ARCHIVÉ -  Transcription

TRANSCRIPT OF PROCEEDINGS

FOR THE CANADIAN RADIO-TELEVISION AND

TELECOMMUNICATIONS COMMISSION

TRANSCRIPTION DES AUDIENCES DU

CONSEIL DE LA RADIODIFFUSION

ET DES TÉLÉCOMMUNICATIONS CANADIENNES

SUBJECT / SUJET:

VARIOUS BROADCASTING APPLICATIONS FOR BROADCASTING LICENCES TO CARRY ON RADIO PROGRAMMING UNDERTAKINGS TO SERVE EDMONTON, ALBERTA, PUBLIC NOTICE CRTC 2002-29 AND RED DEER, ALBERTA, PUBLIC NOTICE CRTC 2002-75

PLUSIEURS DEMANDES EN RADIODIFFUSION VISANT L'EXPLOITATION D'ENTREPRISES DE PROGRAMMATION DE RADIO POUR DESSERVIR EDMONTON (ALBERTA), AVIS PUBLIC CRTC 2003-29 ET RED DEER (ALBERTA), AVIS PUBLIC CRTC 2003-75

HELD AT: TENUE À:

Shaw Conference Centre Shaw Conference Centre

Salon 8 Salon 8

9797 Jasper Avenue 9797, avenue Jasper

Edmonton, Alberta Edmonton (Alberta)

Volume 4

Transcripts

In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

bilingual as to their covers, the listing of the CRTC members

and staff attending the public hearings, and the Table of

Contents.

However, the aforementioned publication is the recorded

verbatim transcript and, as such, is taped and transcribed in

either of the official languages, depending on the language

spoken by the participant at the public hearing.

Transcription

Afin de rencontrer les exigences de la Loi sur les langues

officielles, les procès-verbaux pour le Conseil seront

bilingues en ce qui a trait à la page couverture, la liste des

membres et du personnel du CRTC participant à l'audience

publique ainsi que la table des matières.

Toutefois, la publication susmentionnée est un compte rendu

textuel des délibérations et, en tant que tel, est enregistrée

et transcrite dans l'une ou l'autre des deux langues

officielles, compte tenu de la langue utilisée par le

participant à l'audience publique.

Canadian Radio-television and

Telecommunications Commission

Conseil de la radiodiffusion et des

télécommunications canadiennes

Transcript / Transcription

VARIOUS BROADCASTING APPLICATIONS /

PLUSIEURS DEMANDES EN RADIODIFFUSION

BEFORE / DEVANT:

Andrée Wylie Chairperson / Présidente

Andrew Cardozo Commissioner / Conseiller

Stuart Langford Commissioner / Conseiller

Ronald Williams Commissioner / Conseiller

ALSO PRESENT / AUSSI PRÉSENTS:

Peter McCallum Legal Counsel /

Conseiller juridique

Steve Parker Hearing Coordinator /

Coordonnateur de l'audience

Pierre LeBel Secretary / Secrétaire

HELD AT: TENUE À:

Shaw Conference Centre Shaw Conference Centre

Salon 8 Salon 8

9797 Jasper Avenue 9797, avenue Jasper

Edmonton, Alberta Edmonton (Alberta)

June 23, 2003 Le 23 juin 2003

Volume 4

TABLE OF CONTENTS / TABLE DES MATIÈRES

PAGE / PARA

PHASE I

PRESENTATION BY / PRÉSENTATION PAR:

Rawlco Edmonton Limited 754 / 4601

CHUM Limited/Milestone Media Broadcasting Limited 849 / 5089

Harvard Broadcasting Incorporated 1001 / 6049

CKMW Radio Limited 1101 / 6640

Edmonton, Alberta / Edmonton (Alberta)

--- Upon resuming on Monday, June 23, 2003 at 0900 /

L'audience reprend le lundi 23 juin 2003 à 0900

4594 THE CHAIRPERSON: Order, please.

4595 Good morning. Bonjour.

4596 Mr. Secretary, please.

4597 MR. LeBEL: Thank you, Madam Chair.

4598 The next application is an application by Rawlco Edmonton Limited for a licence to operate an English-language specialty FM commercial radio station in Edmonton.

4599 The new station would operate on frequency 88.3 MHz (channel 207C1) with an effective radiated power of 100,000 watts.

4600 Ms Pam Leyland will introduce the Panel. You have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

4601 MS LEYLAND: Thank you.

4602 Good morning, Madam Chair, Members of the Commission and Commission staff.

4603 I'm Pam Leyland, President of Rawlco Radio. I am proud to run 12 radio stations in Saskatchewan. I like to say the biggest challenge I have running those radio stations is sitting to my immediate left, Gordon Rawlinson, CEO, Rawlco Radio.

4604 To Gordon's left is Don Armstrong, Director of Canadian Talent Development. Armi has been spending so much time in the Edmonton jazz community lately that he is thinking of taking up the saxophone.

4605 To Don's left, Doug Rawlinson, Executive Vice-President, Rawlco Radio. Doug is one half of the "Doug and Doug Show", as we like to call them. The other half is seated behind me to my left, Doug Pringle, Rowlco's Director of Programming. Doug pioneered FM radio in Canada at CHOM Montreal in 1969.

4606 To Doug's right is Dave Babcock, an Edmonton jazz musician. Allow me to tell you a little bit about Dave.

4607 He is regarded as one of Western Canada's finest jazz musicians. Dave is a saxophonist, vocalist and bandleader who makes his living as a professional musician in Edmonton.

4608 After graduating from Grant MacEwan College, Dave went on to perform and record with many artists including Long John Baldry, Glen Campbell, Petula Clark, Colin James and Mary Wilson of the Supremes.

4609 He has let several successful group including the Alberta Recording Industry Association's award winning jazz group, The Jump Orchestra.

4610 Dave's numerous recording credits include appearances on two Juno award-winning albums.

4611 Dave is an all-around great guy and he is getting married in August.

4612 Madam Chair, Members of the Commission. It is an honour to be here today applying for Edmonton's first and only smooth jazz radio station.

4613 We are proud to present you with a unique application, one that provides a distinctive listening choice for Edmonton and provides the wonderful jazz community here with an unparalleled opportunity.

4614 First of all, why smooth jazz? Well, very simply it's a format that doesn't currently exist in Edmonton. It's a unique format that will provide important diversity.

4615 In fact, our research shows only 3 per cent feel they can hear this music often on Edmonton radio today.

4616 Let me tell you about the audience for our new station.

4617 Smooth jazz will never be the number one station in Edmonton and that's fine. It's not a mass appeal format. It's a specialty format.

4618 The critical point is that there is a big enough audience for our new station to be successful.

4619 Our research shows that for about 5 per cent of people we will become their favourite radio station. For 15 per cent, we will become their second favourite radio station. Based on this, we can project a 5 to 7 share of the 25-54 year old demographic.

4620 We are excited about the response to the questions on tuning in our research: 11 per cent of those interested in smooth jazz said they would listen to the radio a lot more, and 26 per cent said they would listen a little more. In other words, we may actually get people listening to the radio more away from other media choices, and that's great for radio.

4621 A 5-7 share of 25-54 year olds will put us at the bottom of the list of FM radio stations. On the surface, that might not sound so hot, but we will not only survive, we will prosper because of several key factors.

4622 The first is our audience will be very desirable for our advertisers. Many of our listeners will be better educated, more sophisticated and have higher incomes. They have money and spend it on dining out, going to the theatre, buying more expensive cars and things for their homes and travel. Our smooth jazz station will have a high-quality audience and we will be able to deliver them to our clients.

4623 So on the revenue side, we are very confident of our conservative revenue projections.

4624 On the cost side, perhaps the most important point is that we will be a Category 3 specialty licence. We think this is key to our long-term success.

4625 It means we will be the only smooth jazz station in Edmonton and nobody can compete against us without going to you, the Commission, first. We won't wake up one morning to find out we have a direct competitor.

4626 So we are going to have this relatively small market to ourselves that that suits me just fine. Edmonton is one tough radio market for an independent FM. There are three major chains: Standard, Corus and Newcap, each of them with two FMs and one or two AM stations. That gives them lots of flexibility and lots of ways to program against a Category 2 stand-alone. That's why we applied for a specialty licence. I don't want to be in that fight.

4627 Our promotion costs will be a fraction of the top-rated stations in the market. That's because our listeners will be loyal. They will find us quickly and once they do, they will stay. There is no other choice for smooth jazz elsewhere in Edmonton.

4628 We will also be able to keep our costs under control because we won't be competing for high-priced radio personalities. Our listeners are into the music and adult communicators who are real jazz enthusiasts will be what we need on the air.

4629 Finally, our total share of the radio market is small and will have little impact on the existing stations. Our research shows that the people who would listen to our station are presently listening to a wide variety of stations, plus we will attract new listeners.

4630 Overall, keeping our costs under control everywhere will help us succeed. We know how to do this based on our experience in Saskatchewan. We never have had the millions to spend that you see in the larger markets. So in this way, our smooth jazz station will be similar to our operations in Saskatchewan.

4631 Don Armstrong is going to tell you know about our Canadian talent development plans.

4632 MR. ARMSTRONG: We have committed to spending $2.4 million over seven years on Canadian talent development. This involves three important initiatives.

4633 The first, and the major one, is Project 10k20. Let me tell you how this project came to be.

4634 There are many, very talented jazz musicians who live and play in Edmonton. There is also an outstanding music program at Grant MacEwan College. When you read the biographies of many of Edmonton's top jazz musicians there is a common thread: they all went through Grant MacEwant's two-year jazz-based music program.

4635 So, on the one hand, there is this terrific jazz program which produces fabulous musicians. On the other hand, they have recorded very little music that we could play on our station.

4636 The reason for the lack of CDs is simple: it's economics. When there is no standard way to distribute them and little chance of getting airplay on commercial radio in Canada, it just doesn't pay to make a CD.

4637 We have talked to lots of jazz musicians in Edmonton, and it's clear that the talent exists to make some great music for our smooth jazz station. The artists just need some support.

4638 So to encourage these musicians to make the music that we want to play on our station and that they would love to record, we created Project 10k20.

4639 Here is how it works:

4640 Once their application is accepted, we will give them $10,000 and the rest is up to them. They can go and try to get more funding from other sources and then they decide how and where the music will be produced.

4641 The artists have a couple of wonderful incentives to produce the best possible CD. The better it is and the more it fits our format, the more airplay it will receive. Not only will it be exciting for them to hear their music on the radio, they will just love getting those royalty payments from SOCAN.

4642 I have talked about the "10k" part of Project 10k20, now for the "20".

4643 We are going to fund 20 Edmonton jazz artists per year for seven years. On top of that, during our start-up period, we will also fund an additional 20 artists. So in our first licence term, there will be 160 smooth jazz CDs produced to play on our station.

4644 This is a brand new concept. We believe it's one that has never been tried before. So to see if it would work in the real world, we asked Dave Babcock to test the concept. He agreed. In fact, his first reaction was: "Wow! I feel like I just won the lotto". He set out five months ago to produce his own album called "Happenstance". Let's just give it a listen.

--- Musical Interlude / Intermède musical

4645 MR. ARMSTRONG: Good stuff, Dave.

4646 We think it's a great CD and the track you just heard is called "Tricksy". We would be happy to make copies of the CD available to the Members of the Commission, and we hope that during the question period you will ask Dave about his experience making the CD.

4647 We also talked to a number of other Edmonton jazz musicians to get their reaction to our concept. Overwhelmingly the response was: "This is great" and "Where do I apply?". In fact, we already have 12 completed applications to take part in Project 10k20.

4648 We are absolutely convinced this is a winner project.

4649 It's a winner for the artists. It's a winner for the station. It's a winner for the listeners, and it's a winner for the entire jazz community in Edmonton.

4650 For the artists they will retain the sole rights to their CD. So the revenue from the CDs they sell goes directly to them. As well as royalty payments, the airplay they receive on our station and on other stations across the country will raise the profile and that will lead to more and better performing opportunities.

4651 Our station will obviously benefit because we will have a continuous flow of fresh new Edmonton music.

4652 Our listeners will benefit. They identify with their local artists. Now they will be able to hear their new releases on the radio and then go and see them perform live in Edmonton venues.

4653 The jazz community as a whole benefits because Project 10k20 creates an infusion of cash, airplay and promotional support.

4654 Two hundred thousand dollars cash will be spent every year of our licence term plus an additional $200,000 will be spent in our start-up phase. This also means money for studio musicians, for producers, for recording studios, and so on.

4655 Project 10k20 will result in this: fully one half of the Canadian music that we play on our station will be by Edmonton artists. We believe we are going to reach this goal by the end of our first year on the air. When we do it, it means that one song out of very six songs -- one out of six -- played on the radio station will be by a local Edmonton musician. We believe that this level of support for local talent is unprecedented in any genre.

4656 So that's Project 10k20.

4657 Our second major commitment is to provide $350,000 over seven years to the Edmonton Jazz Festival. I hope you have had the chance to experience the festival which, of course, is on right now. It's a terrific event.

4658 We know that having a thriving jazz festival that attracts large crowds is very important to our radio station. This kind of funding will help the festival bring in the best possible Canadian artists.

4659 In our on-air programming leading up to the festival, we will feature the music of the artists who will be appearing, and as well we will interview them.

4660 During the festival, we will heavily promote the times and venues of all the shows. We will be live on the scene with interviews and commentary.

4661 We think that the Jazz Festival will be our best opportunity each year to attract new listeners. The stronger the festival is, the more it benefits our station.

4662 Our third major Canadian talent development commitment is to provide $350,000 over seven years to the Yardbird Suite. This will support Canadian talent. If Grant MacEwan College is where many of Edmonton's jazz musicians learn their craft, it's the Yardbird Suite that nurtures their careers. Our funding will increase the number and the quality of the Canadian musicians who perform at the Suite

4663 In summary, we are excited about our plans for Canadian talent development:

4664 MS LEYLAND: Beyond our Canadian talent development commitments, we will also contribute $350,000 over seven years to Aboriginal broadcast training. I am proud of the ongoing work we are doing in Saskatchewan. We are helping First Nations' young people develop their careers in broadcasting and journalism, and we are looking forward to continuing this work in Edmonton.

4665 I have no doubt that Rawlco Radio is uniquely qualified to make our ambitious plans a reality.

4666 One of the things I am most proud of is the record of our Saskatchewan stations for community service. In fact, in the last 11 years we have won the prestigious CAB Gold Ribbon for community service six times.

4667 We love being in radio because it's one of the few businesses where the more you serve your community, the better you do. At Rawlco we all live by that philosophy.

4668 All of our stations have strong news departments and five years ago we introduced News/Talk Radio to Regina and Saskatoon. At the time, many said it couldn't be done because of our small population, but we made a commitment to the people of Saskatchewan and our communities are much better served. I am happy to say after many years of losses the stations are now doing well.

4669 Our experience in the news/talk format will serve us well in Edmonton. Our mature and educated smooth jazz audience will demand, and we will provide, relevant news, weather, sports and community coverage. We will be a completely new news operation and we will bring a fresh perspective to our coverage.

4670 Jazz will be the central focus of our spoken word programming, but Edmonton has a diverse and vibrant arts and cultural community. Our listeners will want to know what is going on at the Citadel, the Winspear, the Shadow Theatre, Walterdale Playhouse, and Edmonton's many other venues.

4671 Our station will likely be the only commercial station that focuses so closely on the cultural life of Edmonton.

4672 Rawlco has the experience to create a new radio station for Edmonton. In the past two years, we have launched four FM stations in Saskatchewan. Our company is very strong financially. The experienced management team we have developed over the years is still in place -- well, perhaps with a few more grey hairs.

4673 Rawlco is a radio only company, successfully operating 12 stations in Saskatchewan. We all live and breathe radio.

4674 I would like to take this opportunity to introduce to you four key members of my management team in Saskatchewan who are here today to cheer us on:

4675 Keith Black, Senior Vice-President of Sales for Saskatchewan.

4676 Mary Kaiser, Rawlco's Corporate Controller.

4677 Jamie Wall, Vice-President, General Manager, C905/ROCK 102 and CKOM in Saskatoon.

4678 Sandee Reed, Sales Manager of our Saskatoon operation.

4679 Sharon Taylor, General Manager of Z99/ROCK 94 AND CJMI Regina is not able to be here today. Her mother is being honoured in Toronto and, of course, Sharon is there with her.

4680 Also with us, David Dekker, Vice-President, General Manager CJNB/Q98 North Battleford, and CJNS Meadow Lake, and saxophonist with the North Battleford Jazz Band.

4681 Bob Young, Gordon's assistant. I like to say everyone should have a Bob!

4682 I believe we have all the ingredients needed to create a great smooth jazz radio station for Edmonton. We have made important commitments and Rawlco is a company that keeps its promises.

4683 I have been in radio for 25 years -- 25 years actually this month -- 21 of them with Rawlco and all of them in Saskatchewan. More than 25 years ago I took my radio training right here in Edmonton at NAIT, the Northern Alberta Institute of Technology. My dream back then as a very young woman was to be good enough to get a job in Edmonton. Little did I imagine that one day I would be trying to create that job by applying for a brand new radio station.

4684 MR. G. RAWLINSON: I ran this company, Rawlco, for many years, but now Pam is the President. My job as CEO is to ensure that Pam and her team, if they do a great job of running the radio station, if they do a terrific community service and provide a great station, that they have a reasonable chance of being successful and making a profit.

4685 So when I heard about the call for applications for Edmonton I though, "Gee, there are three strong, pretty tough operators and they each have at least one AM and they each have two FMs". I thought: "What is needed and not available and that can compete successfully against those strong broadcasters?".

4686 That is how we made the decision initially to apply for a specialty licence, a smooth jazz station, a station that could do well as a stand-alone.

4687 We can do it, we can do it well, and we can make a profit.

4688 MS LEYLAND: Madam Chair, Members of the Commission, this concludes our presentation. We look forward to your questions. I will be quarterbacking the team here today.

4689 Thank you very much.

4690 THE CHAIRPERSON: Good morning and thank you, Ms Leyland, Mr. Rawlinson and your colleagues, and welcome to the hearing.

4691 Commissioner Williams has questions for you.

4692 COMMISSIONER WILLIAMS: Good morning, Pam.

4693 MS LEYLAND: Good morning.

4694 COMMISSIONER WILLIAMS: Rawlco panellists. We have had a pretty exciting weekend.

4695 Mr. Rawlinson, in regards to the royalty payment comments you made earlier, is there a Prince Edward connection that we should be aware of?

--- Laughter / Rires

4696 MR. G. RAWLINSON: It was a wonderful day. It's a wonderful facility for the City of Prince Albert, and we thank you for your indulgence.

4697 COMMISSIONER WILLIAMS: We have a series of questions that we will work our way through, many of which are designed to make sure the record is complete and similar to all of the other questions that we ask of the applicants. So if some of the questions appear repetitive, it is by design.

4698 The first objective in this first series of questions that I am going to work my way through with you is to determine why Rawlco feels it's specialty FM smooth jazz format would best serve Edmonton's adult listeners and provide the greatest degree of programming diversity to its target audience, given that its proposed music mix and Global's non-specialty FM Easy Listening appeared to share many similar characteristics.

4699 So the first question: You are proposing to offer a specialty FM smooth jazz music format to serve Edmonton's adult audience 24 to 54 years of age. You have identified this group as being currently underserved by local radio. Two other applicants are before the Panel, both seeking to serve Edmonton's adult audience.

4700 One, Edmonton Radio Limited is proposing a specialty FM listening format, although they are targeting an older 50+ demographic.

4701 The other, an application by Global Communications Limited is proposing a non-specialty FM Easy Listening format.

4702 I assume that as a participant in a competitive hearing you have reviewed the applications of both Edmonton Radio and Global.

4703 Both Rawlco and Edmonton Radio are proposing specialty FM formats targeted to serve Edmonton's adult listeners.

4704 Could you elaborate on how your proposed specialty FM smooth jazz format differs from the specialty FM Easy Listening format proposed by Edmonton Radio?

4705 MS LEYLAND: I will comment on that first, Commissioner Williams, and then ask Doug Pringle, who we refer to as our music guru, to comment further.

4706 The first point I would like to make is the obvious one, but it is very critical to our application which is that we are a smooth jazz radio station; they are Easy Listening.

4707 The second point is that 90 per cent of our music will be from the last ten years whereas the others will be relying every heavily on older music.

4708 We are a radio station that will be instrumentally based. Both the other applications are vocally based radio stations.

4709 Finally, the point that we are very excited about, is that we will be playing 50 per cent of our Canadian content from Edmonton artists which will certainly make us very unique in this city and, we believe, in the whole country.

4710 Doug, would you like to comment further on that?

4711 MR. PRINGLE: Yes. The four points that Pam just made I think are going to make quite a big difference, a much bigger difference than you might see on paper because, of course, what you don't see on paper is the textural difference and there is a huge difference between listening to pop stations that have a taste of jazz-oriented music and a jazz station that has a taste of pop-oriented music. So I think texturally there would be no doubt what you were listening to.

4712 COMMISSIONER WILLIAMS: So let's walk through the Global example and how it compared to Rawlco.

4713 We have reviewed the sample music list submitted as part of your 3 March 2003 deficiency and the sample list submitted by Global. Interestingly, we note that there is more than a passing similarity between the styles of Category 3 music and the more contemporary Category 2 vocal music both of you have programmed as part of our respective formats.

4714 We might even suggest that the potential exists for a degree of commonality in upwards of 60 per cent for both proposed music mixes, a similarity in 30 per cent Category 2 contemporary vocal, and 30 per cent of Category 3 music.

4715 I suspect this could lead the average listener finding both stations sounding somewhat similar, although the differences may be subtle.

4716 Could you please explain to the Panel how your proposed smooth jazz format would be different from the Easy Listening format proposed by Global Communications Limited?

4717 MR. PRINGLE: There is no question that there is going to be similarity between the two and if you look at it and approach it strictly from a mathematical point of view, you can say that we are playing 30 per cent Category 2 pop and they are going to be playing 20 to 30 per cent Category 3 jazz. You are looking at around 60 per cent that could be the same.

4718 But when you look at it a little more deeply, you will see that 90 per cent of what we are playing is from the last ten years, whereas 50 per cent of what they play is previous to 1990. So right away in terms of era you disqualify a large percentage of that 60 per cent. So I would guess you would probably have more in the range of 30 to 40 per cent similarity.

4719 Of course, the really big difference that the listener would notice is the instrumental quotient. Smooth jazz is an instrumentally based format in a marketplace that literally everybody plays vocals. I mean, talk about a lack. I mean, there is real lack of a station that is instrumentally based and if you are listening to the two stations, that is the first thing that the audience is going to pick up on. It's not the similarities they are going to pick up on, it would be the differences.

4720 So I think 70 per cent of the music would be different, but most importantly we are 50 per cent instrumental and that would completely change the feel and the texture and perception of our station.

4721 COMMISSIONER WILLIAMS: The last question in the program diversity area: Why do you feel your smooth jazz as opposed to either of the two Easy Listening formats proposed would provide Edmonton adults with the greatest degree of programming diversity, and represents the best choice of format to serve Edmonton's adult radio audience?

4722 MR. PRINGLE: Well, Easy Listening is just another kind of pop format and pretty much all the FM stations play some variation of pop or rock or country.

4723 There is nobody that is playing jazz. There is nobody that is targeted on the jazz lifestyle. It just does not exist in Edmonton. So it would be totally unique.

4724 COMMISSIONER WILLIAMS: Thank you.

4725 We are now going to move into the area of local and spoken word programming.

4726 You have agreed to abide by the standard condition of licence requiring that at least one third or 42 hours of your programming be local in order to solicit or accept advertising.

4727 In your March 3rd deficiency you indicated that it was your plan to have announcers live on-air during all day parts with the possible exception of your overnight show.

4728 I note that there are a number of syndicated smooth jazz programs available in the marketplace.

4729 Do you have plans to broadcast any acquired or syndicated programming and, if so, how many hours and what type of programming might this be?

4730 MS LEYLAND: No, we have no plans. Actually, I wasn't aware of it. So we have no plans to carry syndicated smooth jazz programming.

4731 COMMISSIONER WILLIAMS: So will all hours of programming be local-station produced then?

4732 MS LEYLAND: Yes.

4733 COMMISSIONER WILLIAMS: Also in your March 3rd deficiency you indicated that you would employ four full-time on-air staff and announcers would be live during all day parts with the possible exception of overnight.

4734 Could you please provide us with a more detailed picture of when you propose to be live with announcers, and when you propose to offer automated programming?

4735 MS LEYLAND: Certainly. We will be live with announcers from 6:00 a.m. in the morning until midnight, Monday through Sunday, including statutory holidays and our plan is to voice track, as we call it, from midnight to 6:00 a.m.

4736 COMMISSIONER WILLIAMS: With respect to the periods indicated announcers would be live, does that mean real-time live or live auto assist or...?

4737 MS LEYLAND: Real-time live, sitting in the chair.

4738 COMMISSIONER WILLIAMS: You describe your target audience of 24 to 65 year old adults as being a well-educated, professional mature audience, one that you yourself believe will have high expectations regarding the quality of news and information and spoken word programming directed to it.

4739 I would like to work our way through the spoken word portion of the questions.

4740 I understand your smooth jazz format will be first and foremost a music-driven format. However, in reviewing your programming plans, what do you envision as the average weekly ratio of music-to-spoken-word?

4741 I ask this because of the audience expectation that you have identified in your application.

4742 MS LEYLAND: Sure. Let me walk you through our schedule of spoken word and also our plans for an additional announcer in Richmond and surveillance, if that's okay.

4743 COMMISSIONER WILLIAMS: Sure.

4744 MS LEYLAND: We will be scheduling spoken word amounting to 10 hours and 43 minutes per week and that breaks down as follows:

4745 Five hours and two minutes of news per week. So Monday until Friday we will have newscasts from six o'clock in the morning until 6:00 p.m. in the evening, plus morning drive, 6:30, 7:30 and 8:30 newscasts. They will range in length from two minutes to the more in-depth casts in the morning of five minutes of length. On Saturday and Sunday we will have news from 6:00 a.m. until noon.

4746 We will also schedule one hour and 25 minutes of sports; one hour and 30 minutes of weather; 45 minutes of traffic; two hours and six minutes of scheduled community. So that's one minute an hour from 6:00 a.m. to midnight.

4747 Plus we will also have five hours and 12 minutes of unscheduled announcer commentary: six minutes an hour in the morning show, from six to nine o'clock, and two minutes an hour all other hours of the day.

4748 As an example, if we were on the air this morning, the announcers would be talking about the non-stop rain in Edmonton all weekend. I am sure they would be talking about how Montreal beat Edmonton badly on the weekend and, of course, how the wet weather, unfortunately, affected the Works Design, the visual arts celebration that is on. Fortunately, the Jazz City events were all indoors. So likely the rain didn't affect them too much. Those would be some example of our unscheduled announcer commentary.

4749 So the total then for scheduled and unscheduled spoken word per week is 15 hours and 55 minutes.

4750 COMMISSIONER WILLIAMS: Separate from your news, weather and sports, you indicate you would provide coverage of the local, national, international jazz scenes.

4751 Can you elaborate a bit on what you envisioned in that portion of your programming?

4752 MS LEYLAND: Certainly, and I will ask Doug Pringle to also comment on this.

4753 Our audience is obviously into smooth jazz. If you are not into smooth jazz you won't be listening and, therefore, they will be very interested, I think, in all the music they are being exposed to because, again, this is music that is just not heard in Edmonton right now.

4754 They might know a little bit about an artist that is as famous as Diana Krall or Holly Cole. They will know some about Dave Babcock, as an example, because of his 20 years playing here in Edmonton, but there is going to be a wide range of artists that they really know very little about.

4755 So having communicators who know the music is going to be really important to our radio station.

4756 Doug, would you like to comment on that?

4757 MR. PRINGLE: This format is really quite a rare beast. It's actually an adult demographic format that is based around new music actually. So the people who will be listening to our radio station they are passionately involved with the music. They love the music. Many of them were passionately involved with music when they grew up, mainly probably listening to rock.

4758 In fact, a lot of Canada's top smooth jazz artists are former rockers: Rick Emmett of Triumph, Lee Aaron, Heavy Metal Queen. So their love of music has stayed with them all their lives. It's just that now what they are into, they are into jazz and they are going to want the same kind of in-depth information that they looked for when they were younger. So it's going to be a very important component of what we do.

4759 COMMISSIONER WILLIAMS: How many hours per week would this represent?

4760 MS LEYLAND: The unscheduled announcer commentary which includes the kind of information that Doug Pringle was just talking about is five hours and 12 minutes per week.

4761 COMMISSIONER WILLIAMS: If licensed, your station would be a stand-alone in the market. Would you elaborate on why you feel a local stand-alone newsroom with three full-time news staff is adequate to provide your target audience with the type of quality comprehensive news and information programming that you yourself state your audience would expect from the station?

4762 MS LEYLAND: If I can tell you about the staffing for our newsroom and how we see it all working it out.

4763 We will have a full-time news director, obviously, who reads, I would suggest most likely, morning news. It could be afternoon news. One afternoon news anchor/editor. A community reporter who will be responsible for the scheduled community cut-ins that I just talked about. A full-time reporter who would be working Monday through Friday, and a couple of additional part-timers, a part-time weekend new anchor.

4764 I think one of the great things about being here in Edmonton is that there is a larger base of broadcasters in a city this size. Whereas this is a position we often have a bit of a trick filling in Saskatchewan in our smaller communities, it will be easier for us to find a quality part-time weekend news anchor and also a part-time weekend reporter.

4765 COMMISSIONER WILLIAMS: Now, I am going to move into that area of Canadian content.

4766 You indicated in your March 3rd deficiency that you would broadcast a minimum level of 35 per cent Canadian content in Category 2 and 3 music. Your commitment to broadcast 35 per cent Canadian content in Category 3 music exceeds the currently regulatory requirement of 10 per cent.

4767 If licensed, would you undertake to broadcast a weekly minimum of 35 per cent Cancon in Category 3 as a condition of licence?

4768 MS LEYLAND: Yes, we would.

4769 I will ask Doug Pringle to expand on our Canadian content plans because they are fairly detailed and we are excited about them too.

4770 Doug?

4771 MR. PRINGLE: We have a graph which hopefully is not as challenging as the dreaded bubble graph of last week.

--- Pause

4772 MR. PRINGLE: Okay. So to see how we get to double the CRTC minimum Cancon commitment, I guess we should really look at what the minimum requirement is.

4773 As you can tell, this is done for non-mathematicians like myself. So we have over 100 songs and if we start with the top line, what we will play from Category 2 -- that's out pop music category -- out of every 100 songs, we will be playing 30, and out of Category -- that's our jazz commitment -- we will be playing 70 songs.

4774 The CRTC minimum Cancon requirement out of Category 2 is 35 per cent and, as just stated, out of Category 3 jazz it's 10 per cent. If my math serves me well, that's 10.5 songs in Category 2 pop and just seven songs in Category 3.

4775 Of course, we realized we were going to have a huge problem with that 0.5 song. So the only solution we figured we could come up with was to double that amount. So that's how came to 35 songs out of 100. Of course, we get the extra songs all out of Category 3 jazz. This is not on the graph, but I sort of did some quick math myself. So bear with me here.

4776 We go up from 10 per cent Category 3 jazz to 35 per cent Category 3 and, of course, we pick up the 0.5 because that means 24.5 songs for a total of 35 Canadian songs out of every 100.

4777 The exciting part about this for me is that half of those -- that's one song every six -- is going to be from right here in Edmonton.

4778 COMMISSIONER WILLIAMS: Thank you.

4779 Now we will focus our 20/20 on your 10/20. I have a couple of clarification questions regarding your proposed Canadian talent development proposals, Project 10k20, the Edmonton Jazz Festival, the Yardbird Suite Jazz Club and the funding proposal for Canadian Women in Communications.

4780 In the case of your Project 10k20 initiative, you have stated that applicants will face few bureaucratic hurdles in accessing funding and that applicants can spend the money as they see fit. They will not have to account to you on their use of the money.

4781 As I understand this initiative, on an annual basis 20 Edmonton and/or regional or national artists working in the jazz genre will be given $10,000 each to produce a broadcast-quality CD.

4782 Since it appears these artists will get easy access to the funding and then won't be held accountable for the use of the money, how can you be assured, or assure the Panel, that you will, in fact, get 20 CDs per year from this CTD investment?

4783 MS LEYLAND: Commissioner Williams, I will ask Don Armstrong to comment on this further, but I think you would be interested to hear from David Babcock too and his knowledge of the depth of the jazz scene here in Edmonton.

4784 MR. ARMSTRONG: Thank you.

4785 When we initially set out to research the project, we asked Dave to prepare for us a list of Edmonton-area musicians who had produced, or could produce, a jazz CD. He came up with a list of about 65 artists of whom we have spoken to over half. After speaking with eight or ten to get a sense from them as to whether the talent existed that would be willing and interested in producing 20 CDs a year, it became obvious the question was very redundant.

4786 After we talked to ten or eleven, everyone of them said the same thing: "Are you kidding? I'll make one". Then I said: "Over eight years realistically how many could you produce?". There was the odd one who said, "Over the years, one or two", but for the most part artists felt like they could produce over eight years three to four CDs. These CDs need not be all original material, but most of them will be.

4787 The CD that you heard of Dave contains ten tunes, all of which are original material. For example, one artist that comes to mind, Andrew Glover, he is a multi-talented musician, a most, most talented writer. He gave me his CD, "Pazzport", a great CD. When I left Edmonton, I put it in the player and I listened to it for one hour on the way home to Calgary.

4788 He also burned me another CD. He said, "Don, just give this a listen. These are unpublished tunes". I put that in my CD player, I listened to it for the rest of my five-hour drive to British Columbia and all the way home. Those are tunes that are totally unpublished that he has in his home studio.

4789 I said, "How many of those do you have?". He said, "Original material, I have between 300 and 400". He said, "I can produce original material, one CD a month", and that CD was phenomenal quality and all that it required by way of funding is mastering. Everything is done.

4790 Dave, I don't think that's the exception, is it?

4791 MR. BABCOCK: No. It has been my experience, having performed and worked here as a professional musician for 20 years, there are a multitude of talented individuals such as Andrew Glover. Many of the people actually perform on the CD that I just completed also fall into that category. All they really need is the opportunity and the dollars to go out and make those albums.

4792 You are talking about mature artists who are in this for the long haul and need to retain a good deal of credibility in this sound because without a good reputation you are really at a disadvantage.

4793 So in terms of people following through on their promise, I mean it's one thing to take the money and it's another thing to take that money lightly.

4794 COMMISSIONER WILLIAMS: Ms Leyland, I would have thought, given the scope of this initiative, that you would have certain mechanisms or agreements in place with funding recipients to ensure that you receive your 20 annual CDs, not to mention the 160 CDs that you expect to have in-house after seven years.

4795 Again, what assurance can you give the Panel that this initiative is viable and will produce the results that you propose, other than what Mr. Armstrong and Mr. Babcock have referred to?

4796 MS LEYLAND: The assurance that I can give is based on the talent that we have talked to and the assurances that they have given us that not only is there the quantity of artists in this community, but also the quality of artists to support this project.

4797 The other assurance I can give you is the way we do things at Rawlco, and I guess by that I say that Don will be involved going forward -- Don Armstrong will be involved going forward -- with these artists as they come to us, I would imagine, first of all asking for information, then filling out their application, then telling us about their plans. We will work with them every step of the way.

4798 MR. ARMSTRONG: If I may, you are correct, Commissioner Williams, when you say there are few strings attached. That does not mean no strings attached. We will not receive 20 applications at the start of the year and hand out 20 cheques. Rather than regard this as kind of eight years, once a year, handing out 20 cheques, I think it's more appropriate if we look at it as a continuum of say a 96-month term, in which case we are looking at roughly one CD to two CDs per month.

4799 When we receive applications up front, will sit down and talk to the applicant and determine: "What is your background? What do you have by way of sample material? Can you produce eight tunes that qualify in the jazz genre?". The community is sufficiently close and well-known here that those who will apply and will be funded will be quality musicians. We are not talking about self-taught guitar pickers here for the most part. We are talking about professional musicians.

4800 The best check on this is if we fund someone and the material that we receive at the end of the completion of the CD proves not to be air-playable, that person would likely not be considered for future funding.

4801 Doug Pringle can explain to you much better than I, but one production of a CD or a production of a single demo is not going to make a professional musician, and while we want to appeal to a broad, broad base of musicians, and we will, there will be some for whom, when we receive this product, if there are five or six tunes that are air-playable, that are well received, and a year or two later that person decides to reapply, then those are the ones who will receive consideration for a second CD.

4802 MR. PRINGLE: I think Don made a very good point here. This is not going to be sort of amateur hour in terms of giving out funding.

4803 The two most respected musicians probably worldwide are classical and jazz. These musicians are lifers. These are not garage bands. Dave has just said he has been working professionally here in Edmonton for 20 years. He has devoted his entire life to music. So it's a completely different situation than someone who has just been at this for a couple of years, or whatever.

4804 The other thing that we see with this project, which is not on the graph, is we see it as being multi-layered. I think we see everybody who is applying and will be making a CD for us will be talented, but I think there will emerge a group, and I can't say if it's going to be a half-dozen or a dozen or what it will be. It will be a relatively small group of musicians who are world-class. Dave is a world-class player. Dave has the potential to be a worldwide superstar joining Diana Krall and some other Canadian artists.

4805 I feel very sorry for new artists emerging today, not just jazz artists but anybody. I mean, they get one shot and they are out. The state of the industry is such that record companies, they sign you, you have one CD and if it doesn't sell, if it's not a hit you are gone. That's not the way it was for most of the superstar names, the Elton Johns, the Beatles, the Stones, the Supertramps, the Springsteens. You name them. The big stars, the enduring stars of today, when they burst on the scene record companies felt that it took a minimum of three to five albums to establish your career.

4806 The way they looked at it was that the first album introduced the act to the media. The second album, the media introduced the act to the public and perhaps the third album the public might thing about buying, which is a far cry from today where one album has to do all three of those things.

4807 So with an artist like Dave, he would understand that it's not just the quality of the CD that he produces that counts, but it's the quantity of the CD. I mean, I would like to see someone like Dave produce about five albums over an eight-year period because I think that's what it takes to build a career and that's what we are talking about, the top level of musicians here in Edmonton. I would like to see careers launched from this program.

4808 So the idea of taking the money and running I think would be the furthest thing from Dave's mind. But it could happen, you are right, it could happen that one person or two could screw up, but they are certainly not going to get funding again if that happens.

4809 COMMISSIONER WILLIAMS: Regarding both your Edmonton Jazz Festival and Yardbird Suite Jazz Club initiatives, you have stated that you would specify to those in charge of this Canadian talent development initiative that funding be used only to support Canadian talent.

4810 Outside of verbal direction to these organizations, would there be any specific mechanisms, contracts or agreements in place with these groups to ensure that the CTD funding would only be used to support Canadian talent development and not be used to underwrite operational or infrastructure costs? For example, festival security or jazz club phone bills, or whatnot.

4811 MR. ARMSTRONG: Both organizations understand that the money is earmarked for Canadian talent and not for infrastructure.

4812 COMMISSIONER WILLIAMS: Have you put anything to paper, so to speak? Is there a contract?

4813 MR. ARMSTRONG: No.

4814 COMMISSIONER WILLIAMS: You are proposing to allocate $7,000 per year, or $49,000 over the licence term in CTD funding to support Canadian Women in Communications.

4815 However, I would point out that while the Commission has accepted funding directed to the Canadian Women in Communications as an eligible third-party allocation in relation to benefits flowing from changes of ownership, the Commission has never accepted funding directed to the CWC as an eligible Canadian talent direct expenditure.

4816 Given this fact, would you accept to redirect this $7,000 in annual funding to an eligible Canadian talent development commitment acceptable to the Commission, or do you wish to keep all or a portion of the CWC funding on the table as a commitment outside of CTD and, if so, to which eligible party would you redirect and what amount?

4817 MS LEYLAND: We will come up with another way to spend the money within Canadian talent development. However, I would like to still direct the $49,000 to Canadian Women in Communications.

4818 COMMISSIONER WILLIAMS: So all of the money would continue to go to Canadian Women in Communications, the $49,000?

4819 MS LEYLAND: Yes.

4820 COMMISSIONER WILLIAMS: Thank you.

4821 We are going to continue clarifying various parts of your application.

4822 Earlier you elaborated on the reasons why you feel the smooth jazz format is best for Edmonton from a music and programming perspective.

4823 Could you please explain why you believe that the smooth jazz format is the format best suited to the Edmonton market from a financial perspective?

4824 MS LEYLAND: Certainly. There are a number of reasons that I talked about in our oral presentation.

4825 The first is that while we will not be the number one radio station in Edmonton, we will have a solid audience in the 25 to 54 year old demographic which, as we all know, is the demographic that advertisers are most interested in.

4826 We have lots of experience in Saskatchewan in selling a format that is not number one in the ratings and that would be our news talk radio format which also attracts 25 to 54 year olds. The way we sell that radio station, I would see us selling our smooth jazz radio station much the same way, is that we sell it, number one, based on the quality of the programming but, number two, based on the results that it generates for the advertisers. So there is much more focus on results as opposed to BBM numbers.

4827 Secondly, the experience in the United States -- and there is a lot more data about who is listening to smooth jazz in the United States because the format has been in existence there since the 80s -- says that the audience, while relatively small, is mature. I mean, what is mature? I hate the word actually myself, but when I think of a mature audience --

4828 COMMISSIONER WILLIAMS: I'm still working on it myself.

--- Laughter / Rires

4829 MS LEYLAND: When I think of a mature audience, I think of people primarily between the ages of 35 to 54, but I have to tell you at the Yardbird Suite I met a 16 year old girl singing Billie Holiday "Standards from the Stage" and I thought if we get this radio station she will be listening to us too. So we are not going to have lots of teens. We will have some teens, we will have some young adults, but the bulk of our audience will be 35 to 54.

4830 We know how to sell that audience based on our experience at home, and I look forward to having the opportunity perhaps to do that in Edmonton which is a radio market that, according to the last report from the Radio Marketing Bureau, is $49 million of total radio market. When I saw that number and, to be honest, you don't want to know what I said because that is a number that equals the total radio market in Saskatchewan.

4831 In Saskatchewan we have 35 radio stations and in Edmonton there are presently 11. So I would very much look forward to having the opportunity to sell that audience here.

4832 COMMISSIONER WILLIAMS: You have stated earlier that the above-average eduction and income levels of the smooth jazz audience make it more attractive from an advertiser's perspective.

4833 Can you quantify how much more attractive it is? For example, what percentage of advertising revenue share do you believe each percentage of tuning to a smooth jazz station Edmonton will deliver?

4834 MS LEYLAND: I'm sorry. Could you repeat the question?

4835 COMMISSIONER WILLIAMS: Sure. For example, what percentage of advertising revenue share do you believe each percentage of tuning to a smooth jazz station in Edmonton will deliver?

4836 MS LEYLAND: I will give that question to Gord.

4837 MR. G. RAWLINSON: The statistics for other smooth jazz stations show that the audience is higher in the category they call "owner-manager-professional". It also has a higher percentage of people who have completed university, and so on. So that demographic or that psychographic, or whatever you call it, is much more attractive to some types of advertisers. So we will get advertisers who are high-end advertisers that don't advertise necessarily on radio today.

4838 For each percentage of audience, there is we usually call it an index where you index higher or lower. If you have a 3 per cent share, you get 3 per cent of the advertising, or you get 2 per cent or 5 per cent.

4839 To be honest with you, I don't know how much higher, but I know it's substantially higher than the share of your audience share potential just because of that. On the other hand, there are advertisers that buy strictly on ratings and you can do everything you want and you just can't convince them, and we will not be near the top of the ratings, we will be at the bottom.

4840 So those two things factor out. So on balance, we decided to project conservative revenue figures that we were sure that we could deliver.

4841 COMMISSIONER WILLIAMS: And those figures would match your audience share then?

4842 MR. G. RAWLINSON: I think that the revenue that we projected actually is a little bit less than the audience share if you do the math on it, but again we tried to be conservative on our revenue to show that, even with those conservative revenue projections, we can do all of the commitments that we have made.

4843 COMMISSIONER WILLIAMS: Ms Leyland, you estimate that 25 per cent of year one advertising revenues of your proposed station would be garnered from existing local radio stations.

4844 How did you arrive at this estimate?

4845 MS LEYLAND: Actually the reason I asked you to repeat the last question was because I thought that was this question.

4846 COMMISSIONER WILLIAMS: You are really ready for it then.

4847 MS LEYLAND: This question is the one where I think there is no right or wrong answer, but some answers are more right than others from Friday afternoon.

4848 It is an estimate based on our experience. There are a couple of things. One is there is no way that even a single radio station can come into this market and not take some dollars away from somebody that is already spending their advertising dollar with the other stations.

4849 The other thing that is amazing to me, spending time in Edmonton as I have been doing, is just sheer number of businesses and opportunities here. I mean, if one could ever know how many businesses have never been called on by a radio advertising salesperson I think you would be staggered. There is just so much going on there.

4850 COMMISSIONER WILLIAMS: And those would be the ones that you would want.

4851 MS LEYLAND: Those would be the ones that we would want. So our percentage of 25 per cent is an educated guess, but in all ways we have projected conservatively.

4852 MR. G. RAWLINSON: I could also add that even in hindsight you never really know. Even after you have started a new radio station, you can't be sure what percentage came from existing stations versus what came from new sources. You can get a better feel of it, but you still never really know. So it's not a scientific thing. It's just based on gut feeling and a lot of experience in starting radio stations, and the specific nature of this station will take less from other stations than a more mainstream station might.

4853 COMMISSIONER WILLIAMS: Would you consider the Edmonton radio market able to support the entry of more than one new commercial FM station, provided the new stations were programming different formats, targeting different listeners and, I guess, competing for different advertisers? How strong do you see the Edmonton radio market as being?

4854 MS LEYLAND: I will ask Gord to answer.

4855 MR. G. RAWLINSON: I have a couple of things to say on this.

4856 First of all, it's interesting to compare Calgary and Edmonton. Calgary has about $62 million in radio revenues and has seven commercial FM stations. Edmonton has $49 million of radio revenues and has six commercial FM stations.

4857 So you might say there is already just the right number of stations in this market. On the other hand, Edmonton has the second strongest economy in the country, next to Calgary, and the radio stations here are doing very well.

4858 I strongly believe that it's important for the listening public as well as the Canadian radio industry that the Commission not over license radio markets, and that's not just, quite frankly, in this situation clearly from a self-interest point of view because we think we will get the same percentage of audience if you license a bunch of stations or you license just one because our audience is so specific to this format.

4859 We think we will get our 4 share overall or our 5 to 7 share of 25-54s if you license a bunch of stations or if you only license us, if we should be so lucky to be licensed. So it doesn't really affect very much. As far as our own self-interest, we don't really have an opinion on that.

4860 So I would just say I don't know the right number of stations to have for this market, but there are those factors and we don't have any objection to you licensing several stations or just one and it's hopefully us.

--- Laughter / Rires

4861 MR. G. RAWLINSON: I am not sure that answered the question for you.

4862 COMMISSIONER WILLIAMS: No, no. That gives us a good idea.

4863 Let's talk a bit about another FM frequency. You applied for the frequency 89.3 and, as you know, your application is competitive and technically mutually exclusive with another application for that same frequency.

4864 You also indicate in a letter dated 23 April that you wish to alter your application by changing the frequency to 98.1. In a letter dated 16th of May, the Commission advised you that it would be not appropriate in the competitive process to permit an applicant to make such an amendment to its application at a time that is so close to the date of the hearing. Rather the Commission decided to accept your letter as a supplementary response to Question 16 contained in your March 3rd deficiency response signifying that you are prepared to use an alternate frequency should the frequency you applied for, mainly 89.3, not be available.

4865 Can you confirm today that if, for any reason, the frequencies 89.3 or 98.1 MHz were not available, you would be able, ready and willing to use another frequency for your proposed FM station, and please elaborate on this matter and comment on any impact on your business plan that would result from a frequency change.

4866 MR. G. RAWLINSON: Thank you.

4867 The consulting engineers from Doug Allen's firm, and specifically Gord Henckie, has told me that there are five fully Omni 100,000-watt frequencies available for Edmonton, and they are 89.3, 91.7, 98.1, 99.5 and 102.9. All of those five frequencies would work and any one of those five frequencies would be a terrific frequency for our radio station and we would be delighted to have any one of those frequencies.

4868 In addition, there are a couple of other stations that could be 50,000-watt frequencies, 50,000-watt directional. So there is an abundance of frequencies available. The 98.1 we know, we have checked out even more thoroughly and there is no moves required. It's a total drop-in frequency and there is no short spacing. That's why we chose that as our second choice. The choice of frequencies, any one of those five would not affect our business plan.

4869 COMMISSIONER WILLIAMS: Thank you.

4870 This question is for either Mr. Rawlinson.

4871 In 1998, the CRTC implemented the new Commercial Radio Policy. At that time, Rawlco indicated that with the exception of Saskatchewan it would be exiting the radio market. In fact, Rawlco then sold their Ottawa, Toronto and Calgary stations.

4872 Why is Rawlco now wanting to expand the radio business in the competitive Edmonton marketplace and, for the record, could you please restate why you decided to leave the larger markets at that time, and then focus on why you want back in now?

4873 MR. G. RAWLINSON: I think that some people in the Commission would remember it, and it's on the record, that at the last radio review we argued strenuously against allowing multiple license ownership. I could see how it would make it much more difficult for independents to operate. It was already a fairly competitive world with some of the biggest companies also being in television and cable, and so on, and, as a matter of fact, often their radio division was bigger than our company even though we were in several of the larger markets.

4874 As long as it was one AM and one FM per city, we thought we could compete. After the multiple licence ownership, we felt that all the big guys would be doubling up and we just didn't have the financial capability to do the same. So we thought that over time we would get into trouble and get ground down.

4875 Quite frankly, I think that's consistent with what we have been saying today in that we think that an independent stand-alone Group 2 station in a city the size of Edmonton is going to have a tough time against those three strong capable operators that each have two FMs and an AM.

4876 They are not only big companies that really know what they are doing in radio, but they have that additional clout and flexibility. They have additional programming flexibility to attack a stand-alone if it starts to do really well and they have additional marketing clout.

4877 We stayed in Saskatchewan -- it's where we are from -- because we felt that it was the area where we could be the consolidator. As we mentioned, we have added some additional stations in each of the places where we operate. We have invested over the last three or four years over $18 million in capital in Saskatchewan, plus many millions -- I am embarrassed to say it -- in news talk to get those stations up and running. I think we have done a great job in Saskatchewan.

4878 So why are we back here? Well, I tried to explain that --

4879 COMMISSIONER WILLIAMS: With a stand-alone station.

4880 MR. G. RAWLINSON: Yes. Well, we tried to explain that at the start, that one of the reasons is because it is a specialty format so that we do have some regulatory protection, that we are not in that tougher competitive game that all of the Group 2 stations are in.

4881 Secondly, I have to say that I think I have just got itchy feet. I have gotten to the point where I have realized that I might have made a mistake, certainly in selling Calgary. The eastern markets, I think that was absolutely the right move for a company our size, but I think that quite frankly the way things came about we were absolutely, and I think in hindsight, rightly convinced that all of the big companies would be doubling up and it would be very hard.

4882 In order not to just gradually get ground down and beaten up on, which is bad for the employees and bad for the city and bad for the owners of the station -- it's just bad for everybody -- we did the right thing in exiting.

4883 But we have realized we have the financial capability and the strength and we have Doug and Doug and I, and now Pam running the show, we have the capability to take on a difficult situation in Edmonton, but because of the format we can do it.

4884 But I want to state for the record, that I would still wish that the rules were back to the way they were and I wish that we were still in those other markets and there was still only one AM and one FM allowed.

4885 If I can be so blunt, I would rather have the radio stations than the money. I was having more fun when we were the bigger Rawlco than we are today. So that is as frank as I can be and that is the honest situation.

4886 We know we can make a go of this station given the circumstances of where we are at and the format we have applied for.

4887 The radio business is getting tougher and tougher, especially as there are more licences granted. It's just a very, very competitive thing and the big guys are good at what they do. I give them a lot of credit. They have a lot of clout and they use it.

4888 I hope that's enough of answer, but if it isn't I will be happy to try and say more.

4889 COMMISSIONER WILLIAMS: It's your answer and I am sure it's fine.

4890 Is it important to you, Mr. Rawlinson, that the Canadian broadcast system be made up of small, medium and large broadcasters?

4891 MR. G. RAWLINSON: At the risk of sounding flippant, that is a pretty good soft lob.

--- Laughter / Rires

4892 COMMISSIONER WILLIAMS: Yes. Tell us a bit about it though. Why is it important?

4893 MR. G. RAWLINSON: Well, first of all, I have nothing against the bigger companies. When I was talking about how tough they are, I think they also do a good job, but different voices in these bigger cities are, I think, a plus. There are the top six or eight cities in Canada where I can see there is a real advantage to the system in having diverse owners.

4894 I do believe in the smallest markets in Canada that there is a real advantage to the people of those smaller markets to have one owner, and I have expounded on that theory many times, so I am sure the Commission is tired of hearing that.

4895 We are a private company and a smaller company and we put our heart and soul in it. Twenty years ago my father was in Prince Albert, Saskatchewan, and he had a radio station, a TV station and a cable company. We decided, my brother and I, that we had to specialize in one of those three and make that our lifelong thing. We chose radio because we love it. We chose it because we really, really enjoy it. It's not just a business to us. We love radio and, sure, it's a business and everybody likes to make money, but we love radio too.

4896 So speaking for this independent operator, I think there would be a real advantage to having us in this market.

4897 COMMISSIONER WILLIAMS: In terms of broadcasters, you talk abut the small broadcasters and the small markets, should the Canadian broadcasting system have some way, I guess, or support that the smaller operators can grow to become medium operators, can grow to become larger operators, and yet be replaced by other small, medium or consolidation where it's going to a few larger national players?

4898 MR. G. RAWLINSON: Well, it's tough. there are people who put their lives into broadcasting, but then the big companies come along with a huge --

4899 COMMISSIONER WILLIAMS: An offer that they can't refuse.

4900 MR. G. RAWLINSON: A huge offer for a lot of money and it becomes very difficult for people to say no to that.

4901 I really think that the Commission in the past has encouraged, or tried to encourage, smaller broadcasters through their licensing, and I think that has been positive for the country.

4902 I think that multiple licence ownership has resulted in a lot of consolidation, but I don't know that there is going to be a huge amount of additional consolidation. There will be some, but the bulk of it is just taking place.

4903 I would fight strenuously against any further loosening of the ownership rules and, as I said, I think that in a single-owner market where a guy has one of two radio stations, I really believe that that person should get preference for an additional station. I think that the people are far better served as opposed as two companies beating up on each other.

4904 I am not sure I am answering your question, but I think I am telling you everything that I think about this subject.

4905 COMMISSIONER WILLIAMS: You are giving us your thoughts and that's what I am looking for. So you are answering the question.

4906 Thank you very much, Ms Leyland and the Rawlco Panel. That concludes my questioning for this time.

4907 Thank you, Madam Chair.

4908 THE CHAIRPERSON: Thank you.

4909 Commissioner Cardozo.

4910 COMMISSIONER CARDOZO: Thank you, Madam Chair.

4911 I just had one follow-up question to you perhaps, Mr. Gordon Rawlinson, on the matter of the business strategy of Rawlco Radio.

4912 I listened fairly closely to the steps you laid out to Commissioner Williams in terms of how you got to this hearing.

4913 What I didn't hear was what your next steps are. I am wondering if in your strategy from here on is this the only foray out of Saskatchewan or will you be looking elsewhere, and with all the competitors in the room I am not going to ask you to outlay which cities those are. Is this a one-off thing or are you now on a new growth strategy for the company?

4914 MR. G. RAWLINSON: Well, the honest answer is I don't know, or I haven't really thought it through as well as I probably should. We truly had no interest, or no intention of ever going beyond Saskatchewan when we sold those radio stations, and this opportunity came along.

4915 As I think I alluded to earlier, but I will be more precise, I think we made a mistake when we sold the Calgary radio stations. It's where I live, although I like to say that I live in Waskasoo Lake in the summer and spend a couple of months in the winter in Calgary. So I think I made a mistake there.

4916 But, no, I don't think that it's possible for a company our size to compete as a national company anymore. I just don't think that's in the cards. So would this be the only place we ever try to get another radio station? It would depend on the circumstances, but we are certainly not going to try to be a national company which was our dream for many, many years. We wanted to be the biggest and best radio-only company and we were almost there at one point and then the rules changed.

4917 COMMISSIONER CARDOZO: But this foray into Edmonton is for the long haul.

4918 MR. G. RAWLINSON: Yes. I intend to be in radio -- I have been in radio 35 years and I hope to be in radio for another 35.

4919 COMMISSIONER CARDOZO: Do you think the Commission should be taking these issues into consideration, the larger business strategies of the companies that are applying for applications, or should we be looking at just this application here?

4920 MR. G. RAWLINSON: I think you should look at the whole picture, absolutely I do, and quite frankly I think that if you are giving a licence to somebody that you think is going to sell it, then you shouldn't give it to them. I think that you want people that are going to stay owners for the long haul.

4921 COMMISSIONER CARDOZO: If you are looking for new places to go I was up in the northeastern part of the province over the weekend and I tell you they need some diversity of voices there.

--- Laughter / Rires

4922 COMMISSIONER CARDOZO: That will be my next foray when I get into the business.

--- Laughter / Rires

4923 COMMISSIONER CARDOZO: I am kidding.

4924 Thank you very much.

4925 THE CHAIRPERSON: Thank you.

4926 Commissioner Cram.

4927 COMMISSIONER CRAM: Thank you.

4928 I recognize I am going to go into an area that I really shouldn't. The Calgary hearing told me that I was only half a musician because I remember they had smooth jazz people up and talked about the fact that if you can't play or understand jazz, you are only half a musician, you are only the classical side. But I have to go into this.

4929 Mr. Armstrong, I hear you talking about people having an inventory of 200, 300 songs. Jazz, as I understand it, is total improv. Smooth jazz though it's written, is it, and then played, or is it improv?

4930 MR. ARMSTRONG: I would like to direct that one to Doug Pringle, please.

4931 MR. PRINGLE: Yes, smooth jazz actually is very different than traditional jazz. At the heart of traditional jazz it's all about swing and improvisation, whereas smooth jazz is all about mood and groove. The reason why smooth jazz is the most popular form of jazz since probably the big band era of the 40s is because like the 40s and 50s where the songs were relatively short, they had great melodies, and they eventually became the popular music of the day.

4932 When you think of the big bands, the Dorsey Brothers and the great vocalists who emerged out of that era like Frank Sinatra, Peggy Lee, even Doris Day, believe it or not, as a 15 year old emerged with Les Brown and his band. Some of these big band songs were like two and a half minutes long. The same thing with smooth jazz.

4933 These songs are constructed in a way that the general public can appreciate. They are usually around four or five minutes long. Smooth jazz is very rhythmic, fabulous melodies. Within a couple of plays you can be humming along. So it's very different than the general perception of jazz which is kind of, "I can't get a hold of that". This is very easy to get a hold of.

4934 The best example, if you get a chance to listen to Dave's album, a great example of a smooth jazz album. Fabulous rhythms, great melodies. Dave actually can probably do a lot better job than I can in talking about the difference between smooth and traditional.

4935 MR. BABCOCK: In terms of lengths of songs quite often in more beebop jazz or hardbop or any of the other styles that have come along since the big band era, the tendency was for every musician on the recording to get a solo. Some of these songs can run up to eight, ten minutes, and quite often break down into very -- I wouldn't say rudimentary, but getting right down to the heart of the matter and then built up again, brought back in with a melody or the head, as we would call it.

4936 Within the context of smooth jazz, it has a little more of a pop influence, where there is always a melody not far off. There is a lot of improv. On this album there is a number of excellent soloists that are featured within the song, but it doesn't get to the point where that's what dominates the music. You are always going to come back to that melody, to that hook, to that feel much like in pop music. So the listener won't just of drift off.

4937 COMMISSIONER CRAM: Thank you.

4938 My next question is: Edmonton jazz artists, and by my calculations, and I didn't bring my calculator along, there would be 160 CDs -- yes, it's right there so I didn't even have to do the calculation. So that's 160 CDs, if a couple of them do two or three, you still need a fair number of Edmonton artists.

4939 How are you going to define Edmonton, I guess in my mind? Postal codes? If you have lived here for three years or less? I have no idea how you are going to -- or do you really just mean Northern Alberta?

4940 MR. ARMSTRONG: First of all, no, we will not go to the postal codes. The jazz community is a very tight community in Edmonton. The musicians are all known one to the other, and people to whom I have not even spoken about the program have become aware of it through others. So through word of mouth the awareness of our program will become widely known. We have no concern about that whatever.

4941 Will it mean that they have to reside within the City of Edmonton proper? No, it won't be that tight.

4942 COMMISSIONER CRAM: On the monies to the Jazz Festival and the Yardbird --

4943 MR. ARMSTRONG: The Yardbird Suite.

4944 COMMISSIONER CRAM: You were asked about payment for Canadian talent. How do you envisage the payment would be out? Would you simply stroke a cheque to the Jazz Festival, or would you give them a cheque for a certain individual to be on the stage?

4945 MR. ARMSTRONG: The use to which the money would be intended would be communicated to us. We would cut the cheque to them. They would administer the program with the condition that it go to Canadian artists.

4946 COMMISSIONER CRAM: So then the idea is they would say: "We are going to have Diana Krall here. We would like you to give us money for that" and you would give them a cheque. Is that the concept?

4947 MR. ARMSTRONG: Maybe a better example would be, if we take a look at the Yardbird Suite, which exists to foster the career of local Edmonton musicians, it's a wonderful venue. It's not a huge venue. It's totally volunteer run and when they bring in artists, every concert has to be done on a break-even basis.

4948 So if they feel like a group that is coming in -- let's say a quintet is coming in -- and they feel that they can sell 100 tickets at $10 a piece, they say we have $1,000 for talent. That quintet then can get $200 a piece which limits the area from which you can attract the quintet very obviously. Jasiek Poznanski is the Executive Producer of the Suite and when I talked to him about the concept he said, "It's terrific".

4949 Here is one thing he said we could do. There is a world-renowned jazz pianist in Montreal named Yani Yarshik and he said, "I would love the opportunity to bring him into the market, not just to perform but to do workshops with our local talent". He said, "On our current criteria of breaking even, we can't do that. But if we could receive funding through this program we could bring him in and he would have the opportunity to play here. Our local artists in workshop with him would learn from him and the local artists could receive payment as well". He said that the opportunity for local artists to play with a man like Yani Yarshik is worth much more to them than receiving cash.

4950 So that's an example of how those funds could be expanded.

4951 COMMISSIONER CRAM: Thank you, Madam Chair. Thank you, Panel.

4952 THE CHAIRPERSON: Thank you.

4953 Commissioner Langford.

4954 COMMISSIONER LANGFORD: Thank you, Madam Chair.

4955 As a self-taught guitar picker I will try to be kind and wreak vengeance on Don Armstrong who doesn't think much of us.

4956 MR. ARMSTRONG: Please!

--- Laughter / Rires

4957 COMMISSIONER LANGFORD: I want to ask Ms Leyland and Mr. Gordon Rawlinson about a statement that each of them made in different words, obviously. It was on page 3 of your opening statement, Ms Leyland, the way you said:

4958 In your final kind of dialogue with Commissioner Williams you echoed, Mr. Rawlinson, the same kind of comfort level. To be quite frank, I don't understand the basis for it because it seems to me that whereas you with a specialty licence will be constrained from changing formats, other people with just straight commercial FM licences won't be constrained whatsoever.

4959 So perhaps you could educate me as to why someone who isn't doing smooth jazz now couldn't get into that format later. It may be just my total ignorance, and if it is I am always happy to be set on the straight and narrow, but I don't see where your comfort levels come from.

4960 THE CHAIRPERSON: It's our understanding of the regulations that if you are not a specialty licence, to become a specialty licence you have to apply to the Commission and to play more than 30 per cent jazz music, that would make you a specialty licence. So that's what we are talking about.

4961 COMMISSIONER LANGFORD: Well, that's true. I agree with that. I can see your comfort level in that sense, that no one could become pure smooth jazz, but we do have a number of applicants who are on the cusp, if I can put it that way. So I don't quite see -- for example, if Global were licensed they could be nibbling away at part of your audience, and if Edmonton Radio were licensed they could be nibbling away at part of your format and, therefore, part of your audience share.

4962 So I am not entirely sure why you feel that gives you such a high comfort level.

4963 MR. G. RAWLINSON: Well, what you say is true, they could be nibbling away, but to get played more than 30 per cent jazz-oriented music, they would have to apply for a specialty licence. Now, Edmonton Radio I think -- I am not sure whether they are a specialty licence or not. There was some confusion of what they said one time versus another, but if either of those two stations were licensed, there would be more potential for them to nibble at us to steal a shear of our audience. But they would not be able to attack the core of our audience.

4964 It's quite different than being, as an example, a classic rock station and you wake up tomorrow morning -- it happens like that -- and the competitor is doing the exact same thing only has found ways to promote themselves, and so on. I mean, we have been in that game and have done it to others and others have done it to us. It can happen very quickly.

4965 COMMISSIONER LANGFORD: There is no doubt, and that's what I am getting at. I quite agree with you that someone doing urban is unlikely to switch to Billie Holiday overnight or any other form of jazz.

4966 Still the reason I bring it up, and I am not trying to be negative, but when we look, by your own admission, at how narrow a demographic this is, how narrow an audience, I mean you have really picked an audience and you have gone for it, and that's fine. I am not in any way questioning your choice, but you have confined yourself, by your own statement here today and by the words in your own application, to a very, very narrow focus and it would seem to me that your business plan is founded upon capturing basically all of that audience to get the 5 to 7 share that Ms Leyland was speaking about when you had one of your other large and wonderful graphics up.

4967 I just can't help but ask myself that if somebody else were to take a look at that large older demographic in this city and say, "Well, we could shift a bit and take a bit of it" and someone shift a little bit and take a bit of it, that you might be in trouble, that your business plan might just, maybe not fail, but it might not be as -- the results in terms of revenue and market share might not be as happy as you had predicted.

4968 MR. G. RAWLINSON: Perhaps a better example would be in the United States where in many major cities there that have way more radio stations than Edmonton will ever have, there is usually a smooth jazz station. Again, it's a narrow target.

4969 The secondary protection we have is just common sense. It just doesn't seem to make sense to try to be the second best station playing some smooth jazz against a station that really does it well and superserves the core audience. It just doesn't make sense to attack them.

4970 So in cities with 40 radio stations in the United States there is usually one radio station playing smooth jazz and it has a 4 share and it has sometimes a 5 share with that many radio stations. So while what you say is theoretically possible, I don't think it's very probable in the real world.

4971 COMMISSIONER LANGFORD: Well, it's your money, as they say.

4972 One more question on the CDs. I know there has been quite a lot about it, but one thing I was interested in is from your experience, I guess, Mr. Armstrong or Mr. Pringle -- I don't know quite who would be best to answer this -- you actually said at one point, whether it was in your written application or whether it was today -- there is just so much information in front of us. You said at one point, I think, that $10,000 may not be enough. In some instances it might be, in some instances it might not and people could top it up if they wanted higher post-production, or whatever.

4973 What is your feeling? How much more would you need to make it better or if you had a bigger group or if you wanted more effects, or whatever?

4974 MR. G. RAWLINSON: I will ask Dave to comment on his CD, but I have talked to several musicians in the Edmonton market who have produced their CD for as little as $2,500 and broken even by selling them at their gigs, and so on. It's a function of how much you are able to do early on by way of laying down the tracks in your own studio, or whatever.

4975 I also talked to another lady who did everything in a professional studio -- everything in a professional studio -- and her budget pushed $30,000. Now, Dave is very much a perfectionist and has the finest musicians working on that album and did it in top-notch facilities.

4976 Dave, maybe you would like to talk about how that broke down that budget.

4977 MR. BABCOCK: At this point I spent in the neighbourhood of $13,500 thus far, and probably by the time this album is fully completed, manufactured -- the versions we have here are just advanced copies, let's say -- I am expecting to spend in the neighbourhood of $17,500 to finish the manufacturing and the rest of the process.

4978 A lot of that was based on the fact that I don't have my own band or I didn't record this as a group. I recorded it as a solo musician so I was obliged to pay other studio musicians to come and play and that represents a fairly significant outlay.

4979 A group might have an advantage inasmuch as they can pool resources and they wouldn't charge each other to play on their own album. Also there is a different way you can go with it. Music is a very flexible idiom and as long as the results are there musically and quality wise, an album can be recorded in a number of different ways, whichever way suits the music and serves the music in its best sense.

4980 There is no reason why you can't throw up a couple of stereo microphones, set up a live band and record and, based on the amount of time and effort that went in prior to the recording, that that album shouldn't sound stunning, but there are other ways you can do it -- the old adage of there are many ways to skin a cat, and it's absolutely true.

4981 The way I chose to go was more of a multitrack situation where it's a layer upon layer upon layer and you are adding a number of musicians over a period of time. That is how I felt my music would best be served and so that's the way I proceed. For every musician, there is a different set of circumstances and priorities. So not every musician will have the same result or the same methods.

4982 At the end of the day the important thing is that the artist is comfortable with the product they create and what is essential to every artist is that they record an album they can afford to make. As far as the figure of $10,000 that is no small amount of money. Sure, you can spend a lot more than that, but you don't have to.

4983 COMMISSIONER LANGFORD: Taking Mr. Pringle's information that it's a one-shot kind of deal these days in this increasingly competitive market, that often -- I think Mr. Pringle said it and I don't want to misquote him, but it was something along the lines that unlike the good old days where you could have two or three, and perhaps even four albums, before you were consigned to the blue box, it's quite of one album takes all or one CD.

4984 I am assuming then that people would want to spend a little extra on it, and just for sake of argument, assuming that quite a number of the 160 want to spend another $3,000 or $4,000 or $5,000 to lay down those extra tracks or pay some extra musicians, where will they find that kind of money? If they don't have it themselves -- I suppose there is always Gramps -- if they don't have a loving and patron-minded relative and they don't have it themselves, where in the community can they get it and how many times can they go to the well before the sources dry up?

4985 MR. BABCOCK: I could answer that. There are grants which are available from a variety of sources: The Alberta Foundation of Recording Arts, there is FACTOR money, those two for sure, and there is also other performance grants available throughout Canada. That will be one way, or finding people to invest. I mean, it is the music business and there is money to be made. Not all of it is gloom and doom.

4986 The problem with the grant money is that it seems to be a forever shrinking piece of the pie. There is less and less money to go around. I recorded an album ten years ago and we borrowed the money to make it. Then we received funding later to market it and we also received funding to create a video for it.

4987 I think it's also important, while you can rely on grants, some artists rely heavily on grants based on the style of music, whereas some may have a better chance because their music maybe is a little more accessible or popular, however you want to look at it, they have that going for them.

4988 At some point in time the artist has to throw it down so to speak. They have to put in their money. They have to invest something of themselves to go forward. You have to take some risks. You have to be brave about it and you have to believe in what you are going to do. So you not only have to have the skills, but if you back it up with your own dollars I think that speaks the loudest.

4989 COMMISSIONER LANGFORD: Okay. Thanks very much. Those are my questions, Madam Chair.

4990 Oh, wait a minute! Mr. Armstrong wants to give some hope to us self-taught guitar pickers.

--- Laughter / Rires

4991 MR. ARMSTRONG: Thank you.

4992 The rule rather than the exception seems to be that for the most part the CDs that are being produced are self-funded. People save their money and they produce it themselves, or they borrow it and then they hope to break even by selling it at their gigs. So the amount, as I say, can range anywhere from $2,300 to well beyond $10,000.

4993 As David said, most musicians place a lot of that money in there themselves. With this program, yes, we will fund them $10,000, and for the most part that will produce the CD. With the airplay, hopefully the CD sales will not be reliant on just sales at gigs, but rather commercial sales. There will be SOCAN funding, the money that they receive back from sales and then, hopefully, if the album does well, the opportunity to come before us again and apply to build upon that.

4994 I think a lot of artists in their first album particularly might want to do, for lack of a better term, what I would call a sampler. They do a little bit of different forms of jazz and then what Dave has had the opportunity to do on this album is more what I would call his signature style. When you listen to it you will find that there is a monolithic flow to it, there is a similarity to it. So now when people come and see him in concert, what they will hear in concert and what they will hear when they hear his CD will be the same thing. It will be a continuum. It won't be disparate elements.

4995 COMMISSIONER LANGFORD: Thank you very much.

4996 THE CHAIRPERSON: I would like to go back to your 10k20 initiative. It is the very largest of your Canadian talent initiative. It's $200,000 a year and the next one is $50,000. It's $1.6 million over seven years and the next sum would be $350,000. So it's very important.

4997 I am rather surprised that in your application you say we will give the funds, and quote:

4998 This morning, on page 4, your first bullet is:

4999 And on page 5:

5000 I haven't read your particular application page by page, but as far as I know you haven't filed anything other than what is in your presentation now about how you would control this, from what I understand from your responses to Commissioner Williams' question, other than to say, "Well, if they don't do a good job, they won't get money the following year". So you could have five that don't do well this year, and five new ones that don't do well next year, and at the end of the day you would wonder what that did for Canadian talent development.

5001 Surely, if you were using $200,000 to give a contract to someone to do something for you, you would have some strings attached, wouldn't you?

5002 MR. ARMSTRONG: As we said, there are few strings attached. That doesn't mean no strings attached. The --

5003 THE CHAIRPERSON: Can you tell us what those strings will be? It's very difficult to -- the way it has been forward, since it's the largest sum, and we have to see what the value of the Canadian talent development is rather than just money, that may not result in anything.

5004 What would be those strings and would you prepared to actually draft some and show us that you are going to follow this through so that it ends up giving you something.

5005 I understand that at the end of the day you want a product, 160 CDs, but on the other hand it's not like Ms Leyland gave a contract to somebody to produce something. Surely, you would have some parameters as to what the money is going to be used for and the chances of getting the product back, if it were a survey or if it were anything you were paying to do.

5006 MR. ARMSTRONG: That's a fair question.

5007 The application for funding will require that the artist outline a basic business plan in terms of: "Here would be the songs that would be on that album. Here will be the artists who will be appearing. Here is where I intend to produce that album. Here is my background and my experience". There will be a business plan laid down. We foresee people applying to us with perhaps less information than we require and before the cheque would be cut, that we would be satisfied that the project has been thought through and that it does stand a reasonable chance of producing airplayable material.

5008 THE CHAIRPERSON: What would you say if the Commission made acceptance of this proposal conditional upon you giving us some type of parameters or mechanisms that would give us some comfort that this is going to produce what it's supposed to.

5009 From our end, it's Canadian talent development and we certainly have a bit of a concern if it looks like it could be money that ends up doing not very much.

5010 For example, Mr. Babcock said that -- do I have it right, Mr. Babcock -- he could spend as much as $17,500 to get something that he is satisfied with. So if you had had only $10,000 it could well be that would be $10,000 that ends producing nothing because you can't get the rest, the $7,500 that you feel is necessary to produce something that is satisfactory to you.

5011 Do you see where I am coming from?

5012 MR. ARMSTRONG: Yes, I do, and your question is: Would we accept -- sorry, would you just repeat your question?

5013 THE CHAIRPERSON: A requirement that mechanisms, or the type of things that you have been outlining orally, that we actually see what the parameters, how you will handle this amount of money to ensure or to at least give us a level of comfort that something will come out of it for Canadian talent development.

5014 MR. G. RAWLINSON: We would be willing to do it if you require it but, quite frankly, I just don't think it's necessary. It's in our interest to make sure that this is done well. We have the commitment to spend the money and we want to make sure that we are getting value for it.

5015 So we are going to be very thorough, as Don says, about making sure that these people have a reasonably good chance, but we can't guarantee that every dollar of the $200,000 is going to result in a terrific album.

5016 I think that you could write contracts until you were blue in the face, and I don't think that would change the net result. The net result is going to be based on our assessment of the quality of the musician and the self-interest. We have a self-interest in making sure that this is a good-quality album and the musician has a self-interest or else... not only is it all that they would ever see, but as we said earlier the jazz community is a small community. Everybody knows everybody and we will know who are the people who are going to be responsible and properly do it.

5017 So we will do it if you wish, but we just don't think that it's necessary.

5018 THE CHAIRPERSON: Thank you.

5019 Counsel?

5020 MR. McCALLUM: Perhaps one thing you could do though is tell us when you do cut the cheque for that commitment, what follow-up will do with that specific artist to make sure that they follow through with their business plan.

5021 MR. ARMSTRONG: As I mentioned earlier, this shouldn't be regarded as an event that happens once a year for eight years. It's something that happens over the eight-year period. So we will be having one completed album, or two completed albums at the most each month. So it's quite easy to stay on top of what is happening.

5022 They have laid out what studio in which they are recording, the days on which they are recording, and it's very easy for us to monitor that without being intrusive.

5023 MR. McCALLUM: So you have some sort of report filing requirement or something like that so that they get back to you and tell you how it's going?

5024 MR. ARMSTRONG: Probably not. Probably it would be more our making the visits to them and seeing on progress. Rather than they reporting to us, it's our monitoring them.

5025 MR. McCALLUM: I take it that is part of your plan all along, that you would be follow up with them on some sort of continuous basis.

5026 MR. ARMSTRONG: Absolutely. I sat in Dave's studio and watched him mix. I am not sure exactly what was going on, but I was pretty satisfied that what was coming out of the box sounded fine to me.

5027 MR. McCALLUM: One thing I wanted to follow up on as well. Commissioner Cram asked you a question, and you said, "Well, it wouldn't be based on necessarily Edmonton postal codes. They wouldn't necessarily have to have an Edmonton address".

5028 In your supplemental brief at page 30, what you said was that:

5029 Can you clarify what your plans would be in that event?

5030 MR. ARMSTRONG: That certainly was and still is, if you will, the worst case scenario but, as I mentioned, after having talked to 10 or 12 artists, we don't foresee that to be a difficulty at all.

5031 The likelihood that all 20 would be produced by people who currently live in the City of Edmonton is much more likely to be the case than not. If it should be that, we have someone -- to put it another way. It may not be that we just receive 19 applications from Edmonton. Maybe we receive 20 applications from Edmonton, but we get a couple from people who are within our listening range, who are superior to those who live in Edmonton. So those would be given consideration as well.

5032 MR. McCALLUM: If I am an artist outside the listening range, does that mean I can't take part?

5033 MR. ARMSTRONG: What instrument do you play?

--- Laughter / Rires

5034 MR. ARMSTRONG: You would have to meet the requirement. It would have to be eight tunes that meet the Cancon requirement in the jazz genre and we said: Edmonton, Northern Alberta, Alberta. We will never have to go beyond that. Trust me on that one.

5035 MR. McCALLUM: Thank you.

5036 Dealing also with the $7,000 per year that you stated for the Canadian Women in Communications that, if necessary, you would redirect that funding, the $49,000 over the licence term.

5037 Can you indicate, assuming the amount to the Canadian Women in Communications would not qualify as a Canadian talent development initiative, to which other initiatives would you allocate that $7,000 per year?

5038 MS LEYLAND: Frankly, we will need to look at other areas to which we could allocate that money within Canadian talent. So we would need to get back to you with that response.

5039 MR. McCALLUM: Would it be more or less pro rata among the other initiatives that you have undertaken?

5040 MS LEYLAND: We could, though I think there are even other opportunities within Edmonton. There could be something within the jazz music program at Grant MacEwan that might qualify. I would like to take a look in that area.

5041 MR. McCALLUM: Again, assuming that $7,000 per year would not be accepted as a Canadian talent development initiative, but that you would wish to redirect it but also continue to pay the $7,000 per year to the Canadian Women in Communications, would you accept that commitment as a condition of licence?

5042 MS LEYLAND: Yes.

5043 MR. McCALLUM: Thank you. Thank you, Madam Chair.

5044 THE CHAIRPERSON: Mr. Armstrong, since you appear to be so sure that without any written mechanisms or any terms you can achieve what your 10k20 proposes to achieve, would you feel, if you were us, that maybe what instead, since you don't seem to think that it makes any sense to show us what the parameters will be, although you appear to know what they will be, that it be a minimum of $200,000 over seven years and a minimum of a number -- $200,000 per year, $1.6 million over seven years, but a minimum of a number of CDs. You say 1,280 selections.

5045 If you are quite sure, maybe that should be part of the commitment. That would be the test for the production of a number of CDs or a number of selections.

5046 MR. G. RAWLINSON: Madam Chair, we obviously should file with you more information on the conditions. I think the chances are --

5047 THE CHAIRPERSON: You don't have to agree with me.

5048 MR. G. RAWLINSON: Well, I think the chances are we won't necessarily get 100 per cent return of good CDs.

5049 THE CHAIRPERSON: Agreed.

5050 MR. G. RAWLINSON: We recognize that.

5051 THE CHAIRPERSON: Unlike having your roof done, the contract presumably will say that there won't be any holes anywhere.

5052 MR. G. RAWLINSON: Yes.

5053 THE CHAIRPERSON: There must be something --

5054 MR. G. RAWLINSON: But what I think that our commitment is, is that that is the goal and there is a self-interest for both us and for the musicians to do the best we can and the condition of licence should be that we will spend the money in the best way possible. We can lay out in written form, if you want, the things that we are going to say to these artists, but believe me if somebody doesn't come back with a CD we are not going to be able to get the money back. I mean, that just doesn't work.

5055 We are going to do the best we can with all good intentions, and we can lay out how we are going to do this in writing in more detail, if you want.

5056 THE CHAIRPERSON: Thank you.

5057 Those are our questions. We thank you for your cooperation and we will see you again at Phase II which may or may not be today.

5058 Yes?

--- Pause

5059 MR. McCALLUM: Madam Chair, I am wondering if that's an undertaking that they would file more information on conditions, if that's an undertaking that the Panel would wish to have if the discussion here is adequate?

--- Pause

5060 MR. McCALLUM: I take it from your indication that the discussion is adequate for the purpose of the record.

5061 MR. G. RAWLINSON: We will file them anyway, if that's okay.

5062 THE CHAIRPERSON: Mr. Rawlinson, you have your five minutes to tell us why we should give you a licence.

5063 MS LEYLAND: I will kick off our five minute by saying that we think it's probably redundant at this point to go over all the points that we have already made. So we would like to do this just a little bit differently and I would like to ask Dave Babcock to begin by telling you what the station would mean to him and the scene here in Edmonton.

5064 Dave?

5065 MR. BABCOCK: Simply all I can speak from is my perspective as a professional musician, as a long-time resident of Edmonton and someone who plans to continue as a professional musician.

5066 Were the licence to be granted, it would mean not only a lot for me personally, but I know it would mean a lot to other musicians in this scene. It's not very often you get an opportunity like the one I received to create an album and also theoretically to have the opportunity to have your songs on commercial radio.

5067 At this point, the songs that I have composed in the past have been played on CBC and locally with public radio with CKUA here in Edmonton. There are benefits derived from that, but there would be far more benefits derived from having my album played on commercial radio with its wider reach, not to mention other stations across Canada, commercial stations that could play this, as well as the larger markets of the U.S. and beyond.

5068 The 10k20 plan, I believe is a good one because it delivers substantial funds right where it's needed. It's not filtered down through grant bodies. It's right up front, right where you need it. You need funds to create an album. You need seed money ultimately to get things started, but without the engine that would be created by having product and having airplay to further your artistic career. All these things would generate sales which would generate more CDs, which would generate more airplay, which would mean a scene here in Edmonton. It would build something, much as scenes have been built in cities all around the world, especially North America.

5069 Everyone knows Detroit is Motown and everyone knows what Motown is about. That was a scene that was built and I don't see why that couldn't happen in place like Edmonton.

5070 Edmonton musicians generally aren't recognized, I don't think, as much as they ought to be in a national sense. There is a sense that musicians and the music scenes can be found in Vancouver, Toronto, Montreal, Halifax, but Edmonton is not known publicly as being a music centre. We as musicians and people of this scene who live here feel very strongly about our commitment to Edmonton and our fellow musicians.

5071 All I can say is this proposal from Rawlco Radio would make a huge difference. I mean, it already has for me. It has been a big shot in the arm for me personally just going through the whole process of creating music. It's a totally revitalizing situation for me and I know it is for every other musician. I can't say how many times I heard it in the process of recording this album, how many people said this is going to be great. This feels good.

5072 That is the way I feel about this commitment that Rawlco Radio is making. It feels good to me and everyone else who I have talked to off the record personally agree with that sentiment, that it would be good not only for musicians, but for the studios, the graphics designers, the photographers, the people in manufacturing, people in artist management, agents. The trickle-down effect is substantial.

5073 MS LEYLAND: I have to tell you that one of the most exciting things about this whole application has been meeting Dave, but I don't want you to think he is unique. There are many more Daves in Edmonton. They are mature, they are educated, they are professional musicians and the look in their eyes, and Dave was sort of going on there. I mean, he is really excited about this and it has been a huge motivation to all of us in putting together these Canadian talent development plans.

5074 I will ask Gord to comment.

5075 MR. G. RAWLINSON: I just have one quick thing to say. As I said earlier, we did sell some radio stations I think for very good reasons. You asked what other criteria. I hope that you will also look at the track record that we have achieved in Saskatchewan over the last number of years. I think Pam and her staff are doing a fabulous job in Saskatchewan.

5076 That's all I wanted to say.

5077 MS LEYLAND: And finally, just a last minute, which is that to me and our company and our staff this is a very important next step. It's an opportunity for us to grow in the province that is closest to homebase. The station would create opportunities for the staff in Saskatchewan. In our company promotion from within is very important, and I always like to say that I am perhaps the best living example of that.

5078 We are a young company. We have lots of energy, lots of enthusiasm, lots of life to bring to this venture here in Edmonton. It would a lot of fun to tell other business leaders in Saskatchewan that there is a general manager in Edmonton reporting to somebody in Saskatoon. It doesn't happen that often.

5079 Finally, I am proud of our track record in Saskatchewan. You know that we will bring the same high level of service to our station in Edmonton.

5080 Thank you very much for listening to our vision for smooth jazz.

5081 THE CHAIRPERSON: Thank you, Ms Leyland, Messrs. Rawlinson, and Mr. Babcock, of course.

5082 We will now take a 15-minute break and we will come back to hear the CHUM application.

--- Upon recessing at 1107 / Suspension à 1107

--- Upon resuming at 1125 / Reprise à 1127

5083 THE CHAIRPERSON: Order, please.

5084 Mr. Secretary, please.

5085 MR. LeBEL: Thank you, Madam Chair.

5086 The next application is an application by CHUM Limited/Milestone Media Broadcasting Limited, partners in a partnership to be established for a licence to operate an English-language commercial FM radio station in Edmonton.

5087 The new station would operate on frequency 91.7 MHz (channel 219C1) with an effective radiated power of 100,000 watts.

5088 Mr. Paul Ski will introduce the Panel. You have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

5089 MR. SKI: Thank you.

5090 Good morning, Madame Chair, Members of the Commission.

5091 I am Paul Ski, Executive Vice-President, Radio, CHUM Limited. I would like to introduce our team from CHUM Radio and from Milestone Media Broadcasting who will be presenting our partnership's application for a licence to operate an urban music radio station to serve Edmonton, on the frequency of 91.7 MHz.

5092 That station will be known as VIBE FM 91.7, or, more simply, as "The VIBE".

5093 Before introducing our Panel, I would like to acknowledge the presence of three members of the Board of CHUM Limited in the audience: Chair, Jim Waters; Vice-Chair Ron Waters and President and CEO, Jay Switzer. Also present is counsel Bob Buchan.

5094 To my immediate right is Denham Jolly, the founder, controlling shareholder and CEO of Milestone Radio Limited, licensee of FLOW 93.5, Toronto, which was licensed in June 2000 as Canada's first urban music radio station. Denham will be a member of The VIBE'S management committee.

5095 To Denham's immediate right is Farley Flex, Director of Enterprise Development at FLOW 93.5. Farley is also a concert promoter, and a leading manager of Canadian urban music artists. As such, Farley has been an active participant in the Canadian urban music industry for more than 15 years. You may recognize Farley as one of the four judges on CTV's national talent search TV program, "Canadian Idol".

5096 To Farley's right is Aisha Wickham, who is New Media Director of FLOW 93.5, Toronto. Among other things, Aisha is responsible for the implementation of the very active Canadian talent development program at FLOW 93.5, and for management of Milestone Radio's three websites.

5097 To my left, Duff Roman, Vice-President, Industry Affairs, CHUM Radio. Duff and I will be two of CHUM's three nominees on The VIBE's five-person management committee.

5098 Behind Duff is another well-known Canadian broadcaster, Fil Fraser of Edmonton. Fil has been a member of the Board of Milestone Radio since it was licensed, and has agreed to head the Local Advisory Board of The VIBE. Fil will also serve as one of Milestone's two nominees on The VIBE's management committee.

5099 Beside Fil is Peter Miller, CHUM's Vice-President, Planning and Regulatory Affairs. Among other things, Peter will be able to respond to any questions the Commission may have on legal and policy issues that relate to this application.

5100 Beside Peter is Shelley Sheppard, Vice-President, Finance of CHUM Radio, who worked with the Milestone Media team to prepare The VIBE's business plan and financial projections. Shelley will serve as one of CHUM's three nominees on the management committee of The VIBE.

5101 To Shelley's right is Kaan Yigit, founding partner of Solutions Research Group (SRG), which performed the format research and analysis that underlies this application.

5102 To Kaan's right is Hans Jansen of The Bay Consulting Group, which undertook the economic study of the Edmonton market that was filed with our application.

5103 Madam Chair, I would now ask Denham Jolly to commence our presentation.

5104 MR. JOLLY: Thank you, Paul.

5105 Madam Chair, Members of the Commission.

5106 It has been rewarding for me and members of my team, such as Aisha and Farley, to observe and to experience, on a daily basis, the benefits that a fresh new urban music radio station can bring to the communities that we serve, and particularly to the urban music artists who create and perform in those communities.

5107 We were not surprised in the least that our urban music station caught on so quickly in Toronto. Almost every large city in North America has an urban format FM station as one of its top five stations.

5108 Nor were we surprised that we were able to identify, and to help develop and promote, a sufficient number of high-quality Canadian urban music artists to allow FLOW 93.5 to meet its 35 per cent Canadian content obligations from the get-go.

5109 It has been said that "imitation is the sincerest form of flattery". We were flattered, therefore, when other FM stations in Toronto began playing urban music.

5110 We were even more flattered when the Commission recognized just how popular the urban format has become across Canada, with the licensing since 2000 of additional urban stations in Calgary, Vancouver, and Ottawa.

5111 These new stations, along with FLOW 93.51 are now listened to by one million young Canadians across the country.

5112 We at Milestone are extremely proud that we have been able to play a significant leadership role in these developments, and are proud to have helped to bring, in a cooperative fashion, some of the key players in Canada's evolving and expanding urban music industry.

5113 For example, Farley works closely with the new licensees of The Beat in Vancouver on the implementation of those stations' Canadian talent development initiatives.

5114 We look forward to working in a similar cooperative fashion with Newcap, the licensee of the new urban station in Ottawa. We believe that in Canadian urban music, as in most other things in life, there is strength in numbers.

5115 Madam Chair, when the Commission issued its call last Spring for applications to serve Edmonton, which is Canada's fifth largest radio market, we at Milestone Media decided that we would like to be part of that process.

5116 We knew that we understood what it takes to make an urban station successful in the Canadian context, and we knew that we had gained the confidence of Canada's rapidly expanding urban music industry.

5117 We were confident that we could make a significant contribution to the successful launch and operation of another Canadian urban FM station.

5118 Since FLOW went on the air, we have established links with Edmonton artists and clubs and we have had young Edmontonians interning at FLOW long before this call.

5119 Over the decade prior to the launch of FLOW 93.5, all of us at Milestone Media had been very close observers of the Canadian music and broadcasting scene. We had been impressed by the accessibility, style, and on-air diversity of MuchMusic, MuchVibe and CITY-TV, and we thought that CHUM was one broadcasting organization with which Milestone might do business one day. Since FLOW 93.5 launched, we have been involved in cross-promotions with MuchMusic programs such as "Rap City" and "Down Lo".

5120 Therefore, when the preliminary market research results from Solutions Research Group confirmed that Edmonton would be an excellent market for an urban format station, we thought it made sense to explore a possible partnership with CHUM.

5121 When Jim Waters and I got together last summer, the potential for real synergy between our two companies became readily apparent.

5122 We at Milestone know the urban sound, the format, the artists, and the ancillary marketing opportunities associated with operating an urban format station in Canada. CHUM has a wealth of experience and depth in the Canadian radio broadcasting industry.

5123 CHUM has one of the leading national broadcast sales forces in Canada, and also has ample financial and administrative resources to ensure the successful launch and operation of a new station here in Edmonton. It seemed a perfect fit, and that is why we are before you today.

5124 I would now like to ask Kaan Yigit to explain in a top line way, why SRG concluded that the urban format will be highly responsive to the musical listening preferences of young Edmontonians.

5125 MR. YIGIT: Thank you, Denham.

5126 Research among a representative sample of 400 Edmonton residents in the 15-39 age group demonstrates strong market demand for a new urban station.

5127 The Edmonton research had four key findings:

5128 First, we found that urban music styles, such as R&B and Hip-Hop, have strong appeal among young listeners, and particularly those in the 15-24 age group.

5129 Second, the research confirmed that younger Edmontonians who like urban styles are definitely underserved. Compared to those who like other music styles, urban music fans are significantly more likely to say that they "can't find a radio station that consistently plays the music that suits their needs".

5130 This underserved audience is currently using Internet downloads, CD burning, and television channels such as MuchMusic, and the U.S. cable channel BET, to meet their music needs.

5131 Currently Edmonton is well served by stations in the rock and Top 40 formats, but there is no full-time authentic urban station in the market.

5132 Third, our research found that the urban format's potential in Edmonton is comparable to its current performance in the Ottawa or Calgary markets. Among all 15 to 39 year-olds, 58 per cent indicated that they would tune in the station when it became available and 19 per cent indicated that it would become their favourite.

5133 And, finally, the research also found that an urban format station in Edmonton will appeal to a cross-section of young listeners in terms of gender, age and ethnicity. Seven in ten listeners will be young Edmontonians from mainstream cultural backgrounds.

5134 This result is consistent with our past research into this format in Toronto, Vancouver and Calgary.

5135 As you will hear next from Farley Flex, urban is a well-defined, proven format with particular appeal to young Canadians.

5136 MR. FLEX: I would like to begin by saying that I am particularly pleased to be part of an effort to bring urban Radio to the City of Edmonton. It so happens that Edmonton was the city of choice for my parents when they immigrated in Canada in 1965 and then brought my siblings and me not too long after in 1967.

5137 As Paul and Denham have indicated, I have been closely associated with the development of urban music in Canada for the past 15 years. I grew up with Black music. It was when I left Toronto to attend the University of South Florida that I became actively involved in the Black music industry.

5138 As you know, Black music is now more broadly termed urban music and urban is the umbrella for the primary musical sub-genres of R&B, Hip-Hop, and Reggae, which will make up the VIBE playlist. Urban also includes the secondary sub-genres of house, gospel, jazz and calypso.

5139 Urban is arguably the most inclusive and appealing type of music for young Canadians. It transcends race, ethnicity and culture and has become a uniquely unifying medium, as evidenced on the dance floors of local nightclubs and in communities across the country.

5140 Urban is the Music of a generation, just as rock and roll once was.

5141 In 1987 my company, Full Flex Management and Productions, began promoting concerts and managing talent, most notably Maestro Fresh-Wes, Canada's first and most successful Hip-Hop artist today.

5142 With Maestro I have had the opportunity to return to Edmonton almost annually and witness first-hand the growing prominence of urban music in this market. In fact, Edmonton has always been a successful stop for my artists as well as other urban artists when touring across Canada.

5143 In my role as an artist manager, I face the challenge of getting airplay for my artists on Edmonton radio. What is clearly missing is an urban radio station.

5144 VIBE will create a new platform for urban music artists, so that emerging talent, especially from the Edmonton area, can build their careers without having to move to Toronto or the United States.

5145 The urban format we are proposing will feature the primary musical sub-genres of R&B, Hip-Hop and Reggae. One of the unique aspects of these sub-genres is the variety of styles and feels within them.

5146 This allows for dayparting. For example: the feel of the station during the day will be slightly less edgy than during the evening when the ratio of younger listeners increases.

5147 Critical to the success of the urban format, is the credibility of the announcers, because urban is a lifestyle with which the listening audience chooses to identify. It is imperative that the station itself is identified as authentic.

5148 Our announcers will reflect the urban lifestyle in their banter, their distinctive news presentations and their entertainment updates.

5149 As you know, we have committed to a 40 per cent Cancon level. This may seem ambitious, but based on my experience to date with FLOW 93.5, and as a director on the boards and juries of FACTOR, CIRPA and VideoFACT, one of MuchMusic's CTD initiatives, and most recently my experience as a judge on "Canadian Idol", I can state with confidence that VIBE, if licensed, from day one, will be able to meet our commitment of 40 per cent Cancon.

5150 The recent licensing of urban formats in major Canadian markets has significantly increased the pool of Canadian talent from which this new station can draw.

5151 Urban Music stars like Remy Shand, Maestro, Kardinal Offishall, Jully Black, Sean Desman and Swollen Members are just the beginning. Up-and-coming Edmonton artists like the Aboriginal Hip-Hop group War Party and Jeff Hendrick, who will be appearing during the intervention process, will benefit from our CTD initiatives and will ensure that our 40 per cent Cancon goal is achievable.

5152 As we have always known at FLOW, an urban station may be mostly about the music, but it is not all about the music.

5153 Duff Roman will now outline our plans for spoken word and news programming, and local reflection.

5154 Thank you.

5155 MR. ROMAN: Each week, a minimum of three hours and 10 minutes will be formally devoted to news programming, presented in key listening periods.

5156 There will be five-minute newscasts each hour in morning rush hour, 6:00 a.m. to 10:00 a.m., Monday through Friday, and again in afternoon drive from 3:00 p.m. to 6:00 p.m.

5157 In addition to these regularly scheduled newscasts, The VIBE's program hosts will also reflect the local community and the broader urban lifestyle throughout the non-peak listening hours. These mini-features will provide listeners with timely information on the Edmonton urban music scene, the hottest entertainment events, reports on the national and international urban pace setters, Old Skool and other historical musical flashbacks.

5158 Friday, Saturday and Sunday nights, The VIBE goes clubbing. Our live-to-air personalities are "in the house", mixing with their audiences, covering the up-and-coming local urban musicians and

reporting to The VIBE.

5159 Our Weekend "News Round Up" will review the top news stories of the week from The VIBE's perspective in a full 15-minute package at 8:00 a.m. every Saturday morning.

5160 From 9:00 to 10:00 a.m. on Sunday, our weekly openline talk show, "Sunday Morning", presents expert advice and opinions on issues that touch the lives of Edmonton's younger listeners.

5161 Particular emphasis will be placed on reflecting the cosmopolitan, cross-cultural character of Edmonton's urban lifestyle. Of course, we will be looking to Fil and his pro-active Advisory Board for direction.

5162 Immediately following, at 10:00 a.m. on Sundays, The VIBE's "Sports Rap" will provide an hour of news and information on the local and national sports scene. These are the highlights of our formal weekly news and spoken word commitment.

5163 Knowledgeable comment will characterize every hour of each music host's on-air shift. Whether giving the history of a music selection, interviewing an up-and-coming artist or making an insightful observation on living the urban lifestyle, our hosts will offer the fitting remark, the wry comment that pulls it all together.

5164 Collectively, these islands of enrichment add significantly to the overall measure of The VIBE's spoken word programming, and will easily double the formal level submitted with our application.

5165 I would now ask Aisha Wickham to review our $4 million Canadian talent development program.

5166 MS WICKHAM: Thank you, Duff.

5167 Madame Chair, Members of the Commission.

5168 If licensed, The VIBE will expend, over the seven-year term, a total of $4 million on eight major Canadian talent development initiatives.

5169 These eight CTD initiatives will build upon the infrastructure that we have developed over the past three years at FLOW 93.5 in Toronto, and on the synergies we have formed through our relationship with MuchMusic and MuchVibe.

5170 These proposed CTD initiatives reflect our intimate knowledge of the urban music scene across Canada, and our understanding of the untapped talent in Edmonton that is waiting for a showcase like The VIBE can provide.

5171 I am proud to say that FLOW 93.5 commitment to Canadian talent development has already seen the introduction of more than 250 new Canadian urban artists to commercial radio, including K-OS and Edmonton's Jeff Hendrick, both of how performed locally last Saturday night.

5172 I will now briefly summarize each of our eight proposed initiatives:

5175 Commissioners, we are committed to developing Canadian talent development. We are building an infrastructure that will allow us to discover new voices, and to create new Canadian urban music stars.

5176 Thank you.

5177 MR. SKI: Thank you, Aisha.

5178 Madam Chair, Members of the Commission.

5179 We believe that, the application proposed by CHUM Milestone for an urban lifestyle format meets the Commission's criteria for licensing a new radio station in Edmonton.

5180 Commissioners, there are five reasons why urban is the right format and we are the right applicant.

5181 First, we believe we have demonstrated that the Edmonton market can support a new entrant, especially one that responds to the listening priorities and preferences of young Edmontonians that our music and market research have identified.

5182 Second, our business plan draws on the strengths of two complementary organizations, CHUM and Milestone, addressed to building a diverse, new format based on the synergies that flow from this partnership.

5183 Third, we have proposed a Canadian content level of 40 per cent, from year one. CHUM and Milestone have worked together over the years on a series of initiatives relating to the promotion and development of urban music in Canada and this strength of synergies makes us confident that we can achieve this objective.

5184 Fourth, our substantial contribution to Canadian talent development of $4 million over the seven-year licence term is carefully designed and coordinated to make a meaningful contribution to the development and promotion of urban musical talent in Edmonton, in Alberta and in Canada.

5185 Fifth, and finally, CHUM Milestone's application will significantly increase the diversity of programming choice, ownership, editorial voices, and local reflection in the Edmonton market. More than 5,000 Edmontonians have signalled their support for our application through a combination of letters, e-mails and petition signatures.

5186 Madam Chair, Members of the Commission, we look forward to responding to whatever questions you may have regarding our application.

5187 Thank you.

5188 THE CHAIRPERSON: Thank you, Mr. Ski and Mr. Jolly and your colleagues, and welcome to our hearing.

5189 You have filed with your application a demand study, I guess I could call it that, by Solutions Research.

5190 It has identified the stations that are listened to by your core demographic, or your target demographic, 15 to 39. I guess you would consider the core 15 to 29.

5191 MR. SKI: That's correct.

5192 THE CHAIRPERSON: It has identified at page 6, Power 92 or CKNG, CFBR or The Bear, and K-ROCK, the Newcap station, and at page 22, CKRA as a station that has some of the music that you plan to air on The VIBE.

5193 In fact, at page 22 they found that 76 per cent of the 15 to 29 demographic, the core demographic, has Power 92 as its source of R&B, hip-hop and dance. Correct?

5194 MR. SKI: Correct.

5195 THE CHAIRPERSON: So I gather then that CKNG and CKRA, that is Power 92 and CKRA, program a significant level of contemporary music, some dance and some hip-hop.

5196 How different from those stations would The VIBE be, especially Power 92 which was identified by 76 per cent of the respondents as their source of R&B, hip-hop and dance. I don't think reggae was included.

5197 MR. SKI: I will maybe start to answer that and turn it over to Kaan and maybe Farley.

5198 I suppose if there is a little bit of something being played in the market then it will be recognized by people who are surveyed.

5199 What we found, and certainly in making trips to the market which I did initially just to determine in part which direction we might consider going for this particular application, you can readily see that there is not an urban radio station here.

5200 What is really happening is that these other stations that you are referring to are playing what would be termed predominantly hit songs from the urban genre and that's essentially all that they are playing.

5201 A number of them are playing songs which have crossed over to these various formats. We anticipate that might be as little as 10 per cent in terms of the amount of music that would be played by these stations.

5202 In terms of urban shows, we know that Power has one show weekly, I believe, and I believe it's on Saturday night. But other than that, the other songs that they are playing that relate to the urban genre are basically the hit songs and, from what we have been able to hear, very little Canadian. We are looking at a 40 per cent Canadian content initiative and obviously the songs that we are playing from the Canadian urban genre are currently not being exposed in this market.

5203 Kaan?

5204 MR. YIGIT: I would like to add to that. The 76 per cent you refer to is what we tend to call "default tuning", simply on the basis that whatever little R&B and hip-hop that is played in this market is on Power 92.

5205 Now, I did actually look at what Power 92 played in the month of May, last month basically. Of the top 100 records they played, just to give you a sense as to how much urban is represented, of the 100 we were able to count 28 artists that we could call, or songs that we would find in urban charts, about the same number that you find on modern rock and rock charts, and the balance would be basically pop charts.

5206 So as you can see from that, Power 92 is very much of a hybrid radio station that programs top hits from different genres and some urban also.

5207 MR. FLEX: Thank Kaan.

5208 If I could speak to just the approach of an exclusively urban and authentic radio station. In comparison to Power 92, what you would find is that it's more of a cream skimming in terms of its approach to the various genres of music whereas The VIBE the would be much more vertical and much more deep, so to speak, within the sub-genres of the urban format.

5209 So that will be the critical distinction and that distinction is important to us because what it really results in for the urban music enthusiast is tune out factor.

5210 When that song from a genre that is not relatable to their lifestyle as well to their music tastes is played they will flip to, or turn off, or do whatever it takes until they figure they might, by happenstance, run into another urban song on that format.

5211 THE CHAIRPERSON: And I gather that that is why Solutions, at page 6 of the report, predicts that Power 92's share, if you were granted a licence, would go down from 24 per cent to 13 per cent, using as a proxy for share the favourite station. So it would be that those people who like urban music listen to Power 92, but there is not enough depth there in what it is they like and the premise is they would switch to The VIBE.

5212 MR. YIGIT: For a majority the new urban station would be their favourite and Power 92 would become probably their second choice or third choice. It would be one of the stations they would listen to.

5213 And, yes, the impact would be on Power 92 primarily because it's the only station in Edmonton that plays at least some urban music.

5214 THE CHAIRPERSON: But there would be a switch of favourites mainly from Power 92 to The VIBE.

5215 MR. YIGIT: Correct. The portion of Power 92's audience, typically the younger portion that prefers urban, would switch or would make the new urban their favourite station and probably would continue to listen to Power 92, but not as much.

5216 THE CHAIRPERSON: Yes, because if I read this correctly, 76 per cent of the 15 to 29 had Power 92 as their favourite, and 90 per cent of the 15 to 39. Is that correct? I would have found that at page 22 of the Solutions --

5217 MR. YIGIT: Yes, 76 per cent of 15 to 29 age group said that --

5218 THE CHAIRPERSON: And 90 per cent --

5219 MR. YIGIT: Yes, that's correct.

5220 THE CHAIRPERSON: Ninety per cent of the 15 to 39 would have found, I think in that column, their source of R&B, hip-hop and dance on Power 92, if I recall it's what this says. Right?

5221 MR. YIGIT: Yes. One of the sources, along with those --

5222 THE CHAIRPERSON: Others, yes, including all the other things we know of where one can get music, all the other sources.

5223 So as far as your research would indicate, CKRA but mainly Power 92, would be the Edmonton stations that play this type of music, or is there any other?

5224 MR. YIGIT: CKRA plays a little bit. It's mainly Power 92.

5225 THE CHAIRPERSON: Rock, I guess. Oh, no, CKRA is what...? Rock is CIRK. CKRA, how do they identify their -- hot adult, hot AC adult CHR.

5226 MR. YIGIT: It's 96-X, yes. They play a little bit --

5227 THE CHAIRPERSON: So that would not be where you poach your listeners.

--- Laughter / Rires

5228 MR. YIGIT: There would be little, if any, impact.

5229 THE CHAIRPERSON: We have also two applications before us in a similar format as yours. One is the CKMW application which will have a focus on hip-hop, rap, dance and R&B, and Harvard, which proposes a blend of progressive, modern and urban format music.

5230 How, in your view, is what you are proposing different from what they are proposing to fill the urban niche?

5231 MR. SKI: I might start, Madam Chair, and have Denham's and Farley add to this.

5232 I think the nature of the partnership by its very nature is diverse. So we will start with that. I think that because of our relationship with Milestone, they were really the first to bring urban radio to Canada. They have been very successful with it, and it's one of the reasons for our partnership with them. By the same token, CHUM Television, through MuchMusic and MuchVIBE, has also been involved in the urban music genre.

5233 The combination of the two, the fact that we would have an urban station here, the fact that we would also be able to allow exposure, television exposure, across Canada I guess to over six million viewers of MuchMusic and MuchVIBE helps a great deal.

5234 Our Canadian talent development initiatives at $4 million help to ensure that this fastest growing in Canada, and I guess in North America, music genre will continue to succeed. Our 40 per cent Canadian talent initiative ensures that the Canadian urban artists that are not being played in Edmonton -- although these other stations you mentioned may play some urban music, they are really not exposing the Canadian urban artists which we will do with our 40 per cent Cancon commitment.

5235 MR. JOLLY: Madam Chair, as Paul said, we are applying for an urban station. We are not applying for an urban/anything. We are applying for an authentic urban station that is true to the genre. We call it "pure urban sound". So we will be supporting the artists in Edmonton. We will be going deeper than the hits, as they are being played by most people and, as I say, we are not applying for urban/anything. It will be pure urban sound.

5236 Inherent in our application, Madam Chair, I think is an inherent diversity built right into it and there will be opportunities for all kinds of people with our application.

5237 Maybe Farley would like to develop on the music.

5238 MR. FLEX: Just from the standpoint of the music, what I think is critical to understand is urban has evolved into a lifestyle and when you analyze the lifestyle of that urban enthusiast, it's very defined of their willingness and consciousness in terms of crossing over into other areas, as anyone would with any lifestyle. They are dedicated and they are trendsetters in a lot of respects and their focal point is the music. The music is where they learn about the culture, whether it be through video or thorough radio stations or Source Magazine, or what have you. That's where they learn, especially in markets that are removed from the "core urban centres" like New York, Toronto or L.A.

5239 One of the interesting things is that the fervour for the genre is heightened when you come to markets like Edmonton. I have spent some time in the clubs here this past weekend, last night included --

--- Laughter / Rires

5240 MR. FLEX: And it's interesting to see. There are clubs here that play exclusively urban music and the breadth of diversity is just incredible. It actually exceeds Toronto in some respects because there aren't huge numbers of each individual group. So the music has brought them together in an earlier phase of existence, so to speak, than it would in Toronto where you can still have clusters who enjoy the music separately.

5241 It's a wonderful thing to experience and I think when you add other elements of music that do not relate to the genre directly, again I alluded to it in my earlier response, it results in tune out, it results in a lack of authenticity which is the primary concern for that urban enthusiast.

5242 THE CHAIRPERSON: We know you weren't sitting at an outdoor café.

--- Laughter / Rires

5243 THE CHAIRPERSON: Because you wouldn't be wearing your suit.

5244 We will hear, of course, from Harvard and CKMW, but you yourself, at some point in your supplementary brief, which I will find over time, discuss the fact that the station would have to be adapted to the Edmonton market. Of course, what I hear from Milestone is we know how to do it, we have done it in Toronto.

5245 What if a less pure urban is better suited to this city? How comfortable are you about the ability to import the Toronto FLOW to Edmonton VIBE and why is the -- I guess you would describe as more defused or diluted -- less pure urban suggested by the other two applications not more suited to this city?

5246 MR. FLEX: I think the distinction that needs to be made there is that the sub-genres of urban, as the genre itself has evolved, allow for shifting and a little bit of trimming around the edges in certain respects.

5247 When Kaan referred to some of the statistical information, when you include artists like J.Lo or Nelly and artists who have crossed over from urban -- or beyond urban, I guess you could say -- to the pop category, they would still be included in our playlist. So that receptivity that the fringe urban enthusiast, or somebody who is not necessarily 100 per cent vested into the lifestyle, it would still be appealing for them because they are getting so many different mediums of exposure of some of these artists that we will be playing.

5248 So artists who are selling hundreds of thousands of records in Canada that are identifiably urban but also successful from a popular standpoint, would be part of our playlist. So that's where the room for adaptation to the marketplace comes from.

5249 If urban has not been exposed to the heights in Edmonton as it has been in Toronto, the sub-genres allow us, for instance in Toronto, based on the ethnic make-up, we could play a little more reggae because it's a little more relatable to the marketplace.

5250 In Edmonton if that is not the case, you can supplement or replace that void of interest in reggae with other streams within the genre. That is where the fun part really begins.

5251 THE CHAIRPERSON: Of course I have no doubt that when it's not raining Edmontonians are as hip as Torontonians.

5252 MR. FLEX: Oh yeah!

5253 MR. SKI: Madam Chair, if I could just mention too, I think that -- and we have had that discussion the CHUM/Milestone team -- for a CHUM perspective also -- and I can speak to this having managed CHUM radio stations over the last 30 years, the last 22 here in the west -- we built our radio stations from the ground up. We build them from the local market.

5254 The local market staff make determinations in terms of the music that is going to be played by that radio station, and we make those determinations by researching the market, by determining what is going to be best in terms of how we mix the music, what particular genres work best, and we do that on an ongoing basis to make sure that the format in particular is always fresh and it's always appealing to our particular target audience.

5255 MR. JOLLY: I think, Madam Chair, just to qualify, for example soca, which is a genre of urban, would probably not be as plentiful in Edmonton as it would be say in Toronto or in the other bigger centres.

5256 THE CHAIRPERSON: I have found the sentence that I was referring to on page 14 of your supplementary brief, where at the very top you say:

5257 So you would be attentive to the mix as between the various types, such as rhythm and blues, hip-hop, reggae or house, and try to determine what works in this market.

5258 MR. JOLLY: For example, Madam Chair, we probably woudln't go into gospel here which is a sub-genre of urban which we do play.

5259 THE CHAIRPERSON: That's why it's raining so much.

--- Laughter / Rires

5260 THE CHAIRPERSON: Will you mix the various genres throughout the day, or will it be done more in blocks of the various types?

5261 MR. FLEX: We will mix them throughout the day. The slight variations you might see are when we go live-to-air, for instance. The DJs have a little more autonomy in the live-to-air scenario, although there will be, obviously, significant guidance from the radio station as to which track should be included and the feel of the station as it is an extension of our broadcast, so to speak.

5262 In terms of going throughout the day, as I alluded to earlier, we may soften up in certain day parts and things like that, but as far as block programming, no, we will be relatively fluid.

5263 THE CHAIRPERSON: Now, in your supplementary brief at page 14, you say that:

5264 That is why you are removing gospel, I guess.

5265 MR. FLEX: Gospel is unique in that it has evolved actually to sound very much like secular music in terms of the background tracks to it, and so forth. It's really the content that has changed now. A lot of successful urban music artists have come from the gospel genre specifically.

5266 The nuance, I think, in terms of age demo that would differ in Toronto as compared to Edmonton would be an artist like Luther Vandross, for instance, who is considered a more seasoned soulful traditional R&B singer wouldn't have the same appeal as a younger artist like Jaheim where the content is so much different, the presentation, the perspective on love alone is different.

5267 Those types of nuances are what the audience gravitates towards. Diana Ross or Whitney Houston, and so on and so forth, may not be as readily prevalent in the Edmonton market where we are skewing for a younger appeal.

5268 THE CHAIRPERSON: So the differences that will be required between The VIBE and FLOW is based mostly on the age group which is predominant in Edmonton?

5269 MR. FLEX: Yes, I would say most significantly. Again, the ethnic breakdown here, and when you go out to the nightclubs you see that urban is very inclusive in its appeal. We feel comfortable that the urban music that the city has been exposed to, and has sought for on its own without radio in the market, is reflective of what urban truly is, but, as I said, particular to the marketplace and the youth-oriented programming, there would be some differences.

5270 THE CHAIRPERSON: In Toronto, had you pegged it correctly or did you have to alter your plans to make it less contemporary, less young?

5271 MR. FLEX: We didn't really have to alter it in Toronto because, as you may be aware, there was the cross-border station WBLK, for instance, that we have observed and basically we were all patrons of prior to FLOW's inception, but the exposure in Toronto just based on the volume and the population and the transferring of information, whether it be through relatives, this is all prior to the Internet even, where, just from a media standpoint, access to different influences from America are heightened in Toronto, I would think, much more significantly than they would be in Edmonton.

5272 So the appeal of the music and the bands, for instance, that come across the border that would never have come to Edmonton just based not just geographics, but just appeal and promoters recognizing the value, or the lack of in this market. We are going way back but Sly Stone and Parliament and James Brown right up now to some of the more prominent artists, likely would not have been able to play Edmonton as readily as they certainly would Toronto.

5273 THE CHAIRPERSON: Your spoken word content, in the response to the first deficiency question of the Commission, you have indicated it would be 4.32 per cent.

5274 First, I was wondering how you calculated this but I think I have it. On page 17 of your supplementary brief, you have 15 minutes on Saturday for weekend news roundup; one hour on a program called "Sunday Morning", 9:00 to 10:00 Sunday, followed by another hour of "Sports Rap" for two hours and 15 minutes. Then later in the deficiencies at Question 1B, you say, and you repeated this morning, that there would be 3 hours and 10 minutes of news, which gives five hours and 25 minutes, 4.32 per cent.

5275 MR. ROMAN: Yes, that's right. The three hours and 10 minutes of news does include that 15-minute Saturday "News Round Up". The actual number is five hours, 26 minutes, 30 seconds, which is 4.32 per cent of that formal commitment as spoken word.

5276 That also includes some other enriched spoken word areas that I can give you some detail on, if you would like.

5277 THE CHAIRPERSON: But they are not included in the 4.32 per cent.

5278 MR. ROMAN: Well, in the formal --

5279 THE CHAIRPERSON: That's the formal part.

5280 MR. ROMAN: Yes.

5281 THE CHAIRPERSON: But you also have talked about again this morning and in your supplementary brief about "mini-features" of 15 seconds each. I don't suppose that's in the 4.32 per cent.

5282 MR. ROMAN: Yes, it is.

5283 THE CHAIRPERSON: It is?

5284 MR. ROMAN: The mini-features are within the formal. The area of spoken word, the interaction of the host with the music, the interaction with the host on the phones and the things that add life to the format, are part of the informal commitment, and I can take you through that.

5285 THE CHAIRPERSON: I think I have it but for the mini-features, how that adds up, how many minutes it adds up to in a day.

5286 MR. ROMAN: Sure. On the mini-features we are talking about 15 seconds per hour over five hours and that's between 10:00 and 3:00 and the off-hour between drive times over five days, and then from 6:00 to midnight, another 15 seconds per hour over six hours time five days. The total for mini-features is only 13 minutes and 45 seconds.

5287 THE CHAIRPERSON: I see.

5288 The news, in your supplementary brief at page 16 and somewhere else as well, you talk about the difficulty of having structured newscasts for the demographic that you are targeting.

5289 You say:

5290 But you will have five-minute newscasts. That's average, isn't it, five minutes?

5291 MR. ROMAN: That is in drive time and we think that with our particular approach to spoken word via the news that we can handle five hours as part of our formal commitment, yes. For our music-intensive station, five minutes per hour will work.

5292 THE CHAIRPERSON: I was more curious about the structured/unstructured part. How will it be unstructured to keep your audience, because you say structured newscasts turn them off. A five-minute newscast, how will it be different from the one you hear on another station?

5293 MR. FLEX: I guess the essential difference will be the way it's delivered. What we have experienced on FLOW as we have evolved, is that a more conversational interactive in terms of the newsperson and the on-air host style of news delivery is much more appealing, rather than having the very structured, I guess is the word, delivery by one individual.

5294 If you were to listen to FLOW's news broadcast, when our newsperson is delivering something there is a breadth of opportunity for the on-air host to interject and make a comment about that piece of information. What it does, it lightens a bit, it's more conversational, probably is the key descriptive term we would use.

5295 We found that to be much more receptive to our audience.

5296 MR. ROMAN: But I would add, Madam Chair, that they are spotted on the hour so that people know when to tune in the news. The unstructured part, as Farley described, is the interaction and the style of presentation.

5297 THE CHAIRPERSON: You would still have a mix of international, national and local news.

5298 MR. SKI: That's correct.

5299 THE CHAIRPERSON: What has been your experience at FLOW-FM with regard to this type of spoken word and the receptivity of the style to your target audience?

5300 MR. FLEX: What we have experienced is that when we look at as highly musically intensive as our station is at FLOW, that makes us focus on trying to diminish tune out, as any station would. We have, for instance, on our morning show a gentleman named Kenny Robinson who is a comedian basically, and when Kenny interacts with our newsperson Spiria Fearon, Kenny is coming from a totally abstract perspective on something as pure as a political issue, or what have you, and he brings a twist to it and it makes people smile basically is what it does, rather than just simply get the information and move on to the next topic.

5301 So for our listeners, just in terms of that type of exchange, that is the receptivity is heightened.

5302 THE CHAIRPERSON: Will there be some sharing of spoken word programming between The VIBE and FLOW? Your application and your presentation this morning is really infused with this idea of the synergies between the two stations. Will there be some sharing?

5303 For example, would mini-features be not sharable?

5304 MR. SKI: It is not our intention to share those. I think where the sharing might --

5305 THE CHAIRPERSON: It may not be your intention, but will you?

5306 MR. SKI: I think the answer would be no, but I think the only part of the application might be the countdown that we do because the countdown show that we have in the application is something that will probably be put together by all of the urban stations in Canada.

5307 That is our goal so if there is any sharing it would be in that regard.

5308 THE CHAIRPERSON: The countdown is basically music. It doesn't come within spoken words.

5309 MR. SKI: There is some spoken word it in though. There will be descriptions of the music and --

5310 THE CHAIRPERSON: But you haven't put it in the 4.32 per cent.

5311 MR. SKI: No.

5312 THE CHAIRPERSON: What about the mini-features? Considering what they are supposed to address, why would you not share them?

5313 MR. FLEX: I guess a quick response to that is that there isn't a need to do that. The information about the artists that are being played on the station is readily available through all the normal sources, whether it be the Internet or magazines or entertainment portals. More uniquely, when we include local Edmontonian artists that is where the distinction is made. So if we bring in Jeff Hendrick or War Party, or whom have you, to the station to partake in whether it be an interview or co-hosting one of the day parts, that type of thing, obviously we wouldn't share that with any other market. That would be exclusive and more appealing to this market.

5314 THE CHAIRPERSON: But if I understand, those mini-features may also be the result of some research or knowledge of international artists, of the development of the various styles of music and that research could be shared or done together.

5315 MR. FLEX: Again, it could be, but it's so readily available that there really isn't a need. There is no cost factor involved. It's basically homework. So there is no real need for it.

5316 THE CHAIRPERSON: If you can share your homework...

--- Laughter / Rires

5317 MR. FLEX: When you share your homework you end up with the same grade as the guy who failed.

--- Laughter / Rires

5318 THE CHAIRPERSON: Smart students know how to find the smarter students.

--- Laughter / Rires

5319 MR. ROMAN: Madam Chair, you have given us a good idea, but our thrust was not to create a syndication feature with the mini-features.

5320 THE CHAIRPERSON: Now, would it be fair to describe your "Sunday Morning" program as an openline show?

5321 MR. ROMAN: Yes, it would be fair to say that, although there will be some roundtable discussions and those might go on for a while before they go to the phones, but primarily an openline show.

5322 THE CHAIRPERSON: Do you have an openline show at FLOW?

5323 MR. ROMAN: I will let Farley answer that.

5324 MR. JOLLY: No, we don't.

5325 THE CHAIRPERSON: You don't?

5326 MR. JOLLY: No.

5327 THE CHAIRPERSON: Why should there be one at VIBE?

5328 MR. FLEX: I think again, as many synergies as there may seem to be with FLOW, I think it's important that the Commission recognize that we recognize the target demo that we are going after here in Edmonton. It is different than that of FLOW. The issues of concern relative to this particular market are unique and any broadly applied or more common topics again do not need to be addressed on a broad-scale basis.

5329 THE CHAIRPERSON: When your core audience is the 15 to 29 group or demographic, is an openline show not a dangerous venue or occasion for jock talk which, of course, we have a special category at the CRTC called "jock talk".

5330 MR. SKI: It's not necessarily a tune out depending on where it's positioned. If it was during time periods when the youth culture, when young people want to hear music and some type of a flow then, no, it's probably not a good idea. But if that particular type of talk show is positioned during a time of the week when people can listen to it when the music isn't quite as important then, yes, it's something that can work.

5331 THE CHAIRPERSON: You are aware, of course, as broadcasters of the Commission's concern about openline shows and the guidelines that it has put out and the various concerns that have been brought to the CBSC, for example.

5332 MR. SKI: That's correct.

5333 I might have Duff make a comment on that, but we also have our own internal guidelines with regards to the conduct of the openline show host. If you are referring to a shock jock type of situation, that is not part of our programming format.

5334 MR. ROMAN: Yes. I was just going to add that, as the Commission is aware, we have formal talk show, openline guidelines that we have actually filed with the Commission. You have them in your files.

5335 Those are essentially our CHUM corporate policies, but they would be adapted through the CHUM/Milestone approach to Edmonton. I mean, Farley can tell you right now that in terms of music that the music supplied to FLOW with our experience, is already edited for air. Am I correct, Farley?

5336 MR. FLEX: Yes, and I guess more specifically to the openline aspect of it, the topics are going to be topics of concern to youth and the way that is monitored and managed -- and I know Aisha can speak to this because she implemented some of the things we did early at FLOW -- the dialogue is controlled and it is I guess you could say managed prior to going to the airwaves as well.

5337 THE CHAIRPERSON: So you will have a delay of some type?

5338 MR. SKI: Absolutely.

5339 THE CHAIRPERSON: And I guess often what initiates that type of programming is the subjects that one chooses to discuss.

5340 So your decision not to have an openline show at FLOW is not related to the unmanageability of an openline show to a young audience.

5341 MR. FLEX: Certainly not.

5342 THE CHAIRPERSON: I gather from your comments that there will not -- well, you mentioned briefly, but I am not sure what it is you said about syndication. At page 18 of your supplementary brief, you do say that you will explore the potential for synergies through shared or syndicated programming.

5343 So what type of syndication would that be?

5344 MR. ROMAN: Yes, Madam Chair. We used a couple of examples, the Gina Lee "Love Zone" for instance. That program is a very high-quality program, very different kind of mix of music, not necessarily the most prominent songs on our playlist. There is also what we describe as "savory monologue" to go along with that music. So it's part of our after-hours programming. It wouldn't fall within the designed broadcast week. We are really talking about midnight to 2:00 a.m. for the "Love Zone". The only other formal proposal we have put forward with regard to sharing programming is, of course, the countdown, the 90-minute countdown.

5345 I would also add that by exploring the synergies and looking at the kinds of programming that would enhance the listening experience for this station or any station, certainly has been encouraged by the Commission under their Networking and Syndication Policy and that is that is that you see a place for enhancing the listening experience at the local level by targeting particular kinds of syndicated programming. We don't have any specific program in mind, but mindful of trying to enhance the listening experience, we are open to looking and exploring all kinds of opportunities. But we are not a cookie-cutter network station. We are a locally oriented, music-intense urban station.

5346 THE CHAIRPERSON: So, for example, you would see the mini-features, if you did work together, as enriching or enhancing their quality by sharing some ideas, or doing some research together.

5347 MR. ROMAN: What I suggested was --

5348 THE CHAIRPERSON: But even if you did them all, that would be a maximum of 13 minutes a day.

5349 MR. ROMAN: Really, and the thrust was not syndication going into that.

5350 THE CHAIRPERSON: No. And the others would be after -- the "Love Zone", for example, would be after the broadcast day.

5351 MR. ROMAN: After the broadcast day, yes.

5352 THE CHAIRPERSON: How much of the day will be live programming as opposed to automated or voice tracked?

5353 MR. SKI: The entire day will be live.

5354 THE CHAIRPERSON: All 18 hours?

5355 MR. SKI: All 18 hours will be live, yes. Because of the urban format, we will be live probably until about three o'clock in the morning, and if there is any voice tracking at all, it would be during the 3:00 a.m. to 6:00 a.m. time period prior to the morning show starting. But we need to be live and interactive through the full broadcast day and then some.

5356 THE CHAIRPERSON: Your programs from clubs, Friday, Saturday and Sunday, will be live-to-air from the club, like taped and then broadcast at some other time?

5357 MR. FLEX: No. In fact, they are live-to-air.

5358 THE CHAIRPERSON: So Friday night I am either at the club or I can listen on the radio to what is going on at the club.

5359 MR. FLEX: Exactly, and it's essentially a product that is sold to a client which would be the club or a promoter acting on behalf of the club. The key thing there is the whole relationship between the station itself, probably the sales rep and our programming department in that all of the things that we feel should be reflected and maintained as a reflection of our programming will be enforced or encouraged aggressively with the DJs, and so forth. It's very important.

5360 In Toronto what we do is we meet with all the DJs and we bring them in and we talk to them about -- we provide them information as to what tracks are doing well on our station that we need to see additionally reflected in the live-to-air broadcast.

5361 MR. JOLLY: In the urban genre, Madam Chair, I think this in one area in which the market is expanded because, as Farley mentioned, the clubs pay for this kind of service.

5362 THE CHAIRPERSON: So this could be broadcast partly during the regulated broadcast and partly after midnight.

5363 MR. FLEX: That's correct. Because it's a service to the client, you are talking about nightclubs that generally are going to expect patrons to arrive at the club any time between maybe ten and twelve o'clock. So what the live-to-air broadcast does for them as a service is entice people to come down to the club -- address information, who the DJ is, what type of music will be played. That's what the jock who is on-air during the live-to-air presents to the listening audience at home.

5364 So yes, ten o'clock is a normal start time for a live-to-air broadcast.

5365 THE CHAIRPERSON: And I gather there will be five a year.

5366 MR. FLEX: There will be...? Sorry.

5367 THE CHAIRPERSON: Five of those a year.

5368 MR. FLEX: No, no. Those are weekly. We do annual contracts.

5369 THE CHAIRPERSON: So it will be once a week, either Friday, Saturday or Sunday.

5370 MR. FLEX: That's correct, from any particular nightclub.

5371 MR. JOLLY: I think you are referring to the CTD initiative, Madam Chair.

5372 THE CHAIRPERSON: Oh, yes, yes.

5373 MS WICKHAM: The CTD initiative has a live performance --

5374 THE CHAIRPERSON: Yes. So will there be one Friday night, Saturday night and Sunday night?

5375 MR. FLEX: Or Thursday. It depends. I mean, it's based on demand. I can tell you at FLOW --

5376 THE CHAIRPERSON: What is available.

5377 MR. FLEX: We currently have 11 live-to-airs on the FLOW broadcast right now.

5378 THE CHAIRPERSON: How many at FLOW of these?

5379 MR. FLEX: Eleven per week.

5380 THE CHAIRPERSON: Eleven per week?

5381 MR. FLEX: Yes.

5382 THE CHAIRPERSON: So the five per year was under the CTD --

5383 MR. FLEX: Yes.

5384 THE CHAIRPERSON: I see that now.

5385 Interactivity, of course with a young target audience that is a quite popular way of interexchanging with the audience. Besides, I guess you could call the openline show interactivity.

5386 Will there be any other? Your mini-features will just be a 15-minute --

5387 MR. SKI: Fifteen seconds.

5388 THE CHAIRPERSON: Fifteen seconds, rather, excuse me, a 15-second capsule, but is there any other? Will there be, for example, contests or anything that interacts with the listenership?

5389 MR. SKI: I think the format, and I will ask Farley to explain a little bit more, the urban format by its very nature is interactive. I mean, with the live-to-airs that he is talking about, with the constant dialogue between the on-air DJs and the listening audience. So the whole format itself I think could be portrayed as being very interactive.

5390 Farley could maybe give you a few examples.

5391 THE CHAIRPERSON: During those periods, but during the ordinary broadcast day, will there be interactivity or interchange, exchanges with the audience?

5392 MR. SKI: Very much, and I meant during the entire broadcast day, not just the live-to-airs. Farley can give you some examples of sort of the outreach from the DJs to the youth listening to the station.

5393 MR. FLEX: There would, in fact, be a couple of opportunities. An example would be if you bring in, for instance, a local artist to either co-host or be interviewed on the station, you would open up the lines for callers to ask any particular type of question of interest.

5394 Also, as an example, there are on-air jocks who will introduce a particular topic, for instance, as a theme for that particular night of the show and that, just similarly to how a prizing is awarded, is an opportunity for interactivity with the audience. So if the topic of the day is something that happened let's say between J.Lo and Puffy, or whatever it is, when a caller maybe calls in to request the song, you could say, "Hey, what's up? What do you think about this J.Lo/Puffy thing", yadi yadi yada, "and what song would you like to hear?". So it's not just a one dimensional type of interaction.

5395 THE CHAIRPERSON: You noted in your presentation at page 2 that FLOW has three websites. Would you consider those a venue for interactivity as well?

5396 MS WICKHAM: Absolutely. I am the new Media Director at FLOW and the three distinct websites, one is specific to our CTD initiative, one is the radio station's website, which is more marketing and promotions-driven which we have a very active message board where our listeners interact with one another through that and with the announcers, and the third website is more of a corporate website for the Milestone Broadcasting Corporation.

5397 THE CHAIRPERSON: With regard to VIBE, are you proposing one or two or three websites? I know you have one under your CTD plan. We can talk about that. Would The VIBE have a website similar to the FLOW's?

5398 MR. SKI: Yes, it would. I will have Aisha give you the details.

5399 MS WICKHAM: Yes, The VIBE certainly would have one as a component of its regular promotion as a radio station. That's the regular cost of doing business which is separate and unique from the information-based focus of the CTD website. That would be marketing and promotions --

5400 THE CHAIRPERSON: You have obviously anticipated my question under CTD development, trying to determine to what extent the urban music website that is proposed for $130,000 over seven years is actually separate from The VIBE's ordinary website and completely devoted to information, I guess, on the CTD development initiatives and opportunities for participants.

5401 MS WICKHAM: That's correct.

5402 THE CHAIRPERSON: Now, you have given to the Commission some breakdowns in response to deficiencies, that's Question 2. So if I understand there is $40,000 in year one to establish it, and then $15,000 each year to maintain and update it which ends up to $90,000 over seven years.

5403 What is the $500 a month to maintain it as opposed to the amount attributed to its updating?

5404 MS WICKHAM: The $500 a month is regular maintenance that would go on for the database and artist information. The initial building and launch of the website would require a significant amount of lead-up work in terms of building the structure of the website unique to the Alberta market, building on some of the information we have on the Toronto website in terms of general overviews on the urban music industry.

5405 The urban music website in Edmonton would feature bios, database information on artists and others who support them in the urban music genre. That would take some development in terms of purchasing initial software, graphic design work, et cetera.

5406 Then over the remainder of the term, we would be maintaining and adding as new artists come up.

5407 THE CHAIRPERSON: This site will have nothing to do with The VIBE's websites, the radio website.

5408 MS WICKHAM: That's correct.

5409 THE CHAIRPERSON: The CTD development --

5410 MS WICKHAM: Other than being linked in terms of telling people that they can go to this other website for information. They are separate.

5411 THE CHAIRPERSON: And it will be used mostly to advertise or promote the possibilities that your CTD initiatives will offer.

5412 MS WICKHAM: I wouldn't as much say advertise as inform --

5413 THE CHAIRPERSON: And promote.

5414 MS WICKHAM: Inform and educate people about the opportunities to connect with others in this genre, but also to learn about information such as how to better prepare your product for commercial radio airplay, song writing techniques, that type of thing.

5415 THE CHAIRPERSON: And it will have application forms or...?

5416 MS WICKHAM: Correct.

5417 THE CHAIRPERSON: Now, will there be -- I noticed in your presentation today that you talk about websites and the possibility -- I think you called it:

5418 Would the station's website be used for this type of revenue generation?

5419 MS WICKHAM: It's an additional tool that in Toronto we make available to our sales reps in terms of being able to offer added value to clients as well as a separate initiative that clients can take advantage of in terms of reaching their markets.

5420 THE CHAIRPERSON: But would that be from the station's website as opposed to this urban music website that we have been talking about as the CTD initiative?

5421 MS WICKHAM: Yes, that would be a station initiative, not a CTD initiative.

5422 THE CHAIRPERSON: And there would be no marketing or promotion of venues on the weekends or of any other VIBE-related activities on the CTD website, if I may call it that?

5423 MS WICKHAM: No. The only link would be informing people that this is an initiative of VIBE and they can link to The VIBE website from there, but there wouldn't be specific --

5424 THE CHAIRPERSON: And to say go to so and so.com if you want The VIBE, the actual station website.

5425 MS WICKHAM: Right.

5426 MR. SKI: That's correct.

5427 MR. ROMAN: Madam Chair, I think the credibility of this website will be in the database management. As you are aware, with any website or surfing to any link on the Internet, there is nothing more frustrating than out-of-date news.

5428 This is a big chore. That is the database management so the information on the artist is always up-to-date, the names of booking agents, the names of venues. The whole integrated information exchange for our Canadian talent development initiatives will ride on current up-to-date database handling.

5429 MR. JOLLY: Madam Chair, I would also like to point out that there is a fair amount of interaction that takes place between the on-air people on the website, and maybe Aisha can speak a little bit more about that, the on-air people and the listeners.

5430 THE CHAIRPERSON: Now, do you have a CTD-type website, dedicated website, at FLOW?

5431 MS WICKHAM: Yes, we do.

5432 THE CHAIRPERSON: You do as well.

5433 MS WICKHAM: Yes.

5434 THE CHAIRPERSON: Would it be a characterization that would be acceptable to you that it be dedicated to CTD?

5435 MS WICKHAM: Absolutely.

5436 THE CHAIRPERSON: Information and initiatives.

5437 MS WICKHAM: That's correct. Right now that's how we operate in Toronto.

5438 THE CHAIRPERSON: And if the Commission still remains doubtful as to the eligibility of this website as a CTD initiative, would you institute it anyway?

5439 MR. SKI: Yes, we would. We think it's very necessary. We think it has obviously worked extremely well in Toronto and we think it's important for the development of the genre.

5440 THE CHAIRPERSON: The second area of your CTD initiatives that raise some questions is the CTD coordinator which would be $50,000 a year, $350,000 over seven years.

5441 At your supplementary brief, page 28, you explain that's it's the difficult, different, complex initiatives proposed and you need I guess what I could call a dedicated coordinator to manage that.

5442 I would like to know on which initiatives this coordinator's efforts or expertise would be used. I would assume, for example, that one could deduct from that the FACTOR money, the Education Fund. The website is already taken care of, $530,000.

5443 So what is it of the remaining initiatives that this coordinator would work at?

5444 MR. JOLLY: Madam Chair, we have found that it's a very labour-intensive job to really do a good CTD initiative overall.

5445 For example, we have seminars where there are producers and a whole realm of people in the record-producing industry. It takes time to find a venue, to find the speakers, to invite the people to it.

5446 We also go to schools with some of our on-air talent, but I will let Aisha and Farley speak more about those.

5447 MS WICKHAM: If I could expand on the initiatives that you listed that you didn't consider to be under the CTD coordinator's responsibility.

5448 THE CHAIRPERSON: No, just that it's a little difficult to see why The VIBE would need a special person with a special salary offered as a CTD initiative to send money to FACTOR is what I meant.

5449 MS WICKHAM: Sure, I would agree with you on that particular --

5450 THE CHAIRPERSON: And to the Education Fund, et cetera.

5451 MS WICKHAM: I think in terms of the --

5452 THE CHAIRPERSON: So looking at the initiatives that require a dedicated CTD coordinator.

5453 MS WICKHAM: The coordinator would have overall responsibility to ensure that all the initiatives laid out are implemented, from the website on down in terms of ensuring, as Duff referred to, the content on the website being updated. Separate from the graphic work, pure content of research is what gives the website its legitimacy.

5454 The other initiatives are spread throughout the year and require a lot of networking in terms of bringing the right people to the table, for example, with the quadruple urban mix series in terms of auditions taking place, and booking venues, as Mr. Jolly referred to.

5455 Those types of things require somebody who has an handle on the entire initiative.

5456 MR. FLEX: If I could just add to that, Madam Commissioner.

5457 One of the things we have done is we have partnered. We don't believe in some respects of reinventing the wheel to the fullest extent. We have partnered with Canadian Music Week, North by Northeast, et cetera, et cetera, all of the existing educational seminars or conferences that are out there.

5458 What we do is we approach them and say that we would like to contribute to the urban component of those conferences. This would be another responsibility that is ongoing and takes a lot of man-hours or person-hours to execute.

5459 As you know, with Canadian Music Week it's probably one of the biggest opportunities for exposure for artists and in this market it's certainly highly relevant for an artist to get exposure in other parts of the country, whether it be Toronto or Vancouver.

5460 So that is part and parcel of the responsibilities. We do Urban FLOWcase brand in terms of Canadian talent development in Toronto. On an ongoing basis we have thematically presented seminars that need coordination, as Denham alluded to, and it's important to have the right people on the panels offering their expertise in certain areas.

5461 We have done that to an extremely successful extent in Toronto and it can happen here as well.

5462 THE CHAIRPERSON: Would this coordinator also have duties at the station, other than being coordinator for the CTD development?

5463 MR. SKI: No, this would be that person's only responsibility.

5464 THE CHAIRPERSON: And so then again you would accept the characterization that it be a dedicated person.

5465 MR. SKI: Without exception.

5466 THE CHAIRPERSON: At page 2 of your presentation this morning, I guess Ms Wickham you are it in Toronto, but that's not all you do. It says "among other things you are responsible for the implementation of the very active CTD development program".

5467 MR. JOLLY: If I could answer that, Commissioner. The work she does for CTD and the work for the work she does for the station are both quantified. They are separate and apart.

5468 THE CHAIRPERSON: So there is no fear that she will ask for a raise at the end of this.

--- Laughter / Rires

5469 MR. JOLLY: She is always asking for a raise.

--- Laughter / Rires

5470 MS WICKHAM: We are having lunch after this.

5471 THE CHAIRPERSON: So you are not saying that it will be one person dedicated to this job. That person will do $50,000 worth a year of that job.

5472 MR. JOLLY: You might find, as Farley mentioned, that we partner with people and sometimes we enter into a CTD initiative that needs a certain kind of expertise and we try to have a wealth of people of that nature. We might decide to farm it out to someone else, but still having control over it.

5473 THE CHAIRPERSON: You know, of course, what our preoccupation is, is monies spent for Canadian talent development direct costs are to be for that and not for the station.

5474 MR. JOLLY: Absolutely.

5475 MR. SKI: Madam Chair, I think we see this as a contract person, not a staff employee.

5476 THE CHAIRPERSON: In this case.

5477 MR. SKI: In this case, yes.

5478 THE CHAIRPERSON: So then you again would not have a problem with calling it a dedicated amount of money to the coordination of your CTD development.

5479 MR. SKI: No, we would not.

5480 THE CHAIRPERSON: And if the Commission still has preoccupations, would you have this coordinator in any event to make a success of your CTD development?

5481 MR. SKI: Well, I think we would have to have a coordinator of some type. I think it's extremely important. Having some experience in situations where we have talent competitions, you can't imagine -- or maybe you can -- the number of people who will apply for these various grants, et cetera, or apply for a talent competition. We could handle it a number of different ways. We could just take those applications and simply go through them, or we could provide, as Farley has I think with some of his people in Toronto, help to these people, give them advice on what to do and obviously respond to their letters.

5482 But the time that applications come in, to letters that are answered, to the jury system, et cetera, that chooses winners for these, it is quite labour-intensive.

5483 MR. JOLLY: We just had a "Soul Search" contest, Madam Chair, and we had 400 applications. Now, it takes someone to go through 400 applications, just to receive them and also listen to those tapes and grade them. So it's very difficult to ask the programmer or the creative person to go through those tapes. It definitely needs someone.

5484 MS WICKHAM: If I could just add that in addition to the sort of administrative-type role that we are speaking of, there is very much a leadership and guidance-type role in terms of helping to connect artists who may not have the song-writing skills, but have vocal talent, connecting them with people who might be able to get them ready for commercial airplay. We have many examples of that in Toronto.

5485 THE CHAIRPERSON: It is possible to that the $50,000 would be an amount attributed to more than one person who would also have some duties at the station? I gather this is Ms Wickham's situation.

5486 MR. SKI: That is maybe two questions. It could be spread out between certainly more than one person if we decided that that was the best way to approach it, but this person in this particular case would be a dedicated Canadian talent coordinator.

5487 THE CHAIRPERSON: When we speak of an urban format, of course, we usually speak quite a bit about inclusiveness and respect for diversity, et cetera.

5488 You say at your supplementary brief page 10 that at FLOW you have 75 per cent staff from visible minorities and 62 per cent are women. What are your expectations for The VIBE in that regard?

5489 MR. JOLLY: Well, we think that the situation here at The VIBE will definitely reflect the community and we are very fortunate to have Mr. Fil Fraser with us who was Chair of the Human Rights Commission at one time for Alberta. He will also not only be on our Managing Committee, but he will be head of the Advisory Board. We have great confidence in his judgement and his determination to see that there is equity and diversity.

5490 Fil, do you want to say something?

5491 MR. FRASER: Diversity are us!

--- Laughter / Rires

5492 MR. FLEX: I would like to add to that. I think --

5493 THE CHAIRPERSON: Except that the diversity -- well, yes, Mr. Fraser, that's why I was relating it back to FLOW because a number of the people who are here today are actually from Milestone. Correct?

5494 MR. JOLLY: Yes, Madam Chair.

5495 MR. FRASER: Madam Chair, the diversity of Edmonton is different from the diversity of Toronto. It's a different community with a different mix. Our commitment here is to make sure -- and it's part of the role of the Advisory Committee that I will chair -- that in all of its dimensions The VIBE reflects this community.

5496 THE CHAIRPERSON: Yes. The diversity of Edmonton -- I am not an expert -- and the diversity of Toronto, I would assume are different, just from looking at statistics, but the style or the format or the type of music is more related to Black music, is it not?

5497 MR. JOLLY: Well, I think our research showed in Toronto, and after we went on the air we observed it at concerts and whatever we might have had, and subsequent research has shown that 60 per cent of our audience are not Black.

5498 THE CHAIRPERSON: I was just going to say, of course, we are delighted to have somebody show us white people how to be more hip.

--- Laughter / Rires

5499 MR. FLEX: I just want to say with all that was said, the simple or the easy way for me to understand this is that the make-up of the staff is going to be reflective of the interest in the music and who loves it. Because it's so inclusive ion its appeal people are going to emanate from that pool and say, "I would like to work in that industry and be part of this music that I love". That is going to come from all the ethnicities, from both ends of the spectrum and everywhere in between, to say, "I would like to be in radio because I love this music. I would like to be a copyrighter because I love this music".

5500 That is what we have experienced at FLOW and that's why we didn't have to go out and really say, "Oh geez, we need more of this, we need more of that". The appeal of the music inherently dictates that and that's the easy part about it.

5501 THE CHAIRPERSON: That's how it flows.

5502 MR. FLEX: Exactly.

5503 THE CHAIRPERSON: I have a few more questions and my colleagues may as well. Considering it's almost one o'clock we will adjourn for lunch and resume.

5504 We do want to hear all four remaining applicants today. If my colleagues will agree we will take one hour for lunch. So we will be back at two o'clock.

5505 Thank you.

5506 MR. FLEX: Thank you.

--- Upon recessing at 1255 / Suspension à 1255

--- Upon resuming at 1400 / Reprise à 1400

5507 LA PRÉSIDENTE: Order, please.

5508 I would like to discuss with you now the issue of synergies and what it may mean for both The VIBE and FLOW.

5509 There is much made of synergies in your application. For example, in your supplementary brief you talk about drawing upon the successful experience of FLOW-FM, that your application would be strengthened to synergies with CHUM's specialty services. The more specific items in your supplementary brief. You discuss access to the centralized broadcast management resources of the CHUM Radio Group, the possibility of joint promotion and programming initiatives with FLOW and the CHUM specialties. The VIBE would have access to research sales, marketing, consulting and staff training resources, that there would be operating efficiencies because of centralized and administrative systems.

5510 I guess I must be missing a word here, legal or whatever -- and combined purchasing power. Let me see what the missing word is.

--- Pause

5511 THE CHAIRPERSON: Access to numerous operating efficiencies made possible by centralized financial and administrative systems.

5512 Again, in your presentation you talk of the potential for real synergy between the two companies and that was one the reasons why Milestone joined with CHUM and that the CTD initiatives will build upon the infrastructure that we have developed over the past three years at 93.5

5513 Of course, we want to understand better what is intended.

5514 For example, to go back to the CTD initiatives. What is intended by that? That's at page 18, that your eight CTD initiatives will build upon the infrastructure that developed at FLOW? The Commission will want assurances that the CTD initiatives you are putting forward in a competitive process are going to be VIBE'S and all the money is going to go to the benefit of VIBE in Edmonton and some broader initiatives.

5515 So would you comment, number one, on what you mean by "building upon the infrastructure developed at FLOW" with regard with CTD initiatives?

5516 MR. SKI: Madam Chair, I will have Aisha answer that, but I think in a broader sense, I should mention, certainly from CHUM's perspective, and you touched on some operational efficiencies such as CHUM's size, its experience and infrastructure, et cetera, in the broadcasting industry. I think our financial strength, the promotional opportunities that there may be from a television standpoint as it relates to winners of various contests, et cetera, and talent searches that appear on MuchVibe and on MuchMusic thereby expanding obviously the base of viewership and listenership to those particular groups and artists.

5517 Also I think CHUM's sales and marketing expertise which we touched on a little bit earlier, CHUM's selling system which especially is focused on local sales which would be a key part, 80 per cent, of the --

5518 THE CHAIRPERSON: Mr. Ski, if you don't mind, it would be easier if we looked at things one at a time, and after giving you all this preface, my question was: What does it mean to build upon the infrastructure with regard to CTD initiatives? We will have an occasion to speak about all the other matters as well, but I want you to speak to the extent to which we will have some assurance that the initiatives here and the money spent here are all VIBE-related. That raises a question about "building on the infrastructure developed for CTD initiatives in Toronto".

5519 I just want to know what that means with regard to CTD, in particular at the beginning.

5520 MR. SKI: Okay, fine. I will have Aisha --

5521 MS WICKHAM: I can certainly clarify that.

5522 In terms of synergies, we have referred to the learning that we have developed over the past three years at FLOW with the development of our Urban FLOWcase initiative and it's more from an information and expertise standponit that we will be sharing the knowledge in terms of the way we have developed our "Soul Search", talent search, sharing that with the implementation of the quadruple urban mix series in terms of ways of streamlining the process based on what we have learned in Toronto.

5523 THE CHAIRPERSON: And at the end of the day if you had a licence, the Commission could ask you to show that all the monies spent for CTD initiatives are spent here at the Edmonton station.

5524 MR. SKI: We don't have a problem with that.

5525 THE CHAIRPERSON: So it's just a question of knowledge, experience, expertise in a kind of a verbal rather than a monetary way.

5526 MS WICKHAM: More specifically I could refer to, for example, some of the topics we have dealt with in our workshops, the information that has come out of that and the response we got from the attendees of those workshops. The type of information we would share with our audience in Toronto could be distributed through the CTD website in Edmonton. Similarly with the "Soul Search" as well, in terms of the way we have gone about seeking auditions and promoting the initiative on air, we would share that information with --

5527 THE CHAIRPERSON: But there would be two distinct websites.

5528 MS WICKHAM: Correct.

5529 THE CHAIRPERSON: There would be one for VIBE which may get some information and help, but it will be a VIBE website.

5530 MR. JOLLY: There would definitely be -- as you know, FLOW already has a website for CTD, a website for the promotion of the station, and a website for the corporation Milestone Media.

5531 One of the synergies that I am thinking about is we discover a lot of stars in Toronto. Over 250 people have gone on the air in Toronto. Obviously Toronto is not the universe. These people could learn something if they should come to Edmonton and perform and vice versa. These are some of the synergies that we are thinking about.

5532 THE CHAIRPERSON: We will get back then, Mr. Ski, to the other items.

5533 At page 22 of your supplementary brief, one of the things that I may have read into the record, or maybe not, that it will be strengthened to synergies with the CHUM music-based specialty television services.

5534 Do you foresee shared programming with the music-based specialty services?

5535 MR. SKI: We do not.

5536 THE CHAIRPERSON: You wouldn't look at those concerts, for example, having both a video and an audio and...?

5537 MR. SKI: There may be an application. I think that our purpose for these particular concerts was basically for the Edmonton market and how applicable it might be I guess would depend on the artist, would depend on the particular type of concert that it might be.

5538 THE CHAIRPERSON: And, of course, should you be so blessed as to get a television station in Edmonton as well as a radio station, the question would be raised as well.

5539 MR. SKI: We operate our radio and television stations in a totally separate function, as I think I mentioned earlier. Having come from one of those markets just recently in Vancouver, and managing the radio station, we operate independently. We cooperate competitively.

5540 If there are opportunities certainly to further the urban music genre with some association with TV, we would probably do it obviously if it was beneficial to the development of the genre, but primarily we operate independently. That's the way it is certainly in the market that I was just in and I believe in most of the other CHUM radio and television markets.

5541 MR. JOLLY: If I could speak to some of the other synergies, Madam Chair.

5542 This station in essence would be a stand-alone station here in Edmonton. Obviously, it's easier to work with a group of people. For example, our Program Director here would be interested in conferencing with the Program Director in Toronto. Equipment, as is stated there, would be cheaper if it should be bought through the CHUM system, and so on.

5543 THE CHAIRPERSON: Those would not be of concern obviously if you can reduce that type of capital expense. It's just a question of finding out in a competitive process what resources are devoted to this particular station

5544 The mini-features, we have already established that there could be a possibility, but at a maximum that would be 13 minutes a day. Some of them may be sharable.

5545 "Love Zone", you mentioned that probably, but that's after hours, after 12.

5546 At page 19, you talk about, and you have mentioned it a number of times, your top 20 countdown, 90-minute program.

5547 How many of these would you produce and would they be during the broadcast day?

5548 MR. SKI: Yes, they would, Madam Chair. That's a weekly program, a weekly 90-minute countdown.

5549 THE CHAIRPERSON: It says that FLOW and VIBE will take turns producing the program for broadcast in each market at an agreed-upon time each week. How will that work and how is that expensed in your projections?

5550 MR. FLEX: I will speak to the strategy and then possibly someone else can speak to the expense, but I guess the whole concept behind that is the overall national development of the genre.

5551 We did mention earlier that these synergies extend to beyond the two properties. They actually extend to The Beat in Vancouver, and so on and so forth, Newcap in Ottawa.

5552 What we would like to see happen in the spirit of I guess strengthened numbers, is where the synergies are extended in a national fashion so that an artist who is getting airplay in Edmonton does, in fact, have some connectivity with other urban stations across the country.

5553 So when a cohesive effort is made to produce this and produce it amongst all of the urban players in the national market, then those individual flavours, and so forth, would be in fact national as opposed to just spearheaded by FLOW and VIBE here in Edmonton.

5554 THE CHAIRPERSON: At 4.4 of your application, which is the schedule giving your financial assumptions, you say at No. 17 that, I read:

5555 What does that mean?

5556 MR. SKI: I will ask Shelley Sheppard to answer that question, Madam Chair.

5557 THE CHAIRPERSON: I would like to combine that with your statement at page 21 that:

5558 So I would like you to explain to me what you mean by "no intercompany or corporate charges" and how the projections already reflect the synergies.

5559 MS SHEPPARD: Madam Chair, when I am preparing the projections for Edmonton, I am doing the numbers on strictly a stand-alone basis to run the station completely in Edmonton.

5560 What we are saying in point No. 17 is that there are no fees related to any other divisions of CHUM or any people that would work in our corporate areas that are sitting in the Edmonton numbers at this time.

5561 On page 21 when we are talking about the synergies, what we are referring to there on the administration side would be the fact that we do handle, for example, accounting. We handle the accounts payable and the payroll for all CHUM divisions in Toronto. So those types of synergies.

5562 But as far as the numbers go, every cost for Edmonton is accounted for separately in this projection.

5563 THE CHAIRPERSON: Now, when I look at your financial operations, your projections at 4.1 of the application, and I look at, since this is one that you mentioned, administrative and general expenses, these are the actual expenses that VIBE will incur. There is nothing there -- in other words, any synergy has been discounted.

5564 MS SHEPPARD: I will explain to you the types of expenses that are in there just to give you a little bit more information.

5565 THE CHAIRPERSON: Well, my question is: Is that number for year one, that is the sum left after you have taken into consideration the synergies that you have just talked about?

5566 MS SHEPPARD: Yes, you are absolutely right.

5567 THE CHAIRPERSON: And that would be what is incremental to CHUM because of VIBE in that line of projection.

5568 MS SHEPPARD: Yes, you are correct.

5569 THE CHAIRPERSON: And that is true for the seven years, and that is true for sales, advertising and promotion as well.

5570 MS SHEPPARD: Yes. Every department is billed that way.

5571 THE CHAIRPERSON: And so not only are there no intercorporate charges such as the President's salary, or whatever, even down to the line item. That is all incremental expenditures for VIBE itself.

5572 MS SHEPPARD: Yes. Those are all expenses for the Edmonton station.

5573 THE CHAIRPERSON: And the advantages of synergies then would be added to that, would make the amount of money you spend go farther or be more effective.

5574 MS SHEPPARD: Yes.

5575 THE CHAIRPERSON: In your financials, you rely quite a bit on the Bay Study. Now, one thing I find quite interesting, and I would like to ask you about, is your application refers, and relies on these two studies. The market study was conducted between the 7th and 13th of August 02, and Bay reported to you on the 28th of August and you filed your application on the 4th of September.

5576 Did you construct this application between the 28th of August and the 4th of September? I am just curious as to how these things work, in case I get into consulting when I get old.

--- Laughter / Rires

5577 MS SHEPPARD: Madam Chair, just to explain. As far as arriving at our revenue numbers for the application, we come at our revenue numbers from two different methods. One of them, which we would call a top-down method, of course, is coming from Bay Consulting, from their report, looking at the Edmonton market and looking at the growth in the market and revenue potentials.

5578 THE CHAIRPERSON: I was more curious about the timeframe, as to how many hours you worked --

--- Laughter / Rires

5579 THE CHAIRPERSON:  -- between the end of August and the 4th of September to take all these studies into consideration and then to melt them into an application.

5580 MS SHEPPARD: Actually, our second method of coming up with our revenues is coming from a bottom-down approach where we are looking at actual sell out ratios and rates per spot, and I think Paul can explain that. That is something that we had been working on well before that timeframe.

5581 MR. SKI: If I could just add, Madam Chair. It's an iterative process. We are working with our consultants and while we may get a final report very close to filing deadline, we have had the opportunity to discuss different aspects of it through the whole process of putting the application together.

5582 THE CHAIRPERSON: I do notice that your projections for revenues are slightly lower than what Bay predicted, between 8 per cent and 4 per cent lower, I guess. So that would be then adding CHUM's experience to Bay's number crunching, or simply being conservative? The revenues that they project, your projections are lower.

5583 MR. SKI: That's correct and we tend to be conservative with these particular numbers. Again, we are talking about differences of 4 per cent, 5 per cent, 6 per cent. It's hard to be much more accurate than that.

5584 THE CHAIRPERSON: Eight per cent perhaps the first year and then going down, if I calculated correctly. You also say at that same sheet of assumptions that your assumption of starting is September 1, 2003.

5585 Does the fact that you wouldn't be on air, even if you were successful, until I suppose September 04, does that change your projections?

5586 MR. SKI: No, it does not, other than the fact that the market seems to be even stronger than we thought when we originally filed this application. Certainly the trend figures, the figures for the first nine months of this year I think are about 9 per cent or so ahead of last year, or some 2.4 million, something in that range.

5587 THE CHAIRPERSON: So we may be back to Mr. Jansen's numbers for revenues in 2004.

5588 MR. SKI: Yes.

5589 THE CHAIRPERSON: For year one. So year one would obviously be 2004.

5590 Now, I didn't see in your application any delineation of your source of revenues. I gather you are accepting the ones that Bay put forward which is you would take 49 per cent in year one and 48 from local stations and then 39 and 12 from added budgets and then other media, I guess, is the 12 per cent. Correct?

5591 MR. SKI: Essentially that is correct. We think that the other station revenue may be slightly lower than what Bay has suggested just because of the fact that there are a vast majority of stations that we think that may be affected. So I think we would be a little bit lower.

5592 THE CHAIRPERSON: Now, the 49 per cent from local stations, have you attempted to break that down by using the proxy for share, which was the favourite station, and showing that Power 92 would be the station that would be the most affected? Have you attempted to break down where the 49 per cent of your revenues would come as between the existing stations that you would get listeners from?

5593 MR. SKI: Yes, and this is just an approximation. I think from Power we thought the effective change on their particular audience might be about 20 per cent. CFMG, which is in the AC format, may be in the vicinity of 10 per cent. CKRA which is hot AC around 15 per cent. This is how it would affect them and maybe the classic rock, the two classic rock stations, maybe somewhere in the 5 per cent vicinity.

5594 That is the effect we would have on those particular stations and I know that when we went through these numbers and looked at changes in hours tuned, certainly with Power which where we thought there may be the most effect, and Power is one of the four stations owned by Corus in this market, I think what we found was that their relative position in the market didn't change.

5595 They are one of the stations, one of the two stations that has probably the most hours tuned in the market.

5596 THE CHAIRPERSON: If I understand, Solutions says that The Bear would drop by 2 per cent, using the proxy of favourite station to look at share, from 25 to 23, and Power from 24 to 13. That's in Solutions as well. Their prediction would be that The VIBE would be 19 per cent when you look at from that proxy.

5597 MR. SKI: Right.

5598 THE CHAIRPERSON: So it would be the second station among that age group.

5599 MR. SKI: Correct. I will have Kaan reply to that, Madam Chair.

5600 MR. YIGIT: In the 15 to 39 age group that is correct. The new urban station has the potential to become number two in that demo.

5601 THE CHAIRPERSON: Yes.

5602 MR. YIGIT: But just to give you a sense of the broader impact, Power 92 has a 10.6 share, according to the spring book, after the new urban. It should continue to have somewhere in the 8 and change, on a 12+ basis, which is consistent with -- when you look at Ottawa, for example, the new urban station came in there and the CHR station in the market was 10 points and it ended up, after the new urban station came to the market, just under 8 points. And Z95.3 in Vancouver had a similar kind of situation. It went from 11 to 8.5, but in all cases, the CHR stations in the marketplace, when an urban station comes in, maintain their leadership, if you will, in the top five, but of course lose a little bit of share.

5603 THE CHAIRPERSON: Your Bay demand study -- Solutions, rather, demand study, talks about projections and the Bay about projected revenues.

5604 How did you make the connection between the two? Do you have a formula that says they predict you will get a 19 per cent share based on favourite station and therefore this is the amount of revenues you will get. Of course, then it's another analysis to say where it will come from.

5605 But is there a formula to translate the share into revenues?

5606 MR. SKI: We look at a couple of things, and I think we will take the Bay Study as well as the Solutions Study, take both of those plus our experience in operating stations throughout the country to help us. We take a look at what the share might be based on the changes in hours tuned, which I was referring to a little bit earlier, and also we look at the hours tuned that we might repatriate from listening to the Internet, from CD listening, et cetera.

5607 We take those hours and we will discount them slightly because of the fact that we are just starting a new radio statio, and then we will look at Power ratios, which are ratios that give you an idea of how a statio will do given its share -- we thought the station would have about a 6 share -- and how well it would do given its audience share versus its revenue share.

5608 The urban format itself performs pretty close to 1 to 1 in terms of revenue share and audience share.

5609 THE CHAIRPERSON: So the analysis for the 49 per cent revenue, which you would poach from other stations based on the Solutions Study, is not the same. When you talk about repatriation from CD listening, et cetera, you are talking about the other 51 per cent, in fact the other media.

5610 MR. SKI: That's correct, and the audience that we might borrow from those other stations -- I think the station in particular that you talked about which is Power 92 which is one of Corus' four stations. I guess I should mention that they didn't intervene here, so I think that that particular station is quite broad in its scope right now. So that's why it's stands to reason that they might be affected the most of any of the stations.

5611 THE CHAIRPERSON: Maybe they didn't intervene because they didn't think you would be a threat at all.

--- Laughter / Rires

5612 THE CHAIRPERSON: We wouldn't want that to be a measure of your predicted success, would we?

5613 Now, the Bay -- this is a question we have asked, but we never seemed to get an answer to -- at pages 8 and 7 of their study have done some crunching about household spending and personal income.

5614 But no one, or do you have the same numbers but driven down to the level of the 15-39, personal income and, even better, disposable income. Is there no source of this or did I miss it?

5615 MR. SKI: I will ask Hans Jansen to answer that.

5616 THE CHAIRPERSON: At page 7 I see average per capita income in various CMAs, including Edmonton, and at page 8 we have somewhere household spending. Is there nothing narrower than that for the 15-39, or even the 15-29? I think we have asked that of a number of people, but we don't have an answer. Nobody has ever done that to see whether the 15-29 actually have disposable income?

5617 Some parents of very young people say, "No, no, they don't have any money" and parents whose children are now older say, "Oh yes, they do" because presumably it comes from them so it has to be low.

5618 Is there no study that is narrower about the capacity to spend of that lower demographic?

5619 MR. JANSEN: Kaan Yigit has some further details on that.

5620 Kaan?

5621 MR. YIGIT: Actually, it just so happens that on page 17 of the research we filed there is a breakout of the urban core audience for this new station, plus total 15-39 demographic in Edmonton.

5622 There is actually an income breakout. What I don't have is how --

5623 THE CHAIRPERSON: Could you direct me to where you are going?

5624 MR. YIGIT: Yes. It's page 17 of Appendix B.

5625 THE CHAIRPERSON: Of the Bay Study?

5626 MR. YIGIT: No. It's the Solutions Study.

5627 THE CHAIRPERSON: The Solutions Study.

5628 MR. YIGIT: Yes.

--- Pause

5629 THE CHAIRPERSON: Go ahead.

5630 MR. YIGIT: If you look at the column on the right, total 15-39, at the bottom you will see a composition of that overall demographic in terms of household income: Under 40K, 40 to 79, 80+. What I don't have is a comparison to 40+, but nevertheless that information exists in the research.

5631 THE CHAIRPERSON: Oh, yes, thank you. I had missed that.

5632 Not disposal income though.

5633 MR. YIGIT: No, household income.

5634 THE CHAIRPERSON: But nothing on disposal income.

5635 MR. YIGIT: Presumably we could use that as a proxy.

5636 THE CHAIRPERSON: Thank you.

5637 I had missed the fact that you could connect here.

5638 Now, we have asked all the applicants to tell us whether they could live in this market with more than one station, one new station.

5639 Do you have any comments?

5640 MR. SKI: Yes, we do. We think that, as I believe I mentioned earlier, the market so far this year is ahead by approximately $2.4 million. I know in our first year we are looking at $1.6 million in revenues.

5641 So we believe that if the right stations were licensed that the market could absorb more than one station and it's also a growing market, one of the fastest growing markets in Canada.

5642 THE CHAIRPERSON: You won't be surprised if my next question is: What are the right stations in your view?

5643 MR. JOLLY: Of course, the CHUM/Milestone Group and the AVR.

5644 THE CHAIRPERSON: That's the right stations?

5645 MR. JOLLY: Yes.

5646 THE CHAIRPERSON: The VIBE and AVR.

5647 MR. JOLLY: Yes.

5648 THE CHAIRPERSON: Nothing more?

5649 MR. JOLLY: Well, you could look at another station. I don't want to usurp your position, but I think you could make a good judgement --

5650 THE CHAIRPERSON: We are only asking you in what circumstances -- it's your business too. We are asking you in what circumstances you would go ahead and feel comfortable with implementing your proposition and would that circumstance include AVR and other commercial stations.

5651 MR. SKI: Yes, it would. We believe that the most underserved area is the youth market.

5652 THE CHAIRPERSON: That was a good try, Mr. Jolly.

--- Laughter / Rires

5653 THE CHAIRPERSON: Would it matter what format, when you say the younger demographic?

5654 MR. SKI: It would probably matter if it was another urban format because we don't think the market will sustain two urban formats, but --

5655 THE CHAIRPERSON: You also think you are the only real urban format before us.

5656 MR. JOLLY: We certainly do. We are the only pure urban sound, Madam.

--- Laughter / Rires

5657 THE CHAIRPERSON: That's good. So that answers that question.

5658 Now, I have a few questions about the ownership or the partnership.

5659 So you will have a Management Committee of five, three to two. We already know who these people will be at the beginning through your response to Deficiency Question 6, which shows that there will be there CHUM representatives and two Milestone, one of whom is Mr. Fraser from Edmonton.

5660 Will you always have at least one Edmonton person on the Management Committee, because at the moment the other one is your, Mr. Jolly, from Milestone.

5661 MR. JOLLY: We will try for that. Certainly if we are operating over a period of time, we will get to know other people, and certainly.

5662 THE CHAIRPERSON: Your aim would be to ensure that there is on the Management Committee -- which you say its role will be "like a Board of Directors".

5663 MR. JOLLY: Yes.

5664 THE CHAIRPERSON: You would make an effort to have a Milestone representative from Edmonton.

5665 MR. JOLLY: Absolutely. It's always good to have someone on the ground, as they say.

5666 THE CHAIRPERSON: Because it's less likely that it would be a CHUM representative, unless you get a TV station here and you have all kinds of CHUM people around.

5667 MR. SKI: Or unless the manager of the station possibly is part of that Management Operating Committee.

5668 THE CHAIRPERSON: Yes.

5669 Now, the term sheet establishes that the day-to-day operations of the station will be assumed by officers or employees of CHUM.

5670 MR. JOLLY: That is correct, Madam, but it requires a 66 and two thirds per cent majority for any major initiatives.

5671 THE CHAIRPERSON: Such as changing your format, I saw that, but not the day-to-day operations.

5672 MR. SKI: That's correct.

5673 THE CHAIRPERSON: Mr. Jolly?

5674 MR. JOLLY: Yes, you are correct, Madam. It takes a 66 and two thirds majority for any major, but I do not believe the format will ever come up. Any big operations, expenditures, loans at the bank, whatever, things of that nature, the usual things that are outlined, big personnel changes, and so forth.

5675 THE CHAIRPERSON: In your supplementary brief at page 10, I read again:

5676 Will there be advantages to you at Milestone, or is that just as an investment partner?

5677 MR. JOLLY: Could you repeat that question, please?

5678 THE CHAIRPERSON: Well, we have discussed about synergies, et cetera, but if you look at the supplementary brief at page 10, you explain that Milestone decided to participate in this in a partnership, to be in a partnership with a larger company and considering the term sheet, I would like you to speak about the advantages for Milestone you see here, or is it an investment for you only?

5679 MR. JOLLY: I think there are definite advantages. As you know, Milestone is a stand-alone company in a land of giants. We are David in the land of Goliath. So any association with a larger company would certainly be beneficial to us.

5680 As I mentioned before, in terms of personnel training or sales, centralization. We realized, as we said earlier too, that we wouldn't be able to come out here alone to operate a station in Edmonton. We would certainly need the expertise and the help of people with their centralized payroll system and things of that nature.

5681 THE CHAIRPERSON: Mr. Jolly, may I ask you? You have a relationship with Standard at FLOW.

5682 MR. JOLLY: Yes, we do.

5683 THE CHAIRPERSON: There are conflicting numbers as to exactly what the shareholding is, but it's --

5684 MR. JOLLY: The shareholding is 29 per cent, Madam.

5685 THE CHAIRPERSON: 29.9 per cent because I have another number, but I knew it was certainly a minority.

5686 What has been your experience with having Standard on board which will then be a parallel, I guess, with The VIBE and Milestone? I what way has it been helpful? You are involved there with a very large company.

5687 MR. JOLLY: It has been very helpful. As I mentioned earlier, it's a stand-alone company. Even in day-to-day operations we can call up their engineers for advice on whatever. We can call up their program directors. Gary Slate himself has been very helpful. We have become social friends and he is always there to help when we need advice. In fact, he has just offered me the services of a conference call with all his program directors with my program director.

5688 So his help has been very good and the relationship has worked very well.

5689 THE CHAIRPERSON: And in that case, there is I guess in the Standard company some interest in some of the music that would be of interest of the FLOW.

5690 MR. JOLLY: Yes.

5691 THE CHAIRPERSON: And some connections and knowledge.

5692 MR. JOLLY: Yes, because we are in the same city and we also Standard owns a national advertising company and we are with them and they are doing quite well for us. There is no conflict there.

5693 THE CHAIRPERSON: If I may go back to the blessing that maybe you would get both a television station and a radio station in Edmonton.

5694 You know, of course, of the Commission's interest in what the effect of this ownership of cross-media is on diversity and of news voices and of concentration.

5695 So that the record is complete, I would like to ask you what you would do in the area of news and information programming if you had a television station and a radio station in this market to meet the preoccupations that the Commission has expressed many times.

5696 MR. SKI: Similar to other markets, Madam Chair, we will have separate newsrooms, separate editorial staff and policy, and they will be totally separate as they have been in, as I say, the market that I just came from. But the newsrooms will be totally separate. There will be a separate news director for this particular radio station.

5697 THE CHAIRPERSON: Are you aware of the condition of licence that was imposed when Global received a radio licence for Winnipeg where they have a television station? Are you aware of the drafting of that, how it's expressed?

5698 MR. SKI: I believe I am.

5699 THE CHAIRPERSON: And would that be something you would be prepared to accept as a condition of licence, should you get a radio station and a TV station?

5700 MR. MILLER: Yes, that would be acceptable.

5701 THE CHAIRPERSON: Now, are you also familiar with the fact that in Montreal where the same concerns were raised, COGECO offered a different version in that they added the word "exclusive"? In other words, not only would they be separate, but the radio people would be working exclusively for the radio station and the television station. That was raised with Global here as well and you probably know what their answer was.

5702 Would that be a problem for you if the notion of exclusivity as between the two was added to the Winnipeg condition?

5703 MR. SKI: That would not be a problem for us, Madam Chair.

5704 THE CHAIRPERSON: My last question, the question of frequencies.

5705 If you were not granted the frequency you applied for, what would be the fall out?

5706 MR. SKI: Duff Roman will reply to that, Madam Chair.

5707 MR. ROMAN: Thank you, Madam Chair.

5708 To begin with, the frequency that we have applied for, 91.7, has been upgraded to a Class C. Under the Canadian FM allotment plan, 94C and 299C, 106.7 and 107.7, respectively, have potential interference. Therefore, the only other frequencies that would be of interest would be 102.9, 99.5 or 98.1, but they would require a change to the Canadian allotment plan and probably clearances from NAV CANADA.

5709 We have been consulted by DEM Allen and the short answer is that there is more than one usable frequency in this market.

5710 THE CHAIRPERSON: Thank you.

5711 Those are my questions. I thank you for your cooperation.

5712 Commissioner Williams.

5713 COMMISSIONER WILLIAMS: Thank you, Madam Chair.

5714 Good afternoon, panellists.

5715 Upon review of your ownership and financial information, I noticed that there are different initial funding contributions to the proposed 51/49 CHUM/Milestone partnership. In fact, CHUM contributes $3 million and Milestone contributes $600,000.

5716 Are the contributions interest-bearing and, if so, what rate and is the imbalance to be repaid before any partnership distribution takes place, or what arrangements have been made for this disproportionate initial start-up contribution?

5717 MR. JOLLY: As far as I know, Commissioner, there is no interest. This deal was worked out between myself and Mr. Jim Waters and we are both happy about the way it is done. It is based on the standard model, the same deal we did with Standard Broadcasting, and they are happy with it.

5718 As you said those percentages there they are 49/51 up that we are sharing up until the hearing. After that the numbers that you mentioned is for pre-operating and capital and operating expenses.

5719 COMMISSIONER WILLIAMS: I think Vice-Chair Wylie went a bit down this road, but I have another question in this area.

5720 In terms of your expenses, programming, technical sales, advertising, promotion, administration, and interest -- I guess my last question was related to the interest expenses -- represent 75 per cent of your operating and non-operating expenses. Which portion of these expenses or any portion flow to CHUM by way of management service or other contract, either in dollar or percentage terms?

5721 MR. JOLLY: I will let Shelley answer that, but as far as I am aware there are no management expenses over and beyond the actual stand-alone station.

5722 COMMISSIONER WILLIAMS: So there is no expenses say for the provision of payroll or some of the items that you mentioned.

5723 MR. JOLLY: Not to my knowledge, sir.

5724 MS SHEPPARD: I will just add one point. In our assumptions we do make one comment that the only fee that is apportioned in here is an accounting fee which covers off the centralized payroll and payables portion, and that is set out in our assumptions. It is the only fee that is charged.

5725 COMMISSIONER WILLIAMS: Okay.

5726 MR. JOLLY: It is --

5727 THE CHAIRPERSON: So then it --

5728 MR. JOLLY: Sorry.

5729 COMMISSIONER WILLIAMS: No, you go ahead.

5730 MR. JOLLY: Which is fine with us because at FLOW right now we have a parallel company that does it and we have to pay them.

5731 COMMISSIONER WILLIAMS: It appears from the structure of your Management Committee, as was determined a little earlier as well, that the day-to-day management will effectively be carried out by CHUM.

5732 Do you feel any last-minute bad vibes about the Milestone --

--- Laughter / Rires

5733 COMMISSIONER WILLIAMS: About the Milestone division to give up the day-to-day direction of the Edmonton flow to you friends at CHUM?

5734 MR. JOLLY: I don't feel like a runaway bride, sir, no.

5735 COMMISSIONER WILLIAMS: Nothing but good vibrations.

--- Laughter / Rires

5736 MR. JOLLY: Absolutely.

5737 COMMISSIONER WILLIAMS: That's good.

5738 MR. JOLLY: I think the CHUM organization is very respectable. I have met Mr. Jim Waters and I think he is a very respectable gentleman and we have gotten along fine.

5739 COMMISSIONER WILLIAMS: Thank you.

5740 So, Mr. Flex, I assume from your panel's comments on diversity that not only will you discuss J.Lo and Puffy, but you may also comment on the lives of J.Lo and B.Lo, for example.

--- Laughter / Rires

5741 MR. FLEX: Certainly.

5742 COMMISSIONER WILLIAMS: I have no further questions, Madam Chair.

5743 THE CHAIRPERSON: Mr. Williams is on his way to The Comedy Network.

--- Laughter / Rires

5744 THE CHAIRPERSON: Commissioner Cram.

5745 COMMISSIONER CRAM: Commissioner Williams loves reading corporate agreements and I like reading BBMs.

5746 I am looking at your BBMs, Mr. Jolly, in Toronto and I see that from fall 01, when they were pretty good, went down a point and some fall 02, went down 2.4 by the spring of 03.

5747 Can you tell me why that would be?

5748 MR. JOLLY: Well, there are several explanations, solid ones, Commissioner. There is a guy named George Bush that keeps putting on wars all the time and the people who listen to music when there is a war, they want to listen to news.

5749 So each time that we get a fall -- and there have been two wars now since we have been on, the Afghanistan and the Iraqi war, and the threats of war even, the beating of the war drums even makes a problem for your BBM. If you look at those same BBMs, you will see that the news stations have also gone up during that same period.

5750 But above and beyond that, I think BBM aside, we at FLOW feel very, very proud that we are like a quarterhorse running with thoroughbreds and we feel very proud that we are mentioned in the same breath as all the other stations there because the fact of the matter is we have a signal of 228 watts. When I see the chart of all the commercial stations in Toronto, the least powerful station in Toronto, aside from FLOW, is 40 times -- four zero times -- more powerful than our signal.

5751 So we are just holding our own, I think doing a very good job with the kind of signal that we have.

5752 Fortunately, we are getting a stronger signal in the fall, but I think that is one of the major reasons for it. Toronto is a very dense, metropolitan area. I live three blocks from a four-block area that holds 50,000 people because of highrises. And with the shielding that goes on in these highrises, our signal just cannot penetrate. We are about four blocks from our antenna, the studio is about four blocks from the antenna and we cannot pick up our signal in our studio.

5753 So I think that's a major handicap for us. We estimate that there are over a million people in these highrises and office towers that we cannot penetrate.

5754 COMMISSIONER CRAM: I know you would like to advise us, Mr. Jolly, but from sitting here and looking at your decline in 12 to 23 share over the three years -- and I hear you about wars and signals -- then I look at OK, who are another applicant and the same format that they are proposing here, and it has increased in all three years.

5755 MR. JOLLY: They have a much stronger signal than we do.

5756 COMMISSIONER CRAM: But your point about wars was that it would go down. So you said it went down in the fall of 02 because of a war. Well the same format looking for the same demographic, 12 to 24, almost tripled.

5757 MR. JOLLY: Well --

5758 COMMISSIONER CRAM: Just let me finish.

5759 MR. JOLLY: I'm sorry.

5760 COMMISSIONER CRAM: The next year when there was another war, which you again say is a reason, one of the reasons why your listening went down, it went up again by about 4 to 5 points.

5761 So if you were me sitting here, and I am looking at the 12 to 24 demographic, and I am saying these are the ones who -- I mean, same Internet in Victoria as there is in Toronto, and I want to get them back from the Internet and I am looking at these audience numbers. Convince me why I wouldn't go with what OK is proposing?

5762 MR. JOLLY: If you were to look at the numbers, those same set of numbers for KISS, you will see that it had the very same effect as it had on us.

5763 MR. SKI: I think too, Commissioner Cram, that we should look to at the size of the market and the number of radio stations too.

5764 I think that in the Toronto market too KISS recently changed format and they were playing quite a bit of urban music from what we understand. So that is obviously going to help FLOW.

5765 The other thing too that is a challenge for us certainly in the radio industry -- and we too like reading BBMs, but only if they are good ones for us. It's a real challenge for the industry to measure 12 to 24s just because there is so much fluctuation and I know at the regular meetings that I am at at BBM we continually are trying to find different incentives, different ways just to have the 12 to 24s participate in the process of returning a diary so that we can measure that particular tuning. It comes up at almost every meeting.

5766 So as a result of that, there tend to be many more fluctuations in that particular demo than there are in others, but also the size of the market. If you have a larger market, obviously the sample is lower and so, therefore, there are more fluctuations.

5767 If you have a smaller market, then it's a larger sample in demo and so there aren't as many fluctuations.

5768 MR. JOLLY: Commissioner Cram, if you should look over that same period at the Cume, you will see that it was not very severely affected.

5769 MR. YIGIT: If I could add a few points here?

5770 COMMISSIONER CRAM: Just a second though. If I would then compare that to Cume for the OK in Victoria?

5771 My point is I recognize that for this lower demographic we are trying to reach this demographic, but statistically it's difficult for me not to say that the format proposed by OK is not, in fact, three times, based on the BBMs, more popular than urban. The trend is growing rather than declining.

5772 So I need you to tell me why I should not be considering that.

5773 MR. YIGIT: Commissioner Cram, if I could --

5774 COMMISSIONER CRAM: And I know, Mr. Yigit, you want to talk to me. So I really want to listen to you too.

5775 MR. YIGIT: Just for context. First of all, when FLOW came into the marketplace it started with a Cume of a quarter of a million roughly, 250,000, was able to grow that Cume to about 350,000. The trouble has not been the number of people that the station could attract. The trouble has been the amount of tuning that those people are able to do and that is in part a signals issue.

5776 So in fact, from a pure Cume standpoint, FLOW has grown since day one and continues to grow, including 12-24. That's number one.

5777 Number two, about four months to five months prior to the last book, the main CHR station in town, KISS, basically there wasn't the format flip per se, but become a 90 per cent predominantly urban station playing song by song urban hits on the radio. The combined share of those two stations in Toronto was 5.5.

5778 If you excluded the duplication, there were 900,000 people listening to practically urban in Toronto four months ago. Now, that 3.6 share for the KISS station wasn't enough perhaps for the owners of that station to maintain it for the future, but it's speaks to the popularity of urban in Toronto and in general.

5779 Now, a couple of other things. My company does a tracking study for the major labels in Canada -- Warner, EMI, BMG, Universal and Sony -- and since about 1999 the number one music style among 12 to 24 has been hip-hop, not alternative, not rock, not even close.

5780 There was study filed by one of the other applicants in this proceeding, by an American company called Edison, and I quote. It said that in their testing, hip-hop and R&B basically demolished any other music style among African-Americans, Latin-Americans and white Americans.

5781 So in terms of the size and demand for it, there is no question that urban is the number one popular style in the 12 to 24 in particular, and to the point about FLOW really there were factors, market factors at play there, beyond simply what the station did on its own.

5782 COMMISSIONER CRAM: Mr. Yigit, you were here -- or maybe you weren't but I'm sure you have been listening in -- there was a study referred to by OK by Strategic Research talking about the popularity of the urban format and that the popularity of the format was far higher in Toronto than it was in the prairies.

5783 Are you familiar with that study?

5784 MR. YIGIT: Actually, that study that they referred to is a study that we do on a national basis, Solutions Research Group, my company, and it simply speaks to the availability of formats.

5785 COMMISSIONER CRAM: To the availability?

5786 MR. YIGIT: Availability, that's right.

5787 So if you look at this marketplace -- and let me go through the stations. The Bear plays a current and old mix of rock; KROC plays classic rock, but will play some currents; MIX 96X plays a mix of pop rock and alternative; and Power 92 plays rock and some urban basically.

5788 So you can't be a number one format if you are unavailable.

5789 Yes, it is true that rock ranks first in the prairies because there are so many rock stations. By the way, country ranks second because there are so many country stations. Urban doesn't have a chance to be ranked because there is none of it.

5790 COMMISSIONER CRAM: Isn't it in Calgary?

5791 MR. YIGIT: I'm sorry?

5792 COMMISSIONER CRAM: Isn't urban in Calgary?

5793 MR. YIGIT: Yes. CHR urban comes at number five in terms of if we combine the CHR stations and the urban station in Calgary, yes.

5794 COMMISSIONER CRAM: Mr. Jolly, your projections in Toronto, when did you intend to break even when you applied and when are you now going to break even?

5795 MR. JOLLY: I'm glad you asked that question, Madam, because our projections said that we would break even after year three. We are going to break even after 28 months. At the end of this fiscal August will be 28 months and we will be breaking even. That is even before the three years. That would be next March.

5796 COMMISSIONER CRAM: That is not EBITDA, that is break even in terms of --

5797 MR. JOLLY: That is EBITDA.

5798 COMMISSIONER CRAM: I wanted to then talk about your FACTOR letter and what you said in FACTOR in your opening address. I have the letter and it says:

5799 It is a letter to Mr. Switzer, but I'm sure Mr. Switzer doesn't have to explain the letter.

5800 Does that mean that it is incremental to the money that you would be giving to FACTOR? Is that what it means?

5801 MR. ROMAN: It is incremental both to existing commitments to FACTOR by any CHUM stations under the CAB initiatives and incremental to the current FACTOR funding pool. This is money on top of that.

5802 COMMISSIONER CRAM: Okay.

5803 MR. ROMAN: It is incremental and dedicated as outlined in the letter, with 50 per cent of it going to Alberta-based urban artists. There will be no double bookkeeping on this.

5804 COMMISSIONER CRAM: It is incremental to existing funding by FACTOR, then, to Alberta. That is what the letter means?

5805 MR. ROMAN: No. Existing funding that FACTOR operates on. FACTOR gets it's funding from two sources, the federal government and Canadian broadcasters.

5806 COMMISSIONER CRAM: Okay. So when she says:

5807 It means existing funding that FACTOR would be giving to Alberta in any event?

5808 MR. ROMAN: No, because at FACTOR they do reports on how the money moves through their system to regions, provinces, that sort of thing. So there isn't any earmark funding for Alberta per se.

5809 COMMISSIONER CRAM: Okay. All I am interested in is: Is it incremental over the average of what FACTOR would have spent here over the last three years?

5810 MR. ROMAN: That would be fair to say, yes.

5811 COMMISSIONER CRAM: Maybe you could just get a letter saying that so it is clear, crystal clear to idiots like myself. That would be wonderful.

5812 THE CHAIRPERSON: On that point, Mr. Roman, is this FACTOR letter incremental to or in addition to the letter that was filed before addressed to you?

5813 MR. ROMAN: This is an attempt to explain that letter that was previously filed.

5814 We thought we had done well with that letter, by the way.

5815 THE CHAIRPERSON: But this letter still stands on the record, the one addressed to you on August 29th?

5816 MR. ROMAN: That's right. This is supplementary to that letter.

5817 COMMISSIONER CRAM: Then I wanted to talk about your CTD. In particular I wanted to talk about the talent search.

5818 I guess I am having a problem with it in the sense that in the normal course of business, even without CTD existing, isn't it likely that you would have done this anyway? Isn't it likely that in order to build up the station you would be doing a talent search, you would be advertising it, you would be promoting it, you would be doing something along that line in any event?

5819 MS WICKHAM: Not necessarily at the level that we have proposed today.

5820 COMMISSIONER CRAM: So when I look at this, you may done a smaller type of talent search?

5821 MS WICKHAM: Well, yes. I can't really speak in terms of the programming and what a program director might deem an ideal listening per cent

5822 COMMISSIONER CRAM: Well, what would a new station do to promote itself except for something like a talent search?

5823 MR. SKI: We have lots of opportunities to promote the radio station irrespective of talent search. Talent search takes a great deal of time and effort, I think as Aisha outlined before. There are much easier ways to promote a radio station than doing a talent search.

5824 MR. JOLLY: Give trips to Barbados.

5825 COMMISSIONER CRAM: Yes. Well, that would promote it all right.

5826 So once you have your winners -- and you say this takes a lot of work -- I confess, my thoughts are that for the amount of public relations that the station would get the value would be equal to the costs it would take to organize something like this. So there would a saw-off.

5827 In other words, at the end of the day I am having a lot of problems with $50,000 for somebody to coordinate this, or to coordinate any of your CTD, because at the end of the day your station would be getting a lot of collateral benefit from having this talent search, collateral benefit that you would otherwise have to pay for, like the promotion of this talent search and what it gives to you.

5828 MS WICKHAM: I think by virtue of the benefit that it gives the station, it gives the artists that are participating in it an incredible benefit, not only in direct artist fees that they would get for various involvement in the initiatives, but the scale and size of the productions that we are proposing to put on will give these artists, who have never had an opportunity to be exposed in a commercial context, the opportunity to be on a professional stage in front of large numbers of people with the endorsement of a commercial radio station. That is something that they have never had before.

5829 Certainly it would benefit the station in terms of our 40 per cent Cancon to have music of that quality, but the benefit to the artists in terms of being put on a stage and being endorsed by a radio station would give them that exposure. The coordinators role in bringing all this together is ensuring that the event is put off at the level that we anticipate.

5830 COMMISSIONER CRAM: But if you had a smaller one and it wasn't a CTD, your program people would be doing it, and you would be doing it again to build up the reputation of the station?

5831 MR. ROMAN: I would like to add something if I might, Aisha.

5832 Commissioner Cram, I can't think of a single CTD initiative that doesn't, if executed properly, reflect well on a station. You can say that about every single one, including a music scholarship, something that is totally academic and not out there as a sort of an out-and-out promotion.

5833 But I think the initiatives that we put forward really reflects the seriousness that we have to invest and the considerable resources to help us achieve things such as 40 per cent Canadian content to sort of make a difference. That is why we asked for consideration of the CTD Coordinator as part of the CTD package.

5834 We took our approach to this essentially based on the Commission's decisions in this matter. As you know, FLOW had both their CTD Coordinator and their dedicated Web site approved for their licence.

5835 So we did our homework. We did the research and we felt that if we were able to demonstrate, to convince you that we had a dedicated Web site, that we also had a coordinator who was dedicated to implementing the initiatives, not a station employee, that that would be sort of evident and that we could essentially accomplish the objective that we have. That really is to improve the supply of music, Canadian content music, and to promote Canadian content in our coverage area.

5836 MR. JOLLY: Commissioner, with great respect, if you look over those same numbers which you quoted earlier, we have attracted 400 contestants for one series of events. We have also put through 250 new artists on the air, and it hasn't helped our cume that much more than the other people that you cited.

5837 So CTD does not necessarily attract audience, it attracts contestants.

5838 COMMISSIONER CRAM: Or it attracts good will.

5839 Anyway, I wanted to move on to the national television showcase. So once you have decided the winners of the talent search, these individuals then are shown on MuchMusic.

5840 MS WICKHAM: That is correct.

5841 COMMISSIONER CRAM: Is that really what --

5842 MS WICKHAM: The one winner will come to Toronto for a live studio performance and assistance in production of a music video.

5843 COMMISSIONER CRAM: One is given -- and I guess I have to divide it by seven -- a couple of thousand dollars to go to Toronto. Then there is funding for a music video production and marketing and promotional items to publicize results of quadruple mix.

5844 What is that for?

5845 MS WICKHAM: I think by virtue of the way that the station, in addition to our on-air commitment to promote the event, which is an indirect benefit to CTD, we would want to promote the events and off-air initiatives in terms of printing, et cetera, to promote to those who may not be listening to the station, the artists that we are promoting on the radio station.

5846 COMMISSIONER CRAM: But this is the national television showcase for Alberta urban musicians. So you would be buying space somewhere else to promote it, is that is, promote these winners?

5847 MS WICKHAM: Correct.

5848 COMMISSIONER CRAM: And they would be paid to a third party? They would be paid to a third party?

5849 MS WICKHAM: They would be paid through --

5850 COMMISSIONER CRAM: The promotional, the marketing, they would all be third party items?

5851 MS WICKHAM: Correct.

5852 COMMISSIONER CRAM: Okay.

5853 Then they would be shown on MuchMusic and MuchVibe?

5854 MS WICKHAM: Yes.

5855 COMMISSIONER CRAM: Would MuchMusic and MuchVIBE pay them performance fees, Mr. Miller?

5856 MR. ROMAN: I'm sorry?

5857 COMMISSIONER CRAM: Well, because you are the only one that is, if I see it, sort of both in TV and in radio. That's why I'm asking.

5858 MR. ROMAN: Oh, Mr. Miller, yes.

5859 COMMISSIONER CRAM: Would MuchVIBE and MuchMusic pay performance fees for these individuals?

5860 MR. MILLER: Typically for that kind of a performance, no.

5861 COMMISSIONER CRAM: So essentially, other than their production costs, MuchMusic and MuchVIBE have virtually free programming.

5862 MS WICKHAM: If I could address that, I think what we are talking about here is new and emerging artists who would see this as a tremendous opportunity for themselves and an opportunity to get national exposure through a music video and a live studio performance I would consider as priceless.

5863 COMMISSIONER CRAM: I hear you, but as one of the partners of this it is like Peter giving to Paul through the guise of CTD. That is my problem with that. Because when you are a partner in a normal commercial -- if you weren't partners maybe the numbers would be a different thing.

5864 Mr. Flex.

5865 MR. FLEX: Yes, if I could speak to that on behalf of CHUM, there is no real -- especially in the initial stage -- a value, programming value in introducing to national airwaves an artist that nobody has ever heard of. I really, as an artist manager and my experience through VideoFACT, et cetera, in an ideal, from a totally selfish standpoint as a television or radio programmer, you don't even want to introduce artists that nobody has heard of. The draw to your station viewership-wise, listenership-wise, is based on familiarity. That is the challenge we face in urban, especially at radio, is how much familiar music should we be playing or can we play.

5866 Stations other than FLOW that I won't name would certainly -- especially from the standpoint of Canadian content -- rather play a few many, many times per week as opposed to playing many a few times a week. That is based on the appeal of the station and the familiarity that comes through other media.

5867 So when we introduce to VIBE or to MuchVIBE, or what have you -- I mean to MuchMore or what have you, an artist that nobody has ever heard of or has only been heard of on one radio station, and in this case from Edmonton, not from Toronto or Vancouver, I think it is somewhat altruistic on CHUM's behalf to actually entertain that idea.

5868 COMMISSIONER CRAM: Can I then think that it would only be shown between midnight and 6:00?

5869 MR. FLEX: That is to my same point. It would not be only shown between midnight and 6:00, it would be shown during specific programming that is available during -- I'm not sure of the exact air times of all the urban focused shows on Much at this point, but it would fit to format. It wouldn't be on MuchLoud for instance.

5870 COMMISSIONER CRAM: What administration is involved in this? You pay for travel, you pay for the music video production, you buy the marketing.

5871 MS WICKHAM: I think it is very much connected to the urban mix series in terms of the winner being selected from that and linking into the television showcase. There really isn't that much administration required.

5872 COMMISSIONER CRAM: What administration is there for five live club concerts, if I have it, per year, in a live Edmonton club? You find the venue, you pay the amounts.

5873 MS WICKHAM: And you seek the talent that is going to perform at those events --

5874 COMMISSIONER CRAM: Yes.

5875 MS WICKHAM:  -- new and emerging talent, which requires some prospecting.

5876 COMMISSIONER CRAM: Oh, so this is new and emerging talent?

5877 MS WICKHAM: Yes, correct.

5878 COMMISSIONER CRAM: Okay.

5879 MS WICKHAM: As we have done in Toronto in terms of identifying new artists that haven't received airplay on FLOW already, but maybe close to commercially air-ready, we would try to give those artists opportunities over and above those who are already established. That would be the focus of this initiative as well.

5880 COMMISSIONER CRAM: Then the open-air concert. What administration is involved in that?

5881 MS WICKHAM: I would say similarly to prospecting and selection of artists who would perform on those events.

5882 COMMISSIONER CRAM: So it is just finding the place --

5883 MS WICKHAM: And any of the administration that goes along with promoting it through the CTD Web site, promoting it through the radio station as well, making sure that it gets the type of attention it requires.

5884 COMMISSIONER CRAM: But that is a function of the radio station. Right?

5885 MS WICKHAM: At the assistance of the CTD Coordinator, yes.

5886 MR. FLEX: If I could just add to that, Commissioner.

5887 COMMISSIONER CRAM: Yes.

5888 MR. FLEX: When you look from the top down at what is involved in promoting a concert, first of all there are companies that do that exclusively as a business. What is entailed from day one, whether or not you -- I mean, there may be opportunities to partner with the existing people who offer those services, but principally the coordinator would be involved in, as you mention, locating the venue, of dealing with all the logistical details from security to flyer distribution.

5889 The radio unto itself will obviously help promotion, but you have to promote to an audience the way they are used to being promoted to as well. Without an urban station in the market prior to this one --

5890 We are in contact with some people here who function on a day-to-day basis and the best way of communicating, for instance to an audience, is by flyer distribution. Things like that, if you can't farm it out, if there is a street team associated with the station, et cetera, et cetera, you are still going to need that coordinator to administer that whole process. It is a very involved process.

5891 Speaking from experience, you are talking sound equipment, staging, the actual rider necessary for -- right down to the dressing room, whatever it is.

5892 These are things that people do full-time as viable businesses, so to have someone execute this in a multiple case scenario, as well as manage a Web site, as well as nurture and coordinate workshops and seminars and all these things that we infuse into CMW and North by Northeast, et cetera, et cetera, it is a very significant undertaking. In my opinion, if it would have paid more I would have taken the job.

5893 COMMISSIONER CRAM: Mr. Flex, this is a $20,000 conference. That is what the expenditures are for this conference. From the sounds of it, the administration is going to cost at least $15,000 based on the time you are talking about. This isn't just an open-air concert.

5894 MR. FLEX: Yes.

5895 COMMISSIONER CRAM: Thank you.

5896 Thank you, Madam Chair.

5897 THE CHAIRPERSON: Commissioner Cardozo.

5898 COMMISSIONER CARDOZO: Thank you, Madam Chair.

5899 Just a couple of questions to understand what the appeal would be of urban.

5900 First, on the impact of a straight-up urban station on a market.

5901 I'm wondering what your thoughts are about Edmonton, keeping in mind what has happened in other cities.

5902 My analysis of Toronto is that your key competitor was KISS-FM, which recently switched format away from the young demographic that it was after and has gone to be JACKfm; and in Ottawa, KOOL-FM, which is a CHUM station, a couple of weeks ago switched away from a young demographic and moved to BOB-FM. So BOB and JACK have sort of picked up, "kissed off" the format and moved away, leaving the two straight-up urban stations that younger demographic, urban music. Because KISS-FM and KOOL were playing a fair amount of urban music or crossover music, you might call it.

5903 I'm wondering what your observations are in Calgary and whether you think in Edmonton a straight-up urban station, as opposed to an urban/soft urban, would be more appropriate to Edmonton?

5904 MR. FLEX: In terms of what has transpired in the Calgary market, I think we said earlier that the format itself allows for -- or the variety within the format allows for some adaptation relative to the market that you are in.

5905 In terms of Calgary and how they have approached it, they certainly take, I guess you could say, a less intense or less peer, if I can use that term, approach than we have at FLOW. I think that is entirely appropriate for the market that it is in.

5906 It is almost like an urban-101 kind of process where the market may in fact evolve to be similar to, or have a similar appreciation for the music, or heightened appreciation or knowledge-based appreciation for the format as we do in Toronto, or as the audience in Toronto does.

5907 But I think the allowance that the J.Lo's and the Nelly's and the Ja Rule's, and so forth, that crossover factor and the fact that it can still be embraced within the urban format is very, very sensible for a market like Edmonton, as it was for Calgary, and is for Calgary.

5908 COMMISSIONER CARDOZO: I would agree with you that J.Lo is crossover, and her music, but I wouldn't agree with your summation of Nelly and Ja Rule, but I don't think I will take you on on that argument. That is just my sense of them. You probably know more of their music, but it seems to me --

5909 MR. FLEX: Both of them approach diamond in Canadian sales.

5910 COMMISSIONER CARDOZO: I'm sorry?

5911 MR. FLEX: Both of them have almost achieved diamond sales in Canada.

5912 COMMISSIONER CARDOZO: Yes, but I would think that the music of those two artists that are on the top of the charts is usually more pure urban than crossover.

5913 MR. FLEX: Oh no, it's pure in its make up, but the appeal is popular. That's what I'm saying.

5914 COMMISSIONER CARDOZO: Okay.

5915 MR. FLEX: So it is not unlike -- an extreme example would be NWA for instance. Although you couldn't play it on radio when it was out, but the appeal of it was crossover in terms of the sales and who was buying the record.

5916 COMMISSIONER CARDOZO: How does an artist achieve that?

5917 MR. FLEX: It comes from, just to quote, I guess, the tipping point. If you look at --

5918 COMMISSIONER CARDOZO: With J.Lo, she sung different genres of music.

5919 MR. FLEX: Right. But she also did collaborations with someone like Ja Rule for instance. Nelly did collaborations with Ashanti. What that does, that offers a hybrid sort of more palatable sound and then when the artist is introduced to that version of Ja Rule-101 through his association with a more mainstream artist, they then say "Oh, I like the guy who rapped on that and maybe I should check out his album". That is how the music is evolved.

5920 Not unlike what young MC Hammer did for hip-hop. Pure hip-hop fans may not embrace those artists, but they have certainly contributed to the popularity of more pure artists.

5921 COMMISSIONER CARDOZO: I think, Mr. Jolly, you mentioned that you probably have less of the Caribbean-based music, namely reggae and soca I think you identified. You would have less reggae and soca here than in Toronto perhaps?

5922 MR. JOLLY: Yes, Commissioner, and probably gospel. Although I think our --

5923 COMMISSIONER CARDOZO: Less or more of gospel?

5924 MR. JOLLY: I think less to start, but I think eventually there might be a place for gospel. I don't believe any of it is played on the radio here right now.

5925 COMMISSIONER CARDOZO: I would think there is a big religious base here that might find gospel quite appealing.

5926 MR. JOLLY: That's right. That is what I'm suggesting.

5927 COMMISSIONER CARDOZO: But that is a debate for another day too.

5928 Mr. Roman, I have a question for you on changing technology. I can't let you get away without that.

5929 On matters of digital and things like MP3 and burning CDs, does a demographic of radio of this kind speed up the take-up of digital radio in any way? Are young people like to go towards digital radio more than others?

5930 In terms of other technologies like MP3 and burning CDs, is there a sense that young people are doing a lot of that and can you make the case that catering to a younger demographic, either this format or in other formats that that has been suggested for young demographic, helps the -- call it the legitimate radio music business and music business?

5931 MR. ROMAN: Young people love technology and, whether they are creating MP3s or downloading and burning CDs, the technology has to be affordable.

5932 I think that young people will help drive not only the technologies that we have grown accustomed to, but you mentioned digital radio. Concerns and challenges with digital radio are at the cost of the receivers, but exposed to it they absolutely love it.

5933 I think that really the future of things such as digital technologies, whether it is for television or for radio, will really lie with a technology-savvy group of consumers. I would put the young people, because of their comfort and familiarity with the Internet, with computer technologies, really at the forefront of that.

5934 So, yes, I think that there will be a cumulative effect.

5935 But with any new technology there is a start-up period before that critical mass or, as Farley says, the tipping point is reached. We are not anywhere near the tipping point at this point, but I think there are things happening within the digital sphere, such as available alternative programming. The Commission recently licensed a standalone DAB station in Toronto. These things will have to play themselves out.

5936 We are at that point now where we are seeing the cheaper radios being manufactured in Japan and in Europe. We believe our technology has withstood, on a comparative basis, the proposals south of the border with regard to the kind of technology that their broadcasters want to investigate. So I am encouraged and more positive now that we are involved with a winning technology.

5937 But the short answer is, yes, technologically-savvy youth are going to help not just drive the new digital radio spectrum and digital technologies, but I think that they also work with the music industry, and especially on the urban side where so much of the music is created within a computer or with synthesize or electronic instruments and it can be done for lower cost.

5938 We are seeing a real sea change now in how high quality music and other product are coming to market compared to with what the traditional kind of investment that recording studios had to do. I see them more as shopping for already produced masters and CDs and putting promotion and distribution muscle behind it rather than the kind of thing that used to be required of artists, that they needed a record company to get in the business.

5939 I think what FLOW is proving, what Calgary urban is proving, what is happening probably in Ottawa and in Vancouver, is that that link with the urban community and that outlet with the urban format is creating affirmant, a dynamic that is going to really manifest itself in better and more quantity of Canadian musical recordings.

5940 COMMISSIONER CARDOZO: Thank you very much.

5941 Those are my questions, Madam Chair.

5942 THE CHAIRPERSON: Mr. Jolly, I have with me your financial results for 2002. What do the total revenues look like for the end of this coming year?

5943 MR. JOLLY: I think the total revenue --

5944 THE CHAIRPERSON: You don't have to give numbers. Just give me a --

5945 MR. JOLLY: Oh, they look good.

--- Laughter / Rires

5946 THE CHAIRPERSON: I was not finished. I was going to say, you don't have to give me the actual numbers, but can you give me a percentage increase or decrease in performance?

5947 Now that they look good, we expect it to be a plus per cent.

5948 MR. JOLLY: Well, as I mentioned earlier, Commissioner, we, in our financial projections when we made our application for FLOW, suggested that we would break even in year three.

5949 Right now I think that we will be breaking even in 28 months, as I stated earlier, which will be in August.

5950 THE CHAIRPERSON: I heard you say that, but break even and how much over is different.

5951 You are not prepared to say what you expect the percentage increase in your total revenues will be in 2003 from 2002?

5952 MR. JOLLY: I think our percentage increase will be about 15 to 20 per cent.

5953 THE CHAIRPERSON: More?

5954 MR. JOLLY: Pardon me?

5955 More, yes.

5956 THE CHAIRPERSON: Thank you.

5957 MR. JOLLY: Than last year.

5958 THE CHAIRPERSON: Thank you.

5959 MR. JOLLY: Which was about four-nine I believe. I shouldn't say that.

--- Laughter / Rires

5960 THE CHAIRPERSON: Fine.

5961 Counsel.

5962 MR. McCALLUM: Just to pick up on a few things.

5963 You spoke at one point about the live-to-air performances from clubs that would be aired, I think, at 10:00 p.m. once a week.

5964 Just in relation to that initiative, which I think was outside the Canadian Talent Development initiative, will there be DJs, for example, that will be responsible for that?

5965 MS WICKHAM: Just to clarify, the five live club concerts that we proposed in our CTD --

5966 MR. McCALLUM: No, no. I'm talking about the one that is outside the CTD.

5967 MS WICKHAM: Yes. Those ones do not necessarily include a live performance element. Those are DJ-driven.

5968 MR. McCALLUM: I'm sorry, they are which?

5969 MS WICKHAM: Those are driven by DJs who are playing music as opposed to live performances, which is what we are proposing in our CTD plan.

5970 MR. SKI: But if the question is "Are they live-to-air?", they are live-to-air from the clubs.

5971 I think Farley may have mentioned earlier there could be three or four of those on a weekly basis.

5972 MR. McCALLUM: They are monitored by DJs at the clubs. Is that the way it goes?

5973 MR. JOLLY: Yes, it is.

5974 MR. McCALLUM: Not turntables, for example, or turntablism?

5975 MR. FLEX: By "turntablism", disc jockey, if we use the term, is -- I'm not sure we are using it in the same context.

5976 It is a combination between on-air hosts, who would be the voice over the live-to-air, and DJs from the club directly, who may or may not be directly working for the station, that will provide the music element. So it is a combination of the two.

5977 Does that answer your question?

5978 MR. McCALLUM: Yes. What I wanted to get clear was, there would not be turntablism involved, for example?

5979 MR. FLEX: Yes, there would be turntables being used for -- like the source of music comes from turntables. We use what is called a zephyr to transmit the sound back to the radio station to be broadcast over the antenna, but the source of music itself will be an actual DJ, right, and the voice that you would hear in between breaks, just like you would on a normal in-station broadcast, will be that of one of our on-air hosts.

5980 MR. JOLLY: If I could add, counsel, to that.

5981 Turntables have become very popular in this genre. In the last three years the sale of turntables internationally have outpaced that of electric guitars.

5982 MR. FLEX: Did that answer your question? I'm not sure that we did.

5983 MR. McCALLUM: Will turntablism be done a lot or a little?

5984 MR. FLEX: Assuming, let's say, it is a two or three-hour live-to-air, the entire music delivered over the airwaves comes from turntables.

5985 MR. McCALLUM: Thank you.

5986 Dealing with one of the Canadian Talent Development initiatives -- and I'm looking at the deficiency response where you gave details about audio and video streaming for specific CTD promotions, and there is an expenditure of $5,000, I think, in the first year, $30,000 years two to seven, for $35,000 in all.

5987 What I wanted to get clear was what will you get for that expenditure?

5988 MS WICKHAM: One of the benefits of the Web site will be the coverage of local artists. The appeal of a Web site on a global scale and the way we will be promoting the Web site would enable people who are not in Alberta to see and hear urban artists from Alberta through the Web site.

5989 So various performances that are done as part of our other initiatives may be videotaped, audiotaped and archived for rebroadcast via the Web site to enable greater exposure opportunities for the artists.

5990 MR. McCALLUM: So what is the source of the audio and video streaming then? Where is it coming from?

5991 MS WICKHAM: I'm sorry, I didn't hear your question.

5992 MR. McCALLUM: What is the source of the audio and video streaming? Where is it coming from?

5993 MS WICKHAM: Well, there are companies that provide that as a service in terms of providing the computers that would store the data that is rebroadcast through the Web site. It would be viewed off of our Web site, but it is a service that is provided by companies who specialize in that.

--- Pause

5994 MR. McCALLUM: If I can come back to the Canadian Talent Development Coordinator, one of the responsibilities of the coordinator -- and I'm asking the question: Would the coordinator be responsible for overseeing or maintaining the urban CTD Web site that relates to Canadian Talent Development?

5995 MS WICKHAM: The CTD Coordinator's responsibilities would be over and above all of the initiatives to ensure that they are implemented as we intend today, one of those initiatives being making sure that the content on the Web site, the research is accurate, the content is up-to-date, and the artists that are being promoted through our other initiatives are represented on that Web site.

5996 So there will be a graphic designer who is creating the imagery of that, but the CTD Coordinator would be feeding into that person in terms of making sure the information reflected on that Web site is up-to-date and accurate.

5997 MR. McCALLUM: Referring for a second to the technical availability of alternative frequencies, would I correctly infer from your answer that there are alternative frequencies in the market, that there would be little or no impact on your business plan to go to a different frequency than the one you have applied for?

5998 MR. ROMAN: Generally speaking that is correct. We prefer 91.7.

5999 MR. McCALLUM: I'm sorry, "generally speaking". What do you mean by that?

6000 MR. ROMAN: That it wouldn't have appreciable impact on our business plan.

6001 MR. McCALLUM: Are there any circumstances where a different frequency would have an impact?

6002 MR. ROMAN: Oh, sure. I mean, if there are severely compromised frequencies or unacceptable interference. Or in some cases the frequencies that are being looked at are drop-in frequencies so that entails a change in the allotment plan, it requires of approval of NAV CANADA. It is not a slam-dunk.

6003 We picked the frequency that represented the best possible coverage and signal for the Edmonton market but, as I said, in descending order there are three other frequencies that could be considered.

6004 MR. SKI: Those three other frequencies would not affect our business plan.

6005 MR. McCALLUM: Thank you.

6006 Referring for a second again to the deficiency response letter where it say that CHUM would take care of the day-to-day activities of the partnership, I didn't quite get a sense of what the role of Milestone would be in the day-to-day operations.

6007 MR. SKI: It might be best to tell you just a little bit about the structure of the management group in that regard.

6008 Milestone is involved in this application obviously because they bring the urban lifestyle that CHUM has not been as familiar with.

6009 I think when we look at our management operating group, the management operating group will be responsible for the overall direction of the radio station. We plan to meet on at least a quarterly basis to make sure that the station is programmed strategically and to make sure that we are fulfilling whatever our goals and objectives are.

6010 MR. McCALLUM: So will one of the management committee representatives be on-site on like a daily basis for example?

6011 MR. SKI: No, not on a daily basis.

6012 MR. McCALLUM: Thank you, Madam Chair.

6013 THE CHAIRPERSON: Thank you.

6014 Mr. Flex, I have big quarrels with my children because I have three/four turntables in my basement. Should I hang onto to them now while they appreciate in value?

--- Laughter / Rires

6015 MR. FLEX: That is actually a very astute question because if you go on eBay for instance -- and I'm not sure if they have Technics 1200s or whether you would know what model type they are -- if you go on eBay for instance and try to buy turntables, the vintage classic DJ turntables, they have probably appreciated in value at least 500 per cent in some cases.

6016 What I would advise you to do is --

--- Laughter / Rires

6017 MR. FLEX:  -- because they are going to ask you this question, so if you want to be proactive you could go to them and ask them if they want to get CD turntables which they could actually mix CDs the way vinyls have been historically mixed. You will be the greatest mom at least on the street.

--- Laughter / Rires

6018 THE CHAIRPERSON: I think I will keep them for my grandchildren.

--- Laughter / Rires

6019 THE CHAIRPERSON: You have five minutes now, Mr. Ski, Mr. Jolly, to tell us why the Commission should grant you this licence.

6020 MR. JOLLY: Thank you very much.

6021 Madam Chair, Members of the Commission, thank you for listening so intently to our application.

6022 Three years ago some of you here made a bold, visionary and insightful decision to license Canada's first urban station in Toronto. Since then urban format has demonstrated its viability in other parts of Canada and cries for an outlet here in Edmonton.

6023 Edmonton outperforms Calgary in urban record sales, even without an urban radio station.

6024 It is well documented that radio provides the critical underpinning in the development of a music industry infrastructure.

6025 VIBE will be an important catalyst to the creation of new jobs and unique business opportunities related to urban music, culture and lifestyle and will contribute to the thriving Edmonton economy.

6026 We believe the CHUM/Milestone team, as pioneers in the urban genre in TV and radio respectively, and being pioneers in broadcast and social policies, are best suited to address the multicultural and multiracial nature of the greater Edmonton area. CHUM's best practices policy, along with the inherent diverse nature of the Milestone organization, will bring not only diversity in music and programming, but also cross-promotion of new artists between radio and TV across the country.

6027 Equally important, it will bring diversity of news voices, ownership and employment opportunities. To that end, we are pleased to have Mr. Fil Fraser, ex-Human Rights Commissioner of Alberta, on our team.

6028 Edmonton's racially and culturally diverse youth who listen to urban music are underserved. We believe they deserve an authentic urban music station that will satisfy their listening needs and support their lifestyle.

6029 Last but not least, there is a need for Milestone to attain new opportunities in such a highly competitive industry.

6030 MR. SKI: I would like to summarize the main thrusts of our application for a new radio station in Edmonton.

6031 First, the format.

6032 We believe the urban format offers the most distinctive radio service for the Edmonton market in terms of minimum overlap with and minimum impact on incumbent radio stations.

6033 Second, the business plan.

6034 We have filed a very tight, comprehensive application and realistic business plan which includes a commitment to locally responsive programming.

6035 Third, Canadian content.

6036 Our proposed Canadian content level of 40 is achievable and provides unparalleled exposure for Canadian urban artists.

6037 Four, Canadian Talent Development initiatives.

6038 Our Canadian Talent Development initiatives, valued at $4 million over the seven-year licence term, will contribute substantially to the promotion and development of urban musical talent in Edmonton, in Alberta and in Canada.

6039 Fifth, and finally, choice and diversity.

6040 The CHUM/Milestone application for an urban lifestyle radio service represents increased diversity of programming choice, ownership, editorial voices and local reflection in the Edmonton market.

6041 That concludes our comments.

6042 Thank you very much.

6043 THE CHAIRPERSON: Thank you, Mr. Ski, Mr. Jolly and your colleagues for your cooperation. We will see you again in the subsequent phases.

6044 We will now take a 15-minute break and come back to hear the next application by Harvard.

6045 Thank you.

--- Upon recessing at 1545 / Suspension à 1545

--- Upon resuming at 1600 / Reprise à 1600

6046 THE CHAIRPERSON: Order, please.

6047 There will be a slight change in our schedule due to the time. We will hear Harvard and we will then hear the presentation by CKMS and proceed with the questioning tomorrow morning, just so you have an advance notice of that change. We were optimistic this morning I guess.

6048 Mr. Secretary, please.

PRESENTATION / PRÉSENTATION

6049 MR. LeBEL: Thank you, Madam Chair.

6050 The next application is an application by Harvard Broadcasting Incorporated for a licence to operate an English-language FM commercial radio station in Edmonton.

6051 The new station would operate on frequency 91.7 MHz (channel 219C1) with an effective radiated power of 100,000 watts.

6052 Mr. Bruce Cowie will introduce the panel.

6053 You have 20 minutes to make your presentation.

6054 MR. COWIE: Thank you.

6055 Good afternoon, Madam Chair and Members of the Commission, Commission staff. My name is Bruce Cowie and I am Vice-President, General Manager of Harvard Broadcasting. I am both pleased and excited to appear before you today to discuss a new proposal for radio in Edmonton and a new growth opportunity for our regional company.

6056 Let me begin by introducing our panel.

6057 To my right is Paul Hill, President and CEO of the Harvard Group.

6058 To my left is Michael Olstrom, Group Manager, Harvard Broadcasting.

6059 To his left is Gary McGowan, a radio programmer and music consultant. Gary is a life-long resident of Edmonton and, given his strong ties to Edmonton's youth music scene, he was the perfect choice to lead our "in market" research. His commitment to the local music industry is well known in Edmonton, and in fact he is on the cover of this week's SEE Magazine, a local publication dedicated to showcasing the urban street scene.

6060 Next to Gary, is John Donnelly. John is a Canadian musician and a tireless creator of several national events that showcase Canadian talent, including Vancouver's Music West, Molson Canadian Snow Jam, New Music Montreal and the Halifax Pop Explosion. John's latest project is the MTV Campus Invasion, a cross Canada college tour featuring a mix of leading edge rock and hip-hop artists. He is an expert in youth marketing and a key contributor to our CTD initiatives.

6061 Seated in the back row, beginning from my left, are Karen Broderick, National Sales Manager of Harvard Broadcasting.

6062 Next to Karen is Clayton Bzdel, Vice-President, Investments, of the Harvard Group.

6063 Seated beside Clayton is Debra McLaughlin from STAR Inc., the author of our Consumer Demand and Economic Impact studies.

6064 Next to Debra is our legal counsel Rob Malcolmson, a partner in Goodmans LLP.

6065 Madam Chair, we have two members of our Advisory Council here today. Because of scheduling we expected many more. Some are still on their way back from the North Country Music Festival and several are writing school examinations today. But we have with us two members, Eli Kline and Aaron Getz. They are both seated in the front row. Both are involved in Campus Radio. They are also club DJs and they are music producers. This is --

6066 THE CHAIRPERSON: I hope they are not playing hooky?

--- Laughter / Rires

6067 MR. COWIE: I don't think so. In fact, they may have to leave to go to work.

6068 Madame Chair, the Commission is familiar with the operations and track record of Harvard Broadcasting. Our Western Canadian company is built on a long tradition of community service and has faithfully provided broadcast services in Saskatchewan since 1976.

6069 In Regina, our three stations serve distinct consumer segments and are profitable, despite operating in a highly competitive and less economically advantaged market.

6070 We are committed to our listeners and to our communities and we have worked very hard to develop a sustainable long-term business.

6071 One of the tenets of our long-term strategy is developing new markets and, as a Western-based regional broadcaster, the opportunity in Edmonton is both excellent in suitability and in timing.

6072 The plan we will present to you represents a very real commitment. We have made a large investment in research, time and energy to ensure that our understanding of this market is second to none. Our findings are clear and based on the most extensive analysis of the market filed in this proceeding.

6073 Our knowledge of Edmonton, combined with the independent listener, economic and advertiser research, led us to the following conclusions:

6074 JAM FM is the ideal format for the underserved youth demographic in Edmonton.

6075 There is no single music genre that will satisfy the Edmonton youth market. These listeners demand a cohesive mix of urban, modern rock and rhythmic contemporary, combined with spoken word programming that speaks to youth culture.

6076 Advertiser interest in reaching the increasingly influential youth demographic is a national, in fact North American, trend that is not being addressed in Edmonton.

6077 By targeting the youth market, JAM-FM will bring new radio revenues to Edmonton by delivering an efficient means to reach this group.

6078 And, finally, by focusing on a music mix that is not available on Edmonton radio today, JAM-FM can enter the market with minimal impact on existing licenses.

6079 We have combined these key findings with a carefully considered Canadian Talent Development package. In Harvard's view, CTD initiatives should be measured on their long-term impact and relevance to the local market, rather than their dollar total. Only a combination of new monies, increased exposure for the artists, and locally administered funding that specifically targets the needs of this market, will meaningfully advance the development of Edmonton artists.

6080 Michael.

6081 MR. OLSTROM: JAM-FM is designed to serve the 12-to-24 year old demographic. JAM-FM will be different, a new format, a new sound, an approach that reflects directly what Edmonton's youth told us they want.

6082 Throughout recent hearings the Commission has heard that the market for youth radio is in resurgence. Nowhere is this more obvious than in Edmonton. The "Echo" generation is plentiful, thriving and everywhere. Couple this North American population trend with the draw Edmonton has for young families and you have an area with a strong long-term market for the right youth format.

6083 The youth market has evolved. They are savvy consumers and, as our research identified, have more disposable income than ever before. Traditional advertisers are waking up to the wealth of this consumer base. Companies such as Canadian Tire and Wal-Mart, not typically seen as youth marketers, are now engaging in ongoing research into product development for this consumer group.

6084 Despite the size and relative affluence of this youth market, the radio industry has largely abandoned this group. Total hours tuned to radio in the youth demographic declined by 19 per cent between 1998 cent and 2002. Today's youth look to the Internet for their musical needs, because commercial radio is not giving them what they want. It is to this market that JAM FM is directed.

6085 Gary

6086 MR. McGOWAN: BBM tuning data, Stats Canada trends, research from the U.S. and other Canadian markets, pointed to a range of music that captures the tuning of this group. We took these directions to the streets of Edmonton. We went to the clubs, the record stores, malls and concerts. They talked. We listened.

6087 Here is what they said.

--- Video presentation / Présentation vidéo

6088 MR. McGOWAN: Our audience and "in market" research led us to five key findings:

6089 First, Edmonton youth listen to a range of music from a variety of sources.

6090 Second, their influences cover several charts, but the artists they most want to hear are from the modern/alternative rock, urban and rhythmic contemporary genres.

6091 Third, the mix of music they are requesting is not available on any Edmonton radio station.

6092 Fourth, in the absence of a local youth-oriented radio station our target demographic will continue to create their own sounds by burning CDs from the Internet or skipping across music services.

6093 Fifth, Edmonton's youth feel disenfranchised in terms of commercial radio.

6094 So JAM-FM will give Edmonton's youth market a voice. The music that we play will reflect the eclectic music mix this audience wants.

6095 So let's talk about the music.

6096 Today's youth culture listens to a range of music and, unlike past generations, there is no single dominating musical influence. No single genre or artist defines today's youth culture. Instead, the common element is a desire for a mix of music from three genres: modern/alternative rock, rhythmic and urban. Same artists, different charts, same fan base.

6097 This melding of musical genres and influences is also being seen at the artist level. Artists like Linkin Park and Limp Bizkit have incorporated elements of rap and hip-hop styles into their music. Vancouver's urban artists Swollen Members have recorded with rhythmic contemporary superstar Nelly Furtado.

6098 Increasingly, we are seeing artists that have traditionally been identified with one genre of music crossing over to other areas of the musical spectrum, often combining several influences. Kid Rock and Sheryl Crow are another perfect example of this phenomenon.

6099 The blending of genres that will define JAM-FM is a format that exists in other media, but not in radio. For example, one of the most popular programs on the newly launched MTV Canada is "SELECT", a Canadian all-request program targeted at the youth demographic.

6100 Week after week SELECT's top 10 list features the same blend of music and genres that will define JAM-FM's music profile. An analysis of the request lists from the past 50 weeks of SELECT reveals the diversity in the selections: 52 per cent was in the urban/rhythmic contemporary genre; 33 per cent was in the modern rock/alternative rock format; and pop accounted for 15 per cent.

6101 Our research showed similarly high levels of interest in the modern/alternative rock, urban and rhythmic categories.

6102 The keys to creating a youth format that will capture the hearts and minds of today's musically diverse youth culture are:

6103 to ensure that the music on JAM-FM will have the same depth that is available to the target audience on the Internet: uncharted music that has not been exposed in the mainstream; and

6104 never be too narrow. While genres such as urban and hip-hop are popular among a segment of the youth demographic, the larger youth audience demands a more diverse range of music from each of the "cornerstone" genres that form the base of today's youth music culture.

6105 Michael.

6106 MR. OLSTROM: The other common link for connecting to youth culture goes beyond the music. It is an attitude, a perspective and a feeling. It starts with blending musical genres that replicate the music mixes that this group creates for themselves, and it is completed by providing content that they can relate to.

6107 At JAM-FM we will do this with four key feature programming elements:

6108 The JAM-FM Indie Music Show, every Monday at 10 o'clock, will focus solely on the work of local, regional and national artists. We will showcase new music, profile emerging artists and discuss the Canadian music scene.

6109 The New Rock Show is an hour of cutting edge Rock, music typically only found on the Internet. It will be distinct, sharp and resonate with our audiences.

6110 Punk-o-rama taps into the skateboarding culture and will provide the soundtrack for the extreme experiences so much a part of the youth lifestyle.

6111 The highlight of JAM-FM's new programming initiatives is Spotlight. In combination with playing the artist's songs, Spotlight will spend 60 to 90 seconds six times a day exclusively showcasing Canadian artists. These features will run throughout our entire broadcast day.

6112 One of the pillars of our programming strategy will be our distinctive spoken word content. If you are between the ages of 12 and 24 and living in Edmonton, you do not have a local source of information and news that is relevant to you. We will combine the music this group loves with the information that they want.

6113 This group is highly aware of what is happening in the world. They have opinions on a wide range of topics from the Mid East crisis to the emergence of gangs on the streets of Edmonton. These topics are currently reported on existing services, but from a perspective that does not necessarily speak to or for youth. Our interactive approach to programming, and our use of the Internet in news collection and for feedback, will ensure that the voice of the youth culture will find a place in the radio spectrum.

6114 JAM-FM's goal will be to reconnect this group with radio. A key tool to making this a reality will be our Internet site.

6115 One of the keys to JAM-FM's success will be to stay relevant to youth culture. As new trends emerge and tastes shift, JAM-FM needs to be there. It is here that our Youth Advisory Council will play a vital role.

6116 This council will be comprised of Edmonton youth and will be JAM-FM's "eyes and ears" in the local community, ensuring the station stays connected and relevant to its target audience.

6117 The Youth Advisory Council will also be mandated to ensure that our employment practices, news, music and promotion of Canadian artists, reflect the cultural diversity of Edmonton's youth.

6118 We are particularly excited about our Canadian Talent Development proposals and John Donnelly will take us through these.

6119 John.

6120 MR. DONNELLY: Thanks, Michael.

6121 The core of our Canadian Talent Development initiatives is to serve local artists. We will event-market local artists through a range of venues and concerts specifically designed to engage our audience and showcase indigenous talents.

6122 JAM-FM is proposing a creative and extensive investment in several talent development initiatives. In total, they represent a financial infusion of over $2.25 million dollars into the industry, with the bulk of the investment in the first five years.

6123 Our plan balances the need for ongoing support of established initiatives like FACTOR with newly created market-specific benefits.

6124 One of these is JAM-FM's URBAN EXPO. This concert series will be a focal point for connecting new Canadian talent to the broad and growing Edmonton population. JAM-FM will organize concerts and workshops as part of the expo. These educational initiatives will be of particular benefit to the new and emerging artists and will encourage creativity in a range of new music streams and production areas.

6125 The SHOWCASE CONCERT SERIES is another key element of our locally focused, artist-specific CTD plan. Here we will provide funding for 12 concerts each year. Each performer will be given performance fees, making the concert series directly beneficial to the artists from both an exposure and financial perspective.

6126 The NEW SOUNDS CD will support five local artists each year and provide them with invaluable studio time. The songs will be compiled onto a JAM-FM CD, which will be promoted and distributed by the station. This direct contribution will put money into the artists' pockets, while at the same time giving them a leg up on their own recording plans.

6127 But one of the most impactful initiatives of our plan is our MUSIC INDUSTRY TRAVEL ASSISTANCE PROGRAM. In association with ARIA, JAM-FM will provide a total of $475,000 over the seven years, which will fund 20 to 30 tours by Alberta artists.

6128 We will also make funding available for education through a scholarship program at Grant MacEwan College. As part of our commitment to cultural diversity, at least one of these scholarships will be earmarked for aboriginal students.

6129 Finally, we have reserved $40,000 per year in the first five years of the license term in order to facilitate and support new local initiatives as they arise. JAM-FM's General Manager will allocate these funds to eligible programs and we will file an annual report with the Commission detailing our progress.

6130 Bruce.

6131 MR. COWIE: Our proposal is to serve the youth market, a consumer group that is increasingly important to advertisers. Sociologists tell us that this is a group that is at a critical stage in terms of developing life-long media habits, and yet, as Edmonton data shows, without a satisfactory experience in radio. Our format meets their needs and you have heard it in their own words.

6132 JAM-FM meets all of the Commission's licensing criteria.

6133 We have proven market demand for our service.

6134 Our target market is underserved.

6135 We have a solid business plan that taps into new revenues.

6136 Our investment in Canadian talent will add diversity to the system.

6137 We are truly a new voice in the market providing another Western-based perspective.

6138 Our format has high appeal across ethnic and cultural groups in Edmonton.

6139 The Canadian Broadcasting system has changed, and within this new environment the role of the regional broadcaster is increasingly threatened. In an industry dominated by visions of convergence and the need to provide "returns to investors", we think the "local" value of radio is being lost. It is for this very reason that the continued success of the regional broadcasters within the system has never been more important, in our view.

6140 Regional players such as Harvard provide a diversity in perspective. Our proposal offers a viable alternative to more "of the same" radio and will provide a benefit to the Canadian broadcasting system as an enormously strengthened contributor. We offer:

6141 A ground-breaking format in a market that is lacking in diversity.

6142 New monies for CTD that are both truly incremental and creatively impactful.

6143 A proposal that meets the needs of an underserved market, and in doing so strengthens the value of the medium as a whole and specifically contributes to the Canadian Broadcasting System.

6144 Thank you for your attention.

6145 Michael Olstrom will take your questions and direct them to the appropriate members of our panel.

6146 Thank you.

6147 THE CHAIRPERSON: Thank you, Mr. Cowie and your colleagues and welcome to the hearing.

6148 Commissioner Langford, please.

6149 COMMISSIONER LANGFORD: Thank you, Madam Chair.

6150 Welcome to Edmonton. I guess you can say the same to me --

6151 MR. OLSTROM: Thank you.

6152 COMMISSIONER LANGFORD:  -- since we are all visitors in this beautiful city.

6153 I am going to lead you through the first part of the questions. Hopefully we can have a little fun and we can put some flesh on the bones of the questions I may have and then other Commissioners will have some questions I'm sure, and counsel, and I'm sure we will be able to fill the time nicely.

6154 Unless you have been in a deep shelter for the last two days you probably know the questions as well as I do by now. Maybe I should get you to ask them and I will try answering them for a change.

6155 I want to start with format and then we will look at spoken word and go through your Canadian development and staffing and market and revenues, the same thing we have basically been taking everyone through.

6156 But you have a different twist on it and we spend a little more time on format -- at least a different twist on format I mean. We may spend a little more time there, unless you can enlighten me more quickly than some of the others did.

6157 Because unlike some of your competitors for a licence in this market you have combined either two or perhaps three formats. I want to discuss with you how well you think that might work.

6158 As I understand it, you have a kind of hybrid format here which is made up of urban, modern rock and either something called rhythmic contemporary or together they make rhythmic contemporary. I'm not quite sure how that works.

6159 So maybe we could just start with a definition of what you are proposing. Perhaps you can even give us a bit of a breakdown in the sense of percentages.

6160 MR. OLSTROM: Thank you, Commissioner Langford.

6161 What I will do is, I will turn to Gary in just a moment to give you a really good description of this format.

6162 This is a new format we have found through our on-the-street, I guess, connection to the kids and the youth and the demographic the 12-to-24 year olds. We call it progressive modern and urban radio for lack of a better term. It does include modern rock, urban, rhythmic contemporary and the sub-genres that fall underneath it. It is a mix, it is a blend. It is much what many kids today are doing when they are downloading or burning CDs or buying compilations like MuchMusic's Big Shiny Tunes. It is the type of music they are looking for and our research does indicate that this is what they want.

6163 The format doesn't exist on radio, as far as I am aware anyway, but does exist on television in MuchMusic and MTV, just a couple of examples.

6164 I would like to turn to one of the co-creators of the format, Gary McGowan, to speak about his local experience with the music, the youth, and what the music is.

6165 Gary.

6166 MR. McGOWAN: Well, I would like to make the important point, Commissioner Langford, that the blend is the key to the format. That is the format.

6167 Our experience, both at a research level, which Debra could speak to at greater length, but also I think more importantly in an anecdotal level that I have seen over my years of working very directly by being involved in a concert production company that puts on these types of shows has been that the audience responds most strongly to the blend.

6168 If I could, I would like to share an anecdote with you from earlier this year of a show that we put on, actually, interestingly enough, at the request of MuchMusic, who wanted to have a local partner, the company that I am involved with, produce a show that showcased the best new talent in Edmonton.

6169 When I sat down with everybody it was clear very quickly that we couldn't do that with a single genre of music. It has to be a blend of different acts if we were going to truly represent the show for a broadcast which was broadcast on Much, it's Going Coastal program.

6170 So we put together a bill with a couple of punk bands, a mainstream rock band, the Ska Band and a hip-hop act named War Party, who actually I did see earlier in the audience. It is encouraging that artists want to come out and sort of witness these proceedings that have some impact on their future careers.

6171 We charged an admission and our hope was that we would break even on production costs and be able to return some money to the artists. We thought maybe we will get 400 or 500 kids to show up.

6172 We held it at a club called Reds in West Edmonton Mall, one of the city's major 1,500 capacity showcase rooms. By the time the doors closed we had sold 1,400 tickets.

6173 Each artist received I think right around $1,000 apiece, again after expenses. More than I know some of the younger bands had ever thought they would see in the next year as far as far as artist payment went.

6174 I think more importantly -- Rex Smallboy, with War Party, who is again here today -- and I were chatting after the fact and he said "You know, this was a really important show for us, because while we play a lot of hip-hop shows, rap shows in the city, this was a chance for us to move outside the box, to be seen by other elements of the music audience." He said "I was scared. I didn't know what was going to happen. Were we going to be accepted? Were they going to like us?" He said that instead all these kids, who he initially perceived as punk rock kids, were right down front and they were into his rhymes and into the music that backstopped them. There was incredible energy in the room that night.

6175 I was very pleased after the fact when we sat down with the rest of the team and I discovered this anecdotal evidence wasn't my imagination or an isolated experience, in fact it was reflected in talking to Edmonton's youth.

6176 So to properly serve the audience in this city we need to put it all together. We need to give you an hour that blends music from international rap stars like Snoop Dog or 50 Cent, Canadian acts like Rosco, local acts like War Party, because we are going to play in regular rotation local performers; hip-hop acts like Eminem and Jay-Z and Missy Elliot, and Canadian artists like Swollen Members and Choclair, and local acts like Darknord and Politic Live; rhythmic contemporary artists like Sean Paul and Erykah Badu; Canadian acts like Glen Lewis and Remy Shand, and hopefully maybe even repatriate some attention to some of our local acts.

6177 I would cite an act like Highphonics. The lead singer felt he couldn't advance his career here. There was no outlet for him. He moves to Vancouver and immediately wins New Music West's New Artist Discovery of the Year Award. I think maybe we could have kept him home if JAM-FM was on the air.

6178 On the modern rock side of the spectrum, in a given hour we are looking for the bands that are crucial to today's youth and not receiving any sort of significant exposure in Edmonton. I would cite right off the top Radiohead, almost unheard in Edmonton, yet if there is any modern rock act that is key to the youth experience that speaks to youth it would be them.

6179 There are Canadian acts like Veal, The Dears, Flashlight Brown who are on the cusp of following bands like Sum 41 and Gob to major label recording contract status and stardom that need to be exposed in this market.

6180 And we have a host of acts. Some of the bands that were on our bill on that March show I referenced, like Choke and Wednesday Night Heroes.

6181 So that is what you would hear in a given hour on JAM-FM is that sort of music mix. It is carefully targeted to speak to the youth. It is not about genre to them, it is about what speaks to them. This format, I firmly believe, delivers what they want.

6182 MR. OLSTROM: Commissioner Langford, I would also like to turn to John Donnelly, who was also heavily involved in the development of this format. His experiences with youth, we drew on his experiences and his creating of shows to how we deal with these kids and then he sort of delivered the road map.

6183 COMMISSIONER LANGFORD: Before we go to John maybe it would be helpful if I sharpen my question a little bit so that we don't get too long a narrative and then I come back and you say "Oh gosh, why didn't you tell me that before?"

6184 I guess it is, generally speaking, your jobs to be enthusiastic, obviously, and mine to be a little sceptical, so don't take it personally. But I am going to try to punch little holes in this because I want to make sure it holds air basically, not because I have anything against the format.

6185 But it seems to me that, for example, you spoke earlier of our connection was on the street, we interviewed kids on the street, we went to the kids on the street. I heard the term "on the street" three or four times when both of you were speaking. I think it is one thing to talk to people on the street, but sometimes they can lead you down the garden path in a way because they are not really sure of what you are asking.

6186 What worries me a little is, I have heard application after application before us just in this week-long period of people saying "Look, I'm urban" or "I'm modern rock". You come before us and say "blended" and I wonder if the people on the street have thought it out and I wonder how well you have thought it out in saying that this blended format will work.

6187 The simple example being, if you say to someone "Do you want great music? Do you want urban? Do you want modern rock?" and they are not getting any anywhere except on the Internet, they may say yes. But if they had a choice between all modern rock and all urban, assuming they were devotees of one or the other, they might not be happy with a blended format.

6188 So that's where I'm coming from in this question.

6189 MR. OLSTROM: Let me turn to Debra McLaughlin who did our research, very extensive research in the marketplace. She can give you a breakdown of how the responses came back with regards to the different genres.

6190 MS McLAUGHLIN: Thank you.

6191 I do appreciate your scepticism because my job as a researcher is to deal with enthusiasts like John and Gary who come to me and say "This is what I think will work. This is what I know."

6192 Before I even began this processing of testing, the first problem I faced is really identifying these different genres, because they were quite right when they told me that I would have a hard time. There is so much crossover. I find the same artists on every chart. They are on the urban charts, they are on the modern rock charts, and that in itself creates a problem for me as a researcher just understanding what the respondent is saying to me.

6193 I began essentially by looking to see what is happening today. One of the startling things that I found is that the distinct formats that have been proposed to you throughout these hearings do exist in markets. They exist in markets in the U.S., they exist in markets in Canada.

6194 But no one can ignore, and no one has been able to reverse the trend of the average hours per capita decrease for the younger demographics.

6195 I noted that in Toronto, which has an urban format, that from spring '01 to spring '03 the total hours dropped by 15 per cent. In 18 to 24 the total hours for the same time period dropped by 18 per cent.

6196 Vancouver, which has a wonderful urban station as well, 12 to 17, same time period, dropped 29 per cent; 18 to 24 dropped 23 per cent.

6197 I can go through all of the U.S. markets. We checked a lot of them.

6198 But the conclusion that one has to draw is not that the musical formats that are there don't service these demographics, because they do. When you test them, they want them. When you go to the streets they turn up at concerts.

6199 The problem is that they are distinctive. There is one here, there is one there. They split the tuning. They don't bring them back.

6200 When I had done focus groups for this proceeding and others, I have found that part of their problem is how it is being presented to them. They are not one, they are not the other.

6201 So in order to test this I had to take three approaches. I had to go into the market and ask respondents about playlists. Just a simple, straightforward test. Instead of asking people "Which one is your favourite?", I asked them "Which one of these do you listen to most frequently?"

6202 It is an important distinguishing factor, because if I force people to choose I believe that you would have a closer number between modern rock and urban, simply because I am forcing them. But if I ask them just to tell me what they like to listen to frequently I found very little differentiation between modern rock, alternative rock, urban and rhythmic contemporary.

6203 Then because, as I said, the artists sort of bleed over across these charts, I also played them cuts from three of the formats that Gary and John had identified as probably being the single biggest draws for the concerts and the events that they put on.

6204 When I played them format-specific cuts, the difference decreased even more. If there was a nine point difference before, there was now a five point difference.

6205 So it suggests to me that unlike other formats where I have tested, where if you go in and you test with adults and you qualify them for a specific age and a lifestyle you will find very distinguished polarized views of the format, I couldn't find that here. It just didn't exist. And I couldn't find support in any of the markets where you do have distinct formats and I couldn't find it in any of the syndicated research that I reviewed.

6206 COMMISSIONER LANGFORD: Help me, though. Just a minute ago you said there is a difference. The difference shrinks depending on how you approach the questioning, depending on whether you go a little deeper and play them different cuts, depending on whether you set up a concert, as we have heard, or get them on the street and ask them the right questions. But there still is a difference. As you have described it, you said there is one here and there is one there and they split the tuning.

6207 How do you program knowing that? Let's assume for a minute that we accept your figures that possibly there is a new format available here that hasn't been tried anywhere, a bit of a risk but you have done the surveying, then how do you program? Do you do a block of one and a block of the other or do you mix it up? How do you risk losing the urban devotees while you appeal to the modern rock devotees or the rhythmic contemporary devotees? How many songs will an urban devotee sit through of the other formats waiting for one of his or hers?

6208 Does that make sense?

6209 MR. OLSTROM: Absolutely. I guess it goes back to our reference to what kids are listening to nowadays and they are listening to a mix of music. They will listen to an urban song next to a modern rock song, to rap. It all mixes together and blends together over the course of the day.

6210 We found that when we created our music samples and our clocks in our programming that the music did work together and appeal to this youth demographic.

6211 COMMISSIONER LANGFORD: Again, my job is to prod and poke.

6212 You have no precedent to go by but for a little bit of -- well, one concert you put on which was a smashing success, but that may just say something about the concert scene around here, who knows.

6213 On the other hand, in your opening statement you told us about SELECT, but SELECT I gather is a video format type of phone-in show, or however you do it, you make your choices. That may have an impact. I'm not a research analysis, but we may be talking apples and oranges.

6214 The only precedent you seem to have here -- and that doesn't take away from the fact that you may have discovered a winner, but the only precedents you have put before us are one concert and a couple of television sort of request video shows. How does that translate to 18 hours a day or 24 hours a day?

6215 MR. OLSTROM: Well, it was more than one concert show, but I would like to turn to Debra.

6216 MS McLAUGHLIN: I'm sorry, Mr. Malcolmson was distracting me.

6217 COMMISSIONER LANGFORD: Commissioner Cram does that to me all the time.

--- Laughter / Rires

6218 THE CHAIRPERSON: Order, please.

--- Laughter / Rires

6219 MS McLAUGHLIN: First of all, to the issue of blending, one of the key findings from the research, we asked the younger demographics -- in fact we asked everyone from 15 to 44 -- what was important to them in the content of their radio. It was very clear that a large variety of music -- it was 94 per cent in the younger demos. That is on page 21 of the consumer demand study, if you would like to reference it.

6220 As for the research in terms of SELECT on MTV, SELECT is a call-in Internet request program. I don't see that the choice of genre in terms of music videos that you watch differs much from the selection that you would make if you were programming your own radio station. It is the music that drives that show, it is the music that they are calling in to see and to hear.

6221 So in the study that we filed we actually referenced a week. It was the most current week. But to make sure that that wasn't anomalous, I went back and actually reviewed 50 weeks of it. The average is pretty compelling, it is 52 per cent urban, 35 per cent -- sorry, 33 per cent modern and alternative rock and 15 per cent pop. That is averaged over an entire year.

6222 So in terms of what they want to see, what they want to experience, it is a pretty clear statement.

6223 COMMISSIONER LANGFORD: Do you know how the choices are made? Are these choices a real market sample or does some producer of this program select -- sort of say "Well, we had better have a little bit for everybody here". So does the producer in fact break this down? In fact, is it possible that on any given week 100 per cent of the selections might be from urban or modern rock, you choose, but the producer being wily and knowing -- not our Wylie, just a normal wily person -- being a small "w" wily, with the experience of our large "W" Wylie -- realizes that this just won't play to a broader audience and so changes the mix.

6224 Do you know how the mix is done?

6225 MS McLAUGHLIN: Yes, I do. I have firsthand experience with this because the person who actually tabulated that worked in my office for the past two years.

6226 It is 100 per cent request. It comes in my the Internet, it comes in by some phone calls, very few, and it is tabulated and it is produced for the next week. Every week it is summarized so they can produce it.

6227 COMMISSIONER LANGFORD: Is it first come, first served?

6228 MS McLAUGHLIN: It is everybody, everybody who comes in. There isn't a limit on the sample, it truly is a request program.

6229 It is self-selecting for sure. I would describe these people as the "keeners", the people who want to get in, who want to have their voice heard, who want to make sure that what they are watching on television represents what they want to see.

6230 I wouldn't say that in terms of accuracy on a national poll that the specific selections would match, but they don't differ all that much from the selections that you see at the top of those charts.

6231 COMMISSIONER LANGFORD: So you are working from the request list rather than the playlist?

6232 MS McLAUGHLIN: That's correct.

6233 COMMISSIONER LANGFORD: Okay. Do you have any sense -- of course you wouldn't, would you, but you just have no sense about how happy or unhappy, you know, one part of this group is while the other part is being put into kind of reveries of audio because their particular format is on at that moment. I guess there is just no way to track that, is there?

6234 MS McLAUGHLIN: Well, you can track the programming to SELECT. Despite the fact that it is a digital station and the programs themselves are not listed in BBM, you can check the time blocks and see what happens. I would have to assess the continued and growing audience to that program as the audience response to what they are seeing and hearing on the screen.

6235 If there was a disconnect or if there was a portion of the audience that was being sort of repelled by this odd mix, as one might describe it, it certainly doesn't show up in audience and I think that is the best indicator of how successful this format or this proposal is.

6236 COMMISSIONER LANGFORD: Are you folks at Harvard enthusiastic enough that you have contemplated changing the formats of any of your other stations or is there something special about Edmonton that makes this a winner here but perhaps not in Regina?

6237 MR. OLSTROM: We only exist in Regina and we have three formats that are working quite well for us now.

6238 We were in the younger demo with one of our radio stations, got -- to put it bluntly -- sat on by our bigger radio station and forced us out of the format. So we realize -- and the youth market in Regina is a lot smaller and the opportunity for a format like this is not as great as it would be in the Edmonton market.

6239 If I could, maybe I could go to John if would help maybe to give you some sort of idea of what happens with the youth and how they interact with this music. It might give you some understanding of the music and how it actually mixes together.

6240 John.

6241 MR. DONNELLY: Thanks, Michael.

6242 I guess going back to the beginning of how we came to this format, I was thrilled when Michael and Bruce called me and asked me to work with them on this application.

6243 I had worked extensively in the Edmonton market bringing different shows and events to Edmonton, both small shows and fairly large festivals, so I knew instinctively that the hole in the market was the youth demographic, that there was a CHR station and a rock station, but the real hole was there for that 12 to 24 demographic.

6244 But at the same time, I was working on the Molson Canadian Snow Jam festivals, which is a property that we launched four years ago and over the four-year period built it from one event in Calgary to last summer we produced 10 festivals in 10 major cities. We drew big numbers. In Toronto we did 62,000; in Ottawa 50,000; Vancouver 60,000, so a huge turnout to this event.

6245 What we were programming music-wise was a mix of modern rock and urban, a pretty well equal blend of modern rock headliners and urban headliners, on this two-day festival. The audience that we got out as well -- we had large sponsorships for this event so we had big research kiosks at the event and we were able to actually do surveys of the audience and find out who is there and what the demographic was, et cetera.

6246 So we had attendance of 83 per cent between the ages of 12 to 24 and we had incredible reaction to both styles of music. When we put Swollen Members on the stage there was this amazing reaction from the same 20,000 people that were crowded up to the front of the stage as there was for Treble Charger or Gob. So the crowd was going equally crazy for the modern rock as they were for the urban.

6247 As well, we had rhythmic contemporary artists on the bill, we had DJs playing between events. So that was sort of one of the main inspirations for us to go back and say to Harvard: JAM-FM. Let's take a bold step forward and put the two styles together. We know that the young audience is embracing urban, we know that radio stations are now starting to play urban, the modern rock stations are playing Eminem, they are going with 50 Cent, they are starting to break through. Why don't we embrace the format because it is really working with the youth market. I have seen it firsthand.

6248 Another good example is Avril Lavigne, one of the biggest success stories of the year this year internationally. She has just done a huge Canadian tour. And who did she bring on tour with her but, again, Vancouver's Swollen Members, which is an urban artist.

6249 So she is putting the modern rock and urban on the same stage, drawing 16,000 people, and you are seeing that -- it is a young demographic, that was perhaps even younger than 12, they were 11 to 18 I think was really the general age group for that particular show, but the reaction to the urban music was as strong as the reaction to the modern rock.

6250 Then putting forward the suggestion to the team: Let's really look at this. Then you look for other examples and I think the biggest one of all is looking to MuchMusic who for 15 years have been programming urban and modern rock back-to-back. You look at their top 10 for this week and it is 12 modern rock artists and six urban artists and three rhythmic contemporary artists. So there is a lot of argument.

6251 So we got really excited about it when we started to see the music fit together, we started making sample playlist CDs and circulating them to people in the market, to people that we were targeting, and that is what has led us here today.

6252 I guess most telling of all was it was initially based on our intuition and our feel for the market, but when the research came back in and it validated what we had done, when the numbers came back and said 81 per cent interest in urban and 81 per cent interest in modern rock, we knew that we were onto something.

6253 COMMISSIONER LANGFORD: You refer to MuchMusic, which last time I look was owned by CHUM. You can't have missed the fact that they were before us just minutes ago looking for a pure urban format.

6254 Do you have any way of accounting for that? Have they just missed the boat?

6255 MR. OLSTROM: I believe that what we have done is we have found -- or we believe we have discovered a format that speaks to the demographic, the actual hole in the Edmonton marketplace and the format that is required to start repatriating these listeners, this youth back to radio as they begin to leave us for the Internet and other sources of music.

6256 COMMISSIONER LANGFORD: It is an interesting experiment and I don't doubt your enthusiasm for a moment.

6257 Unless there is something more you want to say about the format, I have covered what I want to cover for the record and we can move on. Yes, we have more.

6258 MR. DONNELLY: My reference to MuchMusic was really just based on this last issue that I had with the Canadian Music Network and really just looking at what the top 20 chart is for that particular week. I think, though, if you went back into any previous week over the past few years you will find on their top 20 chart -- and their audience clearly, the same 12 to 24 audience that we are going after, and you will see that mix of music.

6259 When you look in their videoflow you will see that they are programming these artists back-to-back and they could be considered Canada's biggest radio station, although it is a video service.

6260 COMMISSIONER LANGFORD: Short of breaking into people's homes and checking their CD collections, I suppose, that is as good as you can do.

6261 I must say, however, that I guess until you get this on the air it really will be impossible to know for sure whether the urban folks will listen in a rhythmic contemporary and modern rock while they wait for their next selection to come in or whether in fact what you have hit upon here is something that mirrors their actual CD collections.

6262 I guess, as we used to say in the news business, time will tell.

6263 MR. OLSTROM: Commissioner Langford, if I could go to Debra McLaughlin for just a moment.

6264 MS McLAUGHLIN: I just wanted to make the point that I very carefully reviewed a lot of the research in this process and I actually think that people did miss the mark. Their own research showed that there was similar levels of interest in it.

6265 Earlier a study by Edison was referenced by Mr. Yigit and in it -- I believe his top line take of it was that hip-hop and rap was the singularly most popular of all of the formats, but in fact hip-hop scored 78 and alternative rock scored 71. In market research terms, that is not spectacularly greater in terms of interest.

6266 COMMISSIONER LANGFORD: Only in elections and horse races, I guess, does that kind of a margin matter.

6267 Thank you for that. I am really out of questions.

6268 I find it interesting what you are doing and certainly it is your application and I appreciate you explaining it to me and putting it together. The mention of the group certainly helps.

6269 Almost everyone who has been before us with a kind of youth demographic application has mentioned Swollen Members. I think I know what it probably refers to, but all I can think of is fat Parliamentarians with guitars and somehow it is a very unappealing picture.

--- Laughter / Rires

6270 COMMISSIONER LANGFORD: Let's move along to local and spoken word, a bit of a jump but a major part of your application.

6271 You talk about a total of 6 per cent or 7.5 hours, and five hours of that, as I understand it, would be made up of news and weather and sports and traffic, and that sort of thing. I think that is pretty clear to me in your application and in your supplementary and I don't have any questions on that. I'm pretty clear on the times and when they would run.

6272 But I do have some questions on the other 2.5 hours. I'm not clear in my own mind exactly what they will contain or how those are made up.

6273 MR. OLSTROM: The additional --

6274 COMMISSIONER LANGFORD: Perhaps I have missed something.

6275 COMMISSIONER LANGFORD: I'm sorry, Commissioner Langford.

6276 COMMISSIONER LANGFORD: No, no, I'm sorry.

6277 MR. OLSTROM: The additional 2.5 hours is taken up within our Spotlight feature program which totals 42 minutes, I believe, over the course of the week, as well as we averaged out approximately 10 minutes per hour for the 12 hours of feature programming that we would be doing on the radio station. This does not include any anecdotal or interaction of the announcers or any of that. It is strictly within the feature programming that the additional time is allotted.

6278 COMMISSIONER LANGFORD: So I'm looking at your supplementary brief on page 11. This is the JAM-FM Spotlight, 60 to 90 second voice and song kind of vignettes, I guess. I'm not quite sure what you call them, but Spotlights.

6279 Tell me how much spoken word you feel is there and how you figured it out, because there seems to be a music element in that too.

6280 MR. OLSTROM: Yes, there is. What we are doing is, it is an interview, it is a discussion about the artist. We took the 60 seconds, not the 90 seconds. Time fluctuates, but we took 60 seconds as a minimum in our calculation.

6281 COMMISSIONER LANGFORD: How much of it would be a bit of music and how much of it would be --

6282 MR. OLSTROM: None of that is music whatsoever. That is all artist interview or discussion about the artist.

6283 COMMISSIONER LANGFORD: Okay. So then the music part would bring it up to 90 if you had a short vignette?

6284 MR. OLSTROM: No. We would play the entire song. The artist's song would get played at that particular time.

6285 COMMISSIONER LANGFORD: Oh, I see.

6286 MR. OLSTROM: We would highlight the artist, talk about them, whether it is in an interview or whatever it may be, and then we would go in and play their music.

6287 COMMISSIONER LANGFORD: So 60 seconds of clear spoken word in an interview format.

6288 MR. OLSTROM: Yes.

6289 COMMISSIONER LANGFORD: Then the music is just tagged on afterwards. That is not part of it at all.

6290 MR. OLSTROM: No.

6291 COMMISSIONER LANGFORD: So how much of the 2.5 hours per week would these 60-second vignettes take up?

6292 MR. OLSTROM: Forty-two minutes.

6293 COMMISSIONER LANGFORD: Forty-two minutes.

6294 MR. OLSTROM: They run six times daily, seven days a week.

6295 COMMISSIONER LANGFORD: That's right. So that leaves us -- this is getting far too tricky for my math abilities -- but something between an hour and a half and two hours -- something over an hour and a half of time to fill here.

6296 Am I right, Commissioner Cram? See, she's doing it to me. I told you, she does it to me all the time.

6297 Anyway, a good bit is left here. Could you tell me where we find the rest of the 2.5 hours?

6298 MR. OLSTROM: The additional, we have approximated 10 minutes per hour during each of our feature programming, which totals 12 hours over the course of a week.

6299 COMMISSIONER LANGFORD: Now, there was lots of mention in some of your other shows of talk. For example, JAM-FM's Independent Music Show, one hour Monday night, music and interviews.

6300 Did you figure any of that interview time into your --

6301 MR. OLSTROM: That is the feature programming.

6302 COMMISSIONER LANGFORD: That is part of the --

6303 MR. OLSTROM: That is part of the total.

6304 COMMISSIONER LANGFORD: That is part of the --

6305 MR. OLSTROM: Seven and a half.

6306 COMMISSIONER LANGFORD: Seven and a half.

6307 MR. OLSTROM: The two and a half.

6308 COMMISSIONER LANGFORD: The two and a half. The five is strictly news, weather, sports, that sort of thing.

6309 MR. OLSTROM: Yes.

6310 COMMISSIONER LANGFORD: So that one hour is part of the 2.5 hours.

6311 Does that apply to any of these other shows where I might have found a bit of talk, JAM-FM Punk-o-rama and that sort of thing?

6312 MR. OLSTROM: Yes, those are all feature programming.

6313 COMMISSIONER LANGFORD: All of that will have some spoken word element to it.

6314 I guess what I am trying to figure out as I read all of this and realize that there is a kind of a flexible -- and I have no doubt that you will fill the time. That certainly seems to be unquestioned in the amount of small interviews and just talk between hosts and whatnot.

6315 But I'm trying to figure out how you are going to image this station and how you are going to utilize spoken word to do it, since you seem to be saying that a good deal of your spoken word, non-news spoken word will be kind of woven into program.

6316 Can you give me some idea of what we will hear, what kind of format -- "format" is not a good word, it means only the music, but what is the image of this station that we will hear when we turn it on?

6317 MR. OLSTROM: The image of the radio station is targeted at this youth demographic and talking about the things that are of interest to them and importance to them. It is about lifestyle and it is about how the music interacts with that lifestyle.

6318 Maybe I will turn to Gary for a moment to speak about how this underserved use, in Edmonton in particular, isn't being related to in that aspect.

6319 MR. McGOWAN: Well, once again you mentioned format. We do feel that the spoken word that we identified, the level we want to deliver is appropriate to a format that music still predominates in.

6320 I think the one thing we have identified is the fact that currently the interests, the issues that concern Edmonton youth, that 12-24 year old demographic, are not being reflected on the radio. Again, I guess the advantage I have of living in the market and working here is that I run into that time after time after time.

6321 This is just a function, I suppose, of where other broadcasters position themselves, but once again, Commissioner Langford, if I could indulge you with an anecdote, because I have many of them as far as the youth market goes.

6322 Tony Hawk -- who you may be familiar with, is perhaps the most famous skateboarder out there, has his own line of video games which in and of themselves are a big part of the youth experience in this generation -- his demonstration team -- so this is just his sort of associates, not he himself, came to Edmonton on Mother's Day. They were brought here by one of the skate shops. Mother's Day is a big time for youth to, we hope anyway, pay homage to their mom.

6323 To enter the show you had to show up late in the afternoon, so just ahead of Mom's Day dinner, with a donation to the Food Bank, and 2,000 kids were there. It received, to my knowledge anyway on a quick punch through the dial, no coverage on Edmonton radio.

6324 In fact I, having some exposure in the concert world, was getting calls from people who had my number going "Where is it? When does it start? Can you give us some more information?" Fifty per cent of the calls were from moms going "My son/my daughter really want to see this".

6325 It tumbles on through, you know, many, many other issues. Skateboarding, for example, I think is regarded often as an annoyance to people above 25. They roll down the sidewalk and go around this town. There are all kinds of: No skateboarding here, no skateboarding there.

6326 The city itself has only now just begun to develop a plan through Parks and Recreation to build skate parks, because it is not on the agenda of the city because there is no one outlet that really wants to cater to that youth market that serves it. Set against Calgary where since the millennium have had a millennium skate park that is regarded -- it is one of the best in North America. Outdoor parks I am referring to.

6327 We see that if we were on-air today and that was the issue, that would be a perfect opportunity for us to really dig in and say let's move this forward because kids want this reflected.

6328 There are many news issues too that they have a perspective on that is not being heard. I think the general --

6329 COMMISSIONER LANGFORD: So how do you dig in, if I can interrupt, because this is the key point to me.

6330 How does this image or station -- how do you dig in? Is it part of your five hours of news? Do you say as a kind of piece of your news that "Guess what the mothers of Edmonton were doing? You are going to be amazed on Mother's Day." Or does it somehow become part of a discussion among hosts or the talent on your show?

6331 I'm just not quite sure how you would work this in and that is what I'm trying to get a handle on.

6332 MR. McGOWAN: You know, it's all of the above, because, as you put it when you say -- when you said "Guess what the mothers of Edmonton were doing on Mother's Day", that is the perspective of a 25 or 35-plus editorial voice. Nothing wrong with that. It is good to have that agenda on the issue in that way.

6333 What this radio station is going to do is have it spoken from the ground up. We won't have to go on the air and say "Guess what the moms did" because we will be saying "Hey, guess what, Tony Hawks demonstration team is here Sunday. It starts at 4:00. Bring a donation to the Food Bank. You gotta be there. These guys are amazing."

6334 And if you like skateboarding, and much of the demo does, or at least follows it if they don't do it, that is what we will do.

6335 COMMISSIONER LANGFORD: That is part of the spoken word?

6336 MR. McGOWAN: Part of spoken word, part of news coverage, part of sports coverage. It weaves its way through the station from the announcers to the sports and news reporters. That is, again if you will, the editorial voice of the station. It comes from the demo, not from above.

6337 MR. COWIE: Commissioner Langford, I asked that same question when we were building this format and what it is will be a group of young people talking to young people and listening to young people who are not now being heard. That will be in all surveillance possibilities. They will be discussing what is going on in shows, what is going on in music, what is going on in town.

6338 One of the examples that I thought Gary used in that discussion with me resonated very well. He said, you know, while everybody was talking about the success of the U.S. army in Iraq, there were 15,000 kids down the street demonstrating against it, but there was no coverage of that.

6339 We got into a long discussion about G8 conferences and all of that stuff to prove the point that all kids aren't anarchists. They have a point of view. These young people are going to be our leaders of the futures. This Echo generation will take over at some point in time.

6340 So we intend to offer an on ramp for what they have to say. We will do it through our Youth Advisory Committee. We will do it through our news department that will not be all hard news. It will give the basics, news, international, local, national news, but we will be available to talk to and our jocks will talk, our news directors will share on-air host positions.

6341 So that there will be a continuum of the discussion of the lifestyle of the youth in this marketplace from the time we sign on for the next number of years, as long as we can do it.

6342 COMMISSIONER LANGFORD: That is what I would like a little more on. Mostly what you told me, sir, was what was going in to your station and now I want a little more, as you said at the end, about what is coming out.

6343 All this stuff about the 15,000 demonstrators against Iraq, the skateboard demonstrations that were going on, the contributions to the Food Bank, and add any more elements that you want, all that goes into the radio and you have it coming out kind of in a discussion form.

6344 I am trying to get a sense of what I will hear when I turn that radio on in the sense of spoken word woven through this bunch of music selections.

6345 Is that a clear enough question?

6346 MR. COWIE: Yes, it is.

6347 You will hear an ongoing story of a very rich lifestyle of young people, what they are thinking. It will show up in newscasts, it will show up in jock talks with people who call in, or if the jock's call out.

6348 There certainly will be no holes in what is going on in the community for that age demographic group.

6349 COMMISSIONER LANGFORD: Is it just going to be what we used to call "happy talk" in --

6350 MR. COWIE: No.

6351 COMMISSIONER LANGFORD:  -- TV news where there is --

6352 MR. COWIE: No.

6353 COMMISSIONER LANGFORD:  -- a little banter between the hosts --

6354 MR. COWIE: No.

6355 COMMISSIONER LANGFORD:  -- between different views of the world being blown up by itself, or will it be, as you say, more prompted by phone calls or events?

6356 I'm just trying to get a sense of how much time between musical selections would be given to this kind of discussion of issues of interest to these people?

6357 MR. COWIE: You will certainly hear the essence about what they are thinking about in the various drive programs, and particularly the morning show setting up the day.

6358 These are very smart people. They know a lot more at their age than I certainly did when I was their age.

6359 COMMISSIONER LANGFORD: No, I'm not questioning their IQ levels, I am just trying to figure out what I am going to hear when I turn to your radio station.

6360 MR. COWIE: Commissioner, they want to be heard. We need, in this format, to provide that platform. It won't be in talk shows and it won't be in phone-in shows, it will be in a complete celebration of their lifestyle in both hard times and good times and what they are thinking. It will be intertwined with the music and it will show up in some of our special programs.

6361 COMMISSIONER LANGFORD: Will it be scripted or will it be impromptu?

6362 MR. COWIE: It may not necessarily be scripted, but it will be tipped off. In other words, we would hope that our advisory committee will be telling us on a regular basis what is going on. They will have access to our news manager and news announcers and we expect to hear from them things that we ought to be talking about on this radio station. That is the one way it will come to us and it will come out the other way.

6363 In the current program schedules we have been working on we have not built specific incidences of that into the program schedule, but we believe it will happen and it will be encouraged to happen on a regular basis.

6364 COMMISSIONER LANGFORD: How will the Internet work with this? Because you speak in your application of the using the Internet so that listeners can "talk to the programmers and provide `feedback'. I'm not entirely sure how you are going to interconnect that with what is essentially an audio experience.

6365 Is that just a way to collect information?

6366 MR. OLSTROM: It will be through chat discussions, it will be through the interaction where the listener can actually participate. The audience can participate with the radio station by sending e-mails, et cetera, about what is going on in the community.

6367 We think this is important to us. We want to know what JAM-FM is doing about it.

6368 Maybe I can turn to Gary for a moment for some anecdotal.

6369 MR. McGOWAN: Well, I don't know if I have an anecdote for this one, but I will say that certainly in referencing the youth demo, if you want to get hold of somebody the quickest way to do it is to send them an e-mail. That is not a small thing any more.

6370 I think the rest of the world is catching up with it, but this is the line of communication and it would be back and forth to the radio station, both in jocks quoting it, using it to poll, chat rooms, and we could cite lots of other particular examples.

6371 But I think the real point is, it is all in the perspective you come at it from. This is not an odd tool that we are saying "Oh gee, maybe we should figure out how to work the Internet.

6372 We are certainly excited about the growth potential in our Net platform. Certainly one of the exciting things is as bandwidth becomes more available and stuff, the prospects of making radio a little less non-linear are very exciting and relate very well to today's youth.

6373 The perspective, however, is what is important. It is not that the Internet is quirky or that any of these other issues are odd, it is just they need to be out there. With an announcing news staff that is both -- some of which will be in the demo and some of which will understand the demo, you are going to hear a very different type of radio station, both musically and perspective-wise than what you hear in the market today.

6374 COMMISSIONER LANGFORD: There is a certain irony, isn't there, because in a sense you are trying to wean this audience off the music they download from the Internet so they can come to your station and one of the tools to do it is to keep them on the Internet. I suppose they are not incompatible if you are clever.

6375 MR. McGOWAN: Well, I think now that they have shown us that the format exists, in part through the use of the Internet, it behooves us to respond to that.

6376 COMMISSIONER LANGFORD: And are you going to Web cast the signal right away or eventually? Do you have any plans in that area?

6377 MR. OLSTROM: Eventually, yes.

6378 COMMISSIONER LANGFORD: When you say "eventually". I'm not trying to tie you to something, but give me a sense of how long.

6379 MR. OLSTROM: Well, we have a Web site presently but we hope to stream soon. There is a significant cost to it and there are some other issues surrounding it, copyright, et cetera, that at some point in time.

6380 We hope to do it immediately with the launch of JAM-FM however. Because it is important in particular with this use demographic the Internet and computers are a part of their life. It would be vital to part of the radio station in particular in this format to be streaming the radio station.

6381 COMMISSIONER LANGFORD: With all the interaction you are talking about and the kind of energy levels you are talking about, it seems to me this is live programming. We are not talking voice tracking here, at least during the day.

6382 Can you give me a breakdown on what hours will be live, what hours might be automated in some way?

6383 MR. OLSTROM: We will be live 5:30 a.m. until midnight seven days a week -- sorry, 5:30 until midnight Monday through Friday, 6:00 to midnight Saturday, Sunday, and most likely -- and automated overnight between midnight and 6:00 or 5:30 a.m.

6384 COMMISSIONER LANGFORD: This automated, will it be exclusive to this station or will you be using tapes from another station in some way?

6385 MR. OLSTROM: No, it is all local programming.

6386 COMMISSIONER LANGFORD: Give me an idea of your staffing levels to get this thing up and running and maybe just two or three word descriptions of what everybody will be doing, if you don't mind.

6387 MR. OLSTROM: Not at all.

6388 We have 27 staff in total. There are 12 full-time in programming and four part-time; six sales, six general admin and one technical. There will a program director, production director, creative director, writer, host -- a.m. host, I'm sorry, morning show host; midday host; afternoon drive host; two evening swing announcers; a news director; two news staff and two part-time news staff. Sorry, I don't know if I mentioned, two part-time announcers as well.

6389 COMMISSIONER LANGFORD: What will the part-time ones do, just out of curiosity?

6390 MR. OLSTROM: Pardon?

6391 COMMISSIONER LANGFORD: What would you use a part-time announcer for, as opposed to a full-time announcer?

6392 MR. OLSTROM: Weekend fill in and fill in during the week.

6393 COMMISSIONER LANGFORD: Okay.

6394 When you get out and go to these clubs and whatnot, to these live events, how will that work? How will you do that exactly?

6395 Have I not got -- are you going out to some of the clubs? I may have you confused with someone else here. Under, let's see --

6396 MR. OLSTROM: Are you referring to the JAM-FM party show?

6397 COMMISSIONER LANGFORD: I think so. There are so many JAM shows here.

6398 MR. OLSTROM: Yes.

6399 COMMISSIONER LANGFORD: That is exactly what I am referring to, so thank you.

6400 MR. OLSTROM: That show was actually designed to be in-studio with hosts, guest hosts in the studio. There may be occasion where we will go out and do it live on location, however it is designed to be an in-studio. Create the atmosphere of a club on the air.

6401 COMMISSIONER LANGFORD: But you do say in your supplementary brief, as you did just now, "although there will be occasions when the show will move live into clubs."

6402 Just how will that work? Do you have to have a disk jockey in the studio at the same time as you have one at the club or do you --

6403 MR. OLSTROM: We would have an operator in the studio to operate the feed.

6404 COMMISSIONER LANGFORD: That won't be over and above the -- you don't need extra people over and above the 27 that you have spoken of?

6405 MR. OLSTROM: That may be an additional part-time staff or maybe one of the part-time staff already, or a full-time staff. For example, when it airs Friday nights it would be one of the full-time on-air announcers who would either operate it or host it and then we would have one of the part-time staff operating the show back at the studio.

6406 Not only that, we could do it via computer, remote control, which we presently do in Regina where we don't have a body in the control room at all. It is simply done via link with the laptop.

6407 COMMISSIONER LANGFORD: I have a little technological catching up to do it's clear. It's just when those skateboarders knock me off my walker I get all frazzled and I forget to go to my computer classes.

--- Laughter / Rires

6408 COMMISSIONER LANGFORD: Let's move along to Canadian Talent Development and before we get to specific questions I have one general one.

6409 You are talking about a very ambitious $2.254 million over seven years. But what I don't understand is: Why are you spending more in the years when you will be making less?

6410 You are spending more in the first five years than you are in years six and seven. It seems a little counter intuitive to me, but I'm sure there is a rationale to it.

6411 MR. COWIE: The rationale is that we want to upfront the establishment of this format in the marketplace and to reach out in as many ways as we can, including our Canadian Talent Development program, during that first five years of the licence. It just seems to us that we are better to get that done early than wait for it and reap the rewards perhaps later.

6412 COMMISSIONER LANGFORD: I see. So there is some station recognition in it as well I guess and some good will. Is that sort of the idea?

6413 MR. COWIE: Yes.

6414 COMMISSIONER LANGFORD: It makes sense to me.

6415 Your initiatives themselves, they seem fine overall. I don't have any huge questions about any particular initiative.

6416 But I do have some questions -- and you have heard these before if you have been sitting in the audience -- about how precisely you are going to ensure that some of the funds that you are making available make it to the talent and don't get swallowed up somehow in the administrative costs or in putting staging up for some kind of a show.

6417 Let me turn first to your JAM-FM Urban Expo and your JAM-FM Showcase Concert Series.

6418 I am just wondering, there is a considerable amount of money going to these series and I'm wondering who will administer the funds and precisely how do you guarantee -- how do you set this up so that you know it goes to Canadian talent rather than coffee and tea for the entertainers, or something like that?

6419 MR. OLSTROM: We have designed the CTD package so that all the monies go to the talent.

6420 I would like to have John Donnelly sort of run through that with you.

6421 MR. DONNELLY: Sure.

6422 We put a lot of thought and work into the program to try to make sure that the funds are going straight to the artists. Wherever we can, we want to make sure that the funds aren't being eaten up in administration costs or they aren't being eaten up in terms of staging.

6423 For example, the JAM-FM Urban Expo, the thought with this is that Harvard -- or JAM-FM will contribute $50,000 per year for the Urban Expo, but the way we actually are designing this program is that the Harvard's $50,000 is going to be used for artist fees, to get the headliners, to have the headliners come and perform in Edmonton. The thought being that we will have four --

6424 COMMISSIONER LANGFORD: I'm sorry, I just missed that. I didn't quite catch it all.

6425 Could you just go back and say precisely how you are going to focus that funding?

6426 MR. DONNELLY: What we are going to do with the JAM-FM Urban Expo is -- I guess the concept behind it is that in order to have a show you have to have a headliner. You have to have an artist.

6427 The thought with this one is that we want to actually book a good headliner, bring them into Edmonton and give them an opportunity to perform for the City of Edmonton.

6428 At the same time, we want to ask this headliner to conduct a workshop for us where we can invite the emerging artists within the community and the support acts who are playing on the event to actually get, for example, into a recording studio for a hands-on producer workshop.

6429 So this budget actually contemplates revenue from two sources: a $50,000 commitment that comes from the station which is used to bring the headliners to the city. So that money is going to the artist fees for the headliner to get them here, and for the support artists that we are going to plug in and have them perform.

6430 Beyond that, we are going to actually put them into performance venues where you work then with concert promoters, like Gary and myself, where we will actually sell tickets to the event and use the revenues from the ticket sales to cover the production costs.

6431 So the deal that is really struck between the station and the club promoter or the concert promoter who is running the show is: We, the radio station can give you this artist. We have paid for this artist. We want you to turn around and host this live concert performance for us. Your obligation, Mr. Promoter, is to give us the venue and pay for the sound and lights from the ticket sales.

6432 So it is an innovative approach that allows us to invest the money in the artist to bring the big name artist into the market and then create this great creative approach between the two of them.

6433 At the same time, it actually makes the program twice as big because we have put together a $50,000 investment into the Urban Expo, but when that is matched by the contribution from the local venue or the local promoter and the ticket sales, it really means the value of this program is $100,000 in the local market each year.

6434 COMMISSIONER LANGFORD: So you pay to have the headliner perform --

6435 MR. DONNELLY: Yes.

6436 COMMISSIONER LANGFORD:  -- and then part of that payment leads to workshops, DJ workshops, MC workshops, producer workshops with the headliner?

6437 MR. DONNELLY: That's right. So the obligation or the ask to the artist is: We would like to book you and bring you into Edmonton to perform this concert and we also would like you to participate in a station workshop.

6438 COMMISSIONER LANGFORD: So some of this money -- and I am not trying to be cute here or split hairs, but some of this money isn't to talent development, it is to a developed talent. I guess I am trying to figure out how much of the money is spent on having the developed talent talent develop.

6439 It is late in the day, but I think I got through that one.

--- Laughter / Rires

6440 MR. DONNELLY: That is very good.

6441 COMMISSIONER LANGFORD: In other words, how much is for the big "shoe" -- as Ed Sullivan used to say, and that will date me faster than anything else -- and how much is for this major talent working with those who need development in the workshops?

6442 MR. DONNELLY: In reality, if we do this with four shows and we look at -- the plan with this is to stick with 100 per cent Canadian talent. So this is an opportunity to have Canadian artists that are established, and some of them who may have records out already, and have them help emerging Canadian artists and local artists.

6443 So of the $50,000 we would use some of that money to book local artists and give them performance fees and make sure that they are involved. We would also have to -- for example, we have referenced Swollen Members a few times, but they are actually an ideal artist to use as an example because they are Canadian, they have a reputation now, they are ground breaking.

6444 The leader of the band runs a record label, Battle Axe Records. They do their own production. So you can actually get them out, have them perform, you are paying a Canadian artist to come and help -- we are still helping them to build their career.

6445 So if we are giving them a performance fee and bringing them into the market, we are still helping develop this artist and give them further exposure. At the same time we are creating this opportunity for an interaction between them and our emerging artists in a studio environment during a workshop environment.

6446 So we really think that we are creating a program that actually delivers a value to the system that is greater than the amount of our investment.

6447 COMMISSIONER LANGFORD: I don't want to sound like a Philadelphia lawyer here, but are you going have something encompassing all this in writing? Are you going to have an agreement with the Urban Expo that they will match your contribution and that workshops will be set up, or will you have your own person on-site to oversee this?

6448 How exactly do you administer it?

6449 MR. DONNELLY: Yes, exactly that. It is a combination of both.

6450 To pull off something like this, where you are actually having workshops, panel discussions and live performances, you need a team of people to do it. So the radio station promotional staff will contribute to that, outside promoters like Gary and Reds and our producers, they will come onboard and we will all work together to make sure that this event happens.

6451 We actually have the commitment from the station that if in one of the first years the ticket sales fell short of the target that we needed that the station would cover the difference to help make sure that this event succeeded, that all the bills were paid and we had a great reaction so we could in turn bring it back again next year and do it even bigger and better.

6452 COMMISSIONER LANGFORD: Making up shortfalls would be above and beyond the CTD commitment?

6453 MR. COWIE: That's correct, yes.

6454 COMMISSIONER LANGFORD: Thank you.

6455 MR. DONNELLY: I will note, in our deficiency letter that was filed, we did attach a budget for this particular event. So if you needed to refer to that you will see how it breaks down for the four shows and the workshops.

6456 COMMISSIONER LANGFORD: Budgets are one thing, but just precisely making sure that someone is following the money -- isn't that what the detectives say, "Follow the money" -- is quite another.

6457 If you are going to have something in place to do that, that certainly brings us the comfort.

6458 MR. COWIE: Well, Commissioner Langford, too, I think somewhere in John's answer that we may have missed was there will be a headliner but there will also be local acts who are up-and-coming acts and they will be paid for their performances. That comes out of the Harvard $50,000. That all goes to talent.

6459 COMMISSIONER LANGFORD: Okay.

6460 The $25,000 to FACTOR to support urban and modern rock. Has FACTOR agreed to that?

6461 We are veritably swimming in FACTOR letters this week, but I haven't seen one from you folks.

6462 MR. DONNELLY: We filed our first FACTOR letter when we filed the application or with the interventions.

6463 But we have been in touch with Heather Ostertag this week. We joined the list and --

6464 COMMISSIONER LANGFORD: She has become a speed typist.

6465 MR. DONNELLY: Yes, she has. So she actually did e-mail a letter to us and we can file it with the Commission later.

6466 But the request of FACTOR going back a year ago when we filed the application and first contacted them about it was: Would they allow us to direct the funds into the genres within which they are working and would they allow us to direct the funds into our local market and the answer to both questions was yes.

6467 So she said that they would direct 100 per cent of the funds into the modern rock and urban genres, into the existing programs that they already have working for those musical styles but earmarked for Edmonton artists.

6468 COMMISSIONER LANGFORD: Would you be able to file a copy of that e-mail with the Secretary by, say, end of day tomorrow?

6469 MR. DONNELLY: Yes.

6470 COMMISSIONER LANGFORD: We would be grateful for that.

6471 MR. DONNELLY: Yes.

6472 COMMISSIONER LANGFORD: Thank you very much.

6473 I am going to move along now to Canada Day concerts, $10,000 per year in years one to five.

6474 I gather that -- I shouldn't say "I gather", but what I am not sure of is JAM-FM putting on this concert or is this going to be a contribution to a third-party promoter in some way?

6475 MR. DONNELLY: The experience with that particular festival is that I co-produced the Canada Day Festival in Edmonton two years ago with the Canada Day Committee. So this is an existing committee that has been working for I think about 15 years.

6476 The Edmonton Canada Day celebrations, they have a group of 20 or 30 different ethnic groups and community groups. They have a variety of stages all over the city.

6477 So our offer to the Canada Day Committee was that we would provide a fund of $10,000 to them, on the condition that they use that fund to program additional local artists who would appear on one of the stages during the Canada Day celebration.

6478 Ideally we would try to direct them to one of the main stages on the legislature grounds, but when we get into the specifics we will work those things out.

6479 But the understanding with the co-chairs of the Canada Day Committee is that our funds will be used to program local artists, within the genres that JAM-FM is supporting, to perform on Canada Day.

6480 COMMISSIONER LANGFORD: Again -- I'm sorry to sound so sceptical, but that is our job -- do you have something in writing with the Canada Day organizers or is this kind of a handshake deal or you hope to have something in writing sometime?

6481 How is it going to work?

6482 MR. DONNELLY: The process we have had with them is a letter that went from us, initially outlining what our plan was, saying that we are applying for the application and asking if they would like to be a part of it and would they entertain our support.

6483 In exchange, they replied back: Yes, we accept this. We are pleased to accept your support.

6484 The initial letter is already filed with the Commission as part of our interventions, but we will have a specific agreement with each of the festivals that we support which will include clear direction. So we will actually contract this as part of our agreement. In exchange for this, they would have to commit to programming additional local artists for their event.

6485 COMMISSIONER LANGFORD: So eventually -- and perhaps you can work some sort of timing out with counsel, who is far pickier than I even -- we will want some comfort level on that, as I assume you will as well.

6486 Over 70 per cent of your proposals really are focused on organizations and festivals and we have no criticism with that whatsoever. We applaud it.

6487 But, on the other hand, we are comforted by agreements. Because one just never knows where this money goes: Does it go to the talent or does it go to, again, coffee and tea and setting up the stages and cleaning up the venue afterwards? We are very keen on it going to talent.

6488 MR. DONNELLY: We do have letters from each of these organizations that we received prior to filing the application confirming our support and confirming that they are interested in helping us and agree to accept our support. Then we will take it beyond that.

6489 A couple of the bigger ones, the Alberta Recording Industry Association -- and that Music Industry Travel Assistance Program, which is also one of the big platforms that we really believe is a solid idea and can really contribute greatly to the development of Canadian talent in this region -- so we do have a letter that I have here now and can file it with you --

6490 COMMISSIONER LANGFORD: Excellent.

6491 MR. DONNELLY:  -- which we signed with the Alberta Recording Industry Association prior to this proceeding so that we could give you some of that comfort level.

6492 But we have spoken to all the artistic directors and producers at each of our programs and are pleased with their acceptance and --

6493 COMMISSIONER LANGFORD: We are not questioning your bona fides or their bona fides in any way. I'm sure if you have been sitting in the audience you have heard these same questions put to every applicant to come here, it is just that we are terribly keen on making sure -- as I'm sure you are too, but we are terribly keen on seeing this thing as formalized as possible because obviously we don't want things to slip through the cracks and find out that you have all these good intentions, you have made the investment, you have done your part and somehow, by some administrative error, that it hasn't trickled down to the talent.

6494 For example, the last question I could ask you about the same thing, the $35,000 year one to five to the Western Canadian Music Alliance.

6495 Again, what insurances have you put in place to ensure that that doesn't cover day-to-day costs of the Alliance but actually goes to talent development?

6496 It is the last time I will ask you that question, but that is another example of how we are just a little uncertain of -- we are not in any way negative about your proposals, but we are a little uncertain about how you are going to focus this on the talent.

6497 MR. DONNELLY: Again, that will be through a contractual agreement that we will enter into with the producers.

6498 The Western Canadian Music Alliance, this is an alliance of the five industry associations representing Manitoba, Alberta, Saskatchewan, B.C. and the Yukon. So they have revised from Prairie Music Week and the Prairie Music Awards to create this new alliance. So we believe that one is very important and that there is representation from Edmonton on the board for the Western Canadian Music Alliance.

6499 In fact, our agreement with them now is that we will provide $35,000 into their overall operating fund. That helps fund a conference, a festival and an award show.

6500 But our understanding with them is that there will be equal emphasis given to Edmonton artists. So we want to make sure that our Edmonton artists are represented in the festival, that the Edmonton artists are nominated for the award show.

6501 So that one is really a contribution to the greater good of the western Canadian music industry and so we believe that one to be very important.

6502 To answer your question, though, we will contract that. Even in our negotiations we will treat it much like FACTOR does, where they will pay 50 per cent of the fee upfront and then once the event is delivered and the producer has come through and programmed the local artists and delivered the stage, then we can deliver the balance of funds based on the proof of performance.

6503 So I think that would be the approach we would take with our agreements to ensure that the people we are supporting are coming through and delivering.

6504 COMMISSIONER LANGFORD: That is very helpful. That is just the sort of information we are looking for.

6505 Just finally a general question that we ask all applicants, but if after we have reviewed this record and your entire file again, we have gone over it, and if, happily, you are selected as one of the new licensees in this market but we find something in your CTD expenses that we think perhaps is ineligible, will you be willing to redirect that money as an when required?

6506 MR. COWIE: Yes.

6507 COMMISSIONER LANGFORD: Thank you very much.

6508 Just a few more questions. We are almost done so you can smile again.

6509 Markets and revenues.

6510 You speak very eloquently -- and you did as well this morning -- about repatriating new listeners with your youth-focused format.

6511 But have you any sort of hard information, at least speculative information on what percentage of your audience will be made up of new listeners, I guess people who aren't listening to radio now or aren't much listening to radio now?

6512 MR. OLSTROM: If I could, I will turn to Debra McLaughlin to speak to that.

6513 MS McLAUGHLIN: Our expectation is not to drag people away entirely from the Internet but to encourage them to split their time by providing not only the music that they are downloading and they are listening to, but also the spoken word that they can't get the local content.

6514 So we have conservatively estimated that we will increase the tuning in the younger demographics by about 15 per cent.

6515 Of our audience, I would have to do those --

6516 COMMISSIONER LANGFORD: How do you get that number? Is it just a guess?

6517 MS McLAUGHLIN: No, it is not a guess. It is a series of calculations. It is based on their average hours tuned.

6518 Unfortunately, for this type of information our best and really only source is BBM. They do measure Internet, not hours tuned but exposure to Internet, access to it. We can see, for example, one of the new most frequently reported radio stations, which isn't a radio station, is called Internet in the BBM reports and we can track and see what that growth is.

6519 My conversations with BBM leads me to believe that in order to qualify under that Internet banner in terms of radio recording, the audience, is that you actually have to say you listen to an Internet radio station and they record it.

6520 So we looked at those numbers. It is not scientific, it is what we can reasonably do.

6521 We expect them to continue to chat, we expect them to continue to surf, we just want them and expect them, in some degrees, starting small and growing as the excitement around the station grows, to also be tuning in to us.

6522 COMMISSIONER LANGFORD: When do you expect the peak times to be? Will it be the same as for every other radio station? Some of these people are quite young, they are in school -- I hope, sometimes -- when they are not hanging around the malls.

6523 When will the peak times be for this particular demographic? Is it any different than regular working stiffs like us?

6524 MS McLAUGHLIN: I'm sorry, I wasn't sure who was going to answer that, but back to me.

6525 Actually, I was surprised in the youth scan study that we looked at, they actually measured media usage over a variety of media. Surprisingly to me, youth do listen to radio stations in the morning. They, like all of us, need to know what the weather is while they decide what they are going to wear, and they, like us, like to know what the headlines are. So there is some bulk in the listening in the morning.

6526 I would expect it would be lighter after school. It wouldn't pick up in a drive time because they are engaged in post-curricular activities and they work, as we have found out.

6527 But we do expect an abnormal tuning, at least compared to the average, in the evening and on weekends when they are both available to listen to radio and television isn't delivering what they want to watch.

6528 COMMISSIONER LANGFORD: Drive home is a big time for most radio stations, so if the key younger party or demographic is off knocking geriatrics like me out of their walking frames at that time rather than at home listening -- or in their cars which they don't own, listening -- will you tweak the format at that time of the day to try to push it up to sort of 30-year demographic? Can you tune it that finely?

6529 MR. OLSTROM: Not at all. The format has been designed to be balanced throughout the course of the day and what you hear in the morning will probably -- it may get picked up a little bit in terms of some of the day-parting and things like that that does happen generally in radio programming, but for the most part this format is going to be straight across the board 24 hours a day, seven days a week.

6530 COMMISSIONER LANGFORD: Do you have any hard data on the spending power? You talked about them being young and affluent and a very attractive market to advertisers, but do you have hard data to back that kind of sense up?

6531 MR. OLSTROM: Yes, we do.

6532 Debra.

6533 MS McLAUGHLIN: Yes, we do. I would refer you to -- as soon as I can find it -- the youth scan data that we used to determine the value of this market.

6534 It is somewhat dated now, but I would suggest that the data is still appropriate, at least in terms of a benchmark.

6535 From the January 2002 TranScan we found that $19.1 billion represents the disposal income. They average $107 per week per teen in Canada in disposable income. Nineteen per cent of the 3.3 million teens in Canada receive two-thirds of all allowance dollars. It takes only 439 of these super coddled teens to receive $1 million in allowance over a school year.

6536 Half of Canada teens are working after school and 16 per cent of the working teens account for 68 per cent of all earning. This translates into 528,000 teens making a total of $4.7 billion or $8,900 per teen. I think by anybody's guess, if you don't have the expense of a household, if you don't have the expense of an automobile or paying for your education, that is a pretty high disposable income.

6537 COMMISSIONER LANGFORD: I can't let this transcript fall into the hands of my children.

--- Laughter / Rires

6538 COMMISSIONER LANGFORD: I have a couple of quickies.

6539 You say you are going to draw 35 per cent of your revenues from the existing radio market. We have heard that kind of message here before so it is not astounding, but how did you calculate it?

6540 Where are you drawing it from? What do you base this number on? Is it just experience?

6541 MR. OLSTROM: Debra. Poor old Debra.

6542 MS McLAUGHLIN: Hi.

6543 MR. OLSTROM: Hi.

6544 MS McLAUGHLIN: I have some experience obviously, having worked with MTV to help develop their sales, so I know that in fact our estimate -- and the key part of this is that 65 per cent will be new revenues.

6545 I have spent a great deal of time talking to advertisers, people like Ann Burton from the Hudson Bay Company, who told me that they have a whole line of products and a true interest in reaching the youth market and they feel radio is still the best medium with which to reach them. The problem is, across Canada there isn't sufficient radio stations to develop a campaign.

6546 So when I put it together on who can advertise nationally, who would be interested, looked at some of the letters of support -- and I believe there were over 100 filed by advertisers in support of this application suggesting that they can't get to the youth market in Edmonton -- plus looked at just the true efficiencies on the station -- we heard earlier in these proceedings that 18 to 49 and then 25 to 54 year olds are the key demographics that are being purchased, well, that is no different whether it is television or it is radio, those are the key demographics.

6547 So we looked at what the radio stations in this market were delivering. We found that, yes, there is a lot of tuning. I believe Mr. Yigit referred to it as default tuning and I would classify it as that too. But the real efficiencies happen in these other more popular, more frequently purchased demographics.

6548 So 35 per cent represents what we feel would be the shift in share. The share that we are taking is from lower demographics that they don't typically sell on -- not to say they don't get some accounts, because if you are a skateboard shop of if you are a movie release you need to be in this market so you will buy inefficiently.

6549 We estimated that to be about 35 per cent.

6550 COMMISSIONER LANGFORD: Finally, on market and revenues, almost everyone here today and last week has indicated that Edmonton is a strong market and everyone seems to have faith.

6551 In your view, is it strong enough to support more than one entrant?

6552 In answering that I would be grateful if you could extend the answer from a simple yes or no.

6553 Assuming it is yes, does format matter?

6554 In other words, Madam Wylie pushed the former applicant into saying what would you be most comfortable being licensed with and perhaps I wouldn't mind pushing you in that direction as well.

6555 MR. COWIE: If I may respond to that.

6556 The market is very strong and is likely to be over the next 10 years, as is all of Alberta for that matter. We think there is probably room for more than one licence as a result of this hearing. We would expect that the Aboriginal peoples' radio would be one of those.

6557 If there was an intention by the Commission to licence two in the youth demographic area that our application sits, we would hope that that would not be an urban station.

6558 We believe what is going on there is that the urban stations in the United States, and to some degree in Canada, have come into the market very well. It appears they have plateaued. I am just afraid that because it is a very narrow format that it might have to consider format change which would tend to push it towards what we are doing.

6559 So beyond that, we think there is a very strong youth opportunity here in this younger demographic and we think the format that we propose sits nicely in there and the --

6560 COMMISSIONER LANGFORD: Is it fair --

6561 MR. COWIE: I'm sorry, go ahead.

6562 COMMISSIONER LANGFORD: I interpreted you, I apologize.

6563 Is it fair to assume, then, that you would be completely comfortable if you and AVR were licensed and the third licensee were some station appealing to the older demographic, easy listening -- what do they call it, soft jazz or something? I have lost it today -- smooth jazz.

6564 MR. COWIE: That would be our first preference, yes.

6565 COMMISSIONER LANGFORD: That would be your first preference.

6566 Finally, in technical matters.

6567 You have applied for 91.7 and so have at least, I think, four others. I assume, like everyone else, you have looked at other frequencies and there are some available. If we were to give 91.7 to one of the other applicants and ask you to choose another, are you confident you could find one that would not affect your business plan?

6568 MR. OLSTROM: Yes, we are. There are three others available that we feel would not delay or add additional cost.

6569 COMMISSIONER LANGFORD: Thank you.

6570 Those are my questions, Madam Chair. There may be others.

6571 THE CHAIRPERSON: Commissioner Cram.

6572 COMMISSIONER CRAM: I just had one question.

6573 Mr. Donnelly, you were talking about the Canada Day concerts and you went past the word very quickly that the money would be incremental -- that seems to be my term for this hearing -- in terms of that it would be additional monies for an additional artist for Canada Day.

6574 Is that the concept?

6575 MR. DONNELLY: That's right. The Canada Day Committee has their set budget for the year so if we come in as a new station in the market and bring them some additional funds, then we are adding to what they already have.

6576 Our understanding with them is that they already have stages with sound systems in place. What we can do is give them some additional programming, so we can extend the hours. So instead of having a stage just run from noon to 5:00, we could give them a program that takes them from five o'clock to eight o'clock.

6577 So the plan for that is that our money is over and above what they are already operating with and ideally is not directed to any infrastructure costs or any marketing costs because those are already covered.

6578 COMMISSIONER CRAM: But it is for incremental programming?

6579 MR. DONNELLY: Yes.

6580 COMMISSIONER CRAM: Okay. Thank you.

6581 Thank you, Madam Chair.

6582 In many of our applications we get demand studies prepared by consultants who, after the hearing, move on to another client and you, Mr. Cowie, Mr. Hill, Mr. Olstrom, and your colleagues or whoever you hire will actually program the station.

6583 I would like to hear from you what weight, especially in this day of Internet and other ability to get music, what weight we should give to these demand studies that, except for asking "What station do you listen to", are based on very discrete pieces: Which artist do you like? Do you like this music or not?

6584 What weight would you give to the ability of radio broadcasters to appeal by creating a sound -- which is what we used to hear in earlier years. We don't hear much about it any more.

6585 But if you want to get youth back to radio, isn't at least a high percentage dependent on the banter, the continuity, the approach, the attitude, the subject you choose for spoken word, the links between the music? Isn't that what becomes appealing?

6586 Because the individual discrete pieces, yes, you can identify them, so many like this artist and that artist, and they are on this chart and that chart. But radio is different from these other means now of getting music and it is: Do I like to have this in a ubiquitous manner, in my bedroom, in my world, in my car? And 24 year olds do have cars.

6587 So I would like to hear you. You are the broadcasters, you are going to program this station. What is the importance of that compared to tests that say: Well, I showed them these records, they liked them, these pieces, these CDs, this concert?

6588 Is that what radio is about?

6589 MR. COWIE: No. Radio is about what you are talking about.

6590 THE CHAIRPERSON: Of course a lot of these things are difficult to gauge. You have to see what you hear and do.

6591 The planners of this radio station seem to know what they are going to do and who they are going to appeal to, but is there a percentage you would attribute to that total compared to the CDs, the particular pieces of music?

6592 MR. COWIE: Well, let me go to the beginning of where we got started here.

6593 We first looked at -- before we had any research done we looked at the market, suspected what the hole was here and were convinced, from first of all talking to Gary and to John Donnelly, who worked the market, who worked the youth radio market, and so on, that they believed that there was an opportunity here. More importantly, there was a hole that was not being well served by the stations in the market.

6594 It was only after that that we got research that convinced us about the disaffection of this group with mainstream radio, that there is a real danger of losing them forever.

6595 Some of the sociologist's studies that have been done came after as well. All of those things did no more than consolidate our thinking from the beginning that this was where radio ought to be licensed to operate in this market to achieve its highest level of success.

6596 For all purposes, your purposes in the Canadian broadcasting system, ours as a broadcaster and a business.

6597 So we went from there and we asked the questions. That did nothing more than prove where we started.

6598 But we know this: If we don't walk the walk and talk the talk and reflect the lifestyle of this group, they won't listen to us, no matter how good the music is.

6599 So music is part of it. It is the foundation of it. Children -- call them children.

6600 Young people identify with music. It changes through their life. It is part of their peer changes. They change from parent periods to music, and that is how they begin to identify themselves as they grow through the teenage years, and so on.

6601 We look at our staff here as one group that has one common purpose, the news people, the on-air staff, our Youth Advisory Group, the Internet, all of that is to create a place where youth can be heard and can express themselves about lifestyles.

6602 This is anecdotal, but very short. I have a granddaughter in Winnipeg. She is 16 years old. Her main job in life, according to her, is to keep me on the same planet that she is on. And she is on a different planet.

6603 THE CHAIRPERSON: I she the one with $5,600 to spend?

--- Laughter / Rires

6604 MR. COWIE: Probably. Shhh.

6605 But it is very, very important that we listen, and as broadcasters we will listen.

6606 The station will be managed and operated by a very young group of people, people in that age demographic. I am not going to try to run a radio station and talk to these folks on a regular basis because they won't understand me and I won't understand them.

6607 I understand community service, I understand building a broadcasting opportunity that will serve a segment of our population. I will do that, but everybody else will be a part of a team. Our advisory committee will be an extension of that family and we will all be doing the same things, we will be giving youth in this market a place to be where they can be happy with the radio broadcasting system and be a part of it.

6608 I hope some of the people who will be in our Youth Advisory Committee will be back here -- if we are so fortunate -- seven years from now sitting at this table applying for an extension of the licence.

6609 But more importantly, I hope that we will be able to entice more young people into broadcasting through mentoring programs and just letting them be a part of what we do.

6610 So this station will be, in many ways, effectively operated by this whole group as a family group with one main target in mind, and that is dealing with this void in the market and what they have said they want.

6611 That is our mission as broadcasters and with your help we will carry it out.

6612 THE CHAIRPERSON: Thank you.

6613 We have no further questions, so we will give you or your colleagues the usual five minutes or less to tell us why you should get a licence.

6614 MR. COWIE: Well, thank you.

6615 I will just do some of the technical reasons that I think you ought to do this and then I would like you to hear Paul Hill, who has been very silent and very patient through this process today, to tell you a little bit about their commitment as a family business in western Canada and their history here in this, their 100th year of being in business in the Northwest Territories and the rest of Canada and Saskatchewan.

6616 Madam Chair, we believe that Harvard should be licensed for the following principal reasons.

6617 JAM-FM's format is unique to the Edmonton market and is sustainable in the long term. As such, it represents the best use of the frequency.

6618 Our target demographic is very underserved. JAM-FM will bring the youth market back to radio by providing contents that meets their unique needs.

6619 By targeting the youth market, JAM-FM will have minimal impact on existing services. None of the incumbent radio stations have as their core demographic the 12 to 24 age group.

6620 The Edmonton radio market can absorb a new player. PBIT margins among the incumbent FM stations are currently in the 33 per cent range. This is one of the strongest radio markets in the country and it has tremendous growth potential.

6621 Our CTD package is ground breaking and of direct benefit to Alberta artists. JAM-FM's CTDs are locally focused and administered and will give artists access to new funding and a fresh perspective.

6622 In order to have diversity in voices, there has to be diversity in ownership. Approval of Harvard's application will increase the diversity of ownership in the Edmonton radio market.

6623 Radio in Edmonton is currently dominated by large multi-station groups and more have applied in this proceeding. Harvard Broadcasting is a regional prairie broadcaster. Licensing JAM-FM would allow Harvard to move into a market that is a perfect fit and provides us with the opportunity to expand our broadcasting business into a region which shares our western perspective.

6624 Access to the Edmonton market will also strengthen our broadcasting business as a whole, helping to balance the challenges we face in the smaller, less profitable Regina market.

6625 Harvard is an experienced broadcaster that operates in one of the least advantaged and intensely competitive markets in the country. We know how to operate efficiently and are used to competing with large, multi-station groups. If licensed, we will provide a sustainable long-term radio service in the Edmonton market.

6626 MR. HILL: Thank you, Bruce.

6627 Madam Chairperson, distinguished Commissioners, we believe we have a proven track record in broadcasting for over 27 years. We are committed to the communities in which we operate. We know and believe that western Canada needs local ownership and local perspectives.

6628 We have seen our competitors expand regionally and nationally, to the point where we now believe that a larger economic unit for us is critical to our ability to compete and remain economically viable. Our family have been doing business in this region for 100 years as part of the original Northwest Territories, and specifically we have been doing business in Edmonton for over 50 years.

6629 We need to balance our business by becoming a regional player. We need to balance our low-growth area to higher growth areas in Alberta and other parts of western Canada.

6630 We are dedicated to bringing our experience and our 100-year history and our 27 years in broadcasting to the youth market of Edmonton and to expand their radio experience.

6631 We love the radio business. We are not interested in becoming a victim of consolidation. It is our ambition to create an economically viable regional presence.

6632 We ask the Commission to award this licence based on its merits. We have a strong, knowledgeable and able team who would be honoured to bring an exciting happening to the youth market of Edmonton.

6633 Thank you.

6634 THE CHAIRPERSON: Thank you, Mr. Cowie and your colleagues for your cooperation.

6635 We will take a 10-minute break and then hear the presentation by CKMW and proceed to questions in the morning.

6636 Thank you.

6637 We will see you again at the next phase.

--- Upon recessing at 1800 / Suspension à 1800

--- Upon resuming at 1815 / Reprise à 1815

6638 THE CHAIRPERSON: Order, please.

6639 Mr. Secretary, please.

PRESENTATION / PRÉSENTATION

6640 MR. LeBEL: Thank you, Madam Chair.

6641 The next application is by CKMW Radio Limited for a licence to operate an English-language commercial FM radio station in Edmonton.

6642 The new station would operate on frequency 91.7 MHz (channel 219C1) with an effective radiated power of 100,000 watts.

6643 Mr. Bill Evanov will introduce the panel.

6644 You have 20 minutes to make your presentation.

6645 MR. EVANOV: Good afternoon, Madam Chairperson, Members of the Commission, and staff.

6646 My name is Bill Evanov and I am the principal owner of CKMW Radio Limited.

6647 Once again we are pleased to appear before you and I would like to introduce my panel.

6648 To my left is Carmela Laurignano, Vice-President, Radio Group Manager.

6649 To her left is Scott Fox, our Music Director.

6650 To my right is Ky Joseph, Group Vice-President of Sales.

6651 To her right is Jim Bagshaw, a shareholder and General Manager of our new station, the Beat, and former President and CEO of WIC Television Alberta.

6652 In the second row, from your far right is Spence Diamonds, Director of DJ Spinners and a performer on the national stage.

6653 Beside him, Ed LaBuick, a shareholder, Director and Chair of our CTD Music Committee.

6654 Paula Anderson, Retail Sales Manager and former Territory Manager, Edmonton for Quality Music.

6655 Next to Paula is Edmonton's Peter Gregg, our Operations Manager.

6656 To the far right is Bruce Hammond, News and Community Affairs Director.

6657 Ed, Paula, Peter, Bruce are all Edmonton residents.

6658 On the side table, from your far right is Glen Suart, our Market Research Consultant; Mike Yasinski, owner of several large entertainment venues in Edmonton; Tony Young, know to many as Master T from his years at MuchMusic. Finally, to your far left is Stuart Robertson, our legal counsel.

6659 Ladies and gentlemen, in the next few minutes you will hear that: Edmonton is a strong and a financially stable market. Edmonton is a youth market, but with no station targeting youth effectively. Edmonton would be best served by the licensing of an urban dance format, and that a solid, well though out business plan, backed by a strong, committed and experienced broadcast team, will allow CKMW to deliver on all its promises.

6660 We are asking for a licence to operate an urban dance radio station called the "Beat". We have an experienced team with tremendous depth in both managerial and programming talent.

6661 On four previous occasions our team stepped into radio stations that were badly failing and turned them into major success stories. Essentially, we have become really good at rebuilding stations and solving broadcast problems.

6662 Currently we operate three stations in the Toronto CMA, CIAO -- C-I-A-O -- AM 530, serving the ethnic community of Brampton since 1984; CIDC-FM, Orangeville since 1995; and CKDX-FM Newmarket since 2001. Each is now a successful and self-sustaining business.

6663 We have also had 12 years experience specifically serving a youth demographic, initially with a dance CHR on CING-FM -- C-I-N-G FM -- in Burlington, until it was sold by a majority of the shareholders to Shaw, and then building a very successful CHR dance format on CIDC-FM. This despite a very intense three-year battle with some of Canada's largest broadcasters.

6664 In fact, our CHR format at CIDC-FM has outlasted the fierce and collective onslaught of three Corus Energy signals, stations, and Rogers KISS-FM in the Toronto CMA. They have now abandoned their formats and their listeners for the next format of the month, while we have stayed the course. We remain consistent and continue to serve our listeners.

6665 It wasn't luck. We design our format and then commit to it. We have modest and effective business plans that are designed to succeed. We know that when a business is designed to be viable, it can keep its promises.

6666 As shown on Chart 2, our programming formula is very clear. It is based on feedback from the street, the clubs, the DJ spinners and direct dialogue with our listeners.

6667 We are accessible, accessible to our listeners and the music industry. That is what radio is all about. That is how we provide a service to the community. Our competitors operate differently.

6668 We have the strength and experience to expand. Our staff has deep managerial and programming talent. CKMW Radio has a long-term corporate plan to take youth programming to places in Canada that are not adequately served. We do programming for youth very well, and we do it successfully in Canada's biggest market, against the biggest competitors.

6669 We are here to stay. We are tenacious. We are dedicated to the formats we develop. We are faithful to our audience.

6670 In Edmonton, we see an opportunity to solve another major problem, in this case repatriating Edmonton youth to radio from the Internet, from in-car CDs and from the numerous dance clubs.

6671 MR. BAGSHAW: Let's talk about Edmonton.

6672 Edmonton is a youth market. The medium average age is 35, as compared to almost 38 in the rest of the country. The real average age for the market is even lower when you factor in the number of students at the universities and colleges who come from out of town.

6673 In 1998, according to BBM, adults 12 to 24 in Edmonton listened to radio about 18 hours a week. By 2002 that number went down to 12.8 hours, a decline of a whopping 28 per cent.

6674 By comparison, Toronto, market stations targeting youth, the decline was just 9 per cent.

6675 Edmonton radio stations are ignoring the youth market, and ignoring them at their own peril. Our research shows that musically the void is with urban and dance, two genres of music not played on Edmonton radio, but two genres that have a natural affinity to each other. Hence, the Beat.

6676 When reps from major and independent record labels bring new urban and dance music releases to Edmonton, they can't even get in the door of most Edmonton radio stations. So now the reps have turned to a substitute radio, the DJ record pools and the numerous dance clubs.

6677 Consider this, although Edmonton is the sixth largest market in Canada, yet it is the second or third biggest market for dance music in the country. It is not because of Edmonton radio, but rather in spite of it. It is the DJ record pools and the dance clubs who are introducing and breaking new international and Canadian urban dance music, not the radio stations.

6678 So without local radio airplay, the Edmonton market has created its own substitute radio. Substitute radio is what it implies. Edmonton youth has given up on the existing stations playing what they want to hear. Instead, they have developed a substitute way of finding the music they like. Exposure to new dance and urban music comes not from the radio station, but through the DJ record pools and the network of dance clubs where DJs spin and play the music of youth that they want to hear.

6679 It is now a substitute radio that is serviced by the record reps. In Edmonton there are almost 250,000 young adults aged 18 to 34, 96 per cent of whom attend bars and nightclubs 25 times or more each year. That's right, 96 per cent. This is the market that fills dance clubs and this is the market that needs an urban and dance music station.

6680 MR. FOX: As our findings indicate, there is economic and vibrant life in Edmonton. Our approach was well thought out.

6681 First, we looked at the age demographics and realized the big void was youth. Therefore, there was no real point in going after older skewing formats like oldies, jazz or easy listening. With those formats, all you would be doing is stealing revenues and audience from existing stations while not solving the problem in the market. Radio stations are not playing what youth wants to hear and the youth is turning away in large numbers.

6682 Second, we looked at what is already in the market. One portion of the youth likes rock, but there are already three rock stations. Clearly, there is no point in adding another one.

6683 Third, what do youth want that they don't have? Our research told us urban and dance. Urban, which includes hip-hop and R&B is a pretty easy choice. It is one of the most popular genres of music today.

6684 Two other applicants also chose to broadcast urban music but, unlike others, we mixed urban with dance.

6685 Why urban dance? Why not urban rock or urban jazz or urban classical or even just plain urban? Because dance is uniquely compatible with urban and because Edmonton is the number two dance market in Canada, and because all of our research told us so.

6686 Combining rock with urban would not work for two reasons: Rock is already well served in the market and, more importantly, it does not blend well with urban. You don't see any clubs advertising urban and rock, but you do see clubs advertising urban and dance. All rhythmic CD compilations are urban and dance, never urban and rock.

6687 Going totally urban isn't the answer either, because this format will not attract sufficient audience to support a viable business plan.

6688 Our findings also showed that while urban is the most popular music among the under 25 age demographic, few prefer this music exclusively.

6689 As programmers, we recognized that if we blended urban with dance we would be able to reach a majority of the youth who wants music above and beyond the "just" urban. Dance and urban music are compatible. They are a natural extension of each other. They can be successfully programmed. Dance music brings the added benefit of being attractive to the top end of the demo, which in turn will allow the Beat to reach even more listeners.

6690 Dance music is close to our hearts. We have been programming it for more than 10 years. We know from experience this programming will attract new advertisers who will sustain our business plan.

6691 We know a blend of urban and dance makes the Beat attractive to many more people and specifically fills the void in the 12 to 34 market.

6692 Also, urban plus dance offers a much larger pool of Canadian Talent. We at CIDC provide more first-time airplay for Canadian artists and play more uncharted music than any other radio station in our market. We will do the same in Edmonton with the Beat.

6693 Also, there is a new reality of Canadian performers, the DJ spinners, who put together urban and dance music in a way that attracts large young audiences to the clubs. The Beat will bring back to radio the DJ spinners, urban and dance music and large youth audiences.

6694 We don't follow the billboard charts. With listener feedback and airplay, we create our own charts.

6695 Listen to how the Beat will sound. The first two selections you are about to hear are dance music, followed by an R&B track and a hip-hop track, then ending with a dance hit. This is just a sample of how well urban and dance music blend together.

--- Audio clip / Clip audio

6696 MR. FOX: If we could fade that out now. Thank you.

6697 Those aren't necessarily songs that would be on our daily playlist, but they are familiar songs that we think show how well urban and dance music blend together.

6698 MR. BAGSHAW: The Beat business plan is thorough and well thought out. The plan was built from the ground up. We didn't write the plan in an office building, we wrote it while walking the streets of Edmonton, while going to the clubs in Edmonton, while talking to Edmonton youth and talking to Edmonton advertisers.

6699 We have a full slate of Edmontonians to manage the station. I will be the General Manager; Peter Gregg will be our Operations Manager; Ed LaBuick will chair our CTD Music Committee; Paula Anderson will be our Retail Sales Manager; and Bruce Hammond, a well-known radio personality in the Edmonton market for over 20 years, will be our News and Community Affairs Director.

6700 The Beat will have a minimal revenue impact on existing stations in the market. Only 25 per cent of our revenues will come from existing broadcasters. The other 75 per cent will come from new business and other media. The 25 per cent impact on existing stations represents less than 1 per cent of the total Edmonton radio advertising dollars.

6701 Our business plan is realistic and based on three calculation formulas developed over the past 20 years (top down, bottom up and street calculations).

6702 We have the financial resources to see it through and this format has a proven history of being viable. Edmonton needs a strong, independent player to make it happen.

6703 MR. LaBUICK: We have submitted an aggressive CTD plan for $1 million, but in reality our value is much more than that.

6704 We have sought and secured strategic partners who have committed additional funds to our Canadian Talent initiatives.

6705 One of the principal initiatives is to create an annual compilation CD of original urban and dance music. Homestead Recorders Ltd. is sate-of-the-art recording/production studio located at 118th Avenue in Edmonton. Koch Entertainment is Canada's largest independent distributor and has won Distributor of the Year for the last seven years. These two companies are our strategic partners in the CD initiative.

6706 We have been able to leverage our commitment to yield real, effective, long-term benefits to ensure that good urban and dance talent develops and prevails. We will not be satisfied just pressing a CD and leaving it on the shelf, which too often happens with radio stations. For us, it requires seeking excellent talent, professional recordings, national and international distribution, marketing of the product and the artist.

6707 We know that the key to this success is to have everyone involved and have them financially invested in our CD and then together we will make it a success.

6708 As you can see from the chart, we take the funds that are earmarked for the Beat CD, which total $320,000 over the term of the licence. We have leveraged another $175,000 each from our other two partners.

6709 The Standard Club, Edmonton's newest nightclub located at 104th Street, has agreed to invest $105,000 over the seven years for staging, light and sound for our DJ Talent Search.

6710 The total commitment from our strategic partners is $455,000.

6711 While these are not the Beat's commitments, they are the testament to the effectiveness of our strategy to promote and sell Canadian talent.

6712 You will note that in our CTD plan there are committed funds, but as yet unspecified as initiatives, which we intend to leverage as we do with the CD and DJ projects. We expect the station will get established on our format and we will bring significant benefits from other partners as well.

6713 In addition, when you compare apples to apples, if you count in our operating budgets, where others include it in their CTD coordinator as part of the Web site, then our total commitment has enhanced by an additional $525,000 over the term of the licence.

6714 The Beat is absolutely committed to develop Canadian talent. That is Bill's expertise and mine. We have identified 289 aspiring hip-hop artists across the country, 14 of whom are from Alberta, with six from Edmonton alone.

6715 Today several of the applicants talked about a group called the War Party. We made several trips to Edmonton in the last year. We have gotten to know the War Party. The others talk about them, we are going to play them. They are here with us today to give us a sample of what we call hip-hip. They can't get radio play in Edmonton, but they are here to perform for us today.

6716 Ladies and gentlemen, the War Party.

--- Performance / Représentation

--- Applause / Applaudissements

6717 MR. EVANOV: Commissioners, all the applicants mentioned War Party today, the CHUM application did, Milestone, as did Harvard and ourselves. We didn't want you to go to bed tonight without seeing War Party.

--- Laughter / Rires

6718 MR. EVANOV: Anyway, that is our presentation.

6719 Thank you.

6720 THE CHAIRPERSON: Thank you, Mr. Evanov and your colleague, and the War Party.

6721 It is a good thing it wasn't tomorrow morning at 9:00.

6722 We thank you for accommodating the change in our schedule, but we will be bright-eyed and bushy-tailed in the morning to hear you and discuss the details of your proposal.

6723 Good night to all.

6724 Are you performing tonight?

6725 Well, thank you for coming.

6726 We will now adjourn until tomorrow morning at nine.

--- Whereupon the hearing adjourned at 1840, to resume

on Tuesday, June 24, 2003 at 0900 / L'audience

est ajournée à 1840, pour reprendre le mardi

Date de modification :

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