aboriginal Multi‑media.
8140 Good morning, Commissioners. My name is Bert Crowfoot. I am a Siksika Saulteaux from the Siksika Nation of the Blackfoot Confederacy in southern Alberta. My Indian name is Cayastoya(ph) or Bear Ghost, which is one of my great‑great grandfather's names, and I am very proud to carry his name.
8141 This morning I had a smudge to ask the Creator that I might be able to stay the words to you that will best convey the message that we want you to hear.
8142 So the Aboriginal Multi‑Media Society, or AMMSA, is a not‑for‑profit corporation communication organization that consists of several divisions. In addition to CFWE, The Native Perspective, AMMSA publishes Wind Speaker, Canada's national aboriginal newspaper, as well as provincial community news magazines, Alberta's Sweet Grass and Saskatchewan's Sage.
8143 Through the Buffalo Spirit Communications Foundation we produced a television pilot last summer for OMNI Television called The Quest of Buffalo Spirit, and it will be aired in the fall of 2008 in both English and Mandarin languages.
8144 AMMSA's mandate is inclusive of all aboriginal groups in Canada, including First Nations, Métis, Inuit and nonstatus Indians. With this presentation we will describe our proposal to expand the native radio network of CFWE.
8145 For reference, our application is comprised of three parts: the addition of a regional transmitter site to serve the aboriginal population of the Edmonton region; the addition of a transmitter to serve the aboriginal population at Fort McMurray; and the application for a Type B native radio licence.
8146 Prior to describing the reasons for the need to expand our network, it would be beneficial to provide the history of CFWE.
8147 AMMSA celebrated 25 years of community service in March of 2008. We are committed to the continued development and promotion of the heritage of Canada's aboriginal peoples through increased access to communications.
8148 AMMSA established CFWE in 1987 specifically to serve the aboriginal population located throughout Alberta. Initially the distribution system was unique through an arrangement with CBC TV in Edmonton. The audio from the daily program known as The Native Perspective was broadcast by CBC TV weekday mornings. We were known as the radio station on TV. The Native Perspective was heard in aboriginal communities throughout northern Alberta.
8149 On August 31, 1987, CFWE‑FM made its initial broadcast to the town of Lac La Biche, Alberta, from a transmitter site located on the roof of a building across from the studios. This was to signal the start of a new method of communicating with aboriginal communities in Alberta.
8150 Distribution of The Native Perspective program weekday mornings to remote communities via the CBC TV network continued simultaneously. However, the limitations of this arrangement were becoming apparent.
8151 CBC network scheduling changes were making it impossible for AMMSA to reach its programming commitment of 20 hours per week as specified by the Northern Native Broadcast Access Program, NNBAP, which provided the funding for this program.
8152 In 1989 an alternative signal delivery system was established and was comprised of a small network of low powered FM transmitter sites all receiving CFWE program via satellite technology. Ten communities in northern Alberta were selected initially.
8153 In 1990, 19 communities were added to the CFWE network.
8154 On November 1, 1991 the agreement between CFWE and CBC to air The Native Perspective program ended. This added to the urgency to which CFWE pursued satellite distribution.
8155 To compound the problem, CBC, via CBC, was the only radio link for many communities.
8156 An additional 19 communities were added to our network in 1991. This network now consists of 48 FM sites serving 55 communities throughout Alberta.
8157 Several of the communities expressed interest in producing their own programming through community radio. Working with these community stations enables CFWE to strengthen the communication with rural areas by sharing information with the rest of the province.
8158 In 1993 AMMSA relocated the studios of CFWE to its administrative offices in Edmonton. The primary purpose of the Northern Native Broadcast Access Program was to provide radio to isolated or underserved aboriginal communities. Given the number of communities and budget limitations, it was necessary to use low‑power FM transmitters.
8159 While this type of installation does provide the community with radio, it limits the signal coverage to the central part of the community only. Consequently, reception is poor or nonexistent for those people who live some distance from the centre of a community or travel between nearby communities.
8160 In 1990 the federal government cut back on funding for the Northern Native Broadcast Access Program. It also completely eliminated the distribution program that helped expand our radio network, and it also cut the Native Communications Program that funded our print operations.
8161 AMMSA's print operations have since become self‑sufficient and Radio Bingo was introduced in 1996 to generate revenue to continue the expansion of the distribution of the radio network.
8162 The low powered 10 watt transmitters fulfilled our need to introduce CFWE's signal into northern communities, but many of our listeners were frustrated with the range of the low power transmitters. Plans were developed to replace several low powered FM sites with one regional high power FM transmitter which would include signal coverage significantly.
8163 Standoff in southern Alberta was the first community to have this system installed in 1998 to provide coverage to the Blood Reserve and Peigan Reserve. A second system was installed in the spring of 1999 at Joussard near Lesser Slave Lake.
8164 This higher powered system enabled CFWE‑FM to replace VLP FM very low power FM sites in the communities of High Prairie, Grouard, Sucker Creek, Driftpile, Joussard, Kinuso, Slave Lake, Peavine Métis Settlement and East Prairie Métis Settlement.
8165 A 100,000 watt FM site was installed in the Moose Hills Region of northeast Alberta in 2002. This high powered FM site brings signals to the aboriginal communities of Cold Lake, Elizabeth, Frog Lake, Fishing Lake, Kehewin, Saddle Lake and it also serves the communities of St. Paul, Bonnyville and the City of Cold Lake.
8166 It should be noted that CFWE has essentially been operating as Type B native radio since we launched the FM sites at Joussard and Porcupine Hills in 1998.
8167 CFWE is keenly aware that the aboriginal people are increasingly moving from smaller rural communities to the larger urban centers. There are likely many reasons for this, but the numbers shown in the most recent census indicate that this trend is likely to continue as aboriginal people seek out greater opportunities for education, employment, health services, and so on.
8168 Urban aboriginal population figures from the Statistics Canada Census data indicate that Edmonton ranks second only to Winnipeg and it continues to increase steadily. Pegged at over 52,000 in 2006, recent estimates indicate that the figure could be approaching 58,000, due in large part to the city's post‑Census surge in economic activity.
8169 With respect to northeastern Alberta, 10 per cent of the population of Fort McMurray in 2006 indicated they are of aboriginal ancestry. This figure does not factor in the considerable number of temporary workers migrating to the Wood Buffalo region to work in the oil sands.
8170 CFWE continues to grow its network to keep pace with the movements of aboriginal people. It is critical to point out that we are not switching our priorities or switching our broadcast service, that being of Alberta; we are simply planning to expand our provincial radio network.
8171 CFWE wants to continue serving the needs of the audience we have developed over the past 21 years but also giving urban aboriginal listeners an opportunity to hear a friendly and familiar voice they may have heard months or years ago when they lived outside of Edmonton or Fort McMurray.
8172 In many respects the aboriginal culture and traditions are followed more routinely in rural regions and less so in the urban environment. CFWE will serve as a cultural link for urban listeners. We envision CFWE as a hub that connects listeners from a variety of aboriginal communities together.
8173 The audience of CFWE is extremely loyal and our intention is not to dramatically change or overhaul our programming in anticipation of our expansion to include urban listeners. On the contrary, CFWE's unique radio programming and aboriginal cultural content will be a welcome change for aboriginal listeners now living in the Edmonton area.
8174 We have produced a three‑minute clip of what our sound has been over the past years and we would like to play at this time.
‑‑‑ Audio clip / Clip audio
8175 MR. CROWFOOT: If you were wondering, that was our moose calling contest that we hold every year and he did the bull and calf.
8176 Anyway, the early stage of satellite distribution program sharing played a significant role. Several native radio stations that were part of NNBAP, including CFWE, were responsible for the programming during certain portions of the broadcast day. This often included the use of translators. At that stage of our development and coverage, it made sense offering listeners a variety of aboriginal culture.
8177 However, the languages broadcast from other stations did not represent the majority of people listening to CFWE and resulted in significant tune‑out. Dayparting language based on programming and an introduction of new programs that directly include listeners, such as Phrase of the Week, allow us to broadcast aboriginal language throughout the network with risk of alienating the listener.
8178 I must emphasize that our proposal does not include a separate local program to feed either Edmonton or Fort McMurray with this application. Our local is the province of Alberta. To shift our focus away from our existing market and concentrate on either Edmonton or Fort McMurray will alienate and destroy our bond with your existing listeners.
8179 Aboriginal people in rural Alberta know about CFWE. For many it is their connection with home, a familiar voice speaking about people or locations they know. As they visit family on other Reserves or settlements, they stay connected with CFWE.
8180 These family members are now starting to relocate in urban centers for employment opportunities or education and to Fort McMurray to participate in the oil sands development. Without a signal to serve Edmonton or Fort McMurray, the connection is lost.
8181 As I stated, the program feed to proposed transmitter sites will be identical to that which is distributed to our existing network. Our goal is to remain the same only on a larger scale, provide programming that is of interest and culturally relevant to the aboriginal people residing in Edmonton and Fort McMurray.
8182 The resources we have at our disposal, both financial and human, are better utilized by concentrating and expanding the program we currently produce. We have demonstrated since the inception of CFWE our ability to adapt and present programs and music that appeal to a predominantly aboriginal listenership. Lifestyles may vary depending on where one lives, but the values within our listeners remains constant.
8183 One reason for our success to date is that we listen to our listeners.
8184 Although a description of our music format is outlined in our supplementary brief, I will repeat the salient points today.
8185 The general format of CFWE is listed as Country. The majority of our current listeners were raised listening to this genre of music. It also mixes more naturally with the music of many of the aboriginal artists we play. We acknowledge that some musical selections will be the same as that that is broadcast on commercial radio. However, our focus will continue to be the aboriginal listener who grew up listening not only to Country music but to aboriginal artists who never played on commercial radio.
8186 We are not concerned with the charting hits and high turnover, nor do we actively pursue new music from established acts. We do not use slogans like Today's Hot Country or The Best of Yesterday and Today. Our station slogan, The Native Perspective, will continue to be used. It does not promote, let alone mention, a format.
8187 Some of the music we play might appeal to a smaller portion of the incumbent station's share initially until musical selections that are only familiar or of interest to an aboriginal listener are broadcast in the same music set.
8188 Likewise, news and announcements that are broadcast during Country music programming are presented targeting the aboriginal listener of Alberta, which will have little appeal or relevance to the non‑native listener in an urban market.
8189 In addition to aboriginal artists, a portion of our current playlist is dedicated from independent emerging artists seldom played on commercial radio, at least until these artists have established themselves or are assigned by a major label. This has been our experience that some of the music from these emerging artist complements our playlist nicely.
8190 Musicians who perform other styles of music that do not mix with Country format are not excluded from airplay. Their music is scheduled at other times when the focus is more contemporary. Music from aboriginal musicians is often added to our regular Country playlist, thus increasing the exposure of the song.
8191 As a point of fact, CFWE was promoting and playing Shane Yellowbird, a musician from Hobbema, Alberta, long before he charted mainstream.
8192 I must also mention that CFWE is a member of the Western Association of Aboriginal Broadcasters, WAAB, which includes five broadcasters from the Northern Native Broadcast Access Program. These five broadcasters include Native Communications Inc. from Manitoba, Missinipi Broadcasting from Saskatchewan, Aboriginal Multi‑Media Society, CFWE, Northern Native Broadcasting Terrace, CFNR, and the Northern Native Broadcasting Yukon, CHON‑FM.
8193 We have been programming sharing for the past year and are looking at more shared programming in the coming year. Quarterly meetings are held with all members to discuss strategy, share ideas and resolve problems.
8194 An example of shared programming is a live call‑in show on residential school survivors. This program will be produced out of NCI Winnipeg and broadcast to all 250 transmitters of the WAAB network located in western Canada and Yukon.
8195 I am hopeful that I have demystified some of the confusion that is native radio. We are proof that native radio works.
8196 We respectfully ask for your approval of our application to serve aboriginal listeners in Edmonton and Fort McMurray.
8197 Hei‑hei(ph).
8198 THE CHAIRPERSON: Thank you, Mr. Crowfoot, for your presentation. It is informative.
8199 Commissioner Cugini is going to lead the questioning.
COMMISSIONER CUGINI: Thank you, Madam Chair, and good morning.
8200 I have to say I do appreciate the history of CFWE that you provided in your oral presentation this morning. This is the first time that I have met you, so I certainly do appreciate the background.
8201 Your oral presentation does bring up one issue of housekeeping.
8202 You say on page 3 that the network now consists of 48 FM transmitters and, according to our records, we have a list of 35. So I'm going to ask you, just for the sake of efficiency, if you could file with us a complete list of the 48 sites, perhaps by end of day tomorrow.
8203 MR. CROWFOOT: Yes.
8204 COMMISSIONER CUGINI: Is that doable?
8205 MR. CROWFOOT: Yes.
8206 COMMISSIONER CUGINI: Terrific. Thank you.
8207 Now, we are going deal with your application in two parts. First we want to deal with the application for the addition of transmitters in Fort McMurray and Edmonton.
8208 I guess at the outset I do have to make it clear and acknowledge that these applications are severable in that we could approve Fort McMurray and deny Edmonton, vice versa, or in your worst case scenario deny both.
8209 Do you acknowledge that that is in fact what is in front of us?
8210 MR. CROWFOOT: Yes.
8211 COMMISSIONER CUGINI: Okay. Thank you.
8212 If we approve either Fort McMurray or Edmonton, you would become a Type B native service.
8213 MR. CROWFOOT: Yes.
8214 COMMISSIONER CUGINI: So, as a result, we are going to go through some very specific programming proposals that you have in your application, just so it's clearer to us and that we have a complete record. So bear with me.
8215 Of course, you understand that it is because your .5 mV contour would overlap with commercial stations in Fort McMurray and/or Edmonton that you would become a Type B?
8216 MR. CROWFOOT: Yes.
8217 COMMISSIONER CUGINI: So from your application we know that AMMSA operates CFWE‑FM, a radio station with studios located in Edmonton and that the programming is distributed via satellite. Of course, you went through great detail today in telling us that.
8218 MR. CROWFOOT: Yes.
8219 COMMISSIONER CUGINI: Do you consider the studios in Edmonton to be your main broadcast centre?
8220 MR. CROWFOOT: Yes and no. We only have one studio and that's where we produce it, but most of our listeners are in the north.
8221 So I guess the answer is yes.
‑‑‑ Laughter / Rires
8222 COMMISSIONER CUGINI: Okay. So it is all produced at the studios in Edmonton ‑‑
8223 MR. CROWFOOT: Yes.
8224 COMMISSIONER CUGINI: ‑‑ and the staff is located in Edmonton.
8225 MR. CROWFOOT: Yes.
8226 COMMISSIONER CUGINI: Thank you.
8227 MR. CROWFOOT: Sorry, I'm a little ‑‑
8228 COMMISSIONER CUGINI: Hey, so am I.
‑‑‑ Laughter / Rires
8229 COMMISSIONER CUGINI: Would that change? For example, if we were to say yes, we approve the transmitter in Fort McMurray, would that cause you to move that broadcast center to Fort McMurray?
8230 MR. CROWFOOT: No, it wouldn't.
8231 COMMISSIONER CUGINI: It would stay in Edmonton regardless of what we do.
8232 MR. CROWFOOT: Yes.
8233 COMMISSIONER CUGINI: Okay. Thank you.
8234 Now, I know that in your oral presentation you did say that you are not going change the focus of your programming; that that is not your intention. You are not going to overhaul the programming. But if we do approve Fort McMurray and/or Edmonton, you would now go into the largest centers in Alberta that you would be serving.
8235 So you don't see yourself as competing at all with any of the incumbent Country music stations, the commercial stations in those markets?
8236 MR. CROWFOOT: No, not really, because most of the listeners that we have are aboriginal. I mean, I have a friend who was listening to us in St. Paul and they ‑‑ I mean, it's sad to say but he said "I love your programming because you have no commercials".
8237 He said, "You know, I'm listening to great music and all of a sudden a pow‑wow breaks out." So because our traditional music is kind of mixed in with our regular stuff, it's ‑‑ we are not Country.
8238 A lot of our music is Country. On Saturday nights we have Hip Hop, we have Rock, because in some of the isolated communities the youth have no other signal to listen to. So we are their source of entertainment on those nights.
8239 COMMISSIONER CUGINI: And that is common. I mean, I know that that's kind of the format that Aboriginal Voices Radio, for example, adopts as well, in that there is a mix of different genres of music.
8240 MR. CROWFOOT: Yes.
8241 COMMISSIONER CUGINI: You said you don't have commercials.
8242 MR. CROWFOOT: No, we do. We try to have commercials.
8243 COMMISSIONER CUGINI: Right.
8244 MR. CROWFOOT: I mean, since 1990 when we lost funding from the federal government, one of our goals was to become self‑sufficient. At that time 80 per cent of our funding came from government funding.
8245 Today our budget is probably five times what it was in 1990, and now 86 per cent of our revenue comes from other sources other than ‑‑ out of a $3 million budget, $326,000 comes from the federal government for radio programming.
8246 We also have Radio Bingo which generates $1.5 million a year, and that is what we funded our distribution expansion, is with those revenues.
8247 COMMISSIONER CUGINI: Okay. What percentage of your revenue, if we grant you Fort McMurray and Edmonton, do you believe will come from advertising in those centres?
8248 I know you are not limited as a native radio to the amount of advertising but, again, it is just for the sake of completeness of the record.
8249 MR. CROWFOOT: I would probably say that of our total revenue, about 30 per cent of it, 40 per cent of it, comes from advertising.
8250 COMMISSIONER CUGINI: When you say 30 per cent, are you factoring in both Fort McMurray and Edmonton?
8251 MR. CROWFOOT: Yes.
8252 COMMISSIONER CUGINI: And if we were to grant one and not the other, do you have a split of how much advertising would come from just Fort McMurray or just from Edmonton?
8253 MR. CROWFOOT: Most of the advertising that we would get from those communities we are already getting.
8254 COMMISSIONER CUGINI: Okay.
8255 MR. CROWFOOT: For example, we have a lot of government advertising, we have advertising from native organizations. So a lot of, I guess, the clients that we currently serve are located in those areas.
8256 So that's why I'm having trouble with numbers.
8257 So for us to go after other clients that we don't currently have I don't think would make up a very large portion of the amount of advertising that we do carry right now.
8258 COMMISSIONER CUGINI: Okay. You did offer share projections in your application and they are quite modest. They go from 0.1 per cent in year one to just 1 per cent in year seven.
8259 When you came up with those share projections, did you include both Fort McMurray and Edmonton?
8260 MR. STANDERWICK: Yes, we did.
8261 COMMISSIONER CUGINI: How much of a difference would that make if we were to approve one but not the other?
8262 MR. CROWFOOT: It wouldn't be significant.
8263 COMMISSIONER CUGINI: In your application you say that 20 per cent of all your musical selections will be performed by aboriginal talent.
8264 Is that Canadian aboriginal talent?
8265 MR. CROWFOOT: Most of them are Canadian. We do have ‑‑ with aboriginal people we don't really recognize the line, you know; like aboriginal people are aboriginal people. So if someone is from the States and they know people up here, then we would play them.
8266 COMMISSIONER CUGINI: Would you accept that 20 per cent level as a condition of licence?
8267 MR. CROWFOOT: Yes.
8268 COMMISSIONER CUGINI: What proportion of your musical selections are in aboriginal language?
8269 MR. CROWFOOT: Are in aboriginal language?
8270 COMMISSIONER CUGINI: Yes.
8271 MR. CROWFOOT: Approximately 5 per cent.
8272 COMMISSIONER CUGINI: And would you accept that as a condition of the licence?
8273 MR. CROWFOOT: Yes.
8274 COMMISSIONER CUGINI: Thank you.
8275 You just spoke about how some of your programming in the evening does skew younger. Again, bearing in mind that we could approve Fort McMurray and/or Edmonton, do you think that that would change at all?
8276 MR. CROWFOOT: No.
8277 COMMISSIONER CUGINI: Not at all?
8278 MR. CROWFOOT: No.
8279 COMMISSIONER CUGINI: One more condition of licence with regards to music.
8280 As a Type B service would you agree to a condition of licence that requires that a minimum of 35 per cent of the musical selections from the content Category 2 music during each broadcast week be devoted to Canadian content?
8281 MR. CROWFOOT: Yes.
8282 COMMISSIONER CUGINI: Thank you.
8283 We are going to move on to spoken word.
8284 In your application I see that you have agreed already ‑‑ so this is an easy one ‑‑ to a condition of licence that you will provide seven hours of aboriginal language spoken word programming.
8285 MR. CROWFOOT: Yes.
8286 COMMISSIONER CUGINI: Okay. Is this the amount of aboriginal spoken word programming that you currently broadcast?
8287 MR. CROWFOOT: We currently carry about five hours.
8288 COMMISSIONER CUGINI: So you would expand this to seven hours.
8289 MR. CROWFOOT: Yes.
8290 COMMISSIONER CUGINI: Is that dependant on approval of both Fort McMurray and Edmonton?
8291 In other words, if we were to approve one but not the other, would you still expand to seven hours?
8292 MR. CROWFOOT: Yes.
8293 COMMISSIONER CUGINI: Would you expand to seven hours if we denied both?
8294 MR. CROWFOOT: No. I mean, we would continue to do what we're doing.
8295 COMMISSIONER CUGINI: You would keep it at five?
8296 MR. CROWFOOT: Yes.
8297 COMMISSIONER CUGINI: Okay.
8298 MR. CROWFOOT: I mean, our eventual goal is to provide as much as we can, but because we have so many aboriginal languages ‑‑ we have seven different language groups ‑‑ and for us to carry a predominantly Cree language, then what would happen is the others would start tuning out.
8299 So we have always tried to walk that fine line. That's why we do a lot of our programming in English. We also do programming like Phrase of the Week, where we would say, "How do you say this in Blackfoot? How do you say this in Cree? How do you say this in Chip? How do you say this in Dogrib, Slavey, Dene?"
8300 So those are the things that we have tried to do. So we try to balance the amount of programming just to try to keep our listeners with us.
8301 COMMISSIONER CUGINI: It's almost the challenges of programming an ethnic service ‑‑
8302 MR. CROWFOOT: Yes.
8303 COMMISSIONER CUGINI: ‑‑ when you are trying to serve a number of languages and a number of groups.
8304 Again, if we were to approve either Fort McMurray and/or Edmonton, do you see that the focus of the spoken word programming would change in any way to attract more of an urban aboriginal population?
8305 MR. CROWFOOT: No. I mean, as in the presentation, we are trying to keep hold of those listeners that we have that moved to the city.
8306 We had a call one time from a person who was actually in Europe who was listening to us on the Internet and he e‑mailed us and said that it was so nice to hear just the slang, the languages and that sort of stuff from home.
8307 So that was a connection that was made via the Internet.
8308 COMMISSIONER CUGINI: You are talking about aboriginal people who have moved to the urban centres, but what will attract the aboriginal people who have been living in Fort McMurray and Edmonton for a number of years to your station if you plan on keeping the focus of your spoken word to more of a rural aboriginal population in terms of residence?
8309 MR. CROWFOOT: Yes. A lot of the people that move still have connections to where they came from. Their family still reside.
8310 During some of our request lines we have callers call in and say I would like to dedicate this song to, and they will list probably 80 relatives throughout the province. So a lot of them do listen to those sorts of things.
8311 COMMISSIONER CUGINI: Okay.
8312 Now, you did mention in your oral presentation that you have been sharing programming ‑‑
8313 MR. CROWFOOT: Yes.
8314 COMMISSIONER CUGINI: ‑‑ with other native broadcasters.
8315 MR. CROWFOOT: Yes.
8316 COMMISSIONER CUGINI: How many hours, approximately, of the shared programming is on your schedule right now.
8317 MR. CROWFOOT: We do approximately four hours. One of it is the Top 30 Aboriginal Music playlist that is produced out of NCI in Manitoba, but we all play it. We also do the talk phone‑in show for our residential school survivors.
8318 We meet on a quarterly basis and try to look at what programs we have that would be of interest to all of us.
8319 We are also looking at maybe one of the options is to have, in the off hours when we are not on the air, a network feed that would cover the entire network.
8320 So those are the different ideas that we have explored.
8321 COMMISSIONER CUGINI: And you would anticipate that this level of approximately four hours would continue?
8322 MR. CROWFOOT: Yes, or increase.
8323 COMMISSIONER CUGINI: Or increase.
8324 Do you source programming from any other radio stations, other than native broadcasters?
8325 MR. CROWFOOT: No.
8326 COMMISSIONER CUGINI: Okay.
8327 I believe in your application you also stated that you offer a number of hours of religious programming.
8328 MR. CROWFOOT: On Sunday mornings we have approximately three hours.
8329 COMMISSIONER CUGINI: And are these Canadian?
8330 MR. CROWFOOT: Yes. One is, I'm sorry.
8331 COMMISSIONER CUGINI: Are these programs that you produce?
8332 MR. CROWFOOT: No, they are pre‑produced by the client.
8333 COMMISSIONER CUGINI: Okay. You do know that sometimes the Commission will impose conditions on licence for balance and ethics in religious programming. Basically we want to ensure that a balanced set of views is expressed over a reasonable amount of time on matters of public concern.
8334 With this in mind, I will read to you the text of a potential condition of licence and will ask then if you would agree to it.
"Where the applicant broadcasts religious programming as defined in the Religious Broadcasting Policy, Public Notice CRTC1993‑78, dated 3 June 1993, the licensee shall adhere to the guidelines set out in Section 3B.2.(a)..."
8335 Usually this is what the lawyer does.
"... and 4 of that Public Notice with respect to the provision of balance and ethics in religious programming as amended from time to time." (As read)
8336 Will you accept that as a condition of licence?
8337 MR. CROWFOOT: Yes.
8338 COMMISSIONER CUGINI: Thank you.
8339 Now, at this time we are going to address something that may be unpleasant and that is in the event that we decide to deny both Fort McMurray and Edmonton.
8340 In your oral presentation, you say on page 5:
"It should be noted that CFWE has essentially been operating as a Type B native radio since we launched the FM sites at Joussard and Porcupine Hills in 1998."
8341 So is that an acknowledgment ‑‑ I need to know if that is an acknowledgment on your part that effectively the denial ‑‑ regardless of Fort McMurray and Edmonton, you are now operating as a Type B native service?
8342 MR. CROWFOOT: Yes.
8343 COMMISSIONER CUGINI: Then ‑‑ and she will correct me if I'm wrong ‑‑ as opposed to asking you to file with the Commission an application for a native Type B service, will you agree to the conditions of licence that we have just gone over that would be applicable to your current service regardless of Fort McMurray and Edmonton?
8344 MR. CROWFOOT: Yes.
8345 COMMISSIONER CUGINI: Will you agree to those conditions of licence?
8346 MR. CROWFOOT: Yes.
8347 COMMISSIONER CUGINI: Well, I would like to thank you very much.
8348 Those are all my questions, Madam Chair.
8349 THE CHAIRPERSON: Thank you, Mr. Crowfoot. I have no questions.
8350 Counsel...? No?
8351 Thank you very much. We appreciate your presentation.
8352 we are going to take maybe a 10‑minute break.
8353 Oh, you are entitled to two minutes, to be consistent with everybody else, if you're interested.
‑‑‑ Laughter / Rires
8354 COMMISSIONER CUGINI: Even I forgot this time. I apologize.
8355 THE CHAIRPERSON: I don't know if you want to take two minutes to sum up?
8356 I'm sorry, I just overlooked offering it to you.
8357 MR. CROWFOOT: I guess I said most of it in my presentation, but our goal is not to change our programming but to be able to reach more of our people that have moved to the urban centres. I think that connection, as I explained with the person on the Internet, is important when people are not located here; that they can be able to listen and still get a sense of where they came from, to hear familiar voices, to hear the slang of the communities.
8358 I mean, when I listen to people, like I know there from Hobbema, I know they are from certain parts of the province just the way they speak, the way they look. We are not on television so we can't really use those things.
8359 But I think it's important that we continue to reach those people in the cities and be able to continue to do the work that we do.
8360 One of our goals is to become self‑sufficient, but I don't envision us affecting the other broadcasters when it comes to revenue.
8361 That's all I have to say, unless Al has something he would like to add.
8362 MR. STANDERWICK: No.
8363 THE CHAIRPERSON: Thank you, both.
8364 We will adjourn for 10 minutes just to allow the next panel to set up.
8365 Thank you.
‑‑‑ Upon recessing at 0945 / Suspension à 0945
‑‑‑ Upon resuming at 1000 / Reprise à 1000
8366 THE SECRETARY: We will now proceed with Item 19, which is an application by Don Kay on behalf of a corporation to be incorporated for licence to operate an English language FM commercial radio programming undertaking in Edmonton.
8367 The new station would operate on frequency 107.1 MHz, Channel 296C‑1, with an effective radiated power of 40,000 watts, non‑directional antenna, antenna height of 272 metres.
8368 Appearing for the applicant is Don Kay.
8369 Please introduce your colleagues and you will then have 20 minutes to make a presentation.
PRESENTATION / PRÉSENTATION
8370 MR. KAY: Good morning, Madam Chair, Commissioners, Members of the Commission.
8371 Some of you have been here long enough in Edmonton to become residents now. Welcome to our city, the City of Champions.
8372 My name is Don Kay and I will be managing partner of the station we are calling The Planet 107.1. Over a period of 20 years I was on‑air, Assistant Program Director, then a sales representative and finally they made me Sales Manager at CHED here in Edmonton, which used to be right across the street.
8373 Subsequently, Moffat Communications asked me to manage stations in Winnipeg and in Hamilton. We returned to Edmonton in 1994. Since then I have worked as a radio programming sales and management consultant from here in Edmonton.
8374 When the Commission issued its call for applications, well, it was like a dream opportunity for me to apply for and maybe even be awarded a radio licence in Edmonton. Now, I knew that to put a credible application forward to you I would need some help, so I would like to introduce you now to the team that brought this application forward.
8375 My very first call was to my good friend Jim McLaughlin.
8376 MR. McLAUGHLIN: Good morning.
8377 MR. KAY: I have known Jim for many years. He was my colleague here at CHED, me in programming, Jim in news. Eventually he became my boss, as he went on to become the Vice‑President of Moffat Communications Group of Radio Stations. In that capacity over the next 15 years he was also still very involved with CHED and the Edmonton market.
8378 Jim chaired the CAB's Radio Board for four years. He also chaired the BBM Radio Board for four years. Some of you may not know, but Jim was one of the original founders of what we now know as FACTOR.
8379 Jim then introduced me to Sukhvinder Badh. Suki, as everybody calls him, is a Professor of Economics at Simon Fraser University and at Douglas College in Vancouver. He is actively involved in Vancouver on a community, regional and national level. He has been serving on the Western Economic Diversification Committee for over two years now.
8380 Suki and Jim had put together a team to apply for a licence in Vancouver, as you recall maybe back a few months ago in February. So I decided to pick from them and get some good help.
8381 That included David Oakes of Oakes Research who I had worked with many times over the years with Moffat and whose research is exceptional. David has over 30 years of experiencing, researching Canadian, U.S. and international radio markets, and he undertook the research that led to our format choice for The Planet 107.1.
8382 I already knew Liz Janik by reputation. Liz is one of the pioneers ‑‑ I see a couple of people smiling up there. She is one of the pioneers of Alternative radio from her beginnings as an announcer on CFNY‑FM in Toronto. Liz has worked as a programmer and consultant in many radio formats, including Alternative radio in both Canada and the U.S. Most recently she developed the 100 per cent Canadian music station on SIRIUS Satellite Radio. Liz has served on the board of the Canadian Women in Communications and, should we be fortunate enough to win this licence, Liz will be moving to Edmonton and be a very integral part of the station as our Vice‑President of Programming.
8383 I also knew that we needed some local Edmonton helped to put together a good news team, so I reached out again and found Penny Craig. Penny has spent more than 20 years in communications. Eight of those years were at CHED and K‑Rock, both here in Edmonton. Her most recent focus has been within Edmonton's health related nonprofit sectors. If we are successful, she will be the News Director of The Planet 107.1.
8384 Now, I know radio inside and out, but I needed to find someone who knew the Edmonton music scene to help me put together and develop a meaningful package of Canadian content development initiatives.
8385 Barry Allen. He is a native Edmontonian who has been active in the music industry since he was a teenager, starting out as a recording artist and becoming an acclaimed record producer. Barry has operated his own recording studio, Homestead Recorders, since the mid‑1980s. He has worked with a wide range of Canadian recording artists and particularly Edmonton and Alberta artists in almost every music genre there is. Barry has served on the board of Music Alberta.
8386 We also needed someone to make sure that everything gets done and gets done on time, and that person is Jaspreet Gill. Jaspreet is multilingual, currently works as the Marketing Manager of The Source/La Source, B.C.'s English/French newspaper which is dedicated to cultural diversity. She will be responsible to oversee our CCD implementation and our outreach for the various cultural communities.
8387 To round out our panel, we retained Robert Buchan of Fasken Martineau as our legal counsel.
8388 Also here behind me, not sitting on the panel, but my son Rob is here because he has been a radio brat since he was born and knows all about radio.
8389 Now to present our ideas for the new radio station in Edmonton.
8390 The first step in moving forward was to be sure that the market was a viable one. Now, as everyone is aware, the Alberta economy has been on fire for the past few years. Edmonton's economy has also grown with it. As the capital of the province not only does the city benefit from the oil and gas industry, it has a widely diversified economy, including a strong public sector and retail business.
8391 Here are just a few facts.
8392 Edmonton grew in population at double the Canadian average between 2001 and 2006 and is projected to continue to grow at 2 per cent per year. The real GDP is projected to continue to grow at close to 4 per cent per year. Per capita retail sales skew 44 per cent higher than the national average and are projected to increase by an average of 6.3 per cent over the next four years.
8393 Radio is very healthy in this market. With most of the major broadcasters present in this market with multiple media arms, whether radio clusters or radio and television clusters, the stations in the Edmonton area are well positioned to accept new competition.
8394 The most recent news that is also very encouraging to us, TRAM tells us that the rolling year to date radio revenues in Edmonton are up a full 12.9 per cent over the same period last year.
8395 According to TRAM, the radio revenues for the 12 months ending April 2008 were $82 million. Now, that is up from $65 million that the Commission reported for the broadcast year 2006.
8396 So once we were satisfied that the market could accept a new station, the next question was: Okay, what should that station be?
8397 Jim and I and Suki all sat around and talked and we agreed that we would have an open mind and not have any preconceived ideas of what kind of format we were going to throw in here just for the sake of the radio station. So that was when we asked David Oakes to test a variety of music styles and formats to help us make our decision for The Planet.
8398 David...?
8399 MR. OAKES: Thanks, Don.
8400 We surveyed a large sample of Edmontonians, 600 of them aged 15‑to‑69. This gives a worst‑case reliability of plus or minus 4.1 per cent 19 out of 20 times the survey is replicated. We asked respondents how likely they would be to listen to each of nine formats. I asked two key questions on the formats to determine the listener's interest.
8401 The first was how likely they would be to listen to the format and the second was what one format they would prefer.
8402 What emerged from both questions were two formats not currently in the market, Adult Rock and another format, a mix of Blues, Folk and Reggae. Twenty‑six per cent of the sample stated they were very likely to listen to Adult Rock and 18 per cent were very likely to listen to the mix of Blues, Folk and Reggae.
8403 We discovered that the fans for each of these two formats were often the same people. In other words, there was a significant amount of overlap in these two audiences.
8404 We also tested interest in 26 different music styles. I would like to explain the difference between the individual styles of music and the music format.
8405 Essentially, the music styles are the building blocks of the format. So for example, if the format was Classical music, the music styles making it up might beat baroque, romantic, opera and modern classical. When we then looked at the interest of the Adult Rock audience in the 26 music styles, there was a very strong correlation between the music style demands of the two audiences.
8406 They exhibited an unusually strong demand for Adult Rock along with the specialty music styles Blues, Folk and Reggae. In fact, I identified five primary music styles they preferred and three secondary styles. They were Adult Rock, Roots Rock, Blues Rock, Older Blues, Classic Folk, Classic Rock, Reggae and New Folk.
8407 Now to describe the sound of the station, here is Liz Janik.
8408 MS JANIK: Thank you, David.
8409 Good morning, Madam Chair and Commissioners.
8410 The Planet's format is Edmonton's Adult Alternative. It has been especially designed for older music fans in Edmonton who are looking for a wider variety of music styles that are out of the mainstream.
8411 Now, Adult Alternative is also known as AAA, Americana and Progressive FM, but regardless of the label there are four key characteristics to every successful Adult Alternative radio station.
8412 First, they play a wider very eclectic blend of music that is normally not played on commercial radio. The fans are very passionate about music. Even though they are older, they are still interested in hearing new music. They would like to hear new music from heritage artists and they would like to hear new music from the artist of today. They also want radio to play more than one song from an album.
8413 Second, the tone and the presentation of the station is friendly, sincere and intelligent. These listeners want real people to talk to them about the music and about the issues that affect them. They also have a higher than average demand for news and information.
8414 Three, this format appeals equally to both men and women. Even when it is specifically designed, researched and programmed to appeal to women, it typically returns an audience that is evenly balanced between men and women. It is the one format where both sexes can feel at home.
8415 Fourth, every station in this format must be fully customized to its market. Every market has different musical histories and unique competitive influences that shape the overall sound of the station. For example, here in Edmonton when we asked listeners about classic Alternative from the 1980s, artists like Sting ‑‑ pardon me, artists like The Clash and Talking Heads, we discovered that there was a lower than average demand for this type of music even among those listeners that would be Adult Alternative fans.
8416 Now, to give you a little sample of what the station will sound like, we would like to play a short audiovisual presentation.
‑‑‑ Audio clip / Clip audio
8417 MS JANIK: In addition to the wider variety of music styles, Adult Alternative listeners want their radio station to give them more news and information.
8418 To detail our news programming here is Penny Craig.
8419 MS CRAIG: Thank you, Liz, and good morning, everybody.
8420 The research that Mr. Oakes referred to earlier showed very strong interest in local news, weather, and sports. Information on cultural activities was a strong second and local music information very close behind. There is also a clear interest in our planet's ecology and the environment.
8421 The Planet 107.1 will hire four fulltime news reporters and announcers. This will ensure that we have experienced journalists who will serve as anchors for 64 local newscasts each week, for a total of six hours 24 minutes per week; 75 per cent of that will be pure news, with the remainder being weather, traffic and sports.
8422 The large news staff will allow us to have one reporter who will specialize in cultural events and another who will become our environment specialist.
8423 The news department will also take the lead on producing our daily news magazine program, one hour per day, seven days a week. The Planet Magazine will focus on three or four stories each day to provide greater depth. The weekend shows will be a bit different, with the Saturday show putting a greater emphasis on entertainment, sports and culture stories. Sunday will be a week in review.
8424 We will also provide a number of daily features as outlined in our application.
8425 In all, we will provide over 22 hours per week of compelling spoken word programming and I am thrilled to be part of it.
8426 Now here to talk about our CCD initiatives is Jaspreet Gill.
8427 MS GILL: Thanks, Penny. Hello, Commissioners and Madam Chair.
8428 Our CCD initiatives are a very important part of our radio station. In each of the next seven years, The Planet will spend a total of $600,000 above and beyond the basic requirement, of which 80 per cent is directed to local initiatives.
8429 Here is how we would spend the money:
8430 ‑ $120,000 each year to FACTOR. We will of course request that FACTOR direct these monies to Alberta artists, to the greatest extent possible.
8431 ‑ Musical scholarships of $75,000 each year, split evenly between Grant MacEwan College, the University of Alberta and the Harris Institute of Arts.
8432 ‑ An annual contribution of $50,000 to Music Alberta.
8433 ‑ $55,000 each year to hire Canadian musicians to play out our Planet Music and Green Festival;
8434 ‑ $50,000 annually to the Edmonton Folk Festival, one of Canada's premier folk events to hire emerging Canadian artists on a special stage;
8435 ‑ $250,000 annually for Independent Music Awards.
8436 Because we wanted to have a strong local input, our most important contributor to the concept of Independent Music Awards was Barry Allen. We asked Barry to join us.
8437 Barry...?
8438 MR. ALLEN: Thank you, Jaspreet, and good morning.
8439 When Don approached me to give him advice on initiatives to support the local music industry, I was impressed with the things that were already in place, but Don wanted me to provide him with guidance for a project that would truly further the careers of artists.
8440 The first thing I did was recommend an increase in the amount of money going directly to the artist so The Planet could provide them with financial assistance that will genuinely help the artists with their careers.
8441 I suggested to Don that The Planet divide the Independent Music Awards into two parts. The first will give $10,000 prizes to each of the winners of 10 different categories of emerging Canadian artists. An additional $40,000 will be spent to create a compilation CD of the winners and to produce a free concert highlighting all 10 winners.
8442 The second change resulted from my suggestion, based on my career experience trying to develop artists in Alberta. The Planet will add an additional $110,000 each year to be divided among three of the 10 original winners. At the final concert, we will ask prominent Edmonton music industry professionals to choose the three winners. Each winner will receive an additional $36,667 beyond the original $10,000 prize to devote to the production and marketing of their next CD.
8443 I suggested this because I believe to really make a difference, The Planet needs the choose those artists with a chance at success and provide them with enough funds to produce a top quality product that they can take to labels, promoters, producers and audiences.
8444 By the end of the term of the licence The Planet will have provided 70 winners with a boost in their careers, with 21 of them receiving additional support to go on from being emerging to being part of the Canadian music landscape fabric.
8445 And now here to sum up is Don.
8446 MR. KAY: Thanks, Barry.
8447 Madam Chair, Commissioners, Members of the Commission staff, I truly hope that we have been able to convey to you the excitement with which we are approaching this application. The other day Jim, Penny and I reminisced about our days at CHED when it was a music station that had a 32 hours tune share. I mean, that's incredible. CHED was the station in the market.
8448 It was very successful because of a number of things. It was fun. The on‑air staff was live and not voicetracked. We never voicetracked. Announcers did more than intro and extro songs chosen by corporate programmers from elsewhere, when the announcers knew every musician in town because we hung out with them and we encouraged them and when listeners looked forward to something different on the radio, and they got it.
8449 But that was another era and we don't expect that one station today can have the rating that CHED did in those days. But the nature of The Planet 107.1 will be similar. It will be a station that loves music, a wide range of music, from artists like Van Morrison, Joni Mitchell to contemporary adult rockers like Dave Matthews or Colin Linden. Our listeners will be delighted to hear a refreshing new mix of music, including Blues, Folk, and Reggae.
8450 Edmonton has a very rich and vibrant music scene, with festivals and concerts, talented artists from a wide variety of genres, professional recording studios like Homestead and The Physics Laboratory. We have several labels in the city, including Barrypatch Records, Stony Plain Records.
8451 They produced albums from a wide range of artists with a particular emphasis on Roots artists from Amos Garrett to Alternative Country artist Corb Lund, to Blues and Folk artists.
8452 Edmonton is ready for a new fulltime eclectic radio station. With a very strong economy reflected in strong retail sales, Edmonton's radio economy is well positioned to accept new competition. The entry of a new player with experience in this market, with ownership in this market, will create a new editorial voice and new radio competition in a market presently dominated by the big eastern‑based players.
8453 We have produced a strong business plan with a format based upon extensive research by one of Canada's best researchers. As we mentioned earlier, we did not go into this application with any preconceived ideas for the format, but rather tested 26 styles of music, nine formats for both interest and availability. What emerged was how many Edmonton listeners really love the diverse music genres that The Planet will present, from Roots Rock to Blues, Folk, Reggae and Adult Rock.
8454 Our commitment to Category 3 music reflects their musical tastes and their demands. We have made a strong commitment to new Canadian artists with 40 per cent Canadian content, of which half will be to new and emerging artists. We also will make a significant contribution to emerging artists in the kinds of music we will play and the on‑air features that will expose and celebrate them, as well as a substantial financial contribution to their future success.
8455 I am very proud to have pulled together this group of people to appear before you with broad experience in radio, the financial resources to pull it together and the enthusiasm to know that we can make it work.
8456 Thank you for your attention and it's your turn. We welcome your questions.
8457 THE CHAIRPERSON: Thank you, Mr. Kay.
8458 MR. KAY: Yes.
THE CHAIRPERSON: We have lots of questions. I am going start and I'm sure the others will have questions as well.
8459 MR. KAY: Okay.
8460 THE CHAIRPERSON: First of all, I am going to make sure I am organized here.
‑‑‑ Pause
8461 THE CHAIRPERSON: As you know, a number of applicants have proposed a format similar to the format you are proposing and I'm wondering if we could start off with you describing the similarities and differences between your proposed Adult Alternative format and the AAA format proposed by the other three applicants ‑‑ if you wouldn't mind, if you could do each separately ‑‑ Jim Pattison, Harvard, Evanov.
8462 Whatever order you would like to go in is good.
8463 MR. KAY: Yes. Madam Chair, I haven't had the luxury of hearing their presentations. I have looked over a little of their summaries and supplementaries.
8464 But at least the ones who are doing the AAA have proven with their research that that is the format of choice that needs to be in the marketplace, but I will ask Liz to expand on that little bit. She studied the plans a little more than I have.
8465 Liz...?
8466 MS JANIK: Thank you, Don.
8467 I have reviewed the research and the briefs that were presented online. I wasn't able to find comprehensive information from all the applicants to speak with authority to each applicant. I could address some of the key differences, from our point of view.
8468 The first thing that I recognized is the audience that we are seeking to serve with The Planet format is distinct from the audiences that the other applicants have identified. The reason that can I say this with some authority is because our audience has a double key characteristic. One is that they love the Adult Rock, and the second part is that they really do enjoy specialty music, the Category 3 music, including Blues, Folk and Reggae.
8469 I believe we are the only applicant that offers this particular combination. So because we offer a very unique combination of music, we have an audience ‑‑ using David's research, we know that we have an audience of 140,000 people who will really love what it is that we are doing.
8470 Another aspect of ours that is different from the others is that because of this very diverse set of music styles that we are going to be playing, and because of our very strong belief in Canadian music, I believe that we will be able to open doors to artists who would otherwise fall through the cracks of the traditional Pop and Rock formats, even Country.
8471 Corb Lund, for example, is an Alt Country artist and because he is this slightly left of center Country sound, he doesn't fit on most Country formats according to those programmers; and because he has a little bit of twang to what he does, he doesn't fit on the Pop and Rock stations.
8472 So the fact that we have this wider diversity in music styles means that we will bring artists that live and work here in Edmonton and across Canada, we will give them a chance to get to the airwaves. This I think makes us distinct from the other applicants.
8473 One area where I did observe there was some common ground is that it seems that our research among all of us indicates that we will appeal to pretty much an even split between men and women. I think we are all in the sort of 48 to 52 per cent range, which statistically, given margin of errors, means we are almost 50:50. None of us are leaning 65 or 70 per cent male or female. So we all tend to be gender neutral.
8474 That I think is the most that I can do with great authority at this time.
8475 THE CHAIRPERSON: Thank you, Ms Janik.
8476 I'm just going to take a second here and just check something, if you don't mind.
8477 MR. KAY: There is a little bit of a comparative thing, Madam Chair, where Harvard is proposing 20 per cent emerging and so are we. Pattison and CTV and the Evanov ones are lower in emerging artists, but there are some.
8478 The Yerxa application of course is younger Friday. The Harvard and Evanov are skewing towards female listeners and I suppose will have a softer sound as well.
8479 THE CHAIRPERSON: So maybe just sort of to jump ahead in the order that I don't normally ask the question, but which of the applicants then would you view as most competitive with yours or would you think they are all very, very similar?
8480 MR. KAY: Competitive?
8481 THE CHAIRPERSON: Of the ones you have mentioned, yes.
8482 MR. KAY: I guess ‑‑ Jim, have you got a thought on that?
8483 MR. McLAUGHLIN: Madam Chair, in fact, the others are competitive with each other, but we are actually quite different. When you take the 30 per cent specialty music that we are playing, that really moves us into a different area and we will have quite a different sound and really appeal to very much a different audience.
8484 THE CHAIRPERSON: I actually in my notes have them all having some Category 3 music. So we will see that as we go along and I will check my notes, too.
8485 But at any rate I appreciate that. Thank you.
8486 What about then a comparison with the station currently in the market, Alternative Modern Rock, which I understand is a Rogers CHDI‑FM.
8487 Did you compare your format to theirs?
8488 MS JANIK: Yes, I did. What they are doing is a younger Alternative mix. They are playing a wide variety of music styles. They are playing primarily Pop and Rock music styles, and the type of music styles that they are using and age of songs and artists that they are using indicate to me that they will definitely track younger in their audience. I would imagine mostly under 35 would be their primary audience base.
8489 THE CHAIRPERSON: I'm wondering then, did you calculate the percentage of your proposed playlist that is not currently being played in the market?
8490 MS JANIK: I did have access to a Mediabase when we were preparing this application so I pulled up a 12‑week report. Because of the nature of Mediabase, it doesn't allow me to generate percentages readily.
8491 I did go through and I looked at the artists that would be core to our sound, so when I looked at ‑‑ to give you some idea, Corb Lund, who I mentioned already, in a 12‑week period was never played on Pop and Rock Edmonton radio. He was never played.
8492 I love Van Morrison and Van Morrison is played here in Edmonton, and he is played about four times a week on four different radio stations, which means I as a fan would have to wade through 1,500 songs before they would get to that one song.
8493 Neil Young is played here in Edmonton, but the issue with this is that although he is played here almost all the songs that you will hear on the radio here are pre‑1980. Well, that's nearly 30 years ago and it doesn't take into account the fabulous albums he has released just in the last couple of years, the very political one from 2006 and the more romantic Prairie Wind.
8494 We love Joni Mitchell. You can hear Joni Mitchell once a week.
8495 Bruce Cockburn, who was a staple of this format in the United States, is one of the celebrated artists for this format in the United States, is heard twice a week on Joe, which is a format of Classic Hits.
8496 Sting. I can hear Sting in this market. He is played once a day on one radio station.
8497 But I cannot hear all these artists together in any great frequency on any one radio station in this market.
8498 THE CHAIRPERSON: I think that answers the question very well. Thank you.
8499 Now, you have proposed 30 per cent Category 3 music to be offered during the broadcast week.
8500 Are you willing to accept that as a condition of licence?
8501 MR. KAY: Yes, absolutely.
8502 THE CHAIRPERSON: You may have said that this morning.
8503 MR. KAY: Yes.
8504 THE CHAIRPERSON: How many hours per broadcast week are you proposing to devote to Category 3 music?
8505 MS JANIK: Well, at least a minimum of 30 per cent evenly distributed through all dayparts. We don't look at this music style as a negative; it is something that our listeners really want.
8506 So part of our strategy to be successful with the 140,000 people who want the special blend of music is to include it through all dayparts.
8507 We do have some specialty shows in addition, but it is part of the mix; it is part of the sound of the station.
8508 MR. McLAUGHLIN: Could I jump in here, Madam Chair.
8509 A really interesting thing came out of David's research and it was one of those eureka moments.
8510 I have been working with David for years and he is a fabulous researcher and there is always more in the research than dummies like me can get out of it. But we were talking about Category 3 and I suddenly realized something that was in front of us for quite a while. When David does the research, he asks a very interesting question and that is: How much do you like, how much do you want the various categories or the various styles that qualify as Category 3? And you get truly tremendous strong results. People want to hear that music.
8511 But then he asks the question ‑‑ all right, let's say you picked that Folk was your very favourite. He then asks the question: Well, do you want us to create a Folk radio station?
8512 And the answer is invariably no, I don't want a Folk radio station. I want the music I love as a spice inside, you know, a broad spectrum of the music. Which I think may go a long ways to start explaining why for those of us in the industry and for the Commission too, for that matter, licensing Category 3 stations, the success of them has been so difficult.
8513 Really only Classical stations are the only ones that have had real success over the years, and that is because if you pick a target, like I suggested Folk, they don't want that. The listeners aren't looking for that. They love Folk music, but they don't love a Folk radio station.
8514 So that's why our 30 per cent has so many different genres in it, so that we can create that spice and weave it in with all the other music.
8515 We are very confident of our success. David's research has never steered me wrong in years, believe me.
8516 MR. KAY: We also said to ourselves the other day, okay, let's look at our collection of CDs or albums at home. What do you have? What do you have? Okay. Do you have some ‑‑ oh, you do. So we all have this little bit of Blues, a little bit of Folk, a little bit of whatever. And that is part of the basis again where you say hmmm, that makes sense.
8517 THE CHAIRPERSON: Collection of albums speaks to our age, I think.
‑‑‑ Laughter / Rires
8518 MR. KAY: Yes.
8519 THE CHAIRPERSON: I think your comments, though, Mr. McLaughlin, segue into my next question. I should probably have asked the first question a little better.
8520 What percentage of subCategory 3, Jazz and Blues, Worldbeat and Folk, how would you break that down?
8521 MS JANIK: When we asked about the general concept of playing a station with Jazz ‑‑ pardon me, with Blues, Folk, and World beat, we got a very strong response to that. So we looked a little further and because we do this thing of looking at 26 distinct music styles, what we came to understand was that what they really preferred was the Blues and the Folk and not so much Worldbeat.
8522 So we're looking at about, almost 15 per cent Blues and 15 per cent Folk and a little bit above that for the Reggae.
8523 THE CHAIRPERSON: Thank you very much. I'm just making notes here to myself. Thanks.
8524 MR. OAKES: If I could just, as the researcher, discuss this a little bit, when we were trying to figure out the Category 3 music styles and how much they would be played, it was a bit difficult because of the top five musical styles to be played on station, two were Category 3 music styles.
8525 So obviously we would play those more than the Reggae and newer Folk. So out of those it becomes very difficult to try to predict what would be the best composition of those.
8526 All I can say is that when you have two of your top five that are Category 3 music, you have to put them in there and you have to feature them.
8527 THE CHAIRPERSON: So it sounds like the 30 per cent will definitely be a minimum, or there is a good possibility it will be a minimum.
8528 MR. McLAUGHLIN: That's why we have no problem making the commitment to the 30 per cent as a condition of licence.
8529 THE CHAIRPERSON: Thank you.
8530 As I'm sure you know, in the 2006 Radio Policy the Commission indicated it would amend the current Canadian content regulation for Category 3 music, Canadian content for Category 3 music, requiring at least 20 per cent of subCategory 3 for Jazz and Blues selections during the broadcast week be Canadian.
8531 Would you anticipate any problems satisfying that requirement?
8532 MR. KAY: None whatsoever.
8533 THE CHAIRPERSON: No. And if the Commission were to decide to impose that new minimum 20 per cent as a condition of licence, would you agree to that?
8534 MR. KAY: Absolutely.
8535 THE CHAIRPERSON: Thank you.
8536 Now, just specifically, I noticed your program Pick of the Week which you described in your brief ‑‑ I'm just going to turn to it actually.
‑‑‑ Pause
8537 THE CHAIRPERSON: You indicated that you will highlight 52 emerging artists every year and I was curious to know, first of all, how the artists will be picked.
8538 MS JANIK: We will pick the artist based on the music that is submitted to us throughout the year. We will be looking for the best sounding, most appealing releases that are available and we will take into consideration their experience and audience appeal.
8539 THE CHAIRPERSON: So you will be actually soliciting this type of submissions. Maybe you get them automatically anyway, but you will be actively encouraging it.
8540 MS JANIK: We will be actively soliciting. In the past when I have launched local independent‑type programming, typically what I will do as I will create a press release for all the people who are part of the infrastructure in the music industry and advise them of our programming policy and encourage them to send us submissions.
8541 When I launched the 100 per cent Canadian channel on Iceberg, with the help of Indie Pool, they distributed a letter for me to their membership, and within a few weeks I received 500 independent releases.
8542 THE CHAIRPERSON: So you won't have to ‑‑
8543 MS JANIK: So I am quite confident and very actually excited at the opportunity to open the door to radio to artists from a wide variety of genres.
8544 And personally I have a collection at home of 1,500 Canadian artists.
8545 MR. KAY: You know, it is one of those fun things too, where other stations ‑‑ every station has people knocking on the door and say look, would you please play my record.
8546 Well, it gives us a way to expose them and do more than just play their record and make the whole week‑long thing for them.
8547 Also, with our Hey Mom I Have Taken over the Planet program, we can have someone like Sara Philasani(ph) come in and take over the show. And she doesn't have to play just her music, she can play Canadian stuff. But it is a musician who is going to come in, have an open door thing and really do what they want to do.
8548 Burton Cummings, for example, is a closet disc jockey. When I was in Winnipeg when he would come into town I would say, hey Burton, do you want to come in and take over? That would be great for us.
8549 But a lot of these people don't have a chance to do that. We want to give them that chance.
8550 THE CHAIRPERSON: In your deficiency response March 7th, you indicate that you may occasionally run some Canadian syndicated programs. I think you just wanted to leave yourself some latitude there.
8551 MR. KAY: Exactly.
8552 THE CHAIRPERSON: Is that still your same position?
8553 MR. KAY: Exactly, yes. Just some latitude. If there was, for example, a Blues festival and somebody came to us and said we produced this blues program that fits with what is going on in your community, in your city, do you want to listen to it and maybe run it? Sure, we will listen to it.
8554 That would be the only kind of thing that we are planning at this point in time. Other than that, nothing.
8555 THE CHAIRPERSON: Still staying with the 120 hours of local programming?
8556 MR. KAY: Yes. Absolutely.
‑‑‑ Pause
8557 THE CHAIRPERSON: I've got so many applications you can't get them all on one schedule. I just have to flip around here.
8558 126 hours live‑to air, would that be a correct statement, then, if six hours is allowed for syndicated?
8559 MR. KAY: Yes.
8560 THE CHAIRPERSON: Okay.
8561 Now, with respect to your CCD initiatives, I'm assuming because it is quite a lengthy list ‑‑ I didn't have a chance to check your comments this morning with what has been submitted, but I'm assuming there is no change.
8562 MR. KAY: No change.
8563 THE CHAIRPERSON: All right. So with regards to the Music and Green Festival...?
8564 MR. KAY: Yes. The whole concept of green of course is growing everywhere and we certainly plan to be a green radio station. We are going utilize the best practices and ecofriendly right things to do.
8565 And as far as the Green Festival, do you want to talk about that, Liz or is it Jas?
8566 MS JANIK: I can talk about the concept or did you want the details of the finances?
8567 THE CHAIRPERSON: Actually, what I was interested in was how the artists were going to be selected.
8568 MS JANIK: For showcasing on The Planet Music and Green Festival?
8569 THE CHAIRPERSON: Yes.
8570 MS JANIK: Because we have this ongoing dialogue with artists from the community and from Edmonton specifically, we will get to know the artists that are available in our community and we will be able to identify those artists that our audiences particularly prefer.
8571 So we will hire local Edmonton artists that are part of our playlist to be part of the showcase.
8572 We would look for one artist that was a little higher statured to be the headliner and the others would be the emerging artists.
8573 THE CHAIRPERSON: I guess I was ‑‑ and I can see, Ms Janik, with you being involved that you probably don't need any outside expertise. So when I was writing the question I was kind of contemplating were you doing it internally, but I can see that you will be.
8574 And a similar question that I had with respect to the Independent Music Awards, the first phase of that, where there are 10 artists selected, I gather that is as well selected internally?
8575 I know the prize winners are not, the three are not. But will the initial 10?
8576 MR. KAY: Yes, the initial 10 ‑‑ sorry , Liz, did you want to go ahead?
8577 MS JANIK: Yes. Because we will be playing these artists as part of our rotation, what we will do internally is we will identify I would expect the top three from each of the music styles that we have identified. Then we'll take it to the audience and we'll let the audience have their input to pick the top of those three in each of the categories.
8578 MR. KAY: Okay. Would you like further explanation on the top three or...?
8579 THE CHAIRPERSON: No, that's very good.
8580 MR. KAY: Okay.
8581 THE CHAIRPERSON: I don't know, I think we see from these American Idol‑type or Canadian Idol‑type shows, you have to be careful when you ask for audience because you can sort of stack the deck.
8582 MS JANIK: Hence our preselection of them.
8583 THE CHAIRPERSON: Yes, and the final selection.
8584 Now, with respect to the Independent Music Awards Phase 2, as we have just mentioned, you will have a panel that will select the three grand prize winners. You mentioned that each will receive an additional $36,667 for the production of the CD and, if they wish, a video, for a total contribution of $110,000. I have a couple of questions in this regard.
8585 MR. KAY: Sure.
8586 THE CHAIRPERSON: First of all, I'm wondering how these funds will be disbursed. Like would it be ‑‑
8587 MR. KAY: I'm going the turn things over to Barry Allen here in a second. That is the area where, as Barry said earlier, I went to him and said Barry, how can we do more than just the token thing that radio stations do? What can we do that is going to impress the Commission, that is going to be good for the community, going to be good for the musicians?
8588 And then Barry was the one who came up and said okay, Don, here is what you really have to do.
8589 Barry...?
8590 MR. ALLEN: Thanks, Don.
8591 Madam Commissioner, I just felt with the initial in Phase 1, the $10,000 to each, to 10 winners, for $10,000 it is very difficult for a band to record and produce a state‑of‑the‑art piece of product. For $10,000 you would be lucky if you get it completed and get it to the mix stage.
8592 What I suggested to Don was that well, maybe we should take it another step further where we offer a couple of prizes with some substance to it where it would give the bands or the artists the opportunity to not only finish recording their album but also have money in there to manufacture product, to have a professional graphic artist design it, then have money also in the recording process to bring in an outside producer. Those expenses can vary anywhere from $5,000 to $15,000; but to bring in a name kind of producer to help them take their music to a next level, take it to a higher level than they already are, and then also to have enough money to pay a publicist and a tracker and then have money left to do some marketing and promotion.
8593 That has been the big downfall with acts at this point, is we just run out of money. We end up we have enough money to make a record, make a good record and then there isn't money left there to take it to the next most important stage: get it out to the audiences.
8594 That was the reason that intrigued me with this entire application, is that I love the idea of the 40 per cent Canadian content, 20 per cent emerging artists. It means they have some meat on the bone here. They are putting some funds into the community that will in turn filter into the music industry and Edmonton, in Alberta, and it helps people like me; it helps artists; it helps producers. They then have money to hire a manager instead of their friend.
8595 I was real excited about this because I think it works. They need more money.
8596 Without these types of initiatives I'm not so sure where our industry would be today, because to work in the music industry ‑‑ I have worked in the industry for upwards of 40 years, and I mean I love making music, it is the greatest thing anybody can do, to be able to produce artists. It is absolutely magical. I can't tell you how much I love doing it, and I want to be able to keep doing that and I want to get better at what I do, as all artists want to get better at what they do.
8597 They want to write a better record. This program I feel offers them to do that.
8598 Then once that record is completed, then we have a friendly radio station that is eager to play and approachable on a local level. It is very exciting for me and that's why I love this application.
8599 I hope I have answered your question.
8600 THE CHAIRPERSON: I can appreciate it is obviously a very thoughtful approach. What I'm really wondering is how the funds will be controlled to ensure that somebody doesn't take a trip to Winnipeg ‑‑ to Winnipeg, to Mexico ‑‑ although they might take a trip to Winnipeg from Mexico.
8601 MR. KAY: Madam Chair, we have spoken about that one, too. Knowing musicians and knowing radio people, we decided that we would distribute the money in accordance with some kind of plan. I don't think it would be wise to give anybody $36,000 or $46,000 right now and let them make their own decisions if they don't have good management and good ethics or whatever.
8602 So we would distribute that money in accordance with the plan. Once the winners are chosen by an independent body of known musicians probably and radio people in the city, then we would say okay, what is our plan here. That is where Barry knows that industry inside and out. He will suggest things and they will come up with a plan.
8603 We will then say okay, it's going to cost "X" dollars for this recording session, "X" dollars for the mastering, "X" dollars for the making of the CDs. Well then maybe here is some money left over for a management thing. Maybe here is the money you need for a tour.
8604 But I think it has to have a business plan and sometimes we all need that input.
8605 MR. ALLEN: It would be progressive. It would be initial funds to get the project going and then as it is completed along the way, funds will be then issued to pay for those portions.
8606 THE CHAIRPERSON: So you probably ‑‑
8607 MR. ALLEN: Rather than just handing over ‑‑ I totally agree with you, you can't do that.
8608 THE CHAIRPERSON: So you would probably end up then with some type of agreement with these winners or a contract. Maybe not as formal as that, but...
8609 MR. ALLEN: Yes.
8610 MR. KAY: Let me get Jaspreet to answer a little bit of that too, for you, because she is going to be supervising and staying on top of that.
8611 Sorry, Jas.
8612 MS GILL: I will be supervising all the CCD initiatives so the money just doesn't go wandering where it is not supposed to go. So it will be monitored by me and the team, and I will be reporting back and forth. So there is an open communication and we know it is just not being used for, you know, travelling somewhere.
8613 THE CHAIRPERSON: Thank you.
8614 Just let me ask you one question on that, then.
8615 Would you expect to be issuing the cheques directly to a third party or is that just too far down the road to even ‑‑ directly to a third party?
8616 MS GILL: Yes.
8617 THE CHAIRPERSON: You would, okay.
8618 I'm just wondering, under the new regulations video would not qualify as an eligible CCD initiative, so the CCD funds would have to be directed to the production of audio content.
8619 In that case, would you propose to eliminate the option of using these funds to produce a video or would you propose to redirect the funds?
8620 MR. KAY: We wouldn't be doing any videos. If it doesn't qualify, then we will have to let them know that upfront.
8621 THE CHAIRPERSON: Okay. Good enough. Good enough.
8622 In your brief, at page 22, you refer to additional potential significant back‑office and management synergies if your application for The Planet in Vancouver was approved, which unfortunately it wasn't. As you know, we had very few frequencies there, one.
8623 But at any rate I'm wondering, were these synergies or are the synergies that you anticipated incorporated in the financial projections that you submitted with this application?
8624 MR. KAY: No.
8625 THE CHAIRPERSON: No?
8626 MR. KAY: No. We were only talking about possibly doing that syndicated show would run in Vancouver and here, but there was nothing this far. We just thought okay, can we do this as a good business plan? We have the experience, we have the knowledge and we can certainly do it.
8627 THE CHAIRPERSON: That's great. Thanks.
8628 Now, you gave a little more information in your brief this morning but maybe we can just repeat. I will ask my question, although I think you might have given me some of the answer.
8629 In your March 7th deficiency you refer to hiring specialists to write, produce and host your special interest music programs and you refer to them as a freelance producers.
8630 I'm just wondering, to assist in comparing your financial projections to those of other applicants, how many fulltime equivalents would these freelancers equate to?
8631 MS JANIK: I didn't quite hear the last part of your question.
8632 THE CHAIRPERSON: I'm just wondering, to assist in comparing your financial projections to those of the other applicants, how many fulltime equivalents these freelanceers would equate to.
8633 MS JANIK: How many fulltime equivalents?
8634 THE CHAIRPERSON: People. I'm talking about people.
8635 MS JANIK: Oh, we are only looking at some of the feature programs. Specifically the one that comes to mind is Planet Pow‑wow, because there is a gentleman that I had the pleasure of working with on SIRIUS Satellite by the name of Brian Wright‑McCloud and. He is a noted author of the Encyclopedia of Native Music. When we would work with him it would be a nominal amount of money that he would receive. Even all three together wouldn't even add up to I would say at best maybe half a person. If we had three people being paid fees, it would be minimal. It's really just a one‑hour show and it is a small cost.
8636 THE CHAIRPERSON: Okay. Thank you.
8637 Can you just describe for me the total number of employees that you expect to have and how they will break down?
8638 MR. KAY: Yes. Exactly, we are going have four people in news fulltime; there will be seven announcers; plus a PD, and that being Liz; one production manager; one traffic person; two writers, who we intend to keep very busy; one promotion manager; one accountant; one receptionist. I will be general manager and general sales manager, and we will have five sales people.
8639 So that's a total of 25.
8640 THE CHAIRPERSON: Okay. Thank you. I was missing a few.
8641 MR. McLAUGHLIN: I should point out that Liz has told us she intends to do an air shift.
8642 MS JANIK: Yes, it's time to have fun again.
8643 THE CHAIRPERSON: I recall Commissioner Cugini saying how much she enjoyed your programs years back. I'm sure she will comment on that anyway. At any rate, I recall her telling us that.
8644 I just want to look at your financial projections, so I have some kind of involved questions. Maybe we will just work our way through them and see how it goes.
8645 In your brief you indicate your research found your format could produce at maturity a maximum potential 12‑plus audience share of 7 per cent, and in your application at section 6.1 you project reaching a 6 per cent share in year four and 7 per cent in year five.
8646 I'm wondering, given the somewhat narrower appeal of the Category 3 portion of your musical selections ‑‑ and you are free to disagree with that if you don't think it is narrower appeal ‑‑ and the highly competitive nature of the market, could you elaborate as to why you feel your projected market share is achievable?
8647 MR. McLAUGHLIN: First, may I start by disagreeing with your position on Category 3?
8648 THE CHAIRPERSON: Certainly, yes.
8649 MR. McLAUGHLIN: David can give us exact details.
8650 When we looked at the Category 3 music genres, they scored exceptionally high. In other words, there is really genuine interest out there for this kind of music.
8651 You recall I said they dropped way down when you asked if they wanted a specific radio station in those genres, and they don't, but they want to hear that music. And two of the categories tested in the top five.
8652 So in other words, you know, when we were picking the key categories of music to play, two of them tested in the top five. That means our audience is asking us for 40 per cent or they are asking for at least 40 per cent. We are only looking to go to 30, I admit, but we do respectfully dispute that it is a lesser desired music style.
8653 THE CHAIRPERSON: So you feel confident that those are achievable?
8654 MR. McLAUGHLIN: We are very confident.
8655 Also, you know as we started out in those, we took that seven share and cut it in half and then reduced that a little bit to be very conservative in our first couple of years.
8656 MR. OAKES: If I could add to that, the audience reach at 14 per cent was relatively ‑‑ not relatively, it is very conservative. The 7 per cent hours tuned share is very conservative.
8657 I have taken out every possible person out of the audience potential that even has a hint of, well maybe, maybe not, and I have basically got the core there that is very passionate about the music.
8658 THE CHAIRPERSON: Thank you.
8659 Your PBIT levels in years four through seven increase from 42.3 per cent in year four to 50.6 per cent in year five to 54.2 per cent in year seven. I'm just wondering if you could explain why you believe you can achieve these PBIT levels given the Edmonton market's 2007 PBIT level was 26.7 per cent and considering the highly competitive nature of the market. And of course there is a good likelihood some other service or services will be licensed into the market.
8660 MR. KAY: Jim, are you going to answer?
8661 MR. McLAUGHLIN: Yes, Commissioner, I will attempt to take a swing at that to start with.
8662 First of all, because we were so conservative in the first few years, we ramp up rather substantially each successive year. So we only get to our 7 per cent, I will call it our full audience if you will, in year four.
8663 The other issue is we have worked very hard to keep our costs down. When you are a stand‑alone operator, you must keep your costs in check or you will get yourself in trouble. You know, the big guys have 12 other radio stations to send money when they get in trouble or when they are starting out. We don't; we have what is in our pocket.
8664 So by keeping our costs down and being aggressive sales people, we are quite confident that we will have above‑average performance with this radio station.
8665 I managed a stand‑alone FM in Vancouver against all major competition and we took it to the number one sales FM station in the city in two years. We went from $4 million in sales to over $12 million in sales in two years, and I assure you we were making out like a bandit on the bottom line.
8666 MR. KAY: I also want to check ourselves.
8667 For example ‑‑ and I don't want to confuse you with a lot of figures. But, for example, the year one sales we projected in our application was $2,220,000, I believe. So I did some research and talking to people I know in the marketplace and also Liz and I talked about program clocks and how much commercial inventory we were going to have.
8668 Now, obviously we won't have for the first year ratings and numbers to work with, but we said we want to play the game and give people a lot of music and also know that we are going to have to be conservative here. So we came up with a total of 720 minutes of commercial time per week.
8669 Now, in this market the going rate for a 30‑second spot, if you check, is $100 to $110 on the key, the number one stations, the big boys. That is in a full reach plan, 6:00 a.m. to midnight.
8670 So we are basing our sellout component of commercial time at 50 per cent of our available inventory. So that brings it down to 360 minutes. And our spot rate initially of $60 per spot as opposed to the $100 or $110 that the other guys can qualify for.
8671 So when you do the math and the numbers come out ‑‑ we did that to check ourselves ‑‑ the number I came with is $2,246,000 for the first year. So it gave us a feeling of comfort that, okay, we have to play in here. We have to know what we are working with and these numbers seem to me very reasonable, having been on the street here in Edmonton and selling before.
8672 THE CHAIRPERSON: I notice, I guess it is to Mr. McLaughlin's .2, that your revenues are really taking quite ‑‑ like they are increasing almost 50 per cent in year three.
8673 MR. KAY: Yes.
8674 THE CHAIRPERSON: I take it that is just because you will have your ratings and you will be able to raise your rates?
8675 MR. KAY: Yes. We have the ratings and also, you know, the high cost of spots in this market, you know, when I first started researching and I thought well, if the going rate was $60 it is going to take us a while to get up there. But with the going rate being as it is, if we provide a good product and get some numbers, we can certainly do what Jim was able to do in Vancouver. I want to show him we can do that.
8676 THE CHAIRPERSON: I'm just going to digress a little bit here then because I think it is a test to your numbers.
8677 How many licensees did you assume we might grant in your projections ‑‑ just yourselves?
8678 MR. McLAUGHLIN: I would like to answer that this way. We assumed multiple licences. We left it up to you how many.
8679 THE CHAIRPERSON: So regardless of how many we licensed, you still feel comfortable with these numbers?
8680 MR. KAY: We are very comfortable with these numbers.
8681 MR. McLAUGHLIN: Let me just give you a little piece of information. When we actually filed these applications, the 12‑month running TRAM report, Edmonton was a $79 million market. When I pulled the TRAM to come to this hearing, it is an $82 million market. That was only three months ago that we pulled that first TRAM at $79 million.
8682 As we said, it is growing this year, at this moment, at 12.6 per cent. That is phenomenal.
8683 The fact is, Madam Chair, at your discretion you can license what you want and all the newcomers won't use up all the market growth this year.
8684 THE CHAIRPERSON: Thank you. Just as I say, I wanted to just test the revenue lines.
8685 I want to now talk about the expenses, because I noticed in year three that your programming expenses, for example, are ‑‑ I have so many pieces of paper here.
‑‑‑ Pause
8686 THE CHAIRPERSON: Yes, your programming expenses are 27.1 per cent which is considerably less ‑‑ I know it is difficult to ask somebody to speak to somebody else's projections because you weren't in their head; you don't have any idea really or as much of an idea what they were doing.
8687 It is just that Harvard is forecasting 46.6 per cent and Evanov 46.9 per cent for programming expenses. So I'm just wondering if you would care to comment on why your programming might be less or the degree of confidence you have in your number?
8688 MR. McLAUGHLIN: As I explained to you, when you are a little stand‑alone guy ‑‑ I know I'm not so little but the company is. When you are a little stand‑alone guy, you have to control costs.
8689 We have the luxury of having a program director like Liz who both can and apparently will do an air shift. So that covers off, you know, one of those big salary people.
8690 MR. KAY: I might do want to, Jim.
‑‑‑ Laughter / Rires
8691 MR. McLAUGHLIN: Yes, Don was on the air for years, too.
8692 MR. KAY: I will have fun.
8693 MR. McLAUGHLIN: But the fact is we have to control our costs. So we are not going to have the big‑name morning show. We are not going to have the big‑name afternoon drive show. We're going to have, you know, very good talent on the radio station, but not the ego talent. It's not that kind of a radio station.
8694 Our audience is coming for the music, not for the fun and games.
8695 THE CHAIRPERSON: But you did mention in your comments earlier, though, that they are very interested in the news and spoken word programming.
8696 MR. McLAUGHLIN: Yes. And we are investing in the newsroom relative ‑‑ you know, if you are a small music‑based radio station, we have put a lot into our news department so that we do fulfil our listeners' request in that regard.
8697 MR. KAY: Other than the news talk station, CHED and 880, who have just converted to news headlines, I mean, I don't think there are other music stations doing news seven days a week in this market like we will. That is again based on the research and the fact that we truly trust the fact that our listeners want that kind of thing.
8698 THE CHAIRPERSON: That doesn't necessitate hiring these really expensive on‑air people?
8699 MR. KAY: No, that's a different thing. You know, as Liz said earlier, we certainly don't want the juvenile antics. People don't want that with this format. They want a good person who tells them what the music is, but we don't need to do the rah‑rah morning shows. It is all based on the good programming ideas that we have and the research.
8700 THE CHAIRPERSON: I will add that in fairness ‑‑ I don't know if "fairness" is the right word ‑‑ I notice that the Canadian average for programming expenses is 25.9 per cent all cross Canada, and yours is 27.1. The Alberta percentage is 28.3 and comparable markets is 29.5.
8701 So what I'm seeing is that you are not out of whack but the other two are very high, so we will have an opportunity maybe to discuss and get a better appreciation for that later.
8702 MR. KAY: You bet.
8703 THE CHAIRPERSON: Now, with respect to the admin and general, sort of a similar question, because your admin and general are 6.1 per cent. I will give you a number of different numbers here, because I started off, Harvard's are 17.6 per cent of gross revenue; Evanov, 12.8 per cent; comparable markets, 24.2 per cent; and Alberta is 26.2. Yours is 6.1.
8704 That does seem to be a significant difference.
8705 MR. McLAUGHLIN: I think one of the keys there, Commissioner, is the key administration people are all owners and the payment will come off the bottom line, not the middle line.
8706 THE CHAIRPERSON: And later possibly.
8707 MR. McLAUGHLIN: Much.
8708 THE CHAIRPERSON: Well, it depends on how conservative you were.
8709 MR. McLAUGHLIN: Yes.
8710 THE CHAIRPERSON: All right. So you are feeling that that is the explanation for that. That's fine, thanks.
8711 With the strength of the competition in the Edmonton market again and your very substantial losses, especially in the first year, I'm just wondering how you would propose to fund any unexpected losses and for what period of time you would be proposed to fund these shortfalls.
8712 You know, you are showing almost a breakeven in year two. But if that didn't happen, how would you fund and for how long would you be prepared to put in additional monies?
8713 MR. KAY: Well, I know that the three of us certainly it is all ‑‑ we haven't had to go to institutions to get funding; we can do that.
8714 I will let Suki respond to that, if you will.
8715 THE CHAIRPERSON: Thank you.
8716 MR. BADH: Thanks, Don.
8717 Madam Chair, if I look at the Edmonton economic numbers ‑‑ and as Jim McLaughlin just pointed out, the money is already there if you look at it.
8718 If I look at the Edmonton economy, it has the most national, regional retail headquarters, third‑largest number of small businesses in the country, public companies with 10 billion in market capital located in the city, over one billion ‑‑ and it can go on and on and on, all right.
8719 The money is already there. The population growth is there. The income growth is there. The building permits are there. Retail sales are there.
8720 In addition, as Don Kay has just indicated, I am prepared, as are my partners Jim and Don, to subsidize this. We love this business. We are here because it is fun and it's a hobby for us.
8721 THE CHAIRPERSON: Great. Everybody is very bullish about the market, there is no doubt about that. So it is not likely you will be called upon to put more money in; and you have it if you have to. Okay, that's great then.
8722 MR. KAY: Yes.
8723 THE CHAIRPERSON: I'm just wondering, then, with respect to market impact. You note in your executive summary that you will have little impact on the existing stations and yet you are forecasting that you will derive 50 per cent of your year two revenue from the incumbents, which is $1.5 million.
8724 I'm just wondering if you could give us a breakdown by incumbent.
8725 You can submit it; or if you have it, you don't have to.
8726 MR. KAY: We are going to impact ‑‑ if we are going to have impact, it is going to be on the people who are an adult format such as, I'm sorry to say because I am a good friend and appreciate his talents, of Marty Forbes at EZ Rock and even CHED when they want music and they don't want to be listening to talk all the time. But I think the impact is going to be minimal on the rest.
8727 But, you know, those would be probably the two that we are going to have an impact on. There is no way to measure that at this point.
8728 MR. McLAUGHLIN: with sales really following demographics, as they do, it is going to be the older ‑‑ the stations that currently have older demographics.
8729 THE CHAIRPERSON: Which were the two stations again that you expected?
8730 MR. KAY: EZ Rock and CHED.
8731 THE CHAIRPERSON: Is CHED the ‑‑
8732 MR. KAY: CHED is the all‑news, talk, sports.
8733 THE CHAIRPERSON: Okay, CHED. And the EZ Rock one is...? The call letters, do you know?
8734 MR. KAY: Yes. EZ Rock is Astral's station that does very well in this market that is managed by Marty Forbes, and I can't think of the call letters.
8735 THE CHAIRPERSON: Okay. I can find that.
8736 So then if those are the stations that are going to be affected, are they solely the ones or a little bit from everybody else? Or is $1.5 million going to come from those two?
8737 MR. KAY: No, it is going to be a little bit from everybody. You know, everybody is going to try us, I mean, the novelty.
8738 We have some money in the marketing plan for promotion to get people to try the radio station. So, you know, some clients are going to jump on the bandwagon of novelty. You know, if they see a busboard and a lot of advertising and we take the time to spend the money that we have allocated, that is a combination of the listeners who are going to try to tune us in. Also the advertiser might be saying, okay, I may not use them forever, but I want a piece of that and I'm going to dedicate some of my budget toward it for the time being.
8739 So it is going to happen. There is going to be a novelty buy and a novelty tune‑in.
8740 MR. BADH: Don, can I interrupt for a second?
8741 MR. KAY: Yes, sure.
8742 MR. BADH: Madam Chair, I just want to go back to the earlier question.
8743 I have sat in hearings and I have listened to your questions and concerns and I generally do believe that they are issues that need to be addressed with respect to stand‑alones and independents.
8744 If I look at Milestones Radio in Toronto, FLOW, which is doing very well ‑‑ there are other examples such as Paul Larche in Kingston and John Wright ‑‑ sorry, Paul Larche in Kitchener and John Wright in Kingston and so forth. I do understand your concerns about stand‑alone stations and having the ability to finance.
8745 I do have business background. Yes, I am an economist but I also have a business background and I would like to propose something to the Commission, and that is I understand ‑‑ and Mr. McLaughlin and I were also in the running for The Beep. We were just outbid by the bigger boys.
8746 I would like to put forward the following, and that is that in the first term of the licence, all right, I am 100 per cent confident that we're going to be successful, then the value of the licence I understand does go up. And if we are not successful, the value is still there.
8747 I am willing to take as a condition of licence that if we decide to sell that the licence be returned back to the Commission.
8748 THE CHAIRPERSON: That is a very good offer. I don't know that we would go that far, but certainly it shows your level of commitment.
8749 MR. BADH: Thank you.
8750 MR. KAY: And I'm not sure my son will allow that anyways, Suki, so be careful.
‑‑‑ Laughter / Rires
8751 THE CHAIRPERSON: You are not certain, did you say?
8752 MR. KAY: I can hear him right now in the background saying hold it, dad.
8753 THE CHAIRPERSON: Okay. Thank you very much.
8754 So I think we have covered how many licences ‑‑ maybe not.
8755 How many licences do you think the market could support? I know you said it is up to us, but that's not my question though.
8756 MR. McLAUGHLIN: You have four signals I will say in play at this hearing. Is that a good way to describe it?
8757 THE CHAIRPERSON: Yes.
8758 MR. McLAUGHLIN: I would suggest to you that all four are certainly licensable. The aboriginal folks who were up here just before us certainly ‑‑ now, I am giving you my humble opinion, not fact, but certainly seemed deserving of some consideration.
8759 If you choose to license an ethnic station, you have some good applicants there and you have a whole gang of us looking for a couple of other signals.
8760 THE CHAIRPERSON: Okay. Thank you very much.
8761 MR. McLAUGHLIN: We would be very comfortable with a decision that licensed all those for signals.
8762 THE CHAIRPERSON: Thank you very much.
8763 Commissioner Cugini...?
8764 COMMISSIONER CUGINI: Thank you.
8765 You sort of gave me no choice but to ask further questions of Miss Janik with your comments earlier.
8766 But I do have ‑‑ in all seriousness, I noted in your comments that you say each station must be completely customized for its market and that every market has different music histories and unique competitive influences.
8767 What are the music histories and competitive influences of the Edmonton market that make this format so fitting?
8768 MS JANIK: Well, even though this is wearing the label of Adult Alternative, and we use that word "alternative", I was very surprised to see a relatively low overall demand for the Classic 80s Alternative.
8769 COMMISSIONER CUGINI: So Girlfriend in a Coma by The Smiths won't cut it in Edmonton?
8770 MS JANIK: I certainly won't be playing it.
‑‑‑ Laughter / Rires
8771 MS JANIK: And the format, the older versions of the Alternative format have their roots in the glory days of early FM, which I can remember, where progressive radio was a mix of Rock plus other styles like your Joni Mitchell and Crosby, Stills and Nash, but that Classic Rock base is the base here in Edmonton for our format.
8772 This is for people who grew up in the 70s, 60s and 70s, who loved listening to music, still enjoy those artists that they listened to back then, but would like to hear the music from today.
8773 So some of these formats are based on the 80s gold of Alternative and some of them are based on the FM progressive, progressive FM days of the 70s.
8774 In this case we are on the earlier body of music that comes from the 70s.
8775 In Vancouver there was an especially high demand for World Beat, flabbergasting actually. We can't find the same response here in Edmonton. There is some demand but it is so low overall for the general population and for our audience that it doesn't fit.
8776 Here in this market there is a really strong interest in what we are calling Roots Rock, or Alt Country is another label that is common in our industry. These are for the artists that have a bit of a ‑‑ even Country is not quite the right term, but let me use it so it gives you an idea of which direction it goes in. So that is unique to Edmonton.
8777 So I hear this station as been influenced by the music that came of the Classic Rock era and picking the artists of today that are compatible with that sound, including the Blues and the Folk that in the early days of progressive FM we all heard. I mean, that's how I discovered so many of those artists when I was a ‑‑ okay, can I say teenager?
8778 So those are some of the key characteristics here that would shape the sound of the station. It would sound like an oh wow station to people who grew up with Classic Rock.
8779 COMMISSIONER CUGINI: Well, I find that interesting ‑‑ and thank you for that for that further verification ‑‑ because when I look at the formats of the incumbents in the market, you know, at first blush it seems to be covered because we have Classic Rock, we have Rock, Classic Hits, Country, New Country.
8780 Why do you believe that the people that you surveyed have identified the format that you are proposing, that you are proposing as one that is absolutely appealing in Edmonton, given the formats that we have here already?
8781 MS JANIK: Well, if I wanted to hear a mix of Neil Young and Bruce Cockburn and Blackie and the Rodeo Kings and Van Morrison and Joni Mitchell and that great track by I think it is Yael Naim, I would have to bounce around a lot of different radio stations.
8782 Those artists are here, but they are in such minimal exposure to them that there is nothing that suits my taste.
8783 Now, I am a representative of this audience, but I am using the solid statistical information from David Oakes to reassure you that there is 140,000 people like me here in Edmonton that cannot find this blend of music other than sporadically across the board of the Pop and Rock stations that are here.
8784 I don't know if you would remember ‑‑ it feels like ancient history now ‑‑ the early days of FM radio when we would license a Pop station, a Rock station, a softer music station and then we had this sort of other category for things that didn't fit into the first 3 ‑‑ we also had Country in the other one ‑‑ where things that didn't fit in the first four would end up.
8785 That is how CHUM‑FM was born and CHEZ‑FM in Ottawa, CHOM‑FM in Montreal. Later, in later years, CFNY was a Category 4 I think it was radio station format.
8786 So it is not an unusual part of our format history in Canada. It just hasn't been brought into the foreground in recent years.
8787 MR. OAKES: In Edmonton I found this very interesting, when I test the 26th styles for demand, for example I will use one, let's say Reggae, when I ask the demand for it, would you very likely or would you strongly or slightly agree to this type of music style on radio, then I ask what one station in Edmonton comes to mind when you hear that name?
8788 With the Category 3s, huge demand for them, yet well over 80 per cent couldn't mention a station in Edmonton that would play it.
8789 So there is quite a gap between the demand and the perception of the audience out there of does it exist, does it not. They don't think it exists.
8790 So this is going to be something fresh for them because they don't feel they're getting it right now.
8791 COMMISSIONER CUGINI: One follow‑up question to the comparison issue that was discussed with the Chairperson earlier.
8792 One application that you didn't mention was the application we heard yesterday for The Dawg, because I noticed in the video, both videos played Muddy Waters, B.B. King, Stevie Ray Vaughan.
8793 Do you see that as perhaps being the most competitive application to yours?
8794 MR. OAKES: No.
8795 COMMISSIONER CUGINI: So you would be comfortable with us licensing both?
8796 MS JANIK: I would agree with you that because they are playing Blues and Blues Rock and those are two styles that are part of our mix, that they do overlap us to a certain degree.
8797 But again, when they asked the audience what the audience wants, Classic Folk was as big a component as the Blues. So for our audience, they want that fuller mix and they also want the newer music of today and the adult Rock artists like Dave Matthews and Sting, and so on and so forth.
8798 So yes, there is some overlap. I would guess that yes, they would probably be the closest competitor.
8799 Could we survive together in this market? Absolutely.
8800 COMMISSIONER CUGINI: Thank you.
8801 Thank you very much.
8802 THE CHAIRPERSON: Commissioner Molnar...?
8803 COMMISSIONER MOLNAR: Thank you.
8804 I just have two questions for you today. One is just a follow‑up on your CCD commitments.
8805 I note that you say you will provide $120,000 each year to FACTOR and it says:
"... will request that FACTOR direct these monies to Alberta artists to the greatest extent possible."
8806 You know, it is something I have heard in the past, some concern as to how much of FACTOR's money actually ends up here in the West.
8807 One of the things I have heard is that to some extent that may be because the artists in the West aren't aware of FACTOR or aren't aware of how to go about getting at the FACTOR money.
8808 So where you say it will be directed to Alberta artists to the greatest extent possible, I wondered if you had any plans in order to promote and to have people made aware of this money?
8809 MR. KAY: Let me let Barry answer that. He is the guy who has been involved and he knows, so he is the guy to give us the answer to that.
8810 MR. ALLEN: I'm not sure if I can answer it specifically, but I can certainly enlighten it a bit.
8811 The funding bodies, in particular FACTOR, have been majorly important, as you know, for Canadian artists to get us where we are and I know their job is really, really difficult to keep it fair and equitable across the country. But I think they are really conscious of trying to keep it so it is fair for all the regions, and I think they would be most receptive to the fact that if a local radio station in Edmonton earmarks them a considerable amount of money, and the simple question is can we work on something that would earmark this money where Alberta artists could have an insight into it, I think that would be a simple matter of just dedicating it to the region.
8812 You know, there would be conditions of course, but I think it could be developed by working that money so it goes into this area, gets into the local artists' hands from a local radio station.
8813 Part of the problem with FACTOR and Canada Council and Starmaker is out here for some reason Alberta artists, they just don't tend to apply for these grants, the opportunities that are there. I think we have done a poor job as an association and as an industry to make them aware that those monies are there.
8814 You just have to apply, and you have to apply en masse.
8815 Even though you think you may not get it, if you keep throwing it in there, eventually, wow, this guy is pretty good this time. Let's give them some money.
8816 But if we work with The Planet as an industry and we know there is that amount of money there that could specifically be dedicated to the Alberta industry, I think we could do ourselves proud by getting with it, you know, get on the wagon and get those applications in there and I think we would be rewarded, especially if there is a bit of a framework in there where we could have the inside track in there.
8817 I know it is really difficult because you have to keep it fair and equitable, and I think FACTOR has been fair and equitable over the years.
8818 MS JANIK: To specifically answer your question in terms of how we would promote it, we have a show planned on this radio station based on the model of a show that I created for CFNY "X" decades ago called The State of Independence.
8819 The State of Independence is for the local music community. It is scheduled early on Sunday evening, because that is the one day of the week that the entire industry isn't working. The bands come off the road; they come back into town. And this is the place where news and information about independent recording practices and opportunities would be delivered.
8820 So we have the power of our radio station to put the word out there.
8821 We can also work with local music associations, I believe it is the Alberta Music Association to help them inform their members to get the message across that way, and we have other places throughout the day where we can bring in references to various funding as we also would for the scholarships at the schools.
8822 COMMISSIONER MOLNAR: Thank you very much. That is exactly the kind of answer I was looking for.
8823 Just to be clear, I not in any way was suggesting that FACTOR wasn't fair and doing all they could. It was more what I had understood was perhaps the artists were not aware of the ability and weren't getting in their applications.
8824 So promoting it on your station is I think a great way of having that occur. Thank you.
8825 MR. KAY: Yes, teaching them and helping them. You know, as Barry said, sometimes young musicians don't think about business things like that and that is part of our job.
8826 COMMISSIONER MOLNAR: Thank you.
8827 My final question relates to new distribution platforms.
8828 I note in your application that you say you will stream audio. We have heard about the opportunities of new media, both to promote and complement the radio station to create rich, rich content on the web. You know, it is a win‑win situation and I wondered what sort of plans besides streaming audio you might have related to your new station.
8829 MR. KAY: And I'm going to turn that over to Suki.
8830 MR. BADH: Thank you, Don.
8831 Madam Commissioner, Jaspreet and I attended the National Association of Broadcasters meetings this year and that was the theme over there. The Web has the increasingly developed not only as a medium to reinforce existing media, but more importantly as a separate means of providing content and of reaching consumers with advertising.
8832 An interesting study from the Canadian Radio Marketing Bureau 2008 indicates that radio's value rises as Internet usage increases. The radio and Internet are very compatible.
8833 A few facts from the study.
8834 Almost 40 per cent of Canadian adults listen to radio as they surf the Web.
8835 Second, radio and Internet outperform other media in time spent.
8836 Third, radio ads prompt web visits and purchases. Radio advertising has a strong influence on Internet usage further increasing radio's value.
8837 Fourth, over 40 per cent of Canadian adults have typed in a website address into their browser after hearing it on radio.
8838 Five, 57 per cent of adults indicated that a radio ad had prompted them to learn more about the product or service on the website.
8839 Jas can address to that in a bit.
8840 Six, 37 per cent of listeners who actually visited a website prompted by a radio ad actually bought online.
8841 Seven, radio ads are least avoided. Listeners are increasingly accustomed to have content available to them on demand. 40 per cent of all Canadian adults have visited a radio website and the numbers increase with younger adults. The radio website increases listener loyalty, which in turn brings greater value to the station.
8842 While radio is the theatre of the mind and has some advantages, at the same time listeners cannot visualize the product, the hosts, the station. Website gives him that opportunity to see the announcers, to click and see the product that they're interested in.
8843 Our audience is not the younger generation who want contents into their phones or their mobile devices, but they are net savvy and used to reach out to find the content they want. Many of them have blackberries and are able to use the most recent models to surf the net for more information.
8844 We will have to therefor find ways to get them on the net.
8845 Jas is going to comment on that.
8846 I would like to address the other theme that NAB was monetizing this and I would like to address that in a bit.
8847 Jas...?
8848 MS GILL: Yes. So we will be streaming audio, but as you guys heard last week more and more people are accessing signals by their computers in office buildings and sometimes homes and pockets of many cities.
8849 FM signals can experience multipath and other interference so streaming the signal on the net is one way to overcome those problems, or at least in part.
8850 So there is one major concern here, and that is copyright issue. So we certainly don't want to breach any of those copyright rules and neither do we want to have any retroactive rights payments. But if that issue is resolved, we can go and explore that.
8851 Second, in a world where content is king we need to find a way to repurpose our unique content to make it available on demand. So to do this we are going to make our news and other spoken word content available online, on demand.
8852 We will do this a number of ways. Like news stories, weather and other content will be posted in text on the website. Our daily magazine programs will be available to download onto computers and MP3 files.
8853 Weekly Blues, Folk and original programming or our specialty programs again will be on our website, but we have to explore the copyright issues there again.
8854 Third, we would use our Web to provide more services to our listeners, community billboard kind of type we want, entertainment news, update on upcoming concerts by Blues or Folk, Adult Rock and Roots musicians. We can also direct our listeners toward environmentally friendly products and services and information.
8855 As Suki was saying, they go to the website and once we promote it on our radio, they actually going check out the product and they have a higher percentage of purchasing after that.
8856 So we would use the website to promote and explain our CCD initiatives.
8857 As well, we will also have our announcers, bios and blogs so they feel like they are part of the community, they are part of the radio station and in turn all these kind of things actually bring in monetization because you get more ad revenues and stuff. That's what really happens.
8858 We are also going to provide hotlinks to the artists and stuff like that to facilitate downloading and we can probably work something with that.
8859 We are also going to have like contestants and winners' blogs, et cetera, and stuff like that.
8860 Suki...?
8861 MR. BADH: Thanks, Jas.
8862 One of the interesting facts I picked up that NAB this year was that U.S. online revenues have surpassed radio revenues and this includes a healthy chunk of activity on radio websites.
8863 We will provide value‑added services for advertisers with banner ads, hot links to their sites, coupons that listeners can download and through podcasting.
8864 Podcasting brings the power of voice delivered directly to our prospects, customers, employees, partners. While text might still be the most usable format, it is easiest to consume, voice itself has a unique feature of being able to express emotion and being personally in touch.
8865 Monetizing podcasting won't come through ads sales or content sales but through opportunities to enhance their marketing communications with the power of emotion.
8866 A number of different ways podcasting can generate revenues, in press releases, direct marketing, customer relationships, management user support, promotion, e‑commerce, branding, et cetera, and so forth.
8867 And we do recognize the opportunity that new media will bring to us. As we noted, there are some issues to be resolved, but we believe that radio can drive people to our website and our website can drive people to our radio.
8868 Does that answer your questions?
‑‑‑ Laughter / Rires
8869 COMMISSIONER MOLNAR: Yes, it does. It is obvious you have done a lot of work in understanding this. So thank you.
8870 Just one quick question. If you were to be awarded this licence ‑‑ and it is a twofold question ‑‑ how long do you think it would take you to operationalize it; and would you see having your full rich web experience available at that same time?
8871 MR. KAY: Jim, you have had more experience at this than I have as far as getting ‑‑
8872 MR. McLAUGHLIN: We likely could get the station on air early spring of 09. I need six months, let's put it that way. So from decision date to on‑air, six to seven months.
8873 I think that's ‑‑ in my head bone that is spring of 09.
8874 We would have a great deal of our Internet linking done, but the one area that concerns us greatly, again partly because we are a little guy, is the copyright issues, some of which appear a little cloudy at the moment.
8875 We are not afraid of them, but we need to be confident that we are on solid ground.
8876 MS GILL: Actually, the website can probably put up earlier for promotions, probably like two or three months, but all of the working things like podcasts, those things we wouldn't have aired yet either. So those things will be, you know, we will work with copyright issues, but the community links and developing that community feel, that can be started earlier on.
8877 COMMISSIONER MOLNAR: Thank you very much. Those are my questions.
8878 THE CHAIRPERSON: Thank you.
8879 I just have a couple of questions, just quick questions following out of Commissioner Molnar's questioning.
8880 With respect to the FACTOR application process, is it a relatively simple process for musicians or is it a complicated application?
8881 MR. ALLEN: The application itself?
8882 THE CHAIRPERSON: Yes.
8883 MR. ALLEN: Not really.
8884 THE CHAIRPERSON: Not really.
8885 MR. ALLEN: They have various categories that are applicable to bands at their various levels where they are at in their careers in terms of if they are just looking for a demo award or if they are looking for a travelling award or if they're looking for an independent release. There are various levels of funding.
8886 THE CHAIRPERSON: So the issue is really just awareness?
8887 MR. ALLEN: I'm sorry?
8888 THE CHAIRPERSON: The issue then is just awareness? The problem is awareness?
8889 MR. ALLEN: Absolutely. I just really feel that if we did a better job promoting the fact to Alberta musicians that there is money out there, go for it, but it's a hard thing to do.
8890 I think with the station doing it helping, along with our provincial industry association, I feel we can get the job done and get money that is deserved to be getting out here, because our artists are just as good as anywhere.
8891 THE CHAIRPERSON: Great. Thanks.
8892 MR. ALLEN: Thanks.
8893 THE CHAIRPERSON: Thank you.
8894 MR. McLAUGHLIN: Commissioner, if I may ‑‑
8895 THE CHAIRPERSON: Sure.
8896 MR. McLAUGHLIN: ‑‑ just a little point of interest.
8897 Our CCD commitment in this application is larger than our original seed money when we created FACTOR.
‑‑‑ Laughter / Rires
8898 THE CHAIRPERSON: Interesting. You have to think about that; interesting.
8899 I just wanted to follow‑up, Mr. Badh, on your point about monetizing the Internet and the potential that is there.
8900 Would I be right in assuming that those dollars, revenues and expenses, are not reflected yet in your projections?
8901 MR. BADH: You are correct, Madam Chair.
8902 THE CHAIRPERSON: Premature. Okay. Thank you very much.
8903 Legal has some questions.
8904 MS LEMOUX: Thank you.
8905 I have a follow‑up question to Commissioner Molnar's first question.
8906 You have indicated in your supplementary brief at page 19, and I will quote:
"We will request that where possible FACTOR direct these monies to independent artists from Alberta."
8907 Have you done so yet? No?
8908 MR. McLAUGHLIN: No we have not, but we will commit to doing so.
8909 MS LEMOUX: Okay. If you do so, could you provide us with the letter when you do so?
8910 MR. McLAUGHLIN: Sure.
8911 MS LEMOUX: Thank you.
8912 The second question ‑‑ and I'm sorry because there is no link between the questions. It is in answer to Madam Chair's question in relation to the level of Category 3 music to be aired per broadcast week. You have stated that you would devote 30 per cent.
8913 However, it is not that clear if this 30 per cent is based on the 126‑hour broadcast week or if it is based on the number of hours of music programming to be offered.
8914 For the purpose of the condition of licence, could you clarify this for us, please?
8915 MS JANIK: Would you mind, I'm not quite sure specifically what you are asking me.
8916 MS LEMOUX: Okay. What I am asking you is: Is it based on the hours of music programming overall or just the 126 hours broadcast week?
8917 If it is based ‑‑
8918 MS JANIK: It would be based on the total amount of music that we play.
8919 MS LEMOUX: Okay. Could you provide us with the estimated number of hours of music programming to be offered over the broadcast week? And then we will figure out how much 30 per cent will be.
8920 But we need to figure out how many hours.
8921 MS JANIK: Oh, how many hours of air time will be devoted to the 30 per cent ‑‑
8922 MS LEMOUX: Yes.
8923 MS JANIK: ‑‑ based on the number of hours that are ‑‑
8924 MS LEMOUX: Exactly.
8925 MS JANIK: I would have to step aside to do the math.
8926 MS LEMOUX: No problem. Could you provide us by tomorrow or maybe Thursday?
8927 MR. KAY: Yes.
8928 MS JANIK: Absolutely.
8929 MS LEMOUX: That's great. Thank you.
8930 MR. KAY: Absolutely.
8931 MS LEMOUX: Last, just because your speaking notes will be added to the public file, I have noticed in your summary of application that you have deposited with your speaking notes that in the section spoken word you have not included the 60 minute Planet Pow‑wow spoken word programming. That was indicated in your application.
8932 So we just want to know for the public record if you still intend to pursue that program.
8933 MR. KAY: Yes.
8934 MS LEMOUX: You do. Okay.
8935 And lastly ‑‑ and it is a very minor thing ‑‑ with respect to the music commitments, at the Canadian content level commitments you wrote 40 per cent Category 2, that's great, but 40 per cent Category 4.
8936 Our understanding is Category 3, but we just want to clear that up for the public record.
8937 MR. McLAUGHLIN: Obviously a typo. It's 3.
8938 MS LEMOUX: Thank you very much. That's all.
8939 THE CHAIRPERSON: Thank you, Mr. Kay. So this is your two minutes.
8940 MR. KAY: Boy, I do have a good team.
8941 Madam Chair, we believe that our application responds extremely well to the Commission's criteria for new radio stations.
8942 First, the Edmonton market is more than robust. It has experienced, as we said earlier, incredible growth in recent years, to the extent that we are confident that the Commission could issue several licences as a result of this hearing, particularly if one is an ethnic station and one is an aboriginal station.
8943 Second, the licensing of an independent station, Planet 107.1, with local resident owners available to run the station, will have little negative impact on any existing Edmonton station.
8944 Third, the level of ownership diversity will be increased by the addition of a new independent station.
8945 Fourth, editorial diversity will also increase. Licensing The Planet will provide Edmonton with a new, independent editorial voice, one with a very well staffed local news department. We will not only provide 64 newscasts per week, we will also provide that daily ‑‑ and I mean seven days a week ‑‑ hour‑long magazine program.
8946 Fifth, our business plan is very strong and well financed. Moreover, the financing all comes from the shareholders Jim, Suki and myself. We have not had to seek out institutional financing of any kind. We can weather any storm using additional shareholder financing, if required. And we don't think it will be.
8947 Number six, our format is based on comprehensive research. We did not go into this application with a preconceived idea as to any musical format. The Oakes research, as we said, reviewed nine different formats, identified 140,000 music lovers in the Edmonton region who will make up the core of our audience on The Planet.
8948 Number seven, our strong faith in the quality of Canadian musical artists is reflected in our very broad CCD proposals. The wide variety of music styles that will be played on The Planet will allow us to include Canadian emerging artists that would normally fall through the cracks of mainstream formats, and they have in the past.
8949 Number eight, our team has significant experience in building and in managing innovative and successful radio stations throughout Canada and, in Liz's case, in the U.S. as well.
8950 Madam Chair, Commissioners, we appreciate that diversity in all its aspects is a very important concept. In an increasingly consolidated Canadian radio industry we now have stations in major markets across Canada that are owned by a diminishing number of multiple station owners, playing music in the same small number of generic formats, and we believe that you have the opportunity to counter that trend by licensing a new, independent broadcaster in Edmonton was a highly diverse programming format and a commitment to diversify in employment.
8951 Thank you, Madam Chair, Commissioners and Commission staff for the generous and open reception you have given us.
8952 Most important, thank you for this opportunity to outline our dream to you.
8953 THE CHAIRPERSON: Thank you, Mr. Kay and your team. We appreciate it.
8954 We are going to take a break now for lunch and resume at 1 o'clock. Thank you.
‑‑‑ Upon recessing at 1150 / Suspension à 1150
‑‑‑ Upon resuming at 1305 / Reprise à 1305
8955 THE SECRETARY: We will now proceed with Item 20, is which application by Rogers Broadcasting Limited for a licence to operate an English language FM commercial radio programming undertaking in Edmonton.
8956 The new station would operate on frequency 102.3 MhZ, Channel 272C‑1, with an average effective radiated power of 51,000 watts, maximum effective radiated power of 100,000 watts, antenna height of 240 metres.
8957 Appearing for the applicant is Paul Ski.
8958 Please introduce your colleagues. You will then have 20 minutes to make your presentation.
PRESENTATION / PRÉSENTATION
8959 MR. SKI: Thank you very much.
8960 Madam Chair and Members of the Commission, my name is Paul Ski and I am the Chief Executive Officer of Rogers Radio. We are delighted to be here today to present our application for an all news radio station in Edmonton to be known as News 102.3.
8961 I am pleased to have with me today to talk about our all news proposal some true experts in the format.
8962 To my far left is Karen Parsons, News Director 660 News, our all news station in Calgary.
8963 To my immediate left is John Hinnen, Vice‑President of News and General Manager of 680 News.
8964 To my far right is Tom Bedore, General Manager of our Edmonton stations.
8965 And to my immediate right is Susan Wheeler, our Vice‑President Regulatory Affairs.
8966 In the back row, starting from my far left, is Shelley Ruis, General Sales Manager for our Edmonton radio stations.
8967 Next to Shelley, Derek Berghuis, Executive Vice‑President Sales, Rogers Radio.
8968 Next is Rael Merson, President, Rogers Broadcasting.
8969 Next to Rael is Matthew Mitchell, Business Manager for our Calgary all news station.
8970 Madam Chair and Commissioners, our presentation today will focus on three key points. First, why a major metropolitan center like Edmonton needs an all news station. Two, why Rogers would be the best licensee of an all news station. Three, why this application is in the public interest.
8971 One of the attributes of a world‑class city is that it has a critical mass of stories and culture that looks to itself for reflection rather than to other media centers. As Alberta's capital city and the economic center of northern Alberta, Edmonton has that foundation of stories and culture that is perfectly suited for an all news station.
8972 Edmonton is one of Canada's fastest growing major metropolitan centers and has an increasing demand for timely, relevant around‑the‑clock information. Whether it is up to date traffic information in commute times or information on the city's changeable weather conditions, the people of Edmonton will find all news radio an incredible resource as they go about their daily lives.
8973 Industry data shows that Edmonton's economic growth is outperforming that of most other urban centers in recent years and that this healthy economic growth is forecast to continue. The Edmonton radio market has also experienced strong revenue growth and last year was the fastest growing radio market in Canada.
8974 News 102.3 will follow the path of our other all news radio stations and will grow radio revenue in Edmonton by attracting advertisers who have never used radio before.
8975 News 102.3 will be the only all news station in Edmonton that offers live local information 24 hours a day, seven days a week. With reporters on the street around the clock throughout the week and on weekends, residents of Edmonton will know they can rely on News 102.3 to break and track the stories they care about.
8976 With its reliable and consistent news wheel, News 102.3 will offer Edmonton listeners timely news, traffic, weather, sports and business information. News 102.3 will also bring an entirely fresh news voice to the Edmonton market, ensuring comprehensive coverage and reporting on key issues of interest to the people of Edmonton.
8977 Here is how we will do that.
8978 We will have the largest radio newsroom in the city, including 39 fulltime journalist, a dedicated legislative correspondent at the provincial government, a dedicated airborne traffic resource and meteorologist who will ensure up‑to‑the‑minute traffic and weather information and an enhanced online and multiplatform content offering.
8979 MS PARSONS: One of the key things for us whenever we launch an all news services is to explain the format to our listeners. Many think it is just a radio station that does more talk. In reality, all news is as different from talk radio as Country music is from Rock.
8980 Our all news station is consistent every hour, 24 hours a day, seven days a week. Our all news stations feature some core elements.
8981 If you look at the news wheel or the clock that we have appended to the back of our oral presentation, you will see how we propose to run our all news station here in Edmonton.
8982 It looks like this. I don't know if you want to reference it.
8983 We will broadcast six traffic reports per hour, one minute past the hour, 11, 21, 31, 41 and 51 minutes past. As we say, we have traffic and weather together on the ones every hour.
8984 We also broadcast sports twice hourly, at 15 and 45 minutes past every hour. Edmontonians are avid sports fans and our sports segments will broadcast more than just the score.
8985 We also broadcast business reports twice hourly, at 26 and 56 minutes past the hour every hour. A few years ago when the stock markets became more volatile, we felt running business reports twice hourly might not be enough, so we added what we call market minutes twice hourly, at 13 and 43 minutes past the hour.
8986 Our all news stations are all based on a similar news wheel or clock, but the content is customized to each specific market. Our lead stories will always reflect what people are or will be talking about in the community.
8987 News 102.3 will focus more on breaking news than any other station in the market. Unlike news talk stations that normally wait for a newscast at the top or bottom of the hour, we will break in at a moment's notice.
8988 For example, earlier this year when an Air Canada plane was forced to make an emergency landing at the Calgary International Airport injuring 10 people on board, our 660 news team was the first to break the story, arriving on the scene even before the emergency response teams.
8989 As we say, you can read about it tomorrow, see it tonight or hear it now.
8990 We will also place considerable focus on traffic. Like many major metropolitan centers, the residents of Edmonton are concerned about traffic and commute times. We know that one of Edmonton's biggest local issues is that its infrastructure has not kept pace with its economic and demographic boom. Our in‑depth and consistent traffic reporting will make News 102.3 the go‑to station in the market for traffic information.
8991 When it comes to traffic information, we are constantly looking for ways to improve our traffic surveillance. In fact, we have a number of very exciting developments on that front. We are launching a new service that will allow us to measure the speed of traffic on any road or street in this country by utilizing the speed at which cell phones are travelling. This will allow us to provide a unique and personalized service to our listeners.
8992 The other great strength of our service, which will be of particular value to Edmonton listeners, is our weather reporting. News 102.3 will have a dedicated meteorologist to track Edmonton's changeable weather patterns because we understand the value in getting weather information out to the public that is timely and accurate, particularly during severe weather conditions.
8993 Again, due to the fact that our format is so consistent, people can rely on us to give them weather when they want it.
8994 Consistency is the key to our format. We know that our listeners rely on our stations to be on time with our various information elements and we always are. You can set your clocks by it. As news professionals we know that news never stops. That's why we place such importance on the fact that News 102.3 will be live 24 hours a day, seven days a week.
8995 We know that an emergency can strike at any time and we want to be the station of record when it comes to any major breaking story, whether it happens at 3:00 in the afternoon or 3:00 in the morning.
8996 We also recognize that in today's information‑based society people expect to get news information when and how they want it. That's why News 102.3 will also have a strong online and multiplatform content. News 102.3 will make its content available on demand using a variety of customizable distribution platforms, including Internet streaming, SMS text messaging, podcasts and audio clip downloads.
8997 News 102.3 will have an extensive Web component that provides listeners with the opportunity to subscribe to features such as breaking news alerts or the latest traffic reports via the Internet or mobile phone.
8998 News 102.3 will also have a dedicated staff responsible for updating its website on a regular basis as news stories and information come into the station.
8999 For example, News 102.3 reporters will carry cameras in their kit bags so they can post pictures of breaking news stories while they are on location.
9000 In short, our local news and information content will be available any time, anywhere, by whatever means the listener prefers. Our goal is to make News 102.3's website an information portal in Edmonton that complements and builds on our on‑air news content.
9001 I am particularly proud that my station, 660 News in Calgary, won the award for best newscast in a major market in the Prairie region from the RTNDA in its very first year of operation.
9002 MR. HINNEN: At Rogers we believe in the all news format. In fact, it was June 7, 1993, 15 years ago this week, that Rogers Broadcasting made the bold move of switching a profitable AM radio station, CFTR, to 680 News. At the time CFTR was a successful Top 40 radio station and was earning around $1 million a year.
9003 It was at that point that Tony Viner, President and CEO of Rogers Media, went to Ted Rogers and said Ted, I have a great idea for you. I know we are profitable but I have this plan to launch an all news station that will lose $3 million next year. He explained our plan for 680 News and Ted said of course, go for it.
9004 Today 680 News is one of Canada's most successful radio stations and has become a template for similar stations around the world. In the last BBM ratings 680 News set a new Canadian ratings record with nearly 1.3 million listeners tuning in each week.
9005 Two and a half years after the launch of 680 News we launched News 1130 in Vancouver. Like Toronto, it took many years for the station to become profitable, but by last year News 1130 had more listeners than any station in Vancouver.
9006 Building on that success, we launched our third all news station in Calgary, 660 News, which has now been operating for just over two years. While not yet profitable, it too is performing according to our projections.
9007 Today Rogers Broadcasting operates seven award winning all news and news talk radio stations across Canada. No broadcaster has more experience at all news than we do. Through years of hard work and considerable investment, Rogers has established unparalleled expertise in this format. In fact, we have been asked by broadcasters from around the world to assist them in developing this format in cities such as London, Moscow and Beijing and many have visited our stations to learn more about how we deliver this format.
9008 Our all news stations are also regularly recognized by the industry for their broadcasting excellence, having received a number of local, regional, national and international awards year after year.
9009 For example, this year Vancouver's News 1130 received an Excellence in News Reporting Award from the British Columbia Association of Broadcasters. Toronto's 680 News received America's RTNBA Edward R. Murrow Award for best newscast in a major market and also this year was named At Canadian Music Week's best news/talk/sports station of the year. It is the fourth year in a row we have won that award.
9010 Just this weekend News 95.7 in Halifax received the Gordon Sinclair Award for best live special event coverage from the Atlantic region's RTNBA for its tracking of the tropical storm Noel.
9011 We are truly proud of these accomplishments and have attached a partial list of some of the awards that our news stations have won.
9012 MR. BEDORE: We believe there are four important reasons why licensing this application is in the public interest.
9013 Number one, editorial diversity in the market will be enhanced. News 102.3 will bring a fresh local news alternative to the Edmonton market by expanding and enriching the news and information sources available on radio. The result will be a richer and more diverse marketplace of editorial voices.
9014 The Edmonton radio market is currently served by two information stations. However, their content is derived from essentially the same source. So while Edmonton radio listeners may appear to have a choice of two stations, they are hearing largely the same editorial perspective and content on both. With live 24‑hour local programming, News 102.3 will bring a new and independent voice to the radio market and offer a true news alternative to what is currently available to Edmonton radio listeners.
9015 Number two, we will grow radio revenue in Edmonton. All news more than any other format can bring new advertising categories into radio because of its high impact performance results. Traditional advertisers on radio target consumer segments like adults 25‑to‑54 and buy their advertising on the basis of ratings. All news radio advertisers target other businesses and owners, managers and professionals and buy based on results and the quality of the audience rather than ratings. These advertisers tend to come from the financial, business to business, advocacy and automotive categories.
9016 All news is also a different format for advertisers because it offers active listening unlike most music formats, which tend to be listened to passively. This is particularly attractive to small and medium sized local businesses as it gives them an accessible platform to market their businesses in their community and allows for more targeted advertising.
9017 Also, no commercial break will be longer than 60 seconds. That means more commercial impact for advertisers.
9018 The Edmonton market continues to experience strong growth and the revenues earned by our all news station will only be a small share of the expected revenue growth in the market. As a result, we believe our station will have a minimal impact on the existing stations.
9019 Number three, we will make substantial long‑term investments in capital and human resources. Our proposal involves a level of investment and long‑term commitment that is not easily matched by other broadcasters. The fact that we are the sole applicant in this proceeding to propose a spoken word specialty format clearly supports this assertion.
9020 In licensing News 102.3, the Commission will ensure Edmonton has a live, local, 24 hours a day, seven days a week radio station with the largest radio newsroom in the market.
9021 Few broadcasters are willing to sustain the losses required to establish this unique type of service in the community. Rogers has the business acumen, the expertise, the resources and, most importantly, the commitment to make News 102.3 a viable radio service that truly reflect the needs and demands of the people of Edmonton.
9022 Number four, our benefits package is directly targeted at the training and development of local spoken word and journalistic talent. In addition to the significant investments in capital and human resources associated with offering this type of format, we also propose to make tangible contributions to Canadian Content Development initiatives, over and above basic requirements, totalling $1.5 million over the seven‑year licence term.
9023 Our proposed tangible benefit commitments are designed to strengthen the quality and diversity of news voices in the system through training and development opportunities for spoken word and journalistic talent on four different levels.
9024 At the grassroots level Rogers will direct $300,000 to the Radio in the Schools Program to support the creation of radio and multimedia content and skill building by Edmonton public high school students.
9025 Second, we propose to direct $175,000 to the Northern Alberta Institute of Technology in support of journalism workshops at the university and college level.
9026 The third level, the Rogers News Access Program will provide $525,000 in funding to enhance the provision of diverse and alternative points of view by campus and community radio stations.
9027 Finally, we will direct half a million dollars to the Canadian Media Research Consortium in support of mentoring programs for practising journalists to enhance their knowledge and improve their skills. This funding will also support the production of the consortium's State of the Industry Report on trends affecting journalism in Canada. This will be extremely useful to the industry and the Commission in evaluating the health and quality of editorial voices in the system.
9028 We are confident these tangible benefit contributions will have a positive impact on the development of spoken word and journalistic talent.
9029 However, the true value of the benefits of this application is the community service role this station will have in the Edmonton market. No other station will offer the same level of investment and commitment to local programming and community reflection as News 102.3.
9030 MR. SKI: Madam Chair and Members of the Commission, the Edmonton radio market needs the type of live local around‑the‑clock news service News 102.3 will provide. Our proposal will enhance diversity of voices in the market and balance the editorial perspective currently available to Edmonton radio listeners. We will provide support for community broadcasting and promote the development of young journalistic and spoken word talent.
9031 As a specialty licence, the Commission can be confident that Rogers will adhere to its commitments to this format throughout its licence term. As an FM station, News 102.3 will be accessible on new and portable devices, giving it the ability to reach a larger portion of the population and be of greater value to emergency response services.
9032 News 102.3 will have a minimal impact on incumbent radio stations, given that our projected annual advertising revenues can be accommodated largely within the natural growth of the market. And we have the experience, the resources, the expertise and the commitment to deliver on the promise of this proposal.
9033 As we have done in Vancouver, Calgary and Toronto, Rogers will establish a strong and respected news presence in the community with highly visible local on‑air talent, a seasoned professional news staff and experienced local traffic reporters.
9034 With approval of this application, we will provide a high quality, timely and relevant news and information service that by focusing on breaking news, traffic and weather is responsive to the needs of the people of Edmonton.
9035 We have a winning formula for News 102.3 and we are eager to get on with the challenge.
9036 Thank you for your attention. We would be pleased to answer any of your questions.
9037 Thank you.
9038 THE CHAIRPERSON: Thank you, Mr. Ski.
9039 Commissioner Molnar will be leading the questions.
COMMISSIONER MOLNAR: Thank you and welcome here this afternoon.
9040 I appreciate your opening remarks. They help me somewhat in what I'm going to frame as my first question to you.
9041 I was looking through your application and I was looking at the financials and, frankly, it is a bit astounding to see what a large investment it takes to operate a news format. Looking at Edmonton and the growth in this market, one of my questions, one of the things that came to me quickly was why would Rogers choose to do news with all the opportunities and all the potential revenues that could be generated in this market?
9042 You know, you can please answer. I see in your opening remarks clearly you are very proud of what you can do with your news program but were there any other reasons why you chose this format?
9043 MR. SKI: Thank you, Commissioner Molnar.
9044 As we said, this particular format is part of the DNA of Rogers. We believe we are the experts, as we said. I won't go over the opening comments.
9045 As someone who is somewhat new to Rogers from another place, I watched from afar and quite admired the fact that they were willing to take a format that was new to Canada and develop it and stay the course for 15 years; I mean, tremendous losses over that time.
9046 So the question is: Why would you do that? There are a couple of reasons.
9047 One is that this is the type of format that is very durable. Yes, you have losses in the first few years, the first several years, depending on how things happen, but at the end of the day, once it becomes profitable, it can become quite profitable if you are willing to stay the course, as I think Rogers has proven that it has done.
9048 The other part of that too is that it is a format where there are some barriers to entry for others if you are successful in it. So unlike a music format that can be changed actually by tomorrow morning, this type of format can't be and it is very difficult for others to duplicate this format. So it is durable over time.
9049 I think the other point is that in the future, as now, we are looking for other platforms to make this more of a multimedia experience for listeners. This type of format gives us content that's not easy to duplicate and from that standpoint it helps to put us in a better position for the future.
9050 So that's why, for all those reasons and a few of the others, that's why we think it is certainly worth the investment.
9051 COMMISSIONER MOLNAR: Thank you for that.
9052 One of the questions that is first and foremost is what is the impact, what do you perceive to be the impact on the incumbent news talk station CHED?
9053 MR. SKI: Commissioner Molnar, it's a different type of radio station. It is a news talk radio station and our experience ‑‑ and this particular group has had lots of it and I will have Derek give you an idea of what happens from a revenue standpoint.
9054 But if you look at our ‑‑ and I know you have looked at our financials. I think the revenue that we plan in the first year, first couple of years, as we have said, I think will probably be absorbed by market growth to begin with.
9055 The other aspect of this is that by and large past experience shows that no one radio station is hurt that much because it is a different type of format.
9056 This format is based largely on results and relationships with clients and different clients.
9057 I will have Derek kind of give you maybe a broader perspective because he lives and breathes this every day.
9058 MR. BERGHUIS: Thank you, Paul.
9059 I suppose in answering the question, Madam Commissioner, history is always a good indicator of what is going to happen and we can really speak to our experience in Toronto, Vancouver and Calgary.
9060 When I returned home to Canada some 13 years ago this month to help with a little 680 project in Toronto, it really was quite amazing to me. We couldn't get arrested in the major agencies in Toronto. As much as I would like to have had Eaton's on the air back then, they were a huge advertiser in Canada. The Bay. The Bay to this day is not on 680 news. We don't get Listen up Canada. We very rarely get Sleep Country Canada on our all news station.
9061 So we don't get the conventional radio advertisers.
9062 Back to Edmonton specifically, this is an $82 million market. If you look at our first year projected revenues of $1.2 million ‑‑ and we were conservative with a 40 per cent coming from existing stations, conservative meaning high. It may be closer to 30 per cent, but we wanted to be saying that it's the low hanging fruit. Of course we will pick off the trees first and we will go around and canvass all of our existing relationships that SONiC‑FM has and that World FM has in the market.
9063 But what news does, and I saw over the years, is there was very little overlap in Toronto between the 680 advertisers and the CFRB 1010, the news talk advertisers.
9064 The same was borne out with News 1130 in Vancouver and then the competitor, if you will, News Talk CKNW, again, very, very little overlap.
9065 News is uncanny in its ability ‑‑ and we work with a lot of formats, and I have over the years. My love is all news obviously and that is known to all my colleagues, and I don't want to be too partial to it. But they would agree with me that news brings more advertisers into radio than any other format on the planet.
9066 When I came back to Canada 13 years ago I looked at a lot of the all news formats are around the States, and Detroit fascinated me because in Detroit they had business‑to‑business like crazy on the all news station. Automotive Parts Suppliers advertising to reach the purchasing departments in the big three automotive manufacturers.
9067 Again, it is not like Sears advertising its weekend sale. It was very specific targeted business‑to‑business advertising.
9068 That came to pass in Toronto too, obviously a different type of business to business. In Toronto you can't turn on 680 News without hearing some very technical advertising that sometimes I don't even understand what they are advertising. It is a very complicated technical services that companies are selling into the financial industry in Toronto to the service sector.
9069 Shelley will speak in a minute about how that may manifest itself down the road in Edmonton.
9070 Edmonton is an oil and gas center and it is quite likely that we will have a lot of business‑to‑business advertising; again, totally new advertising to radio.
9071 The other thing, I mean the other huge category for us in the all news sector is financial. Financial is broad, but it is retail banking, it is commercial banking. It is mortgages. It is all kinds of insurance products, not only retail insurance products but business insurance products and mutual funds, investment products.
9072 Business‑to‑business, I'm just going to go back to that for a minute.
9073 One of my favourite early advertisers in Toronto that that became an advertiser in Vancouver with us was the British Trade Commission, and they were advertising site selection. So they want to reach chief executive officers and chief operating officers in companies who would be locating manufacturing or distribution arms of their companies in the European market and saying hey, come to Britain.
9074 We helped them develop that campaign. Q9 Networks which stores data for companies, as soon as we launched in Calgary, they said can we be on that station as well.
9075 So business‑to‑business is a huge part of what we do.
9076 Admittedly a big, big category for us is automotive and the dealers love this format. That is the part of what we do that intersects with other radio stations because auto dealers do love the format. In the early days we couldn't get the manufacturers on because they were all coming through the agencies and, again, we couldn't get arrested in the agencies because we didn't have a lot of ratings and we didn't have gross rating points.
9077 Our advertisers in all news usually don't know what gross rating points are. They want results and they are grassroots owner operators in many cases.
9078 We do have consumer advertising and a lot of it is all news exclusive. It is a decision made grassroots by local owner‑operators.
9079 One example in Toronto which I think is kind of funny is Short Man Brown's. It's a store that sells clothing to short men. And I would often say why are they on the air with us with just two stores and we can't get The Bay.
9080 But it is, again, Short Man Brown the proprietor is making the decision and he measures his response by how his sales go and who comes in the door.
9081 Another thing, advocacy advertising. It was totally new to Canada really when 680 launched. Didn't get a whole lot of advocacy advertising in radio.
9082 Toronto is the provincial capital. A lot of decisions are made at the economic and political center of Ontario. Advocacy allows unions to get on the air, public interest groups and there's no reason why Edmonton, being the provincial capital in Alberta, would be any different.
9083 I'm going to let Shelley talk a little bit more to the Edmonton market. She has been here her entire career and will speak to some of the areas where she thinks there is great opportunity in this format.
9084 MS RUIS: Thanks, Derek.
9085 I have lived in Edmonton my whole life and I have spent the last 13 years selling radio in this market. The first 10 of those years actually was with World FM, our station in the market.
9086 With that particular station where I see some similarities with our all news station is that we were looking for nontraditional revenue advertising. So we went and we learned how to sort of dig up the businesses that would be looking for sort of a more specialty audience, looking to reach a very specific market. We have seen some success in doing that and so we certainly are the experts in the market in finding that niche type of advertising formats.
9087 I was also part of the launch of SONiC‑FM, so I know how difficult it can be to start selling advertising in a start‑up station when you have no ratings and really no background on the format.
9088 So you know, it is a competitive market and we did learn how to pave our path there.
9089 But Edmonton is a booming economy and, you know, I was at a function not too long ago and I was speaking with a fellow who owns an electrical company that they send electricians up north into Fort McMurray, into the oil and gas industry up there, and I was telling him about this format and sort of some of the successes that other advertisers like him have had in some of our other markets. He could really see that that was something that would be of great interest to him because he would be reaching advertisers, other business owners that could not only use his services up north but could also use them within their own markets here in Edmonton.
9090 Some other areas where we have seen some success and have seen some interest is again in some of that advocacy when we talk about unions. That is a very topical thing in Alberta as well.
9091 So, you know, we do have a lot of experience in this market looking at nontraditional advertisers, and we think we can be very successful with that here.
9092 MR. SKI: Commissioner Molnar, I'm not sure if I mentioned that Derek was in sales ‑‑
‑‑‑ Laughter / Rires
9093 MR. SKI: ‑‑ earlier on in the introduction, but I know you specifically asked about CHED and I wanted to make sure that we gave you a fulsome answer. I hope we got close.
9094 But if I could just mention one quick thing, Corus has about 32 per cent of the market tuning here in Edmonton and I think if we look at our projections for the first year, we think will affect a lot of the stations on an almost equal basis. That has been the past history of the development of this format.
9095 Even if we do impact them a little bit more, which is possible, it might be $50,000 or $100,000. It is an insignificant amount, quite frankly, with someone who has that kind of market share.
9096 COMMISSIONER MOLNAR: Thank you for that.
9097 While it has likely been answered, I understand you are saying it is a minimal impact and I understand what you are saying about you will generate in large part new advertisers, new advertising dollars. Your application states that 40 per cent of revenues will come from existing radio stations.
9098 So could you give me a breakdown of that, including the anticipated ‑‑ and I think you did just answer, as it relates particularly to CHED.
9099 But if you could break down that 40 per cent of revenues, I would appreciate that.
9100 MR. SKI: Yes, we could do that. By and large ‑‑ we can supply that to you I guess in due course.
9101 But essentially from what we have seen historically, it is almost equal. If you take 16 stations in the market, for instance, that means in our first year it will affect them by about $30,000, because roughly 40 per cent of our $1.2 million is roughly $500,000, so about $30,000 per station.
9102 Again, that is on average. It could go up a little bit, it could go down, but it might be 50,000, it might be 70,000, but that's an average.
9103 If you would like it by station, we could take a guess at that, given our past history.
9104 COMMISSIONER MOLNAR: That's not necessary, thanks. So the sense is there is there is no particular impact on the existing news talk station, no more than on any other station in the market?
9105 MR. SKI: No, not really. I mean there could be slightly more given that they are in a similar format, but as Derek says, a lot of the ad buys on that station are based more on ratings than on our station, primarily because the rating or reach of the radio station normally isn't as high. Sorry, the reach is normally as high but the time spent listening is lower.
9106 So most advertising buys are based on time spent listening which means ‑‑ and Derek alluded to it ‑‑ our station has lower time spent listening because people listen three, four times a day to the station, at least we hope they will, and that's normally the way that it is tuned. So they are not with us for a long period of time. It reduces the time spent listening.
9107 Having said that, we tend to have a very high reach. As we mentioned in the opening remarks, 680 News reaches more people than any other radio station in Canada.
9108 So while we reached them, for advertising agencies to place a buy, they placed those buys on average hours tuned or time spent listening so we're down the scale. So that is why we had to go in a different direction, call on business‑to‑business and local advertisers.
9109 COMMISSIONER MOLNAR: Thank you.
9110 I'm going to turn to the issue of synergies.
9111 You note in your supplementary brief that there will be synergies in news sharing with your other stations in Alberta, particularly your stations in Edmonton. I assume that might be news sharing and news staff.
9112 Is that right?
9113 MR. SKI: No. The sharing that we will do, I think we said we are hiring 39 new broadcast journalists for this because it's really quite separate from World, our ethics station, and from SONiC, our Modern Rock station there. They are as diverse as diverse can be. They are three very different stations.
9114 So our sharing is essentially building administrative synergies, technical, finance, back office. That's where the majority of the sharing comes for us.
9115 As I think you have seen, 60 per cent of our costs of operating this nation are in programming, which is higher than any other station obviously because it is labour intensive, and 85 per cent of that 60 per cent programming cost is people.
9116 COMMISSIONER MOLNAR: So would you be using the 39 people who are generating these news stories to support your existing stations within the market?
9117 MR. SKI: Again, we have separate people doing the news on both of those radio stations because it is a different type of station.
9118 I might have John or Karen just kind of ‑‑ they're the people who do it every day ‑‑ just kind of maybe elaborate on that a bit.
9119 MS PARSONS: Although as a News Director I am quite enthused about the idea of tapping into World in particular for potential news stories, or maybe some of our talent, there will be no overlap. Like the 39 that we are proposing to hire here in Edmonton would be separate from anybody who worked on World FM or SONiC. SONiC has a very different sound than what we would be interested in.
9120 MR. SKI: I should mention, too, if I could, that the 39 are incremental. That is incremental staff to what we may have now in the existing cluster now.
9121 There is one other thing that I may have forgotten, is that we will have a dedicated legislative reporter which we don't have now and of course if we can, we will have that person provide materials to our stations and to our northern Alberta stations.
9122 COMMISSIONER MOLNAR: Okay. Thank you.
9123 I just wanted to confirm that bringing in this news voice wouldn't affect the news voices that were already out there with your existing stations.
9124 MR. SKI: No, not at all.
9125 COMMISSIONER MOLNAR: No. Thank you.
9126 I would like to turn to the issue of CCD, your Canadian Content Development, and I just need to clarify a few things. Some of this I think is easily clarified.
9127 In section 8(a) of your application form you indicated that you plan to exceed the basic CCD contributions by allocating an additional $214,285 a year to CCD. Correct?
9128 MR. SKI: That's correct.
9129 COMMISSIONER MOLNAR: If I do math, would that equal $1.5 million?
9130 MR. SKI: That's correct.
9131 COMMISSIONER MOLNAR: Okay. Great.
9132 Just so that we are clear on your financials that you have attached, you show Canadian Content Development at that $214,000 and I assume, because you represented it in thousands, that we have lost a few of the pennies. So that $214,000 is your over and above?
9133 MR. SKI: Yes.
9134 COMMISSIONER MOLNAR: So where in your financials is your basic contribution?
9135 MR. SKI: The basic contribution ‑‑ and we would be happy to split that out for you, if you like ‑‑ is in the programming news line of the financials.
9136 COMMISSIONER MOLNAR: Okay, thanks. I will leave it to legal if that's necessary or not. They will tell you later. Thank you.
9137 Just some questions on the specific elements that you have proposed to deliver to.
9138 I am going to just flip to this in your opening remarks so we can maybe follow there.
9139 Starting with the first, at the grassroots level, the $300,000 to Radio in the Schools program. Just to clarify, I am certain that you are very aware of the 2006 Commercial Radio Policy and what it noted as being eligible contributions.
9140 Can you give us some further details regarding how this $300,000 would be allocated to ensure that it in fact meets the requirements of the commercial radio policy?
9141 MR. SKI: Yes. I will ask Susan to answer that.
9142 COMMISSIONER MOLNAR: Thank you.
9143 MS WHEELER: Thank you.
9144 I will explain why we see that fitting within the new Commercial Radio Policy and then I will ask Tom to give you some specifics on how the program will work, since he has been interfacing with Steven Wright who is going to administer the program on our behalf, if approved.
9145 One of the larger changes to the Commercial Radio Policy and the Canadian Content Development policy in and of itself was that the Commission brought in that to allow for training and development opportunities for spoken word talent. Similar to how the Commission recognizes Instruments in the Schools as being an eligible CCD initiative to further musical development and education, we see that the Radio in the Schools program is an analogous type initiative whereby we are giving the tools and the instruments to broadcast journalists of the future to really develop some skills and develop some skill building, I guess, in that field.
9146 I will allow Tom to explain how it is going to work in practice, but we do see this as being integral to development of spoken word talent for the broadcasting system.
9147 MR. BEDORE: Edmonton Public Schools have been looking at a new system that is taking place in Portland, Oregon. It is called a Skill Center. They have been looking at it here in Edmonton primarily because over the past 10 or 15 years there have been a lot of high school students who have left high school before graduating. They have seen the dollar signs in the oil patch and so they go do that for a while and before they know it, they have no other skills.
9148 So radio and television journalism is one area that obviously we are very interested in. We came to them and they felt it would fit beautifully with their skill center.
9149 So what we hope to do is encourage some of these young students who do have an interest in journalism already, or maybe more importantly don't have that interest yet, we feel the Skill Center is going to give them a really good idea about what a career in journalism can be, how exciting it can be. Maybe you can't make quite as much money as you can in the oil patch, but it can be a very rewarding career.
9150 So we see this as just a great opportunity for the students and for the post secondary institutions here in Alberta that provide journalism courses. We think they will see great results from that in the very near future.
9151 COMMISSIONER MOLNAR: Thank you.
9152 Just help me understand what particularly you would be spending the money on. The Skills Center and what would that include?
9153 MR. BEDORE: It would be program materials, so the books, the courses. In some cases we would probably help out ‑‑ you know, they would use the money to buy microphones and boards and other tools that journalists would use. Of course, many of the tools journalists use in this day and age are all electronic and there are new features coming out all the time, as Karen can attest to.
9154 So we want to make the Skill Center as cutting‑edge as we can so that when the students enrol at NAIT, they are already familiar with the software and the hardware associated with broadcast journalism.
9155 MS WHEELER: Commissioner Molnar, we would be happy to provide you and the Commission with a breakdown of the budget that will be allocated towards this initiative, if that is at all helpful or of interest to the Commission.
9156 COMMISSIONER MOLNAR: Thank you. I am looking for a similar breakdown for the Canadian Media Research Consortium.
9157 MS WHEELER: We don't have that presently but we would be happy to provide that to you.
9158 COMMISSIONER MOLNAR: Fair enough and thanks for that.
9159 Is this something that you can provide within a couple of days?
9160 MS WHEELER: We will make best efforts. Obviously we are dependent on our third‑party administrators to provide us with that information, but we will make best efforts to be able to provide that to you.
9161 COMMISSIONER MOLNAR: Thank you.
9162 Just to follow up since we don't have those details, if it was determined that they are not eligible, could you confirm that the CCD funds that you have earmarked for these initiatives would be redirected into eligible projects?
9163 MS WHEELER: Absolutely.
9164 COMMISSIONER MOLNAR: Okay. Thanks.
9165 Would you be able to tell us right now if they were deemed to be ineligible, where you would redirect those funds?
9166 MS WHEELER: We have cautioned some of our recipients that the Commission might not be of the view that these fall within the Commercial Radio Policy's criteria for eligible initiatives, so we have committed to redirecting them within the initiatives already identified.
9167 So it would likely be, depending on which initiatives you deemed not to be eligible, they would be reallocated.
9168 COMMISSIONER MOLNAR: Just prorated. Just prorated between what is eligible, what is deemed eligible.
9169 MS WHEELER: Yes. That's right.
9170 COMMISSIONER MOLNAR: Okay. Thank you.
9171 I also would like to ask you about the Community Radio Fund, your monies that you have directed there.
9172 I believe you sent a letter that indicated that with the money the fund would be eligible to spend a maximum of 12 per cent of that towards their administrative costs.
9173 MS WHEELER: It was our understanding that that was sanctioned by the Commission when it was certified as an independent production fund.
9174 COMMISSIONER MOLNAR: Yes. And so you are probably aware that after that time a decision came out which stated that the fund is allowed to retain up to 20 per cent of the first $200,000 in revenues and after that 5 per cent for admin fees for all monies over and above the $200,000.
9175 So in light of that, and based upon the amount that you are proposing here, would you be willing to go back to the fund and obtain a letter attesting to the fact that the 7 per cent, the difference between a 12 per cent in the 5 per cent allowable, will be reinvested into your initiative?
9176 MS WHEELER: We would be pleased to do that, yes.
9177 Just to clarify, this proposal was made before the Commission had certified the Radio Fund and those criteria had been put in place. So we would be happy to do that.
9178 COMMISSIONER MOLNAR: Yes. We understand that as well, so thank you.
9179 MS WHEELER: Yes.
9180 COMMISSIONER MOULDER: Just a couple more questions.
9181 You heard here that some of the applicants said there are four frequencies, there are four available. I wondered what your views were regarding the market capacity here in Edmonton to support a number of new licence applications.
9182 MR. SKI: In terms of frequencies or in terms of number of stations?
9183 COMMISSIONER MOLNAR: Well, not just what frequencies, but the number of stations.
9184 MR. SKI: I think that really depends on the formats that might be licensed. Certainly our belief has always been that if there are fewer stations, two or three licensed, then it gives those stations a little bit of time to become immersed in the market and at least give themselves some type of share so that they can at least be profitable and successful over time.
9185 When we looked at frequencies, we looked at I think about three or four different frequencies, some better than others. And I think dependent on the type of radio station, the type of format that a station has, the ability to reach enough listeners becomes extremely important.
9186 For instance, in our particular situation the frequency we have applied for, 102.3, is third adjacent to both of our radio stations, third adjacent to SONiC and third adjacent to World.
9187 What does that mean? It means that if it is third adjacent, there could be potential interference. With engineering briefs they are theoretical and so you don't know until you actually put the station on the air what will happen.
9188 That has been problematic over the years when certain licences have been granted. But we certainly believe that 102.3 would be the best frequency for us, for essentially two reasons.
9189 One, it gives us enough reach. I alluded to the fact earlier that this type of format requires that reach in order to be successful.
9190 The second part of it is that we can control the interference. It is lodged between our two stations so we have the ability to control any interference that there is with any of our radio stations. So where it would be difficult for another applicant that is licensed, obviously given the difficult position of an ethnic station, with World, and given that SONiC is in the developmental stages, we would be reluctant to give up any coverage for either of those two radio stations obviously unless it might be to, say, ourselves.
9191 So as a result, that is obviously one of the frequencies we think best for us.
9192 The other reason for that is that we also can control the potential interference because we can collocate the antenna for that particular frequency on our tower. So it is the most efficient way obviously, as far as we are concerned, the most efficient way to use the frequency.
9193 COMMISSIONER MOLNAR: Okay, fair.
9194 Frequency aside, you mentioned that you thought there was room for only a couple new entrants?
9195 MR. SKI: We think two or three, again depending on the type of format. Certainly we have had challenges with our ethnic station here, no question. SONiC is in the early developmental stages.
9196 I know that the Commission will deliberate long and hard about the need that there is in the market for certain types of applicants, certain types of stations. We have only heard very few so far so it is hard for us to say too much, other than certainly if another Ethnic station was licensed or if another Rock station was licensed, they would affect us the most.
9197 So if there were stations that were licensed that weren't either Rock or Ethnic, then maybe three would be good. If they were Rock or Ethnic, then maybe quite a few less than three would be best for us.
‑‑‑ Laughter / Rires
9198 COMMISSIONER MOLNAR: Thank you.
9199 I hear what you are saying as it relates to the impact on Rogers and your own stations. The economic capacity of Edmonton and its growth, you would agree, would support maybe three?
9200 MR. SKI: Yes.
9201 COMMISSIONER MOLNAR: Yes, okay. Thank you.
9202 Those are my questions. Thank you very much.
9203 THE CHAIRPERSON: Thank you.
9204 Commissioner Cugini...?
9205 COMMISSIONER CUGINI: Thank you, Madam Chair.
9206 Good afternoon.
9207 I really just have one question and that is: Why do you think that this format ‑‑ why do you think that this is the best use of an FM frequency?
9208 One of the things we hear is the one thing that is saving AM, for example, is talk. Certainly 680 is on AM and I believe the Calgary station is on AM.
9209 So how is this the best use of an FM frequency in this market?
9210 And you have notes, Mr. Ski, so were you ready for this?
‑‑‑ Laughter / Rires
9211 MR. SKI: Even without notes, I have been thinking about this. The notes are just there in case I forget under the bright lights.
9212 Well, I think there are quite a few reasons why FM at this particular point in time. We don't have an AM at the present time for starters. But I think, too, the format costs for all news are cost and labour intensive already.
9213 If you are mounting a new AM radio station, then AM adds another ‑‑ could add another four to $5 million in terms of building the infrastructure in order to put an AM signal on the air. That is because of the fact that you have to buy land, you know, and then we are in the business of tall towers and big fields quite frankly, whereas with FM you are one tower. You put your antenna on a tower; you may be sharing it with others.
9214 That is not the case with AM. You are normally dedicated to one particular radio station.
9215 So it takes up our costs maybe another $5 million. Given that the costs are already quite large, it becomes difficult these days to do that.
9216 Second, reach is pretty important, as I mentioned earlier, to us in this particular format and so an FM signal allows us to penetrate buildings better. It allows us to reach more people and obviously attract more potential listeners.
9217 The operating costs would change our business model quite substantially because operating costs on the AM band tend to be twice what they are on FM just because of power consumption.
9218 I think fourthly ‑‑ I think I am to four ‑‑ it is the future of the format. Obviously when we first launched the all news format it was 15 years ago and at that particular time it was a different point in time and we have been successful, but it took a very long time. We think on FM it will take a shorter amount of time.
9219 There has been a movement in the U.S. for news talk and all news radio stations to move from AM to FM. It allows us to reach ‑‑ and this is important for us for the future ‑‑ allows us to reach younger listeners, because there is a bit of a social stigma of younger listeners listening to AM radio.
9220 It's a challenge. It's why most news/talk stations tend to target ‑‑ well, not necessarily target, they tend to get audiences that are 45‑plus. But if you have a similar format on FM, you have an opportunity at least to have those people listen to your station because there is an affinity for them to be at least on the band.
9221 As we say, if they are not in the church, it's very difficult to preach to them. So if they are on the band, then we at least have a shot.
9222 Also, devices now and in the future, iPods, MP3 players, don't have AM radio on them. They have FM radio on them, but not AM radio.
9223 So it puts us in a better position I guess to be successful over time.
9224 I guess for all of those reasons is why we believe FM, at least at this point of time, is better.
9225 COMMISSIONER CUGINI: Thank you for that fulsome answer.
9226 Thank you, Madam Chair.
9227 THE CHAIRPERSON: I have a few questions and I will just pick up on a question that Commissioner Cugini was asking and Commissioner Molnar was asking, as well, and that is with respect to the impact on the Corus news talk radio station.
9228 I was wondering, before Commissioner Cugini started her question, what the advantage was to you being on AM versus Corus.
9229 So having listened now to what you have said, it seems that over time you might have a significant advantage and indeed take more of a share of their market. We have only looked and we traditionally ask for year two impact, but it looks to me like over time you could have a considerable advantage.
9230 Is that correct?
9231 MR. SKI: You are talking about our impact on CHED?
9232 THE CHAIRPERSON: Yes.
9233 MR. SKI: No. We alluded to it earlier and I will have John maybe give you an idea of the differences between a news talk station and maybe the type of station that we are because they are totally different.
9234 In Toronto, for instance, 680 News operates side‑by‑side with other news talk radio stations in the market. I think there are for now and they all operate within their own individual formats. They are still in the format so obviously we haven't had an impact that would make them change those formats, because we are different. It is a different type of service. People listen to it in a different way.
9235 Maybe John could elaborate on that just a little bit, if you like.
9236 MR. HINNEN: Sure. In Vancouver, another example CKNW, which is Corus' station there, does very well. In fact, it is still the number one station when it comes to audience share in that market. We compete against them and actually I think we complement each other in many ways.
9237 When we launched 680, it was really designed to be everybody's second favourite radio station. People would have their own music station and they would come to us if they required some information, be it traffic, weather, news, whatever it happens to have been. So we have always felt that we complemented each other and we are much different.
9238 CKNW, CFRB and certainly CHED here has long hours tuned. We don't and it is because of the talk programming that they have. We have no talk programming except for the fact that we constantly have news information on the air.
9239 So they are totally different and I think that in many ways we complement all broadcasters, be they talk or music based stations, and in many ways we see that we work with all of them.
9240 THE CHAIRPERSON: So the fact that you are on FM and they are on AM is not any particular impact on Corus. I understand your comments about FM being the future, especially with respect to new devices.
9241 MR. SKI: Right. Certainly. And our audience tends to be slightly younger, in some cases quite a bit younger than audiences to news talk radio stations.
9242 THE CHAIRPERSON: Thank you for all that.
9243 I was just wondering, can you tell me in the Toronto and Vancouver markets, just picking up on your comments and your opening remarks there, how many years it was before you became at least break even, just in relation ‑‑ I see here you're talking about year seven.
9244 So I'm wondering what your actual experience was in those two markets.
9245 MR. SKI: John can probably give you those years.
9246 MR. HINNEN: In Toronto it was year five. In Vancouver it took us nine years, partially because it is a slightly smaller market, but also because of the fact that Corus actually launched an all news station against us and actually slowed us down by a couple of years. It took us nine years there.
9247 THE CHAIRPERSON: Calgary, then, I understand it's relatively new in Calgary. I think you said two years.
9248 But are you on track with what you had forecasted and when did you forecast a turnaround in Calgary?
9249 MR. SKI: I'm not sure when we forecasted that. John may know. But we are on track in that particular market, too.
9250 Again, it is a slow build. As we said earlier, it does take us some time. But when I looked at the numbers, we developed our numbers for this particular application based on our experience with all news in other markets.
9251 We know how the business plan works given that experience that we have had and, quite frankly, Toronto, Vancouver, Calgary all sort of looked like this. Toronto happened a little bit earlier than we thought, but by and large they looked very much like this.
9252 We believe, I think, that it could be five years, it could be six years for Calgary. That's the way it looks to us right now.
9253 THE CHAIRPERSON: Again, is there competition in Calgary? You don't consider it quite competition, but is there a news talk format as well in Calgary?
9254 MR. SKI: Yes, there is.
9255 THE CHAIRPERSON: Thank you.
9256 In Vancouver is your news station on FM?
9257 MR. SKI: No, it is not.
9258 THE CHAIRPERSON: I'm just wondering, I think it was Mr. Bedore maybe who talked about the CCD. I don't remember exactly who did the CCD segment.
9259 So when you were speaking about the Canadian Media Research Consortium, I understood you to say in support of mentoring programs for young journalists, but you left out the part about mid‑career scholarship for practising journalists, I thought.
9260 Was that your intention?
9261 MR. BEDORE: No.
9262 THE CHAIRPERSON: Maybe I just missed it.
9263 MS WHEELER: No, it wasn't our intention.
9264 THE CHAIRPERSON: All right. Thanks.
9265 MS WHEELER: The program would cover both.
9266 THE CHAIRPERSON: Both? Okay. I might have just missed it. Thanks.
9267 I'm curious to know how you assign 39 journalists in the seven days. I would just appreciate some explanation of how that might work.
9268 MR. SKI: Certainly. I will ask Karen and John to tell you how this works because it is actually quite exciting.
9269 Karen...?
9270 MS PARSONS: Well...
‑‑‑ Laughter / Rires
9271 MS PARSONS: How long have you got?
9272 What happens with this format is that you have very tight teams of people who work certain shifts. So we have in the early morning two anchor editors who come from the midnight until the 6 o'clock, 5:30‑6 o'clock period, and then the next shift is what we call the morning show; again a team of an editor, who does the line‑up, two anchors and anywhere from three to five reporters, including traffic reporters. We would have a meteorologist, a traffic reporter. We have a traffic reporter in the air, one of the ground as well, and then that same kind of complement flips through the day basically.
9273 We also have audio editors who pull in the feeds from different places, from CNN or ABC or BBC, whatever, that kind of thing. We also have them pulling from our stations right across the country. We share a similar computer station.
9274 So that is basically how we would use up all of those people.
9275 THE CHAIRPERSON: So at 3:00 in the morning how many people what I find working as compared to 10 o'clock in the morning?
9276 MS PARSONS: You would have between ‑‑ I would say on average three or four people staffing overnight.
9277 What I will say to that, as well, is that we would have all of our staff on call 24 hours a day, right. So I can pick up the phone or they can pick up the phone and we can have people on the ground in any city within half an hour, an hour.
9278 At 10 o'clock in the morning of course the complement is a great deal larger. I would say at that point in time we have between ‑‑ at least a dozen people in the newsroom and, you know, whether it is the legislature or city hall or ‑‑
9279 THE CHAIRPERSON: So these journalists aren't all in the studio except for the legislature, are they? They are out on the road?
9280 Yes, they are because you mentioned the ‑‑
9281 MS PARSONS: Definitely. Definitely we put a lot of people out on the road.
9282 BE CHAIRPERSON: Thank you. I just want to make sure.
‑‑‑ Pause
9283 THE CHAIRPERSON: Your sales team, how many did you have a your sales team?
9284 I'm just picking up on the fact that you can't rely on the BBM measurements to attract advertisers.
9285 MR. SKI: Right.
9286 THE CHAIRPERSON: Did I understand that correctly?
9287 MR. SKI: Yes. Actually in our sales and promotion department we have approximately 7‑1/2 people.
9288 THE CHAIRPERSON: So that is a lot of pounding the ‑‑ cold call. Well, you are using your contacts, I suppose, from your other stations.
9289 MR. SKI: Yes, in part. But again, this is very different.
9290 It is a developmental build in terms of we are not using ratings quite as much.
9291 THE CHAIRPERSON: Yes.
9292 MR. SKI: And I should mention, too, that when there are ratings ‑‑ and the station does get some ratings ‑‑ this particular type of format performs better than others because of the fact of something we call a power ratio, which means that our revenue share tends to perform better than the audience share, normally two to one for news talk ‑‑ well, all news stations in particular. So there is that part of it.
9293 So we do get some rating driven business.
9294 But the rest of the business is really driven by ‑‑ it is really developmental business, as Derek alluded to. I mean, very little radio advertising is done by those who advertise in trade magazines. We get a lot of that and it is part of that business‑to‑business advertising.
9295 THE CHAIRPERSON: What did you say there a few seconds ago? It made me think that your rates were higher for this format.
9296 You said about your revenue was driven ‑‑
9297 MR. SKI: Oh, the power ratio.
9298 THE CHAIRPERSON: Yes.
9299 MR. SKI: No. We would like them to be, but no.
9300 What it means is that what we are able to do is if somebody is buying based on ratings, they will tend to buy our station, still not to the same degree they buy others for all the reasons that Derek outlined earlier. But stations tend to perform a little bit better because of the type of audience that this type of format delivers.
9301 So whereas on a music station it might be one‑to‑one ratings versus audience share, at the station it's better than that.
9302 THE CHAIRPERSON: So do your sales people sell more than ‑‑ in this market, for example, well, I doubt they would sell all three stations. But would they sell your other stations at the same time, your sales, or is it completely independent, your sales force?
9303 MR. SKI: It is independent, as it is with most of our stations.
9304 Derek again maybe can speak to that as it relates to Toronto market, for instance, where we have four separate sales teams. It's a different type of sale.
9305 THE CHAIRPERSON: Okay, thank you.
9306 Yes...?
9307 MR. BERGHUIS: Yes, in Toronto we operate a sports station, an all news station, an Adult Contemporary station and a Rock station, four different sales departments. Our plan right now, in Calgary we have four stations as well, two music stations, each of which has its own sales department and because of the size of market right now in Calgary we have one sales department selling both the sports and the news station.
9308 I think the way we would launch here, because of the size of market would be with a single team. The second phase, which would be very, very quick, would be to hire all news specialists to go out to call on really business‑to‑business, financial and some of the categories we talked about, but ultimately all news is such a different sell from music radio that we would have a separate sales force.
9309 I don't think that would be day one, but that would be what we would try to evolve to. That is what we have done in our other markets.
9310 THE CHAIRPERSON: If I was an advertiser in Toronto, would you offer me a discount if I went on more than one station?
9311 MR. BERGHUIS: That is our custom plan. We have a combo package and we do offer discounts based on usage of multiple stations.
9312 THE CHAIRPERSON: Thank you.
9313 MR. SKI: It's not very high.
9314 THE CHAIRPERSON: Okay, I will keep that in mind.
9315 Commissioner Molnar...?
9316 COMMISSIONER MOLNAR: Thank you. I just have one more question.
9317 It twigged me as the discussion went on about devices and how, you know, not all devices work on AM, and it reminded me of what you said earlier on as to why you are getting into the news broadcasting and that is for the rich content that it creates that you can use over multiple platforms. So that is very exciting.
9318 The one question I had is whether or not that content will be available on a proprietary basis over Rogers distribution platforms or will this be technology agnostic?
9319 MR. SKI: Let me have John explain what we do now in terms of type of content that we use or provide on multi‑platforms.
9320 MR. HINNEN: We really think that certainly in the case of the Internet it is a huge part of our platform in terms of making sure that we get information to people wherever they want it and whenever they want it.
9321 Quite frankly to your point, we just put various things on our websites and so that is open to the public at large and it is not specific to Rogers or anything else. But we do think it is important to provide people alternative opportunities to listen to information.
9322 If you take, for example, the traffic reports that we do on our radio stations, we now have it set up that you can listen to the latest traffic report online. So if for some reason you are in your office and you have no access to radio, you can listen to it without having to stream. You can certainly stream as well if that is what you wish to do, but the latest traffic report is separated out.
9323 If, for instance, you happen to be somewhere and you can't reach a radio or for some reason you can't reach some other kind of device, we also have it set up now that you can actually listen to the latest traffic report via SMS text messaging.
9324 So that if you type in "traffic" after you punch in 680, 680, we actually send you the latest audio version of the traffic report that was available. So it gives people more opportunity to listen to a traffic report.
9325 We send information to various many places. We have RSS feeds of our local content that we actually know have ‑‑ actually we send to various billboards around the city of Toronto. We also, for instance, provide it to Pizza Pizza, which is a large chain of restaurants. They have a number of TV screens in many of their restaurants now, and as part of their offering they have information about the store, but they also now have a news feed of our local news information that we provide them.
9326 So we're trying to make sure that we keep in touch with our audience no matter wherever they might be.
9327 COMMISSIONER MOLNAR: Thank you.
9328 So if we look, for example, at the wireless platform, mobility platform, that would be available over all technologies?
9329 MR. SKI: Yes, it would. If you are asking would it be supplied to ‑‑
9330 COMMISSIONER MOLNAR: TELUS as well as ‑‑
9331 MR. SKI: Yes.
9332 COMMISSIONER MOLNAR: Yes.
9333 MR. SKI: Yes.
9334 COMMISSIONER MOLNAR: Okay, thank you.
9335 THE CHAIRPERSON: Thank you.
9336 Counsel...?
9337 MS LEMOUX: I have one question of clarification with respect to over and about CCDs.
9338 So in section 8.1(a) of your application form you indicate that you plan to exceed the basic contributions by allocating an additional $214,285 a year to CCD.
9339 However, in section 7.1 of your financial projections under the caption CCD you indicate a yearly contribution of $214,000. There is a difference of $285 per year and since it is captured by a condition of licence, we need to have the exact number per year.
9340 MR. SKI: We could refile that with you, if you like.
9341 MS LEMOUX: Okay. Actually I have another request for you guys.
9342 With respect to all the requested undertakings, can you file them by Thursday, end of day Thursday?
9343 MS WHEELER: Yes.
9344 MS LEMOUX: Thank you.
9345 THE CHAIRPERSON: Thank you, counsel.
9346 Mr. Ski, this is your two minutes.
9347 MR. SKI: Thank you very much, Madam Chair.
9348 I think you can tell, I hope, by the excitement from our team here today that we are pretty passionate about the all news format at Rogers and we are anxious to bring our brand of all news to Edmonton.
9349 As I mentioned earlier, I think, it is part of the DNA and it has been for 15 years when Rogers was the architect of Canada's first all news station.
9350 We loved the challenges, I guess, that no one else wants to take on.
9351 If I could, I would like to just review three key factors: one, the quality of our application; two, diversity of news voices in the market; and three, the competitive state of the radio market and the level of market impact.
9352 I will do that briefly, because I think we have covered most of those items today.
9353 First, the quality of our application.
9354 We will be 100 per cent local. Our programs will be entirely spoken word 126 hours per week, 168 if you take the full 24 hours. We will employ 39 new broadcast journalists. We will contribute tangible benefits of $1.5 million above the basic CCD commitment. We will make the most effective use of the 102.3 frequency. We will connect with our audience through multiple touch points on multiple platforms and create a truly integrated communications experience.
9355 Second, diversity of news voices.
9356 We will be the only 24‑hour a day, seven day a week news and information service in Edmonton, the only one in a market that has been dominated by one editorial voice for a long time. We are so determined to succeed in this format that we applied for a specialty licence to give you confidence in our commitment. But beyond this, you only need to look at our experience and our determination in the other markets in which we program all news stations to understand that commitment.
9357 Third, the competitive state of the market and the level of market impact.
9358 Edmonton is booming, EBITDA is high, revenues are increasing faster than any other Canadian market and our format, all news, will have the least effect of the incumbents. In fact, we will grow the market revenue probably more than any other format because we are so different.
9359 As I said at the opening, we are passionate about the format and we have been recognized as world leaders in its development. But beyond our list of commitments, the major benefit that we are proposing in the establishment of a radio service like this is that we know the citizens of radio will come to rely on it and it will become an indispensable part of their lives.
9360 Thank you very much. We appreciate your attention and questions today.
9361 THE CHAIRPERSON: Thank you, Mr. Ski and your team.
9362 We are going break now for 15 minutes, so we will be back about 20 minutes to 3:00.
9363 Thank you.
‑‑‑ Upon recessing at 1420 / Suspension à 1420
‑‑‑ Upon resuming at 1440 / Reprise à 1440
9364 THE SECRETARY: For the record, Black Gold Broadcasting Inc., on behalf of a corporation to be incorporated, has filed in response to undertakings the Leduc County Radio Survey raw data. This data has been added to the public record and copies are available in the public examination room.
9365 We will now proceed with Item 21, which is an application by John Charles Yerxa on behalf of a corporation to be incorporated for a licence to operate an English‑language FM commercial radio programming undertaking in Edmonton.
9366 The new station would operate on frequency 107.1 MHz, Channel 296C‑1, with an effective radiated power of 40,000 watts, non‑directional antenna, antenna height of 272 metres.
9367 Appearing for the applicant is John Yerxa.
9368 Please introduce your colleagues and you will then have 20 minutes to make a presentation.
PRESENTATION / PRÉSENTATION
9369 MR. J. YERXA: Madam Chair, Commissioners and staff, my name is John Yerxa. I was born and raised in the Edmonton area and I have spent all my life, the past 31 years, involved in the radio business. My father, Hal, was a pioneer in Canadian radio and inducted into the CAB Broadcast Hall of Fame.
9370 In 1954 he started CFCW in Camrose, which, as its call letters indicate, was Canada's first Country and Western formatted station.
9371 In 1977, at the age of 18, I began my broadcast career as an on‑air announcer CFCW. Over the next decade, while based in Edmonton, I gained experience in almost every aspect of radio broadcasting, moving from on‑air announcing to commercial writing, promotion, programming, sales and eventually management.
9372 In 1986, while serving as the Operations Manager of the Edmonton stations, I started an association with pollster Angus Reid to launch the Pulse Surveys dealing with news and public affairs issues in northern Alberta. Soon after that I establish my own research division to conduct music testing and radio programming surveys, as well as local advertiser studies.
9373 Unfortunately, as a result of my father's ill health, the stations I was associated with were sold to Newcap Broadcasting Limited in 1989. However, I quickly rebranded the Pulse Surveys, renamed them the Yerxa Polls, and affiliated them with The Sun newspaper chain across Alberta. I also began to introduce the services of John Yerxa research to radio broadcasters nationally.
9374 I have now consulted radio stations in small, medium and large markets across Canada for almost 20 years. This experience, combined with my ongoing work in this radio market, has prepared me well for an ownership and management role in Edmonton.
9375 Next to me, on my left, is my oldest son Zachary, who at 15 years of age was possibly the youngest major market DJ working in Canadian radio when he began at Edmonton's Power 92 in 2001.
9376 Zach eventually became Power 92's Assistant Music Director and a member of its top‑rated morning team. Later he was hired by CHUM as The Bounce FM's first Music Director and evening host here in Edmonton.
9377 Since leaving The Bounce, Zach has established himself as a well‑known member within the local Edmonton music scene, especially after his band, The Casanova Playboys, achieved Band of the Month status on SONiC‑FM. Zach is the primary architect of the music format that is before you today.
9378 Incidentally, today is Zach's 23rd birthday and this is his birthday present.
‑‑‑ Laughter / Rires
9379 MR. J. YERXA: Next to Zach, on his immediate left, is my second son Barron.
9380 While working part‑time for Corus in Edmonton, Baron provided assistance to its programming department in preparation for the successful launch of the Joe format. He is trained in computer network administration and currently oversees the computer operations of John Yerxa research.
9381 Barron has also contributed to the development of our website New107FM.com.
9382 Next to Barron, on his immediate left, is my third son Hunter.
9383 Hunter is presently majoring in economics at the University of Alberta and is also an infantryman in the Loyal Edmonton Regiment, a Canadian Army Reserve Unit based in Edmonton. Hunter was recently awarded an Edmonton youth leadership award by Mike Lake, the Member of Parliament for Edmonton‑Mill Woods.
9384 He too has experience in radio, serving as a control room operator for The Bounce. Hunter created and actively manages NEW‑FM's Facebook page, which now has over 1350 online my members.
9385 On my immediate right is Sherri Pierce.
9386 Sherri has 17 years of radio sales experience and was most recently Director of Sales for all of the Corus stations in Vancouver. She is my sales partner and has helped me immensely in gathering advertiser feedback for this proposal.
9387 Behind Sherri, to my far right, is my cousin, Linda Brain.
9388 For over 15 years Linda served as the administrative head of all of the Newcap stations here in Edmonton. She was also in charge of implementing Newcap's cultural diversity and employment equity policies. Linda's input regarding our overall staffing and administration has been invaluable and she will serve as NEW‑FM's Operations Manager.
9389 Next to Linda, on her left, is Faaiza Ramji.
9390 Faaiza previously handled promotions at The Bounce and also helped to oversee CHUM's CCD initiatives here in Edmonton. Faaiza has greatly assisted me in crafting our approach to Canadian Content Development in this application.
9391 To Faaiza's left is Jordan Schroder.
9392 Jordan currently produces and distributes a weekly podcast covering emerging local talent and the music scene, as well as arts and current events here in the City of Champions. Jordan's primary contributions have been in the area of spoken word and interactive programming. He will be cochairing a Digital Youth Council with my son Hunter and will serve as NEW‑FM's fulltime New‑Media Administrator.
9393 To Jordan's left is Marvin Haugen.
9394 Marvin started with my father back in 1963 as the accountant for CFCW. He currently assists me as the in‑house accountant for John Yerxa Research and he has helped me to structure my business plan.
9395 Finally, next to Marvin, on his left, is my daughter Signe Yerxa.
9396 Signe is just finishing her Grade 12 year and is a valuable member of our NEW‑FM street team. Signe also helps me to organize and look after her three brothers.
‑‑‑ Laughter / Rires
9397 MR. J. YERXA: I am very proud to appear before you today as an applicant for a NEW‑FM radio licence in Edmonton, a community where I have spent the majority of my life and my broadcast career. The opportunity to start a NEW‑FM in my hometown with my three sons and daughter by my side is a dream that I am finally realizing after many years.
9398 Approximately 18 months ago I began gathering and reviewing local market information in anticipation of achieving this goal. Last summer, my commitment strengthened when I informed key broadcast clients that I would be submitting an Edmonton application. Then, last October, once my qualitative research phase was finished, I commissioned a local audience survey to verify the best new FM format opportunity for this market.
9399 My proposal is for a new FM station that will specifically serve Edmonton's teen and young adult population. That is where the largest unserved hole presently exists in this market. That is where a new FM station would have the least negative impact on existing commercial competitors and that is where we must develop a more compelling radio service if our goal is to repatriate younger listeners and build an Edmonton radio listening audience for the future.
9400 Let's quickly review the market information that supports this proposal.
9401 MS BRAIN: Our proposal for a new FM station to specifically serve Edmonton's teen and young adult population is built on three critical factors: local demographics, local BBM survey data and local audience research.
9402 Here are the facts.
9403 In Edmonton 15‑to‑24 year olds now account for a higher proportion of the total population than any other large CMA in Canada. No other large CMA, apart from Calgary, has a higher percentage of 15‑to‑34 year olds in its overall population.
9404 As one of Canada's major educational centers, Edmonton now welcomes at least 106,000 fulltime students to its various post secondary institutions. Since a high number of these students are nonresidents, the size of Edmonton's under‑35 population is even more substantial.
9405 Only three of 16 commercial stations ‑‑ The Bounce, SONiC and The Bear ‑‑ are currently relevant to Edmonton's under‑35 population. Both SONiC and The Bear play Rock music and skew male. The Bounce is a Top 40 station skewing female.
9406 In the kit accompanying your notes are four demographic positioning charts from Canadian Broadcast Sales covering the last four BBM surveys conducted in Edmonton. Taken together, they dramatically illustrate that there is room for an Edmonton radio station targeting listeners under 35 years of age skewing slightly female or targeting an even percentage of younger males and females.
9407 On this basis alone we believe the CRTC should license a new commercial FM station in Edmonton, adding diversity and choice to younger residents.
9408 MR. H. YERXA: Almost 18 years ago we began a series of discussions with Edmontonians of all ages about their attitudes toward the local radio market and their ideas for a new FM music format. From these focus groups and one‑on‑one interviews came the realization that many people would be attracted to a variety music format.
9409 For example, most 35‑to‑54 year olds indicated they would listen to a new format offering a variety of artists ranging from Adult Contemporary to a Adult Alternative. On the other hand, many teens and young adults demanded a greater variety of new music from each of the following genres: Rock, Hip‑Hop, Dance and Pop.
9410 They claim that in terms of airplay, all these styles were compatible. In other words, they did not see Rock and Hip‑Hop as opposites. Many younger women said they like Rock as well as Pop and a lot of them felt there should be more Dance music on the radio.
9411 MR. B. YERXA: Once our qualitative research phase was complete, a survey of 450 local area residents 13‑plus years of age was conducted by Banister Research. The sample included both radio and non‑radio listeners. Bannister tested two different variety formats, one targeted at under 35 residents, younger variety, and one targeted at over 35 residents, older variety.
9412 We knew that neither of these formats existed locally, yet suspected that each held some potential for success. In the end, both ranked almost neck and neck in terms of core support and lack of availability.
9413 However, younger variety listeners consistently rated higher in their dissatisfaction with the local market and their desire for an alternative to the existing commercial stations.
9414 Further analysis revealed the younger variety format would also bring a much higher percentage of local residents back to commercial radios from iPods, the Internet and other music sources. This research confirms there is room in Edmonton for a younger variety format whose core target audience would be 15‑to‑29 years of age, leaning slightly female.
9415 We estimate such a station would debut at a four share, yet no more than 14 per cent of its overall share would be derived from any commercial station and approximately one‑third of its overall share would be successfully repatriated to local commercial radio.
9416 MR. Z. YERXA: The younger variety format will offer a much larger selection of new music than any of the existing commercial stations in Edmonton. That is why we have chosen the name NEW‑FM. 80 per cent of our weekly selections will have been released within the past six months and 20 per cent of our weekly playlist will be comprised of new and emerging Canadian talent. No song will repeat more than twice per day and we plan on 740 distinct songs per week.
9417 NEW‑FM's breakout by genre will be 20 per cent New Rock, 25 per cent Hip‑Hop, 30 per cent Dance and 25 per cent Alternative Pop. We will not play more than 20 per cent Rock because SONiC and The Bear already serve under 30 listeners with Rock music. Therefore, what little Rock we do play will focus on new and emerging talent that is not getting adequate airplay on either of those stations.
9418 The Bounce is a chart driven Top 40 service referring to itself as Edmonton's number one hit music station. However, NEW‑FM will focus on uncharted Hip‑Hop, Dance and Pop selections that The Bounce ignores.
9419 For example, there are currently dozens of remixes as well as scores of songs achieving top status in the Dance community that are not receiving any airplay on The Bounce. Last Friday Mediabase personnel analyzed over 100 songs on our website playlist and found no greater than 11 per cent overlap on any of the local commercial stations. Mediabase also reported that at least 30 per cent of our entire playlist is not receiving any airplay on its monitored stations in Canada and the U.S.
9420 We encourage you to visit our website, new107fm.com to hear a music mix that is significantly different from what is being offered on any of Edmonton's commercial stations. Once there, you will be introduced to various local ethnic and aboriginal artists like War Party, Etiket(ph), Touch and Nato and Red Nation, who have received little if any commercial radio exposure in Edmonton.
9421 You will also see that over 800 people have signed our petition and I encourage you to read their comments attesting to the passion and excitement that now exists for this new music format.
9422 You might also wish to visit our Facebook group, which in only two months has gained over 1350 members.
9423 Members of the Commission, younger Edmontonians are not going to stop using MP3 players or surfing the Internet because of NEW‑FM, but by offering the youth of this market a greater variety of new, uncharted music, especially from undiscovered Canadian artists, we will start to draw more of them back to commercial radio.
9424 MR. SCHRODER: NEW‑FM will represent a new and completely independent news voice in our community. This responsibility, if addressed properly, will further differentiate it from other radio stations and music sources. After all, an iPod cannot deliver up‑to‑the‑minute local information and local reflection.
9425 Therefore, NEW‑FM will have a fully functional news department with three fulltime staff. They will spearhead our mandate to deliver over 10‑1/2 news and spoken word programming each week aimed directly at Edmonton's 15‑to‑29 age demographic.
9426 But in order to repatriate younger Edmontonians to commercial radio and keep them listening, here is what we must do in terms of our news and spoken word programming.
9427 Number one, we must be concise.
9428 Younger Edmontonians have told us that their primary motivation for listening to radio is to hear and discover new music. Therefore, for those who appreciate some news information, the interruptions must be short and fast paced.
9429 Number two, we must be relevant.
9430 Our target listeners primarily want information that reflects their interests and concerns. That means more emphasis on technology, education, jobs, the Internet, cultural diversity and various other social issues.
9431 It also means writing a youth slant into as many stories as possible through a combination of writing style and our news staff's stability to access proper feedback from our target audience. For example, we will feature listener opinions off our website while also presenting audio clips from Newsline, our automated phone service that will specifically be dedicated to youth comment. This in turn will encourage even more feedback.
9432 Number three, we must be local.
9433 Local means more emphasis on high school and collegiate sports, along with campus news. It means presenting local items that address the rising cost of education, the lack of affordable housing, the necessary expansion of our city's light rail transit system and the impact that drug abuse and obesity are having on our youth today.
9434 Our goal will be to present local stories on NEW‑FM that you won't hear on other stations. Our goal will be to offer news and information content that is 90 per cent local.
9435 MS RAMJI: NEW‑FM cannot draw listeners back to commercial radio through voice tracking and automation. If our mandate is to reintroduce the Internet generation to local radio, then we must personally engage our target listeners at all hours, day and night. For this reason NEW‑FM will be live 24/7.
9436 The great thing about today's technology is that it can also allow our on‑air staff to be on the street at all times. Therefore, NEW‑FM will incorporate mobility in as many dayparts as possible, creating word‑of‑mouth excitement throughout the Edmonton area.
9437 Through our various online links, dozens of young Edmontonians and have already requested membership on our street team. Some even showed up recently to help us promote NEW‑FM at Hip‑Hop in the Park and the recent Kanye West concert. We know that once licensed, NEW‑FM will be able to unleash a stable of youth at various events throughout the Edmonton area.
9438 MR. H. YERXA: The rapid growth of our Facebook community clearly suggests that NEW‑FM will be a social network as much as it will be a radio station. Therefore, once licensed, our website will become a hive of activity. Besides picking up our stream, entering station contests and downloading podcasts, our listeners will be able to participate in music surveys and web polls, as well as rate and comment on various news stories. Their feedback will in turn influence the future content of our music and information programming.
9439 NEW‑FM's message board will allow them to post upcoming events, personal thoughts and links to other websites. They will also use our website as a resource tool to discover new music and learn more about new and emerging Canadian artists, and within the emerging artist section of our website aspiring musicians can register and upload their music directly onto our server.
9440 All of our announcers will have a dedicated Facebook page and all of them will appear online while they are conducting their on‑air shifts. Our audience will also be able to instantly message each jock via the Internet or on their cell phones, and anyone will be able to text a specific station code to immediately receive live song title and artist information.
9441 In anticipation of this high degree of activity, Jordan and I will cochair a local Digital Youth Council that will meet quarterly to keep NEW‑FM abreast of the latest developments and interactivity and ensure that members of our target audience can communicate face‑to‑face with NEW‑FM personnel on a regular basis.
9442 MS PIERCE: In order to draw and keep Edmonton youth, NEW‑FM must offer five things.
9443 One, a steady diet of new, uncharted music from the Rock, Hip‑Hop, Dance and Alternative Pop genres.
9444 Two, high exposure of new and emerging Canadian talent.
9445 Three, news and information that specifically reflects the interesting concerns of younger Edmontonians.
9446 Four, relatable on‑air hosts who are available to engage them 24/7.
9447 Five, a social online platform enabling them to interact with both NEW‑FM and their peers.
9448 Once we meet these objectives, NEW‑FM will own and an important slice of the 12‑to‑34 market in the city.
9449 But what about its financial viability? Here are two facts that are now changing the attitudes of advertisers and media buyers about the teen and young adult market.
9450 Today's youth are the most affluent generation of young people ever. Almost one‑third of them now work and the latest consumer research indicates youth spending in Canada reached $50 billion in 2006.
9451 Canadian families with teens now spent over $100 billion on them, making this market incredibly influential on national household purchasing habits.
9452 Facts like these explain the numerous support letters we have received from potential clients and they also underline the positive feedback we have recently gathered from advertisers who claim they would strongly consider buying NEW‑FM.
9453 Why are they so enthused? Because they all agree that commercial radio is now failing seriously in its ability to deliver the influential teen and young adult market to their community.
9454 MR. J. YERXA: Madam Chair, Commissioners and staff, even though the feedback we have gathered from local advertisers and media buyers is optimistic, our business plan is conservative. NEW‑FM will not be cash flow or PBIT positive until year four, nor profitable until your five. But I have the financial resources to weather any unexpected shortfall and if there is ever a need for additional funding, I have solid backing from either ATB Financial or other members of my family.
9455 I also wish to stress that our business plan will have no material impact on any of the incumbents.
9456 In year two, the $672,000 that we will take from commercial radio will represent less than 1 per cent of the $89.6 million we have estimated in total market revenue.
9457 NEW‑FM will be complementary to all of them and, again, is based on a solid foundation of demographic needs, BBM ratings data and both qualitative and quantitative research.
9458 Having said that, I want to close this presentation by telling you why this application represents the best choice for the use of the 107.1 frequency in Edmonton.
9459 We will create musical diversity in this market by providing a format that is unique to the under 35 demographic and the local FM band. In doing so, we will further the objectives of the Broadcasting Act by repatriating a generation of Canadians to radio who are not using the medium because it is not offering the programming they want to hear.
9460 We will also support the objectives of the Act by embracing the challenges brought on by the Internet and new media.
9461 In addition to a 40 per cent Cancon commitment, we will commit that 20 per cent of our weekly playlist is comprised of new and emerging Canadian artists and we will accept that as a condition of licence regardless of future market conditions.
9462 We will make a significant contribution to CCD, with expenditures of $2.1 million. This amount is impressive for a company of our size and will significantly benefit its recipients.
9463 We will bring a new youthful editorial news voice to the Edmonton region. We will commit to be live 24/7. We will reflect our community's cultural diversity in our hiring practices, in our spoken word and in terms of airplay. Perhaps most important of all, we will bring local and independent ownership back to Edmonton, thereby increasing ownership diversity in this market.
9464 I am 100 per cent independent, 100 per cent local, and I will hold full control of the licence right here in Edmonton.
9465 Everyone knows the radio industry has become extremely consolidated and that the Commission appreciates independent applicants participating in the hearing process, but here is what truly differentiates this application for many others. Even though I have an intimate knowledge of many markets across this country, I have never appeared before you as an applicant in any of those markets. That is because Edmonton is where my life is, has been and will continue to be.
9466 Having spent 31 years in this radio market, I am now putting it on the line this one time to pursue a dream in the community where my father raised me and where I have now, as a single father, raised my own children. For over 60 years and through three generations the Yerxas have been involved with radio in this city and now, having just turned 49 years of age, I look forward to beginning a new and exciting chapter in the Canadian broadcasting system with my children by my side.
9467 Therefore, I respectfully ask you for this opportunity in my hometown.
9468 THE CHAIRPERSON: Thank you, Mr. Yerxa. And happy birthday to your son. We hope you enjoy the day.
9469 MR. Z. YERXA: I will.
9470 THE CHAIRPERSON: Commissioner Zucchini ‑‑ Zucchini.
9471 COMMISSIONER CUGINI: Excuse me?
‑‑‑ Laughter / Rires
9472 THE CHAIRPERSON: Oh, brother. Should I go home now?
9473 COMMISSIONER CUGINI: Yes.
9474 THE CHAIRPERSON: Commissioner Cugini will lead the questions.
9475 COMMISSIONER CUGINI: I knew that side plate of zucchini was a bad mistake at lunch.
‑‑‑ Laughter / Rires
COMMISSIONER CUGINI: Thank you, Madam Chair, and welcome to all of you.
9476 I have to say, though, I wish I had my two nieces sitting by my side right now. So, Julia and Alicia, if you are listening, send me an e‑mail.
9477 I'm going to begin with your choice of format. You have of course detailed for us further that New Rock, Hip‑Hop, Dance and Alternative Pop. Back in my day you were either a Rock person or a Disco person. So tell me, what do these formats all have in common that they all belong on one radio station?
9478 I know you said that your survey said they are compatible, but I need you to expand a little bit more on that and why you think that this kind of radio station will serve the taste of Edmontonian's youth.
9479 MR. Z. YERXA: Okay. Well, first of all, when we surveyed most of the teens ‑‑ actually, I'm sorry all of the teens and young adults ‑‑ we asked them to cite examples of their favourite music, and it always fell into these four categories, which were Rock, Hip‑Hop, Dance and Pop. And even though these music styles may be somewhat different from each other, they all are considered to be compatible in terms of airplay by the majority of the listeners.
9480 But I think one of the most compelling attributes for the iPod, and one of the reasons that most of my friends, you know, end up surfing the Internet looking for new music is because I think they really want the choice to be able to hear all different types of music.
9481 I think nowadays, especially with cultural diversity and everybody kind of doing their own thing, you don't want to put yourself in a corner by saying I only listen to Rock, I only listen to Rap. This is reflected when you go to nightclubs. They play everything. This is reflected in iPod mix; there is everything on an iPod.
9482 I know for us, we have a massive library of music at home and most of our ‑‑
9483 COMMISSIONER CUGINI: That doesn't come as a surprise to me, given your family's history.
‑‑‑ Laughter / Rires
9484 MR. Z. YERXA: I know most of my friends show up and they're like oh my God, yeah, put that on, put that on, put that on. Every single genre is definitely respected and is something that people want to hear.
9485 I think for us, NEW‑FM's main thing that I want to concentrate on, especially at the beginning, is Dance music because there is a major hole for Dance music in Edmonton.
9486 As far as Rock ‑‑ hold on, I can break it down for you a little bit.
9487 MR. J. YERXA: Zach, just ‑‑
9488 COMMISSIONER CUGINI: That's okay. Go ahead. Go ahead. It's youthful enthusiasm.
9489 MR. J. YERXA: Yes. Yes, it's like herding cats.
‑‑‑ Laughter / Rires
9490 MR. Z. YERXA: Thanks. I'm just really passionate. This is what I will say though. Hold on before I give it to you ‑‑
‑‑‑ Laughter / Rires
9491 MR. Z YERXA: I honestly believe from the bottom of my heart that this format complements the lifestyle of our target, so that is why the playlist looks like it does, that's why the website looks like it does. And all the feedback I have received has been extremely positive.
9492 MR. J. YERXA: I just want to add that one of the most enlightening moments for me, when we did our qualitative talking focus groups, mall intercepts one‑on‑one, was this whole concept for someone of my generation ‑‑ I mean, I'm not that old, but still, this whole concept of mash‑ups and the idea that they just want to mix it all together and they want to kind of have control over that.
9493 So consequently, you know, the idea that these styles are all compatible was ‑‑ it was a revelation to me and of course this is what we have investigated now for the past couple of years.
9494 COMMISSIONER CUGINI: Now, in your application ‑‑ and you repeated it today ‑‑ you said that a large percentage of what you are planning on playing on this radio station isn't current being played in the Edmonton market.
9495 MR. Z. YERXA: Right.
9496 COMMISSIONER CUGINI: Why do you think that is? Why do you think the radio stations are staying away from this?
9497 MR. Z. YERXA: I think because ‑‑ this is from my experience as a Music Director at a Top 40 station.
9498 I think that radio has been kind of under these traditional formats for so long that they just ‑‑ they don't want to stray from what, you know, what they have kind of followed for quite a long time. I think the problem with that is that there is so much music nowadays, especially because of the Internet, that is amazing, that people listen to on their iPods and that they go search out and find for themselves, that just doesn't get the opportunity to be on the air because they don't have a major label behind them, number one.
9499 Number two, I think it turns ‑‑ a lot of programmers are a little bit afraid to go into uncharted waters. They really want to stick to Pop and what works.
9500 I know personally that back when Hip‑Hop was kind of making its debut and getting onto the airwaves, a lot of programmers were like oh my God, should we play this in the daytime? You know what I mean? They were a little bit worried about it.
9501 The truth is that people my age, they don't worry, you know what I mean? They're not worried if it's going to offend them or if it's a little bit too much.
9502 You know, people want to go out and discover new music, and I think that's why this format will be successful in that area.
9503 COMMISSIONER CUGINI: Because you did mention daytime, is it safe to assume that the genres of music from which you will be drawing your content will be played throughout the broadcast day?
9504 MR. Z. YERXA: Yes.
9505 COMMISSIONER CUGINI: Is it definitely dayparted?
9506 MR. Z. YERXA: I mean, the daytime stuff will be a little bit more focused on Dance and the Alternative Pop aspect, whereas in the evening we will go a little bit more Hip‑Hop and a little bit more Rock, just so we are not so abrasive during the day while not depriving the younger listeners during the night of all the new content that they should be hearing.
9507 COMMISSIONER CUGINI: You have set yourselves up for a great challenge. I mean, your own research says that 19 per cent of your listeners will be those who do not listen to any local radio stations and another 13 per cent will be made up of those who listen to non commercial and/or out of market radio services.
9508 You did go through quite a bit of explanation in your oral presentation. But especially those who go to non commercial or out of market radio services for the Internet to get their music, it is also because they like to be able to draw their music from a variety of sources as opposed to having one radio station, one programmer therefore telling them what they should listen to.
9509 How are you going to change that attitude?
9510 MR. Z. YERXA: Well, I think for us, one of the great things about this radio station is if you look at our playlist it has come from a massive variety of sources. I mean, blogs are a very big thing on the Internet. There is obviously peer‑to‑peer filesharing.
9511 I think the local aspect of this radio station, which is where ‑‑ our music department isn't saying yes, drop us off your CDs, we will listen to them and we will let you know. We are actively pursuing these artists and saying we want to play you.
9512 There is enough room on our radio station. We are not a small, narrow format. We can support all these genres; we can support all these artists.
9513 I think the great thing about the station is that it will really be ‑‑ what I really want it to be is a source for young people where they are coming to us because they trust us to give them the best new music.
9514 COMMISSIONER CUGINI: Let's talk about emerging artists for just a second because as part of your spoken word, you are planning an hour and 10 minutes to Emerging Artists Spotlight.
9515 What efforts will you make to reach out to emerging artists other than this one hour and 10 minutes of air time?
9516 MR. J. YERXA: All right. We have the Emerging Artists Spotlight that run essentially every couple of hours, one minute every couple of hours, an hour and 10 minutes, as you said.
9517 Beyond that we will promote them on air as much as we possibly can.
9518 We will have an artist of the week that we will feature on our website. We will have profiles and links on the website within the archive section for every one of our emerging artists that we can put on there. We will offer podcasts.
9519 We will offer ‑‑ now, you are talking about promotion of existing or what will we do generally to just go after emerging artists?
9520 COMMISSIONER CUGINI: Both.
9521 MR. J. YERXA: The key is to have a link on our website where they can register and they can upload their music directly to our server. That is very important.
9522 Jordan, do you want to add anything? You don't have to.
9523 All right.
9524 COMMISSIONER CUGINI: Mr. Yerxa Sr., you said in your closing remarks that you will commit 20 per cent of your weekly playlist. Is that 20 per cent of 40 per cent or 20 per cent of the entire playlist?
9525 MR. J. YERXA: Half of our Cancon ‑‑
9526 COMMISSIONER CUGINI: Okay.
9527 MR. J. YERXA: ‑‑ will be committed to new and emerging artists regardless of any changes in this market.
9528 COMMISSIONER CUGINI: Okay.
9529 Now, you know that there are strong incumbents in the market. You have CHBN and it has a CHR format, CHDI and its Modern Rock format. These two in particular are targeting the same target demo, or maybe you don't see it that way.
9530 So I'm going to ask you to comment on whether or not you do think they are targeting the same demographic group that you are, or not.
9531 MR. J. YERXA: Well, they are within the same demographic sphere, I guess we will call it or area, but the difference is that fundamentally SONiC is a Modern Rock male skewing radio station. SONiC is a Top 40 very narrow charted female station ‑‑
9532 MR. Z. YERXA: The Bounce.
9533 MR. J. YERXA: I'm sorry. Thank you, Zach.
9534 The Bounce is Top 40 skewing female, and we anticipate kind of fitting in the middle, maybe skewing a little more female and offering just a massive variety of music.
9535 What we found is, you know, how are we going to bring them back from iPods? The one thing an iPod can't give them, even in terms of music, is new music. 80 per cent I think of our music is current, within the last six months. The balance will probably fall in between about six and 24 months.
9536 So this massive variety of new music ‑‑ hence the name NEW‑FM ‑‑ is going to clearly differentiate us from the existing players in the market.
9537 MR. Z. YERXA: I think another thing that is really good about our playlist is that with most ‑‑ well, I would say with all formats, like whether it is Top 40 or Modern Rock, they are being serviced music from record labels and the have to wait to get that single, that single that is being pushed by the rep. Therefore, they will add that that week if that is what the record label has as a priority.
9538 With us, anything that is leaked, like right off the Internet, if it is an artist like Kanye West who just had a show here, if he releases an album track or brand‑new mixed tape track that everybody wants to hear and is downloading, why shouldn't the radio be playing that? Why shouldn't we be turning our listeners on and saying listen, Kayne West has leaked a brand new single, here it is for you right now on the air. And if you would like, you can go to our website, you can stream it there and we will show you how we get our new music so that we can help you as a source in that way.
9539 MR. J. YERXA: Commissioner Cugini, I just want Jordan Schroder to add something.
9540 MR. SCHRODER: Commissioners, I just wanted to speak to the repatriation of the generation that is currently listening to iPods and going to MySpace and other sites primarily to discover new music.
9541 That is a small percentage of the demographic who are going out of their way to discover these places, digging through various websites. There is no way to prove this quantitatively, but how many more people in that demographic would like to have a convenient source to discover that, that maybe wouldn't go out of their way but would still like to hear that same music?
9542 COMMISSIONER CUGINI: I believe you are the applicant ‑‑ as the Chair said earlier, we do have a number of you here before us, but I believe you are the applicant that isn't projecting any growth in share of audience from years three to seven. I think you start at four and you end at six by year seven.
9543 MR. J. YERXA: That's correct.
9544 COMMISSIONER CUGINI: Explain your rationale to us for that.
9545 MR. J. YERXA: Okay.
9546 COMMISSIONER CUGINI: While you gather your notes, the other question I was going to ask related to that is: Are you being overly cautious and therefore underestimating your impact on the incumbents?
9547 MR. J. YERXA: I honestly don't believe that we are being overly optimistic. I did indicate in my supplementary brief that I am a contrarian and that in the position that we are in as a stand‑alone independent, we don't want to be overly optimistic.
9548 We actually saw a potential perhaps eight share, but of course you know from seeing me in previous appearances that you don't take the maximum; you take a percentage of that.
9549 We scaled it back to a four, given the dynamics of the market, given the fact that certainly until people meters come in we may have some challenges related to the diary‑based methodology. But we do know that once we launch, there is a great opportunity to double our share ‑‑ I mean to increase by 50 per cent within the first two years.
9550 Once we do that, however, we are looking at a levelling off. Our business plan is based on you licensing and least two commercial, new commercial FMs and one specialty.
9551 Therefore, knowing that there may be a compression coming, we just don't want to be overly optimistic. We feel that that is quite a reasonable projection.
9552 COMMISSIONER CUGINI: And because of course you just raised the issue of how many we could license in the market, I also have no doubt that you have had the opportunity to look at some of the other applications before us.
9553 In particular Harvard, for example, is proposing that 40 per cent of its musical selections will be devoted to current selections. Rawlco is also proposing a new music and the emerging artist format and, as you know, Pattison, Don Kay and Evanov are all proposing AAA formats.
9554 Which of those do you see as the most competitive, the least competitive?
9555 MR. J. YERXA: We honestly do not believe that any of them are very competitive with what we are proposing. We are the only applicant before you that is specifically going after a younger demo of 15‑to‑29 core audience.
9556 Rawlco, for example, they say new and emerging, but when you look at their deficiency letter and you look at what they are proposing, they are saying it is a 30‑to‑40 year old core target. So obviously it must fall somewhere within the AAA realm or something like that.
9557 So honestly we do not see direct competition with any of the applications that are presently before you. We truly will be a complementary service in this market.
9558 COMMISSIONER CUGINI: So you could coexist if we were to license you and any of the other applicants before us?
9559 MR. J. YERXA: Yes.
9560 COMMISSIONER CUGINI: Okay. Fair enough.
9561 Your spoken word programming, I'm going to take you to what you submitted with your oral presentation today, because one of the questions I had when I looked at your application was pure news, you had a total of 2 hours and 24 minutes and my question was: No sports?
9562 But now you have 2 hours and 24 minutes of news and local sports in what you filed here.
9563 MR. J. YERXA: Right.
9564 COMMISSIONER CUGINI: Which now begs the question: Of 2 hours and 24 minutes, how much is news?
9565 MR. J. YERXA: The CRTC always asks this question and yet ‑‑
9566 COMMISSIONER CUGINI: You should be ready.
9567 MR. J. YERXA: I am. But, you know, when you talk to young people, when you say how can we be relevant to you, you know what news is to them? How about my high school sports scores? What's happening as far as the collegiate teams at the University? That is local news to them.
9568 It is such a unique approach when it comes to pure news.
9569 If you want the breakout, I figured well, we are going to be more sports heavy on weekends, just because that is the way it goes Thursday, Friday, Saturday, which is also why ‑‑ you are probably going to walk me to walk through the people and their duties and I'm ready to do that. But that's why our weekend person will be ‑‑ those casts will be a lot more sports heavy and they will have the sports beat among a few others.
9570 Sports is considered local news. It is what is relevant to young people. It may not be considered local pure news to the CRTC.
9571 So on that basis I suppose that during the week, especially the early part of the week, I kind of in my head an hour ago thought well, okay, we are probably looking at maybe 12 per cent, 10 or 12 per cent of each cast, maybe 15 seconds out of the two‑minuter. Then once we get into the weekends, you are looking at probably half a minute out of the two‑minute cast.
9572 Therefore, I am estimating two hours will be pure news, approximately, and then say another 25, 26 minutes of sports, 24. But that is what you are looking at in terms of pure news.
9573 COMMISSIONER CUGINI: And I am going to ask you the staffing questions because I didn't see it in your application. And if I did miss it, I apologize.
9574 Your total spoken word commitment is six hours and 20 minutes, and I see here that you are saying without announcer talk. So we do need to go through your staffing plans, if you could provide that to us, please.
9575 MR. J. YERXA: Okay. We are going to have three fulltime news staff. Logistically let's talk about first how this is going to be accomplished.
9576 We will have our morning reader, we will call that, our News Supervisor/Director, but they are all going to be pretty equally balanced in terms of their skillset. Nonetheless, you do have to have a chief.
9577 Our morning reader and supervisor will operate from 5:00 in the morning until 1:00 in the afternoon. They will be responsible for the newscasts between 6:00 and 9:00. Then between 9:00 and 1:00 they will prepare the runs for the afternoon, including the actualities.
9578 Especially all of them will be responsible for pulling clips off of Newsline. That is incredibly important for this demographic. We need feedback, both on our Newsline and also taken from our website.
9579 They will conduct follow‑up interviews, and so on, and prepare the afternoon run.
9580 Now, the second person, the afternoon news reader, will operate from 1:00 until 9:00, Monday to Friday. They will look after the newscasts from 4:00 to 6:00, including evening meetings and the setting up of news stories for the following morning.
9581 Now, our third person will operate from 8:00 until 4:00 on Saturday and Sunday, and they will look after the newscasts from 10:00 to 3:00. They are going to have to come in at least an hour to two ahead because they have to get those sports scores in, post them online. That is, as I said, a very important element of this.
9582 The other three days are flexible. In fact, for all of them it is highly flexible, as long as they give us the 40 hours. You know, they have to do what is necessary.
9583 The key thing here is that when you look at our promise and you look at us having three fulltime journalists, we should be able to cover at least one evening meeting every night of the week, if necessary, whether it be a council meeting or whether it be some sort of event.
9584 Now, as far as beats, they will be divided up into specific beats. The morning news reader will be responsible for education, transportation, health and politics. The afternoon news reader will be responsible for the environment, technology, arts and entertainment and, as I said, will also cover many evening meetings.
9585 Therefore, he or she will come in later in the day. They will start at 1:00.
9586 Our weekend reads, as I indicated earlier, will be more sports heavy. The third journalist will likely work Saturday and Sunday, three flex days. They will primarily be responsible for sports, high school and collegiate, not NHL and other professional sports, as well as campus issues and aboriginal issues. He or she, as I said, will also be available to cover those meetings that we need coverage of.
9587 COMMISSIONER CUGINI: So what is your total?
9588 MR. J. YERXA: Three news people.
9589 COMMISSIONER CUGINI: And programming?
9590 MR. J. YERXA: Programming, I guess I just better ‑‑ let me just get the whole staff list.
9591 COMMISSIONER CUGINI: Not a problem.
‑‑ Pause
9592 MR. J. YERXA: Here I thought I was lucky that you didn't nail me in the deficiencies.
‑‑‑ Laughter / Rires
9593 COMMISSIONER CUGINI: You have to leave something for us to do at the hearing.
9594 MR. J. YERXA: Everybody else got nailed.
9595 All right. Here is what we have.
9596 We have seven on air. You have the three news. We have the host of our morning show, 6:00 to 10:00. There will also be our chief blogger that will handle specific promotion assignments. We have the host of our midday, who will also be the music director in charge of music clock and format maintenance from 10:00 to 3:00; host of the afternoon drive, who will also be the program director responsible for on‑air talent and general programming.
9597 We have the three swings which are going to hold down the Saturday and Sunday, the three shifts, plus they will be flexible on each taking approximately two other shifts.
9598 We have a production manager that will oversee all the commercials responsible for all the imaging and promotion, may do some on‑air. There may be some sharing if necessary.
9599 We have a creative director responsible for the administration of all our commercial orders, writing, will contribute to the website.
9600 We have our promotions director who will oversee, edit, administer and manage the NEW‑FM street team, which is a task which I think our promotions director is going to be very capable of, and will also cochair the CCD Committee.
9601 We have our NEW Media Administrator who will oversee, edit, administer all interactive content and will cochair the Digital Youth Council.
9602 Now, I know you are going to say but programming. This is what he does and everything is going to filter through him. All of our key people will be able to update and add information onto the site, but the key imaging, a lot of the key website content will be filtered through Jordan.
9603 Okay, so now, do you want me to continue?
9604 COMMISSIONER CUGINI: No, I think that covers it. I do understand that the Internet presence that you will have is an integral part of your plan, so not to worry.
9605 I am going to move on to CCD.
9606 I know you provided quite an extensive response in the deficiency letter, dated March 17th, with regards to the over and above, but I do want to ask you: You say that each year as the basic annual amount changes NEW‑FM will adjust factors over and above allotment, thereby ensuring that it receives $125,000 annually, or $875,000 over the seven‑year licence term.
9607 That is just the over and above the 20 per cent of the over and above that goes to FACTOR?
9608 MR. J. YERXA: Commissioner Cugini, if I was to just give you an over and above figure, would that ‑‑
9609 COMMISSIONER CUGINI: That would save us a heck of a lot of time.
9610 MR. J. YERXA: Yes, okay. $2,041,505.
9611 COMMISSIONER CUGINI: Can you give us the breakdown on a year‑by‑year basis?
9612 You don't have to do that right now; you can file it with staff.
9613 MR. J. YERXA: Of course I can, but ‑‑ yes.
9614 COMMISSIONER CUGINI: Thank you. That's the right answer.
‑‑‑ Laughter/ Rires
9615 COMMISSIONER CUGINI: Mr. Yerxa, I have a final question for you and my colleagues of course may have others.
9616 Throughout your application and again this afternoon in your oral presentation you point us to the fact that you are local, that you are from Edmonton, that you don't plan on moving and that this will of course, if we license you, add diversity of ownership in the market. And, as you know, we have very well heeled incumbents in the market and you would be here as a stand‑alone operator.
9617 I heard you in your oral presentation say that you have the financial backing to see this through to the end, but I would like you to take us through why you feel it is so very important for us to license someone who lives and breathes Edmonton in light of, like I say, the incumbent reality.
9618 MR. J. YERXA: Well, I guess it really comes down to the Broadcast Act. I mean, let's face it, it has two objectives: Canadian content and I guess access to the system by both participants in terms of ownership, as well as bringing audiences into the system.
9619 So I suppose that is the legal kind of technical position I'm taking.
9620 But beyond that, I would hope, as we have indicated to you, go to our website ‑‑ some of the language is not necessarily appropriate, but it is what it is ‑‑ and just examine the degree of creativity and the tremendous response we have been able to muster in this market.
9621 I just feel we are so quick on our feet that we can make a decision in a matter of minutes if necessary. We can yell at each other and then we can agree that this is what we are going to do and we can move forward.
9622 I honestly believe that some of the most innovative ideas that can come forward in this industry will come through local independent ownership, because we have no choice. Innovation, survival, that is our key. It isn't a political process for us; it isn't a bureaucracy.
9623 So also beyond that ‑‑ and I mean, you know this ‑‑ we reflect the market. We have tremendous support in this market.
9624 I hope you read our letters because they aren't form letters. You know, you have your necessary letters from the Mayor and various MLAs or Senator, whatever, but go read some of those other letters. See what people have written heartfelt.
9625 I think they will also explain why it is so important to bring local ownership back to this market.
9626 So vis‑à‑vis the other players, it will be tough but we are in a sense a niche specialty format.
9627 Your next question will be: Well, okay, but what if they go there? What if they position themselves where you are?
9628 My response is this ‑‑ and you also may say: Well, what if you want to go where they are?
9629 Well, first of all, we are not going to go on a suicide mission. They are well financed; they have more resources in almost every interpretation of the word. Our survival will be to go down a road less travelled, to do what we think we can do well.
9630 So we are not going to compete with them and they are not going to compete with us because they are all doing very well in this market, thank you.
9631 Why don't more companies consider this? Why should they?
9632 With the exception of that little blip you saw in '06 on the PBITs, I mean this is a good market and there is not a lot of incentive to rock the boat. In larger companies you have to have a measured plan in the market.
9633 So I believe that on that basis we are not going to go where they are. It is unlikely that they are going to go where we are.
9634 The other thing is that we have a COL of 20 per cent new and emerging, so we can't move. We are new and emerging. That is our essence.
9635 The other thing is that you may wonder, well, these are smart people, these are well‑financed people across this country. They can't think of something like this?
9636 Well, my response is as follows.
9637 Maybe what I will do is let me just read you one excerpt here from a letter, just a very short letter that was written by the former head of Newcap here in Alberta just until very recently. I will quote him.
9638 Al Anderson, 47, 48 years in this market. In his letter of support for me here's what he says:
"The youth market is essential in regaining a segment of radio listeners who have been quickly disappearing to the Internet and all of the other entertainment choices available today, a market that the big‑box operators fear and refuse to serve." (As read)
9639 I mean, there it is. It is just ‑‑ it is a function of things are going well and why rock the boat and why go after a less desirable demographic to some of them.
9640 So I hope that answers some of your questions.
9641 COMMISSIONER CUGINI: It does and I hope I didn't take away from the final two minutes that the Chairperson will give you.
9642 Thank you, Madam Chair. Those are my questions.
9643 THE CHAIRPERSON: Commissioner Molnar...?
9644 COMMISSIONER MOLNAR: Thank you.
9645 Welcome and happy birthday.
9646 MR. Z. YERXA: Thank you.
9647 COMMISSIONER MOLNAR: I want to follow up and actually the letter that you just quoted from really segues quite well into what I was going to ask you.
9648 Without question I think the whole system is stronger if we can repatriate youth into our system. You know, it is obvious you have a lot of passion in believing that you can do that and you have established a business plan in significant detail that you believe will attain that.
9649 My question really is a little bit about what if you are wrong. What if the format doesn't work exactly as you have laid it out, the formula isn't quite there? What if in fact the youth want true news? What if sports isn't news and they come back?
9650 So have you built into your plan ways and means to be able to modify; you know, a little bit of fluidness, if you will, so that you can respond to the youth market as you try and repatriate them?
9651 MR. J. YERXA: