ARCHIVED - Transcript, Hearing 16 January 2012
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Volume 1, 16 January 2012
TRANSCRIPTION OF PROCEEDINGS BEFORE THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION
To consider the broadcasting applications listed in Broadcasting Notice of Consultation CRTC 2011-675, 2011-675-1, 2011-675-2 , 2011-675-3 and 2011-675-4
Rodd Miramichi River Hotel
1809 Water Street
Miramichi, New Brunswick
16 January 2012
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.
Canadian Radio-television and Telecommunications Commission
To consider the broadcasting applications listed in Broadcasting Notice of Consultation CRTC 2011-675, 2011-675-1, 2011-675-2 , 2011-675-3 and 2011-675-4
Eric BowlesLegal Counsel
Lyne CapeHearing Manager and Manager, Radio Operations and Policy
Rodd Miramichi River Hotel
1809 Water Street
Miramichi, New Brunswick
16 January 2012
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TABLE OF CONTENTS
PAGE / PARA
1. Newcap Inc.5 / 33
2. Miramichi Fellowship Center, Inc.68 / 450
3. Maritime Broadcasting System Limited115 / 858
3. Maritime Broadcasting System Limited190 / 1358
1. Association des radios communautaires acadiennes du Nouveau-Brunswick195 / 1385
PANEL OF INTERVENERS
2. Hal Somers214 / 1494
3. Jim Malone218 / 1516
4. Susan Butler222 / 1537
1. Maritime Broadcasting System Limited240 / 1681
2. Miramichi Fellowship Center, Inc.245 / 1716
3. Newcap Inc.251 / 1754
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PAGE / PARA
Undertaking94 / 665
Undertaking96 / 690
Undertaking181 / 1291
Undertaking239 / 1671
Undertaking244 / 1709
Undertaking257 / 1784
Undertaking261 / 1817
--- Upon commencing on Monday, January 16, 2012 at 0900
1 THE CHAIRPERSON: Good morning. It appears it's me that's holding things up here, but I think we are ready to start.
2 Bonjour, mesdames et messieurs, et bienvenue à cette audience publique.
3 Je vous présente les membres du comité d'audition :
4 - Louise Poirier, conseillère nationale;
5 - Timothy Denton, conseiller national;
6 - et moi-même, Elizabeth Duncan, conseillère régionale de l'Atlantique et du Nunavut. Je présiderai cette audience.
7 The Commission team assisting us includes:
8 - Lyne Cape, Hearing Manager and Manager, Radio Operations and Policy;
9 - Eric Bowles, Legal Counsel; and
10 - Jade Roy, Senior Public Hearing Officer and Hearing Secretary.
11 Please speak with Ms Roy if you have any questions with regard to hearing procedures.
12 At this hearing we will study three licence applications to operate commercial FM radio stations in Miramichi and one application for the New Glasgow market.
13 For the Miramichi market, the Panel will study the applications submitted by Newcap Inc. for the frequency 95.9 MHz; Miramichi Fellowship Center Inc. for the frequency 96.5 MHz with a transmitter at Blackville on the frequency 107.7 MHz; and the application submitted by Maritime Broadcasting System Limited for the frequency 102.5 MHz.
14 These three applications will be treated as competing applications for the Miramichi market.
15 We will also study the application submitted by Hector Broadcasting Co. Ltd. for the New Glasgow market for the frequency 97.9 MHz.
16 The Panel will base its decision on several criteria, including the state of competition, the diversity of editorial voices in the Miramichi and New Glasgow markets and the quality of the applications. We will also consider the markets' ability to support a new radio station and the financial resources of each applicant.
17 I would remind the three applicants for the Miramichi market that since they did not submit the necessary technical information to the Department of Industry with respect to the use of alternative frequencies, the Panel will not discuss this issue.
18 J'invite maintenant la secrétaire de l'audience, Jade Roy, à vous expliquer le déroulement de l'audience.
19 Madame la secrétaire...
20 THE SECRETARY: Thank you and good morning.
21 I would like to go over a few housekeeping matters to ensure the proper conduct of the hearing.
22 When you are in the hearing room, we would ask that you please turn off your Smartphones and beepers as they are an unwelcome distraction and they cause interference on the internal communication systems used by our translators. We would appreciate your cooperation in this regard throughout the hearing.
23 We expect the entire hearing could take a day and a half. Please note that we will be starting at 8:30 a.m. tomorrow morning. We will let you know of any schedule changes as they may occur.
24 You can examine all documents on the public record of this proceeding in the Examination Room, which is located in the Northwest Room. The telephone number of the Examination Room is 506-836-6091.
25 Interpretation services will be available throughout the duration of the hearing. English interpretation is available on channel 1 and French interpretation on channel 2. We would like to remind participants that during their oral presentations they should provide for a reasonable delay for the interpretation while respecting their allocated presentation time.
26 Le service d'interprétation simultanée est disponible durant cette audience. Vous pouvez vous procurer un récepteur auprès du technicien à l'arrière de la salle. L'interprétation anglaise se trouve au canal 1 et l'interprétation française au canal 2.
27 There is a verbatim transcript of this hearing being taken by the court reporter. If you have any questions on how to obtain all or part of this transcript, please approach the court reporter during a break. Please note that the full transcript will be made available on the Commission's Web site shortly after the conclusion of the hearing.
28 Just a reminder that pursuant to section 41 of the Rules of Practice and Procedures, you must not submit evidence at the hearing unless it supports statements already on the public record. If you wish to introduce new evidence as an exception to this rule, you must ask permission of the Panel of the hearing before you do so.
29 Finally, please note that we will also be tweeting the documents during the hearing at the @CRTCGCCA using the hashtags #CRTC or #Miramichi, ou le mot-clic #CRTC ou #Miramichi.
30 And now, Madam Chair, we will begin with item 1 on the Agenda, which is an application by Newcap Inc. for a broadcasting licence to operate an English-language commercial FM radio programming undertaking in Miramichi.
31 Please introduce yourself and your colleagues and you will then have 20 minutes to make your presentation.
32 Thank you.
33 MR. STEELE: Well, good morning, Madam Chair, Commissioners and Commission staff. I am Rob Steele, President and Chief Executive Officer of Newcap Radio and before we begin our presentation I would just like to say welcome and it's a pleasure to be here in the Miramichi.
34 Now I would like to introduce our team.
35 Seated in the front row furthest to my left is Glenda Spenrath, Newcap's Vice President of Operations and Regulatory Affairs.
36 Next to Glenda is Jackie-Rae Greening who is the Operations Manager of CFCW in Camrose, Alberta. Jackie-Rae has long been recognized for her contribution to Country Radio as an on-air personality, programmer and manager. She is currently the Co-Chair of Canadian Country Music Week coming to Edmonton in 2013 and 2014 and is also a former Chair of the Board of the Canadian Country Music Association.
37 To my immediate left is David Murray, Chief Operating Officer of Newcap Radio.
38 To my right is Steve Jones, Newcap Radio's Vice-President of Programming.
39 Next to Steve is Dan Gallant, the General Manager and General Sales Manager of our Fredericton station, Fred FM. Dan was born and raised in the Miramichi, he attended high school here and studied Criminology at NB Community College in Miramichi before graduating from St. Thomas University. He has worked for Newcap in sales and management starting in 2007 in Alberta and became our General Manager in Fredericton in 2009. Next to Dan is Ron Ryan, Vice President of Atlantic Operations.
41 MR. MURRAY: Madam Chair, Newcap is proud of its record of service in markets of almost every size in Canada and we are particularly proud of our integration with the community in markets throughout Atlantic Canada. In every market we have entered, the community has seen immediate benefit through new music formats, news voices and more listening choices and in each market the community has rewarded us with top ratings, generally in our first BBM book. Our approach to entering a new market invariably causes the incumbents to dramatically improve giving the community significantly better radio.
42 Our success is based upon a number of factors:
43 Research on the market's economic capacity;
44 In depth format research before we consider applying and ongoing research to be sure that we are on track;
45 Investment in the best equipment and people to ensure a high quality technical sound and top quality programming;
46 A strong record of training our programming, sales and management staff, while providing good career paths for new and existing employees.
47 I would now like to ask Glenda Spenrath to talk about the economic case for a new station in Miramichi.
48 MS SPENRATH: Thanks, Dave.
49 We have closely examined the economic underpinnings of the Miramichi market. The first thing that struck us was the retail sales picture. FP Markets 2012 data indicates that per capita retail sales are 66 percent higher than the national average. In addition, FP Markets projects retail sales to increase by over 10 percent in the period 2013 to 2017.
50 The most recent statistics, available to us, from the Miramichi River Tourism Association indicates that the lowest quarter for visitors to the area was the first quarter at 52,000 visitors, climbing to 84,000 in the second quarter. Miramichi offers year-round tourism opportunities from snowmobiling and cross-country skiing in the winter to ocean sports in the summer and let's not forget about those arriving to fish.
51 All of these out of market arrivals spend a significant amount of money in the region. According to the Miramichi River Tourist Association, they inject some $31 million annually.
52 Newcap has experience operating in small markets with a strong input from tourism and we know how to convert these opportunities into radio revenue. If we use the Radio Bureau rule of thumb to convert the projected 2012 retail sales of $550 million, we could expect to see over $2 million in radio revenues and, given the absence of a local television operator, we expect that more would be available. This is more than enough to support the incumbents and new radio entrants.
53 When we enter a new market, we also look to see what the programming opportunity might be and, rather than rely on what our instincts might tell us, we hire an independent researcher. Here to summarize what the market research told us is Steve Jones.
54 MR. JONES: Thanks, Glenda.
55 We hired Mark Kassof and Company to survey the market for us to determine what listeners feel about the radio available to them and to help us determine the right programming approach. This is the type of research Newcap conducts frequently in nearly every market we serve. We firmly believe that great radio comes from understanding what the listeners want and need in a radio station.
56 Mr. Kassof's first observation was the degree to which local residents were dissatisfied with local radio service. In fact, the level of satisfaction with local radio was so low that after conducting this study Mark reviewed 20 different studies that he had done for Newcap in 20 different markets since 2003. Of all of them, Miramichi is the lowest at a 2.9 average satisfaction level with local radio. The other markets ranged from a high of 3.9 to a previous low of 3.1. This is statistically very significant.
57 Mr. Kassof asked respondents about their satisfaction with the radio station they listen to most. Interestingly, 50 percent were totally satisfied with SiriusXM satellite radio; 53 percent with rock station C103 from Moncton, but only 21 percent of those who listened most to the only English-language radio station in Miramichi, The River, were totally satisfied with the station.
58 But this study wasn't all about the obvious dissatisfaction with The River. The primary goal of the study was to determine the best format for a new station to serve Miramichi, and that goal was achieved. Mr. Kassof tested eight different formats with adults 18 to 54 and Country emerged as the most in demand.
59 To determine this, Mark investigated both listener interest in various formats as well as the awareness of the availability of each format in Miramichi.
60 The result is a number that Mark calls the "percent of format void". A high "percent of format void" represents an opportunity, because listeners are both interested in a format and have no awareness of any station in the market currently providing that format.
61 Twenty percent of 18 to 54-year-old listeners express a positive interest in Country and cannot identify any station associated with that format. Country outperforms every other format in terms of percent of format void.
62 Now to talk about how this new station will sound is Jackie-Rae Greening.
63 MS GREENING: Thank you, Steve.
64 Newcap has a strong record in delivering high quality, locally focused Country radio across Canada. The Mark Kassof research study not only indicated that Country was the most in-demand format, it also demonstrated that Country listeners demand the most localism. All of our 14 Country stations are totally locally originated and in Miramichi we propose an equally local station.
65 All of our newscasts will be developed by our news team in Miramichi and originated here. Our 4-person news team will provide 80 newscasts each week, including news at the top and bottom of each hour in the morning show, plus hourly updates the rest of the day. In total, we will provide 3 hours 40 minutes of news, of which 3 hours will be pure news.
66 In our application we outlined some features that we intend to provide through the week and we believe that these features will draw the interest of Miramichi residents. But, frankly, our greatest community involvement will come in the talk from our hosts, particularly in the morning drive. Just as we do elsewhere, our morning show will include interviews with important local newsmakers, from political leaders, those spearheading local charitable activities, local athletes or just ordinary residents of our community who do extraordinary things.
67 We do have a very successful Country station in Moncton and will be able to draw from it for artist interviews and promotions that we could not otherwise provide in a small market like Miramichi. For example, XL 96 will be presenting Canadian superstar Johnny Reid in Moncton this May. If we were on-air in Miramichi, all of the interview material on XL would also be available to Miramichi listeners and we would absolutely develop opportunities for our listeners to go to see him.
68 Our music programming will feature the best of today's Country performers with a touch of hits from the past. Of course, we will put a strong emphasis on Atlantic Canadian acts such as 2011 ECMA country nominees Ashley Condon, Heather Allison, Kevin Davison and Larry Foley, just to name a few. The 2012 ECMA Music Week will take place in Moncton this year and we will be all over that with XL taking the lead for country music. The material generated would be available to Miramichi as well.
69 We propose to devote $15,000 per year to the development of Canadian Content.
70 20 percent or $3,000 annually will go to FACTOR;
71 Another $ 2,000 will go to the Miramichi School Board for the purchase of musical instruments to give an early push to young musical talent; and
72 $10,000 will go each year to Miramichi Music Festivals.
73 Miramichi has a number of festivals through the year and we have contacted two of them to discuss working together. We have received letters from:
74 The Miramichi Country Music Festival, held in September each year featuring local and regional musical talent.
75 The other letter is from The Miramichi Exhibition, which is held in July every year. The bandstand at the Exhibition burned down some time ago and they have not presented local and regional acts as they once did.
76 All expenditures will conform to CRTC guidelines.
77 MR. GALLANT: There is a great opportunity for a new station to enter with minimal impact on the incumbent. The research provided by Mark Kassof indicates that there is a lot of out-of-market tuning. Sixteen percent of all respondents indicated that SiriusXM is the station they listen to most often. And in the key demographics of 25 to 54, 14 percent indicate that our Moncton Country station is the station they listen to most often.
78 It is clear that there is a lot of out-of-market tuning which is not being turned into revenue in the market. Frankly, when a service that you have to pay for ranks second in tuning and shows higher satisfaction than the local station, and when distant Moncton stations also draw significant interest and higher satisfaction, that there is a great opportunity for a well-programmed locally focused Country station to repatriate tuning.
79 We believe that the format we propose will be complementary to MBS's Hot AC station, The River. There is virtually no overlap between the two formats. We would expect that the arrival of a Country station will provide an additional listening option, more diversity and the increase in quality that competition brings.
80 We have had significant success in entering markets in the Maritimes over the past few years. The charts we have provided to you with these remarks shows what happens.
81 In Charlottetown, where we had a weak AM that we converted to FM and added a second FM, we launched into a market where the incumbent, MBS, had three stations. Our first BBM ratings period placed our stations as numbers one and two.
82 In Sydney, where we entered a market where the incumbent, MBS, had three stations, we went to number one in hours tuned in adults 25 to 54 in the first BBM ratings and our station is ahead of our business plan.
83 In Kentville, we launched a new FM against MBS's combo of two FMs and immediately went to the top of the ratings and we are well ahead of our business plan.
84 In all three cases, the incumbent broadcaster, MBS, warned of doom and gloom for their stations. If you continue looking at the charts you will see what eventually happened, the incumbent broadcaster responded to the competition and provided a better service to the public. So three years out there is more of a ratings balance between them and us.
85 The real winners in all of this competition are the local listeners who receive much better service, a new news voice and more differentiated formats.
86 And we don't think that there are really any losers. An examination of the CRTC Annual Return information for 2010 shows the strength of the Atlantic Canada radio industry, particularly in the smaller markets.
87 The most interesting one is the profit figures.
88 In 2010, the small market PBIT margin for Newfoundland and PEI combined was 18 percent.
89 The small market PBIT for Nova Scotia was 16.5 percent and for New Brunswick small markets it was 21.1 percent.
90 The Canadian small market average for the same year was only 12.7 percent, 8 percentage points below New Brunswick.
91 Clearly the addition of new stations in markets like Charlottetown, Sydney and Kentville have been easily absorbed.
92 And now here to sum up is David Murray.
93 MR. MURRAY: Madam Chair, Members of the Commission, we propose to bring a new and dynamic voice to Miramichi with a format not available in the community now. With a strong locally rooted station and a well focused format we will bring a new dynamic to the market. As Dan described, our entry into markets in Atlantic Canada has been a win-win proposition: the listeners benefit from our station and the incumbent loses complacency and works harder to provide a better sound.
94 Our proposal is sustainable, with minimal impact on incumbent stations; it will add a new, more locally focused news service with a new editorial voice; it will provide exposure for a range of Canadian country artists not heard in the market now and will provide the highest amount of Canadian Content Development money of the three applicants at this hearing.
95 We would be pleased to reply to your questions.
96 THE CHAIRPERSON: Thank you, Mr. Murray.
97 I would just like to take a second and check with legal. I just have a quick question.
98 THE CHAIRPERSON: Okay, thank you.
99 I'm actually going to be questioning Newcap and I'm sure Commissioner's Poirier and Denton will have some follow-on questions, but I'll start.
100 I appreciate your excellent remarks this morning and they will be useful as well in our evaluation of the applications.
101 I'm going to just start first of all doing it in the order that I prepared the questions and first just starting with staffing.
102 I'm looking at your application at Appendix 7.1(b) and I just wanted to work from there and just discuss the staffing. I noticed you made some comments on staffing in your remarks this morning as far as the numbers of people so it may have changed slightly, but just so we can get a better idea of what those numbers are.
103 You had said in your application at that appendix, three full-time and two part-time announcers and two full-time news reporters and you referred to some part-time news street team personnel. This morning it's a little bit different, but I'm just wondering, just so that we understand what your proposal is for those employees.
104 MR. MURRAY: Right. You are referring to the difference in news where we said four?
105 THE CHAIRPERSON: Well, just trying to finalize.
106 MR. MURRAY: Yes.
107 THE CHAIRPERSON: Just understand what your --
108 MR. MURRAY: I think that's pretty similar. We are talking about two full-time news, two part-time, probably roughly three full-time equivalencies, but four bodies in news.
109 THE CHAIRPERSON: Okay.
110 MR. MURRAY: Does that clarify it?
111 THE CHAIRPERSON: Not really. So what was in the application, just referring to announcers, announcers you are considering part of your news, too, because in the application you distinguished between announcers and news reporters.
112 MR. MURRAY: Right.
113 THE CHAIRPERSON: So you said three full-time announcers and two part-time announcers; two full-time news reporters and some part-time news street team personnel.
114 MR. MURRAY: Right.
115 THE CHAIRPERSON: So I'm just trying to --
116 MR. MURRAY: I think I will ask -- Glenda prepared those numbers. Just so there is no confusion I will get her to go through exactly what we are going to have.
117 THE CHAIRPERSON: Okay.
118 MS SPENRATH: Yes, you are absolutely correct, what we have projected is three full-time on-air announcers, two part-time announcers. We do have in the projections a spot for a creative writer and two full-time news, two part-time news.
119 In addition to that, there will be three sales and two admin that will round out a staff of 15.
120 And in that 15, I guess it would be a 13 equivalency -- full-time equivalency.
121 THE CHAIRPERSON: The full-time and part-time news people, they are out on the street? Is that generally what they are, the difference between them and announcers?
122 MS SPENRATH: Yes, and they would be the ones putting together the casts.
123 I am not sure if Steve, maybe, wants to jump in here, as to what the announcers will be doing, but they will definitely be responsible for the news content, the news gathering and the news delivery.
124 MR. JONES: I think you have covered that well. That describes my understanding, as well.
125 THE CHAIRPERSON: Will these all be new people, hired in Miramichi -- well, maybe not all hired in Miramichi, but all working in Miramichi?
126 MS SPENRATH: Yes, absolutely, they all will be hired and residing and working here.
127 THE CHAIRPERSON: So you are not bringing new people in to Miramichi, then, they are all going to be hired from here?
128 MS SPENRATH: Again, I might refer to Steve, who will be assisting with recruiting.
129 MR. JONES: We recruit nationwide, for the best and most talented people we can.
130 What we find in markets like Miramichi, particularly in Atlantic Canada, is that there is an urge to return home. So when we are able to recruit talent that wants to live and work in Miramichi, we tend to have much greater success in terms of retention.
131 A good example is Dan beside me, who was working for us in Alberta, but being from Miramichi, had a longing to return to New Brunswick, and now is our general manager in Fredericton.
132 So we will look for people like that, who have an urge to live and work here.
133 THE CHAIRPERSON: I probably didn't catch all of the numbers. You will have technical staff here in Miramichi?
134 MS SPENRATH: You are talking engineering staff?
135 THE CHAIRPERSON: Yes.
136 MS SPENRATH: Probably not. That would probably be resourced from Moncton or Halifax.
137 THE CHAIRPERSON: And would you normally turn to Moncton or Fredericton?
138 There is not much of a difference mile-wise, I don't think, between getting from here to either of them.
139 MR. MURRAY: Yes, it could be either one.
140 An awful lot of that technical service can be done remotely now. We do all of our IT support, for example, from Dartmouth, for right across the country, and all of our engineers can connect to the transmitter sites.
141 They can't do everything, of course, but a lot of the equipment now -- everything is basically a computer, even the transmitter. So we can connect and make some minor fixes that way, and switch from one transmitter to the backup transmitter remotely, and things of that nature.
142 So there probably wouldn't be a need for a full-time engineer, but probably one of our employees would be on call and be able to call the engineer and be guided through making some adjustments and such.
143 So that is how we would handle that.
144 THE CHAIRPERSON: I notice from the stations that I listen to that there is virtually never any interruption in service, so I take it that radio technology is very reliable. So I can understand.
145 As far as sales, will you be using commission sales? Is it totally commission selling?
146 MS SPENRATH: Yes, actually, it is. It would be the same as in any of our other markets, where, typically, with junior sales people, we may bring them on with a guarantee, until they have grown their list, and then we would switch to straight commission.
147 And our national, of course, would be straight commission.
148 THE CHAIRPERSON: How many people did you say for sales?
149 MS SPENRATH: We are budgeting three people in sales.
150 THE CHAIRPERSON: And that is full-time?
151 MS SPENRATH: Yes, they are all full-time.
152 THE CHAIRPERSON: That's a lot of people. That sounds like a lot, three people.
153 MS SPENRATH: It may be, but it is comparable to what we have in other markets, such as Fredericton.
154 THE CHAIRPERSON: Good. Excellent.
155 The administrative support person would be located here in Miramichi, as well, or would they be in head office?
156 MS SPENRATH: No, that's a local person, and that person would be a combination of administrative duties, some accounts payable, minor accounting duties, and traffic as well.
157 Some of our accounting duties, such as payroll, are done out of our head office, but they would be the full-time administrative person here.
158 THE CHAIRPERSON: I see your station manager described as also having sales duties. Is that the case, or is that over and above the other three?
159 MS SPENRATH: That person would have combined station management plus sales duties; more of, I guess, a mentor or a leader for the sales team.
160 THE CHAIRPERSON: Perfect. That's great, thank you.
161 I would like to now switch to synergies. I understand that you have 24 radio stations in Atlantic Canada, and we have already talked about the ones in Moncton -- two in Moncton and one in Fredericton.
162 You had stated in your 2010 letter of September 27th that there would be synergies in the areas of staff training sessions and creative services. I am wondering if you could describe for us in a little more depth what that would be.
163 MS SPENRATH: Initially, as far as the creative services position, we do have a budget for a full-time person. Possibly at the start, in the first three to six months, we may provide some creative services out of Moncton, but as soon as it warrants a full-time position, we would have that position here.
164 Our staff training would be in the way of sales training, primarily. We have PD training, as well, for the announcing and on-air staff.
165 MR. JONES: If I could speak briefly to some of the initiatives we take in terms of staff training, we are quite proud of our dedication to training our staff and providing them with a career path, providing them with opportunities to grow and develop.
166 Last year we did two initiatives, in particular, that brought training to markets of this size that wouldn't normally have that. What we did was, we recruited world-class trainers in music scheduling and in on-air coaching, and we did a coast-to-coast tour, stopping in at least one city in each region across Canada, and then we would bring in all of our announcers, or in the case of our music scheduling, all of our program directors and music directors, for a day or two of intensive training.
167 That is a regular occurrence across the company.
168 THE CHAIRPERSON: Can you shed a little bit more light on creative services, what that entails?
169 MR. JONES: That is the writing and production of commercials, and that does take a great deal of training. To communicate with people, to connect with them and motivate them to do something in a 30-second message takes a real skill.
170 THE CHAIRPERSON: Thank you.
171 Just going back to staffing, when you are selling ads, do you sell national ads by format, or are all of the national ads -- in a market like this, what is the usual rule of thumb, 80:20, 20 percent national?
172 Are they sold from head office or --
173 MR. MURRAY: No, probably in Miramichi it would even be smaller than that. It would probably be 15 percent national, 85 percent local.
174 But our ads, typically, will come from CBS, Canadian Broadcast Sales, out of Toronto, or Montreal, or Vancouver, et cetera, but probably, for Miramichi, it would be out of Toronto.
175 We would also have perhaps some regional sales in New Brunswick, where an advertiser might have a store in Moncton, another store in Miramichi, and another store in Fredericton or something, and the decision-maker, or the one that is buying the advertising, might be in Moncton, or they might be in Halifax, or something along those lines.
176 So we would look for those types of opportunities. I can't give you examples, we don't know exactly what we might get here, but we would definitely look for that.
177 THE CHAIRPERSON: Okay. I understand. That gives me, also, a better understanding that the creative services refer to advertising.
178 Are there other types of synergies that you expect?
179 And I am happy that we have Ms Greening with us, because I am actually wondering how this station will benefit from all of your other country stations. You have brought Ms Greening with you, so obviously there must be some anticipated benefit for this station beyond what Moncton might even be able to offer. So I am kind of interested in that.
180 MS GREENING: Definitely. We have country stations in major markets to medium markets to smaller markets. Obviously, for Edmonton, as a market, we get all of the top stars, like your Lady Antebellums, Taylor Swifts -- and we always make those interview opportunities available to all of our country stations in the Newcap chain.
181 But, for the most part, it will definitely be local. Every country station that we have really targets the community we are in.
182 So there is definitely that synergy on a larger level, but every station really stands alone, on its own.
183 THE CHAIRPERSON: If I were working for your station here in Miramichi, I would pull down the interview, but I would do voice around it and talk around it?
184 MS GREENING: Exactly, yes. That's exactly what happens.
185 THE CHAIRPERSON: It's interesting to me that the music interests would vary so much from community to community that it would be done locally in each community. There is that much music?
186 MS GREENING: Very true.
187 It's interesting, once a month all of the country programmers across the country -- we are all on a conference call, and we all share ideas, and we are all really the same in a lot of ways, but in other ways we are different.
188 If you look at our music lists, we will have a lot more artists from around Alberta, whereas here, obviously, it will be Atlantic Canada artists that will be more of the focus.
189 THE CHAIRPERSON: Thank you.
190 Mr. Jones, I know that you are VP of Programming, so you are situated in Dartmouth, but what is your role with respect to the ongoing operation of the stations, and also the start-up?
191 MR. JONES: My role is sort of consultative. We work our company in such a way that decisions are made locally. We are very decentralized. Our head office isn't very large for a company of our scope.
192 What I try to do is help with research, help with programming, help with marketing, help with understanding the audience and delivering to the audience great radio.
193 In the early days, where we may not have a full staff, as we start to build up the radio station prior to launch, my role would be more hands on and active. But at the time of launch, we would have a local program director here, and my role would be to help guide and develop their skills and help make sure that the radio station is as good as it can possibly be.
194 THE CHAIRPERSON: So maybe for you and Ms Greening; how does the local programmer decide -- how do you get that information? How do you determine what listeners in Dartmouth want to hear versus listeners in Miramichi versus Kamloops?
195 MR. JONES: We are very dedicated to audience research, and we use Mark Kassof & Company across the country in our company to help determine what music is best for each market.
196 We did that study prior to submitting our application. There is a very good chance that we would do another study prior to launching, to make sure that the snapshot in time that we took a year ago hasn't changed in terms of what listeners want from a radio station.
197 We do that in almost every single market we are in, regular, ongoing research, to understand what listeners want and need from us, because the only way to truly be successful in terms of ratings and be successful in terms of delivering results to advertisers is to deliver a product that people want.
198 THE CHAIRPERSON: Thank you.
199 This is more of an administrative question. Were all of the synergies taken into account in preparing your projections for this station?
200 MS SPENRATH: Yes, they were.
201 THE CHAIRPERSON: Now I want to turn to diversity of programming. Actually, you may have cleared this up in your -- I had a question about your news. There seemed to be some doubt as to whether the three hours and 40 minutes included sports.
202 Did you say this morning that your pure news was three hours?
203 MR. JONES: That's correct, yes.
204 THE CHAIRPERSON: So the 40 minutes would be sports, then. Is that the clarification?
205 MR. JONES: Yes.
206 THE CHAIRPERSON: Thank you.
207 MR. JONES: And there may be some weather updates in there, and some entertainment news, things that wouldn't qualify as pure news.
208 THE CHAIRPERSON: I am interested, then, in what elements of the programming that you are proposing will distinguish your station from what is currently in the market, other than for the obvious music platform.
209 MR. JONES: Right. As a general rule across the country, we ask our news people to deliver content that is at least 75 percent local. That is a mandate that they are given and deliver on in stations all across the country.
210 So our news would have, definitely, a local focus to it.
211 How it would be different from our competitor, that's a hard call to make on a day-to-day basis, but it would go back to understanding our audience and understanding what interests them, what speaks to them, and delivering newscasts that touch on those kinds of stories on the local level, every day.
212 THE CHAIRPERSON: So those three, presumably, news people that you are going to hire, they will be trained and supervised, they will know what to look for and how to go out and get it.
213 MR. JONES: Absolutely. We share our research and they understand our audience.
214 THE CHAIRPERSON: How do you evaluate how they are doing with that?
215 MR. JONES: We consult on a regular basis with all of our on-air people, including news talent, and evaluate their performance. That is something that I lead as our VP of Programming.
216 THE CHAIRPERSON: Your programming, I guess I am getting a feel for how it would reflect the local community, but how would you sum up how it would benefit and how it would reflect the local community?
217 MR. JONES: It's absolutely new news and editorial voice in the market, and as much as the news may be the news, every single broadcaster takes a different approach, and the more diversity that can be provided, the better.
218 So we would immediately be providing a new editorial voice in the market, and one that is locally focused and locally trained, and I am absolutely confident that it would be a complement to what is already in the market.
219 We also, across the country, share our news stories across what we call the Newcap news network, which is not a news network that you would be aware of, because as listeners you wouldn't hear it on the air, you would only hear the results of it.
220 It is an electronic file-sharing system, where news people in every single market can file stories that can be picked up by any station across the country.
221 For example, last summer, when Slave Lake burned nearly to the ground, we have a station in Slave Lake, and we were able to provide national coverage of that fire at the local level.
222 THE CHAIRPERSON: Actually, I think that probably back in a Calgary hearing, this might have been in the development stage, this electronic file sharing.
223 MR. JONES: Yes, it was, and now it is well --
224 THE CHAIRPERSON: Well underway?
225 MR. JONES: -- in place across the country, yes.
226 THE CHAIRPERSON: Thanks.
227 What are the reasons you feel that your application would best contribute to the diversity of programming in the market?
228 Do you have anything more to add to that?
229 MR. JONES: I think we have definitely covered off -- the main point being that every market deserves more than one news voice, and with the lack of a local TV broadcaster, and a limited choice in local media -- the No. 2 radio station in this market is SiriusXM satellite radio. It definitely says something about the need for more choice when the No. 2 choice in the market is a service that people pay for, and a service that is, for the most part, piped in out of the U.S.
230 THE CHAIRPERSON: Yes, I noticed two things there. I noticed your last comment, but also your point about not having a local television station in the market.
231 You committed to a 35 percent Canadian content level. I am wondering if that is consistent with your commitment in Moncton with your country station.
232 MR. JONES: Yes, I believe we are at 35 percent in Moncton, as well.
233 THE CHAIRPERSON: How does it compare, then, with your other stations across the country operating in that format?
234 MR. JONES: I believe that all of our country stations operate at 35 percent, and most of them, as a rule, shoot for 36 or 37, because it's important that we make sure, in the event of any disputes over whether something is Canadian at the end of the week, that we are in compliance at all times.
235 THE CHAIRPERSON: So it's trying to ensure that you are in compliance with the 35 percent that holds you to that level?
236 MR. JONES: Yes.
237 There is no shortage of great Canadian talent out there.
238 I think Jackie-Rae is the best one to elaborate on that.
239 MS GREENING: Yes, I was the Chair of the Board for a few years at the Canadian Country Music Association, and we take great pride in the fact that the country genre has come a long way in the last decade. We are finally building a superstar system, and it is because of country radio that we have the Johnny Reids and the Paul Brandts of the world.
240 It's a really strong format now, more so than it was a decade ago.
241 THE CHAIRPERSON: It is interesting to me, though, that you still feel comfortable with the 35 percent?
242 MS GREENING: Totally, yes.
243 THE CHAIRPERSON: It's a reasonable number?
244 MS GREENING: A very reasonable number, yes.
245 THE CHAIRPERSON: Your definition of emerging artist was included in the application that you filed in July of 2010. Are you prepared to adhere to the definition announced in 2011-316?
246 MR. JONES: Absolutely, yes.
247 THE CHAIRPERSON: Thank you.
248 Now I have a few economic questions, and then I will be finished.
249 The financial summary that you filed with your application forecasts --
250 And I am going to turn to it, if you will bear with me for a second.
251 It forecasts a negative PBIT throughout the full seven-year licence term, and I notice that MBS is forecasting a positive PBIT in Year 3.
252 So, given the demand for this format, which you have spoken to in your research, I am wondering if your forecast fully reflects the potential in the market, or accurately reflects the potential in the market.
253 MR. MURRAY: I think that our forecast is definitely conservative. I know that when we applied in other markets, our experience is that we have exceeded those numbers, and sometimes quite significantly.
254 But we tend to be cautious. We are entering a market that we are not particularly familiar with, and we want to present numbers that we know we can hit or exceed.
255 I could give you some examples.
256 For example, in Kentville, I think we projected $1 million, and Kentville is a very similar size market population-wise, et cetera. We projected to do about $1 million per year for the first three years, but we actually did closer to $2 million per year.
257 In Sydney, we projected a little more than $1 million a year, and did more than double that, as well.
258 And it's pretty much the same situation in Charlottetown.
259 I am hoping, obviously, that we exceed these numbers dramatically, but I would say that these are quite conservative.
260 THE CHAIRPERSON: There must be some real accountant in there at the core to be so conservative.
261 MR. MURRAY: Exactly, yes.
262 THE CHAIRPERSON: It looks like you are telling me by about 50 percent -- right -- significantly conservative.
263 MR. MURRAY: Yes.
264 THE CHAIRPERSON: Because my next question was, why would you consider this an opportunity worth pursuing, but if that is your answer, that this is ultra conservative, that is --
265 I don't want to put words in your mouth, I shouldn't have said ultra conservative.
266 MR. MURRAY: No, that is certainly the case. We are very bullish on Atlantic Canada, period. In 2008-2009, when there was, basically, a world recession, our revenue increased in Atlantic Canada. It went up 4 percent or 5 percent in 2009, and we continue to work very hard and do the best we can in those markets, and we think that Miramichi will be similar.
267 We see Miramichi as an extension -- more expansion into New Brunswick. We are in Moncton and we are in Fredericton, and we would love to be here and connect those stations from a news network standpoint, connect them from a sales training standpoint, from having sales conferences, et cetera. It just gives us more synergies and more strength, and we are able to, then, draw news and stories from this region and add them to Moncton and Fredericton and to our other Atlantic stations.
268 MR. JONES: It may be worth pointing out, too, that in our experience, when we enter a market that is underserved, that is served only by a single commercial broadcaster, the market as a whole expands in terms of its ability to generate revenue. There are more feet on the street, there are more advertisers being called upon, there is a better advertising story to tell, and generally the whole market increases.
269 That has been our experience in all of the Atlantic Canada markets.
270 MR. MURRAY: Exactly. We don't have those numbers, but you do. So I think you will be able to look at Kentville, for example, and I would be surprised if the Kentville market hasn't nearly doubled in its radio revenue, and the same with Sydney -- probably not double -- with our one station against the other four that were there. It has probably increased quite dramatically.
271 We haven't taken a very large share from the incumbents, we have actually expanded the market.
272 And in Charlottetown, I know that to be the case. In Charlottetown, we were in the LMA until 2005. The highest amount of revenue that the LMA ever enjoyed was just a little over $4 million, and this year we have done significantly more than $4 million ourselves.
273 So that market has more than doubled.
274 Well, I shouldn't say that, maybe they are doing less than that, but you have those numbers, so --
275 THE CHAIRPERSON: Yes. That certainly answers my question, though. That's great, thanks.
276 In your application you are showing, in Year 2, $197,000 of revenue, and 25 percent of your revenue will come from out-of-market radio advertising.
277 I am just wondering if you are able to explain to us which stations you figure that will come from, and how much, or do you get down to it that finely? That was in your Appendix 7.3.
278 MS SPENRATH: Yes. We don't drill right down into which stations it would come from. There is an awful lot of out-of-market tuning here, so there certainly is opportunity for repatriation and then monetization of that repeat rating.
279 MR. MURRAY: Are you asking where the revenue will come from?
280 THE CHAIRPERSON: Yes.
281 MR. MURRAY: Because the out-of-market tuning is not really getting any revenue in the market, I think.
282 THE CHAIRPERSON: No, no. Which radio stations -- your Moncton station, for example, obviously are going take Sirius, is your thinking?
283 MR. JONES: We can fairly accurately predict where we will take our listeners from; more difficult to predict how that will be monetized. But definitely, we will repatriate --
284 THE CHAIRPERSON: That's probably a better question.
285 MR. JONES: Right. So we will repatriate some listening from SiriusXM for sure. There are a lot of people. It's the number 2 station in the market. In all the research across the country we have never seen SiriusXM perform as well as it does here in Miramichi. So we will definitely repatriate some of that tuning.
286 We will also repatriate the bulk of the tuning going to XL96 in Moncton, which is our own station but it's not something that financially benefits us in Moncton. It would be much better to have a local radio service take that tuning.
287 And we estimate that, you know, we will take a few listeners here and there from other out-of-market stations in Fredericton and Moncton.
288 THE CHAIRPERSON: What would be the quality of your signal from Moncton here?
289 MR. JONES: It's definitely hit-and-miss. As you move further south, it's a more reliable signal, but it does not get into this market at all, I think.
290 We can provide you with a contour map that would show that even our .5 mV curve is well south of Miramichi and well south of the footprint of our proposed radio station as well.
291 THE CHAIRPERSON: So what that would tell us is, too, that people are desperate to listen or anxious to listen to country music and that's where they're going to find it.
292 MR. JONES: Yes. They would put up with the static in order to get what they want.
293 THE CHAIRPERSON: Yes.
294 I just have two questions left.
295 In Mark Kassof -- did I pronounce that correctly? In his research that you filed -- and I'm just going to turn to that, I just want to make sure that I'm understanding it correctly -- he says:
"We project an 18-54 share of 18 percent of this country station, making it the number 2." (As read)
296 And I'm just wondering how that reconciles with the 25 percent market share that's filed in your application.
297 MR. JONES: The 25 per cent market share represents our estimate of a 12+ share. The 18 percent is an 18-54 number, which we researched 18-54 in this study.
298 What we have noticed in this study, and we have noticed it in research projects all across the country, is the popularity of country music increases exponentially with age. So as you reach listeners over 55 and over 65, you begin to see that -- well, in the case of CFCW in Camrose their ratings are absolutely, you know, phenomenal in those demographics.
299 Unfortunately, they are not for the most part monetizable in radio sales and we are forced to create a business model. So we did research 18-54.
300 The 18-54 share is 18. Our estimate if you include all those listeners over 55 brings the 12+ share up to 25 percent.
301 THE CHAIRPERSON: Okay. Thank you very much.
302 And so my last question is we're interested in your comments on the concerns expressed by ARC New Brunswick and ARC du Canada that the introduction of the new English-language FM station in the Miramichi will have a destabilizing effect on the advertising market and potentially affect the advertising potential and viability of community stations that serve in around the Miramichi.
303 Would you like to comment on that?
304 MR. MURRAY: Sure. I think we have partially answered that by saying that we believe we will grow the market dramatically. We think the revenue here is very underdeveloped. It will probably more than double if we -- we've tried to extrapolate what we think the market is.
305 We think it's perhaps a little under a million or around a million and we think the potential is well over two million, and a rising tide will raise all boats.
306 So, you know, we are certainly not going to -- and maybe Steve can talk about the audience overlap and synergies -- but we are not going to be targeting the same types of revenue that the community station and the French stations are now.
307 MR. JONES: In virtually every market we are in, there is a community broadcaster of some sort, whether it's a not-for-profit or whether it's a religious Christian broadcaster or a French-language broadcaster, and in all those markets we coexist more than peacefully.
308 People who choose to listen to those radio stations, in our experience, choose those stations not just for their content but for their value system.
309 In the case of a geographic area where maybe the Francophone population represents a significant minority, they are looking for that touchtone and that cultural representation, not necessarily, you know, just the music. So they continue to listen to those radio stations.
310 They continue, if they're advertisers, to support those radio stations because they culturally represent something very close to their heart.
311 The Acadian population here is very proud of their culture and I am absolutely certain they will continue to support a radio station that serves directly that need. And the same with the Christian broadcasters.
312 So we believe that they have absolutely nothing to fear from our presence in this market or any other.
313 THE CHAIRPERSON: Okay. Thank you all for your comments.
314 I will give Commissioner Poirier a chance here.
315 COMMISSIONER POIRIER: Yes. I will have a few questions but I might ask them in French, so you better put on your translation device, please.
316 THE CHAIRPERSON: Excuse me. I need to make sure mine works. One second. I will just be one second.
317 COMMISSIONER POIRIER: What number in French is it? It's number 1? I believe 1 or 2. You will find it, I'm sure.
318 THE CHAIRPERSON: Can you say something in French?
319 CONSEILLERE POIRIER : Alors, oui, je vais dire quelque chose en français pour permettre à tout le monde de vérifier s'ils entendent bien les questions et les comprennent bien. Si vous n'avez pas d'appareil de traduction, il nous fera plaisir de vous en remettre un.
320 Ça va?
321 LA PRÉSIDENTE : Non.
322 CONSEILLERE POIRIER : Non?
323 CONSEILLER DENTON : Oui.
324 CONSEILLERE POIRIER : Oui? Oui.
325 Not all of you have a translation device. I could target you, you know, and make you feel uneasy.
326 MR. MURRAY: Budget constraints, I guess, at the Commission.
327 COMMISSIONER POIRIER: Okay. Well, it's good to have a translation device because I will always ask questions in French.
328 Pour moi, la question principale est de savoir si le marché de Miramichi peut recevoir une nouvelle station, parce que nous avons trois choix.
329 Le premier choix, c'est d'avoir un nouveau compétiteur comme Newcap; le deuxième, c'est d'avoir déjà l'incumbent, comme on dit, celui qui est là, qui va créer une synergie, ce qui souvent est moins coûteux et demande moins de revenus publicitaires au début; ou encore, de transférer l'émetteur, tel que demandé par les Miramichi Fellowship Center.
330 Alors, je veux être sûre que vous convainquiez le panel que malgré la situation économique difficile à Miramichi, où il y a eu beaucoup de pertes d'emploi et où l'économie n'est pas si facile que ça pour les gens, j'aimerais que vous nous convainquiez qu'il y a de la place pour une nouvelle station comme vous, standalone, dans le marché là.
331 Vous allez être seul, Newcap, ici dans le marché, à ce moment-là, avec Maritime Broadcasting, et, bien sûr, les deux autres qui sont présents. Convainquez-nous qu'il y a de la place.
332 MR. MURRAY: Thank you. That's a very good question. I'm really glad you asked it because we definitely prefer the first choice, that Newcap be awarded the licence.
333 We have no fear whatsoever with competing with Maritime Broadcasting. We have seen in many examples in recent years in Camrose, a market with a similar-size population, where we've entered that market against two FMs of Maritime Broadcasting and did -- doubled our revenue projections. We are making a significant amount of positive cash flow from Camrose, and the market, as we said, has dramatically benefited.
334 We see Maritime. They have improved their service. We believe we do very -- we provide a very good service as well. The Camrose market has dramatically benefited from that.
335 We have seen the same thing in Sydney, where we entered the market in Sydney about the same time as we did in Camrose. Maritime Broadcasting had two FMs and an AM station there. There was also another station licensed at the same time for Sydney. Sydney is a little bigger market. And we dramatically -- we exceeded our projections, our audience shares. We had more listeners than the other four stations combined in Sydney and we exceeded our projections, but more importantly, the community got great radio from us and they got much better radio from Maritime, who, you know, were forced through competition, like we would be or anybody would be --
336 COMMISSIONER POIRIER: Yes, but, Mr. Murray, you believe that the economy here in Miramichi is good enough to support a new station? You are sure of that?
337 MR. MURRAY: Yes. I am getting to that. I am just --
338 COMMISSIONER POIRIER: Okay. But you were repeating what you told us in your presentation.
339 MR. MURRAY: Yes, but they were good points.
340 COMMISSIONER POIRIER: Yes. And repetition is always good.
341 MR. MURRAY: Exactly. In radio, repeat, repeat.
342 COMMISSIONER POIRIER: Okay.
343 MR. MURRAY: Yes. And actually I think I will -- you know, I sense you are very impatient.
344 COMMISSIONER POIRIER: Yes, but come to it, please.
345 MR. MURRAY: Yes. I think I will pass it on to Glenda, who can give us some -- there's also some very positive economic news in Miramichi.
346 MME SPENRATH : Puis-je répondre en anglais?
347 CONSEILLERE POIRIER : Bien oui.
348 MME SPENRATH : Merci.
349 Yes, at the time that we put the application together, you know, we looked at various economic factors and we saw an opportunity there. We saw some very good -- some positives there.
350 And in addition to the statistics that we looked at, of course, we went to some industry metrics, the most common being the Radio Bureaus, where they predict that half a percent of your retail sales should come through in your advertising revenues, which would mean in this market that your retail sales should be north of $2 million. Now, that might not actually be the case at the present time because maybe the market is underperforming.
351 But, you know, the other thing we do is we look at the economics of similar markets, and when we looked at various markets, there were some striking resemblances between, for example, Kentville and Miramichi.
352 Even though the per capita income was 23 percent below the national average in Kentville, as it is in Miramichi, we were very successful in Kentville. Food and shelter, cost of living, they are, again, 23 percent lower there and 24 in Miramichi.
353 And the one thing that was really similar in that market is that their retail sales in Kentville were 75 percent higher than the national average. In Miramichi it's 66 percent.
354 So they are very tourism-driven as well and, as David mentioned, we have done very well there. We far exceeded our business plan there. Though we based it on our experience at the time and that was the situation when we were filing, we today feel even more bullish about that.
355 When you think about some of the recent announcements that have come out about Miramichi, on Friday Weyerhaeuser announced that they have sold their mill to Arbec out of Quebec and so Arbec has announced that they will be looking at reopening the mill in this current year, which would create over 100 jobs.
356 Later in 2010, after our original application was filed, the federal government had announced that they were going to be relocating a federal payroll centre here. Now, although the Long Gun Registry was also talked about disappearing, that change there would create 310 net new jobs for Miramichi, of which almost half of them are in existence now, have been in existence.
357 And then recently, the provincial government announced that they are going to be putting half a million dollars into the airport and they are looking at this as more of a cargo centre and more of a travel destination.
358 So there is promise there and there are good economic signs as well.
359 CONSEILLERE POIRIER : Parfait. Merci. Je suis contente d'apprendre que ça va mieux parce que j'étais venue cet été, et les nouvelles étaient des fermetures, entre autres, au niveau hospitalier, je pense, et c'était difficile pour les gens.
360 J'aimerais, par contre, aussi voir l'impact que vous allez avoir. Parce que vous choisissez un format de musique country, c'est certain que cela va avoir un impact sur l'auditoire que vous avez à Moncton.
361 Alors, est-ce que cela ne va pas réduire aussi vos revenus à Moncton puisque vous allez peut-être avoir une perte d'auditoire?
362 MR. JONES: We do not monetize in Moncton the listeners here in Miramichi that tune into XL96. We do not solicit advertising up in this community and we in no way monetize that. So there is no fear on our part.
363 If every single listener in, you know, Northumberland County and Miramichi were to abandon XL96 and tune into Country 95.9, that would make us very happy and we have no fear of that.
364 CONSEILLERE POIRIER : Oui. Je sais que vous ne pouvez pas les solliciter, mais peut-être qu'il y a des commerçants qui vous demandent d'acheter de la publicité à Moncton.
365 Est-ce qu'il n'y en a pas des gens d'ici qui achètent de la publicité sur Moncton?
366 MR. JONES: Not to speak of. Now, there would be some advertising on the Acadian coast in places like Richibouctou and Bouctouche, but as you come further north, no, there is absolutely no advertising.
367 COMMISSIONER POIRIER: Okay.
368 Il y a en deuxième position, outre les radios satellite, c'est la radio Beauséjour, et cette radio-là a des craintes parce qu'elle doit jouer, elle aussi, de la musique country.
369 Est-ce qu'il n'y a pas un danger pour une station de radio communautaire qui a toujours un budget beaucoup plus serré que les radios commerciales, est-ce qu'il n'y a pas un danger qu'elle perde cet auditoire-là, donc, qu'elle perde des revenus et qu'on les mette dans une situation plus délicate?
370 MR. JONES: No, I don't believe that it puts those broadcasters in a difficult position.
371 As I mentioned earlier, I think that the people who choose to listen to radio stations like Radio Beauséjour and other community radio stations are making a value statement more than they are a preference about music.
372 So while they may lose some listeners who fluctuate here and there as they find the music they like, I doubt they will lose any support from the community, which will and should remain extremely proud of what they stand for.
373 CONSEILLERE POIRIER : Vous avez mentionné dans votre présentation aujourd'hui -- et ma question peut s'adresser peut-être à madame Greening ou à madame Spenrath -- que vous allez partager un peu de la musique country ou des émissions, du contenu, présentées à Moncton.
374 J'aimerais donc savoir : Est-ce que ça va être différent de ce que vous présentez à Moncton sur votre station country? Est-ce que ça va être complètement différent ou est-ce que ça va être un rebroad, comme on dit, une retransmission de ce que vous présentez à Moncton, mais qui sera donnée ici sur les ondes de Miramichi?
375 MS GREENING: It will definitely be a different radio station only for the fact -- I think if you listen to each of our 14 country stations in Canada, they are all very different and unique. You cater to -- country is probably the most local format. The listeners believe in localism and you have to really cater to that.
376 So definitely, we have the expertise of country programmers across the country, but Miramichi's country station will be programmed just for here locally. You will notice a difference. There is a different feel to each of them.
377 COMMISSIONER POIRIER: Yes, but I want to make sure because in your document, page 6, you wrote:
"...in Moncton ... we will be able to draw from it for artist interviews and promotions..."
378 That you could provide to the Miramichi market.
379 Will it be exactly the same thing or will it be different?
380 MS GREENING: It will be different. It will be up to the host who draws those interviews off our FTP site. So it's up to them to make it local. They are only taking the artist portions of the interviews. We just post those up and the local announcer will hopefully localize it and make it their own.
381 MR. JONES: It would also be quite easy, as we have done in many cases in the past, to have an artist of some stature like a Taylor Swift who might come through our Camrose-Edmonton studios to record two interviews. It may be possible for that artist to record localized portions of the interview.
382 So I think the simple answer is no, in most cases it won't be the same at all. It will be unique programming created for our radio station in Miramichi but derived from the synergy that exists, because the artist would not normally visit a community this out of the way.
383 CONSEILLERE POIRIER : Et ma dernière question, Madame la Présidente, est une question que je calcule très importante. Et si jamais vous n'êtes pas sûrs de la réponse, vous pourrez nous la donner par écrit plus tard.
384 Si le marché va bien et que le panel décide d'accepter deux demandes qui sont faites ici pour Miramichi, par exemple, que nous décidions d'accepter Maritime Broadcasting et Newcap ou bien que nous décidions d'accepter Newcap et Miramichi Fellowship Center ou bien une autre possibilité, est-ce que cela va changer beaucoup votre plan d'affaires et de quelle façon?
385 MR. MURRAY: Now, that's a very good question.
386 Let me first say that I don't think licensing the Miramichi Fellowship application would have any impact on our business plan. They are in the market now. They are just readjusting, you know, which one is the repeater and which one is the originating station. So that is probably a good move.
387 If you licensed ourselves and Maritime, you know, right off the bat we are both country format, so we wouldn't do that. Probably the first one on would be country and the next one would change formats.
388 I think that would create some pressure on our business plan. It would be more difficult to hit our numbers. Our numbers being quite conservative, I think we would hit those, but I don't think we would double them.
389 So I think we would be happy to accept any type of accommodation that you approved and do our best for the community, but definitely, if you give them two FMs and us one, they have an advantage and, you know, there wouldn't be the balance in the market.
390 CONSEILLERE POIRIER : Vous maintiendriez votre demande si on acceptait Maritime Broadcasting et vous?
391 MR. MURRAY: Absolutely, yes, and we would still keep our 50 percent increase in Canadian content development and we would still provide all the news and all the localism and, you know, we would still want to be here.
392 CONSEILLERE POIRIER : Parfait.
393 Merci beaucoup, Madame la Présidente.
394 THE CHAIRPERSON: Thank you.
395 Commissioner Denton.
396 COMMISSIONER DENTON: Good morning, gentlemen.
397 I have a question in relationship to the use of the term "monetizable" -- I think it was Steven Jones -- and you said that country music ratings were higher for those over 50. It might have been over 55; I don't know which.
398 Could you explain what you mean by that listenership not being monetizable?
399 MR. JONES: Sure, and I did mention over 55, but it is really exponential with age. So as you look at listeners over 65 or over 75, often it gets even larger.
400 What I meant by monetizable is that certainly, on a national level, advertisers generally don't target listeners over 55 for a variety of reasons, one being they believe that their buying decisions and habits are already established and very difficult to change.
401 So to try to convince someone who has purchased, you know, a Chrysler vehicle all their life that they should change to a Volkswagen when they're 60 is a very difficult task.
402 So on a national level, certainly, those advertisers are not targeted very often. Not many ads are purchased based on reaching those listeners.
403 On a local level, that sometimes changes. We do have local advertisers who see the wisdom in targeting older listeners, but because of the lack of consistent ability to turn ratings in that demographic into revenue, we generally don't research the market above the age of 55.
404 MR. MURRAY: I think perhaps Ron Ryan could add some detail to that as well. He is our Vice-President of the Atlantic Region and he has a very diverse sales background.
405 MR. RYAN: Good morning. We have a number of products, a number of stations presently that are dominant in the 35+, generally translated into 55+.
406 I will use an example, VOCM in Newfoundland, throughout the Province of Newfoundland. I process all the national orders and have signed off on them for eight-nine years now many, many hundreds and I have seen probably three orders nationally for 55+ demo and not of any consequence, no money attached of any consequence really.
407 So back to Steve's point again. Locally it's something that we can work at from a retail perspective. If they are looking for that demo, the traffic that we provide brings the benefit of the sales order, but outside of that it's very, very difficult to get any money from that 55+ demo.
408 MR. JONES: It shouldn't be interpreted though that we don't serve that audience.
409 COMMISSIONER DENTON: No, no. It's a question of -- it intrigues me that a demographic which is among the fastest-growing in Canada, because all those Baby Boomers are now me and you -- well, not quite, some of you, but getting up there. We are well off. Our numbers are growing. You know, 1,000 people turn 65 a day in Canada for the next 20 years. They all have money and the advertising focus -- obviously, somebody must know what they are doing, but I'm just questioning, I guess, whether they actually do. It's not monetizable is what you keep saying.
410 MR. JONES: It's not presently monetizable. There may be -- as that demographic continues to swell, there may be opportunities to monetize it.
411 MR. RYAN: It's more monetizable on a local level.
412 MR. JONES: Yes, on a local level, there are opportunities. They are not tremendous and that is why we built our business plan around 18 to 54.
413 COMMISSIONER DENTON: Okay. Thank you. It's just a fascinating fact of life, I guess. Thank you.
414 THE CHAIRPERSON: So just one last question staff has asked me to go back to that I should have included.
415 With respect to the broadcast of emerging artists, if your application was approved, would you be prepared to abide, by means of a condition of licence, to a requirement to broadcast a minimum of 4 percent of all musical selections from emerging artists as defined in 2011-316? So the question is by COL.
416 MR. JONES: Yes, we would be pleased to do that.
417 THE CHAIRPERSON: Okay. Thank you very much.
418 So, Madame la Secrétaire.
419 THE SECRETARY: Thank you. Do you want to take a 10-minute break?
420 THE CHAIRPERSON: We will, yes. Fifteen. I think we have --
421 THE SECRETARY: A 15-minute break. Thank you.
422 THE CHAIRPERSON: Thank you.
--- Upon recessing at 1014
--- Upon resuming at 1031
423 THE CHAIRPERSON: Okay, good morning.
424 Madame la Secrétaire?
425 THE SECRETARY: We will now proceed with Item 2 on the Agenda which is an application by Miramichi Fellowship Centre Inc. for a broadcasting licence to operate an English-language specialty commercial FM radio programming undertaking in Miramichi with an FM rebroadcasting transmitter in Blackville.
426 Please introduce yourselves and your colleagues and you will have 20 minutes for your presentation.
427 Thank you.
428 MR. STEWART: Good morning and welcome.
429 I will let the people around me introduce themselves. I would like to say welcome to the Miramichi.
430 THE CHAIRPERSON: Thank you very much. Thank you. We are happy to be here.
431 MR. NOWLAN: Good morning. I'm -- now, have I got the right button?
432 Good morning. I'm Eugene Nowlan and I'm a local businessman and I support Life Radio.
433 Now, to John Stewart.
434 MR. LYNCH: Hi. My name is Ted Lynch.
435 I'm the Manager of Life Radio and born and bred Miramichier for 41 years. I'm also an on-air presenter and look after the sales of Life Radio Broadcasting.
436 MR. HALLIHAN: Madam Chair and Commissioners, my name is Matt Hallihan and I do the drive home show. I also look after music programming.
437 I have been with the station for five years.
438 MR. WATLING: Good morning. I'm Robert Willard Watling. I'm the community chaplain for the Miramichi area.
439 It's a great pleasure to be here to represent Life Radio.
440 MR. UNDERHILL: Good morning. My name is Scott Underhill. I have been with Life Radio for about four years now, the evening show host and also the computer technician.
441 THE CHAIRPERSON: Thank you very much.
442 Madam Poirier will lead off with the questioning, Mr. Stewart.
443 THE SECRETARY: Sorry, I think, Mr. Stewart, would you like to make your presentation?
444 THE CHAIRPERSON: I guess I'm anxious.
445 THE CHAIRPERSON: But I am anxious to hear what you have to say. Sorry, go ahead.
446 MR. STEWART: It's probably my nervousness that you are catching on to.
447 THE CHAIRPERSON: No, I have got my own brand. Thanks very much. Go ahead.
448 COMMISSIONER POIRIER: But it was good to see you move to your translation device when they mentioned my name, so good.
449 MR. STEWART: Yes, thank you.
450 MR. STEWART: And as a local Miramichier I have to say from my heart for you to come here on this morning means you are really dedicated to what you do, with -26 on the outside. Thank you for coming. It's a joy to be able to speak to you.
451 And I would like to say welcome to the Miramichi. You will see that our skyline is not dominated by office towers or banks. It is steeples, places where people gather weekly to sing subcategory 35 music. We have 31 of them in this community.
452 In fact Miramichi is 99.73 Christian. Somebody told me more Christian than Rome.
453 MR. STEWART: That's according to Stats Can.
454 Every year the mayor of our city has a concert. It's not rock. It's not pop. It's not country. It's subcategory 35.
455 Every year the mayor of this city has a breakfast right in this room and that's where they sing subcategory 35 music as well.
456 In fact, we are big on subcategory 35 music here. Everything -- every year the graduates get together, form a choir and part of the graduating exercises they sign subcategory 35.
457 We get married to the sound of subcategory 35 and we grieve our losses to the same sound.
458 People gather in the park to sing subcategory 35. And we have a folk song festival but we always start it with a subcategory 35 concert.
459 Every night in Miramichi you will find somebody singing subcategory 35 music in a big gathering. In fact, in this room on Saturday 200 ladies got together to play for me the same subcategory 35, and I really appreciated it.
460 It's little wonder that when we turn the transmitter on in 2005 the Maritime local hockey team music right away got after us to air their games when they were on the road and so did the big Pond Hockey Tournament that the Prime Minister visited. They wanted us to air them as well.
461 Our station is so popular in this city that people meet me on the street and offer me support to make sure it stays on the air.
462 You will see as you look at our interventions that the premier of the province gave us a letter of support; a Member of Parliament, Tilly O'Neill-Gordon; a Member of the New Brunswick Legislature, Robert Trevors, who is also the Solicitor General and Minister of Public Safety; the President of the Chamber of Commerce, Hal Somers. And Eugene Nowlan who is here beside me -- he is the owner of one of the biggest companies in Miramichi, the biggest employer and he is co-owner of that -- and he also gave us a letter of support.
463 These community leaders did that because they know we are here for the community. We are moving our transmitter from Blackville to Miramichi because we believe in the Miramichi River Valley in a big way.
464 We surveyed the city this year and our stats show that 42 percent of this community listens to Life Radio even though our transmitter is only 50 watts. They have to gather around the transmitter to do so.
465 MR. STEWART: Many of the people we surveyed told us they would love to get it in their homes but they only can get it in their car for the most part. We have that survey available if you would request it in the station.
466 This station was born out of an opportunity or a desire to help the Miramichi River Valley. The original station that we started was staffed by people from a "Skills Link" program. That's a government program. We brought in 10 youths at risk. We trained them at all sorts of radio things and we got them involved in broadcasting. That did a lot for their self-esteem. One of those guys is with me today and it's been a great opportunity to help people that way.
467 Life Radio has run programs to promote local business:
468 We had food and clothing drives for the disadvantaged.
469 We promoted local work opportunities and drives to get sports equipment for children who could not afford it.
470 We fill toy boxes at Christmas and we help young Miramichiers with their self-esteem to be better people in society.
471 Captain Wilson Sutton and I have teamed up together with "Social Inclusion" a provincially-funded program to help all the disadvantaged groups in the Miramichi River Valley.
472 We did a roof project to help people raise money to help people get a roof over their heads.
473 Autism Miramichi is a very important part of our thrust. We are deeply involved with fundraising for people in that sector.
474 We have been involved in supporting the Miramichi Youth house.
475 We have been heavily involved at our own costs at helping the women's shelter, the "Transition House" here.
476 "Meals on Wheels" is right in our building and some of our staff on snowy days are out volunteering to give meals to seniors. You know what they talk about when they come back, the importance of volunteering.
477 Literacy: One of the biggest problems in the Miramichi River Valley. We co-founded that group and it happens right in our building as well. We have four classes for literacy and when it comes time to talk about it we can draw from a large pool of people to talk about the importance of literacy in this community.
478 We conduct interviews with economic development people and partner with local industry to help people find jobs.
479 We promote "A Family Place". It's a CAPC Canada program. I helped co-found that.
480 We run messages to keep this Miramichi River cleaner and if you would have come in June you would have found it a lot nicer environment for fishing. And we are proud of that Miramichi River and we try to do our best to keep it clean.
481 Now, as you mentioned earlier, our hospital is struggling. 60 of our 150 beds are taken up with seniors waiting to get into a nursing home. 300 people protested in front of the hospital a few weeks ago about that.
482 I talked to a few of them later and I said it would be better if we had 100 volunteers than 300 protestors. And so we have teamed up with the hospital to try to get 100 volunteers to relieve staff to make the stay of these seniors a lot better and we'll be starting that this week. I guess I already started it.
483 Because we are locally owned and operated, our whole focus is the Miramichi. When a mill closes it's our brother who lost his job. When a young guy gets in the NHL, we went to school with his parents. They are not far off news stories to us. They are personal. We have the connections to get the whole story out as it affects the Miramichi.
484 We can show how decisions made on Wall Street or Finland affect a home in Miramichi. When a business is struggling it's not a statistic to us. It's our sister. It's our brother-in-law. It's our niece's friend.
485 Some of our staff went through the AA program and we know how to get proud Miramichiers involved in a program like that.
486 Of course we do all this on a very modest budget. Compare our budget to other radio stations and you'll see right away we have learned how to do more with less. At a time when the Miramichi is struggling, we have that opportunity to help a struggling community.
487 We are not here to take out of the Miramichi. We are here to put in, to invest.
488 When I served on the Enterprise Miramichi Board, I learned that a dollar spent on a local business would circulate seven times in the community, thus making the community a stronger place. We are that local business.
489 We don't have shareholders in some far off place looking for a profit. We are investors ourselves and we are investing in the Miramichi River Valley, our wonderful home.
490 We want to promote our local artists although when we first started we did a terrible job on how we reported what we did. We have caught on. In fact, we have given a lot more than what we told you in those reports.
491 The guy sitting beside me is a local artist. Because he works for me I can't tell you what I give him to help him make a CD but, let me tell you, it's lots. If you would like him to sing -- and we are just about to do that again. Because he is a local artist he started a song writers' circle, "Song Writers Corner" featuring local artists. He has the "in" with those people and we air them on our station.
492 We do not exist as a station nor will we to promote a certain philosophy. We exist to make the Miramichi a better place to live in.
493 We don't want to preach empty words to our city. We want to get our hands dirty helping it, encouraging the business man as he goes to and from work, showing youth how to have a better way of life and get involved in their community and even encouraging the police people as they drive in their patrol cars.
494 I could tell you stories about that. Our stories go through a filter when we go on air. Is it preachy? Does it encourage? Is it positive?
495 We are different enough from other radio stations in Miramichi that we will not create a hardship for them. We supply a different service than they do and we take a very different approach.
496 We try to look at the positive side of the Miramichi. Our music is different from theirs. So we complement the radio industry in this area like -- because I'm left-handed I can tell you like a left and a right arm they do the same thing, but from a different perspective.
497 We are looking for a piece of the marketing pie that no one else is looking for. It's like the hair dresser and the building supplies store. It's a different competition. That's where we are.
498 They are totally different things and they have a different market. We will be getting a piece of what would not, for the most part, go to anyone else anyway. We are a voice of compassion for the river.
499 The songs we play inspire a positive environment where creativity happens and self-esteem is developed. Our whole message to the Miramichi is positive so that people from the cradle to the seniors enjoy our music, our station without having to worry about the little ears.
500 Subcategory 35 has many flavours. One of those flavours is country and we are playing that already on our transmitter here in Miramichi.
501 Now, I would like to look at the reason -- I want to talk about what Scott does at night too. He has a great program for youth where -- he was involved in a different lifestyle before he joined us and he is very interested in helping the youth who are struggling with addictions and so on. That's a great program at night. Not something I listen to, mind you, but he likes it and so do a lot of youth.
502 I want to move to why we are requesting a higher power Class A station. It's in order that we might protect our FM frequency. We have already been bumped once and had to change frequencies. It is evident that a transmitter on Beaverbrook Road set at 29 watts doesn't serve this whole city very well.
503 The downturn in the lumber industry has hit Blackville really hard. Our big mill has closed. The spinoff: the closure of a lot of local businesses. The unemployment rate in Blackville reaches 42 percent sometimes. As recent as Christmas a large trucking company right next to us had to close their doors. They had been in business for 68 years.
504 The chairman of the Blackville Credit Union told me they would have to restructure with the changing economy. Infrastructure such as the internet in Blackville because it's a rural community is poor and so is NB Power. I'm on their case constantly to have a more solid power line.
505 Without question, the biggest part of our present audience lives in Miramichi. This being the case, we will not be hurting the present stations since -- pardon me -- we are already here.
506 We have many requests from people who can only get our station in their car, to be able to also get it in their homes. They are presently doing this through the internet but would love to get it on their radio. Since we are already established in the area by a rebroadcast transmitter we will create minimal effect if any, on present radio audiences and because of our uniqueness we will not hurt their markets.
507 This is a small community. People know us on a first name basis and they are willing to support us.
508 As I understand CRTC, your philosophy is local. Well, I want to tell you about "local". We are locally owned, locally operated, locally staffed, promoting local news from a local perspective, promoting local artists and, I guess, the positive voice of the Miramichi is something that you could call local.
509 One more thing just before I close.
510 One of these days in the not too distant future, every one of us will close our lives for the last time and draw our last breath. My hope for everybody in this room, that the next thing you hear is subcategory 35.
511 THE CHAIRPERSON: Thank you, Mr. Stewart.
512 Commissioner Poirier will commence. Thanks. Thank you.
513 COMMISSIONER POIRIER: Yes. I really have the feeling that I understand now why 200 women sang here for you.
514 COMMISSIONER POIRIER: I will try to ask my questions in English, okay? So if you don't understand me wave at me. I'll speak in French and then, you know, use the translation device.
515 I have plenty of questions but I'll start with your transmitter configuration because we wonder why instead of moving your transmitter from Blackville to Miramichi you don't have a more powerful transmitter instead located anywhere or either in Blackville or in Miramichi.
516 So you would stop the discontinuous coverage between the two regions for those listeners who listen to you in their car and while you are doing what you're doing, you will have a low power in Blackville and a low power is not protected. So why is it your strategy instead of having a stronger, more powerful antenna?
517 MR. STEWART: The journey of a thousand miles begins with one step. That's what we are wanting to do. We are wanting to continuously grow.
518 So the concept is of course to reach this community, not to get bumped off here -- to reach this community well. If you like, I could talk to you about wanting to put a higher power in Blackville as well but I'm not sure that you would want me to talk about that today.
519 Our goal is to do that. We are a spread-out region and a spread-out area and the focus of the population is this small city. That's what we are trying to step into first.
520 COMMISSIONER POIRIER: But what will happen to the audience from Blackville? They were used to getting local news. They were used to having a service over there that was really local for them. They could be the losers in this swap.
521 MR. STEWART: As a Miramichier I want to tell you that Blackville and Miramichi are pretty much one community. The Blackville news would be so minimal that, you know, it's -- and so when we give news it's the valley that we're covering.
522 The city is news here. The centre of what we do is the city. We shop in Blackville and Miramichi. We come to the doctor here. We go to school here. We go to a lot of times church here. Most of what people do in Blackville is totally hooked to the city so it's basically -- in fact there is a movement because I was in enterprise in Miramichi to try to make it all one tax base.
523 And so there will be no less coverage for Blackville. There will just be more coverage for where the centre of the population that exists.
524 COMMISSIONER POIRIER: But you will keep your studios in Blackville, won't you?
525 MR. STEWART: We will do our best to do that. There will probably be a little bit of both.
526 I was addressing that -- didn't I already? Did I miss that in my presentation?
527 COMMISSIONER POIRIER: Well, I could have missed it.
528 MR. STEWART: No, I might just do -- we want to move here and, yes, keep some of our employees in Blackville and also have some here.
529 COMMISSIONER POIRIER: Okay. So you will have two studios?
530 MR. STEWART: You know how you connect with -- that's how we will do it.
531 COMMISSIONER POIRIER: Okay. But your main studio will be in...?
532 MR. STEWART: It will be both places if we can.
533 COMMISSIONER POIRIER: Both places equally?
534 MR. STEWART: Yes.
535 MR. LYNCH: It's possible when me, as a salesperson who is on the road who has to travel 35 minutes to get back to the studio, could do my show, it would create flexibility for staff.
536 COMMISSIONER POIRIER: Okay. And the antenna will be located on the church steeple?
537 MR. STEWART: No, we want to put a tower.
538 COMMISSIONER POIRIER: A tower?
539 MR. STEWART: Yes.
540 COMMISSIONER POIRIER: Whereabouts? Have you done --
541 MR. STEWART: Yes, we have already got a location. It's a big church property and we can put it behind it and we're all ready to go.
542 COMMISSIONER POIRIER: Okay.
543 MR. UNDERHILL: The engineering has been done.
544 MR. STEWART: Yes, the engineering has been done.
545 COMMISSIONER POIRIER: Yes? Okay, we are learning. That's good.
546 And you have -- and the antenna in Blackville is on the church steeple?
547 MR. STEWART: No.
548 COMMISSIONER POIRIER: No?
549 MR. STEWART: There is a tower there too.
550 COMMISSIONER POIRIER: It's a tower there?
551 MR. STEWART: Yes.
552 COMMISSIONER POIRIER: Okay. Nothing will change over there?
553 MR. STEWART: No, no. Blackville will get the same coverage. Hopefully in the future it will get better coverage too. We are a very spread-out population and so a small transmitter like that --
554 COMMISSIONER POIRIER: Okay. So do you plan to do something at a point to fill the gap in between those cities so the people who travel between those two will be able to follow your station?
555 MR. STEWART: Yes. Yes.
556 COMMISSIONER POIRIER: Yes, you plan it later on?
557 MR. STEWART: Yes.
558 COMMISSIONER POIRIER: Okay. You keep it secret.
559 COMMISSIONER POIRIER: I am trying hard, Madam Chair, to get some information but it seems it won't work.
560 Okay. Let's come back to a broader issue.
561 You talked a lot about the economy and what you're telling us it doesn't look good. Unemployment can reach 42 percent of the population. That's a lot. So do you feel there is room for a commercial radio station other than your radio station?
562 MR. STEWART: Oh, would you ask everyone to leave?
563 MR. STEWART: Another commercial station?
564 COMMISSIONER POIRIER: Other than yours.
565 MR. STEWART: I would like to say there is only room for us. That's kind of selfish.
566 But I have some figures there that we are planning on bringing in later if you would like for me to show them now?
567 COMMISSIONER POIRIER: Yes, go. Yeah, you have the opportunity right away.
568 MR. STEWART: We, as you know, live here and over the last few years we have lost a lot. If you would have come here in 19 -- I hate to say this, but in 1986 CRTC ruled there wasn't room for another station in Miramichi. I have the letter with me in fact. Somebody kept it. Not actually your letter but the business who signed at that time.
569 If you would have come here in '85 you would have seen an icebreaker going up and down that river. You would have seen a trainload of ore up here at the port. You would have seen -- the community would have smelled different.
570 COMMISSIONER POIRIER: Yeah.
571 MR. STEWART: There were seven mills closed here. We have lost $500 million out of our economy here.
572 COMMISSIONER POIRIER: Yes, but let's talk about the present and the future.
573 MR. STEWART: Right.
574 At present we are still on the very downside in our economy. Unemployment in Miramichi right today is 17 percent in this city.
575 COMMISSIONER POIRIER: M'hmm.
576 MR. STEWART: A local banker told me he missed his target last year by 55 percent. Yes, Eugene's business is growing and, yes, the mill has been bought but it's been traded a lot of times. The plywood mill has been changed hands a few times and it always goes back to it.
577 I don't know. We hope it starts. We want to be the positive voice but we have been through a lot here in Miramichi and our economy is certainly on a downturn.
578 COMMISSIONER POIRIER: But what about the new investment that Newcap related to, the opening of the mill, the airport development and the federal employment centre? What about these?
579 MR. STEWART: Yes, those are great. And we're glad. Those will produce a hundred jobs like the mill. We have lost thousands. We have literally lost thousands.
580 You know a sad thing happened here at Christmas. A planeload of grandparents were headed to Fort McMurray to watch their children open their Christmas presents.
581 Our population -- do you know for example the high school -- we have 200 graduating and 75 in kindergarten. That tells me something today that people have had to leave here. We hope they all come back in the future.
582 If you would come here in five years' time maybe this would be a totally -- we hope it will be a totally different place but it isn't yet.
583 COMMISSIONER POIRIER: So you are talking about the decrease of the population here in Miramichi and the surrounding?
584 MR. STEWART: Yes.
585 COMMISSIONER POIRIER: Okay.
586 Okay. Let's move to the CCD commitments, okay?
587 We have given you a chart and it's -- we will call it Exhibit No. 1. It is the in the exam room if you, the public needs it. It will be posted on the website tomorrow, okay.
588 And it's very simple. We just want to clarify what are your CCD conditions.
589 We believe it's "B" lane and as of a condition of licence you would see the black lane added to your licence if you get -- we accept your licence proposal. So it means you would add $500 the first year and $1,000 the next year for this licence term.
590 So I want you to confirm that "B" lane and the condition of licence written in black is the one that you proposed in this application.
591 MR. STEWART: You are talking about "C" or...?
592 COMMISSIONER POIRIER: I'm talking about "B".
593 MR. STEWART: "B", okay, yes. Yes.
594 COMMISSIONER POIRIER: It is the one?
595 MR. STEWART: Yes. I had a mistake there, didn't I?
596 COMMISSIONER POIRIER: Yes. Well, you wrote in some of your -- I think it's in your financial projections that it could be $1,500 per year.
597 So we want to make sure that you made a mistake there and that what you wrote on lane 8.1 in your application is the right thing.
598 MR. STEWART: Right.
599 COMMISSIONER POIRIER: Okay.
600 MR. STEWART: We always have exceeded what we have told you.
601 COMMISSIONER POIRIER: Yes.
602 MR. STEWART: But yes, that commitment.
603 COMMISSIONER POIRIER: And the total excess would be of $3,500 --
604 MR. STEWART: Yes.
605 COMMISSIONER POIRIER: -- over and above --
606 MR. STEWART: Yes.
607 COMMISSIONER POIRIER: -- the CCD basic commitments?
608 MR. STEWART: Yes.
609 COMMISSIONER POIRIER: Thank you very much.
610 Programming, okay. It appears to us that the programming proposed in your new station in Miramichi would essentially be the same as the currently being offered on CJFY-FM Blackville with a few variations. Am I right?
611 COMMISSIONER POIRIER: Is it the same as the one you have in Blackville?
612 MR. STEWART: For the most part, yes.
613 COMMISSIONER POIRIER: What is different?
614 MR. STEWART: There would be more local news. As we grow we will do better at news.
615 COMMISSIONER POIRIER: Okay, but in your documents you wrote 80 hours of programming per broadcast week will be local.
616 MR. STEWART: Yes.
617 COMMISSIONER POIRIER: What about the 46 hours left? Is it syndicated programming?
618 MR. STEWART: Our late night is of course not -- it's just -- well, I guess it's local too. Maybe I misunderstood that.
619 The only thing that won't -- that hasn't been local so far is a bit of our weekend stuff. The rest would -- maybe I have a wrong number there. I'll have to check that.
620 COMMISSIONER POIRIER: Could you check, because we would like to have the split of out of the 126 hours you are programming what is local programming, what is syndicated programming and where does it come from, Canada, United States? What is local news out of it?
621 MR. STEWART: Local news?
622 COMMISSIONER POIRIER: Yes.
623 MR. STEWART: Yes. It will be a high level, 80 percent local news.
624 COMMISSIONER POIRIER: Local programming is different from local news?
625 MR. STEWART: Yes.
626 COMMISSIONER POIRIER: Okay.
627 MR. STEWART: Okay, yes.
628 COMMISSIONER POIRIER: So I'm sure you won't have 80 percent of local news in the sense that news includes news, pure news, plus weather, plus traffic, plus publicity on events. You said it would be maybe hours of announcements.
629 MR. STEWART: Yes. Is that for news?
630 COMMISSIONER POIRIER: Well, what I have is what you wrote in your document, 3 hours of pure news --
631 MR. STEWART: Okay.
632 COMMISSIONER POIRIER: -- plus 5.6 hours of public service announcements, plus 17 hours of announcer talk.
633 MR. STEWART: Okay.
634 COMMISSIONER POIRIER: This leads to 25.6 hours, okay.
635 MR. STEWART: Yes.
636 COMMISSIONER POIRIER: And you said 80 hours of local programming. If I add those two it leads to 106 hours, but what about the rest?
637 You may take the time to find out --
638 MR. STEWART: Okay.
639 COMMISSIONER POIRIER: -- and write it down and give it to us by -- Eric, what date would be a good date?
640 MR. BOWLES: I would suggest that the end day today would probably be appropriate.
641 COMMISSIONER POIRIER: The end of the day today?
642 MR. STEWART: We will have that question in writing, will we?
643 MR. BOWLES: We can provide that to you.
644 COMMISSIONER POIRIER: Okay. Because we want to know what is on air, okay --
645 MR. STEWART: Yes.
646 COMMISSIONER POIRIER: -- as precisely as you can give us.
647 MR. STEWART: Yes.
648 COMMISSIONER POIRIER: Okay. And you may talk to the staff if you want to know the categories.
649 Do you want to add something?
650 MR. HALLIHAN: I think maybe what your question is about syndicated radio shows weekend programming, we do a lot of syndicated shows on the programming on the weekend with the exception to some hours on Saturday. A few programs are Canadian, with a Christian Top 20 countdown from Life 100.3 in Barrie, Ontario.
651 COMMISSIONER POIRIER: Okay.
652 MR. HALLIHAN: But as far as percent --
653 MR. LYNCH: Sorry. Also, as John mentioned earlier, we have added an all new show which is over an hour a week, just highlighting local artists.
654 COMMISSIONER POIRIER: Okay.
655 MR. LYNCH: I don't believe that is in the report.
656 COMMISSIONER POIRIER: This is local programming, but for syndicated programming we would love to know how many hours and the source of it.
657 MR. STEWART: Okay.
658 COMMISSIONER POIRIER: Okay? And if in pure news you include or not PSA, public service announcements --
659 MR. STEWART: Not in pure news.
660 COMMISSIONER POIRIER: Okay. So how many hours of public service announcements do you plan to do?
661 MR. STEWART: Isn't that five?
662 COMMISSIONER POIRIER: Five point six?
663 MR. STEWART: Yes.
664 COMMISSIONER POIRIER: Okay. So give us a full review of it.
665 MR. STEWART: Okay. Yes.
666 COMMISSIONER POIRIER: In terms of hours we would appreciate, because there is some missing part in it, okay.
667 Let's talk about your news.
668 In your application you mentioned that the new station would broadcast two different local newscasts each day. Out of 11 newscasts, how many newscasts do you plan to broadcast and will they be exacting the same between Blackville and Miramichi or will some be different?
669 MR. STEWART: No, they will be exactly the same.
670 COMMISSIONER POIRIER: Okay.
671 MR. STEWART: And they would be repeated, like two different newscasts repeated.
672 COMMISSIONER POIRIER: And during the weekends, will you add some news reports during the weekend?
673 MR. STEWART: We haven't said that. That would be a goal.
674 COMMISSIONER POIRIER: You plan it?
675 MR. STEWART: Yes.
676 COMMISSIONER POIRIER: When? For when?
677 MR. STEWART: I was going to say as soon as we can, but that's probably not good enough.
678 COMMISSIONER POIRIER: Usually we expect a broadcaster to broadcast news seven days a week.
679 MR. STEWART: Right.
680 COMMISSIONER POIRIER: Okay? This is our expectation. So we wonder if you plan to increase from five to seven days a week.
681 MR. STEWART: Yes, we do.
682 COMMISSIONER POIRIER: When?
683 MR. STEWART: April -- well, whenever. We don't know how long this is going to take, before you even get back to me.
684 COMMISSIONER POIRIER: Yes.
685 MR. STEWART: So within six months of when we are up and going.
686 COMMISSIONER POIRIER: Okay. So this is your final answer?
687 COMMISSIONER POIRIER: We are not playing Jeopardy, but is it your final answer or do you want to think about it?
688 MR. STEWART: Well, we could think about it I guess and get back to you later as well.
689 COMMISSIONER POIRIER: Yes. Later on today, okay?
690 MR. STEWART: Okay.
691 COMMISSIONER POIRIER: At the end when you give us the other information, it would be good for us to know when you plan to do that.
692 What about religious programming, okay. Up to now I think you broadcast two hours a week. Do you plan to increase that number of hours? Don't you broadcast the Sunday morning service?
693 MR. STEWART: Yes.
694 COMMISSIONER POIRIER: Is it the only religious programming you will have on-air if we --
695 MR. STEWART: We have one-minute programs or little ones like that. That's all we have, yes.
696 COMMISSIONER POIRIER: What do you mean?
697 MR. STEWART: Like Thought For The Day, Focus on the Family, those sorts of things.
698 COMMISSIONER POIRIER: Is it real religious or it's more a value...?
699 MR. STEWART: Most of it would be very value related.
700 COMMISSIONER POIRIER: Value related.
701 MR. STEWART: Yes.
702 COMMISSIONER POIRIER: So it's not religious in the --
703 MR. STEWART: No.
704 COMMISSIONER POIRIER: -- pure sense of religious?
705 MR. STEWART: No. No.
706 MR. NOWLAN: Focus on the Family is all about what we can do to help families. It's values-based for families and it doesn't come from a religious perspective.
707 COMMISSIONER POIRIER: Okay. So only two hours of real religious programming?
708 MR. STEWART: Yes. Yes. I don't hesitate to say that we are not there to preach, we are there to let our light shine.
709 COMMISSIONER POIRIER: Okay. So there will be a balance in the religious programming broadcast.
710 MR. STEWART: Yes.
711 COMMISSIONER POIRIER: Okay. Open line programming, do you intend to open the lines to the general public so they will talk on air?
712 MR. STEWART: Everything we would do that way would be recorded and played later.
713 COMMISSIONER POIRIER: Okay. So do you have some kind of -- do you have guidelines to make sure that what is on air respects our policy regarding open line programming?
714 MR. STEWART: Since we are not doing open line programming we don't have that in effect yet --
715 COMMISSIONER POIRIER: Okay.
716 MR. STEWART: -- but when we do, we certainly will.
717 COMMISSIONER POIRIER: Okay. If you do it, you know we need to --
718 MR. STEWART: Yes.
719 COMMISSIONER POIRIER: -- be aware that you have some guidelines.
720 MR. STEWART: Yes.
721 COMMISSIONER POIRIER: Okay.
722 Diversity, okay. Now that we have a better understanding of what you're doing and programming here, could you review the reasons why you believe your application would best contribute to the diversity of programming in the Miramichi market?
723 MR. STEWART: Well, I believe there is a real market for subcategory 35. As I have tried to show, it's not covered by anyone else, from stations outside the area. I suppose you could get it off satellite, but there has been no indication in any of the studies that people are doing that -- it's a part of our community.
724 We are local people and we are here to invest in the Miramichi and to help local Miramichiers and to help build business. When a business struggles we will often help them in every way we can because they are close to our hearts. I believe we are the best alternative because we are local, local, local, local, local and in the diversity we offer a slant on everything that comes through our station that unique to us in the fact that we don't -- like this morning I talked pretty negative about the community --
725 COMMISSIONER POIRIER: Yes.
726 MR. STEWART: -- I would never do that on-air and so we are here to encourage the Miramichi River Valley.
727 Eugene has a list of things there that I am involved in that we could talk about so that we could talk about how we do have a handle on this community, if you are interested in hearing that.
728 COMMISSIONER POIRIER: Yes.
729 MR. NOWLAN: From a leadership perspective sometimes a good leader takes us where we have to go and not where we want to go and it's important to hear some of these things that John is involved in as a leader of the radio station and give us a feel that he knows the pulse of the area. He has lived her for over 50 years, he has served on the Tourism Board which worked at developing tourism in the region;
730 he was Chair of the Economic Development Commission for the Miramichi and the Minister of Finance for the province;
731 he was a member of the Enterprise Miramichi Board;
732 he served on the Collaboration Miramichi, whose mandate was to bring all communities of the region together;
733 he Chaired and served on the Citizen's Advisory Committee for the Atlantic Institution -- that is our local prison -- dealing directly with the inmates and the wardens;
734 he Chaired a board which started literacy classes all over the region;
735 he was Co-Founding Chairperson for A Family Place established in centres all over Northumberland County;
736 the work with federal government in helping develop children and supporting families;
737 he established Meals on Wheels in central Miramichi;
738 he was Chairman of the Access Centre, a Committee to make computers available to the disadvantaged people in the area;
739 he established a group to clean up the Miramichi River of garbage and litter;
740 he sat on a committee to establish a park in Blackville area and he served on the Historic Society Board for Central Miramichi;
741 he sat on a board to establish a community chaplain program in the City of Miramichi;
742 he presently serves on the Social Inclusion Board helping the underprivileged of the area; and
743 he helped establish community youth groups and children's clubs working with street people and youth at risk.
744 John is from that background and that is what impressing me as a businessman. John has a handle on what's going on in the Miramichi. He has been involved in business, he can walk into any business in the Miramichi and I tell him in our company we have several hundred people working, he can walk in and he can talk to anybody and he understands what's going on.
745 Life Radio is -- John wants to says it's a category 35 station, but it's a voice in the River that knows the heart of the River.
746 COMMISSIONER POIRIER: Yes. Well, I hope you are in good health.
747 MR. STEWART: You are starting to sound like my wife.
748 THE CHAIRPERSON: They need you.
749 MR. STEWART: She is always saying that.
750 COMMISSIONER POIRIER: So let's talk about the staffing plans.
751 You have a staff of six persons?
752 MR. STEWART: Yes.
753 COMMISSIONER POIRIER: Full-time or part-time?
754 MR. STEWART: Part-time.
755 COMMISSIONER POIRIER: So how many are part-times, how many are full-time?
756 MR. LYNCH: There was three full-time and three part-time, but because of what I do, the music, I have taken a part-time position, but I am -- which is sort of full-time. I guess I'm on call a lot. So there is basically -- now there is two full-time and four-part time.
757 COMMISSIONER POIRIER: Okay. But this will be the plan for the new generation of this station?
758 MR. LYNCH: No.
759 COMMISSIONER POIRIER: You will keep the same plan or you will change?
760 MR. LYNCH: No, it will need a full-time manager, so it will definitely go back up to three full-time and three part-time.
761 COMMISSIONER POIRIER: Okay. So you will be seven then?
762 MR. LYNCH: No, that still remains six.
763 COMMISSIONER POIRIER: Still six.
764 MR. LYNCH: Yes. It needs full-time staffing.
765 COMMISSIONER POIRIER: Okay. What about the volunteer administrator? So this will --
766 MR. LYNCH: We have a lot of people that want to get involved as volunteers and it would be actually easier for them to access the station if we were in Miramichi.
767 COMMISSIONER POIRIER: Okay. So are you going to increase the number of staff or volunteers to provide the service you expect to provide with this new licence, if you get it?
768 MR. LYNCH: As John mentioned, we work at a modest budget and, you know, at some point as we slowly and steadily had a vision to grow the answer is yes, we would like to at some point staff more.
769 COMMISSIONER POIRIER: Staff or volunteers?
770 MR. LYNCH: Yes. Do more local.
771 COMMISSIONER POIRIER: Okay. Who is in charge for training the volunteers, because you have to ensure that they fully understand the Commission's regulations when they are on-air.
772 MR. STEWART: Most of our volunteers are not on-air, but if they are Ted would be training them.
773 MR. LYNCH: I have looked after and overseen and had hands-on with working with paid staff as well as volunteers.
774 COMMISSIONER POIRIER: Okay. So you are the one in charge of training volunteers?
775 MR. LYNCH: Yes. Yes.
776 COMMISSIONER POIRIER: Okay. You make sure that they follow all the rules that the CRTC --
777 MR. LYNCH: Yes. I have been with the radio station since its inception with how it began and it was such a positive project to Service New Brunswick that the station was actually recognized across Canada in Service New Brunswick magazine. They did an actual little story on it when we started up, it was so positive. A lot of people that were trained youth at risk with the station are maybe not with the station today, but the report is that they are all doing great. It was a great encouragement.
778 COMMISSIONER POIRIER: Okay. Let's talk about the audience from the Commission's point of view. Your audience projections appear optimistic. The economy is pessimistic, but the audience share seems to be very optimistic.
779 On what did you rely to provide us with those optimistic numbers?
780 MR. STEWART: We constantly survey the community. Three times since we have been here we have surveyed the community. Of course we are small so we conduct the survey ourselves, not radio station staff but somebody we would bring in to do that.
781 One survey that we did in the very beginning, we surveyed 700 people, which is a big stat for a small city, and 42 percent said they were listening at some point throughout the week.
782 As I talked to you about the culture of the place at the very opening about the big sub-category 35 thing, people are interested in what we are doing. That is inherent in our culture here. The fact that 200 women came here to pray for it, that's a percent of our population. There is a very big interest in family, we are a family-oriented city, and we are a relatively Christian culture.
783 COMMISSIONER POIRIER: Yes, but if your prognostic is so good, it means you might harm some other ratio stations that are already in the market. I think MirAcadie, okay, who is in the market who I think of the other commercial radio station. So where will get that audience from?
784 MR. STEWART: Since we already have a transmitter here there won't be a major shift because we are already serving this community. I think there are tons of people who don't listen to radio now that are interested in what we have to offer them. So I think we bring in a new market.
785 I can't see us hurting the Francophone population at all that way because they serve that very well.
786 COMMISSIONER POIRIER: So will your numbers be the same if we also accept another commercial radio station in the market? I come back to it.
787 COMMISSIONER POIRIER: Will you survive --
788 MR. STEWART: It would be difficult.
789 COMMISSIONER POIRIER: -- if we do it this way?
790 MR. STEWART: It would be difficult. We will survive. We say we have God on our side and that's a pretty big thing, but we will survive, yes, but it will make it a lot more difficult.
791 COMMISSIONER POIRIER: If we say no to your application, if we say we refuse it, what will happen to your station?
792 MR. STEWART: It's very hard to keep going from Blackville. I love the community and I want it there. You know, when I first started everybody said you should start in Miramichi, but it has to come here -- I have come to that conclusion over the time that I have been involved -- in order to be sustainable.
793 COMMISSIONER POIRIER: So if we say no, will you close down the station in Blackville?
794 MR. STEWART: I would only do that if I really, really had to. Like we are working with volunteers and all of that, but it would create hardship for people with us.
795 COMMISSIONER POIRIER: Okay, so I'm done, Madam Chair. I will let you go on with the other Commissioners.
796 Thank you very much for your openness.
797 THE CHAIRPERSON: Thank you, Madam Poirier.
798 Commissioner Denton...?
799 COMMISSIONER DENTON: I have no questions, thank you.
800 THE CHAIRPERSON: I do have a few questions.
801 I'm just wondering, it appears to me listening to the discussion that the station now is actually a Miramichi station. For all intents and purposes it sounds to me like it is now a Miramichi station. You know, when I started looking at this application I thought it was a Blackville station, but you speak of it as being one community.
802 MR. STEWART: Yes.
803 THE CHAIRPERSON: And even though there is that gap between Miramichi and Blackville when we look at the maps that Commissioner Poirier was talking about, you still talk in terms of as though it's really in the Miramichi.
804 MR. STEWART: Yes. The Miramichi River Valley is a kind of a homogeneous community. Like I said earlier, we shop here, we go to the doctor here, everything is done -- go to school.
805 THE CHAIRPERSON: Okay.
806 MR. STEWART: You know, we do have a school in Blackville, but a lot of our young people come here.
807 THE CHAIRPERSON: Just for interest, the six of you at the table, how many of you live in Blackville?
808 MR. STEWART: It might be a good question to ask how many live in Blackville or were born in Miramichi because we --
809 THE CHAIRPERSON: I guess I'm just trying to get in my own head, you know --
810 MR. NOWLAN: Miramichi?
811 THE CHAIRPERSON: Yes, Miramichi.
812 MR. STEWART: I live in Blackville.
813 MR. LYNCH: I married into Blackville.
814 THE CHAIRPERSON: Married into.
815 MR. HALLIHAN: And I live in Blackville as well. I was born in Newcastle.
816 THE CHAIRPERSON: Okay.
817 MR. UNDERHILL: I live in Miramichi.
818 MR. WATLING: Yes, I live in Blackville, was born in Miramichi.
819 THE CHAIRPERSON: Okay. That's interesting. Yes, that's interesting.
820 So just to clarify, because I don't think I have a clear answer, if I went to work for your radio station today, I would work in Blackville; correct?
821 MR. STEWART: Yes.
822 THE CHAIRPERSON: I would physically work in Blackville?
823 MR. STEWART: It would depend on what you were doing. Right now as it is, yes.
824 THE CHAIRPERSON: Yes. So I notice there is a letter in the file where the church here on Beaverbrook Road has given you permission to use a room in their facility for a studio.
825 MR. STEWART: Yes.
826 THE CHAIRPERSON: So will you be originating programming both here in the Miramichi and in Blackville or closing one or the other -- or closing the Blackville?
827 MR. STEWART: I pastor that church as well so yes, there is room there. What we will try to do is keep some staff in Blackville. You know how you hook up LogMeIn-types of things --
828 THE CHAIRPERSON: Yes, yes.
829 MR. STEWART: -- and we will work that way.
830 THE CHAIRPERSON: So technology will allow you to do all of that.
831 MR. STEWART: Yes.
832 THE CHAIRPERSON: Okay. So both locations?
833 MR. STEWART: Yes.
834 THE CHAIRPERSON: I think that's what you were mentioning before, that it's more convenient if you are on the road. You might want to go into Miramichi to the Beaverbrook location and --
835 MR. LYNCH: That's right. People who want to get involved, some can't. I had an aboriginal fellow who wanted to -- you know, we wanted to work with him to kind of encourage him. He was interested in radio and, you know, he couldn't really -- it was an hour and a half drive pretty much from where his home was at the time and too far for him to get involved and he just couldn't be involved because it was too far to go to Blackville, but Miramichi would definitely be -- is the centre of this area.
836 THE CHAIRPERSON: Okay. Just going to the discussion you were having with Commissioner Poirier about the hours, the standard broadcast week is considered 6:00 in the morning until midnight seven days a week, so that's 18 hours a day times 7 days a week, 126 hours. So Lyne Cape -- I'm sure she will be happy to help you, I know she was talking to you earlier -- she will maybe help explain to you what we are looking for there and then we are hoping that you can come back in the reply phase, which will be the last phase of the hearing today, depending on how the hearing progresses. We had it scheduled for 4:30, but it might be earlier, it just depends on how time goes, but you could check with Lyne and she will make sure that you understand what it is we are looking for there. Okay?
837 MR. STEWART: Are you looking for people in the station until midnight?
838 THE CHAIRPERSON: No.
839 MR. STEWART: No?
840 THE CHAIRPERSON: No, not necessarily. We are just looking to know how you fill those hours, that's all. She will explain it to you.
841 So we are not asking you to change anything, we are just trying to understand, that's all.
842 The other thing -- I'm just reading my notes here -- I notice that in Decision 2003-613 when you were initially licensed, it indicates that you were proposing 90 hours per week of local programming and now it's 80 hours. Has it been 80 hours for a long period of time?
843 MR. STEWART: It's probably 90 and that's why I think we need to go and research that.
844 THE CHAIRPERSON: Okay. All right then, because we are showing this application is 80 hours.
845 MR. STEWART: Right.
846 THE CHAIRPERSON: Okay. So if you could talk to Lyne, that would be helpful.
847 MR. STEWART: Okay, that's good.
848 THE CHAIRPERSON: Okay.
849 So are there any other questions? Legal or...? No. Okay.
850 Thank you very much. I think we are going to break now.
851 What time would you like us back?
852 THE SECRETARY: We will break for lunch and we will be back at 1:00 p.m.
853 THE CHAIRPERSON: Thank you.
854 Thank you very much. Thanks.
--- Upon recessing at 1126
--- Upon resuming at 1300
855 THE SECRETARY: We will now proceed with Item 3 on the agenda, which is an application by Maritime Broadcasting System Limited for a broadcasting licence to operate an English-language commercial FM radio programming undertaking in Miramichi.
856 Please introduce yourself and your colleagues. You will then have 20 minutes to make your presentation.
857 Thank you.
858 MR. PACE: Madam Chair, members of the Commission, welcome to Miramichi.
859 My name is Robert Pace and I am the Chairman and owner of Maritime Broadcasting System Limited. I am proud to introduce our team for today's hearing.
860 Seated to my far right is Anne Woods, General Sales Manager of 99.3 The River, here in Miramichi.
861 Next to Anne is Jim Meredith, our Chief Financial Officer.
862 To my immediate right is Stephanie MacFarlane, a former resident of Miramichi and our Vice-President of Sales.
863 To my immediate left is Garry Barker, Vice-President of Programming.
864 To Garry's left is our morning show host of 99.3 The River, who hopefully you woke up with this morning on the radio, Michelle Roy.
865 We appreciate that the CRTC has chosen Miramichi for this hearing. Our team is excited to have you consider our application for a new country FM radio station for this beautiful but economically challenged area.
866 Maritime Broadcasting System, or MBS Radio, is a Maritime-owned and operated radio company, with radio stations in small and medium markets in New Brunswick, Nova Scotia, and PEI.
867 From its beginnings in Campbellton, New Brunswick, MBS has evolved into a truly regional broadcaster. We operate radio stations in larger markets, such as Halifax and Moncton, and many smaller communities, including Sussex, Amherst, and here in the beautiful Miramichi.
868 We have the vision, resources, expertise, and experience in providing local, relevant broadcasting in challenging markets, one of which is right here.
870 MS WOODS: Thank you, Robert.
871 While we are obviously applying for a new FM licence to serve Miramichi, I would like to briefly tell you a little about our current radio station, 99.3 The River, and its outstanding and unique community service.
872 99.3 The River is the voice of greater Miramichi and has served the community for more than 60 years.
873 We hold annual barbecues at our studio location for local chapters of the Parkinson's Society, the Make-A-Wish Foundation, the Relay for Life, and the CNIB.
874 We air live Sunday church broadcasts.
875 We announce births and deaths.
876 We do post-game interviews with the players and coaches of the Miramichi Timberwolves, our team in the Maritime Junior A Hockey league.
877 Our cruiser covers all major festivals and events throughout the year with live, on-location reports.
878 And, most of all, we are proud of our record of providing the public regular access to our airwaves. We don't just read liner cards promoting an event, we get local organizers and volunteers on the air with us to promote their cause or function.
879 When we air Drinking and Driving public service announcements, we don't use a standard nationally produced announcement, we invite each and every member of the Miramichi Police Force into our studios to record individual announcements. Thus, every person of the 30-plus member force, from the dispatcher to the chief, and every person in between, is on the air.
880 If there is a traffic accident, perhaps involving a car or a hydro pole, we contact the police and put them on the air with the latest details, including street closures.
881 In recent years, we have held radiothons for the benefit of the local Hospital Foundation, which raised in excess of $80,000, and for the Haitian post-earthquake relief efforts, which raised more than $20,000.
882 We encourage as many guests as possible to appear regularly on our station, so that we are truly the voice of the community.
883 The River also airs a very popular weekly Sunday morning musical program, Home Brew. This two-hour request show features local and regional artists, including Gabe Lapointe, George Paul, the Miramichi Fiddlers, the Pubdogs, Mavis O'Donnell, Adam Jardine, and Ron Mazzerole.
884 99.3 The River is your community, your station. We are excited to build upon this wonderful past and, with the greater resources of additional staff with a second radio station in Miramichi, our community reflection will be enhanced significantly.
885 MR. BARKER: Allô. Bonjour. Bienvenue à Miramichi.
886 Our new FM radio station will repatriate a larger percentage of out-of-market tuning. Country listeners will be able to listen to country music with a strong local and regional flavour, in their hometown.
887 This music will be just one component of our made-in-Miramichi radio station. More in-depth news, increased coverage of municipal and rural councils, and spoken word focused on the Miramichi target audience of 25 to 54 will be a true reflection of their local tastes and interests.
888 We have a proven track record in Miramichi. Let us build on this legacy.
889 The Miramichi community supports our efforts in launching a new station in a country format, as demonstrated by our letters of support and by community intervenors.
890 As a true reflection of the diversity and culture of Miramichi, the station will offer a contemporary mix of country hits, along with specialty programs featuring older country classics and Maritime favourites.
891 Our format-finder research was conducted in August and September of 2011. A total of 322 participants completed an on-line questionnaire, with a choice of four format offerings. The overwhelming choice for a new radio station in Miramichi was country.
892 This preference was further solidified with the release of the Fall 2011 BBM reach book, showing 67 percent of all out-of-market tuning going to country stations in Moncton, Saint John, and Shediac.
893 After an extensive evaluation of both local/regional and Canadian country artists and libraries, we are proud to commit to a CanCon level of 42 percent weekly. This will be for both 6:00 a.m. to 6:00 p.m. on weekdays and 6:00 a.m. to midnight weekly.
894 We further commit to ensuring that 30 percent of our Canadian content selections will be local or regional. This is a significant additional commitment. For further clarity, out of 100 songs played, 42 will be Canadian content. Of these 42 songs, 12 or 13 will be local or regional.
895 Canadian artists will include Terri Clark, Johnny Reid, Paul Brandt, and George Canyon, while local and regional artists to be featured will include the Pubdogs, Eddie Vautour, and Connie and Paul.
896 Our new FM will also feature other well-know artists, including Keith Urban, Garth Brooks, Kenny Chesney, Lady Antebellum, and Brooks and Dunn.
897 MBS Radio is also committed to supporting new, emerging Canadian artists, and we intend to broadcast a minimum of 4 percent of all musical selections in this category, based on the definition included in the CRTC Broadcasting Regulatory Policy 2011-316.
898 Our new FM will regularly provide live artist interviews to touring musicians who may be in the Miramichi area to promote their music and live performances. Local emerging artists will also be eligible for up to $5,000 in complimentary commercial airtime to promote a new release or their upcoming live performances.
899 To further enhance our "Made-in-Miramichi" sound, two music specialty programs will resonate with local input. The Saturday Night Kitchen Party will be a three-hour request show, featuring a blend of local and regional artists and classic country songs.
900 An accurate description of the essence of this program would be traditional and local recordings. This feature will be similar to our Saturday Night Hoedown program, which has aired continuously on our sister station CFCY in Charlottetown for over 60 years.
901 On Sundays, our new FM will air the East Coast Top Ten, featuring new and emerging country artists from the Maritimes in a countdown format.
902 Locally produced spoken word during this program will highlight feature interviews and background information on the featured artists and songs.
903 MBS is proud to operate some of the most successful country radio stations in Canada, including CHFX in Halifax, CKEN in the Annapolis Valley, and CFCY in Charlottetown.
905 MS MacFARLANE: Thank you, Garry.
906 We want to play a major role in the development of local emerging talent through airplay, advertising, promotion, and through our local Canadian talent development initiatives.
907 MBS Radio is committing $10,000 yearly above the basic Canadian Content Development requirement, for a total of $70,000 over the first licence period, for the following three initiatives.
908 To support the ongoing development of journalism and music in the Miramichi region, our new FM will offer an annual $4,000 scholarship to a graduating high school student from District 16. The scholarship committee from the Miramichi Valley Region, District 16, will review applications and select a recipient who is entering a program in the field of journalism or music at a recognized post-secondary educational institution.
909 MBS Radio will also supply annual funding to Music New Brunswick. This is a provincial music industry association that provides support for musicians who are involved in the creation of music within the province. Our $4,000 annual contribution will be used for Songwriter Circles in Miramichi, along with payment of services for area musicians participating in concerts or performances in the Miramichi area.
910 Our third initiative above the minimum CCD commitment will provide $2,000 annually to FACTOR, with the funds being used in New Brunswick.
911 These initiatives exceed the Commission's basic Canadian Content Development requirements by $70,000.
912 MR. BARKER: With respect to our programming beyond music, local news will be our priority and will be reflected in each of the more than 60 newscasts airing weekly.
913 A minimum of 70 percent of news content will be from the greater Miramichi area, along with 20 percent provincial content.
914 Our new FM will bring greater resources and synergies to cover and report, in more detail, events and causes important to residents of Miramichi and, in particular, our core audience.
915 We are committed to the extensive promotion of local events, activities, and causes through a daily Community Calendar. This 90-second feature will air 28 times weekly.
916 It will be mandatory that every hour of programming have local content. Local content will include community activities, fundraisers, service club information, road construction and travel conditions, sports, weather, school bus delays, storm closures, birthdays, and anniversaries.
917 Our programming mission is to be a leading radio station in Canada by truly reflecting the people, character, and culture of the greater Miramichi region.
918 MS MacFARLANE: We are proud of our application for a new FM. I can tell you from personal experience, as a past resident of Miramichi who lived here in the good times, that this area's economy is currently very fragile.
919 The Miramichi area has seen a number of downturns in the past 10 years, with the loss of thousands of jobs, particularly in the forestry and mining sectors.
920 Reduced radio revenues by MBS Radio are symptomatic of these problems. The important economic indicators for the area, such as building permits, unemployment rates, aging and declining populations, are not positive trends.
921 Given the state of the local economy, we are in the best position to introduce programming diversity, without creating undue negative financial impact on the existing radio service.
922 It is possible for MBS Radio to provide a second viable radio service in this market by realizing efficiencies and maximizing synergies with our existing radio station.
923 In just the past 10 days we were approached by the Mount Saint Joseph Foundation in Miramichi to assist with a major fundraising campaign. The Foundation's mission is to enhance life at the Mount Saint Joseph Nursing Home, home to 131 residents. Here are some of the direct quotes from their written presentation to our radio station, which can be found as Appendix 1 to this presentation.
"The economic situation has been stagnant for the past five years with the closure of the major industrial businesses in the area. Many of the young workers between the ages of 30 and 55 are employed in other parts of Atlantic Canada or in western Canada. In the past twelve months there has also been an exodus of young families as spouses have chosen to relocate to maintain the family home environment."
924 A further quote:
"The economic base is at best suffering, partly due to the global economy and the inactivity of the industrial sector. The population is aging and there is a lower than average household income in the Miramichi compared to the rest of the Province of New Brunswick."
925 MR. PACE: The granting of a competing new FM station will have major consequences on the capacity of our company to maintain the existing level of service.
926 One of today's applicants has presented unrealistic and overly optimistic economic assessments and projections for the Miramichi economy. Interestingly, the two local operators, who are intimately involved in the local area, understand the economic challenges that this area is presently facing and the impact on existing operations.
927 We present to the Commission the FM Markets projections for 2011 for Miramichi and a comparison relative to Canada, the Province of New Brunswick, and other communities. The attached chart at Appendix 2 clearly shows an alarming variance between Miramichi's retail sales per capita as a percentage of per capita income. This is very important to review because it is the foundation in the calculations to determine the total estimated radio revenue for Miramichi. This evidence clearly shows that Miramichi is not capable of supporting two competing FM commercial radio stations.
928 If the Commission decides that an additional commercial radio service can be supported in this economically fragile market, we suggest that it be guided by its numerous past decisions of licensing local or regional broadcasters over a national broadcaster. Appendix 1C of our Supplementary Brief provides a list of communities where there is one local commercial radio operator.
929 We believe that there are five key reasons why Maritime Broadcasting System is the preferred applicant for a new FM licence to serve Miramichi.
930 First, our application responds to the demand for a local country radio station. Our application far exceeds the minimum Canadian Content requirements and ensures significant weekly airplay of local and regional musical artists. We will repatriate out-of-market tuning with an exciting mix of contemporary and classic country with a truly local feel and essence. MBS Radio knows country music and has the most listened to radio stations in Halifax and the Annapolis Valley of Nova Scotia, and in Charlottetown, Prince Edward Island.
931 Second, with an expansion of resources, our new FM country radio station will feature more than 60 newscasts weekly, with a minimum of 70 percent local content. We will cover and report in more detail on events and causes important to the residents of Miramichi and, in particular, our core audience. In addition to the 60-plus weekly local newscasts, we are committing to strong additional spoken word content that will truly reflect the people, character, and culture of the greater Miramichi region.
932 Third, we have an intimate knowledge of this community. We are the broadcaster in the best position to cultivate further relationships with community organizations, events, and festivals, to ensure a greater presence and a higher profile.
933 Fourth, we are offering meaningful local Canadian Content Development initiatives that far exceed the Commission's basic requirements.
934 Finally, we believe that ownership of Canadian broadcasting must include smaller, independent, regional broadcasters. Just as small business contributes to job creation and growth in the Canadian economy, smaller broadcasters contribute to the growth and development of Canada's broadcast system. Maritime Broadcasting is an independent local licensee, with a realistic business plan that will not only ensure that we meet our commitments, but will facilitate the production of high quality programming that is reflective of the Miramichi area and its cultural diversity. At the same time, we will make a substantial contribution to Canadian musical talent, particularly with local and regional artists, by committing to 12.6 percent weekly airplay. Our plan will provide for financial viability without material impact on existing radio stations, and we will increase the diversity in news, spoken word, and musical formats.
935 Thank you.
936 THE CHAIRPERSON: Thank you, Mr. Pace.
937 Commissioner Denton will lead off the questioning.
938 COMMISSIONER DENTON: Good afternoon, ladies and gentlemen.
939 I might point out for everyone in the audience that Appendix 2 is presented, and this will be available in the Public Examination Room for other parties.
940 Since the core of your economic argument seems to be based on Appendix 2, can you take me through it slowly?
941 I see, in the first block here, you are showing that you compare retail sales per capita to per capita income.
942 Am I led to infer here, then, that when you have retail sales per capita at $22,800, and per capita income at $25,200, essentially that means that there is very little left over for mortgages and every other kind of expenditure?
943 MR. PACE: Correct. It allows you $2,400 to pay your rent, your mortgage, and everything else.
944 So my argument is that this 90 percent ratio is an anomaly.
945 COMMISSIONER DENTON: Yes.
946 Let's go to the second box, the estimated Miramichi radio revenue calculation. Can you take me through that, please?
947 MR. PACE: What we put forward in our application is that, if you look at the actual -- because, let's not forget, FP Markets projections are simply projections. So we went to your actual revenues for all of the radio stations in New Brunswick, and then we looked at the total retail sales in New Brunswick, and we came up with a ratio of between .29 percent and .31 percent in 2010.
948 What we are saying is, the ratio of .3 for the New Brunswick market is far more accurate than what Newcap is presenting at .5. They are using the .5, which is a national figure, and suggesting that that is what is used in Montreal, Toronto, Edmonton and Calgary.
949 We are suggesting that Miramichi is not Montreal, Calgary or Edmonton, and that a more factual and accurate picture would be .30.
950 COMMISSIONER DENTON: Granting the truth of your ratios, can you take me down each column?
951 You have two columns here, one based on FP Markets projected retail sales, and then you have the right-hand column, based on FP Markets percentage of retail sales per capita to per capita income.
952 Tell me about the difference between these two columns.
953 MR. PACE: On the first one, you look at the per capita of $22,800.
954 COMMISSIONER DENTON: Yes.
955 MR. PACE: We are saying that if you go to the top box, a more realistic number to use would be the New Brunswick average, which is 51 percent, rather than the 90. And even in Canada it's 39. In Moncton, which we all would agree is the retail capital of New Brunswick, which attracts all of the tourism numbers, whether it's Magnetic Hill or the new casino, which would generate significant -- their number is 50.
956 But the whole of New Brunswick number is 51, so we are suggesting that the number that would be appropriate for Miramichi would be the 51, and if you factor that in, then the total market, by these estimates, which are actual numbers, not projections, would be close to $1 million for the market.
957 COMMISSIONER DENTON: What my mind is trying to understand is, what is the difference in the two columns, one to each other?
958 Does this establish a range between 1.689 and .955?
959 What is the significance of the difference between these numbers?
960 It may be self-evident to you, but what is the story being told by these two columns?
961 MR. PACE: That's fair.
962 I would ask Jim Meredith to speak to that.
963 MR. MEREDITH: Thank you, Robert.
964 The first column is the financial projection market for FP Markets. They are projecting $22,800 in retail sales per capita.
965 COMMISSIONER DENTON: Yes.
966 MR. MEREDITH: The next column over is $12,900. That is our assumption, based on using the New Brunswick percentage of retail sales per capita to per capita income of 51 percent, multiplied by the per capita income of Miramichi of $25,200.
967 COMMISSIONER DENTON: Okay. Therefore, is it your contention that the right-hand column is the more realistic one?
968 MR. MEREDITH: That's correct, yes.
969 COMMISSIONER DENTON: From this, therefore, we derive what?
970 MR. MEREDITH: That the estimated radio revenues for the market are approximately $1 million for Miramichi.
971 COMMISSIONER DENTON: As opposed to nearly 1.7.
972 MR. MEREDITH: That's correct, yes.
973 COMMISSIONER DENTON: Okay. Good.
974 MR. PACE: We point this out because, in the Supplementary Brief that Newcap presented, they estimated that the market was 2.5. Interestingly enough, this morning it dropped to $2 million in the oral presentation.
975 Our pitch is, clearly, that we are trying to look at actual numbers. Your numbers, from the CRTC, for the whole Province of New Brunswick, are actual numbers. The StatsCan numbers for retail figures are actual numbers. What we are suggesting is that the Miramichi FPI projections are questionable in this instance.
976 COMMISSIONER DENTON: Well, in fact, in that case why did you use the New Brunswick 51 percent level rather than the Miramichi 90 percent level?
977 MR. PACE: Well, if you use the 90 percent level it will lead to a much, much higher number of retail sales.
978 COMMISSIONER DENTON: Yes.
979 MR. PACE: Which we don't think exists in this market.
980 COMMISSIONER DENTON: Right, so using the lower ratio you think you're establishing a more realistic ratio.
981 MR. PACE: Yes.
982 MR. BARKER: I might add, Commissioner Denton, that the 0.3 percent is representative of all of the New Brunswick radio revenues for 2010, relative to sales.
983 COMMISSIONER DENTON: Okay. I think your point is made.
984 MR. PACE: Thank you.
985 COMMISSIONER DENTON: So I'm going to go back to -- and I am going to start here with Canadian content and then we'll move through the usual topics in order and finally ending up back again at finance. So we are here now at the CanCon portion of the questioning.
986 You stated on page 9 of your supplementary brief that you will devote 42 percent of your musical selections from content Category 2, popular music, to Canadian musical selections broadcast in their entirety. This level will apply to the broadcast week as well as during the period between six a.m. and six p.m. Monday to Friday.
987 And you further state that 42 percent -- a minimum of this 42 percent -- a minimum of 30 percent of Canadian content selections will be from local and regional artists.
988 You conclude by saying that you are fully prepared to accept these commitments as conditions of licence.
989 However, we haven't got your definition of local or regional. So for the sake of being super, abundantly clear we would like them.
990 MR. PACE: Thank you for the question.
991 Our definition that we propose to use in using these calculations to come up with the numbers, we are striving for 50 percent Miramichi and broadcast area to be defined as local.
992 So 50 percent Miramichi and broadcast area local; the remaining 50 percent regional, meaning New Brunswick -- the remainder of New Brunswick, PEI and Nova Scotia.
993 COMMISSIONER DENTON: Right.
994 Okay, good. This is the question of emerging artists and commitment to the same. The question arises from mathematical calculations.
995 In section 8.4 of your application you have committed to devote by condition of licence a minimum level of 4 percent of musical selections to emerging artists per broadcast week. On page 9 of your supplementary brief you seem to indicate otherwise.
996 More specifically, in terms of Canadian content commitments, you state that you will devote 42 percent of your musical selections from Category 2, popular music, to Canadian musical selections, broadcasts in their entirety and of this 42 percent a minimum of 30 percent of Canadian content selections will be devoted to local and regional artists.
997 You then specify that you will devote 25 percent of these selections to selections from emerging artists.
998 Now, according to our staff calculations this would translate into 3.1 percent commitment to emerging artists per broadcast week as opposed to 4 percent commitment, so inquiring minds want to know whether it's 3.1 percent or 4.
999 MR. BARKER: I love these math questions.
1000 COMMISSIONER DENTON: I know. You probably did well with them in school.
1001 MR. BARKER: I will leave that for a little bit later to be determined.
1002 If we were to use 100 songs that were played on the radio -- I think this might be the easiest way for us.
1003 COMMISSIONER DENTON: I think the point is your application is being carefully reviewed by experts.
1004 MR. BARKER: And I do very much appreciate that and I guess the thing that concerns me, Mr. Denton, is that I really saw Ms Duncan using the highlighter a lot so I think she has got a fair bit with us as well.
1005 Of 100 songs 42 will be Canadian content. 12 to 13 will be local or regional of which three or four would be emerging artists. 30 of those CanCon songs will be non-regional of which 1 would be an emerging artist.
1006 So if I was to make this into a sentence that hopefully makes sense at least to myself, in this example we would have four or five emerging artists selections out of 42 CanCon which would be more than 10 percent of all CanCon and 25 percent of local regional would be emerging artists.
1007 COMMISSIONER DENTON: And the disparity is explained -- say that last sentence again.
1008 MR. BARKER: Sure. So in this example we would have four or five emerging artist selections out of 42 CanCons which would be more than 10 percent of all CanCon being emerging artists.
1009 COMMISSIONER DENTON: Okay. So, clearly, when we are thinking of 3.1 or 4 we're not getting -- this is the picture and we can ignore that. Thank you.
1010 The next set of questions relate to personnel and what you are going to do with them.
1011 Aside from stating that you intend on hiring at least one news reporter and two on-air announcers you have provided few details in terms of your staffing plans.
1012 Could you therefore review with us the number of employees you intend to hire, taking care of specifying what role each of these will be?
1013 MR. BARKER: Sure. Thank you, Mr. Commissioner. I just have -- my relevant sheet.
1014 In terms of proposed staffing for our new country FM it would be an additional two fulltime on-air announcers, two fulltime news staff, one fulltime promotion/community liaison coordinator and one part-time announcer.
1015 COMMISSIONER DENTON: Good, thank you.
1016 In terms of synergies of the staff level you had specified that the two stations would share technical staff and management. Could you elaborate on this and provide us with the number of employees this entails as well as their positions which will be shared with CFAN-FM Miramichi?
1017 MR. BARKER: I can tell you that in terms of our combined staffing, if I could deal first if you don't mind, with just the on-air components and within the building?
1018 COMMISSIONER DENTON: Sure.
1019 MR. BARKER: We would have a combined staff of five fulltime announcers, three fulltime news, two sales, one promotion/community liaison officer, one general sales manager and three part-time announcers.
1020 In terms of synergies our accounting, invoicing and traffic logs would be generated from Moncton.
1021 COMMISSIONER DENTON: Where in fact they are already those people, so you're --
1022 MR. BARKER: Correct.
1023 COMMISSIONER DENTON: -- basically back office will be and continues to be in Moncton.
1024 MR. BARKER: M'hmm.
1025 COMMISSIONER DENTON: So then if I do, do the addition of what you propose for the new, you have got -- I see five fulltime for the new one and one part-time. And these would be -- and then for the combined staff I see five, three, two; so eight, 10, 12 fulltime and three part-time.
1026 MR. BARKER: You're correct.
1027 COMMISSIONER DENTON: So subtracting one from the other we get what's left.
1028 MR. BARKER: Correct.
1029 COMMISSIONER DENTON: Thank you.
1030 COMMISSIONER DENTON: Just to be clear, these anticipated synergies including ones from your regional stations, you have taken them into account in preparation of your financial projections?
1031 MR. MEREDITH: Yes, that's correct.
1032 COMMISSIONER DENTON: Good.
1033 So, diversity: Can you review with us the reasons why you believe that licensing of your application would contribute to the diversity of programming in the Miramichi market and, more specifically, in terms of what is currently being offered on your existing station CFAN-FM?
1034 MR. BARKER: Thank you for the opportunity.
1035 COMMISSIONER DENTON: Well, we like to let you have a pitch.
1036 MR. BARKER: I appreciate that.
1037 As is mentioned, 12.6 percent of all weekly airplay will be local/regional so that's one huge thing.
1038 Obviously, the demand for a country format is extremely strong. I believe that if you had the opportunity to listen to the lady on my left, Michelle Roy this morning, even in just the 45 minutes I listened to her this morning, the spoken word in the content was such that I don't hear it in many other markets.
1039 So that for example, I didn't count but I would say we had 20 birthday announcements on it, of which those 20 birthday announcements at least five or six were from and featured listeners on the air. That's different.
1040 Then, if we go five minutes later we have an interview that goes for four or five minutes with the organizer of the upcoming ice pond hockey tournament which starts in Miramichi on February the 3rd talking about everything from teens, registration, deadlines; the ice conditions last year relative to what the ice conditions are forecast for this year.
1041 Those are two integral points. But if I was to say what is this station going to bring differently, obviously the first and foremost thing is the format. The music will be significantly different than what our current offering is.
1042 But, if I could maybe go just a little bit more in detail in terms of a major news event that unfortunately made national news several weeks ago, and that was the recent fire in nearby Rogersville, and where diversity of our existing station and our proposed new FM could be truly reflected, the January 6th fire destroyed the municipal offices including the fire station.
1043 So while one station can report on the fire, the investigation, the immediate concerns including fire fighting resources available after the fire, the other station could report on the specific losses incurred as a result of 40 years of town documents being destroyed.
1044 Miramichi's fire department has rearranged its fleet to supply Rogersville with a truck and breathing apparatus and the Jaws of Life.
1045 This is just one example, I think, of a story having so many different sub-plots it could be reflected upon and focused on by two of our radio stations.
1046 COMMISSIONER DENTON: Let's talk about money again.
1047 Obviously, the story being told here is that Miramichi's economic base has seen better days and we hope to see them again better. But right now things are not so great. Therefore, it bears on the question of whether the place can support one station or two -- I mean commercially -- and what's going to happen when you have -- if you have two.
1048 So let's just start with the effect of two stations on yours. I would like to ask you why Maritime projects that a considerable portion of its projected 33 percent share for a new country music station would come at the expense of your existing station.
1049 Is this realistic and, if so, is it desirable?
1050 MR. BARKER: I can start this if you wish, Robert, in terms of --
1051 MR. PACE: Okay.
1052 MR. BARKER: -- how do we determine what the share would be. And we used BBM for this, Bureau of Broadcast Measurement, of which Newcap and Maritime Broadcasting are both members.
1053 In the BBM Fall Reach book of 2010, if we look at Northumberland County, the "Others" represented 61.3 percent of all tuning. Others equals the amount of radio stations that are not subscribers to BBM.
1054 So any measured station with at least a one share will show in that Reach book. The only other radio station that we estimated would have any kind of reasonable share that was a non-BBM subscriber was CKMA.
1055 So we were estimating that 90 percent of that "Others" would be CFAN which equates to a 55 share.
1056 Our projected 12+ share for the new FM current out of market country tuning, when we filed the application, showed CJSC and CJXL combined with 18.1, both country stations.
1057 e projected what we believe is a very reasonable figure in terms of audience movement, a tuning shift from CFAN to country as being 15. If we use the 18.1 for CJSC and CJXL with the 15 from CFAN we come up with a 33 share for our new FM.
1058 I would like to add further that in terms of follow up to our initial presentation we did do -- or, sorry, this is before our initial presentation. We did a BBM diary research in March in Toronto.
1059 Of those diaries 3 percent of those diaries showed satellite tuning in Northumberland County -- 3 percent from BBM.
1060 In the fall 2011 BBM Reach book which was released just in December, it shows that CJSC and CJXL have gone up to 26.4 which proves that country music and the demand for it is growing based on factual Bureau Broadcast Measurement numbers.
1061 COMMISSIONER DENTON: Thank you.
1062 So then would you please elaborate on which out of market stations and what amounts you expect to repatriate the total of 18 audience share points you have projected? From whom are you going to get this?
1063 MR. BARKER: This was predicated on taking CJSC and CJXL tuning which added up to 18.1 percent, both country radio stations received in Northumberland County.
1064 COMMISSIONER DENTON: So are you anticipating getting all of that listenership?
1065 MR. BARKER: Well, I guess we don't have to get all of it now based on the growth in the latest BBM which came out after our submission where it showed that those two radio stations now account for 26.4 percent of all tuning, so growth from that 18.1 in a year to 26.4.
1066 COMMISSIONER DENTON: Okay. So you -- but you intend to get a good portion of that?
1067 MR. BARKER: I certainly do.
1068 COMMISSIONER DENTON: I am going to ask you a silly question. How realistic is that?
1069 MR. BARKER: I think it's -- I like to be realistic and I think this is very realistic from the standpoint that we know right now and with the reach book that came out just in December that 20 percent -- CJXL in Moncton reaches 20 percent of the people in Northumberland County.
1070 Now, Newcap said, "Well, they will listen to it if it's static-y or something". Well, you say, you know what? If we have got local content, local presence, if we have got 12.6 percent of our artists being a local, I can't for the life of me think as to why people in this county wouldn't want to listen to something that listens in this county and reflects this community as well.
1071 COMMISSIONER DENTON: For the sake of clarity are you referring to the Northumberland area when you speak of tuning in Miramichi?
1072 MR. BARKER: Yes, that's the measured cell within BBM that would be the closest to specifically defining the Miramichi central area.
1073 COMMISSIONER DENTON: Again, because we read what you write --
1074 MR. BARKER: A hopeful sign.
1075 COMMISSIONER DENTON: -- you project that your proposed country music station will generate an advertising dollar to audience share point ratio that is lower than that generated by your incumbent station CFAN. Why?
1076 MR. BARKER: I may pass this along in terms of the specific calculations to Jim, but the normal rule of thumb is that when radio stations are forecasting revenues that whatever your audience share is, you don't fully monetize that share immediately. As much as the wonderful person to my right may think you do, you really don't monetize it fully at the beginning.
1077 Traditionally, and we have done the same thing, is that radio stations, particularly new applicants for a market, will estimate that they may generate 80 percent of their maximum audience share in the first year, growing to 90 percent. We call it a power ratio. And then in year three you fully monetize the audience share into revenue share.
1078 COMMISSIONER DENTON: This is the second time I am going to talk about monetization. I am just learning so you are instructing me, and this is helpful.
1079 When you speak of this monetization what is the process that is going -- that is gone through to get to this monetization. Is it that your listenership -- tell me about this lag. Why does this lag occur?
1080 MR. BARKER: Okay. I am learning as I go through this as well.
1081 If we were saying that our audience share represented 10 percent of listening the normal rule of thumb is -- based on past history, is that in year one you may only generate 80 percent of your revenues based on that 10. So in other words you're only maximizing at 80 percent.
1082 Sorry, I'm using the wrong number, 10,000/8,000 -- 10,000/8,000.
1083 COMMISSIONER DENTON: But you're describing the lag. Do we have a reason for it? Why is it caused?
1084 MR. BARKER: You just don't convert advertisers as fast as you convert listeners.
1085 COMMISSIONER DENTON: Okay, asked and answered.
1086 Yeah. Part of your estimated sources of revenues will be from the existing CFAN station. Let's talk about that.
1087 To what extent is that going to happen and to what extent do we need to understand this better?
1088 MR. BARKER: I could start off while other people look at their notes.
1089 COMMISSIONER DENTON: It's a hard question --
1090 MR. BARKER: I can just start off that we are estimating 61 percent of our new revenues on our new FM radio station would come from CFAN.
1091 Stephanie would like to expand on that. I'm hoping you'll say "yes".
1092 MS MacFARLANE: So, as Gary said, 61 percent of our projected revenues on the new station would be moved over from CFAN. And in conversations with our advertisers, and I have certainly been out on the street with our team, that would hold true anecdotally with them that it will be a redistribution of dollars to a great extent.
1093 However, we have also projected that we would have two other ways in which we would create revenue stream on the new station, one of which is that we would secure some additional buying from existing advertisers.
1094 And the projection that we have made is 10 percent of what they would currently be spending annually on CFAN, because these are existing advertisers, we would expect to see that growth from them because we are offering a new station some additional listeners and so on. So that would be part of their revenue stream, albeit small, but part of their revenue stream onto the new station.
1095 The other percentage that we are projecting is that we would see new advertisers come to the station and that we would secure them from currently perhaps not advertising at all or advertising using other means whether it's flyer, newspaper, those kind of other advertising alternatives.
1096 And what we have projected in our financial statements for that would be again 10 percent of the revenue off of CFAN, so an additional $75,000 annually in the first year onto our new station from new advertising sources.
1097 COMMISSIONER DENTON: That's 10 percent, right?
1098 MS MacFARLANE: Yes.
1099 COMMISSIONER DENTON: The 10 percent of existing buyers would buy -- sorry -- of the revenue you expect to get?
1100 MS MacFARLANE: Yes.
1101 COMMISSIONER DENTON: So the existing buyers would buy more, that you contributed 10 percent of that.
1102 MS MacFARLANE: Yes.
1103 COMMISSIONER DENTON: And new buyers and former users of other stations or other media --
1104 MS MacFARLANE: Yes.
1105 COMMISSIONER DENTON: -- are another 10 percent?
1106 MS MacFARLANE: Yes.
1107 COMMISSIONER DENTON: All right.
1108 And the rest is coming from...?
1109 MS MacFARLANE: Well, that would make up the entirety except for national sales which we have also in there.
1110 COMMISSIONER DENTON: Okay.
1111 MS MacFARLANE: So we are looking for 325 from our local sales and the additional would be made up of national sales.
1112 COMMISSIONER DENTON: Yes.
1113 So sort of the moose under the table here in this discussion is the extent to which you are asking us to consider, first, whether we should license any other station at all, including your own application, or license something new, because the picture you are painting is that it's pretty thin and we are faced with a choice of doing nothing in relation to commercial stations, doing something, and if we do something, then it's license you guys or the other guys.
1114 So do you want to discuss your order of preference of pain and pleasure here?
1115 MR. PACE: Well, I think we have to go back and look closely at the marketplace and I think we have tried in our supplementary brief but also in our oral -- some of the key economic trends here. And I think you have heard it from the people that are actually in the local community.
1116 We heard today from the Miramichi Fellowship. You know, it's in their brief. They outline clearly -- I didn't realize, quite frankly, until this morning that, you know, Blackville has an unemployment rate of 44 percent, but I did forget that there was a major trucking firm that closed down there before December.
1117 There are some real economic challenges in this marketplace. We have faced it this year. Our local revenues are off 6 percent.
1118 Our national revenues -- and you have these figures to look at. Our national revenues, which we have little control over, are off 27 percent, and that is a situation that I know is being observed in other small markets.
1119 Because where there is uncertainty in the economic environment in Canada, the big retail advertisers are lumping their national dollars into the big centres. They don't spend any extra money. So they have to cut somewhere. So we are seeing in the smaller markets that national money is decreasing.
1120 So that's the facts. I mean this is a million-dollar market. I think we dispelled quite clearly, using your own data and Stats Canada data, which is pretty accurate data, clearly that it is a million-dollar market rather than a two-and-a-half-million-dollar market.
1121 Now, I can go back about six years -- and I was sitting here this morning and I was listening to David Murray from Newcap, and six years ago there was a pitch in Kentville, and the pitch was simply: Here's a market, it needs competition and there won't be any undue harm with respect to the incumbent.
1122 Now, I must point out that that market is a $4-million radio market, which you know. This market here is $1 million. Well, the pitch and the myth that was created was that if you bring competition to a market, there's going to be no harm on the incumbent but there is going to be this huge growth in the overall market.
1123 You look at your facts, you look at the reporting, there is no growth in the Kentville market over that five years if you add in the cost of inflation. The same can be said for Sydney.
1124 But the one that's more alarming than anyplace, and it is public information, is Halifax. If you look at the PBIT numbers in Halifax from 2006, when it was 28.6, in 2010, it's 6.2.
1125 So that concept or myth that the more stations that you put in a market will grow the pie is a myth, the best example being Halifax, because if you look at the actual numbers in 2006 that you provide to the public and look at them in 2010, and if you factor in inflation, nothing has changed. But the more concerning piece is in that same timeframe the actual national dollars went down. I don't know where that trend is going.
1126 So, you know, when I look at those facts -- another thing that I would like to raise here, when I looked at Newcap's numbers, where are the dollars going to come from?
1127 In their financials, 25 percent from out-of-market radio stations. But then I had Steve Jones here say this morning that Newcap in Moncton doesn't monetize anything in Miramichi.
1128 We do commercial monitors of their stations in Moncton, our stations in Moncton, but we also talked to Astral in Miramichi, who are our national sales reps, and they don't monetize.
1129 So when you look on page 14 of their supplementary brief and there's a number in there for 25 percent of out-of-market, if it's not being monetized now, where is it going to come from? I strongly suggest it's going to come right from us because that's the history.
1130 So that's the judgment call that I think has to be made. I think we provide, you know, a great product here in the Miramichi. Would I hope that this was a $2-million market? I think everybody does.
1131 But you can't say -- if you look at the numbers that we presented to you, it confirms that it's a million-dollar market and we're doing a million dollars.
1132 And I don't think you can say that because you're the only operator in the market that you're not interested in maximizing the amount of money that you would get from advertisers because our people, our sales people, our general sales manager, are all paid on commission. It's in their self-interest to maximize what's in the market.
1133 So that's just my thoughts.
1134 COMMISSIONER DENTON: So, what you're saying is it's a million-dollar market, the station is pulling in a million bucks, and that's my takeaway from your disposition on the economics of the station.
1135 MR. PACE: Correct.
1136 COMMISSIONER DENTON: Okay.
1137 MR. PACE: And if I could point to actual or highlight evidence that that will be different, I would love to see it.
1138 COMMISSIONER DENTON: Wouldn't we all?
1139 MR. PACE: But, you know, we've heard this morning from people who actually live and work here. You know, it's a global thing.
1140 I mean, Madam Chair, you live in Nova Scotia. You know, in Nova Scotia we had two plants, pulp and paper plants, that are basically belly up and closed.
1141 It's no plight on Miramichi here, but it's just a fact of life that the resources that they relied on for years, forestry and mining, and I might add -- and it's in our brief -- that, you know, Bathurst is also going to be challenged, you know, in the next year or two because that mine is running out. So that's another thing that's on the horizon.
1142 COMMISSIONER DENTON: Thank you.
1143 Those are my questions, Madam Chairman.
1144 THE CHAIRPERSON: Commissioner Poirier?
1145 CONSEILLERE POIRIER : Oui, et je vais les poser en français pour le plus grand plaisir de monsieur Barker.
1146 M. BARKER : Merci.
1147 CONSEILLERE POIRIER : Si j'ai bien compris -- it's okay, it's working? Ça va? Je vous laisse trouver la station et faites-moi signe quand tout fonctionne bien. Madame Chair aussi.
1148 LA PRÉSIDENTE : Oui.
1149 CONSEILLERE POIRIER : Oui?
1150 Alors, vous dites que c'est un marché de 1 million de dollars et que déjà, c'est ce que vous recueillez comme revenus dans votre station. Alors, pourquoi appliquer pour une deuxième station?
1151 MR. PACE: That's a good question.
1152 COMMISSIONER POIRIER: I know.
1153 COMMISSIONER POIRIER: I know it is.
1154 MR. PACE: Here is what we would be faced with. If we did nothing, the Commission would be left with the impression that there is a need here and I know what would happen: exactly what happened in Kentville, exactly what happened in Sydney and in Charlottetown.
1155 It's all right for that to happen in those because those were bigger markets, but when you get down to a small market like this, we had to do something.
1156 So we looked at it and said, okay, we own our own tower, we own our own transmission building, we own our own building here, you know, we can step up to the plate -- which, by the way, I want to remind the Commission of this.
1157 When the economic environment was good here, on our own, in 2003, we flipped from AM to FM to serve this community. But, you know, we are a small company. We are not like the national players that are publicly traded. I mean our access to capital is different. As a local/regional broadcaster, we don't have those deep pockets. So once a year we look at, you know, what capital resources we have to deploy.
1158 We looked at Miramichi but we also looked at the trends, building permits, unemployment, declining population, and at that time we would say no, we will wait till things improve.
1159 They really haven't, but we are in this position here where, you know, if we don't do something and step up -- and I think we have shown clearly that there are synergies here, you know, that we can provide diversity in format, diversity in news, and it will be a better service and, you know, hopefully the economy will improve.
1160 I hope that answers your question.
1161 CONSEILLERE POIRIER : Oui, mais je vais continuer dans le même sujet. Deux sous-questions à ça.
1162 Donc, votre premier choix serait qu'on ne donne aucune licence à personne parce que vous pensez que le marché est déjà saturé?
1163 MR. PACE: That would be the prudent thing to do and re-look at this situation. I mean none of us are experts here in terms of predicting the economic future. I mean the best economists in Canada try to help the government do that and there's sometimes difficulties. Nobody knows that.
1164 But right now, I mean if you look at the actual signs, the actual numbers, the trends for here, it don't look good.
1165 CONSEILLERE POIRIER : M'hmm.
1166 Cependant... You wouldn't have to --
1167 MR. PACE: Not with her.
1168 COMMISSIONER POIRIER: Just put it in your -- okay.
1169 MME MacFARLANE : Je vais essayer d'écouter en français.
1170 CONSEILLERE POIRIER : O.K.
1171 MME MacFARLANE : Les femmes, c'est une autre chose, mais...
1172 CONSEILLERE POIRIER : Dans le domaine de la radio, quand on accorde une licence, cela prend quelques années avant que la station soit implantée. Or, l'avenir de Miramichi semble meilleur pour les prochaines années.
1173 Alors, notre perspective n'est pas d'implanter une nouvelle licence pour l'an passé ou il y a deux ans, mais pour l'avenir, en 2013 et en 2014, et la preuve de cela, c'est que dans votre plan d'affaires, vous êtes rentable en théorie à la troisième année. Nous sommes en 2012. Alors, 2013, 2014, vous êtes rentable certain en 2015.
1174 C'est donc signe que vous croyez qu'il y a de la place pour une nouvelle station puisque vous allez être rentable dans trois ans.
1175 MR. BARKER: If --
1176 COMMISSIONER POIRIER: It's difficult to answer those questions because it's --
1177 MR. BARKER: No. I think it's easy from the standpoint that the synergies are the things that cause us to be profitable after year 3 and that's the only thing that does it.
1178 CONSEILLERE POIRIER : Oui. Et les synergies, c'est justement là que je voulais aller...
1179 M. BARKER : O.K. Merci.
1180 CONSEILLERE POIRIER : ...parce que vous avez des synergies importantes avec 23 stations en Atlantique plus une directement ici dans le marché.
1181 Newcap a 24 stations avec lesquelles aussi ils peuvent faire des synergies. Alors, quelle est la différence? Eux peuvent faire des synergies, vous pouvez en faire, vous dites pouvoir être rentable dans trois ans et eux vont mettre sept ans à être rentable parce qu'ils n'ont probablement pas de radio ici directement dans le marché.
1182 Alors, comment se fait-il qu'on puisse expliquer une situation où vous allez être rentable dans trois ans, alors qu'eux disent ne pas être rentable avant sept ans?
1183 MR. BARKER: Madame, I could certainly first address this -- and I know I will call upon Robert for this as well -- is if you look back to Newcap's presentation relative to their staffing levels for one radio station versus the combined staffing levels of our two radio stations, there's where you can see a significant reason as to why they will not be showing a positive PBIT through year 7.
1184 They are proposing, I believe if I am correct, 13 full-time employees. With the synergies of our two radio stations it's 12 full-time and three part-time for two radio stations. And that is just one example.
1185 Then we have to be cognizant, of course, in terms of we already have our building here. All of the capital has been invested here.
1186 And I think there's a thing that you can't put a value on -- I wish you could -- but it's the relationships that we have in this community now that we can build upon. And I know I can speak on behalf of Anne and Michelle in particular in terms of the intense community involvement that the radio station is involved with now is certainly going to be a wonderful platform on which to grow modestly in the future.
1187 You get someone else that comes to town, in my experience in smaller markets, of which I have worked many, is that you end up with a 50-50 split in terms of your revenues. Your expenses clearly don't go down 50 percent.
1188 And I think another thing that I experienced -- and I don't need to mention the market, but it was fairly recently -- that I think it's a shame for radio to be pitching to charities, to community organizations, and saying, we will do your promotion but you have to exclude the other radio stations.
1189 And that is a very common thing that happens, where you say, you know what, I don't think radio is doing it service by operating that way.
1190 CONSEILLERE POIRIER : Oui. Plaçons-nous du point de vue du consommateur, de l'auditeur. Si nous vous donnons la deuxième licence dans ce marché, ils vont cogner à la même porte pour avoir de la publicité, ils auront les mêmes prix pour la publicité.
1191 Si nous accordons une licence à une autre station de radio, et c'était le point dit ce matin par Newcap, "competition will push Maritime Broadcasting to be better."
1192 Et du point de vue du consommateur, ils auront le choix d'aller... vous allez vous faire compétition, et c'est le consommateur de même que le commerçant qui peuvent être gagnants parce qu'il y aura de la compétition.
1193 Que répondez-vous à cet argument-là?
1194 MR. PACE: I'd love to answer.
1195 That is the pitch that's made, and, you know, in a market of $4 million in Kentville, you can get by on that. In a market of $5 million in Cape Breton --
1196 But when you get down to a million-dollar market, here's the thing, I think. We are a local/regional broadcaster. Newcap is one of the top five national broadcasters. All of those broadcasters are publicly traded companies.
1197 So on the one hand, we as a regional broadcaster serving Weymouth and Digby and Milton, I don't see Rogers there, I don't see Corus there. So at some point in time there has to be some support for a regional broadcaster.
1198 CONSEILLERE POIRIER : Cependant, cela est vrai seulement si c'est votre hypothèse qu'il n'y a un marché que d'un million de publicité. Nous avons vu d'autres chiffres dans les demandes d'application qui parlent de 1.5 million potentiel, voire beaucoup plus que cela. Donc, tout votre argument repose sur le fait qu'il n'y aurait un marché que de 1 million de dollars.
1199 Mais si cela était faux, si le marché était plus grand que ça?
1200 MR. PACE: I would argue you have to look at actual facts and actual evidence. All of the $2.5 million, those are all projections. What is factual is what we have been doing for the last five or seven years. That's actuals.
1201 COMMISSIONER POIRIER: Okay.
1202 MR. PACE: Then we also looked at -- and we went through that chart to explain it clearly, that we believe strongly that the point 3 ratio should be used for New Brunswick. We are applying for a radio station in New Brunswick, not in Edmonton.
1203 COMMISSIONER POIRIER: Okay.
1204 MR. PACE: So if you look at that, there's a huge difference --
1205 COMMISSIONER POIRIER: I know.
1206 MR. PACE: -- between expanding the marketplace from .3 to .5.
1207 COMMISSIONER POIRIER: But I mean, your whole approach relies on that fact and it could be wrong.
1208 MR. PACE: I think it's right.
1209 COMMISSIONER POIRIER: Yes, naturally. That is the one you are presenting.
1210 MR. PACE: I went and I had this philosophical argument back in the hearings in Kentville and Sydney.
1211 COMMISSIONER POIRIER: Yes.
1212 MR. PACE: I'm glad now I've been proven correct. It was this pitch that with competition all these advertisers are going to come out of the ocean and the market is going to expand. Look at your own numbers. It hasn't happened.
1213 COMMISSIONER POIRIER: Okay. So imagine now I am a citizen who lives in Miramichi and I listen to your news. Wouldn't it be better for diversity to listen to two different newscasts from two different owners than listening to a newscast that owns two radio stations and in which the two rooms are connected, with the same journalists.
1214 MR. PACE: Garry?
1215 M. BARKER : Pardon.
1216 I don't know what the benefit is if there happened to be two separate rooms in which news is disseminated relative to one. I would counteract that by saying that there are so many possibilities of expanding and going into further detail in regards to Miramichi news. I will use some examples.
1217 In terms of the Mount Saint Joseph Foundation in Miramichi, which there was an attachment in today's presentation, they are desperately seeking a Radio Fund sponsor, of which we are pleased to be.
1218 But just think about nursing homes and say, okay, we have a news department that could be devoting the resources to three or four different elements underneath that umbrella of that topic of Saint Joseph Foundation, one of which would be what are the waiting times for people in hospital now to get a nursing home bed in Miramichi? What are the line-ups like if the person is a resident of Miramichi but they are in hospital but they could get a place in Blackville or Rogersville? What are the implications there?
1219 Then another thing that I became aware of that I think a story needs to be told is things like elder abuse and elder abuse by their children. Now, you say -- think of just that one story and then say, okay, if I have competing news people and I want you to do a better job than they do, that is our motivation in terms of making sure that we have the better product.
1220 We can never rest on our laurels, we realize that, but I like to challenge our announcers. I like to challenge Michelle in terms of saying I want you to be the best announcer in our company, and the way you can be the best announcer in our company is by realizing what they are doing and doing it better and localizing it.
1221 COMMISSIONER POIRIER: Yes, but, Mr. Barker, from the viewpoint of the listener --
1222 MR. BARKER: Yes.
1223 COMMISSIONER POIRIER: -- listening to two newscasts from two different owners, wouldn't there be different topics covered, wouldn't there be a different perspective, wouldn't it be different for him so it would grow in diversity in the community?
1224 And imagine, okay, because I have been in two small cities where there is a fight between the mayor and the radio station. They don't get along well, okay, for different reasons. And then there is some kind of a -- hmmm, they don't give interviews to that journalist and so on.
1225 And when you have two stations, well, at least the public is better served, don't you think? I am pushing you at the limit because --
1226 MR. BARKER: No, I appreciate that.
1227 COMMISSIONER POIRIER: Yes.
1228 MR. BARKER: I think we have to have our eyes open in terms of the size of this community, and if you were to look right now online in terms of news sourcing, Miramichi Online, or if you were to look at 99.3 The River's Web site in terms of local news stories, you are going to find three or four stories that are current, that were delivered this morning on our radio station. You may find that many on Miramichi Online.
1229 Now, is there something we are missing in terms of -- I'm talking about more of the in-depth. But I mean if there's one car accident -- God forbid -- there is one car accident. Both radio stations, regardless if they are in separate buildings, will be reporting on that. In terms of the Rogersville fire, if there was another radio station it's the same story.
1230 I think there is a tremendous opportunity within the confines of one building is where you can get into the different angles and different subtopics within the theme of the initial story. I really believe that if you have two stations competing, you are after the headlines. Where we have an opportunity is to focus on some issues within the Miramichi Hospital, for example. We know that country lifestyles and country listeners needs are different from Hot AC listeners.
1231 So we can deal with those issues, but you are doing that in a meaningful purpose because you know you want to have different product on both of your radio stations within the same theme of local news.
1232 COMMISSIONER POIRIER: So what percentage of your news will be different from one radio station to the other?
1233 MR. BARKER: I would be lying if I could give you anywhere close to being an accurate --
1234 COMMISSIONER POIRIER: Give it a thought.
1235 MR. BARKER: But, you know, if I said -- if you were to define, well, if it's different, if you are both doing a story on the Miramichi Hospital Foundation, then I would say, well, there is no difference in terms of that headline, but in terms of the actual story content, it could be dealing with the removal of a a Tim Horton's from the Miramichi Hospital on one radio station, it may be dealing with emergency room waiting times as compared to the provincial average on the other radio station. However the topic, if you wanted to say, well, it's still the Miramichi Hospital, but the content within that is totally different.
1236 The content itself, if we get rid of the headlines, I would estimate would be 60 to 70 percent different, and those are the stories that aren't the ones that just happened right now. These are the ones where you are doing some investigative journalism to get behind the story.
1237 COMMISSIONER POIRIER: Okay. So you said 60 to 70 percent different --
1238 MR. BARKER: M'hmm. M'hmm.
1239 COMMISSIONER POIRIER: -- from the two radio --
1240 MR. BARKER: The others have to be the same.
1241 COMMISSIONER POIRIER: One another.
1242 MR. BARKER: Yes.
1243 COMMISSIONER POIRIER: Thank you for the answer.
1244 My last question, Madam Chair, and I will leave it to you.
1245 Are you going to play French country music on your radio station or English only?
1246 MR. BARKER: I can tell you, I wanted to make sure that particularly with our Home Brew program it would be 100 percent English.
1247 COMMISSIONER POIRIER: Okay. Thank you very much.
1248 THE CHAIRPERSON: Thank you, Madam Poirier.
1249 I think we have gotten a lot of information here, but I am curious and just following up on a few points. I think Madam Poirier covered a lot of the points very well there.
1250 Just to follow up on the last item, the different stories and different listeners, I don't understand how you would satisfy the CFAN listeners if half of the story was on the other station?
1251 My understanding is that a listener prefers one station, it will flip back and forth to get more of a news story. I just don't quite understand that explanation.
1252 You don't need that.
1253 MR. BARKER: No.
1254 MR. BARKER: Sorry yes, I live in Halifax as well.
1255 I think if you looked at it, Commissioner Duncan, in terms of I'm going to try and change it from, let's say, a hospital, but if we used the -- or health issues in general for example. Newcap has mentioned this, "Our survey shows that" the country really kicks in at 35 years of age for example and it will go 55, 65, 75. What we have to do is, the more we know our listener the better we can serve them. Miramichi listeners are different from Sussex listeners, different from Saint John listeners.
1256 I know there was a story that was of important significance here in Miramichi in the last week in terms of palliative care nursing. Well, if you are dealing with palliative care my knowledge would suggest that a palliative care story could be much more significant to a country listener than to a Hot AC listener. However, if there were funding cuts or if there were changes in terms of the paediatric ward within the Miramichi Hospital, that would be much more relevant to the younger demographic that would be listening to a Hot AC.
1257 I want to emphasize, Madam Chair, that we are not going to be hiding the stories that have developed overnight because the first thing people want in the morning is what happened in my own backyard last night. We won't -- I say, well, we will be different so we won't use it. We would never do that.
1258 But in terms of that other percentage where we are dealing with things, there are certain -- researchers will call them life groups, so that if you have a preference for country music your tastes are significantly different than a person who might listen to The Bounce in Halifax. Although you may be the same age, but we are talking in terms of lifestyles, we are talking about income levels, education levels.
1259 Then the more you know, again, about your listener, the better you can serve them. I know that we have done listener discussion panels in some of our smaller markets and larger markets where we will get 20 people together of a fairly specific demographic, but over the span of a 90-minute period we will ask them about what's important to them and I have found differences, clear differences
1260 But the one thing that seems to be the commonality -- and I have foreground in places like Marystown, Newfoundland to Ottawa -- the one thing that is constant is local.
1261 Sometimes I imagine you likely get tired of hearing the word, but local to me goes beyond -- as we mentioned in our oral presentation, it goes far beyond doing a public service announcement for, let's say, Canada Blood Services. I was on the air many times, poor ratings, but when I was on the air it would be the same standard public service announcement as on every other radio station, they need 100 pints of blood, roll up your sleeve and give the gift of life.
1262 In Miramichi, and in some of our smaller markets, it is far more effective if Michelle has the nurse who is on duty that day at Canadian Blood Services, to have her on the air with her and say, "Look, if the blood clinic is 2:00 to 4:00 and 7:00 to 9:00 today, let's help Miramichiers. For one, we want to see them give blood, but is there a preferable time for them to give blood? Is there any specific need for a certain type of blood? And I would even think that Michelle may -- without speaking for her -- may go to the point of saying, "Okay, so if I go down there what do I get? Is there a doughnut or is there a muffin? Let's talk about it." But let's bring the name. It's Nancy who happens to be the head nurse or clinic person at that blood donor clinic to me makes it a whole lot different than just reading a public service announcement?
1263 THE CHAIRPERSON: I think that's helpful. I see some distinction there in what you said.
1264 You mentioned about the local hospital has approached CFAN to help them with their fundraising campaign.
1265 MR. BARKER: Anne would know, but the hospital I think has come back to us. But this was also -- the recent one which is on the appendix is the nursing home that has come to us for funding -- for a radiothon.
1266 THE CHAIRPERSON: Yes. And was it the nursing home, then, that was also referred to by the Miramichi Fellowship Centre?
1267 MR. BARKER: I don't know the answer in terms of who referred them, all I know is I got a copy of that about 10 days ago.
1268 THE CHAIRPERSON: No, but I mean have they asked, the Miramichi Fellowship Centre, the same question?
1269 MR. BARKER: Oh, I don't know.
1270 THE CHAIRPERSON: Is that what we heard earlier?
1271 MS MacFARLANE: No. He said no.
1272 THE CHAIRPERSON: No?
1273 MR. BARKER: No.
1274 THE CHAIRPERSON: Okay, thank you.
1275 It seems clear, then, to me, at least at this point, that based on Stephanie's comment that the projection of new revenues from increased advertising spend was 10 percent of the revenues for your current station, so there is no room in the market for any station. I just want to be clear, that is your position.
1276 Is that your position, because you are saying 956,000 are potential and it seems like you are at that? So that's your preferred position?
1277 MR. PACE: That's where we are, unless somebody can show me compelling actual numbers.
1278 THE CHAIRPERSON: Okay.
1279 MR. PACE: I haven't seen them.
1280 THE CHAIRPERSON: Okay.
1281 I noticed in your brief at page 11 you say that:
"We estimate that this loss of audience share for CFAN will result in a reduction of the station's annual revenues of between $225,000 and $275,000. This represents more than the PBIT of CFAN for the 2011 year." (As read)
1282 That is different than the information I have on file, so I just wonder if you could give me --
1283 MR. PACE: Yes.
1284 THE CHAIRPERSON: -- in confidence, that's fine --
1285 MR. PACE: Yes.
1286 THE CHAIRPERSON: -- further detail on that. It's just different from what I have.
1287 MR. PACE: When we put that in our application it was before we had to put the numbers in so it was an estimate.
1288 THE CHAIRPERSON: Okay. So you will give me your final --
1289 MR. PACE: Yes.
1290 THE CHAIRPERSON: -- just to make sure that I have the right information.
1291 MR. PACE: Yes.
1292 THE CHAIRPERSON: Okay.
1293 You also go on to say:
"The policy of the Commission has never been to license a new service at the risk of having an existing service disappear." (As read)
1294 Certainly I would agree with that statement, but I'm just wondering, do you really believe that CFAN would disappear?
1295 MR. PACE: If...?
1296 THE CHAIRPERSON: If we licensed a new station?
1297 MR. PACE: I just look at what has happened in the Maritimes in the past and the numbers support my claim.
1298 It's one thing to have a market that has a previous radio revenue of about $4 and $5 million, there is some flexibility in there that you can play with, but this year in particular our numbers are down 10 percent. Those are actual numbers, 6 locally, 27 percent nationally.
1299 There is not much wiggle room here and I think we have clearly shown that in Newcap's projections where they say 25 percent will be from out-of-market stations when in fact they say on the record that they are not monetizing any revenue presently, and we know in Fredericton Astral is not as well as we are not in Moncton.
1300 So that $200,000, in a nutshell, it's going to come right out of our numbers and then you have to look at what can you sustain with that number.
1301 So our proposition is, I think the Commission has an opportunity here if they want to add additional diversity with respect to format, we will step up and attempt to, you know, put this on the air and hope that the economy -- you know, we have to be optimists in the Maritimes, I mean if we all sort of head for the hills there will be nothing left here.
1302 THE CHAIRPERSON: Well, I think that probably I hear news reports about the Province of New Brunswick looking for solutions and, as Commissioner Poirier pointed out, we are looking down the road and I think we have to consider that in two or three years things will have turned around, even the -- and I don't have all the details, but the Port Hawkesbury mill that closed down -- I think it was in Port Hawkesbury that you referring to --
1303 MR. PACE: Yes.
1304 THE CHAIRPERSON: -- they have a buyer now, don't they?
1305 MR. PACE: Yes, they have a buyer but it's going to be a buyer that is coming back and is only going to open one part of the mill. It's no different than when in Liverpool they had a reduction of half the thing.
1306 But I draw your attention to the Auditor General in New Brunswick's report last week, it wasn't the rosiest picture being painted period because of the per capita debt and that 75 percent of all the government revenues now are going to be in two departments, health and education. It was not a rosy picture.
1307 THE CHAIRPERSON: Okay. I appreciate your comments so we will take those into consideration. I think that we have dealt very thoroughly with your comments and will certainly give them serious consideration and the others have an opportunity in the reply period if they have anything they want to add to it.
1308 I will say that it's always a concern to me, and I think that Commissioner Poirier touched on it, that if there is an investor with a means that's willing to bring a service to a community, then it's difficult to deny that opportunity to the listeners. So we have to consider the consumers.
1309 MR. PACE: But I think you also should look at, you know, there were two other potential applicants that could have been here that know New Brunswick very well, one being the Irvings and one being Astral in Fredericton. Obviously, you know, they are smart broadcasters, I mean they didn't apply.
1310 THE CHAIRPERSON: Okay.
1311 MR. PACE: I mean the risk, to be quite frank here, is whether -- you know, every place we have a radio station that there is going to be increased competition, pretty soon you won't have regional players.
1312 THE CHAIRPERSON: No.
1313 MR. PACE: Because we all know economically in the Maritimes it's not as healthy as a place like Alberta where Newcap have a huge number of stations, or B.C. So that's the challenge here.
1314 THE CHAIRPERSON: Okay. Thank you.
1315 MR. PACE: Thank you.
1316 COMMISSIONER POIRIER: May I...?
1317 THE CHAIRPERSON: Yes, certainly. Certainly.
1318 COMMISSIONER POIRIER: On some issues you brought, Madam Chair, I have one or two follow-up questions.
1319 Usually in a market as big as this market, elsewhere in the world and in Canada, there is room for two or sometimes even three major commercial radio stations. Why would it be different here?
1320 MR. PACE: Well, let me give you a more concrete example.
1321 Last year in Estevan you looked at the market which was much more healthier than this market in terms of economic trends and in that case you licensed the incumbent. I refer you to that decision.
1322 So I am assuming that there is some precedent with respect to the CRTC when they look at these markets that --
1323 COMMISSIONER POIRIER: Yes. Each situation is different.
1324 MR. PACE: Sure. But there has to be --
1325 COMMISSIONER POIRIER: We don't have to follow --
1326 MR. PACE: No, no.
1327 COMMISSIONER POIRIER: -- what has been decided for a region if it is proven to us that it is different, the reality is different. So we never start with the fact that we have allowed that many in that kind of market, but usually there are at least two big commercial radio stations in a market as big as yours. I'm talking about 85,000 people here -- 85,000 in the region. 85 000, à peu près, de population,
1328 MR. PACE: But there is 24,000 people that we -- basically when you look at the retail --
1329 COMMISSIONER POIRIER: The small --
1330 MR. PACE: -- retail community, it's 24,000 people.
1331 COMMISSIONER POIRIER: Yes, but all together with the area it is over 60,000.
1332 MR. PACE: But I think most people would say when you actually try to attract advertisers most of the retail advertising is going to be in the central core.
1333 Garry, you might speak to that.
1334 MR. BARKER: Madam Poirier, I would just like to say that in terms of licensing the model that I think, just strictly in my own opinion, that works, is Truro. Truro is a community not much different from Miramichi, but it's one operator of two radio stations.
1335 I think I would like to emphasize -- I don't control the money so I would like to have as many stations as possible.
1336 MR. BARKER: But I think given the fact that we did not decide to just do an intervention upon the call for applications, we decided to apply and we have put a fair amount of work into our application and we are sincere in terms of what we are promising, that I think if we were to summarize, we are just suggesting that should the CRTC license an additional FM licence for Miramichi that it be us.
1337 COMMISSIONER POIRIER: Okay. It could be the final word, but still I have one question, okay, because it was good. Well done.
1338 COMMISSIONER POIRIER: You can repeat it after I'm finished.
1339 PBIT, the PBIT in Miramichi, the radio market, including our friends from the Miramichi Fellowship Centre, is around 31 percent, between 28 and 31 percent, and usually -- usually in New Brunswick it's around 21 percent and in Canada 19 percent. So it's way above the PBIT elsewhere.
1340 So to us it means there is room for a new station.
1341 MR. PACE: So are you suggesting that if you run well-run operations that you should be penalized by bringing forth --
1342 COMMISSIONER POIRIER: Never. No.
1343 MR. PACE: No.
1344 COMMISSIONER POIRIER: No, never.
1345 MR. PACE: But I guess the bigger question is, like where does it stop? Because in Halifax we went through all these discussions five years ago, we had PBIT there of 28.6 percent in 2006, we now have PBIT of 6.2. Where does it end? Does it go to zero and then all the diversity of voices is owned by the CBC and the federal government? I mean that is ultimately where this can all --
1346 COMMISSIONER POIRIER: Yes.
1347 MR. PACE: And that can happen, there is a danger.
1348 MR. BARKER: Madam Poirier, I am really pushing my luck on this one, but given the fact that it was a 30 percent PBIT put us in a position to be applying for a second FM here.
1349 COMMISSIONER POIRIER: Okay. So your final statement is...?
1350 MR. BARKER: Should the Commission, in their infinite wisdom, decide to license one additional commercial FM radio station from Miramichi, we would respectfully suggest that it be Maritime Broadcasting System.
1351 COMMISSIONER POIRIER: Thank you very much. I am finished.
1352 THE CHAIRPERSON: Thank you very much. I appreciate your detailed information, it's very helpful.
1353 Madam la Secrétaire...?
1354 THE SECRETARY: Before we take a break we will just go to Phase II. This completes Phase I.
1355 THE SECRETARY: We have now reached Phase II in which applicants appear in the same order to intervene on competing applications if they wish.
1356 Newcap and Miramichi Fellowship Centre have indicated that they would not appear in Phase II, therefore I would ask Maritime Broadcasting System Limited to intervene on the competing application.
1357 You have 10 minutes to make your presentation.
1358 MR. BARKER: Thank you.
1359 My name is Garry Barker, Vice President of Programming for Maritime Broadcasting System.
1360 Madam Chair and Commissioners, the intervention response is strictly dealing with something we have already discussed, the market size cannot support two competitive stations.
1361 Unemployment of 15.5 percent in July 2011, which is more than 50 percent higher than the New Brunswick provincial average and more than 100 percent of the Canadian average for the same time period.
1362 Fact, declining population between the '01 and '06 Census, Miramichi decreased by 2.1 percent, Canada increased by over 5 percent.
1363 I would also strongly suggest to the Commission before any decision is made on this market, that you review the 2011 Census figures which are to be released next month. The 2006 Census in terms of median age, Miramichi 42.4 years; Canada 39.5 years.
1364 The value of building permits issued by the City of Miramichi in 2009 was $20.4 million; in 2010 it was $13.1 million; in 2011, for the first eight months it was $4.7 million.
1365 Newcap estimates, as per page 14 of their supplementary brief, says:
"Radio revenues for the Miramichi marketplace are $2.5 million."
1366 Here is the revenue for CFAN: 2010, $1,064,000; 2011, $947,000. As previously mentioned, an 11 percent drop in revenue over 12 months, local revenue down 6 percent, national revenue dropping 27 percent.
1367 FP markets as per Appendix 2 of our oral presentation, our analysis of the FP markets data absolutely confirms using a .3 percent calculation, which is the average number used for all stations in New Brunswick that the Miramichi radio revenue market is $956,000.
1368 Madam Chair, we respectfully state that after looking at our actual results for fiscal 2011 and reviewing the analysis of the FP market projections, we strongly suggest Miramichi is a million dollar radio revenue market. Newcap has presented no substantive evidence or proof that this is otherwise. This market cannot support two competitive FM stations.
1369 In CRTC Decision 2011-42 for Estevan, Saskatchewan:
"In considering applications for new radio services, the Commission's predisposition generally lies in favour of increased competition and diversity, along with the improvements in the overall quality of available services that these promote. However, it must also ensure that markets are able to support the entry of new stations, and that the introduction of competition in a radio market will not have an undue negative impact on the incumbent stations in that market."
1370 Furthermore, in that decision:
"Currently, the Estevan radio market is served by the commercial stations CJSL and CHSN-FM. Owned and operated by Golden West, they together recorded strong compound annual growth in revenues of approximately 4% between 2005 and 2009, while achieving solid profitability levels."
1371 Although the outlook for both economic and retails sales growth in the Estevan radio market is generally positive, it is the Commission's view that this market is not capable of supporting a new competitive radio entrant at this time, given its relatively modest size and the extent of its anticipated growth. However, the Commission considers that Golden West, by realizing efficiencies and maximizing synergies among its existing radio stations in Estevan, would be able to provide a viable third local radio service in that market."
1372 Madam Chair, we think that the Estevan economic trends are much more favourable than those in Miramichi and suggest that the Commission follow the Estevan precedent and support our application which would provide program diversity and news, spoken word and musical formats.
1373 I thank you very much.
1374 THE CHAIRPERSON: Thank you, Mr. Barker, Mr. Pace and your team.
1375 We will have a break at this point I think.
1376 MR. BARKER: Thank you very much.
1377 MR. PACE: Thank you.
1378 THE CHAIRPERSON: Thank you.
1379 The break is scheduled for 15 minutes, so 3 o'clock.
1380 Resuming at 3:00, thank you.
--- Upon recessing at 1437
--- Upon resuming at 1504
1381 THE SECRETARY: We will now proceed to Phase III, in which interveners appear in the order set out in the agenda to present their intervention.
1382 Nous procéderons maintenant à la Phase III de l'audience, dans laquelle les intervenants comparaîtront dans l'ordre tel qu'indiqué à l'ordre du jour pour présenter leur intervention.
1383 Nous débuterons avec l'intervention de l'Association des radios communautaires acadiennes du Nouveau-Brunswick.
1384 S'il vous plaît, vous présenter et présenter votre collègue, et vous disposez de 10 minutes pour votre présentation. Merci.
1385 M. BRYAR : Merci. Mon nom est Roland Bryar. Je suis le directeur général de l'ARCANB, l'Association des radios communautaires.
1386 Je suis accompagné du président de CKMA, la radio communautaire ici à Miramichi, monsieur Léo Comeau.
1387 M. COMEAU : Bonjour.
1388 M. BRYAR : Avant de commencer, j'aimerais saluer nos amis du cours de technique radiophonique de Caraquet, du Collège communautaire, qui sont ici avec leur professeur, Martin Friolet et Jean-Guy Landry. Alors, l'ARCANB est un partenaire de développement avec le Collège communautaire du Nouveau-Brunswick pour ce cours de technique radiophonique.
1389 Alors, l'Association des radios communautaires acadiennes du Nouveau-Brunswick s'oppose à la demande de Maritime Broadcasting System Limited.
1390 Il n'existe pas de données BBM pour le marché de Miramichi. Nous comprenons cependant que le marché est desservi par deux stations privées anglophones et une station communautaire membre de l'ARCANB, CKMA.
1391 Les communautés francophones et anglophones sont bien desservies par ces stations. Nous pensons également que le marché n'est pas assez grand pour accueillir deux nouvelles stations anglophones. Ceci pourrait avoir un impact négatif sur les annonceurs.
1392 Avec l'arrivée de Newcap et l'ouverture d'une deuxième station anglophone de MBS à Miramichi -- elle exploite déjà la station The River -- le marché publicitaire risque d'être déstabilisé.
1393 Nous croyons que MBS réagit à la demande concurrente de Newcap, demande 2010-1176-7, afin de pouvoir maintenir son marché existant. Si le CRTC accordait ces nouvelles licences, nous assisterons à une fragmentation de l'auditoire.
1394 Pour rejoindre le même auditoire, les annonceurs locaux devront composer avec deux nouvelles stations radiophoniques. Ceci augmentera les dépenses reliées à leur budget promotionnel de leurs produits ou de leurs services. Si elle décidait de ne pas faire affaire avec l'une ou l'autre de ces stations, elle risque de se retrouver avec une diminution de son chiffre d'affaires à la fin de l'année.
1395 Si le marché a de la difficulté à maintenir deux nouvelles stations radiophoniques de langue anglaise, nous craignons que celles-ci soient tentées d'étendre leurs tentacules sur les marchés limitrophes, soit ceux du sud-est du Nouveau-Brunswick, de la péninsule acadienne et de la région Chaleur. Or, l'ARCANB a aussi des membres dans ces marchés, soit respectivement CJSE-CFBO, CKRO et CKUI (radio en implantation).
1396 Au niveau des langues officielles, la région de Miramichi est doublement minoritaire. L'ajout de deux stations anglophones dans le paysage radiophonique de cette région est une menace par rapport au développement et à l'épanouissement de la population francophone et acadienne de cette région. De plus, la menace que les annonceurs décident de retirer les publicités à la station locale est présente. En effet, comment justifier d'investir dans cette radio de petite taille alors que leurs budgets promotionnels seront consacrés à conserver leurs acquis au niveau des stations anglophones?
1397 Alors, je vais laisser la parole maintenant à monsieur Comeau.
1398 M. COMEAU : L'Association des radios communautaires acadiennes du Nouveau-Brunswick s'opposent à la demande de Newcap Inc. (numéro de référence 2010-1176-7).
1399 Il n'existe pas de données BBM pour le marché de Miramichi. Nous comprenons cependant que le marché est desservi par deux stations privées anglophones et une station communautaire membre de l'ARCANB, CKMA. Les communautés francophones et anglophones sont bien desservies par ces stations.
1400 Nous pensons également que le marché n'est pas assez grand pour accueillir deux nouvelles stations anglophones. Ceci pourrait avoir un impact négatif sur les annonceurs. Nous comprenons qu'en s'établissant à Miramichi, Newcap risque d'avoir l'effet de déstabiliser le marché.
1401 Nous croyons que la demande concurrente de Newcap déposée par Maritime Broadcasting System, demande 2011-1270-6, est une réaction de celle de Newcap afin de pouvoir maintenir son marché existant qu'elle exploite avec la station The River. Si le CRTC accordait ces nouvelles licences, nous assisterons à une fragmentation de l'auditoire.
1402 Pour rejoindre le même auditoire, les annonceurs locaux devront composer avec deux nouvelles stations radiophoniques. Ceci augmentera les dépenses reliées à leur budget promotionnel de leurs produits ou de leurs services. Si elle décidait de ne pas faire affaire avec l'une ou l'autre de ces stations, elle risque de se retrouver avec une diminution de son chiffre d'affaires à la fin de l'année.
1403 Si le marché a de la difficulté à maintenir deux nouvelles stations radiophoniques de langue anglaise, nous craignons que celles-ci soient tentées d'étendre leurs tentacules sur les marchés limitrophes, soit ceux du sud-est du Nouveau-Brunswick, de la péninsule acadienne et de la région Chaleur. Or, l'ARCANB a aussi des membres dans ces autres marchés, soit respectivement CJSE-CFBO, CKRO et CKUI (radio en implantation).
1404 Au niveau des langues officielles, la région de Miramichi est doublement minoritaire. L'ajout de deux stations anglophones dans le paysage radiophonique de cette région est une menace par rapport au développement et à l'épanouissement de la population acadienne et francophone de cette région. De plus, la menace que les annonceurs décident de retirer les publicités à la station locale est présente. En effet, comment justifier d'investir dans cette radio de petite taille alors que leurs budgets promotionnels seront consacrés à conserver leurs acquis au niveau des stations anglophones?
1405 THE CHAIRPERSON: Thank you for your presentation. Madame Poirier is going to lead the questioning.
1406 CONSEILLERE POIRIER : Je ne comprends pas pourquoi c'est moi qui pose des questions, Madame la Présidente. Vous devez m'expliquer.
1407 THE CHAIRPERSON: You are just so smart and good-looking.
1408 COMMISSIONER POIRIER: Please erase that in the minutes.
1409 COMMISSIONER DENTON: Which part do you want erased, Louise?
1410 COMMISSIONER POIRIER: Okay, let's be serious. On va vous parler. C'est sûr que c'est moi, et ça me fait plaisir de poser les questions à votre groupe, que j'ai eu le plaisir de visiter cet été.
1411 Je comprends votre réalité, mais vous affirmez que le marché n'est pas assez grand pour accueillir deux nouvelles stations anglophones. Sur quoi vous basez-vous pour nous dire cela?
1412 M. BRYAR : Merci beaucoup pour la question, Madame Poirier.
1413 Je pense qu'on a entendu plus tôt les gens de Newcap et les gens de MBS parler des autres marchés. Ils n'ont presque pas fait référence au Nouveau-Brunswick.
1414 Alors, si on prend le Nouveau-Brunswick, avec un marché de taille semblable, on devrait aller dans le marché de Bathurst ou de Campbellton ou d'Edmundston, puis dans ces régions-là, il n'y a jamais plus que trois radios. Il y a deux ou trois radios. Alors, il y a déjà trois radios dans le marché ici.
1415 Un deuxième point également, c'est qu'au niveau de la population, alors, ces gens-là parlent de population générale. Juste au niveau de la population de Northumberland, il y a 46 065 personnes. Là-dessus, il y a 12 330 personnes. Alors, ils vont sur un marché... il faut couper les chiffres qu'ils vous ont présentés en trois. Sinon, ils font de la publicité auprès du marché francophone. Le marché francophone est inclus dans leurs projections, ce qui n'est pas correct, selon nous. Le marché francophone devrait rester le marché francophone.
1416 CONSEILLERE POIRIER : Est-ce à dire que vous avez des craintes que votre auditoire francophone délaisse MirAcadie ou d'autres radios francophones dans la région pour écouter une radio anglaise?
1417 M. COMEAU : Nos auditeurs sont beaucoup des grands amateurs de la musique country. Alors, on nous dit, avec la demande de la nouvelle radio, qu'ils feraient la promotion de la musique country. On aurait probablement une perte d'auditeurs si c'était le cas, parce que nous, dans notre région également, la musique country est très populaire.
1418 Alors, s'il y a une station de radio qui fait la promotion de la musique country, on a déjà beaucoup d'auditeurs qui écoutent la radio CJSE, qui est une station radiophonique qui fait la promotion de la musique country, et beaucoup d'auditeurs écoutent cette radio-là.
1419 Alors, nous autres, pour faire compétition à ces deux radios-là, la radio anglophone et celle-là de CJSE, on a déjà pas tellement d'auditeurs, et si on devait en perdre, c'est sûr qu'on va avoir des problèmes.
1420 CONSEILLERE POIRIER : Cependant, le but d'une radio communautaire, c'est d'être très près des besoins de sa communauté.
1421 M. COMEAU : Absolument.
1422 CONSEILLERE POIRIER : Si votre communauté aime la radio country, c'est à vous d'en jouer plus, n'est-ce pas?
1423 M. COMEAU : On a plusieurs animateurs qui sont écoutés. On regardait les chiffres tantôt. Ça donnait 45 pour cent des émissions qui étaient écoutées à cause de l'animateur. Alors, si cet animateur-là choisit de la musique country et a des sujets d'intérêt pour la communauté, c'est sûr que la cote d'écoute va augmenter. Mais c'est à nous autres à faire nos devoirs. Vous avez raison.
1424 M. BRYAR : Si vous permettez, également, c'est que la radio communautaire remplit son rôle à l'intérieur d'une programmation musicale généraliste, il faut se comprendre. Donc, c'est une radio régionale généraliste. Donc, elle ne peut pas seulement jouer du country ou pas seulement jouer du pop rock, mettons.
1425 Et puis, par exemple, on prend Radio Beauséjour. Il y a plusieurs années, avant qu'elle ait ses deux licences, une plus rurale et l'autre plus urbaine, donc, plus country et plus pop rock en général, ce problème-là se posait. C'était une radio généraliste qui devait faire compétition à plusieurs radio anglophones qui, certaines, se spécialisaient en country et d'autres se spécialisaient en rock, et c'est ça le point de repère de la remarque.
1426 CONSEILLERE POIRIER : Donc, il y a un danger que les francophones qui écoutent les radios francophones communautaires de Radio Beauséjour ou MirAcadie migrent de vos stations à des stations commerciales anglaises et que cela mettre en péril certaines de vos stations; c'est bien ça?
1427 M. COMEAU : Oui.
1428 M. BRYAR : En plus de jouer un rôle d'assimilation, hein. C'est un facteur d'assimilation, il ne faut pas l'oublier. Le contraire s'est produit dans le sud-est. Il n'y avait pas beaucoup de services francophones, et les auditeurs écoutaient l'anglais. Puis quand les radios communautaires sont arrivées, ils se sont tournés vers le français.
1429 Alors, ici, c'est le contraire. Il y a une radio francophone et il y a un danger d'assimilation indirect par ce... s'il y avait d'autres licences où les radios, les corporations de radio, peuvent diffuser une programmation spécialisée dans un style plutôt qu'un autre.
1430 CONSEILLERE POIRIER : Cependant, j'ai entendu, au moins de Newcap -- et je ne suis pas certaine si Maritime Broadcasting l'a dit -- mais eux pensent que les auditoires des radios communautaires sont tellement passionnés et pour la langue française et pour la vie en français dans des régions à minorité linguistique comme la vôtre qu'ils ne changeront pas parce qu'ils sont trop fidèles et passionnés pour vos radios.
1431 Qu'est-ce que vous pensez de cela?
1432 M. COMEAU : Je suis complètement d'accord avec vous, Conseillère Poirier, mais il faut, dans la mesure du possible, avoir des émissions qui vont les capter, qui vont avoir leur intérêt, puis qu'on soit présent dans la communauté. Si on n'est pas présent dans la communauté, ça va être tout un travail à faire pour les garder avec nous... à notre écoute, je devrais dire.
1433 CONSEILLERE POIRIER : Je ne peux pas vous demander des chiffres précis, mais quel pourcentage -- et je parle de pourcentage pour ne pas avoir des chiffres précis -- de vos revenus à MirAcadie proviennent des revenus de ventes de publicité?
1434 M. COMEAU : Je ne pourrais pas vous répondre exactement, mais au niveau de la région ici, en 2008, on avait un directeur général qui s'était dévoué corps et âme pour aller chercher de la publicité. Il avait réussi à en avoir pas mal. Je ne peux pas vous donner le pourcentage.
1435 Mais avec son départ, on a un employé qu'on nomme le directeur des opérations. Lui ne fait pas de promotion ou ne va pas chercher de publicité. Alors, on a tout un travail à faire pour essayer d'avoir des vendeurs. On travaille présentement là-dessus pour avoir des vendeurs qui vont aller chercher de la publicité.
1436 CONSEILLERE POIRIER : Donc, le risque, ce n'est pas tellement de perdre des revenus publicitaires; le risque pour vous, c'est surtout de perdre de l'auditoire?
1437 M. COMEAU : Surtout, oui.
1438 CONSEILLERE POIRIER : Surtout. Parce que vous n'avez pas beaucoup de revenus publicitaires?
1439 M. COMEAU : Non.
1440 M. BRYAR : Si je peux me permettre, c'est que les deux sont interreliés. Je veux dire, si tu n'as pas d'auditoire, il n'y a pas beaucoup de gens qui veulent acheter de la publicité, puis si t'en as de l'auditoire, bien là, ils veulent acheter de la publicité pour vendre leurs produits. Donc, les deux sont reliés.
1441 CONSEILLERE POIRIER : Oui. Dans certains cas, c'est relié, mais pas toujours quand l'auditoire est très, très faible.
1442 M. BRYAR : C'est ça. Puis il faut penser également que CKMA a traversé une crise. Présentement, c'est une entreprise avec un employé rémunéré seulement, donc, un employé qui fait tout là. Il y en a deux comme ça dans la province.
1443 Puis il y a de l'espace pour le marché francophone, mais il faut développer ce marché-là. Alors, si on coupe le marché avant qu'on ait la chance de l'exploiter, c'est ça le danger pour nous.
1444 CONSEILLERE POIRIER : O.K. Il est, vous savez, possible pour des radios commerciales de parfois donner de l'argent à des radios communautaires pour les aider à survivre.
1445 Est-ce que vous avez déjà reçu des argents des radios commerciales de la région ici pour vous aider?
1446 M. COMEAU : Pas nous autres, non.
1447 CONSEILLERE POIRIER : Pouvez-vous répondre avec le micro?
1448 M. COMEAU : Non, nous autres, nous n'avons pas reçu d'argent d'aucune radio commerciale.
1449 CONSEILLERE POIRIER : Est-ce que vous connaissez d'autres radios communautaires de langue minoritaire qui, dans la péninsule gaspésienne, aurait reçu de l'argent de radios commerciales, qui, pour justement peut-être compenser des pertes possibles, veulent supporter la communauté francophone?
1450 M. BRYAR : Non. Moi, je n'ai pas entendu. Il me semble que j'ai entendu parler d'un précédent peut-être en Ontario, dans le bout de Hearst ou dans les Grands Lacs à quelque part là, mais c'est flou. J'ai cherché la référence et je ne l'ai pas trouvée là. Mais il me semble que c'est dans le bout de Hearst en Ontario.
1451 CONSEILLERE POIRIER : O.K.
1452 M. BRYAR : D'ailleurs, c'est une excellente idée, et puis si c'était mis comme condition de licence, c'est certain que ça ferait l'affaire de la radio communautaire également. Si elle pouvait aller chercher un revenu de base des autres stations qui sont en place, c'est certain que ça serait une alternative qu'on étudierait.
1453 CONSEILLERE POIRIER : Monsieur Comeau, vu que vous êtes directement, est-ce que vous êtes en accord avec la suggestion?
1454 M. COMEAU : Complètement d'accord. J'ignorais que la chance nous survienne ainsi. On n'était pas au courant qu'on pouvait aller vérifier ou aller demander de l'aide auprès des radios commerciales.
1455 CONSEILLERE POIRIER : Alors, je poursuis avec les dernières questions que j'ai, Madame la Présidente.
1456 Est-ce qu'il y a un risque réel que vous puissiez fermer si une autre station commerciale... et non pas deux, parce que depuis le début, vous parlez de deux autres radios. C'est sûr, nous pourrions accepter deux autres radios commerciales, mais en supposant qu'on en accepte juste une nouvelle, est-ce que vous pensez que l'impact serait aussi grand que vous l'avez décrit?
1457 M. COMEAU : J'écoutais tantôt le dernier groupe qui s'est présenté ici, puis on parlait d'un budget annuel de 900 000 à 1 million. Nous autres, quand on touche le 60 000, on sourit. Alors, il y a une moyenne différence entre les deux là.
1458 Si on perd de la publicité à cause de l'arrivée d'une nouvelle radio, c'est sûr qu'on n'aura pas d'autre choix que de probablement fermer les portes.
1459 CONSEILLERE POIRIER : Pensez-vous que les commerçants qui vous encouragent, parce qu'il n'y en a quand même pas énormément, eux seraient prêts à couper les revenus qu'ils vous accordent pour les transférer dans des radios commerciales?
1460 M. COMEAU : Non. Je pense qu'on a des commerçants qui nous sont fidèles. Je pense qu'on a un travail à faire au niveau de la vente de la publicité.
1461 Comme Roland expliquait tantôt, on a un employé. On a besoin de quelqu'un pour aller chercher de la publicité, puis on est en train de travailler là-dessus. On est en train de mettre ça en place pour avoir deux vendeurs qui iraient chercher de la publicité.
1462 Mais il y a du travail à faire, puis on est au courant de ça. On est au courant qu'on doit travailler plus fort pour nous maintenir en ondes.
1463 CONSEILLERE POIRIER : O.K.
1464 Alors, ma dernière question, puis elle est très importante pour moi parce qu'une radio anglaise normalement dessert surtout une communauté anglaise. Je suis très consciente comme francophone que beaucoup de francophones sont quand même attirés par la musique anglaise et par les radios anglaises. C'est vrai partout au Canada et particulièrement à Montréal. Donc, c'est vrai ici.
1465 Mais quelles seraient... A votre avis, si la Commission décidait d'accepter une licence, quelles seraient des conditions que nous pourrions mettre ou que nous pourrions exiger qui feraient en sorte qu'une radio communautaire comme MirAcadie, qui a déjà de la difficulté à survivre... et je prends celle-là parce qu'elle est directement dans le marché. Radio Beauséjour n'est pas dans le marché. Alors, je ne vais pas aller faire cette comparaison-là.
1466 Qu'est-ce qu'on pourrait mettre comme conditions pour garantir... parce que c'est aussi l'objectif du CRTC de garantir la survie des radios qui sont présentes dans le milieu. Qu'est-ce qu'on pourrait exiger comme conditions pour faire en sorte que vous n'êtes pas mis dans une situation dangereuse?
1467 M. COMEAU : Je te le laisse.
1468 M. BRYAR : Oui. Bien, premièrement, je pense que la suggestion que vous avez faite tantôt au niveau de l'argent -- l'argent, c'est le nerf de la guerre -- c'est certain que dans la condition actuelle, une condition de licence avec un pourcentage des revenus qui irait à MirAcadie, bien, ça aiderait beaucoup.
1469 La deuxième, je ne sais pas s'il faut en faire une condition de licence, mais moi, ce qui me chicote, c'est la spécialisation des antennes. Alors, il faut voir que CKMA est généraliste et va demeurer généraliste parce que c'est à l'intérieur de son mandat communautaire. Elle ne peut pas juste jouer du country ou juste jouer du pop rock, alors qu'elle va faire compétition avec deux stations, qui elles risquent d'être polarisées, soit juste du country, soit juste du pop rock ou juste une pop rock...
1470 Si c'est MBS qui l'a, par exemple, bien, c'est certain qu'elle ne va pas avoir deux stations... en tout cas, si j'étais eux autres, ce n'est pas ça que je ferais. Moi, je ferais une station plus à caractère country, puis l'autre plus à caractère pop rock, pour être capable d'aller chercher l'ensemble du marché. Alors, c'est un petit peu ça là.
1471 CONSEILLERE POIRIER : Donc, il n'y a aucune autre suggestion que vous faites là?
1472 M. BRYAR : Non. Non. C'est ça.
1473 CONSEILLERE POIRIER : Parfait! Alors... oui?
1474 M. BRYAR : Vous parliez tantôt également de... ça m'échappe là.
1475 CONSEILLERE POIRIER : Bien, peut-être que vous pourriez y penser. Peut-être que mes confrères ont d'autres questions.
1476 M. BRYAR : O.K. D'accord. Oui.
1477 CONSEILLERE POIRIER : Je vous remercie beaucoup pour le...
1478 M. COMEAU : Merci.
1479 CONSEILLERE POIRIER : Et ce que je comprends, c'est que la francophonie peut être menacée un peu, en tout cas, la radio d'ici?
1480 M. BRYAR : Oui.
1481 CONSEILLERE POIRIER : O.K.
1482 THE CHAIRPERSON: Thank you, Madame Poirier.
1483 Commissioner Denton?
1484 No questions.
1485 I have no questions, but if you have another -- did you recall what you were trying to --
1486 MR. BRYAR: No, I'm sorry.
1487 THE CHAIRPERSON: Thank you for coming, and we will certainly take your comments into consideration.
1488 MR. BRYAR: Thank you, Madam Chair.
1489 THE SECRETARY: I would now ask Hal Somers, Jim Malone, and Susan Butler to come to the presentation table.
1490 THE SECRETARY: We will hear each presentation, which will then be followed by questions from the Commissioners to the panel.
1491 Each intervenor will have five minutes for their presentation.
1492 I would now invite Hal Somers to begin. You have five minutes.
1493 Thank you.
1494 MR. SOMERS: Hello, Madam Chair and Commissioners. My name is Hal Somers and I am appearing today in support of the Maritime Broadcasting System's application for a second licence to serve the Miramichi area.
1495 I currently own and operate two automobile dealerships in Miramichi. I have been in Miramichi all of my life, and in the automobile business for over 30 years.
1496 I purchased my Ford store in 1991, and the Mazda store in 2005. I am the sole owner of the business; however, I have both of my sons working in the stores. My eldest is in the Mazda store, and my youngest son is at the Ford store.
1497 I was voted onto the Board of the Miramichi Chamber of Commerce approximately eight years ago. I then moved into the Vice-President role four years ago, and into my current role as President two and a half years ago.
1498 As a local businessman, I have had the opportunity to live through both prosperous and challenging times here in Miramichi. For many decades, Miramichi was a vibrant and economically strong community, largely due to revenues generated from the mills and the mines.
1499 But with the closures of these critical employers in the region, we have seen the exodus of thousands of jobs. These job losses have meant not only a decline in the average income of the residents here, but a massive migration out of the area of our population, as they have sought other employment.
1500 We are now suffering from a shrinking population base, as well as declining incomes.
1501 I have included an attachment of graphs with my presentation from the Government of New Brunswick that illustrates the challenges I am referring to.
1502 As President of the local Chamber of Commerce, I am faced with these business challenges every day, but it is critical that we find ways to keep thriving and growing, even in the face of current economic conditions.
1503 CFAN has been an important part of helping us to do that in the community. Because of their long history and ties to the region, we have found CFAN a keen and willing partner in helping local businesses find creative ways to promote themselves. From the ability to locally voice and produce ads, to creating engaging contests and promotions, the CFAN team has worked enthusiastically with businesses to help them connect with their customers.
1504 Further, CFAN has worked with local business groups, such as Rotary, the Downtown Business Association and, of course, the Chamber of Commerce, to help bring awareness to new businesses that are working hard to open their doors in these challenging times.
1505 For example, CFAN offers new members to the Chamber a complimentary welcome package on-air to help them make local residents aware of their business and the products and services they offer.
1506 Also, over the past many years, CFAN has established themselves as the voice of the Miramichi, and many of our residents have made them part of their daily routine. Because of this they have tremendous influence, providing local fundraisers and community events, and they do this consistently throughout the year, when needed by our local community. This has helped to establish them as a local business that is there for the local community.
1507 As a business advocate, I am in favour of having two radio stations, under one roof, with Maritime ownership. I think that MBS understands this region and what its unique needs are, and has demonstrated that well over the years.
1508 CFAN does an excellent job now of messaging effectively and with impact to our community.
1509 Local ownership of business is one of the most important factors in moving Miramichi forward economically in the coming years. Local owners who earn their dollars in the local marketplace spend their dollars in the local marketplace, create employment here, and sustain it in the long term.
1510 I have found the local leadership and Maritime ownership of CFAN and MBS to be truly committed to these values, and their actions have demonstrated this well over the years.
1511 I am here today to support them, like they have supported us through the years. I believe that CFAN is part of the fabric of this community, and I welcome the opportunity of having another station under their leadership to help work with local business and grow our community.
1512 Thank you, Madam Chair and Commissioners.
1513 THE SECRETARY: Thank you.
1514 I would now invite Jim Malone to present. You have five minutes.
1515 Thank you.
1516 MR. MALONE: Hello. My name is Jim Malone, and I am here today to demonstrate my support for the Maritime Broadcasting System's country music station licence.
1517 I am a lifelong resident of Miramichi. I grew up here, and then returned after a few years, when I went to school out of the region to play hockey.
1518 I married a lovely lady from the Miramichi, and we have raised our two sons here.
1519 Over the years I worked with Irving Oil as the Branch Manager, with the Atcon group of companies in HR, and now as Manager of Miramichi Transit.
1520 As a long-time resident of the Miramichi, I have many great things to say about the region -- the warmth of its people, the richness of the culture, and the beauty of the landscape. However, over the past decade it has sustained many hard times. With the mills closing, the mines shutting down, and people relocating out of the region to find work, we have seen a once vibrant economy struggle to keep moving forward.
1521 However, for those of us who live and work here, moving forward is the only option, and I believe that CFAN has played an important part in helping this community move forward.
1522 With each of my previous work experiences, I always depended on CFAN to create awareness of the goods and products that our companies offered. Today, part of my role as Transit Manager is to communicate with the community on the benefits of using Miramichi Transit. I value CFAN and its role in helping me to do this.
1523 From the campaign to raise awareness of the benefits of public transportation for seniors and working people, as well as the environment, CFAN has played an important role in making sure that our transit system is continuously supported by all Miramichiers. This approach is working, and each year our ridership is going up.
1524 Further, when we have a nasty snowstorm, or the buses are running late due to road construction, I am able to effectively and quickly communicate with the community through CFAN.
1525 Further, I have had the opportunity to work closely with the CFAN team on the creative advertising and promotion of our service to the community. This past year we had a successful bus shelter promotion to create awareness of the locations of the bus shelters. The team at CFAN dressed up in crazy costumes and had their pictures taken for a contest that saw listeners search daily around the region for the day's location of the CFAN team picture to win prizes.
1526 They are good sports and are willing to do what it takes to support local business and community development projects.
1527 I saw the same types of behaviour when I was with Irving, in the support of our Mother and Father's Day promotions, and our community barbecues, and when I was with Atcon, helping to promote and support our job fairs.
1528 I would also like to speak on what I have observed as their support of other community groups. They air the scores of local hockey tournaments and highlight weekly results. They support our Midget AAA Rivermen Auction through promotions and airtime.
1529 My experience with Rotary has shown me what they do to help that organization work in the community, from 12-hour races to the Pumpkin Festival, the monthly trip draws to raise money, and more.
1530 Also, for those who love golf, there is the noontime report with Ken McBride.
1531 I could go on, but I think you are able to get from this that CFAN is a critical part of our community.
1532 With our current aging population, as well as the continued global focus on environmentally friendly transportation options, I believe that a transit system in Miramichi is a vital resource for our people. Keeping it front and centre in people's minds is challenging, and I depend on the local radio station to help me do this, so that our transit system remains a sustainable transportation option for our region.
1533 I would truly like to thank the CFAN team for their past and ongoing support of what we are trying to accomplish, and look forward to having a second station under their capable umbrella to help me continue to promote our transit system in the future.
1534 Thank you, Madam Chair and Commissioners.
1535 THE SECRETARY: Thank you.
1536 I would now invite Susan Butler to present. You have five minutes.
1537 MS BUTLER: Good afternoon, Madam Chairperson and Commissioners. My name is Susan Butler, and it is my pleasure to appear before you today in support of Maritime Broadcasting System's application for a country music station licence in Miramichi.
1538 I am director of Canada's longest standing Folksong Festival, the 55th Miramichi Folksong Festival. This is my 30th year as volunteer director.
1539 I was born and raised in Miramichi and have lived most of my life here, except for four years.
1540 I am a singer/songwriter with eight recordings to my credit, and have performed in many parts of Canada and the Maritimes.
1541 I was presented the Order of Canada and the Order of New Brunswick in 2007 for my work in preserving folklore and promoting up and coming local talent.
1542 Our festival is not a seasonal event, but consists of year-round activities. These performances consist of local talent, as well as professionals such as Tommy Hunter, the Irish Rovers, Stuart McLean, and Rita MacNeil, to name just a few.
1543 I have a tremendous passion for the local music community and for creating opportunities to develop the talent of local musicians. I believe that the Miramichi region produces some of the greatest musical artists in this country, and having the support of the local radio station is critical in showcasing that talent to the public.
1544 I host many fundraisers, not just for the local community, but on a national and international scale. The last major fundraiser was for Haiti, an eight-hour, non-stop music showcase. Over $20,000 was raised with the help of our local radio station, 99.3 The River.
1545 The radio station's support goes back to the early days of radio in Miramichi, starting with CKMR, which is now known as CFAN.
1546 Back in the fifties, the radio station would come to the festival and record the performances, and the show was aired the following day on the radio for those who were not able to attend.
1547 I have also had the opportunity to host several festival programs prior to each festival. This radio station allowed me to give our listening audience the advantage of hearing some of the local, Maritime, national and international performers who would be appearing at the festival.
1548 CFAN supports all events in Miramichi, and is very open to suggestions to improving their quality of delivery.
1549 I have been promoting all levels of music for over 30 years, consisting of classical, semi-classical, folk, pop, and country, and I have to admit that the concerts I have presented that have the highest attendance are those of a country nature. Does Miramichi need a country station? I strongly believe that it does, and I support its request.
1550 With MBS's commitment to 42 percent Canadian content in its music programming, it is demonstrating very real and tangible support for the development and the promotion of Canadian talent.
1551 Further to this, they have made a commitment that 30 percent of the Canadian content will highlight local and regional artists, which equals 13 percent of all weekly music selections. This is incredible support for what we are trying to achieve in offering our local artists exposure to listeners and ultimately an ability to make a decent living from their talent.
1552 I have had the opportunity over the past to host Sunday shows with local talent, and I have been told that this type of programming will be part of the new station.
1553 MBS has committed, as well, to provide funding to several important areas of Miramichi music talent development: annual funding for FACTOR; annual support of $4,000 to Music New Brunswick for the payment of services for local musicians participating in non-profit/fundraising events in the region; and an annual scholarship of $4,000 to qualifying local high school students advancing onto post-secondary studies in either music or journalism -- clearly music being my passion.
1554 One of our local performers, Terry Whalen, was able to produce his last recording with the financial support of FACTOR, and one of his recordings was nominated for an ECMA award.
1555 The scholarship opportunities that MBS's funding would bring is an important removal of a critical barrier that many of today's young people face, which is the ever increasing cost of post-secondary education. Any assistance that a young high school graduate can secure will make it more achievable for them to pursue their dreams of a career in music by accessing the training they will need to make that dream a reality.
1556 In conclusion, I would like to say that I am very much in support of the licence application that MBS has submitted. I feel strongly that they have served the interests of this community in local music talent development over the years, and in fact have gone above and beyond in many cases to help keep the musical culture that is such a vital part of this region alive.
1557 This is a Maritime-owned and operated station that is staffed by people from our community that care about our community. The fact that they give local talent the airtime that it needs to develop and grow, and not just recently, but for the many years the station has been serving the region, speaks louder than any words I can say about their commitment to this community. This radio station keeps us all connected.
1558 Thank you, Madam Chairperson and Commissioners.
1559 THE CHAIRPERSON: Thank you all very much for your comments.
1560 First of all, Mr. Somers, the maps that you have provided to us, perhaps you could quickly review them.
1561 MR. SOMERS: Sure.
1562 The first map that you look at is the population distribution in New Brunswick, and you can see Northumberland County in yellow. That is the breakdown of the number of people in Northumberland County.
1563 The population change from 2005 to 2010 -- I think says 2005, but I don't have my glasses --
1564 THE CHAIRPERSON: 2006.
1565 MR. SOMERS: 2006, I'm sorry. Fives and sixes are bad for me right now.
1566 THE CHAIRPERSON: Yes, I understand.
1567 MR. SOMERS: When you look down there, the population has shrunk in Northumberland County substantially.
1568 Then, on the second page, we have the distribution of seniors, 65 years and older, by county. The yellow area is Northumberland County again, and the senior population -- 5 to 9.9 percent.
1569 And then the unemployment rate is the big one in northern New Brunswick, as you can see, sadly -- 15 percent or more in Northumberland County.
1570 That just goes to the argument that the population is shrinking and unemployment is rising. Those are absolute facts.
1571 THE CHAIRPERSON: I am interested, from both you and Mr. Malone, as business people, in your hopes for the future in this region, talking out, maybe, three and five years.
1572 I understand the historical, we have had a good description of that, but --
1573 MR. SOMERS: As far as economic growth?
1574 THE CHAIRPERSON: Yes.
1575 MR. SOMERS: The only thing we really have is optimism, and we have been optimistic for the last several years that the economy was going to grow. Unfortunately, that hasn't happened, as you can see from the statistics that we have put forward.
1576 There are some glimmers of hope. There are some opportunities in the wood industry again, and although the wood industry will never rebound to what it was several years ago, we think it can still play a part in this community, and there is an opportunity there right now.
1577 And the federal government is moving the payroll centre here, so that should add some additional jobs. However, some of them are going to come from the gun registry, the existing jobs that are already here.
1578 I am not really sure of the exact numbers. We have asked the question, and we haven't really gotten a solid answer on that.
1579 But, of course, we are positive that we are going to see the economy grow in the next few years.
1580 THE CHAIRPERSON: Mr. Malone, do you have anything to add to that?
1581 No. Nobody has a crystal ball, I guess.
1582 But, generally, you are feeling optimistic and positive?
1583 Can I say positive?
1584 MR. SOMERS: I have bills to pay, I have to be positive.
1585 THE CHAIRPERSON: Yes, this is true.
1586 Generally, again, being business people -- and neither of you is operating a monopoly -- maybe the transit is. You compete with cab drivers anyway, right?
1587 How do you feel about the benefits of competition? What do you think it will do for the market?
1588 I understand, and I think it's wonderful that you are pleased with MBS, and that you have come forward to say that. I think it's great that you have done that, but I just wonder, generally, what your thoughts are on competition.
1589 MR. SOMERS: I can speak from my own experience of being in the car business. I really wish there was a Board like this in the auto industry --
1590 MR. SOMERS: -- because in the last few years, with the economy shrinking in Miramichi, we have had an additional three new car dealerships open up. I was fortunate enough to have the opportunity to look at them in advance, and have the opportunity to turn them down, because it wasn't viable, in my opinion, to operate.
1591 So, as a result of these new stores opening up, our revenues have decreased, because the population is only so big, the market is only so big. Our sales have decreased and we have had to lay off some staff from our two stores.
1592 So it's just the distribution of moneys.
1593 If there were new industries coming into the area and a few hundred or a few thousand new jobs, then absolutely. But, like you mentioned earlier, we don't have a crystal ball, so I really couldn't look at it and say: Yes, we are going to have these jobs in the next two to five years, so we can support a new store.
1594 I see it as just a distribution of wealth, if you will, to add another radio station.
1595 THE CHAIRPERSON: You have the Ford and the Mazda stores, so the new dealerships coming in -- maybe Honda or General Motors or --
1596 MR. SOMERS: Yes, there was Volkswagen and there was Kia, and the other one was Nissan.
1597 THE CHAIRPERSON: Does that tell me that those big corporations would have been looking positively on the Miramichi market? What can I interpret from that, anything?
1598 MR. SOMERS: That they absolutely must have been looking positive at something but maybe they have that crystal ball we are looking for. I don't know where they would get their numbers from in a shrinking market like we have.
1599 But I guess competition looks at, okay, we are just going to win and we are going to be aggressive in the market and try to take some of the business away if it's available.
1600 THE CHAIRPERSON: Yeah.
1601 MR. SOMERS: Yeah.
1602 THE CHAIRPERSON: Okay. Thank you very much.
1603 Ms Butler, do you have anything to comment on either of those too, like do you see opportunities coming to you if there is a new licensee?
1604 MS BUTLER: Yes, I do after listening to MBS' presentation this morning.
1605 And their presentation was so real and they are living in the real world, so to speak. We can paint a pretty picture but common sense is reality. As far as competition, competition is healthy. I can see with this new radio station an opportunity for the cultural venue.
1606 THE CHAIRPERSON: But only if it's licensed to MBS, not a new --
1607 MS BUTLER: That's right.
1608 THE CHAIRPERSON: -- licensee.
1609 Okay, thank you very much for your comments.
1610 MS BUTLER: Yes.
1611 THE CHAIRPERSON: My other fellow Commissioners...?
1612 COMMISSIONER POIRIER: But just to follow on your question why, you said okay, yes, competition is good only if it's MBS. Why wouldn't it be good if it's Newcap?
1613 MS BUTLER: Well, it could be as well but, as I said, listening to MBS' presentation this morning they -- I think one question was would CFAN be pushed to the back or be annihilated so to speak?
1614 That's what I was thinking of when you had asked that question. I just don't see it that way. I just see it as just more opportunities for culture and for Miramachi in general.
1615 COMMISSIONER POIRIER: Okay. Yeah.
1616 Mr. Somers, you didn't close your store --
1617 MR. SOMERS: Oh, no.
1618 COMMISSIONER POIRIER: -- because you had competition?
1619 MR. SOMERS: No, I did not close my stores, no.
1620 COMMISSIONER POIRIER: You still survive?
1621 MR. SOMERS: Right.
1622 COMMISSIONER POIRIER: You still make money out of them?
1623 MR. SOMERS: We did cut back, though, yes.
1624 COMMISSIONER POIRIER: Cut back. Did your staff move to the other car dealers? Are they working there?
1625 MR. SOMERS: They may have.
1626 COMMISSIONER POIRIER: They may have, right?
1627 MR. SOMERS: Yeah, I'm not sure. Some have gone and I'm not sure. I haven't really followed up to see where they are.
1628 COMMISSIONER POIRIER: Yeah.
1629 Taking the viewpoint of the consumer or the people who have a store or whatever, isn't it good to have a choice to decide where they want to put their money to advertise to have different means to maybe reach clients who were listening to a radio station from out of the market?
1630 I don't know. Isn't it good to have a choice? Doesn't it give you power?
1631 MR. SOMERS: Yeah, absolutely. There is no question about it. It's good to have a choice. But I think purely from an economic perspective I think that you have to be -- I think you have to look at it that way. In a market this size competition can be detrimental as well.
1632 I mean, I really believe that somebody -- and I only can speak about the auto industry because that's what I know the most about.
1633 I really feel that there will be some people who will not survive in this market with the number of competitors that we have. And I think -- I don't know. If what you guys are saying is true that there is only a million dollars to spend in this market for radio, then somebody is going to get half and the other person is going to get half and you're going to have a hard time to survive and to run a viable operation.
1634 The other thing it's really tough to get back to the community when your funds are low. That's what we are experiencing right now. I would get -- I was talking to Jim earlier.
1635 COMMISSIONER POIRIER: Yes.
1636 MR. SOMERS: We would probably get one request a day without exaggerating to give to something. We are fairly generous in the community as far as our giving goes and we have had to really cutback in our giving and being able to help with community events and whatnot because of the competition.
1637 Now, hopefully the other people will be good community citizens and they are going to give as well. I guess we can only speak on behalf of CFAN because we are -- we only have experience with them. So we know that they are good community citizens and that they give back. The others we can't talk about.
1638 COMMISSIONER POIRIER: And the others you don't know.
1639 MR. SOMERS: We don't know.
1640 COMMISSIONER POIRIER: There is an expression. Maybe I shouldn't mention it.
1641 MR. SOMERS: The devil you know?
1642 COMMISSIONER POIRIER: The devil you know is better --
1643 MR. SOMERS: I don't think --
1644 COMMISSIONER POIRIER: -- than the devil you don't know is exactly the one I had in mind.
1645 MR. SOMERS: Yeah.
1646 COMMISSIONER POIRIER: So it's always like this. Naturally, we prefer to deal with the one we know.
1647 MR. SOMERS: Right.
1648 MS BUTLER: Also, I guess it's loyalty.
1649 COMMISSIONER POIRIER: Yes.
1650 MS BUTLER: Like CKMR was the first radio station in Miramachi. We are going back over six years ago and all -- like then we had CFAN and then 99.3, The River. They all followed suit and I guess you just feel loyal to them.
1651 COMMISSIONER POIRIER: Yes.
1652 MS BUTLER: You know, I'm not saying that a new radio station wouldn't offer something new and diverse. You know, I'm sure it would. But I guess it's loyalty that lies with me.
1653 COMMISSIONER POIRIER: And loyalty is very important.
1654 MS BUTLER: That's right.
1655 COMMISSIONER POIRIER: Thank you very much.
1656 THE CHAIRPERSON: I would -- Mr. Somers, because I was sort of focusing my question on you as a businessperson, but as head of the Chamber of Commerce, what is the general feeling among your members about the economy here in the region over the next three to five years?
1657 MR. SOMERS: I think I can speak on behalf of the group and say that we are generally optimistic. I know that we are really involved in the community as far as trying to promote new business and work with existing business that's here.
1658 We have worked hard with government over the last couple of governments. We worked really hard with the Liberal Party as well as now we are really associated strongly with the PC Party trying to move some things forward.
1659 Again, all I can say is that we are optimistic and our general membership is optimistic but we haven't got a whole lot of success stories that I can put to you and say this is what's happened over the last couple of years.
1660 THE CHAIRPERSON: Thank you very much.
1661 Commissioner Denton...?
1662 Well, thank you all very much for coming. MBS is very fortunate to have such loyal listeners and advertisers. Thank you very much.
1663 THE SECRETARY: This completes the list of appearing interveners in Phase III, for Items 1 to 3 on the Agenda.
1664 So maybe you want to take a 10 to 15-minute break before we go to the last phase which is Reply by Applicants?
1665 THE CHAIRPERSON: Could I just ask Mr. Pace, if he is still in the audience, if he would mind coming up to the table because I didn't formalize my deficiency request like I should have done -- if you don't mind?
1666 THE CHAIRPERSON: Thank you.
1667 It was just at page 11 of your brief where we discussed the fact that you had said that a reduction of the station's annual revenues, $225,000 to $275,000 represents more than the fee for 2011 and you had explained to me that these were written before you finalized your numbers.
1668 So if you could give us an undertaking by -- obviously not the end of the day. Tomorrow is -- tomorrow?
1669 MR. PACE: I can do it tomorrow.
1670 THE CHAIRPERSON: Can you?
1671 MR. PACE: Yes.
1672 THE CHAIRPERSON: Thank you very much then. Thanks. Thank you.
1673 THE SECRETARY: So we'll take a 10-minute break before we do the last phase.
1674 THE CHAIRPERSON: Thank you. So that would be 2:05, 2:10 -- 3:10.
1675 THE SECRETARY: 3:10.
1676 THE CHAIRPERSON: Thank you.
1677 My computer is on Eastern Time, okay, sir. I have to adjust. I'm on Ottawa time.
--- Upon recessing at 1556
--- Upon resuming at 1613
1678 THE SECRETARY: We will now proceed to Phase IV in which applicants can reply to all interventions submitted on their application. Applicants appear in reverse order.
1679 I would ask Maritime Broadcasting System Limited to reintroduce yourself for the record. You have 10 minutes for this purpose.
1680 Thank you.
1681 MR. PACE: Madam Chair, my name is Robert Pace. I'm the Chairman of Maritime Broadcasting Systems Limited.
1682 Madam Chair, both competing commercial applications have proposed country as their chosen format. However, our country application is distinctly different in that we are the only applicant to promise 42 percent Canadian content and 12.6 percent of all weekly airplay devoted to local and regional musical artists.
1683 Our current station has served Miramachi for 60 years. Building on our relationships with the community our new FM will offer a distinct local country format with minimal negative impact on our current operations.
1684 Increased synergies will allow for superior broadcast services. We want to build on our history, our knowledge and our passion for this community.
1685 MBS is very proud to have successfully developed great country radio stations in Charlottetown, Halifax and Annapolis Valley. That expertise and Maritime passion can be brought to our new Miramachi FM. We have the local history, knowledge and people like Anne Woods and Michelle Roy who are lifelong active residents of the Miramachi community.
1686 Our company is truly Maritime-owned and operated here in the Maritimes. We have faithfully provided quality local broadcast services in New Brunswick, Nova Scotia and PEI for 40 years.
1687 We are Maritimers. We know the Maritimers. We work here. We live here and our success is based on here and is determined on how well we program, promote and serve the communities that we live in.
1688 We would dearly like to have this new opportunity to serve the residents and listeners in Miramachi.
1689 I would like to thank CRTC staff, Madam Chair, Commissioners for giving us the opportunity to hear our story today and I wish you all safe travels and a very happy 2012.
1690 THE CHAIRPERSON: Thank you, Mr. Pace.
1691 I don't know, questions, one question.
1692 Commissioner Poirier has a question.
1693 COMMISSIONER POIRIER: Yes, I have a question.
1694 After listening to MirAcadie, the community radio station here that has difficulties to survive and knowing that most of the money must go to FACTOR, the money to CCD commitments money, but part of it is discretionary. And listening to them knowing that they are afraid you might take part of their audience and they have a very small audience and it's because the country music attracts Quebecers, New Brunswickers and all Francophones throughout Canada.
1695 So would you be willing to consider giving them part of your discretionary money for the next seven years? Is this something you have ever thought of doing? They are not real competitors and it's been done elsewhere in Canada with commercial radio supporting community radio stations.
1696 MR. PACE: I would have no problem with it as long as it is within the guidelines that you people provide.
1697 COMMISSIONER POIRIER: If we were telling you, yes, it is in the guidelines we have would you even be willing to put it in as a condition of licence? And I would ask you what amount of money. You could think about it and come back to us, maybe, Mr. Legal Eric Bowles?
1698 MR. BOWLES: I guess you can consider an undertaking to that effect if you wish, sure.
1699 COMMISSIONER POIRIER: So that's my only question. So we would like to know if you are willing to support them how much money and would you be willing to put it as a condition of licence? This is my --
1700 MR. PACE: You are asking a hypothetical?
1701 COMMISSIONER POIRIER: Yes.
1702 MR. PACE: Would we be open, yes. Have we any idea of how much? That would be a difficult question to answer because we don't know exactly how that affects our period.
1703 MR. BARKER: Yeah, and I think the other problematic area here is that we have made firm commitments to music and to the school board here in Miramachi relative to the funds that we have already allocated and are promised.
1704 COMMISSIONER POIRIER: I am just asking the question, okay? You know what commitments you have made and everything is hypothetic as you said.
1705 So I was asking so if ever you think there is a possibility for you to do that we would love to have a letter confirming it. If you cannot we would love also to have a letter or something telling us that you won't be doing that.
1706 MR. PACE: Okay, thank you.
1707 COMMISSIONER POIRIER: Okay, by...?
1708 MR. BOWLES: Would it be acceptable to have this undertaking performed by end of day tomorrow?
1709 MR. PACE: Yeah, we can do it at the same time. Yeah.
1710 COMMISSIONER POIRIER: Okay, thank you very much.
1711 MR. BARKER: Merci, and thank you to Donna Shufelt(ph) from the Halifax office as well.
1712 THE CHAIRPERSON: Thank you very much.
1713 THE SECRETARY: Thank you.
1714 I will now invite Miramachi Fellowship Centre to come to the presentation table.
1715 THE SECRETARY: Please reintroduce yourself for the record and you have 10 minutes. Thank you.
1716 MR. STEWART: I'm missing one. My group shrunk in the meantime.
1717 We have Eugene Nowlan on my right and Ted Lynch on my left. I'm John Stewart, Madam Chairperson.
1718 It's a delight to be able to speak to the intervention. Is it time to go ahead?
1719 THE CHAIRPERSON: Yes, certainly go ahead too, sure.
1720 MR. STEWART: We saw from the interveners here this afternoon who spoke they didn't really intervene on our part -- against us. But there was a written one so we will talk about some of those written things that were said.
1721 One of the things that was said was to bring another station into the area would be catastrophic to CKMA. Our presence is already here through a rebroadcast transmitter so our audience is pretty much established for the most part.
1722 Our move is a necessity to stabilize what we already do. I do not believe we will hurt other markets since we are -- and the key is unique. We are looking for a unique piece of the pie and we would be taking a slice of the pie that really no one else is looking for.
1723 When they talked about in the second statement CKMA was awarded a French community licence in 2006 -- the station was encountering difficulties. And I can sympathize deeply with them. In 1985 it was deemed by CRTC that our community couldn't handle another big station.
1724 And since then we have dropped by $500 million just from a few of our industries that have failed. I think the moose under the table became an elephant today as we begin to look at how far our economy has slipped over the last few years.
1725 I deeply sympathize with them and in saying so, like fatcattat.com, the big mills, all those things going down it is a tough place right now. And I think that was brought out clearly here today.
1726 And we talked about -- however, we talked a little bit about diversity, a second news voice and I think that we can supply that with very minimal cost. We can be that second news voice in the community. We are diverse from CKMA in a major way and we do totally different things than they do.
1727 I listened to their station. I cannot ascertain that they play any subcategory 35. And so if somebody was turning to us it wouldn't be from them. It would be -- we're totally different people doing totally different things.
1728 I thought later though as I listened to them and, you know, I'm in a smaller station and I know they are. I think there are resources that could be shared other than just finances. Perhaps that's personnel and selling advertising and programming and those sorts of things. I would be open to that. I don't know how far I can go with it but I'm interested. I am. I'm interested in what they are doing as well.
1729 And the stations they talk about in Bathurst and Moncton that are beaming into this area, none of them are touching subcategory 35 music at all. So we argue we are very unique to this market and not covered by anything else.
1730 If we are here we are supplying something no one else will be supplying and we are not taking from it. We are adding to the broadcast industry here.
1731 As I said, the stations to the south of us they don't pretend to -- they don't pretend to be involved in our local news either, which we are. So we have broadcasters from Moncton and Bathurst and places that you can get their signal here, but they are not telling our news and they are not telling it from our perspective. It's not a local thing that they are doing, it's just people are desperate looking for something from somewhere else.
1732 We see the area, as I said this morning, from Miramichi to Blackville as one region, our school districts, our buses. We talk about -- let me see all the things I have. We go to the festivals here, church. Enterprise Commission is one.
1733 What affects this city affects Blackville big time. It's a horse and a mouse -- whatever happens here is huge in Blackville -- so it is essential that we be a bigger part of what goes on here so that in doing so we will help the whole River Valley. What's good for here is good for Blackville in many ways because our people from Blackville come here to work.
1734 This is an area that we serve well with subcategory 35 music. I'm on the final one. The population is well-served by other stations -- their intervention said -- and is not large enough to sustain a new station and because we are unique we won't hurt them. We, in fact, as we do well, could even help them because we are able to reach a sector of the population nobody else is hardly looking for.
1735 There is a big sector of this population that is looking for what we do. We heard today that our population is aging and aging population love what we do. Because of that, we would be doing a great service for the aging population as well.
1736 Because we are able to reach other parts of the community that no one else is reaching we will keep dollars in this community that would be gone otherwise.
1737 And a recent survey that we conducted showed us that we have a good audience here -- 42 percent we saw -- and the people of this city want us to serve them. The whole elected leadership have said that.
1738 THE CHAIRPERSON: Thank you, Mr. Stewart.
1739 Were you going to read into the record your --
1740 MR. STEWART: I thought that was the final closing remarks.
1741 THE CHAIRPERSON: Yes, this is. This is it.
1742 MR. STEWART: Oh! I thought this was answering. I will have to get my notes just to be --
1743 THE CHAIRPERSON: Okay. Certainly. Take your time. Sure.
1744 MR. STEWART: Sorry. Local programming. We currently are and will be broadcasting 95 hours of local programming a week -- we thought that through -- five hours on weekend of Canadian syndicated programs and 26 hours on the weekend of American syndicated programs.
1745 News programming. Our plan for news programming is the following: Monday to Friday, three different newscasts, four minutes in length, 12 times per day; Saturday, two different newscasts, four minutes in length, seven times during the day; Sunday, one news broadcast, four minutes in length, five times a day.
1746 Spoken word. The total amount of spoken work programming that will be broadcast is 35 hours per week: five hours of pure news; 5.4 hours of weather; one hour of sports; 5.6 hours of PSA; 17 hours of announcer talk; and two hours of religious broadcasting.
1747 THE CHAIRPERSON: Thank you very much.
1748 Any questions? No.
1749 Thank you very much, Mr. Stewart. Thank you.
1750 And Mr. Lynch and Mr. Nowlan, yes, thank you. Thank you.
1751 THE SECRETARY: Thank you.
1752 I would now ask Newcap to come to the presentation table.
1753 THE SECRETARY: Please reintroduce yourself and you have 10 minutes.
1754 MR. STEELE: Good afternoon, Madam Chair and Commission staff. I am Rob Steele and here once again with me is David Murray to my left and Steve Jones to my right. We want a chance to reply to the written and the oral interventions.
1756 MR. MURRAY: Thank you.
1757 Before I respond to the opposing interventions we would like to thank the 75 supporting intervenors, including the Federal Member of Parliament, several city councillors and many, many local business owners.
1758 There are three intervenors opposing our application, two from the Francophone community radio sector and one from Maritime Broadcast Systems.
1759 Our response must start from the point of view that our research shows that there is significant dissatisfaction with the state of radio in Miramichi. The research was undertaken in English, but it did not screen out bilingual Francophones.
1760 The Acadian Community Radio Association would have you do nothing to improve this situation, but the status quo does nothing for the 8 percent of Francophones here either. Our research shows that Miramichi residents look outward for radio services more than they do to the market. The Kassof research shows that more local residents listen to out-of-market English-language radio at least once a week than listen to Francophone community radio; 34 percent to Moncton commercial English stations; 23 percent listen to Sirius FM; 7 percent to CBC One; 5 percent to French-language CKLE-FM from Bathurst; 4 percent each to French-language community radio stations CKRO and CJSE.
1761 So CKMA has more to fear from imported French-language commercial and community radio than it does from a local English-language country station.
1762 They also raised the spectre that a new station will look for rebroadcasters on the Acadian Peninsula, undermining their members in that area. This is certainly not our intent and any such expansion would be subject to a public process.
1763 Today MBS created a totally new metric in an attempt to demonstrate that radio sales potential of the market is less than $1 million. They discard the FP Markets Miramichi data and comingle Miramichi and New Brunswick data to arrive at a figure that supports their case.
1764 If we use the tried and true industry-accepted standard that radio revenues represent .36 percent of retail sales, we arrive at a radio revenue for the market that is significantly more, double in fact, which is the $2 million we project.
1765 MBS calls into question the validity of FP Markets retail projections. First, we point out that the retail sales projected for 2012 are totally consistent with those posted in 2009, '10 and '11 and other years.
1766 Second, FP Markets is a reliable, long-established economic reporter and projector.
1767 MBS' intervention is full of the economic woes for Miramichi. We have experience in small markets in Atlantic Canada that face economic challenges. For example, in Corner Brook, with a similar population to Miramichi, 26,800, and similar retail sales, $599 million, the radio revenue is well over $2.4 million. In Grand Falls, Newfoundland and Labrador, with a much lower population of less than 14,000 and retail sales of $478 million, and who have lost its principal employer, radio revenue is well over $1.4 million.
1768 At a hearing in Charlottetown in 2005, and again in Sydney in 2007, the Commission heard applications from both us and others for new FM stations in Charlottetown, Sydney and Kentville. In all three cases MBS argued that it would be fatally wounded by the arrival of new stations. In all cases, including Miramichi, MBS has posted profit margins significantly higher than provincial, regional and national averages.
1770 MR. JONES: A stand-alone broadcaster in a market like this has a tendency to grow complacent, knowing that advertisers locally have little choice. Competition sharpens the mop, forces them to improve their service.
1771 We believe that The River exemplifies this phenomena. Until recently the only live local programming was in morning drive. Mid-days on The River are currently voice tracked, recorded in Charlottetown; evenings recorded in Amherst.
1772 But even the threat of new competition has resulted in change for the better. Subsequent to this call, in October they added the live local afternoon drive show. Imagine the improvements that could be made when they have to compete with a strong local station.
1773 MR. MURRAY: We believe that MBS and the French-language radio stations have nothing to fear from the arrival of a new station in a completely different format. A new country station will repatriate listeners from Sirius FM and Moncton radio with minimal impact on the incumbent broadcaster.
1774 The arrival of a new FM will provide competition in a marketplace for the first time and competition on a level playing field.
1775 It will also provide a new editorial voice.
1776 We will invest $105,000 in the development of Canadian content over the course of the licence, 50 percent higher than the competing application.
1777 For these reasons we believe Newcap is uniquely qualified to provide an exciting new local choice in Miramichi.
1778 We would be pleased to reply to your questions.
1779 THE CHAIRPERSON: Commissioner Poirier, go ahead.?
1780 COMMISSIONER POIRIER: Well, I will ask you the same question I asked MBS. You were maybe out of the room when I asked it.
1781 We heard the French community radio station MirAcadie saying: We will lose audience because we all know that Francophones are attracted by English radio and English country music, too, and they only have a small share of the audience.
1782 We allow, the CRTC commercial radio, to give money from their discretionary money to community radio stations. Would you be willing to support them and how much money would you accept having it as a condition of license?
1783 You are free to answer whatever you want. It's a possibility that you can put on the table and you would have until -- Eric -- tomorrow to do it?
1784 MR. MURRAY: We can respond to that.
1785 MR. MURRAY: Just again, there is very little money that is not earmarked for something or another. We have made agreements with the school board, we have made agreements with the -- we don't have concrete final agreements with the music festivals, but I can suggest a couple of things and you can tell us if they are acceptable or not.
1786 We could give, if you permitted, our basic to the community French radio station. That's about $1,000 a year. Some of it is supposed to go to FACTOR though, I will remind you.
1787 The other thing that we would do, if you would permit us to increase our CCD we would give $5,000 a year.
1788 COMMISSIONER POIRIER: Well, I don't think you can give the FACTOR money to any other than FACTOR, okay. So it has to be discretionary money.
1789 MR. MURRAY: You have the power.
1790 COMMISSIONER POIRIER: And I don't think you can increase the CCD commitments you have made up to now.
1791 MR. MURRAY: Okay.
1792 COMMISSIONER POIRIER: Am I right?
1793 THE CHAIRPERSON: Yes.
1794 COMMISSIONER POIRIER: Okay. I just asked the question because you heard the same thing I did.
1795 So that's it.
1796 THE CHAIRPERSON: Just on that point, perhaps, if you were the successful applicant you would keep that in mind and help them out along the way if you can, whether it is, as Mr. Stewart suggested, by cooperating. I believe you do that in other markets, maybe not with French community stations, but I believe you do help out other community stations.
1797 MR. MURRAY: We can probably find a couple of thousand bucks a year.
1798 THE CHAIRPERSON: Anyway, that would be at your discretion, it's not a commitment.
1799 Commissioner Denton...? No.
1800 What do you have to say to MBS' comment. They took issue with you saying that you would take money from -- that your revenue would come from repatriating listeners from Sirius and Moncton radio and they didn't seem, if I understood them correctly, to think that there was any revenue there because you had said that you don't charge for that, that you are not selling ads or accepting ads, I gathered, in Moncton to reach this market.
1801 MR. MURRAY: Yes. Our application wasn't as clear as it should have been
1802 What we meant with that 25 percent is that because there was such a large listening base from out-of-market and the retailers are not getting -- they are not getting value for their radio advertising dollars now because they don't have -- the listening is not there. MBS indicated that they had 50 or 60 percent, I mean those numbers are completely fabricated.
1803 The BBM does not say that, it says them and others and they don't belong to BBM. So our research said they had 31 percent, that's probably what they had, because it was a completely independent study and so, you know, if the advertisers think they are getting 50 or 60 percent, because maybe that's probably what they are telling them, they are not, they are getting 30 percent.
1804 By us coming into the market, getting our fair share, our 18 percent, we will get a lot of money from new advertisers that aren't getting value for the money now and also who aren't advertising on radio because they are not getting results.
1805 Ratings really have very little to do with local revenue. You have to have a certain number of listeners, but if you buy the correct amount of radio commercials with great creative you will get results and the advertiser will come back and they will buy you again and again and again, but if you don't have great creative and you don't buy the right amount, you won't get results and they just won't buy radio, they will buy something else or they won't advertise, they will go online or they will do whatever.
1806 So there is obviously a lot of pent up -- this market is very underperforming, as we think we have demonstrated, we believe we are accurate on.
1807 THE CHAIRPERSON: Good. Thank you very much. I have no other questions.
1808 Legal, any questions?
1809 MR. BOWLES: No, none.
1810 THE CHAIRPERSON: Okay. Thank you very much.
1811 That concludes this portion of the hearing.
1812 Would you like to handle that part?
1813 THE SECRETARY: Yes.
1814 First of all, I would ask Miramichi Fellowship to come back to the microphone, please.
1815 THE SECRETARY: We would ask you to provide the undertaking that you read into the record in writing to the Commission.
1816 Could you provide those?
1817 MR. STEWART: Yes, we would be glad to.
1818 MR. STEWART: I was thinking that 61 percent they are all talking about, that's probably us in the BBM.
1819 THE SECRETARY: Thank you.
1820 So this completes the consideration of items 1 to 3 on the Agenda.
1821 THE CHAIRPERSON: Tomorrow morning at 8:30?
1822 THE SECRETARY: Tomorrow morning at 8:30, the presentation by Hector Broadcasting.
1823 THE CHAIRPERSON: Thank you very much, everyone. Thank you.
--- Whereupon the hearing adjourned at 1641, to resume on Tuesday, January 17, 2012 at 0830
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