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Toutefois, la publication susmentionnée est un compte rendu textuel des délibérations et, en tant que tel, est transcrite dans l'une ou l'autre des deux langues officielles, compte tenu de la langue utilisée par le participant à l'audience.
TRANSCRIPT
OF PROCEEDINGS BEFORE
THE
CANADIAN RADIO‑TELEVISION AND
TELECOMMUNICATIONS
COMMISSION
TRANSCRIPTION
DES AUDIENCES AVANT
CONSEIL
DE LA RADIODIFFUSION
ET DES
TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT:
VARIOUS BROADCAST APPLICATIONS /
PLUSIEURS DEMANDES EN RADIODIFFUSION
HELD AT: TENUE À:
Fairmont Hotel Vancouver Fairmont Hotel Vancouver
900 West Georgia Street 900, rue Georgia O.
Vancouver, British Columbia Vancouver (C.-B.)
March 3, 2005 Le
3 mars 2005
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
BROADCAST APPLICATIONS /
PLUSIEURS
DEMANDES EN RADIODIFFUSION
BEFORE / DEVANT:
Charles Dalfen Chairperson
/ Président
Andrée Wylie Commissioner
/ Conseillère
Ronald Williams Commissioner
/ Conseillier
Joan Pennefather Commissioner / Conseillère
Stuart Langford Commissioner
/ Conseillier
ALSO PRESENT / AUSSI PRÉSENTS:
Pierre Lebel Secretary / Secrétaire
Alistair Stewart Legal Counsel /
Conseillers juridiques
Joe Aguiar Hearing
Manager /
Gérant de l'audience
HELD AT: TENUE
À:
Fairmont Hotel Vancouver Fairmont Hotel Vancouver
900 West Georgia Street 900, rue Georgia O.
Vancouver, British Columbia Vancouver (C.-B.)
March 3, 2005 Le
3 mars 2005
TABLE DES
MATIÈRES / TABLE OF CONTENTS
PAGE /
PARA
PHASE I
PRESENTATION BY / PRÉSENTATION PAR:
Rogers Broadcasting Limited 929 / 5640
PHASE II
INTERVENTION BY / INTERVENTION PAR:
Multivan Broadcast 1084 / 6716
Dr. John Burns 1110
/ 6859
Irene Chu 1116
/ 6910
Reginald W. Bibby 1119 / 6930
Darrell Peregrym 1128 / 6978
Aboriginal Peoples Television Network 1134 / 7010
Global Television Network 1141 / 7052
CHUM Limited 1149
/ 7092
PHASE III
REPLY BY / RÉPLIQUE PAR:
Rogers Broadcasting Limited 1164 / 7174
PHASE I
PRESENTATION BY / PRÉSENTATION PAR:
Standard Radio Inc. 1181 / 7288
Evanov Radio Group Inc. 1244 / 7687
Vancouver,
B.C. / Vancouver (C.‑B.)
‑‑‑ Upon resuming
on Thursday, March 3, 2004
at 0835 / L'audience reprend le jeudi
3 mars 2005 à 0835
5637 THE
CHAIRPERSON: Order, please. A l'ordre, s'il vous plaît. Good morning, everyone.
5638 MR.
LEBEL: The next item on the agenda are
applications by Rogers Broadcasting Limited to acquire the assets of the
English‑language television programming undertakings CHNU‑TV Fraser
Valley, British Columbia from NOWTV British Columbia Inc. (NOWTV BC) and CIIT‑TV
Winnipeg, Manitoba Inc. (NOWTV Manitoba).
The latter station is not yet in operation.
5639 Appearing
for the applicant, Mr. Rael Merson. He
will be introducing his colleagues. You
have 20 minutes to make your presentation.
PRESENTATION / PRÉSENTATION
5640 MR.
MERSON: Good morning, Mr. Chair,
Madam Vice‑Chair, Members of the Commission. I am Rael Merson, President of Rogers Broadcasting. It is our pleasure to appear before you
today to present our applications to acquire assets of CHNU‑TV, serving
the Fraser Valley and CIIT‑TV, Winnipeg, and for authority to establish a
rebroadcast transmitter for CHNU‑TV in Victoria.
5641 With
me today are Leslie Sole, CEO, Television for Rogers Broadcasting'
Madeline Ziniak, Vice‑President and General Manager, OMNI Television;
Jeff Thiessen, Senior Vice‑President, Trinity Television; and Alain
Strati, Vice‑President, Business and Regulatory Affairs.
5642 At
the next table we have Albert Lo, Vice‑President Corporate Affairs and
Director of Balanced Programming for NOWTV; Willard Thiessen, President and
CEO, Trinity Television' Tony Viner, President and CEO, Rogers Media; Laura
Nixon, Vice‑President Finance and CFO, Rogers Media' and Malcolm Dunlop,
Vice‑President Programming and Marking for OMNI Television.
5643 As
well, a number of additional people are available to answer any questions,
including Tim Smith, Vice‑President of Programming for NOWTV; Kelly
Colasante, Vice‑President, Operations and Engineering for OMNI
Television; Terry Mahoney, Station Manager for NOWTV; Tom Ellie, Vice‑President,
Finance for OMNI Television; and Gloria Thiessen, Director of Human Resources
for NOWTV.
5644 In
our presentation today we are going to describe to you why, given our
experience and expertise as a niche broadcaster, we believe we are the most
appropriate owners of NOWTV and why the approval of this transaction is in the
public interest.
5645 But
first I am going to ask Jeff to describe the sequence of events which have lead
Trinity Television to this point.
5646 MR.
J. THIESSEN: Good morning,
Commissioners.
5647 In
1976 my parents, Willard and Betty Thiessen, launched Canada's first Christian
television talk show "It's A New Day" on CKND in Winnipeg. This show was and still is a huge success. It is available on conventional television
stations in western Canada and across the country on Vision TV.
5648 From
that solid base, the Trinity Television Ministry expanded to include Christian
programming for children, first with the program "Follow Me" and
then, in 1986, with "Sunshiny Day", which continues to air in many
countries around the world.
5649 In
2000 we were granted a licence for a new religious television station in the
Fraser Valley. We launched NOWTV in
September 2001 and are immensely proud of what we have accomplished since
then. From day one our objective was to
present viewers with a message of hope and faith by offering a wide variety of
spiritual, moral and value‑based programming.
5650 Our
program schedule is built around a solid core of Christian programming,
programs like "It's A New Day", "LifeLine" from the Miracle
Channel in Lethbridge and "FreeTV" from the "FreedomEyes"
in Toronto. These programs provide a
forum for the discussion of Christian values and beliefs in our modern society.
5651 Our
schedule also includes programs which more specifically examine morals and
values in today's relationships. One
example is "Pure Sex and Relationships" hosted by John and Helen
Burns, two Pastors from a local Church in the Fraser Valley. We complement that programming with almost
20 hours of balanced programming each week including: issues‑oriented programs such as
"Online", our call‑in viewer input and feedback program, and
faith‑specific programs such as "Muslim Faith" and
"Aaradhna", examining the values, beliefs and teachings of non‑Christian
religions.
5652 Our
schedule also includes entertaining comedies and dramas that use storytelling
and illustration to demonstrate some of the challenges faced by modern families
and individuals. While these programs
in and of themselves address moral and ethical issues, we also produce
interstitial segments to provide additional context and perspective to the
issues and dilemmas raised by these programs.
5653 We
were honoured in 2002 when the Commission granted us a licence for a religious
station in Winnipeg, my family's home town.
We intended to launch that station expeditiously, as we did with NOWTV,
but unfortunately financial challenges intervened. The cost of operating NOWTV has far exceeded our
expectations. As a not‑for‑profit
organization, we have found it impossible to raise the capital necessary to
cover our on‑going losses and, at the same time, finance the start‑up
of our new station in Winnipeg.
5654 We
have tried to resolve these problems in various ways. We obtained the CRTC approval for a corporate reorganization to
make it easier for us as a for‑profit corporation to raise capital from
institutional sources. We also filed an
application for a rebroadcast transmitter in Victoria to put ourselves on an
equal footing with our competitors. But
the fact is, we ran out of time and we ran out of money. After careful consideration we came to the
very, very difficult conclusion that we had no choice or option but to sell
NOWTV.
5655 After
engaging the services of an investment banker and undertaking a complete
offering to any interested parties, we are very pleased to enter into an
agreement with Rogers. Rogers' size and
financial stability was critical to give our creditors the comfort necessary to
allow us to continue to operate NOWTV while these applications were being
considered. Rogers has the resources
necessary to improve the performance of NOWTV and to launch NOWTV in
Manitoba. They have the experience and
expertise in niche broadcasting, which will be an important asset for the
future success and development of NOWTV.
5656 Most
importantly Rogers has committed unequivocally to continue the mandate we
started with NOWTV, which means that while we have to give up our ownership
position, we do not have to give up on our original objective.
5657 In
addition, my family and I will have the opportunity to continue to play a
meaningful role in the religious television broadcasting industry in
Canada. We are pleased that our
agreement with Rogers provides for that.
5658 Rael...?
5659 MR.
MERSON: We are proposing to acquire the
assets that Trinity uses to operate NOWTV, as well as the rights that Trinity
holds in the broadcasting licence to operate a religious television station in
Winnipeg.
5660 The
purchase price for the two undertakings is $13 million, of which
$12.25 million has been allocated to the purchase of NOWTV, with the
remaining $750,000 allocated to the assets of NOWTV Manitoba. We derived the valuation of NOWTV by present
valuing the financial forecasts for that television station, plus an estimated
residual value. NOWTV Manitoba was
valued in accordance with the costs incurred to date.
5661 Our
agreement also provides for the continuing involvement of the Thiessen
family in the operation of NOWTV.
Willard Thiessen will be offered the position of Chair of the Local
Advisory Board in Winnipeg; Jeff and Gloria Thiessen will be retained as
consultants for ongoing projects and initiatives at NOWTV.
5662 We
have also committed to a production agreement, enabling us to continue to
access their experience and expertise in Canadian religious
programming. Taken together we believe
these agreements will assist us in our efforts to establish and strengthen
NOWTV and religious programming in Canada.
5663 Rogers
is the logical purchaser for the NOWTV television stations. Like ethnic broadcasting, religious
broadcasting is about serving a specific under served segment of the viewing
audience. Over‑the‑air
religious and ethic television stations are governed by stringent policy
requirements, and both are based on challenging business models.
5664 We
acquired CFMT‑TV in 1986 after that station had experienced many years of
financial difficulties and was facing insolvency. At the time many questioned our motives for buying the station
and suspected that we would operate it as much more of a mainstream station.
5665 We
did not do that. Instead, we rebuilt
the station from top to bottom, making substantial investments in CFMT's ethnic
programming, its studio and production facilities, and in the management and
operation of the station.
5666 After
a number of years, CFMT turned the corner and became a viable television
station. In 2002, with your approval,
we expanded our service to other ethnic communities in Toronto for the launch
of a second ethic station.
5667 Throughout
our 18 years of ownership of CFMT we have not only remained true to its
core mandate of ethnic broadcasting, but have gone further to establish the
station as an internationally recognized provider of award‑winning
programming, with a proven commitment to ensuring the highest standard of self
expression for ethnic and linguistic communities.
5668 Our
two stations now serve at least 40 different ethnocultural groups each
month in at least 33 different languages.
We have also committed $48 million to specific initiatives for the
development and production of Canadian ethnic programming, establishing the
only source in Canada for the funding of Canadian ethnic documentaries and
dramas.
5669 With
NOWTV we are faced with a situation very similar to that of CFMT almost
20 years ago. We believe we are
ideally suited to take on the challenge of serving the community of religious
communities in the Fraser Valley and in Winnipeg.
5670 Much
like we have with CFMT, we are determined to invest the programming and
financial resources necessary not only to establish a sound financial
foundation for NOWTV, but also to use that foundation to develop and produce
the very best in Canadian religious programming.
5671 Leslie.
5672 MR.
SOLE: We have committed unequivocally
to maintain the NOWTV religious television mandate, operating fully within the
requirements of the religious broadcasting policy. We are not seeking any relaxation of the existing conditions of
license for these stations. In fact, we
have proposed two additional conditions.
5673 First,
to allay any concerns that we might seek to use the NOWTV stations as vehicle
to focus on ethnic programming we have proposed that the Commission attach a
condition of license to limit the amount of third language programming on these
stations to 5 per cent of the broadcast schedule.
5674 Second,
in our reply to an intervention we reaffirmed our commitments to Canadian
balanced programming and proposed additional conditions that the Commission
could attach to the NOWTV licences.
These conditions would require us to broadcast greater amounts of
Canadian balanced programming in prime time.
We would be pleased to discuss those proposed conditions in greater
detail.
5675 One
of the most significant benefits to the NOWTV stations will be their ability to
access OMNI's highly experienced national sales force.
5676 The
more evident benefit relates simply to the lower costs of sales based on NOWTV
using OMNI's in‑house resources.
However, another important benefit relates more directly to the sales
team, one that has already faced the challenges of convincing advertisers of
the benefits offered by niche broadcasters.
5677 Canadian
religious television stations rely on appropriate entertainment programming to
address the interests and demands of their viewers. For those programs that meet its religious policy programming
criteria, NOWTV will also benefit from available programming synergies with the
OMNI stations, allowing them to offer high quality entertaining programming at
a reasonable cost.
5678 MS
ZINIAK: Balanced programming is a
cornerstone of the religious broadcasting policy and is the defining element of
the Canadian approach to religious television programming. This is an area in particular where we
believe we have much to offer.
5679 We
understand that the reflection of diversity in television programming, whether
it is religious or ethnic in nature, requires a detailed understanding of local
issues and concerns, as well as strong, positive working relationships with
local community groups and leaders. We
will use our experience with the OMNI stations to build on and enhance the
relationships NOWTV has established with local faith groups in the Fraser
Valley and throughout the Vancouver area.
5680 NOWTV
also has working relationships with local independent producers. We will expand and enhance those
relationships through a strong, community‑based program development
process similar to that employed by the OMNI stations.
5681 At
OMNI we have shown that it is possible to produce excellent programming for
many smaller ethnic and linguistic groups by building strong relationships with
them and by working closely with community‑based independent
producers. We will take that same
approach at NOWTV for the development of balanced programming for a diversity
of larger and smaller faith groups.
5682 Local
independent producers representing faith groups from throughout the community
will have the opportunity to submit program proposals. We will work with them to develop
programming concepts that meet the needs of their communities and which comply
with our broadcast quality standards.
We will help them identify and access the programming and economic infrastructure
necessary to support their programs. A
portion of the benefits we have proposed is specifically earmarked to support
this type of project development.
5683 We
will expand the NOWTV Program Balance Committee to incorporate all of the
community advisory functions of the very successful OMNI Television Community
Advisory Board, while at the same time ensuring that NOWTV Board continues to
address program balance issues.
5684 We
will establish a similar advisory board for NOWTV in Winnipeg. Based on our experience with OMNI, we
understand the important role that advisory communities play in ensuring that a
diversity of voices from within the community is heard and that their concerns
are addressed.
5685 Alain...?
5686 MR.
STRATI: We believe the approval of our
application will result in significant and unequivocal tangible and intangible
benefits for viewers in the Fraser Valley and Vancouver, and in Winnipeg, for
Canadian independent producers of religious television programming and for the
Canadian broadcasting system as a whole.
5687 We
have proposed a comprehensive package of six tangible benefit initiatives worth
a total value of $1.3 million over the license term. They include:
5688 $450,000
to establish the NOWTV Documentary Fund for the independent production of
Canadian religious and faith‑based documentaries;
5689 $300,000
in license fees for a four‑part series examining the history of
aboriginal faith and spirituality in Canada with APTN as the executive producer
and first window broadcaster;
5690 $150,000
in development grants for the production of religious television programming by
independent producers in British Columbia and Manitoba;
5691 $200,000
for Canadian independent production projects developed in collaboration with
Vision TV;
5692 $100,000
in scholarship awards at the British Columbia Institute of Technology in
Vancouver and the Red River College in Winnipeg; and, finally,
5693 $100,000
to support comparative religious seminars in collaboration with Regent College
and Trinity Western University.
5694 The
approval of this application will also result in significant intangible
benefits. They include:
5695 the
long‑term viability of NOWTV will be assured and a new religious
television station in Winnipeg will be launched;
5696 NOWTV
and the Canadian religious broadcasting industry as a whole will continue to
benefit from the experience and expertise of members of the Thiessen family;
5697 NOWTV
staff have been offered continued employment at the station and will also
benefit from the increased job training and career advancement opportunities
that a large broadcasting company has to offer.
5698 Rael...?
5699 MR.
MERSON: We have applied for a licence
to establish a NOWTV rebroadcast transmitter in Victoria. The approval of that application will ensure
that residents of Victoria have access to a religious station that is freely
available to viewers elsewhere in the market.
In addition, it will ensure that NOWTV is placed on equal competitive
footing with all of the other television broadcasters operating in the
Vancouver/Victoria market.
5700 As
part of the rebroadcast transmitter application we have proposed additional
tangible benefits including:
5701 first,
$250,000 to the NOWTV Documentary Fund; and
5702 second,
$100,000 for development grants to local independent producers based in
Victoria and on Vancouver Island.
5703 We
have also committed to produce local religious programming for Victoria
specifically reflecting the faith and spiritual communities of that community.
5704 We
believe the approval of our applications will have no material economic impact
on other local television broadcasters in the Vancouver/Victoria or Winnipeg
markets. Experience in the Toronto
market clearly shows that there is sufficient programming available to allow
all mainstream ethnic and religious stations to offer attractive program
schedules consistent with their respective mandates.
5705 Vancouver/Victoria
is the country's fastest growing television market and is likely to continue to
experience a strong growth for the foreseeable future. The evidence clearly suggests that the
national advertising revenues from our rebroadcast transmitter in Victoria can
easily be accommodated within natural market growth.
5706 Television
broadcasters in Winnipeg as a group have experienced increasing profitability
over the past five years. NOWTV
Manitoba is unlikely to change that trend.
The launch of NOWTV Manitoba will provide a valuable new outlet for
advertisers who are seeking an independent local market alternative to the
national television broadcast groups.
5707 Winnipeg
is one of the few major markets in this country without an independent
television station.
5708 Mr.
Chair, Madam Vice‑Chair, Members of the Commission, we believe the
approval of our applications would be in the public interest for the following
reasons:
5709 first,
the proposed transaction will ensure the continued operation of a failing
religious television station in the Fraser Valley and will ensure the launch of
a religious television station in Winnipeg;
5710 second,
the approval of a NOWTV rebroadcast transmitter in Victoria will provide
residents of that community with access to a religious television station and
will place NOWTV on an equal competitive footing with other broadcasters in the
market;
5711 third,
we are the logical purchaser of the NOWTV television stations. We have proven expertise in niche television
broadcasting. We understand the
significance of balance and reflection and have demonstrated our ability to
offer high quality programming that addresses the needs of a diversity of local
groups and communities;
5712 fourth,
as further evidence of our commitment to Canadian balanced programming, we have
proposed conditions of license that would require the NOWTV stations to provide
more of that programming in prime time; and finally,
5713 we
have proposed a comprehensive package of significant and unequivocal tangible
benefits and plan to undertake other programming enhancements that will result
in a material increase in the choice, diversity and quality of Canadian religious
programming.
5714 We
believe all of these programming and operational commitments will be to the
benefit of the Canadian broadcasting system and contribute to the continued
growth and development of Canadian religious programming.
5715 That
concludes our presentation. We thank
you for your time and attention and would be pleased to answer any questions
that you may have. Thank you.
5716 CHAIRPERSON: Thank you.
5717 Vice‑Chair
Wylie...?
5718 COMMISSIONER
WYLIE: Thank you, Mr. Chairman.
5719 Good
morning ladies and gentlemen.
5720 I
will have programming questions for you.
The Chairman will then have financial and licensing issues that he will
discuss with you. So they are obviously
not complete silos, but I am focusing on the programming.
5721 In
your application at Part 1.6, which you filed under cover of letter 24
November 2004 ‑‑ before the Commission asked for it because
you notice that you had not filled that part ‑‑ you accepted
that your application will be operated under the same terms and conditions as
the current licence. That is also
repeated in your supplementary brief at more than one place.
5722 This
morning you also said, at page 10, that you are not seeking any relaxation
of the existing conditions of license.
You are proposing an additional one with regard to ethnic programming
and what you call an additional condition which we can discuss that you raised
in reply and that is, in my view, an alteration of a condition that exists now.
5723 Can
you confirm first whether in filing that completed page, 1.6 of the application
form, and making the commitments you made at various parts of your
supplementary brief, your point of reference was the CRTC decisions related to
NOWTV BC and NOWTV Winnipeg rather than what is on the air now, what the
programming schedules are?
5724 MR.
STRATI: Yes, that is correct.
5725 COMMISSIONER
WYLIE: What is your understanding of
the phrase "terms and conditions" that you are prepared to accept?
5726 For
example, does it include conditions of license only or the commitments that
were made at licensing originally and referred to in the related Commission
decisions?
5727 MR.
STRATI: The terms and
conditions would be the terms in terms of, for example, the
100 per cent religious programming, terms from the religious policy
as well the specific conditions of license.
5728 COMMISSIONER
WYLIE: Only the specific conditions of
license? You see that as the terms and
conditions?
5729 MR.
STRATI: That's correct.
5730 COMMISSIONER
WYLIE: Maybe we can speed up the
process about what it is that you are committing to when you say you will
continue these services as they were licensed.
5731 We
could go through the conditions of license, as well as the commitments that are
in the decision, and see what your view is of whether they will be the
commitments and conditions that you will be operating under and, if not, why
not?
5732 Do
you have the decisions with you, because that will be quicker. It will be faster than ‑‑
you have the initial decisions, 218 for Fraser Valley and 229.
5733 MR.
STRATI: Yes. Yes, we do. Yes, we do,
Madam Chair.
5734 COMMISSIONER
WYLIE: So No. 1, 100 per cent
religious, you have agreed.
5735 MR.
STRATI: Yes, Madam.
5736 COMMISSIONER
WYLIE: Then under 2(a), 18 hours
of balanced programming. That is
Winnipeg, sorry. Let's go back.
5737 The
Fraser Valley one first. Eighteen hours
of balanced programming a week, of which 12.5 hours between 7:00 to 11:00
and 15.5 original first run programming.
5738 I
do have a copy of your reply and at pages 4 and 5 you raise different options
for balanced programming.
5739 I
guess to my question would you accept to abide by this condition of license,
18 hours of balanced programming of which 12.5 hours between 7:00 to
11:00 and 15.5 original first run programming, is not what you would accept as
a condition of license.
5740 MR.
MERSON: We would absolutely accept it
as a condition of license. We believe
the terms we proposed are in addition to that, but we would absolutely accept
that as a condition.
5741 COMMISSIONER
WYLIE: Your proposal on page 5 of
the reply is option 2, which would be a minimum of 12 hours of Canadian balanced
programming from 6:00 to 11:00 as opposed to 7:00 to 11:00?
5742 MR.
SOLE: Yes, that's correct.
5743 COMMISSIONER
WYLIE: What is your understanding of
the change between that and the condition of license?
5744 MR.
MERSON: Madam Vice‑Chair, the
change is an attempt by us to introduce more Canadian balanced programming into
prime time, while at the same time trying to maintain a sufficient window to
allow for the broadcast of Christian programming in prime time.
5745 So
we were looking for the ability to find a way to continue to do
effectively two hours of balanced programming in prime time, while still doing
at least an hours' worth of Christian programming in prime time.
5746 COMMISSIONER
WYLIE: So it would be reduced
from ‑‑ you would still do 18 hours of balance
programming?
5747 MR.
MERSON: Absolutely.
5748 COMMISSIONER
WYLIE: Of which 12 hours instead
of 12.5 would be between 6:00 to 11:00.
And 15.5 would be original first run programming, but 12 hours
would be Canadian?
5749 MR.
MERSON: Absolutely. We seem to have one ‑‑ let
me check with Alain quickly.
5750 For
some reason we had thought the balance commitment in prime time was
12 hours, not 12.5, but perhaps we can confirm that at a later point.
5751 COMMISSIONER
WYLIE: Are you speaking about your
alteration of the condition or the one that was attached?
5752 MR.
MERSON: The one that is in the
licence. Perhaps it is just a
misunderstanding on our part, but we will clarify it.
5753 COMMISSIONER
WYLIE: I may have made a mistake.
5754 MR.
STRATI: That's fine, Madam Chair. It is just a quick clarification. The current condition of license is
12 hours.
5755 COMMISSIONER
WYLIE: Is 12 hours.
5756 MR.
STRATI: Correct. It is 15.5 originally.
5757 COMMISSIONER
WYLIE: My apologies. Twelve hours between 7:00 to 11:00.
5758 MR.
STRATI: So the same number of hours,
just that it would be Canadian now.
5759 COMMISSIONER
WYLIE: Same number, an hour more, and
Canadian.
5760 MR.
STRATI: That's right.
5761 COMMISSIONER
WYLIE: So those are the conditions that
were attached to the Fraser Valley.
5762 There
were also commitments that the Commission chose to pick up in the decision as
one of the reasons why it was awarding the licence I guess.
5763 At
paragraph 14, 7.5 hours of the 18 hours of faith‑specific
programming would be produced by non‑Christian groups and broadcast ‑‑
that is paragraph 14 ‑‑ weekdays between 9:30 and 10:00
and Saturday from 8:30 to 1:30.
5764 MR.
MERSON: We would absolutely commit to
that.
5765 COMMISSIONER
WYLIE: Okay. At paragraph 19, 80 per cent Canadian content between
7:00 and 11:00.
5766 MR.
STRATI: Just to clarify, Madam Chair,
there was a subsequent decision that clarified that it wasn't 80 per cent. It was going to be, I believe, 50 per
cent from 7:00 to 11:00.
5767 COMMISSIONER
WYLIE: Do you have a number for that
decision?
5768 MR.
STRATI: Yes, it is the same decision
just ‑1.
5769 COMMISSIONER
WYLIE: ‑1 was a correction.
5770 MR.
STRATI: That's correct.
5771 COMMISSIONER
WYLIE: Thank you.
5772 At
paragraph 20, 40 per cent of annual growth revenues would be spent on
Cancon, of which $100,000 on script and content development.
5773 MR.
MERSON: No, that would be a commitment
we could not meet.
5774 COMMISSIONER
WYLIE: Why not?
5775 MR.
MERSON: I have to think through the
financing of the operation, but it would be just difficult for us to meet. It is a number that we know the specialty
channels are comfortable with. But I
don't really know ‑‑ and perhaps I ask Leslie for what a relative
number would be for an over‑the‑air broadcaster, but I think it's a
far lower number. My guess would be
around 20 per cent.
5776 MR.
SOLE: Yes. We haven't used this in conventional broadcasting since the
policy review, but my recollection is that conventional over‑the‑air
broadcasters could be anywhere from 16 to 24 per cent. I have not looked at any current numbers,
but from our own experience that the relationship between Canadian content
spending and gross revenue would be under 25 per cent in most cases.
5777 COMMISSIONER
WYLIE: Do you have a substitute number
for that then, or is it your intention to just abandon paragraph 20?
5778 MR.
MERSON: No, we do not, but perhaps we
could come back with ‑‑
5779 COMMISSIONER
WYLIE: Yes, good idea.
5780 MR.
MERSON: We could caucus about
it a ‑‑
5781 COMMISSIONER
WYLIE: And see how it can be.
5782 MR.
MERSON: ‑‑ and see what we
can come up with.
5783 Again,
it is a number that is a difficult number to meet as an over‑the‑air
broadcaster, but let us caucus and we will come back with something.
5784 COMMISSIONER
WYLIE: Would it also be difficult to
spend $100,000 on script and content development over the term of the licence?
5785 MR.
MERSON: No, that would not be
difficult. In fact ‑‑
5786 COMMISSIONER
WYLIE: That is okay. So you will come back to us about the
percentage.
5787 MR.
MERSON: Yes.
5788 COMMISSIONER
WYLIE: At paragraph 22,
6.5 hours per week to children 2 to 11, and 8.5 for 12 to 17.
5789 MR.
MERSON: Absolutely.
5790 COMMISSIONER
WYLIE: Now if we go to the other
decision ‑‑ I think it's quicker to do it this way.
5791 If
you go to the 229 Decision, the Winnipeg one, you are accepting 100 per
cent religious?
5792 MR.
MERSON: Yes.
5793 COMMISSIONER
WYLIE: I think I left out there
was also a paragraph ‑‑ yes, 21‑22 hours per
week ‑‑
5794 I'm
back to the Fraser Valley one, paragraph 21. Twenty‑two hours a week of programming would come from
Winnipeg, which I assume at the time meant the production facilities of
Trinity? Because this was before ‑‑
this was when Fraser Valley was licensed.
5795 Do
you have paragraph 22?
5796 MR.
MERSON: I'm just looking
at 21. Twenty‑two hours a
week. Can I interpret that as local
programming, locally produced programming?
5797 COMMISSIONER
WYLIE: Oh, I'm sorry. You are right. Paragraph 21, excuse me.
5798 MR.
MERSON: If we can interpret that as
locally produced programming, absolutely.
5799 COMMISSIONER
WYLIE: But locally produced ‑‑
5800 MR.
MERSON: In either Winnipeg ‑‑
5801 COMMISSIONER
WYLIE: ‑‑ in Winnipeg or
the Fraser Valley?
5802 MR.
MERSON: No. In the Fraser Valley for the Fraser Valley and in Winnipeg for
Winnipeg.
5803 COMMISSIONER
WYLIE: Because at the time you didn't
have ‑‑ there was Winnipeg station. What do you understand this to be?
5804 MR.
MERSON: I understood this to be a
commitment by the Thiessens to produce programming locally in Winnipeg that
would serve the Fraser Valley market.
We would prefer to interpret that as programming produced in the Fraser
Valley to serve the Fraser Valley market.
5805 If
you are okay with that, we would absolutely do it.
5806 COMMISSIONER
WYLIE: Is there a connection between
that and the commitment you have with Trinity for, is it $500,000?
5807 MR.
MERSON: No, there is no connection
between the two. We will engage the
Thiessens ‑‑
5808 COMMISSIONER
WYLIE: But would it be some of that
programming that would be produced?
5809 MR.
MERSON: Possibly to the extent it was
produced in the Fraser Valley, but if it was produced in Winnipeg, not at
all. So we interpret this as a local
programming commitment and we are comfortable with it as a local programming
commitment.
5810 COMMISSIONER
WYLIE: We can discuss a bit later the
issue of local programming.
5811 So
Winnipeg then 100 per cent religious, 18 hours of balanced
programming a week of which 12 hours ‑‑ I think I have it
right this time ‑‑ is to be Canadian original content and of
2.5 original locally produced Canadian content from a faith‑specific non‑Christian's
perspective.
5812 I'm
looking at 2(a) of the attached conditions of license. Is your intention to discuss the different
proposal you have made in your reply to this one as well?
5813 MR.
MERSON: Absolutely.
5814 COMMISSIONER
WYLIE: So would you alter 2(a) as you
propose it for me?
5815 MR.
MERSON: Yes, Madam, we would
do that.
5816 COMMISSIONER
WYLIE: Can you do that now?
5817 MR.
MERSON: Verbally? Absolutely.
5818 COMMISSIONER
WYLIE: Yes.
5819 MR.
MERSON: Our proposal, if I can lay my
hands on it, is to adopt either one of two options and that is to ‑‑
5820 COMMISSIONER
WYLIE: Well, your option 2 is the
preferred one, so let's discuss that.
5821 MR.
MERSON: So talk about only
option 2.
5822 Option 2
is an option that is the condition of license currently that Crossroads
Television has in Toronto and it is to expand the definition of prime time from
7:00 to 11:00 to 6:00 to 11:00, but to require all the balance that occurs
between 6:00 to 11:00 to be Canadian.
5823 This
is something we would like to do. Over
and above that, the reason for doing it that way is to ensure that we had
sufficient opportunity in prime time or in that period of time to continue to
do Christian programming as well.
5824 COMMISSIONER
WYLIE: Now, in both the British
Columbia and Winnipeg stations it is 18 hours of programming of which some
is in prime time.
5825 Am
I to understand that instead of 18 hours of balanced programming a
week you would do 12 hours?
5826 MR.
MERSON: I'm sorry, Alain.
5827 MR.
STRATI: Madam Chair, just to clarify,
it is 18 hours in both instances for balanced programming. In Winnipeg there are 12 hours of
original.
5828 In
terms of the 7:00 to 11:00 slot, the current requirement is 7.5 of Canadian
original. So, as we have talked about
for the expansion from 6:00 to 11:00, we have talked about 12 hours
of Canadian balanced being within that time.
5829 So
the overall hours per week is still at 18 hours.
5830 COMMISSIONER
WYLIE: The 18 hours is the same?
5831 MR.
STRATI: That's correct.
5832 COMMISSIONER
WYLIE: The 12 hours remains the
same.
5833 MR.
STRATI: That's correct.
5834 COMMISSIONER
WYLIE: But if you look at the condition
of license attached to Winnipeg it says that 12 hours shall be original
Canadian programming.
5835 MR.
STRATI: That's correct, so perhaps
the ‑‑
5836 COMMISSIONER
WYLIE: So what you are doing is, you
are keeping the same number of hours, but expanding by one hour the timeframe
in which it is to be broadcast.
5837 Is
that correct?
5838 MR.
STRATI: The 12 hours of Canadian
balance ‑‑ of original hours ‑‑ it would be
at any time during the broadcast week.
The 7:00 to 11:00 is currently seven and half hours of Canadian
original, so within that there is of course the ability to do 4.5 hours
outside of that 7:00 to 11:00.
5839 So
if we go from 7:00 to 11:00 to 6:00 to 11:00, what we are doing is actually increasing the
number of Canadian balanced hours from 6:00 to 11:00.
5840 COMMISSIONER
WYLIE: And expanding by one hour the
timeframe in which it can be placed ‑‑
5841 MR.
STRATI: That's correct.
5842 COMMISSIONER
WYLIE: ‑‑ as a quid
pro quo.
5843 Now,
2(b) is 7.5 hours of the 18 hours of balanced programming to be
broadcast between 7:00 and 11:00 is where the change comes. Right?
5844 MR.
STRATI: That is correct. To 12.
5845 COMMISSIONER
WYLIE: No. 3, to report at the end
of each broadcast year about how you are performing with regard to the
No. 2 condition of license.
5846 That
is acceptable?
5847 MR.
MERSON: Absolutely.
5848 COMMISSIONER
WYLIE: The commitments in Winnipeg, at
paragraph 13, 26 movies a year as part of balanced programming.
5849 Any
comment?
5850 MR.
MERSON: No. We would like to continue to have that option.
5851 COMMISSIONER
WYLIE: At paragraphs 25, 26 and 31
the Commission, in the Winnipeg decision, addresses the purchase of
rights ‑‑ I just point out to you that is something that we
will get back to ‑‑ that the expectation when the Winnipeg
licence was granted was that the purchase of rights for programming would not
alter the relationships of the other broadcasters in the market for the
purchase of rights.
5852 Can
you focus on those, because I will get back to that.
5853 At
paragraph 26, for example, where it says:
"Trinity stated that it had no
intention of competing with conventional local Winnipeg television stations in
the acquisition of programming and the applicant indicated that it would be
prepared to wait until all other players in the market had put together their
program schedules before purchasing rights for any programs that fit it's
programming vision."
(As read)
5854 Do
you have an initial comment about whether this commitment is one that you would
abide by?
5855 MR.
MERSON: We would absolutely abide
it. It is a reflection of the reality
of buying program rights in the Canadian marketplace in the sense that they are
three very strong national broadcast networks that invariably, simply because
of their buying power, tend to buy first.
5856 Absolutely
we would abide by it, but I think it would be forced on us more than we would
abide by it ‑‑ more than we would need to have to formally
abide by it.
5857 COMMISSIONER
WYLIE: At paragraph 31 ‑‑
because we will get back to that as well ‑‑ as I read from
paragraph 31:
"As regards the intervenor's
concern with respect to potential competition by Trinity for acquisition of
popular foreign programming, the Commission is of the view that Trinity's
business plan for Winnipeg clearly demonstrates that Trinity will not have the
resources to compete with existing television licensees in that
regard." (As read)
5858 Is
it your view that paragraph 31 could be put in a decision approving this
application?
5859 MR.
MERSON: Absolutely. Rogers clearly has the resources to buy
television programming when it needs.
The reality is simply that the program suppliers will fulfil the
requirements of the major buyers before they even chat with us.
5860 So
it isn't as much a question of resources as it is a question of buying power or
bargaining power and we lack the bargaining power with program suppliers. And nothing in any of these decisions will
change the balance of power within the Canadian television marketplace.
5861 COMMISSIONER
WYLIE: Paragraph 37, The
Commission expects Trinity to adhere to the commitment to broadcast
19.5 hours per week of programming devoted to children and youth and
maintain this level for the entire term of license.
5862 Comments
about your intentions?
5863 MR.
MERSON: Our intentions are to adhere to
it completely.
5864 COMMISSIONER
WYLIE: And then spend $4.1 million
on the production and distribution of priority Canadian programming over the
license term.
5865 MR.
MERSON: Absolutely.
5866 COMMISSIONER
WYLIE: And $105,000 to support the
Manitoba independent production industry.
5867 MR.
MERSON: Absolutely.
‑‑‑ Pause
5868 MR.
MERSON: Sorry. Perhaps, Madam Chair, Alain has just sort of
tweaked me to a point I might have overstepped on.
5869 MR.
STRATI: Sorry, Madam Chair. I just want to clarify in terms of priority
programming.
5870 NOWTV
is not required to do priority programming because it doesn't have, as you
know, the distribution across the country in terms of meeting that.
5871 So
certainly I think if we look at the programming commitments we have made in
terms of Canadian balanced programming and what we would do with programming on
NOWTV, I think there is an interest in increasing the quality and certainly
increasing the Canadian programming content on the stations, but I don't think
that it would be a specific expenditure commitment to Canadian priority
programming.
5872 Certainly
we could, as we have discussed before about in terms of the first licence for
Vancouver in terms of Canadian programming expenditures, I think we could
discuss in the same way and come back to you in Phase III and talk about a
commitment for Canadian programming for Winnipeg.
5873 COMMISSIONER
WYLIE: So you will address later the
commitments in paragraph 37?
5874 MR.
STRATI: We will do so for both
stations.
5875 COMMISSIONER
WYLIE: And to what extent you would
abide by them or have some other proposal.
5876 MR.
STRATI: That's correct.
5877 COMMISSIONER
WYLIE: So I will leave it to you at the
next stage. You will have had an
opportunity to think about it.
5878 Because
you have addressed or proposed to have 100 per cent religious programming,
can we have your understanding of what is religious programming according to
the Commission's policy?
5879 MR.
MERSON: I will hopefully give you a
quick introduction and then ask Leslie ‑‑ or Jeff perhaps
first and then Leslie just to elaborate.
5880 Our
understanding is, as the definition provides, that every program that appears
on the air on this channel needs to be 100 per cent religious. A definition is ‑‑ the one
that is provided that describes programs that deal with moral, ethical or
spiritual issues or religious services.
5881 But
over and above that, over the past four years of the running the station, Jeff
and his team have developed a set of criteria and a set of exclusions that
really give them, to a greater degree, a framework that describes what it is
that they would find acceptable on the station and what would not.
5882 We
have spent a bit of time thinking as well about what absolutely would not fit
on a religious television station.
5883 I
am going to ask Jeff just to add his comments.
5884 MR.
J. THIESSEN: Thank you, Rael.
5885 One
of the things that we wanted to do when we were licensed for this market was to
create a service that would really meet the religious needs of the community
and to find innovate ways to really discuss topics that haven't been discussed
on any other station. We worked through
the policy very carefully, worked through the decisions that have happened with
Vision and CTS over the past, and developed a framework during our Winnipeg
process that really articulated how we do programming at NOWTV very clearly.
5886 What
we did was, we created a criteria that was a framework that we would have to
get through to determine whether a program is religious or not. It was based entirely on the policies of 93‑78.
5887 Perhaps
it would be okay if I just go through that criteria list now so we are ‑‑
5888 COMMISSIONER
WYLIE: Yes. And we will expect one of
the applicants to explain what their understanding is.
5889 MR.
MERSON: Of their ‑‑ of
course.
5890 COMMISSIONER
WYLIE: Or do they now. Since it will be the purchaser who will be
operating this licence, it may be better to see what their understanding is of
how you have done it and why they will continue or why it fits the policy.
5891 I
don't want to prevent you, Mr. Thiessen, but we want to make sure that the
purchaser also understands.
5892 MR.
MERSON: We would be happy to
do that.
5893 COMMISSIONER
WYLIE: So perhaps you can tell us to
what extent you agree with what Mr. Thiessen ‑‑
5894 MR.
MERSON: Perhaps we can simply ask
Leslie to do the information.
5895 COMMISSIONER
WYLIE: Of course I am well aware that
the Thiessen family will have an ongoing relationship with the purchaser, so as
long as the two of you understand what it is you are going to be doing and
confirm that that is what will continue however you want to address it.
5896 MR.
SOLE: You can imagine that there were a
number of discussions about this because of the Thiessen family maintaining an
interest and consulting us in the future.
We have agreed, in fact. I will
be delivering to you the things that Jeff and I and other programming and
management people have agreed to.
5897 The
six criterion start with an initial criterion that asks: Does the program raise and specifically
address issues or questions which are spiritual, moral, ethical or religious in
nature?
5898 The
second distinction is: The program is
constructive and positive in its portrayal of moral or ethical issues,
religious ideas, dogma and traditions.
5899 The
third one: The program enhances freedom
of religious expression.
5900 Fourth: The program promotes understanding and
respect of religious differences.
5901 Five: The program presents religious teachings, music,
services or events.
5902 Or,
in the sixth: The program tells stories
dealing with religious or spiritual themes events, morals or characters.
5903 That
is the first layer of identifying programs that may be suitable for a religious
television station. The supplemental
review that we have agreed to use, and we found effective in the hypothetical,
is we have decided that any program that glorifies socially reprehensible or
questionable behaviour in three specific areas, sexuality and sexual themes,
violence, and then the third one, hate crime and illegality.
5904 We
think that most programming, acquired programming and foreign programming, and
even domestic programming, need to pass through these screens to be part ‑‑
a useful part of a religious television station, Madam Vice‑Chair.
5905 COMMISSIONER
WYLIE: I have read, like you, those six
principles which are found in your supplementary brief at paragraph 31. Perhaps a more helpful discussion would be to
look at the program schedule and pick a program that is not obviously fitting
within these criteria and explain to us your understanding of why it would fit
within the religious policy and how it is handled to perhaps increase its
ability to fall under religious in the coding.
5906 If
you look at the NOWTV Vancouver fall schedule, "Fresh Prince of Bel
Air", "Everybody Loves Raymond", "Leave It to Beaver",
pick one of these programs and fit it within the six criteria you read, both in
your understanding of how they are religious and, second, how they are handled
by Trinity at the moment and how you would handle them.
5907 MR.
SOLE: If we could use the term
"situation comedy", does that capture the ones you have just
described?
5908 COMMISSIONER
WYLIE: Pick one of these because they
are on the schedule for the fall that you have provided us.
5909 MR.
SOLE: We could be very specific, and I
shall pick one of them.
5910 COMMISSIONER
WYLIE: Pick the one that the
intervenors focused on. Then we will
know we have the one that is the most difficult to fit within your six
criteria.
5911 MR.
SOLE: If we want to get into the actual
content of the program, if that is the exercise, I would be happy to do that.
5912 COMMISSIONER
WYLIE: You know what the exercise
is. We want to know what is your
understanding of a religious program, how programs that may not appear to be
religious at first glance may become religious and may fit the Commission's
definition. You are going to be the
licensee so we want to see what you understand.
5913 MR.
SOLE: Those particular programs are
storytelling, and that storytelling invariably has spiritual, moral and ethical
challenges and resolutions in almost every single episode.
5914 MS
ZINIAK: I would also add that I think
what NOWTV has begun, which we would continue and actually OMNI has had
experience in doing, is also having interstitials that would bookcase the
program which actually would contextualize and actually enhance the
relationship of spirituality and religion with the actual program.
5915 NOWTV
has been doing this, OMNI also has been doing this in another way, but we
find very effective and does contextualize and bring further meaning and
spirituality or religious values to the program.
5916 COMMISSIONER
WYLIE: Mr. Thiessen, at the moment do
you have interstitials? Do you have
introduction to this programming that enhances its ability to fit within the
six criteria Mr. Sole was reading?
5917 MR.
J. THIESSEN: Sorry. Go ahead.
5918 COMMISSIONER
WYLIE: Either of you. Both of you preferably.
5919 MR.
J. THIESSEN: Perhaps I could start.
5920 COMMISSIONER
WYLIE: Because presumably you will be
proving some programming.
5921 MR.
J. THIESSEN: We are going to,
absolutely.
5922 COMMISSIONER
WYLIE: Rogers will either accept it or
not, depending on where it fits.
Because you know this is raised all the time: What is a religious program?
Is a program that is not religious on one station religious on the
other?
5923 Tell
us what your understanding is.
5924 MR.
SOLE: But there will be local
production that contextualizes these programs hosted by people from various
faiths and their reflections between these programs.
5925 As
Maddie said, we do it on Ontario, but Trinity Television is doing it ‑‑
has been doing it for quite some time.
5926 Maybe
I disappointed the answer a little bit by not mentioning that, but in between
these situation comedies there are a Canadian spiritual reflection and now I
should say of a spiritual moral or ethical nature.
5927 COMMISSIONER
WYLIE: Normally the panels before us
give answers to questions we didn't ask.
Now I have to prod you.
‑‑‑ Laughter /
Rires
5928 COMMISSIONER
WYLIE: Perhaps one way of doing it, Mr.
Sole, is to look at your six criteria and tell us what kind of a situation
comedy would not be acceptable because it would breach or violate one of the
six criteria?
5929 MR.
SOLE: I am far more comfortable with
those examples. Situation comedies,
"Sex and the City", "Drew Carey", "Coupling".
5930 COMMISSIONER
WYLIE: What criteria would they
violate?
5931 MR.
SOLE: They would be in the second
layering where the sexuality or the language was glorified or used in a way
that had no relation to enhancing the actual challenges and resolution of the
story. They would be not necessary and
therefore ‑‑ we don't want to use violence or sex or hate and
crime as a source of entertainment, but at the same time they are quite
legitimate in a discussion with resolution.
Where Drew Carey tells a lot of just off‑colour jokes and that is
a certain kind of show, it would not suit our channel.
5932 I
have as many more examples if you would like them, Madam Vice‑Chair.
5933 COMMISSIONER
WYLIE: Of course, I don't think that
the purchaser has focused on religion as much in the last five years as they
have in the last two months.
5934 Would
that be fair?
‑‑‑ Laughter /
Rires
5935 MR.
SOLE: Yes.
5936 COMMISSIONER
WYLIE: Yes. So we are testing your understanding of this.
5937 MR.
MERSON: I think it's fair to say we
have wrestled with this issue. We
understand the need to find a way to really ‑‑ I won't say
circumscribe, but build a framework to allow us to deal with the issue of what
is religious and what isn't religious.
So we have developed this sort of set of criteria that run over and above
what we think is in the policy to really, as much as anything else, guide us
into making these decisions.
5938 Just
to refer to the interstitials as well, I think we feel strongly that no amount
of interstitials can turn a non‑religious program into a religious
program. It has to qualify as a
religious program first, and then if the context and the detail are not self‑explanatory
you need to ensure that the context and the detail are explained thereafter.
5939 So
it is just as we go through the filters and the screens it is the sequence of
events.
5940 COMMISSIONER
WYLIE: Mr. Thiessen, at the moment how
many of the programs that are scheduled in prime time actually are the subject
of interstitial introduction?
5941 MR.
J. THIESSEN: So how many programs in
prime time do we have interstitials with?
5942 COMMISSIONER
WYLIE: Yes.
5943 MR.
J. THIESSEN: Anything that is not
overtly religious.
5944 COMMISSIONER
WYLIE: So what would be a ballpark
figure between 7:00 and 11:00?
5945 MR.
J. THIESSEN: Something like
"60 Minutes" would always have a discussion, call‑in
discussion afterwards.
5946 COMMISSIONER
WYLIE: No, I'm talking about the type
of situation comedy that we have been discussing.
5947 MR.
J. THIESSEN: Those, 100 per cent
of ‑‑
5948 COMMISSIONER
WYLIE: How common is it have an
introduction?
5949 MR.
J. THIESSEN: One hundred per cent.
5950 COMMISSIONER
WYLIE: Is that what you plan as well,
Mr. Sole?
5951 MR.
SOLE: Yes. It's our intention to put these interstitials together with
specific episodes for long periods of time so they would become part of the
presentation.
5952 COMMISSIONER
WYLIE: So that they are
contextualized.
5953 MR.
SOLE: Right, and so that the
interstitial is actually connected to the episode as opposed to the program in
general.
5954 COMMISSIONER
WYLIE: When you were asked by the
Commission in a deficiency letter to identify what changes you would make to
the programming schedules, your answer was ‑‑ that would be on
page 23 of the first deficiency response which is December 10, 2004.
5955 Question 33,
page 23. You answered:
"It's very difficult for us to
provide further specificity as to the changes, if any, we might make to the
NOWTV programming schedule."
(As read)
5956 Later,
at the top of paragraph 24:
"As a result, we are not in a
position to provide the Commission with suggested changes we would make to the
current NOWTV schedule, nor to file a proposed programming schedule for the
station." (As read)
5957 This
application is based on an asset purchase so therefore you are applying for new
licences.
5958 What
is the term you are applying for?
5959 MR.
MERSON: Perhaps Alain could answer
that?
5960 MR.
STRATI: We would be seeking a full
license term. However, given the
circumstances and certainly that NOWTV is up for renewal in, I believe,
18 months, we would be willing to come back for a shorter term and discuss
what our programming has become and our programming plans and how they have
developed.
5961 COMMISSIONER
WYLIE: You are getting ahead of me.
5962 MR.
STRATI: Sorry.
‑‑‑ Laughter
/ Rires
5963 COMMISSIONER
WYLIE: I was only going to ask you why
it wasn't fair to ask for programming schedules when you are applying for new
licences of seven years and they expire on the 31st of August.
5964 So
what you offering now is a term of 18 months?
5965 MR.
STRATI: The current licence ‑‑
5966 COMMISSIONER
WYLIE: Yes, but they will be new
licences.
5967 MR.
STRATI: Yes, I agree.
5968 COMMISSIONER
WYLIE: Well, what is your ‑‑
it is very odd to say we are not filing programming schedules. The Commission always wants them to get a
feel for ‑‑
5969 The
Winnipeg programming schedule was filed in 2001 and never implemented. So you prefer an 18 month and then you
will come with a programming schedule or prepare one for us now?
5970 MR.
STRATI: We would ‑‑
5971 COMMISSIONER
WYLIE: I am accommodating.
5972 MR.
STRATI: Sure, I agree.
5973 At
the time we were discussing just because of the current scheduling it was
difficult for us to sort of develop a new schedule. Certainly we would be ‑‑ there are some people
here ‑‑
5974 COMMISSIONER
WYLIE: Why? I don't understand.
5975 MR.
STRATI: Understand, there are plenty of
here, we would be glad to do that.
5976 COMMISSIONER
WYLIE: Why is it difficult to develop a
schedule for Winnipeg? The schedule was
2001. Would you like us to say,
"This is what you have to abide by"?
5977 I
understand that schedules are just an indication, one indication, a helpful one
for the Commission to understand what the intentions are.
5978 MR.
STRATI: Parts of the schedule would be
similar in terms of some of the available programming, but there would be
certainly some local programming from Winnipeg.
5979 If
Commission deems it appropriate, we would be glad to provide a schedule that
would provide further detail in terms of the programming from Winnipeg. Some of it may not have specific titles, but
they would certainly be an indication of the genre of programming, the type of
programming that would be in the schedule.
5980 MR.
MERSON: Perhaps we ‑‑
5981 COMMISSIONER
WYLIE: And how it would be scheduled.
5982 MR.
MERSON: Perhaps we weren't sufficiently
clear in the response to the intervention.
5983 What
we had intended to say is essentially the programming blocks that you see on
NOWTV in the Fraser Valley now is what we would program into and adopt largely
as a schedule.
5984 We
obviously don't have programming because we couldn't fit in titles, but
contextually the program schedules would be the same with the possible adjust
of Canadian balanced programming in prime time.
5985 COMMISSIONER
WYLIE: Have you examined, Mr. Strati,
the Winnipeg schedule that was filed with the application in 2001?
5986 Is
that what you would want us to refer to at renewal time, however late or short
your term of license is?
5987 MR.
STRATI: I do have the Winnipeg
schedule.
5988 I
think, as Rael mentioned, the Winnipeg schedule would be much sort of along the
same lines in terms of the current Vancouver/Fraser Valley schedule, in terms
of the development of that schedule would be much more along the lines of what
the Winnipeg station would ‑‑ how it would program its
schedule.
5989 COMMISSIONER
WYLIE: Well, I leave it to you to
discuss further.
5990 This
is an asset purchase. I did see in
your ‑‑ you have talked about ‑‑ at least in
your CTT, in your tangible benefit commitments, seven year term so I assumed
you wanted a seven year term. You would
be getting new licences.
5991 I
leave it to you to see whether you want to file your own programming schedules,
which would be the case if you were applying for a licence, abide by the ones
that are there or, as Mr. Strati suggested, have these licences we would give
you expire at the end of 2006.
5992 MR.
MERSON: Thank you for pointing that
out.
5993 That
was something that wasn't obvious to us and absolutely we will do that.
5994 COMMISSIONER
WYLIE: Because we are trying to
determine, as are the other parties participating in this, what are your
intentions and what it is that one would look at to see whether you are abiding
by what you proposed when you applied, and also what you will end up with in a
decision if these were to be approved.
5995 Let
me go now to the synergies in programming that would flow from these
applications if they were approved.
5996 You
have addressed them in a number of places.
Some of them are obvious administrative overhead and obviously, as the
Chairman will probably discuss, also sales where there will be an advantage
because you would have a station in Winnipeg, one in Vancouver and two in
Toronto, with rebroads in Ottawa and ‑‑ London, is it? And London.
That would be a very different force from what we now have.
5997 I
would like to look at those synergies as between the NOWTV Vancouver and
Winnipeg, as between the NOWTV stations and the OMNI stations and the effect on
programming rights, both with ‑‑ in relation to what
programming will end up on the screen and obviously that it probably will have
revenue repercussions in the market, although you already have intimated that
that is not your conclusion.
5998 Let's
look at Vancouver and Winnipeg.
5999 Could
you clarify, in a general fashion, the symmetry or lack of symmetry that there
would be between the programming schedules of the two NOWTV stations if you
were the licensee of both?
6000 MR.
MERSON: Thank you.
6001 We
do think there would be tremendous synergies on the programming side between
NOWTV in Vancouver and in Winnipeg.
6002 I
will ask Leslie just to elaborate a little bit further.
6003 COMMISSIONER
WYLIE: That is obviously what one could
see more easily if one had two programming schedules based on the assumptions
that you have made.
6004 MR.
SOLE: We will undertake to provide you
with the Winnipeg schedule before the day is over, Madam Vice‑Chair.
6005 COMMISSIONER
WYLIE: And also indicate ‑‑
6006 MR.
SOLE: The similarities.
6007 COMMISSIONER
WYLIE: Oh, probably file a schedule of
your own unless it is exactly the one that is in place now.
6008 MR.
SOLE: It will be in relation to this
question and illustrate the similarities between ‑‑ what our
plans would be.
6009 The
synergies between NOW Vancouver and NOW Winnipeg go back to the origins of the licences. We think that a market like Winnipeg will
need the substantial backing of a market like Vancouver in program production
and program development and the purchase of technology.
6010 We
think that in multi‑faith or inter‑faith broadcasting that there is
an ability to reach a broader audience outside of geography and so there would
be portability for talent, there would be portability for programming ideas
that would work in both markets.
6011 On
the purchase of specific entertainment programming, it would be a sum game, it
would be our ability to buy Ontario, Manitoba and Vancouver. On a very specific religious program like
"The Ten Commandments", we would be able to buy Vancouver and
Winnipeg.
6012 But
we have commonality in systems, we have commonality in sales and marketing, we
have commonality in technological innovation and growth, commonality in
training that we would be able to offer these employees. So we think Winnipeg and Vancouver are one
fit.
6013 The
big thing when you put NOWTV with the multi‑ethnic or the multilingual
channels is that the synergies become even larger.
6014 We
own a national sales organization that is on the Lakeshore in Toronto with
15 people. NOWTV in Winnipeg and
NOWTV in Vancouver will have a very substantial saving in the cost of
advertising sales. I mentioned that earlier. But even more importantly, because we are
there and because we are with the agencies on a regular basis, these channels
will have more of an opportunity to sell the programming to the advertisers
that they are meeting.
6015 So
cooperative production, cooperative acquisition and cooperative development.
6016 COMMISSIONER
WYLIE: Would you focus on the
financial ‑‑ the assumptions that were filed with the Winnipeg
projections?
6017 MR.
MERSON: I'm sorry?
6018 COMMISSIONER
WYLIE: You filed with the Winnipeg
financial projections a page of assumptions that were used to construct them.
‑‑‑ Pause
6019 COMMISSIONER
WYLIE: I may not have it in my binder
at the same place as you do.
6020 MR.
MERSON: Ah, too much paper.
6021 COMMISSIONER
WYLIE: Annex D were the projections,
but attached to them was financial projections.
6022 Do
you have that?
6023 MR.
MERSON: Yes.
6024 COMMISSIONER
WYLIE: Financial assumptions, rather.
6025 At
the top it says:
"Much of the same programming
costs already included in CHNU's projections would run on the Winnipeg
station." (As read)
6026 How
much of this programming would be the same?
"Much of the same programming". What would be the level of programming that would run on the same
station ‑‑ on the two stations, excuse me?
6027 MR.
MERSON: Perhaps I can ask Laura just
what her assumption was at that point, if it is a financial question.
6028 As
a programming question ‑‑
6029 COMMISSIONER
WYLIE: I'm trying to look at it would
seem to me that is one way of asking the question about what the programming
will look like, because it says "Much of the same programming" would
be included in Winnipeg and in Vancouver and that is why we constructed the
projections in that fashion with regard to incrementalism only.
6030 All
costs assumed to be incremental, much of the same programming. So from a programming perspective it raises
the question of just how much of the programming will be the same.
6031 MR.
MERSON: Perhaps I could address the
question from a little bit of a different angle, and that is to answer the
question sort of as in terms of local programming.
6032 We
have assumed we would produce between 20 and 22 hours worth of original
local programming weekly in Winnipeg.
6033 COMMISSIONER
WYLIE: Okay.
6034 MR.
MERSON: Does that help?
6035 COMMISSIONER
WYLIE: Yes. It all helps because it certainly isn't there.
6036 MR.
MERSON: Absolutely.
6037 COMMISSIONER
WYLIE: How much of the balanced
programming will be there too? How much
of the programming between 7:00 and 11:00 will be the same? What is going?
6038 What
would those two schedules look like when you file them?
6039 MR.
MERSON: Could we get back to you on
that point ‑‑
6040 COMMISSIONER
WYLIE: Yes.
6041 MR.
MERSON: ‑‑ and
identify all of those as part of the schedule?
6042 COMMISSIONER
WYLIE: Yes, and perhaps then give an
answer, because here it says "Much of the same programming". There is nothing, unless you point it to me,
in the application that I saw that gave me a sense of how much these two
stations would be the same.
6043 MR.
STRATI: I agree.
6044 COMMISSIONER
WYLIE: Thank you.
6045 MR.
STRATI: Just on the ‑‑
it did mention ‑‑ I know they had the example of the Thiessen
contract and its balanced programming, so there would still be ‑‑
the COL is still 12 hours of original so it would be Winnipeg. There may be opportunities for some of the
Fraser Valley, but I understand.
6046 The
same programming was to be a limited amount of programming, but I understand we
haven't clarified that and we will.
6047 COMMISSIONER
WYLIE: Yes. Presumably if one is to rely on the financial projections, and I
hope you will, you have some idea where the savings will be, the synergies will
be, and for us perhaps where the sameness will be between the two. You will get back to us.
6048 At
the bottom of the same page, close to the bottom, it is"
"All programming will be
coordinated through Toronto and Vancouver, with input by local program station
manager." (As read)
6049 Are
you expecting to have an independent station manager in Winnipeg?
6050 MR.
SOLE: Yes.
6051 COMMISSIONER
WYLIE: An autonomous programming
manager in Winnipeg?
6052 MR.
SOLE: I would say in the case
as described it would be the same person, Commissioner Wylie.
6053 COMMISSIONER
WYLIE: In the second deficiency letter,
the one that was filed ‑‑ response rather, that was filled on
23 December 2004, at page 2, we were asked to explain this:
"All programming would be
coordinated through Toronto and Vancouver, with input by local program station
manager." (As read)
6054 I
expect that would be the station manager in Vancouver as well as Winnipeg?
6055 MR.
SOLE: Yes.
6056 COMMISSIONER
WYLIE: In Vancouver would you have a
programming manager separate from the station manager?
6057 MR.
SOLE: Yes.
6058 COMMISSIONER
WYLIE: And not in Winnipeg?
6059 MR.
SOLE: Not in Winnipeg.
6060 COMMISSIONER
WYLIE: At the bottom of the answer
there to Question 2, Part (b), you say:
"Of course, as a local
television station the programming manager at NOWTV in Winnipeg will be
responsible for the production of the local programming that reflects the
interest and demands of local Winnipeg viewers." (As read)
6061 Will
that be the extent of the involvement of the manager in Winnipeg? You say programming manager, but you now say
it is going to be a station manager.
6062 MR.
SOLE: Yes. I could get into the evolution, but television sales and
administration, as I said, is somewhat centralized so the station manager and
the program manager many times become the same.
6063 There
is more than just that person. We are
going to have an advisory board in Winnipeg and in Vancouver, as we do in
Ontario, that would help any of the programmers at any time deal with editorial
or contentious programming acquisitions or scheduling.
6064 COMMISSIONER
WYLIE: Yes, problems, contentious
advice, et cetera. But I am focusing
more on the ongoing operation of the station in Winnipeg and the extent to
which it will be autonomous.
6065 MR.
MERSON: Perhaps I can just point out
why it is ‑‑
6066 COMMISSIONER
WYLIE: Which will not be your advisory
committee.
6067 MR.
MERSON: Perhaps I can just point out
the structure that NOWTV currently has in place.
6068 It
has a station manager in the Fraser Valley and its Vice‑President of
programming, Tim Smith who is here, operates out of Winnipeg. These stations work together. One programming manager would be more than
enough to oversee programming for both stations.
6069 Does
that help at all?
6070 COMMISSIONER
WYLIE: The local programming, how much
would be only Winnipeg and how much will be Vancouver?
6071 Address
for me the tendency to delocalize if you have two stations that are the same,
that are under the same ownership and the same type of station.
6072 MR.
MERSON: I can deal with it in the
general terms. Maybe Leslie can do some
of the specifics.
6073 I
think business people look for synergies and so wherever they tend to find them
they tend to look for them.
6074 On
the other hand, the offsetting force is the need to be relevant to the local
communities and somewhere between the two, obviously at a general level, is a
happy medium.
6075 When
you look at NOW's programming requirements, including the requirements for
original programming and balance and the constraints of working within the
religious policy, you can see a natural tendency to find a way to ensure that
as much religious programming is possible so it would operate on both
stations. I think it's fair to say that
to the degree you could find those synergies, you would look for them.
6076 Unlike
sort of a conventional television station that has a requirement to local news,
or has local news and local current reflection as a fundamental part of its
core programming, a religious television station tends to have programming and
values and content that is more applicable to sort of a broader audience. We see that in the broadcast world in
general. The more niche the programming
tends to be, the more your requirement to find a larger audience to distribute
it over.
6077 So
somewhere there is a happy medium.
Perhaps in terms of specific numbers, when we present the program
schedule for Winnipeg we can highlight exactly which one each of those will be.
6078 COMMISSIONER
WYLIE: In the first deficiency letter,
the response to December 10, 2004, at page 24, Question 34, you
say there:
"In a typical broadcast week we
would expect that as much as 20 per cent of the programming schedule for
NOWTV Vancouver would consist of local programs serving the local television
viewers." (As read)
6079 And
although you are still developing the plans for NOWTV, which you will continue
doing for us, Winnipeg, we would expect it to offer 10 per cent of local
programming.
6080 So
those are numbers. They are more
specific.
6081 What
is the overlap between the two that you are expecting, or is that something you
are going to tell us later?
6082 Because
I presume even the religious community is not the same here as it is in
Winnipeg, so local programming of a religious nature or of any nature
presumably would be different. What
will be the overlap?
6083 Have
you thought about that? Because that
also has a revenue implication, doesn't it, certainly an expense implication if
you can air the programming on both stations and call it local programming in
either case.
6084 MR.
MERSON: Absolutely. I think our intention here was to
ensure ‑‑ was to commit to 20 per cent local programming
in the Fraser Valley and 10 per cent in Winnipeg.
6085 COMMISSIONER
WYLIE: And that is the per cent of...?
6086 MR.
MERSON: Of the broadcast week. In terms of actual we have not had a
discussion about what the overlap might actually be between the two, but
perhaps we can address it and present it as part of the program schedule.
6087 COMMISSIONER
WYLIE: Mr. Sole, in your view is
programming produced in Winnipeg and identified as local programming to meet a
condition of license or a commitment, can it also be in Vancouver to meet the
same condition of license or commitment?
6088 MR.
SOLE: It could be in Vancouver, but it
would no longer be local. It would be
original Canadian. That's my
understanding. Market of origin is the
only place where a channel ‑‑
6089 COMMISSIONER
WYLIE: So you can address, then, the
overlap, because it may well be that it is local in Winnipeg, but it is an
acceptable program in Vancouver.
6090 So
they are two different questions, I agree with you.
6091 Lets'
talk about exchanges and sharing between NOWTV and the OMNI stations.
6092 If
you look at your deficiency response of 23 December at pages 2 and
3 ‑‑ and that is also in your financial projections ‑‑
assumptions, rather. You talk about six
hours of programming per week from the Rogers Television properties would be
made available at no incremental cost.
6093 It
continues on the following page. The
last sentence is:
"We have assumed that a
relatively small amount of that kind of programming would be made available to
NOWTV at no incremental cost."
(As read)
6094 What
type of programming is that, those six hours?
6095 MR.
MERSON: Perhaps I can ask ‑‑
6096 COMMISSIONER
WYLIE: They are, I think I am correct,
referred to in your financial assumptions?
6097 MR.
MERSON: Yes, it is in the financial
assumptions.
6098 COMMISSIONER
WYLIE: Yes, in the financial
assumptions for the construction of your Vancouver stations. Correct?
Yes.
6099 MR.
MERSON: That is correct.
6100 COMMISSIONER
WYLIE: Yes.
"Six hours of programming per
week from Rogers at no incremental cost."
(As read)
6101 What
will be those six hours?
6102 MR.
MERSON: Perhaps I can ask Maddie to
describe the program.
6103 MS
ZINIAK: Thanks, Rael.
6104 I
think there are some definite synergies where indeed OMNI does sometimes and is
producing multilingual programs that would be considered balance that are
taking a look at faith programmings or celebrations. That's just one example.
6105 Also,
we have had the wonderful opportunity of producing documentaries in third
language because of our benefit with OMNI and we have had some proposals not
only coming from Ontario, and in fact also from British Columbia and Manitoba. An example of that would be a program called
"My Jihad" that looks at a woman's discovery of her own Muslim faith.
6106 Also
to talk about something that we are very excited about and feel is very
meaningful and that is our partnership with APTN. As part of our benefits we suggested some series as far as
aboriginal spirituality goes.
6107 So
this is just some of the things that we are looking at. I would be happy to give you more detail,
but when we take a look at perhaps ethnicity and multilingual programming,
there are some occasions where there are celebrations of ethnocultural faith
demonstrated in issues as well as celebrations as far as church services, et
cetera.
6108 COMMISSIONER
WYLIE: These six hours, then, would not
be foreign programming, would they, or could they be foreign programming, those
six hours?
6109 MR.
SOLE: They would be local ‑‑
they would be original Canadian productions.
6110 COMMISSIONER
WYLIE: Can we add these words to the
six hours ‑‑
6111 MR.
SOLE: Yes.
6112 COMMISSIONER
WYLIE: ‑‑ so that it would
say, "six hours of Canadian" ‑‑"
6113 MR.
SOLE: An average of six hours per week
of original Canadian production.
6114 COMMISSIONER
WYLIE: Okay.
6115 In
the deficiency letter response at page 22 you address the ‑‑
you have already made a commitment that there would be 5 per cent only of
third language programming on either of these stations.
6116 Is
that correct?
6117 MR.
MERSON: That is correct.
6118 COMMISSIONER
WYLIE: I think you ‑‑
well, I don't think you do address at page 22 at the bottom in response to
Question 32(c), that of course anyone is allowed to have up to 15 per
cent of ethnic programming without any special permission, but that you would
do far less than 15 per cent.
6119 How
much less?
6120 MR.
MERSON: We don't have a specific number
for it. We wanted to sort of give you
the confidence to ensure that we were comfortable with the 15 per cent
ethnic limit.
6121 Do
you have any more information, Les?
6122 MR.
SOLE: Again, I think we were
highlighting the flexibility in all television stations to do 15 per cent
and it said in all likelihood we would do less.
6123 If
you wanted us to quantify that, I could give you something like 10 per
cent now, but I would like to talk to the other people before we gave you that
percentage.
6124 COMMISSIONER
WYLIE: Yes. You helped me. I was
going to ask you, since you would be doing far less would you accept
12 hours, which is 10 per cent?
6125 You
want to come back?
6126 MR.
MERSON: Yes, absolutely.
6127 MR.
SOLE: That's fine.
6128 MR.
MERSON: Ten per cent would
be fine.
6129 COMMISSIONER
WYLIE: Would that 10 per cent of
ethnic programs include the 5 per cent in third language?
6130 MR.
MERSON: Yes, it would.
6131 COMMISSIONER
WYLIE: Would you accept six hours so
that we wouldn't have to calculate 6.6 and a half hours of third language?
6132 MR.
MERSON: Absolutely.
6133 MR.
SOLE: Yes, we would.
6134 COMMISSIONER
WYLIE: You can confirm what you are
prepared to live with when you come back with the other answers.
6135 In
the first deficiency letter again at page 26 you talk about the
possibility of religious programming on OMNI.
6136 How
many hours are there currently of what could be called religious programming on
OMNI? You may not have ‑‑
6137 MR.
MERSON: I'm going to ask Madeline to
address the issue, but I think it's hit and miss and I think she wanted to
point out that it was sort of a hit and miss process.
6138 COMMISSIONER
WYLIE: A ballpark figure
obviously. I can't expect you to have
calculated that.
6139 MR.
MERSON: Madeline, any ‑‑
6140 COMMISSIONER
WYLIE: I'm more interested in how much
more would there be if you were granted these two licences.
6141 MS
ZINIAK: I would say generally that one
cannot say it is the norm for OMNI to be producing as a public affairs a new
station religious programming, but indeed there are occasions where there are
special celebrations like Baisakhi for the Sikh community, the ordination of
Deacons and Priests for the Greek Orthodox Church, installations of Bishops,
that we would cover and we would do specials on.
6142 It
would be a guess to say how much throughout the year, but there is an intrinsic
value in celebrating faith leaders in the ethno‑specific communities that
indeed during the course of what we do at OMNI we would cover. We would see this as something that
certainly would enhance balanced programming on NOWTV and would certainly be
relevant to the ethnocultural communities across Canada.
6143 We
have also seen quite an interest from other audiences in exactly what are some
of the religious values and celebrations of these communities?
6144 COMMISSIONER
WYLIE: In order to ensure that NOWTV
remains a religious station and OMNI directed to the ethnic community, do you
see any possibility of accepting a limitation of the percentage of Canadian
programs that would be shared between NOWTV and OMNI?
6145 The
aim would be to ensure that those two stations, which have very different
formats, or are supposed to have a different format ‑‑
6146 MR.
SOLE: Could I just ask one point of
clarification?
6147 COMMISSIONER
WYLIE: ‑‑ and are not in
the same cities, that there isn't a temptation ‑‑ now that you
are in religious programming you can talk about temptation ‑‑
to move away from their particular format or their particular audiences.
6148 MR.
MERSON: Could I just chat with Alain
quickly?
‑‑‑ Pause
6149 COMMISSIONER
WYLIE: You can get back on that too.
6150 MR.
MERSON: Yes.
6151 COMMISSIONER
WYLIE: We are just trying to frame this
so that it will be what you say it will be and what we want it to be.
6152 So
would there be an appropriate limit of the Canadian programming that would be
on both stations, on both sets of stations, the OMNI station and ‑‑
6153 MR.
MERSON: I have to admit, we have not
thought about it.
6154 COMMISSIONER
WYLIE: You are looking very puzzled.
6155 MR.
MERSON: Yes. No, we ‑‑
6156 COMMISSIONER
WYLIE: An ethnic station and a
religious station, if they end up looking the same, may have steered away a bit
from their initial vein.
6157 MR.
MERSON: That is obviously not our
intent, but I have to admit we haven't thought about it. If you give us the time, we would be happy
to respond.
6158 COMMISSIONER
WYLIE: I hope somebody is keeping track
of all this homework. When there is a
lot of homework it is because there are a lot of things missing. That is what the nuns used to tell me. And they were religious, so heaven
knows. They must have had it right.
‑‑‑ Laughter /
Rires
6159 COMMISSIONER
WYLIE: Let's talk now about the
acquisition of program rights.
6160 In
the first deficiency response at page 25 ‑‑ and you
talked about that again today, that there would obviously be synergies despite
that fact that it will be 100 per cent religious programming.
6161 There
will obviously be a desire ‑‑ well, an obvious potential to
purchase program rights, foreign and Canadian, that are possible on both the
OMNI stations and the NOWTV station.
6162 Is
Rogers currently providing programs to NOWTV?
6163 MR.
MERSON: Yes, we have in the past.
6164 COMMISSIONER
WYLIE: Would those be foreign, Canadian
or both?
6165 MR.
MERSON: I believe both is the answer,
but I will double check with Maddie.
6166 COMMISSIONER
WYLIE: Your financial projections show
that in year one there will be $3.5 million spent on foreign programming;
year three $4,2 million; year five $5 million; year seven
$5.8 million.
6167 How
does that compare with what is being spent on foreign programming now? It is not broken down, if I recall, in the
2003 return that we have for NOWTV.
Those would obviously be confidential because they are historical, but
do you have a sense of what the difference is?
6168 MR.
MERSON: Perhaps I could ask Tim Smith
if he could give us ‑‑
6169 COMMISSIONER
WYLIE: We intend to respect, obviously,
the confidentiality of the 2003 returns.
The Chairman will get with you why we don't have the 2004 returns, but
perhaps you can give us some level of at least ballpark difference or lack
thereof between 2004 foreign programming as opposed to the figures that I have
just picked up from the financial projections filed by Rogers.
6170 MR.
MERSON: Could we get you that number
and submit it?
6171 Tim,
do you have it?
6172 COMMISSIONER
WYLIE: Obviously ballpark figures
because they are confidential.
6173 MR.
SMITH: Just for my clarification ‑‑
6174 COMMISSIONER
WYLIE: I'm trying to see what is the
difference of what is proposed in expenditures for foreign programming compared
to what is currently being spent on foreign programming.
6175 MR.
SMITH: I'm going to say that we are
roughly 25 per cent less.
6176 COMMISSIONER
WYLIE: That's good enough.
6177 And
that would be true for 2004, because we don't have these figures.
6178 MR.
SMITH: That is correct.
6179 COMMISSIONER
WYLIE: Thank you.
6180 In
your financial assumptions again you say that:
"Programming acquisition costs
will be coordinated in Toronto where national rights are involved." (As read)
6181 That
will be four ‑‑ is that correct? I think that's in your financial assumptions for Vancouver.
6182 Will
that be true for both Vancouver and Winnipeg?
6183 MR.
MERSON: Yes, that would be
the case.
‑‑‑ Pause
6184 COMMISSIONER
WYLIE: Talking about the synergies
related to foreign acquisition, by national advertising agency ‑‑
"natural advertising synergies" do you mean airing the same program
in the schedule of all four stations and selling national advertising across
all four stations for the program concerned?
6185 MR.
MERSON: No. It would be impossible to coordinate all those schedules.
6186 What
we meant is when our buyers ‑‑ when the advertising agencies
call for pictures, our sellers go in and explain what it is we have. They are generally looking for audience
demographics that they can fulfil and we will simply have the ability to pitch
to them a broader range of offerings than what we currently have.
6187 COMMISSIONER
WYLIE: Do you see it as possibly
happening though?
6188 MR.
MERSON: Absolutely.
6189 COMMISSIONER
WYLIE: That all four stations would
show the same program?
6190 MR.
MERSON: Oh, no.
6191 Leslie
should speak to it.
6192 MR.
SOLE: It would be very rare.
6193 The
four stations could, in some cases, use the same programming, but there is
clearly two different program mandates.
There are two different ‑‑ in this case there are many
different local markets.
6194 We
also don't think that ‑‑ we only think a percentage of these
acquisitions will apply to all four channels.
So on the occasion where ‑‑ I could give you one, if
there was a live Papal broadcast from Rome, that would be an exception where
that might happen. Otherwise we would
program these stations locally and directed towards the religious mandate in
Manitoba and B.C. and the ethnocultural mandate in Toronto, Ottawa and London.
6195 COMMISSIONER
WYLIE: You are talking here about a
program, a special program, a Papal broadcast, not ‑‑
6196 MR.
SOLE: Yes. I get ‑‑ we have no intention of networking
these stations, Madam Vice‑Chair.
6197 COMMISSIONER
WYLIE: Would you be comfortable, then,
with a limitation on the percentage of foreign program? We are talking about the acquisition of
program rights and the concern obviously of those who already have stations in
these markets. You have read the
interventions as well as I have. You
will hear from them as well.
6198 Would
you be comfortable with a percentage limitation of the number of the foreign
programs that would be shared between the OMNI television stations and the
NOWTV television station?
6199 MR.
MERSON: Could we think about it?
6200 COMMISSIONER
WYLIE: Yes.
6201 Mr. Strati,
I hope you have your list. You guys are
going to have a busy lunch.
6202 Do
you currently sell regional rights of non‑Canadian programs you purchase
nationally to Channel M?
6203 MR.
SOLE: We do sell programming to
Channel M. I'm not sure it's of
the description ‑‑ did you ‑‑ foreign?
6204 COMMISSIONER
WYLIE: Perhaps you can tell us what you
sell to Channel M?
6205 MR.
SOLE: Malcolm...?
6206 MR.
DUNLOP: Thanks, Leslie.
6207 Presently
we sell Channel M a show called "Canada: A Peoples History".
We sell it to them in seven languages.
It's the 31‑part series that CBC produced that we translate into
seven languages.
‑‑‑ Pause
6208 MR.
DUNLOP: Last year we also sold them
some English programming. We sold them
"King of the Hill", but that contract ended, I believe August of last
year.
6209 COMMISSIONER
WYLIE: We discussed briefly
paragraph 26 of the Winnipeg decision regarding the acquisition of
rights. You briefly explained that that
situation would not change if you were to be the licensee of these stations.
6210 Can
you expand on that? I'm looking at the
extent to which the ability of Trinity, the current licensee, to purchase
foreign programs and the ability of Rogers, with all the stations they have, to
purchase foreign programming are, to me, fairly apparently different, at least
unless their difference is explained away, which is what you did this morning.
6211 Paragraph 26.
Do you recall we have discussed briefly where the Commission, one of the
reasons for it licensing Winnipeg was the belief that despite the interventions
at the time it was not going to have an impact.
6212 MR.
MERSON: The television landscape in
Winnipeg really has shifted dramatically in the last couple of years with the
acquisition of Craig by CHUM. So when
you look at the television broadcast landscape in Winnipeg they are
essentially ‑‑ all three large commercial networks have outlets
in Winnipeg. Winnipeg, in fact, at this
point is one of the only markets that doesn't have an independent television
player.
6213 Nothing
we could do in Winnipeg would move us up the pecking order relative to those
national networks and we could not ‑‑ the landscape, which is
the pecking order in terms of buying foreign programming would not change at
all.
6214 COMMISSIONER
WYLIE: If the concern was to ensure
that these stations remain religious stations, do you think that one way to
ensure that would be to impose a limit on the amount of U.S.‑produced
programs aired during prime time?
6215 I
have the impression with the changes we are making to the balanced programming,
the one you have suggested, by adding an hour you would have more
opportunity ‑‑ the balanced programming spread between 6:00 to
11:00 instead of 7:00 to 11:00 would give you more flexibility ‑‑
am I correct in reading that ‑‑ to air possibly foreign
programming, popular foreign programming?
And is that likely to detract from the niche format of this station and
should it be limited?
6216 MR.
MERSON: We don't believe it should be
limited. Very similar to ‑‑
from two perspectives.
6217 The
first perspective is ‑‑ and Jeff speaks passionately about
this, so I might ask him just to sort of speak to it as well.
6218 COMMISSIONER
WYLIE: But he won't be in charge.
6219 MR.
MERSON: No, I understand. But he speaks passionately and we believe it
to be true as well that a lot ‑‑
6220 COMMISSIONER
WYLIE: You have to be passionate about
it.
‑‑‑ Laughter /
Rires
6221 MR.
MERSON: ‑‑ that a number of
the morals and ethics and lessons that are to be taught that occur within a
religious framework really are told best in the nature of storytelling and in
lessons.
6222 Jeff
is more eloquent on the topic than I am about how it is. History has really built storytelling as
a ‑‑ the best religious leaders were the best
storytellers. So we do believe we need
a significant component of storytelling within the schedule to make all the
lessons that the station seeks to tell evident.
6223 But
more so than that or equal to that is the need to provide a reasonable
financial framework into which these stations can operate. The model that is currently being followed,
which is a model of mixed ‑‑ three different areas of
religious types of programming really hasn't been a success. It hasn't broken through over here at all
and it would be a difficult model to sustain in Winnipeg. It will take some time to build these
stations, but to impose more conditions that might actually limit the
attractiveness or the desirability of the programs to viewers I think would be
very difficult.
6224 COMMISSIONER
WYLIE: If the Commission disagreed with
you and felt that it was necessary to impose a limit on the broadcast of U.S.‑produced
programs during prime time and, secondarily, on the amount of simulcast of
popular U.S.‑produced programs during prime time, would you think of what
the limits could be and get back to us?
6225 I
understand you don't want any limits, but should we impose them at least you
can go upwards from zero to what would be an acceptable limit.
6226 What
would be the impact ‑‑ you addressed it a little, the impact
on NOWTV if the Commission felt it necessary to impose the conditions? What would be the financial impact, the
extent of the financial impact?
6227 In
other words, what have you relied on in building your financial
projections? I'm sure you have decided
just how much of your revenues would come from simulcast opportunities from
airing U.S. popular programming, so if you back it out now you can tell us what
the impact would be of removing some of that flexibility that you have built
into the model.
6228 MR.
MERSON: Perhaps I can ask Malcolm just
to take us through how the model was built and the degree of reliance on that
type of programming.
6229 MR.
DUNLOP: Thanks, Rael.
6230 COMMISSIONER
WYLIE: From the programming
perspective. The Chairman will look at
revenues and expenses. Just connect it
to the questions I ask.
6231 MR.
DUNLOP: With any lost U.S. programming
our revenue model would decrease, depending upon what the restrictions
were. For example, if an hour were to
be taken way in prime time you would be looking at somewhere around $800,000 to
$900,000 a year in lost revenue.
6232 COMMISSIONER
WYLIE: Thank you.
6233 I
would like to look now at the consulting agreement and the programming
agreement with the Thiessen family.
6234 You
filed a programming supply agreement with Trinity according to which you will
pay $500,000 in licence fees per year for exclusive rights to first run
original programming eligible for complementary funding.
6235 Is
that correct?
6236 MR.
MERSON: That is correct.
6237 COMMISSIONER
WYLIE: That will be religious
programming?
6238 MR.
MERSON: Yes.
6239 COMMISSIONER
WYLIE: Will that programming be
intended for airing on both OMNI and NOW?
6240 MR.
MERSON: Potentially, yes.
6241 COMMISSIONER
WYLIE: Is that ‑‑
6242 MR.
MERSON: Oh, I'm sorry. You said OMNI and NOW. I thought you said both NOWs.
6243 No,
not at all. Directed only for the NOW
stations.
6244 COMMISSIONER
WYLIE: Could it not be that in some
cases it would be possible to air the same program on the OMNI station? Or you intention is to have that air on the
NOWTV stations only?
6245 MR.
MERSON: That is our intention. It is possible, but it is not our intention
to have them air on both stations.
6246 COMMISSIONER
WYLIE: Is this arrangement ‑‑
the Chairman may get back to this, but from a programming perspective, is that
part of the purchase and sale agreement?
In other words, but for that you wouldn't have purchased those assets?
6247 MR.
MERSON: Not at all. We don't know religious programming, as it
has been pointed out to us, and the Thiessen's have a long and proud history in
producing religious programming that predates NOW by a significant number of
years.
6248 We
wanted them. You might argue this is a
contract that is more to our benefit than necessarily to theirs. We want some continuing involvement by the
Thiessens in the ongoing operations of the business.
6249 You
will note that some of the other clauses beyond ‑‑ as you get
into the consulting arrangements, they go beyond normal consulting arrangements
which simply speak for services rendered and payments to be made. They really speak to the success of the
stations going forward. We want to keep
them involved in the stations in every possible way.
6250 COMMISSIONER
WYLIE: What is the meaning of
Clause 3 of that agreement, Mr. Thiessen?
Most Favoured Nation clause in non‑legalistic language, what is in
the intention, or the other parties as well?
6251 This
is the agreement that you filed.
6252 By
the way, what I have is unsigned. Is
that an agreement that has been executed?
6253 MR.
MERSON: Yes, it has.
6254 COMMISSIONER
WYLIE: Has it been executed exactly the
same as it was filed in draft form with us?
6255 MR.
STRATI: Yes, it's the same
agreement. I just filed it for the
purposes of filing it electronically so it would be available electronically,
but we certainly have the hard copy.
6256 COMMISSIONER
WYLIE: The one I have is
November 15, 2004.
6257 MR.
STRATI: Yes.
6258 COMMISSIONER
WYLIE: Clause 3, just explain to
me what is the intention?
6259 MR.
MERSON: Trinity Television produces a
showed called "New Day Ministries" ‑‑ I'm sorry,
called "It's A New Day" and part of what it was that Trinity required
from Rogers was in the event that we became the owners of the station they
would have some ability to continue "It's A New Day" on NOWTV.
6260 We,
because we hadn't finalized the schedule, really couldn't find a place to
guarantee to them that we might find a home for "It's A New Day" on
NOWTV, so we came up with a clause that essentially said if we decide to open
up time on the station for brokered programming we agree that you will have an
opportunity to bid for that time and that we will not charge ‑‑
we will not sell the same time to anybody at a lesser price than the
opportunity that you have to buy it from us.
6261 COMMISSIONER
WYLIE: Is that your understanding, Mr.
Thiessen, as well?
6262 MR.
J. THIESSEN: Yes.
6263 COMMISSIONER
WYLIE: What percentage of Trinity's
production yearly will this represent, this $500,000?
6264 I
assume that eligible for complementary funding means from existing funds in
Canada that the programming would be acceptable for.
6265 Is
that the intention?
6266 MR.
MERSON: Perhaps I can ask Jeff. This is a clause he wanted.
6267 MR.
J. THIESSEN: Thank you.
6268 Yes,
indeed we are looking to develop greater abilities in programming and when we
discussed the program arrangement we really wanted to find ways of using that
as seed money.
6269 Right
now currently our cost of production is about $2 million. This is a significant amount of more money
to include in programming. We would
love to work with Rogers and other groups to apply for CTF, or any other
funding opportunity to create great religious programming.
6270 COMMISSIONER
WYLIE: If you were unsuccessful in
getting complementary funding from Canadian sources, would that have an effect
on the $500,000 yearly in license fees?
6271 MR.
MERSON: It would have no effect from
our perspective. We are committed to
$500,000.
6272 The
reason we were a little oblique about the nature of the programming is Jeff
would like to use this, as he said, as seed money. So we didn't commit to numbers or hours, we merely committed to
doing this on sort of normal commercial terms.
6273 If
it turns out that he can in fact engage one of the funding sources to help with
the programming we think we can produce something that would be more
interesting than something that we might be able to do if we can't engage some
of the other funding sources.
6274 COMMISSIONER
WYLIE: In this contract, in
Section 1 where programming is described for the purpose of the contract,
I haven't seen the word "religious" anywhere there.
6275 Mr. Thiessen,
is all the programming you produce religious programming?
6276 MR.
J. THIESSEN: It would in fact be
religious. That was only an omission
because it was taken for granted it would be religious.
6277 COMMISSIONER
WYLIE: Yes, but is all the programming
that you produce ‑‑ is this produced through New Day
Ministries or through Trinity production?
What is ‑‑
6278 MR.
J. THIESSEN: It's actually
through ‑‑ the contract is with Trinity Television, but we are
able to delegate that to any of the other organizations we are involved with.
6279 COMMISSIONER
WYLIE: Yes. Would all your production satisfy a definition of religious
programming?
6280 MR.
J. THIESSEN: Yes, it would.
6281 COMMISSIONER
WYLIE: What percentage of Trinity's
production would that likely represent?
6282 I'm
looking at page 8 of the first deficiency response, the one
December 10. At page 8, you
provide there under Question 12:
"The production expenses
accounted for by programming that was produced by Trinity for year one, year
two and an estimate for year three..."
(As read)
6283 The
numbers are there. I don't think
confidentiality was requested for it.
6284 Is
that what the body with which you have the contract ‑‑ is
that the amount of production, or does that represent local production
via the television station as a opposed to the production entity.
6285 I'm
trying to get a fix on how much of the programming produced by
Mr. Thiessen's company would $500,000 a year represent.
6286 MR.
MERSON: As you can tell, it is a little
difficult to determine. Currently I
think what Trinity does for NOWTV is fairly simple talk‑formatted type
programming.
6287 We
contemplated that we might do something a little different with this
programming. It is the reason we
haven't been specific in the programming agreement about how many hours that
might be produced, because Jeff wanted to go back and see if we could perhaps
build something a little bigger with the funding. Obviously we thought it would be a good idea and we wanted to
encourage him to do that.
6288 Is
your question: If the worst comes to
the worst and what you end up producing is a talk show of some sort, how many
hours might that represent?
6289 COMMISSIONER
WYLIE: So some of these license fees
may not end up in a program that would be on the stations.
6290 MR.
MERSON: I'm sorry, I misunderstood the
question.
6291 COMMISSIONER
WYLIE: The $500,000 is license fees per
year, then presumably there would be other funding and a program eventually
produced that is satisfactory or not for putting on the air.
6292 MR.
MERSON: We wanted to leave Jeff that
flexibility, yes.
6293 MR.
J. THIESSEN: But I think just
to confirm to you, it was paid out as a licence fee, which means they
would be licensing it from us to be aired on NOWTV.
6294 COMMISSIONER
WYLIE: Yes.
6295 MR.
J. THIESSEN: Specifically as a license
fee means we would be airing it.
6296 COMMISSIONER
WYLIE: Likely end up ‑‑
6297 MR.
J. THIESSEN: Yes, absolutely on NOWTV.
6298 COMMISSIONER
WYLIE: ‑‑ broadcast.
6299 MR.
J. THIESSEN: Correct.
6300 COMMISSIONER
WYLIE: There is also a contract with
Mr. Thiessen and his wife Gloria Thiessen, with you and your wife. You were retained in a consulting role for
$155,000 per year.
6301 Was
that contract filed with us? I don't
have it in my file.
6302 MR.
MERSON: Pardon?
6303 Madam
Chair, in the response to deficiencies we did highlight sort of in summary what
the contract entails. Though we didn't
file the agreement we certainly have it and would be glad to file it as well.
6304 COMMISSIONER
WYLIE: Fine. Since I only have the summary and not the contract, would you
expand on the role of Mr. and Mrs. Thiessen as it affects programming?
6305 MR.
MERSON: The contract with the Thiessens
is for $155,000 per anum.
6306 The
two major roles that we want to engage them in, the first really is the launch
of the Winnipeg television station. We
do think it will take up a substantial portion of their time for the first at
least two years of the contract.
6307 Over
and above that, we wanted them to essentially ‑‑ we wanted
Jeff to act as a sounding board and Jeff to act as a liaison with the religious
communities to allow us to really engage them in what it is that we are trying
to build.
6308 As
I mentioned earlier, the contract isn't a simple consulting agreement and I
apologize, I didn't realize it wasn't filed.
But it has a term in it as well that is essentially success based, that
if the Winnipeg station turns out to be a successful station there is a
residual payment that is due to them as well.
We want to engage them in the success of building the Winnipeg
station. It's the primary
responsibility and function of the contract.
6309 COMMISSIONER
WYLIE: I will leave it to the Chairman
to see whether that contract should be filed.
It appears ‑‑
6310 THE
CHAIRPERSON: I think you can ‑‑
I have taken it that we would like to see it filed.
6311 MR.
MERSON: Absolutely. We would be happy to do that.
6312 COMMISSIONER
WYLIE: Yes, because it has an impact
obviously on ‑‑
6313 I
have a few questions about your tangible benefits.
6314 You
have, on page 3 of the second deficiency letter ‑‑ I
think it is, if I recall, dated 23 December, 2004. You have talk here about a minimum of
$75,000 of the $1.3 million would be directed to NOWTV Winnipeg; $50,000
would be accounted for by the original Red River scholarship; and a minimum of
$25,000 specifically directed to independent producers based in Manitoba
through the pilot development grants for independent producers and NOWTV
Documentary Fund.
6315 How
much of the $25,000 will come from the NOWTV Documentary Fund and how much from
the pilot development grants for independent producers?
6316 MR.
MERSON: Perhaps I can ask Alain.
6317 COMMISSIONER
WYLIE: In other words, what is the
likeliest split of this $25,000 taken from these two different tangible
benefits?
6318 MR.
STRATI: Given the dollar amounts
involved it is probably more likely that it would come from a development grant
to support the production.
Unfortunately, it probably is not enough to support a licence, a
specific documentary licence.
6319 COMMISSIONER
WYLIE: Are you prepared to suggest what
this split would be?
6320 MR.
STRATI: I wouldn't hesitate to say
100 per cent, but I think a very high proportion of the $25,000 would be
towards pilot development and that the documentary fund would be more towards
Vancouver.
6321 COMMISSIONER
WYLIE: Okay, thank you.
6322 You
have proposed a comparative religious studies conference, $100,000. Will this be one conference consisting of
multiple seminars or a series of seminars?
Expand a little on what this will be.
6323 MR.
STRATI: Sure, I would be glad to. This is a great initiative. It's something we have also done with Rogers
Sportsnet in terms that we developed a workshop with four different schools
regionally, and basically what it is is an opportunity ‑‑ we
would be looking for a one or two‑day seminar to discuss comparative
religious issues, and certainly at Regent College and Trinity Western.
6324 So
we were looking at an ongoing process that would be interchangeable between the
schools. For example one year we would
have it at Regent College, the subsequent year at Trinity Western, and vice
versa.
6325 In
terms of how often we would do it, the Sportsnet workshops, we currently have
budgets of about $20‑$25,000 for those and they have been quite
successful. Given that, we would be
probably looking at about four total seminars in the seven year timeframe. So two at each of the two universities.
6326 COMMISSIONER
WYLIE: So not necessarily once a year.
6327 MR.
STRATI: That's correct.
6328 COMMISSIONER
WYLIE: Is the participation going to be
limited to the students at those colleges, at those institutions?
6329 MR.
STRATI: Certainly that would be the
focus of it. I don't think it would be
limited. For example at the schools for
Sportsnet, we have expanded it to ‑‑ for example it is held at
BCIT here in Vancouver and it is by no means limited to BCIT students. The seminar workshop on sports programming,
sports broadcasting is open to other students as well as others who are interested
in sports broadcasting.
6330 COMMISSIONER
WYLIE: Is Rogers participation in that
just money or is the staff involved as well in the organization, et cetera, or
simply money that you give these institutions.
Would you organize, have a hands‑on role in organizing?
6331 MR.
STRATI: Sure We have found that the
success comes from both. In planning,
for example, the Sportsnet seminar here in Vancouver they actually work with
BCIT to schedule it so that when ‑‑ they do cover the
Vancouver Canucks for example, so they try to make sure that Jim Hughson for
example is here and a lot of others are here in Vancouver at the time of the
seminar so that it can access the resources of Sportsnet talent and staff and
producers to discuss the elements that
go into the production.
6332 COMMISSIONER
WYLIE: So you are going to use a
similar approach ‑‑
6333 MR.
STRATI: Absolutely. I think it is more engaging for the
students and they appreciate it.
6334 COMMISSIONER
WYLIE: ‑‑ for comparative
religious studies instead of hockey.
That could be turned into a labour problem now instead of hockey. Right?
‑‑‑ Laughter /
Rires
6335 COMMISSIONER
WYLIE: The Vision TV, it is discussed
in your supplementary brief at page 16.
6336 How
is the Vision TV Foundation managed? Is
there a separate management board from the Vision TV Management Board?
6337 MR.
STRATI: Yes. As I understand it, with the Vision TV Foundation there is an
independent board that oversees the production decisions.
6338 COMMISSIONER
WYLIE: As a result of the money that
you put into this, would you have a seat on that board, on the board of that
foundation?
6339 MR.
STRATI: No, we would not.
6340 COMMISSIONER
WYLIE: So it would be more a financial
contribution ending up with some programming.
Right?
6341 MR.
STRATI: That's correct. Actually it is specifically ‑‑
6342 COMMISSIONER
WYLIE: What kind of programming? Drama?
Documentary?
6343 MR.
STRATI: It can be either, probably more
likely for documentaries. In discussing
with Vision, they discussed a couple of projects as examples that they are
working on and have ‑‑ are working on in that they have the
projects in front of them, the project proposals, and they would see the
opportunity for additional license fees in order to meet the budgets in order
to trigger those productions and make those productions happen.
6344 In
terms of discussing it, that was the opportunity. Given not only number of projects but also the licence fees
involved, we would be probably talking about some documentaries.
6345 COMMISSIONER
WYLIE: In your tangible benefits you
have added $350,000 if the Commission approved your application for the
transmitter in Victoria.
6346 How
did you arrive at that amount? Why is
it not $250,000? What was the ‑‑
how did you arrive at the amount?
6347 MR.
STRATI: I believe ‑‑
maybe someone can ‑‑ in terms of the projections, I believe it
represents 10 per cent of the additional revenue from Victoria.
6348 COMMISSIONER
WYLIE: Of the additional revenues you
project.
6349 MR.
STRATI: That's correct.
6350 COMMISSIONER
WYLIE: Captioning and described
video. What are your intentions in that
regard?
6351 Confirm
whether or not you would accept as a condition of licence to close caption
90 per cent of all of the Fraser Valley and Winnipeg stations programming
beginning the first year of operation?
6352 MR.
MERSON: Yes, we would.
6353 COMMISSIONER
WYLIE: Okay. And described video. The
Commission has now a requirement for descriptive video imposed on the CTV
stations, the Global stations, the CHUM stations and I guess on OMNI.2 as well.
6354 Comment
on the appropriateness of a similar condition of license on the Winnipeg NOWTV
and the Vancouver NOWTV.
6355 MR.
MERSON: Perhaps I can ask Alain to
address the issue and Kelly to describe what we do at OMNI.
6356 MR.
STRATI: Sure, I think that would
be ‑‑ certainly Kelly can talk about described video we do
currently at OMNI, but we do feel that would be appropriate.
6357 COMMISSIONER
WYLIE: The same conditions.
6358 MR.
STRATI: That's correct.
6359 COMMISSIONER
WYLIE: Diversity. You
mentioned at page 18 I think of the first deficiency letter at some
length your corporate cultural diversity plans for 2002 and 2003 and that 2004
would be submitted at the end of January 2005 ‑‑ the 2004 plan
rather. Has that been submitted?
6360 MR.
STRATI: Yes, it has, Madam Chair.
6361 COMMISSIONER
WYLIE: Would you confirm that you would
include these two stations, should you be licensed to operate them, into your
corporate plan?
6362 MR.
STRATI: Sure. Absolutely.
6363 COMMISSIONER
WYLIE: Thank you,
Mr. Chairman. Those are my
questions.
6364 Thank
you ladies and gentlemen and good luck with the homework.
6365 THE
CHAIRPERSON: Thank you very much.
6366 Would
it be possible to get a copy of that consulting agreement before we resume?
6367 MR.
MERSON: Absolutely. We can give it over right now.
6368 THE
CHAIRPERSON: Good. We will resume in 15 minutes. Nous reprendrons dans 15 minutes.
‑‑‑ Upon recessing
at 10:45 a.m. /
Suspension à 10 h 45
‑‑‑ Upon resuming
at 11:05 a.m. /
Reprise à 11 h 05
6369 THE
CHAIRPERSON: Order, please. A l'ordre, s'il vous plaît.
6370 Mr.
Merson and ladies and gentlemen, we will proceed with the questioning. I am going to basically cover three areas
with you: the value of the transaction,
both properties; the impact of what the granting of the application would be on
the markets involved; and a general question about the integrity of the
licensing process related to the Winnipeg facility.
6371 Those
will be the general areas and the order will be intermittent.
6372 First
of all, on the filing of your 2004 numbers, the date is
November 30th. This is for
CHNU. The date was November 30th
and they have not been filed.
6373 MR.
J. THIESSEN: We have just recently
filed those.
6374 THE
CHAIRPERSON: Like a minute, a day?
6375 MR.
J. THIESSEN: I believe we did last
week.
6376 THE
CHAIRPERSON: Have we received
those? Not to our knowledge.
6377 So
the answer is you have filed them.
Okay. We will have to have a
look at them.
6378 I
won't go over the confidential figures of the file, but in the application
there were financial statements for Trinity Television and those had 2004
numbers in them, as well as 2003 numbers.
So that underlined my question as to why we hadn't received the filings
for 2004. We will use these as rough
estimates without divulging the numbers since we did grant confidentiality.
6379 When
I look at the 2003 figures ‑‑ again without mentioning the
specific numbers ‑‑ they don't reconcile with the financial
summaries that are public that we issued based on Trinity Television's
results. They are off by annoyingly
small amounts, but off.
6380 So
I wonder whether you could ensure when you file that you compare with staff
what the discrepancies are, and also look at the 2004 year in the same light
and see what it is. I think we have the
general drift for 2004 based on these filings.
6381 MR.
J. THIESSEN: We would be pleased to do
that. We waited until filing to make
sure we had audited statements to ensure that they would be correct this time.
6382 THE
CHAIRPERSON: So these statements in
your application are not audited?
6383 MR.
J. THIESSEN: That is correct.
6384 THE
CHAIRPERSON: Okay. But they were filed in November I assume and
so the 2003 figures should have reconciled with the year old figures that the
Commission had published in its financial summaries, but they don't.
6385 MR.
J. THIESSEN: I'm sorry.
6386 THE
CHAIRPERSON: Okay. So you want to check into that.
6387 I
haven't had a chance to review your consulting agreement. I think I have your own copy of it. A quick read I think suggests that the
description did not do it justice, that there is more in that consulting
agreement than is described in the response to Question 9 in the
deficiency letter.
6388 As
you noted earlier, Mr. Merson, there are incentives and lump sum payments,
and so forth, that I haven't had a chance to digest in the few minutes, but I
guess the numbers in the deficiency are pretty well the bottom number, the
lowest conceivable numbers?
6389 MR.
MERSON: That is correct. They could increase, depending on the
profitability of the Winnipeg station.
6390 THE
CHAIRPERSON: Right. So most of them appear to be contingent on
getting other licences, and so forth, and success.
6391 I
don't know, have you done an analysis of what, based on various sensitivities,
you feel that that contract is worth?
6392 MR.
MERSON: We have. We thought the kicker, for lack of a better
work, might be worth something up to $500,000 in our estimation.
6393 The
contract is a response to Jeff's request to really stay involved with the
station and our desire to keep him involved in the operation of the Winnipeg
stations. He has a vision for what
NOWTV might become which he wanted to sort of remain true to, including
applying for a licence in Alberta, should that make sense.
6394 This
is something he believes in and really wants to advance and wants to stay
involved with the business. So this was
our attempt to find a way to ensure that he retained an interest in the
business continuing forward.
6395 But
it depends. Not only are they
contingent, but they are contingent upon future activities.
6396 THE
CHAIRPERSON: Right. I understand that.
6397 I
guess there is a present value of the guaranteed flow and I suppose some
estimate of the contingencies that you think you have. Where this bites of course is on the value
of the transaction because, as you know, the definition of "transaction
value", that is a commonly used definition, one is from the International
Business Brokers' Association, would deem it to be the total of all
considerations, including consulting agreements and future considerations.
6398 So
you have valued this transaction at $13 million, $12 and a quarter for the
Vancouver assets. The question we have
to decided is: Is that the real value
or should it be topped up by the value of these consulting agreements?
6399 Perhaps
I could have your views on that first.
6400 Second,
if the Commission did deem the value to be increased by the value of those
considerations, what number should the Commission us.
6401 Third,
what additional tangible benefits would you be prepared to offer?
6402 So
it is a three‑part question and perhaps you can take them in order.
6403 MR.
MERSON: As to the valuation question,
the key for us are the future services that are to be rendered by Jeff, Laura
and Willard in the continuing evolution of the business. As I said, this is something we wanted and
demanded more than they necessarily pushed us to do.
6404 So
to some degree from the valuation perspective, the consulting agreements, as
I'm sure you know, really were in respect of services that were going to be
rendered that clearly are incidental to the transaction and should be added to
the transaction.
6405 We
will extract every iota of value for $155,000 out of Jeff and Gloria. We don't know this business and are
determined to learn it and be as good as we possibly can at it.
6406 So
to some degree we really believe the service is going to be rendered, so it is
an issue and it is the reason we divorced it from the transaction itself. In fact, it took a lot longer to negotiate
the consulting agreement and the programming agreement then it did the basic
agreement. It was done. The consulting agreements and the
programming agreements were done over a period of time thereafter.
6407 The
second part of your question I think is:
How do we get a sense of what the value of the kicker might be?
6408 The
kicker really is dependent on the last few years of the contracts.
6409 If
you look at the Winnipeg projections ‑‑ and I'm trying to find
them
6410 THE
CHAIRPERSON: Section 6.
6411 MR.
MERSON: What you would see in your 6
and 7 is around ‑‑ in fact it is an average of years 5, 6 and
7. You would see around $3‑$3.2 million
worth of, let's say, EBITDA as it is defined.
The Thiessen's percentage of that would be 12 per cent. Multiplied by the multiplier, so 12 per
cent would be ‑‑ my math is terrible ‑‑ $320‑$350,000
roughly, multiplied by 10, which would be $3.5 million, present value of
that today.
6412 THE
CHAIRPERSON: That is from the
consulting agreement.
6413 MR.
MERSON: That is from the consulting. That is the additional sort of value that
might be attributed to the kicker if you did the calculation.
6414 THE
CHAIRPERSON: Would that be a fair
number, in your view, to add to the value of the transaction?
6415 MR.
MERSON: I think it would be an
aggressive number, but I think it would be fair. It certainly is one we contemplated. And if you thought benefits would be 10 per cent of that
number, it might be 10 per cent of the $3 million present value back
to day one.
6416 THE
CHAIRPERSON: So you would be prepared
to commit to that level of ‑‑
6417 MR.
MERSON: Absolutely. If it was deemed to be an additional part of
the transaction. As I say, we feel
strongly we will make them work for this, but that is your determination.
6418 THE
CHAIRPERSON: I want to give you an
opportunity to make the case that it shouldn't or do simply agree that it
should?
6419 MR.
MERSON: No, in my opinion it absolutely
should not. It is a completely separate
agreement. It was one, as I say, we
negotiated over a period of time. We
asked ourselves: Who do we have who
could launch a Winnipeg station for us?
We didn't have anybody. Jeff and
Gloria were there, they knew the community, they are committed to religious
broadcasting and wanted to play a part in the evolution of the business.
6420 So
I believe it is an entirely different agreement. If you had said to us in retrospect: If you thought this was going to be an issue and for an
additional $300,000 worth of benefits would you have included it as part of the
original transaction? Absolutely would
have. It was something we would have
done. But I think it is a completely
separate issue.
6421 THE
CHAIRPERSON: I can see that the
motivations could have been quite different and normally every transaction is
unique in some ways and has its own motivation, but wouldn't you agree that it
is often the case that senior officers, key personnel, are kept on as part of a
consideration for a transaction, whatever the motivations.
6422 MR.
MERSON: Absolutely. Non‑compete agreements. We have seen some evidence of those.
6423 THE
CHAIRPERSON: If, pursuing that line,
you were to add another $300‑$350,000 of benefits, what would they likely
be?
6424 MR.
MERSON: Could we think about it?
6425 THE
CHAIRPERSON: Yes. You can think about it, yes.
6426 MR.
MERSON: Thank you.
6427 THE
CHAIRPERSON: Let's look at the
programming agreement now. Again, I
have a number of questions about it.
This we do have.
6428 I
note that the programming, Section 1 of this agreement, provides for at
least $500,000 for programming during each year of the term, representing, it
says:
"...up to $3.5 million of
license fees over the seven‑year term." (As read)
6429 MR.
MERSON: That is correct.
6430 THE
CHAIRPERSON: Right. But I guess when I read it with
paragraph (d), the last sentence in paragraph (d) says:
"If the purchaser pays license
fees of more than $500,000 for programming during the year of the term, the
purchaser's commitment for future years will not be reduced." (As read)
6431 So
it is the words "up to $3.5 million". This could actually exceed $3.5 million, couldn't it?
6432 MR.
MERSON: I think what we were trying to
do with that clause is just allow Jeff the flexibility to ‑‑
depending on when the contracts are made for production of programs ‑‑
to slide between. But the agreement is
only ‑‑
6433 THE
CHAIRPERSON: So even though it doesn't
say "subject to paragraph (b)", which would put a cap on
it ‑‑ caps are very timely ‑‑
6434 MR.
MERSON: Oh, I apologize. It was clearly intended to be a cap.
6435 THE
CHAIRPERSON: It was a cap?
6436 MR.
MERSON: It was clearly intended to be a
cap.
6437 MR.
J. THIESSEN: Not necessarily on my
side, but on his side.
6438 THE
CHAIRPERSON: His side. But that is how you understand it,
Mr. Thiessen ‑‑
6439 MR.
J. THIESSEN: Yes.
6440 THE
CHAIRPERSON: ‑‑ that there
is a cap there? Okay. Thank you.
6441 I
appreciate from your deficiency response that you have been doing approximately
$1.2 million of programming with your production facility, at least that
is what you have booked over the last three years, and this represents less
than half that. So you are in a comfort
zone, Mr. Merson, I suppose.
6442 MR.
MERSON: Absolutely. And it reflects what we think might be a
little bit of a shift in our Canadian production to balance in a way from
Christian programming.
6443 THE
CHAIRPERSON: Okay. I have that.
6444 So
now let's again discuss whether this is a consideration that you formed prior
the purchase price? What is your view?
6445 MR.
MERSON: Absolutely not. It is a programming agreement. We would engage somebody to do it for
us. The terms, the normal commercial
terms ‑‑ the only reason it isn't as specific as a traditional
programming agreement might be, which essentially refers to hours of production
and dollars related to that production is we wanted to give Jeff the
flexibility to retain the copyright to the shows and that we would only license
the rights to broadcast the shows on the various NOWTV stations.
6446 So
once you go down this path ‑‑ I'm not a lawyer, but as we
started working down this path of how it is you describe this transaction in
general terms rather than specific just to allow him the flexibility to go and
look for additional sources of funding and come to us with proposals, we ended
up in an agreement that is a little atypical of a traditional programming
agreement, only because it doesn't say hours and dollars directly.
6447 THE
CHAIRPERSON: So it is your position and
your evidence here, I guess, that this was not intended, nor should it be
regarded as, part of the consideration of the overall transaction?
6448 MR.
MERSON: That is correct.
6449 THE
CHAIRPERSON: Is that your view,
Mr. Thiessen?
6450 MR.
J. THIESSEN: As I understand it, Rael
is going to make me work for every dollar of that, and so because of that, we
are providing them, it is not actually dollars that are given, it is dollars
worked for.
6451 THE
CHAIRPERSON: I'm talking about the
licensing of the programm.
6452 MR.
J. THIESSEN: That is correct.
6453 THE
CHAIRPERSON: Where do you draw the line
between the consulting services and the programming services?
6454 MR.
J. THIESSEN: Where do I draw the line
between then?
6455 THE
CHAIRPERSON: Because you are going to
have to work under both I gather.
6456 MR.
J. THIESSEN: That is correct. Because it's not ‑‑ like
$500,000 is an awful lot of money to produce programs, but it isn't, I guess,
as much as I would dream to have for producing programs. So the money that would be in this
particular contract for programming would be applied directly to the
programming amount, not according to my salary.
6457 MR.
MERSON: The other thing I would point
out, and I don't have the programming agreement in front of me so I say this
with just the recollection of hindsight, but the programming agreement, as I
recall, is with Trinity Television and the consulting agreement I believe is
with the principals ‑‑ not the principals of Trinity. Trinity is a registered charity and the
consulting agreement is with the Thiessen's themselves.
6458 THE
CHAIRPERSON: Yes, that is what it
says. I believe you are correct. I think I have your views on that.
6459 Just
a question on brokered time sales. It
was difficult for us to determine where those were accounted for in your annual
returns to the Commission since they don't appear to be on those returns and
they don't appear to be either in the financial statements you filed.
6460 Where
did you account for those brokered time sales?
6461 MR.
J. THIESSEN: Brokered time sales.
6462 The
first year I think we did approximately half a million of brokered sales, then
it went up to about $900,000, then I think the third year we did about
$1.1 million I believe.
6463 THE
CHAIRPERSON: We have those numbers at
least in the ‑‑ $419,000 in 2002; $936,000 in 2003; and
$1.178 million in 2004.
6464 My
question is, where in your returns, in which line of the returns were they
accounted for?
6465 MR.
J. THIESSEN: I can refer this to Tim
for clarification, but I believe that those would be under advertising revenue.
6466 THE
CHAIRPERSON: Local? National?
6467 MR.
J. THIESSEN: National.
6468 THE
CHAIRPERSON: You are certain?
6469 MR.
J. THIESSEN: It would not be local.
6470 THE
CHAIRPERSON: As I say, your file of
Trinity Television ‑‑ unaudited as I now understand ‑‑
financial statements or your returns have that line in them.
6471 So
you are saying that we should find them in the national airtime sales line?
6472 MR.
J. THIESSEN: Yes. That is actually sold by our national agency
directly, so it would be under their line, out of their revenue.
6473 THE
CHAIRPERSON: Okay. By the way, I have been passed a note that
your annual return has not, as of today, been received at the Commission, so if
you filed it last week it is still not with us.
6474 MR.
J. THIESSEN: I will ensure that ‑‑
there is probably somebody listening at the office right now who will check
that for me.
6475 THE
CHAIRPERSON: Let me move now to the
issue of simultaneous substitution on your programming, on the revenues that
flowed from them.
6476 I
know Commissioner Wylie had a dialogue with ‑‑ let me get the
chart ‑‑ Sole. No, it
wasn't with Mr. Sole, the gentleman in the back ‑‑
Dunlop, yes ‑‑ on that.
6477 What
numbers do simultaneous substitution currently represent would you estimate in
your revenues?
6478 MR.
DUNLOP: Are you talking now to me?
6479 THE
CHAIRPERSON: Yes.
6480 MR.
DUNLOP: When I estimated the revenue
projections I did not differentiate whether they would be simultaneous
substitution or not. I just projected
the revenue based on what we felt we could achieve in a rating point in the
market.
6481 THE
CHAIRPERSON: Using roughly the same
schedule as we see in the November 2004 for now?
6482 MR.
DUNLOP: Basically for 2004, yes.
6483 THE
CHAIRPERSON: How many programs are
simulcast currently?
6484 MR.
DUNLOP: Tim would know that.
6485 MR.
SMITH: There are currently two programs.
6486 THE
CHAIRPERSON: Which are those?
6487 MR.
SMITH: "60 Minutes" on
Wednesday evenings at eight o'clock and "48 Hours"
Saturdays at 10:00.
6488 THE
CHAIRPERSON: How do you work the
interstitials in with that?
6489 MR.
SMITH: Those two programs actually
carry a full one‑hour open‑line program that follows the program to
discuss the issues presented in the program.
6490 THE
CHAIRPERSON: I see. So there are two currently, those two. Do you have plans to increase the number of
programs that will be simulcast?
6491 MR.
DUNLOP: It would always be our intent
as much as possible if we can get simultaneous substitution that we would,
particularly in our strip programming with some of the U.S. stations that come
into the market.
6492 THE
CHAIRPERSON: Right. I know in the Winnipeg proceeding you were
licensed. I think it was
Mr. Thiessen who indicated that he didn't think that you would have the
Vancouver rights for a number of these programs going forward but you seem to
have been able to acquire those rights.
I think in our decision we had indicated that testimony.
6493 So
I guess you are going to try to get more is what you are telling us?
6494 MR.
DUNLOP: Yes, we dill
6495 THE
CHAIRPERSON: This goes to impact now,
Mr. Merson. You are projecting
revenues of course which when compared with the original projections for the
Vancouver Fraser Valley station which are considerably higher than they were
then. I can give you the magnitudes but
you probably have seen them.
6496 Currently
there is a projection for CHNU seven‑year total of $87 million
versus $21 million in the original projections of the seven‑year
total, and that going up to the $93 million with Victoria.
6497 MR.
MERSON: Yes.
6498 THE
CHAIRPERSON: So naturally the question
of impact arises on the market. I note
in your deficiency response you have provided an answer to that, but I wonder
whether you can summarize that answer for me here as well.
6499 What
impact CHNU‑TV as NOWTV would have on the Vancouver television market?
6500 MR.
MERSON: Vancouver, Victoria, the Fraser
Valley is far and away the fastest growing television market in the
country. It grew by around 11 per
cent last year. The market size at the
end of last year I think was $370 million. So we are forecasting that the business would grow by
approximately $10 million worth of revenue over the period of the next
seven years; $12 million with the inclusion of Victoria as well.
6501 So
our contextual take on what the market impact might be was, you know, if you
assume that the market might grow by the rate of around 4 per cent per
annum over the next seven‑year period of time, it will grow by
approximately 30 per cent over the seven years, and 30 per cent of
$370 million is around $120 million.
6502 So
the $10 million is a very small proportion of just the growth of the
marketplace, less than 10 per cent of simply the estimated growth, and that
is if the market slows down and calms down.
6503 In
absolute terms, if we hit $16 million in sales in this business, it would
be less than 1 per cent of the size of the market.
6504 My
mistake. My math is off. It would be $16 million over
approximately $500 million if that was the case, so less than around
3 per cent of the entire market size in absolute terms. But even in growth terms it will account for
less than 10 per cent of the growth of the market.
6505 If
we look at the market, nothing goes up in straight lines we know and last year
was a phenomenal year for the Vancouver‑Victoria marketplace, but it
literally grew by the size of two stations the size of NOWTV in one year.
6506 THE
CHAIRPERSON: Right.
6507 MR.
MERSON: So we can't imagine we are
going to have much impact on the growth of the market.
6508 THE
CHAIRPERSON: It is interesting that the
numbers that we show in our financial summaries are growths in revenues for the
market ‑‑ I think I better begin by saying that we are a
little puzzled as to where you get the $369 million, because when we look
at our returns for the conventional market six television stations ‑‑
we didn't have CHNU so we couldn't do a seventh ‑‑ the
revenues in the market are just under $250 million. That includes Lower Mainland and Victoria.
6509 So
how does it get grossed up to $370 million?
6510 MR.
MERSON: The difference between the two
is the impact of network revenues on the marketplace. The numbers we have Malcolm can elaborate on where they come
from.
6511 MR.
DUNLOP: Certainly. As Rael said, they were included in the
network. Even if we look at the spot
market itself it is about $260 million approximately. I think $259 million was the number.
6512 THE
CHAIRPERSON: $250‑plus?
6513 MR.
DUNLOP: $259 million in the
spot market, plus network, I'm sorry.
$121 million for network, equalling $380 million.
6514 THE
CHAIRPERSON: When you say
"network" you mean what?
6515 MR.
DUNLOP: We would mean CBC, CTV,
specialty, digital, and so on.
6516 THE
CHAIRPERSON: You are including the
specialty services?
6517 MR.
DUNLOP: That would be under
"network", yes.
6518 THE
CHAIRPERSON: I see. And you are including the CBC?
6519 MR.
DUNLOP: Yes, we are.
6520 THE
CHAIRPERSON: Are you included CBUT or
the network allocation for ‑‑
6521 MR.
DUNLOP: These are funny numbers
sometimes because we get them from the TV Bureau. So some of it I believe is spot and some of it is network for the
CBC for example.
6522 THE
CHAIRPERSON: You are going to build on
those numbers.
6523 Could
you help me out with a reconciliation of your numbers with what you see in our
annual summaries, including convention and specialty, just to show me how again
hopefully these numbers ‑‑ because there is a fair gap. In fact, if we remove ‑‑
you see, we have for network payments a number that is currently zero and it
used to be, back in 2000‑2001 a number of $4 million plugged in for
those and then it went down to zero because of ‑‑ don't ask me
why, but it did.
6524 Then
there were infomercials and syndication production which ‑‑
but if you take only national and local you get a number of about $240,000, as
you will see.
6525 So
if you could do a comparative chart that builds from this and shows us how we
get to the $370 million, that would be very helpful.
6526 You
might as well file that at the beginning.
6527 So
now looking at your projections for Vancouver that you whizzed the numbers by
me unfortunately, Mr. Merson, so I didn't quite follow. You can do it either way. I see where you go the $16 million,
that is year six and year seven revenues for your station. But could you do it either on the basis of
the seven‑year total or some average so that we can do a bit of apples to
apples, and building in your assumptions indicate how ‑‑ I
guess your point is that $87 million will be a lot smaller than the growth
in the market.
6528 MR.
MERSON: Absolutely. Could we present those numbers together with
the reconciliation that you have requested?
6529 THE
CHAIRPERSON: Okay. That would be helpful.
‑‑‑ Pause
6530 THE
CHAIRPERSON: Have you done a
calculation as to ‑‑ I don't believe I saw it ‑‑
the percentage of your projected revenues that will come from existing
stations?
6531 MR.
MERSON: We have not done that. It is unlikely that much of it would come,
just the market growth is strong enough to ensure that there is more than
adequate revenue to go around.
6532 THE
CHAIRPERSON: But you have to assume
their growth ‑‑ they would grow as well, right, with our
without NOW?
6533 MR.
MERSON: Absolutely there would. Again the numbers, even if you use just the
spot market as against the local television station and you are using the
number ‑‑ I think it is $260 or $270 million, just
spot. And how much did it grow?
6534 MR.
DUNLOP: It grew 6.88 per cent.
6535 MR.
MERSON: It grew 6.88 per cent.
6536 THE
CHAIRPERSON: When you say
"spot", do you mean national and local?
6537 MR.
MERSON: National and local, but none of
the network revenues and none of the specialty revenues. So $260 million ‑‑ I'm
doing this in my head ‑‑ at 7 per cent would be around
close to $20 million annually.
6538 THE
CHAIRPERSON: Right. Again, our charts ‑‑ and
these are public ‑‑ show a lot smaller numbers than that. They do show a big leap in 2003 over 2002 of
34 per cent in national sales, but for 2004 over 2003 we just show
2.8 per cent growth for national sales and then 8.3 per cent for
local, but given the ratios would be a lot closer to 2.8 per cent than to
6 per cent, based on this chart.
6539 MR.
MERSON: Based on that chart.
6540 THE
CHAIRPERSON: Yes.
6541 MR.
MERSON: Perhaps we can submit the same
reconciliation at the same time.
6542 THE
CHAIRPERSON: If you could do that as
well that would be helpful.
6543 If
you could then, based on that, give me an estimate of what you think you would
draw from other stations?
6544 MR.
MERSON: The cannibalization would be.
6545 THE
CHAIRPERSON: It may be that I would
just save a lot of questioning by asking you to do the same for the Winnipeg
market?
6546 MR.
MERSON: Absolutely. Happy to do it.
6547 THE
CHAIRPERSON: Thank you.
6548 I
would like to move over to that market.
In Winnipeg of course the station has not launched. I guess I was having a little trouble
figuring out what exactly is being acquired by Rogers. What are the assets that are in effect being
acquired in Winnipeg.
6549 MR.
MERSON: The only asset would be the
broadcasting licence, subject to your approval.
6550 THE
CHAIRPERSON: Is that an asset? Have you consulted Mr. Engelhart on
that?
6551 MR.
MERSON: No. No assets then, if that is the case.
6552 THE
CHAIRPERSON: It is $750,000 being
allocated for we are not sure what. I
think we have your answer, but ‑‑
6553 MR.
MERSON: $750,000 was simply the cost
that was sunk into the application, plus some accumulated obligations that
Trinity has entered into, lease of transmitter site, those types of things, in
anticipation of launching a licence that haven't yet been dealt with so the
accountants keep them on the balance sheet.
In real terms they are sunk.
6554 THE
CHAIRPERSON: Right. But it seems to be a notional figure because
it is hard to relate it to anything.
You did, for example, in the Vancouver station, file an investment
analysis which included license application.
6555 I
didn't see one for Winnipeg. Was there
any reason that wasn't filed? The last
page of the financials for ‑‑ you did one for ‑‑
it was Appendix E.
6556 MR.
MERSON: We certainly have that number
which is the reason I'm sort of hesitating.
We did go through and calculate the costs that had been spent on
acquiring the Winnipeg licence and sort of costs that had been incurred on
programming to date and the transmitter.
6557 So
we absolutely have it. I apologize if
it wasn't filed, but we will certainly file it.
6558 THE
CHAIRPERSON: Again, I think it would
complete the record. I'm not sure how
useful it would be because again I think you probably just did an allocation
based on an estimate.
6559 Is
that correct?
6560 MR.
MERSON: No, it was based on
sort of hard costs that were incurred to acquire the licence.
6561 THE
CHAIRPERSON: Okay, then it will be
helpful. So you would identify the
costs incurred and describe what it is that that covers.
6562 We
do have, in your deficiencies, an indication that launch is going to be costing
another $1.2 million. These are
entirely new costs in addition to the sunk costs that you have already incurred
that are under the umbrella of the $750,000 is what you are saying?
6563 MR.
MERSON: I must admit, sort of reading
the $1.2 million number when I saw the financial and asking Alain what it
related to, but the launch of Winnipeg will cost more than $1.2 million. $1.2 million is our estimate of the pre‑operating
costs just to get the station on the air in terms of sort of the organizational
activities that we have to engage in, commitments we have to make.
6564 Over
and above that, we have budgeted for $3.3 million as the cost of acquiring
the assets necessary to launch the station, the hard costs.
6565 THE
CHAIRPERSON: Okay. Perhaps it will flesh out a bit better when
we have the investment analysis.
6566 We
talked about market impact in Vancouver and I guess there is a similar issue in
Winnipeg. It goes to the nature of the
stations that were licensed and the component of revenues for example that
would come from donations and other. So
the image of the stations at licensing were certainly originally in Vancouver
and Winnipeg were religious stations which were going to have a large component
of brokered programming and a large component of donations and would not be
powered by a strong multiple ownership group.
6567 So
in addition to the numbers, do you think that is a legitimate concern of
people, that this is in effect a transformation and raises concerns that almost
go back to the notion of should there be a call for a new licence in Winnipeg?
6568 MR.
MERSON: Clearly not as robust a market
as Vancouver‑Victoria is. It has
all three conventional networks in place.
By our calculation the market has actually been fairly stagnant over the
last few years, but profitability of the business has dramatically increased.
6569 The
questions we ask ourselves as business people is: Does the demand exist for this type of service? Would more competitors stimulate the market
or would they necessarily cannibalize the other players in the
marketplace? Because we know there is
some notion of activity in the marketplace actually stimulating a market. Winnipeg is the only ‑‑ I
say "the only", it is one of the only major markets that doesn't have
an independent broadcaster of any sort.
6570 If
you would look across the country there is some evidence that suggests an
independent operator can actually stimulate some activity in the marketplace.
6571 So
it is a reasonable business opportunity.
It isn't a slam‑dunk and it's the reason we think it really works
best with NOWTV Vancouver in place.
6572 As
to the prior question, which is: Has
the station evolved, perhaps Jeff could take you through the history of how it
is and why it is they felt it necessary to evolve the way they program in
Vancouver, but sort of as I understand it they have tried both models. They found the revenues simply didn't exist,
particularly as it related to Canadian religious programming.
6573 So
I don't want to put words in Jeff's mouth, but that is how it was explained to
me how the models evolved.
6574 Do
you want to add anything?
6575 THE
CHAIRPERSON: I don't mean to cut
Mr. Thiessen off, but that really isn't my question. I think we have read that and you have
documented that very well as to why you needed to move in the direction you did
and Vice‑Chair Wylie has been through the programming questions.
6576 I
suppose if the acquisition were by another religious organization or faith‑based
organization seeking to acquire this asset and make a go of it I wouldn't be
asking these questions, but I think that from the point of view of the
perception in the marketplace my question is:
Is it legitimate to say that the ownership of this enterprise by Rogers
Broadcasting is a very different kettle of fish from a religious organization
and therefore raises issues of competitive fairness in terms of licensing and
so on?
6577 MR.
MERSON: This is a licence that has many
facets and requires sort of a complicated schedule. Every single program on the air has to be religious and if the
context isn't obvious ‑‑ we have committed to ensuring that
the context of the programming is obvious.
6578 Over
and above that, we have an obligation to sort of 60 per cent Canadian
content in Winnipeg, 12 hours worth of balanced in prime time, including
sort of a large proportion of that sort of being locally produced. The opportunity evolve the channels with
something much more mainstream doesn't exist.
6579 The
requirements of having to deal with the different constraints in building the
program schedule essentially limit the amount that you really can do with the
station to do anything much more different from what it is that Jeff and the
Thiessen's have done with it with Vancouver currently.
6580 Leslie
and Malcolm have worked on the schedule, I don't know if you wanted to add
anything.
6581 MR.
SOLE: I would just add that one of the
material differences between Rogers owning the Winnipeg licence and the plan
that was forwarded by Trinity is that we are a corporation that is traded on
the stock exchange and we are not in the business of collecting or calculating
donations directly from viewers. So we
are very naturally pushed to the advertising model.
6582 THE
CHAIRPERSON: Okay.
6583 MR.
MERSON: But we are tied up in
knots. There is very limited
opportunity to ‑‑
6584 THE
CHAIRPERSON: I take that point. I guess it is really ‑‑ it
goes to the integrity of the licensing process. If you like Part A is the nature of the transition and
Part B is what used to be called trafficking and may still be in some
quarters. The idea that a licence
issued and not launched should not be put out for call is I guess the issue you
have to address.
6585 MR.
MERSON: Perhaps I can just ask Alain
for a little perspective on it.
6586 MR.
STRATI: Sure, I would be glad to.
6587 Mr.
Chair, I think we have looked at certainly other issues and other precedence in
terms of other transactions in terms of what are the issues that were
discussed. To specifically address the
issue you have mentioned of course is to ensure the integrity of the licensing
process is maintained.
6588 I
think in terms of the licence trafficking issue there has been a couple of
specific points that have been raised in terms of issues such as the
reasonability of any financial gain, if there is one. Certainly there is the issue of financial distress, if the
station is in financial distress and the ability of someone to come in and
retain the viability of the station.
6589 More
specifically, on issues of unlaunched stations, there have been other instances
I can think of. You may remember the
Télémedia transaction. There was a
station in Calgary, an FM station that was licensed. At that point in time there was a discussion in terms of value,
there was a discussion in terms of sunk costs, costs that had already been
incurred by the licensee. So there had
been investments that had been made in terms of an effort to launch the
station.
6590 I
think there was also discussion in terms of the benefits, in terms of the
industry benefits, the Canadian broadcasting benefits. So from our perspective we are looking at
the overall transaction in terms of financial gain which would incorporate both
licences certainly.
6591 The
financial distress of NOWTV in terms of where they are at, in terms of the need
to sell both stations, but perhaps a bit more specifically on Winnipeg, is that
investments have been made. In terms of
the integrity of the licensing process, we have talked a little bit about
program acquisition rights and the fact that at the time there was a lot of
discussion about acquisition rights. In
fact, I think it was one of the specific elements of discussion.
6592 Given
the fact of the nature currently, there is three national players in Winnipeg,
they will purchase programming by and large for multiplicity markets including
Winnipeg. NOWTV will likely be very
different, in that quite apart from its religious programming mandate there
will also be de facto that it will not buy nationally. It may buy from Vancouver and Winnipeg, it
may buy for Winnipeg.
6593 So
from a rights perspective we feel that the same issues are discussed here and
there is not a significant difference in terms of what NOWTV was discussed then
as what it would be now.
6594 The
revenue Rael has discussed in terms of the fact ‑‑ and I think
Leslie mentioned as well in terms of the advertising revenue certainly a much
greater part of it because of it.
6595 But
the Thiessen family has made an investment in the station, there have been some
costs, there is a significant effort and we do think that launching the station
in Winnipeg would benefit the industry not only because there is a new station in
Winnipeg that there has been a strong demand there for quite a long time, but
also because of the ability of NOWTV in Vancouver and NOWTV in Winnipeg which
would provide a robust two‑station accommodation.
6596 THE
CHAIRPERSON: I have your answer. Our rule is that we are very suspicious of
any transfer of licence in the first term of a licence. That goes back to the beginning of the
Commission. There are individual cases
where, as you say ‑‑ and there are others we could name ‑‑
where the Commission has nevertheless approved transactions either because they
were part of a package or because of distress situations. You are saying that this is one such case
when exception should be made to that rule.
6597 MR.
STRATI: That's correct. I think some of the similar circumstances
where these issues have been discussed are also present here as well.
6598 THE
CHAIRPERSON: Right. Let me take you to the doomsday scenario,
though, Mr. Merson.
6599 Assuming
that the Commission were inclined not to approve this part of the transaction
but were inclined to approve the Vancouver part ‑‑ and we will
get to Victoria in a moment ‑‑ but if Vancouver were approved
and Winnipeg were not, would you proceed with the closing?
6600 MR.
MERSON: We would proceed with the
closing. We continue to believe we
would be the best owners and NOWTV Vancouver would be ‑‑
Fraser Valley would be the natural partner to NOW Winnipeg. We believe the demand exists.
6601 We
are not sure this is a great idea, but absolutely we would proceed.
6602 THE
CHAIRPERSON: Perhaps I overlooked it in
reading the purchase and sale agreement that that contingency was addressed
where you would get approval for one and not the other, in which case what
would happen to the purchase price?
6603 MR.
MERSON: You have me there. I can't recall. I know we discussed it. I
can't recall whether it is in the agreement itself.
6604 THE
CHAIRPERSON: Mr. Strati, did I
miss it? Is it in the agreement itself?
6605 MR.
STRATI: I can check quickly.
6606 THE
CHAIRPERSON: I didn't recall seeing it.
6607 MR.
VINER: I would be surprised if it
didn't say subject to terms and conditions that were ‑‑
6608 MR.
STRATI: Yes, it does obviously refer to
CRTC approval. I would just verify
quickly whether it is contingent on the either/or scenario like you mentioned.
6609 THE
CHAIRPERSON: You can get back to us on
that and, if you like, what the price would be. Would it remain $13 million or not?
6610 MR.
MERSON: No, the price would be reduced
by the $750,000. That is the
recollection that comes back to me, that we had a discussion at the time about
the relative values and what they might be.
What I can't recall is whether the agreement directly addresses the
ability to proceed on one without the other.
We will check that.
6611 THE
CHAIRPERSON: That is what I can't
recall either. Thank you.
6612 Would
that scenario in any way affect your Vancouver business plan, as far as you can
see?
6613 MR.
MERSON: It would absolutely affect the
business plan.
6614 As
Madam Vice‑Chair was sort of discussing with us, there are some natural
synergies in the programming between the two stations so it would affect it to
some degree. But perhaps we can sort of
quantify how that would work in response to her question.
6615 THE
CHAIRPERSON: That would be fine, if you
could do that.
6616 Let's
turn to Victoria. What growth would you
see in your revenues? I guess the total
is, what, $6 million over seven years.
Right? It goes from a total of
$87 million without Victoria and $93 million with Victoria, so that
is the measure of that.
6617 MR.
MERSON: That is correct.
6618 THE
CHAIRPERSON: What would be your
view ‑‑ you have probably read the interventions and we will
hear the intervenors so I don't want to preempt that discussion, but what in
your view would be the effect of us granting you the Victoria transmitter on
the revenues of CHET‑TV and CIVI‑TV?
6619 MR.
MERSON: Again, we can't imagine it will
have a material impact. Our projection
in year seven is that the gross revenues of the station would be
$2 million more. So this is over a
period of seven years. At the end of
the seven years we think Victoria might add an incremental $2 million to
the business.
6620 This
again is in a market that is growing fairly rapidly.
6621 We
know the demand exists. This is
religious programming. Victoria is a
market that is part of the Greater Vancouver marketplace. The advertisers, when they look to buy,
don't differentiate. They do not
distinguish between Victoria and the rest of the marketplace. They expect that when they but they will
receive coverage in the entire Fraser Valley, downtown Vancouver and Victoria
as well.
6622 As
well, the program suppliers. When you
buy rights to the Vancouver marketplace automatically sell rights to Victoria
as well. So it is very much one
economic market, much in the way that sort of Hamilton and Toronto are one
economic market.
6623 So
in answer to your question: Do we think
this will have much impact? We really
don't think it will have much impact, simply based on the absolute value and
number of the dollars in the marketplace.
6624 We
think the demand exists and Jeff has tons of anecdotal evidence to suggest that
the demand exists. This is something
that would simply put the business on an equal competitive footing.
6625 Jeff,
as he analyzed why it was the business wasn't succeeding as well as he might
have hoped, really focused on it as being one of the major issues he had to
deal with. It was the reason they
applied to the Commission a couple of years ‑‑ I forget when
the initial application was, about a year back ‑‑ to add the
Victoria rebroadcaster.
6626 THE
CHAIRPERSON: Could you detail that,
Mr. Thiessen, as to that view that Mr. Merson just expressed that you
held?
6627 MR.
J. THIESSEN: As soon as we launched
NOWTV in Fraser Valley there was an immediate response from Victoria, pastors
calling up saying "What is going on here?
We don't get it on our channel service."
6628 Since
that time there have been e‑mails and phone records and people calling
up. When I realized that it was
imperative for us to get going in Victoria I called up some dear pastor friends
out that way and they were saying, "You know what, it is going to be very,
very important."
6629 I
also know Mr. Low is here as well and he has had some of our independent
producers who produce other types of religious programs and they themselves
have wanted an expression into Victoria and Vancouver Island as well.
6630 So
it is not just from the Christians who have called me, but it has also been
other faith groups expressing a desire to ‑‑ there are pockets
of those faith groups in that area that are lacking a religious service and we
think that NOWTV is the best service.
6631 THE
CHAIRPERSON: So that is on the service
front.
6632 What
have advertisers told you?
6633 MR.
J. THIESSEN: Local advertising. We didn't actually in our application have
any local advertising.
6634 THE
CHAIRPERSON: No, I understand that.
6635 MR.
J. THIESSEN: Sorry.
6636 MR.
MERSON: The limitation of not having
Victoria.
6637 MR.
J. THIESSEN: Oh, from the national point
of view? Oh, I can't express the
difficulty we have had both from the nationally ‑‑ us being
the last on the list for sure and then having us not having the opportunity of
pitching Victoria.
6638 One
of the biggest problems we have is even locally here there are opportunities
where our local sales people have four Subway franchises, say, to pitch, and
because we have franchises in Victoria and Vancouver that goes into a common
pot for advertising, we just simply don't get any of those buys.
6639 So
there is significant difficulties for anyone who is not in Victoria and I think
that it is one of those things that just is very, very important going forward.
6640 MR.
W. THIESSEN: If I could just add one
point here, even in the area of religious brokered programming we have had a
number of people that wanted the Victoria market and we missed the buy on
brokered religious programming because we didn't have the Victoria marketplace. So it has hit us not only on national sales
but even on the brokered market side.
6641 THE
CHAIRPERSON: I may have missed your
answer to Madam Wylie's questions, but are you planning to do brokered
programming?
6642 MR.
MERSON: Yes, we are. Limited amounts.
6643 THE
CHAIRPERSON: Limited amounts. Again, you didn't show those in your
projections, did you?
6644 COMMISSIONER
WYLIE: $100,000.
6645 THE
CHAIRPERSON: $100,000.
6646 MR.
MERSON: Yes, we did.
6647 THE
CHAIRPERSON: That is the other. It says "barter", but is
that ‑‑
6648 MR.
MERSON: Same thing.
6649 THE
CHAIRPERSON: Same thing. So that represents then ‑‑
6650 MR.
MERSON: No. I think it's under paid programs. It is under paid programs I think.
6651 THE
CHAIRPERSON: Sorry?
6652 MR.
SOLE: Infomercial. There are infomercials and paid programs.
6653 THE
CHAIRPERSON: Again, there are many
financial pages.
6654 I
see $100,000 in the Winnipeg lines throughout.
I don't see any in the Vancouver with or without Victoria projections.
6655 I
will go back to your original. This is
our copy of that.
‑‑‑ Pause
6656 MR.
STRATI: Mr. Chair, I am looking at
the ‑‑
6657 THE
CHAIRPERSON: Oh, infomercials, paid
programs.
6658 MR
STRATI: ‑‑ and paid
programs. That's correct. The first year is $842,000.
6659 THE
CHAIRPERSON: I'm sorry, you are quite
right. So that represents ‑‑
that doesn't change with Victoria. So
that is six of 87 ‑‑ or six and half of 87 or six and a half
of 93.
6660 Mr.
Thiessen, they are not showing any Victoria brokered programming here. Do you think that is an untapped opportunity?
6661 MR.
W. THIESSEN: There is a great
opportunity there.
6662 THE
CHAIRPERSON: Right. In Winnipeg you have the $100,000 of barter
in addition to the infomercials. A much
higher percentage in Winnipeg than in Vancouver.
6663 Is
that correct? I'm looking at seven year
totals, four of 27. What's that? More than a quarter?
6664 MR.
MERSON: I am going to ask Malcolm just
quickly for that assumption and what the basis of it was.
6665 MR.
DUNLOP: When I put the paid programming
estimates together I based it on the following: In Vancouver I based it on 10 hours of American and
15 hours of Canada, and I based the same in Winnipeg and the same hours in
both markets.
6666 THE
CHAIRPERSON: The same absolute hours?
6667 MR.
DUNLOP: Yes, basically the same hours
in terms of for estimating.
6668 THE
CHAIRPERSON: I see. The difference between the $6.5 million
and the $4.1 million is what the Vancouver market will be able to achieve
for you?
6669 MR.
DUNLOP: Yes.
6670 THE
CHAIRPERSON: All right. Okay.
Thank you.
‑‑‑ Pause
6671 THE
CHAIRPERSON: Let me just review this to
see whether I have covered everything I wanted to. I believe I have covered most of it.
‑‑‑ Pause
6672 THE
CHAIRPERSON: There are a number of
questions that you will be addressing in reply and I may, when I have seen the
filings that I hope we will be able to get as soon as possible.
6673 Do
you believe that you will have ‑‑ how much of that filed
material do you think you will have before the final phase of the proceeding,
which will be today?
6674 MR.
MERSON: We hope virtually all of
it. My sense is there is some
information that is more rapidly needed than others, particularly the program
schedule and the stuff we went over earlier this morning. So if we could focus on that first, we will
present all that stuff as quickly as we can, hopefully by the end of lunch,
just to give you the opportunity of just looking through and spend some time
with us.
6675 Then
ensure the stuff that isn't going to arise ‑‑ hopefully will
not arise again, we will file hopefully by the end of the day.
6676 THE
CHAIRPERSON: Thank you. Those are my questions.
6677 Vice‑Chair
Wylie.
6678 COMMISSIONER
WYLIE: Following the Chairman's
question about the possible dissociation of the two, I understand your response
to his request that in coming back to us with programming you will also address
the possibility that that would be just for Vancouver, to the extent that it
has any impact?
6679 MR.
MERSON: Absolutely.
6680 COMMISSIONER
WYLIE: As well as whether it is the two
stations.
6681 MR.
MERSON: Absolutely.
6682 COMMISSIONER
WYLIE: Thank you.
6683 COMMISSIONER
WILLIAMS: Mr. Viner, would it be
fair to characterize this application as a bailout of a troubled licensee, that
due to your size and scope of your organization you may be able to make
successful if you had all the pieces?
6684 MR.
VINER: I wouldn't characterize it as
just that, Commissioner Williams.
6685 At
Rogers Media we would like to grow and we would like to grow in television,
although we would like to grow in a way which matches our core
competencies. So there are a number of
reasons why we are interested.
6686 The
first is, this is a robust market in which we do not find ourselves.
6687 Second
is that niche broadcasting, as we have perhaps boringly repeated, is a core
competency of our company skill that we built over the last 20 years at
OMNI, and we really believe that we can bring some very positive ‑‑
make very positive contributions to the system, and we can make this profitable
because we know how to make these things profitable, not wildly so, but
nonetheless we can provide the financial stability and the skill‑set
necessary to make them profitable.
6688 So
yes we are bailing the Thiessen's out.
They are in financial stress and it is a fit with our skills.
6689 COMMISSIONER
WILLIAMS: Thank you. I had four other questions, but our very
able Chair covered them so I won't ask them again.
6690 THE
CHAIRPERSON: Thank you.
6691 Counsel...?
6692 MR.
STEWART: Merci, monsieur le président.
6693 Just
a quick question of clarification. The
agreement of purchase and sale that was filed doesn't appear to have been an
executed one, but it may have been for the same reason that was given
previously with respect to the consulting contract that what we got was the
electronic version.
6694 But
can you confirm that there is an executed agreement and the date of that
agreement?
6695 MR.
STRATI: Absolutely. We do have it. In fact, we may have a copy here. If not, we will get a copy shortly. But it is the same agreement.
6696 MR.
STEWART: Thank you. Thank you, Mr. Chairman.
6697 THE
CHAIRPERSON: Thank you very much for
your presentation. You answered the
questions very directly and helpfully.
Thank you.
6698 Mr.
Secretary...?
6699 MR.
LEBEL: Thank you, Mr. Chairman.
6700 We
shall now hear the appearing intervention.
‑‑‑ Pause
6701 MR.
LEBEL: For the record, I would like to
indicate that Crossroads Television System has withdrawn its intervention.
6702 So
the first appearing intervention will be presented by Multivan Broadcast.
‑‑‑ Pause
6703 MR.
KANE: Mr. Chairman, Members of the
Commission, we are prepared to go on, but it would be very helpful if we could
consider our intervention over the lunch hour in light of a number of things
that were said this morning. We think
we could be of more benefit to the Commission if that opportunity was provided.
6704 THE
CHAIRPERSON: I have no problem with
that, provided that the next person in line wishes to go on now because I think
we want to keep on schedule given the heavy number of items we have today and
tomorrow.
6705 I
don't know whether the next person on the list ‑‑
Dr. John Burns has withdrawn, did you say?
6706 MR.
LEBEL: No. I said Crossroads Television System has withdrawn.
6707 THE
CHAIRPERSON: You know what, I think
probably it might be best if we just adjourned for lunch and resumed in an
hour, at 1:15.
6708 Would
that be helpful, Mr. Kane?
6709 MR.
KANE: That is very helpful,
Mr. Chairman. Thank you.
6710 THE
CHAIRPERSON: Great.
‑‑‑ Upon recessing
at 12:15 p.m. /
Suspension à 12 h 15
‑‑‑ Upon resuming
at 1315 / Reprise à 1315
6711 THE
CHAIRPERSON: Order, please. A l'ordre, s'il vous plaît.
6712 Mr.
Secretary.
6713 MR.
LeBEL: Thank you, Mr. Chairman.
6714 We
will now hear the intervention by Multivan Broadcast.
6715 You
have ten minutes to make your presentation.
INTERVENTION
6716 MR.
REITMAYER: Mr. Chairman, Members of the
Commission and staff, my name is Art Reitmayer, and I am the President and CEO
of Channel M Television, a role which I have had the pleasure of holding since
the Commission granted Multivan Broadcast Corp., Channel M's parent company,
the right to launch a multicultural broadcast station in 2002.
6717 I
am joined at the table today by, to my left, Johnny Michel, our Vice‑President,
Programming, Production and Promotion; and to my right, Greg Kane, Channel M's
legal counsel.
6718 In
addition, we would like to note the presence in the audience today of Dianne
Collins, our News Director; Farnaz Riahi, our Director of Finance; Peter
Gillespie, our Vice‑President of Engineering and Operations; Bruce
Hamlin, our Vice‑President of Sales; as well, our Chair, Robert Lee;
Directors, Douglas Holtby, James Ho and representing the Segal family, Gary
Segal.
6719 I
will now begin our intervention.
6720 In
appearing before you today, it is our intention to outline Channel M's concerns
with respect to the transaction proposed by Rogers Broadcasting Ltd. to acquire
the assets of Trinity Television. These
are the concerns of a truly independent broadcaster that was granted a licence
to serve the ethnic communities of Vancouver one and a half years ago.
6721 That
licence, issued when we commenced broadcast, imposed on the station a number of
conditions designed to ensure what we proposed ultimately made it onto our
schedule. Provisions of the Ethnic
Broadcasting Policy also ensured that the service launched by Channel M
reflected the needs of Vancouver's multicultural and multiracial communities.
6722 The
licence mandate of Channel M is a complex one.
The station is required to broadcast 50 per cent of its programming
in languages other than English, French or Aboriginal, must broadcast at least
22 different languages each month, and is also required to be 100 per cent
ethnic between 8:00 and 10:00 p.m.
6723 By
the very nature of the service and due to the variety of language and ethnic
groups that Channel M serves, the Commission has long recognized that in order
for the operation to be sustainable, it must cross‑subsidize some of its
programming with revenues generated by English‑language foreign
programs ‑‑ typically from the U.S.
6724 When
the ownership group of Channel M applied for a multicultural licence to serve
Vancouver, they applied with an understanding of how to sustain their service,
given the competition in the market as then existed. The group assumed willingly the significant investment required
to build a state‑of‑the‑art, over‑the‑air
television station that would provide the unserved ethnic communities with a
service that they could call their own and be proud to welcome into their
homes.
6725 The
market conditions that Channel M faced when it filed its licence application in
June of 2001 were comprised of a number of long‑term stations in
transition and the imminent launch of a new commercial service in Victoria, as
well as NOWTV in the Fraser Valley.
6726 The
licensing of VTV in 1997 and The NewVI in 2000 dramatically increased the
commercial inventory available in the market, but the competitive landscape for
programming and commercial advertisers did not include the Trinity Television
service. NOWTV's mandate was to be 100
per cent religious and therefore it was not foreseen by other broadcasters or
the Commission that the station would be a factor in terms of competition for
programming or market revenues.
6727 In
responding to Channel M's written intervention, Rogers commented that Channel M
was trying to portray the Vancouver market in more bleak terms than was in fact
the case. Nothing could be further from
the truth. What we provided was a
realistic overview of the market using the same figures as submitted by Rogers
with some added context.
6728 The
suggestion that overall market growth in revenue would allow for NOWTV's increased
focus on spot television sales ignores the reality of stations already in the
market with a commercial mandate.
6729 Television
spot sales in the Vancouver market have been in decline since the late
1990s. Fiscal 2003 saw the first true
increase in a number of years with total spot revenues returning to the same
level as realized in 1998. Market spot
revenue for fiscal 2004 was up 3.7 per cent, with 2005 having a relatively
strong first quarter, with noticeable slowing as we move through the second and
into the third.
6730 Channel
M is one and a half years into its licence term and, to date, has not achieved
the level of revenues originally projected.
It would be very difficult for Channel M and the important service it
provides to realize its objectives should the Commission see fit to change the
landscape and approve Rogers' submission as filed.
6731 The
revenue growth projected by Rogers of in excess of $10 million, excluding Victoria,
can only come at the expense of other broadcasters in the market.
6732 MR.
MICHEL: Three of the conditions
proposed by Channel M are with respect to programming on NOWTV. The first condition seeks to ensure that
NOWTV complies with the Religious Broadcast Policy by airing religious and only
religious programming.
6733 Rogers,
in response to our intervention, make it apparent that their definition of
religious programming includes flexibility to air programs that address
spiritual, moral and ethical interests.
While we don't dispute that religious programs can be spiritual or moral
or ethical, it does not follow that spiritual, moral and ethical programs are,
de facto, religious programs.
6734 The
Religious Broadcasting Policy clearly states that a religious program is
defined as:
"...one that deals with a
religious theme, including programs that expound religious practices and
beliefs or present a religious ceremony, service or other similar event."
6735 Under
this definition we fail to understand how news and information programming,
such as "48 Hours", "Dateline" and "60 Minutes",
as well as the U.S. syndicated comedy shows such as "Everybody Loves
Raymond" and "The Fresh Prince of Bel Air" qualify as religious
programming.
6736 If
these programs were to run on other services in the market, one would not
expect the station to classify them as religious programs. Why then is it appropriate for NOWTV?
6737 We
also submit that a condition should be put on NOWTV to ensure they fulfil their
promise to contribute to their local market by producing local programming that
falls within their religious mandate.
6738 In
their original licence submission, NOWTV committed to:
"...reflect the local community
of the Fraser Valley and contribute to the development of a distinct balanced
religious television industry."
6739 To
our observance, this commitment has never been met.
6740 With
respect to our request for a "balanced programming" condition of
licence, we were encouraged to see that Rogers has agreed to provide no less
than 12 hours of access in prime time to non‑Christian religious
groups. It is important to note,
however, that our intervention was not only concerned with reinforcing this
condition, but with ensuring that the definition of "balanced
programming" was unambiguous.
6741 In
Rogers' response to our intervention, they claim that we erred in our
calculation of "balanced" programming because we analyzed the
station's launch schedule rather than the station's current schedule. Further, they argued that acquired news‑oriented
programming and the locally‑produced "Online" talk show should
be included as part of the "balanced" hours.
6742 We
disagree with these arguments.
6743 First,
in examining the current schedule on their website, the station lists only 2.5
hours of balanced programming in prime time.
6744 Second,
to portray "60 Minutes", "Dateline" and "20/20"
as programming that provides a religious perspective different from the
station's primary Christian orientation is questionable. The balanced programming concept was meant
to provide non‑Christian religious groups with access to the station's
schedule.
6745 Third,
as the content of NOWTV's locally produced talk show "Online"
primarily deals with themes that do not have a Christian focus or deal with any
type of religious theme at all, the show certainly could not be regarded as
providing an outlet for non‑Christian religious perspectives.
6746 MR.
REITMAYER: In their submission to
acquire the assets of NOWTV, Rogers has applied to have the coverage area of
the Fraser Valley service extended to include southern Vancouver Island and
Victoria.
6747 We
ask that the Commission deny the requested extension. It is our belief that the applicant has not fulfilled its
original service mandate to the communities of the Fraser Valley, nor has it
proven in any tangible way there is demand in Victoria for its religious
programming.
6748 To
allow the extension of a service for the singular purpose of levelling the
playing field would be a significant change in market dynamics, given that the
licence was not to be competitive with other market stations.
6749 Rogers
throughout its written submission would have us believe that NOWTV was granted
a mandate for the Fraser Valley and Vancouver.
However, NOWTV applied for and was granted a licence to primarily serve
the communities of the Fraser Valley, as reflected in the Commission's decision
of July 2000.
6750 The
issue of extending the reach of NOWTV into Victoria is about advertising, not
service. Rogers explains in their
intervention how national advertising is sold and that NOWTV is currently at a
disadvantage due to its lack of carriage in Victoria.
6751 However,
NOWTV was never licensed with a mandate to compete for national
advertisers. As outlined in their
licensing decision, the service was to have nominal impact on the Vancouver
market and, more importantly, be non‑competitive and not affect the
financial viability of other commercial television stations. Only a small portion of the station's
revenue was to come from advertising sales as it was to rely heavily on
donations and payments from producers.
6752 To
suggest that the Victoria extension is needed to give NOWTV an equal footing in
the battle for advertisers is completely counter to the station's mandate and
reveals the true intention is the further exploitation of U.S. syndicated
product that has found its way onto the station's schedule.
6753 As
Channel M is a stand‑alone Vancouver‑based station, we will
restrict our comments on the matter of the Winnipeg service to those filed with
our written submission and request that the Commission deny the precedent‑setting
transfer.
6754 In
conclusion, we respectfully submit that in order to ensure the integrity of the
broadcasting regulatory process, the stability of the Vancouver broadcast
market, and to restore balance to our competitive landscape, that the NOWTV
broadcast licence be returned to its original Religious mandate: a mandate that
by the very nature of the station's narrow focus must carry appropriate
restrictions to ensure that it does not stray from its premise.
6755 As
such, we propose that in the event the Commission approves the proposed
acquisition, the following six conditions of licence be incorporated to ensure:
6756 (1)
the Religious broadcasting mandate is adhered to;
6757 (2)
the station operates the licence to serve the community for which it was
originally approved;
6758 (3)
NOWTV does not compete for mainstream U.S. syndicated or Canadian entertainment
programming;
6759 (4)
local programming dollars are spent on local programs produced by NOWTV, for
the residents of the Fraser Valley;
6760 (5)
the balanced programming licence requirements originally imposed are complied
with; and
6761 (6)
third language programming on NOWTV is limited to "no more than 5 per cent
of the station's programming schedule each broadcast week", as proposed by
Rogers.
6762 We
thank you for the opportunity to present our intervention and respectfully ask
that you impose the conditions we have recommended on this sale and that you
deny the applications to extend the NOWTV service into Victoria and sale of the
Winnipeg licence.
6763 We
would be pleased to answer any questions.
6764 THE
CHAIRPERSON: Thank you.
6765 Commissioner
Pennefather.
6766 COMMISSIONER
PENNEFATHER: Thank you,
Mr. Chairman.
6767 Good
afternoon, gentlemen.
6768 I
want to ask you some questions that come out of today's presentation, so
forgive me if they jump around a little bit.
6769 Going
in, I had of course your very extensive intervention. As you note, it is quite thorough.
6770 Perhaps
I could start with it, though, to try to get a little bit more of a framework
for my questions ‑‑ not that there are that many of them. It is just a couple of key things I think I
would like some more thoughts on.
6771 You
were here this morning for the discussion, I think, with the applicant. There was a discussion with both Vice‑Chair
Wylie and the Chairman, particularly the Chairman, regarding the impact on the
market.
6772 You
certainly reflect on that and you are bringing that back today in your
presentation.
6773 Considering
this morning's discussion and the previous comments in reply and in application
by Rogers on the Vancouver market, its growth, its size, their indication this
morning that they didn't see a major impact considering the nature of the
religious programming service, do you have any further comments on that
discussion and your further comments in this presentation of the impact on
Channel M of this application?
6774 MR.
REITMAYER: Thank you.
6775 When
you look at the Vancouver market, I think you have to take into consideration
not just the one year where you saw a significant lift, which was 2003. I think people have looked at that and said
the market is back on track. We went
through a number of years post the launch of VTV in Vancouver where the market
was virtually flat to down. With
respect to other stations in the market, it is not that expenses and everything
else that go into the operation of an enterprise have gone down. So everybody continues to try and take that
portion of the money.
6776 So
when you are looking at a market, if it goes up 2 or 3 per cent, which it did
last year in 2004, to assume that that money can all go to one player would
assume that the other players are not looking to get any kind of return given
that their expenses have also gone up.
6777 To
my experience, so far I haven't seen a lot of the companies willing to see a
decrease in their bottom line with respect to their operations. So they are fighting harder to get a share
of that increase as well.
6778 From
Channel M's perspective we, a station that was launched a year and a half ago
and still having to try and meet our objectives, have to fight even harder to
get those dollars. So if you add another station into that mix, it is
just more stations trying to fight to find profitability.
6779 That
profitability, whether it is profit or break‑even, is really what is
required just for us to provide the services that we do.
6780 So
to suggest that that money can be taken with no impact on other stations is not
quite the case. We are not seeing that
kind of growth. We are not in the 20
per cent days any more.
6781 Like
I say, we have seen one year in probably the past eight where we have maybe
been slightly over 10 per cent. The
majority of the growth in air time sales is what you have seen, on the
specialty side, and there continues to be a shift with respect to those
dollars. So you are seeing significant
growth.
6782 That
is the number that shows up under Network.
When you were talking with Mr. Merson this morning, he was talking with
respect to TVB numbers. We see both the
spot sales and the specialty or network numbers ‑‑ and those
network numbers actually include specialty.
We have seen a significant shift, and we are still continuing to fight
that battle on the conventional side.
Stations that don't have that mix have to fight all that much harder.
6783 COMMISSIONER
PENNEFATHER: When you say this
afternoon television spot sales in the Vancouver market have been declined
since the late 1990s, is that what you are referring to?
6784 What
is the specific cause of that in your view?
6785 MR.
REITMAYER: When you look at the amount
of inventory that has been brought into the market, I think that had some role
to play in it. There have been
significant stations licensed into the Vancouver market since 1997.
6786 The
other factor, I think, is what is being experienced right across the country
right now, which is there is a shift in how advertisers are placing their
dollars. Specialty is a factor along
with all the other options that are out there with respect to Internet.
6787 As
we were talking the other day, you can walk into any washroom in the city and
there is advertising there now. It is
taking some of those dollars.
6788 COMMISSIONER
PENNEFATHER: Let's focus in a little
bit more specifically on Channel M.
6789 I
think you indicate obviously in this discussion the U.S. programming component
of your financial portrait and its importance.
You focus in, as you do in your intervention, that NOWTV B.C. is
currently affecting the financial viability of commercial stations in the
Vancouver market.
6790 What
I am looking at when I am discussing that is the current schedule.
6791 I
understand your point about the previous decision and evolution, but when you
make that statement could you clarify for us on what basis you make that
statement that you made in your intervention that NOWTV B.C. is currently
affecting the financial viability of commercial stations.
6792 What
is the cause of that?
6793 MR.
REITMAYER: I think there are two
reasons. One is the competition for
programming.
6794 As
we have submitted before with respect to acquisition of programming, a service
that was to be non‑competitive in programming was seeking to acquire a
program that Channel M looked to to put on its schedule when it first launched,
that competition for programming drove up the cost to us close to
$900,000. That, to me, is a direct
impact.
6795 The
other part is when you look at the market dollars, if you have U.S. programming
on a schedule where you wouldn't have normally anticipated it, it is going to
take some of the market dollars from advertisers for that programming.
6796 To
a large extent, what Mr. Merson said earlier and other members of the Rogers'
panel, it is based on ratings success in the market. The ratings success in the market right now is on the U.S.
syndicated programming that is running on that schedule.
6797 COMMISSIONER
PENNEFATHER: If I may, one could interpret
your concern about mandate of the service going forward is really focused on
this syndicated U.S. programming and
the ability to carry that as understood by the applicant.
6798 Do
you have a sense from looking at the revenue projections that the applicant has
tabled on the public record of how that revenue projection is related to this
issue of U.S. programming?
6799 What
does that tell you?
6800 MR.
REITMAYER: All of the revenue that they
would have there, I think the easiest question is to go back. If that U.S. syndicated programming wasn't
on the schedule, I think you would find that the revenues that would be on the
station would look more like what was originally filed by NOWTV when it sought
to obtain the licence in the Vancouver market.
6801 You
were looking at a service that was significantly lower in revenues because the
nature of the programming ‑‑ and again, their individual that
was on the panel at that time said that the appeal from an advertiser point of
view for religious programming is not as high as it is for commercial
programming, the nature of the U.S. syndicated product.
6802 COMMISSIONER
PENNEFATHER: As you say, you were using
the current schedule of NOWTV to look at this.
I am curious too about your comment this afternoon on page 5:
"We also submit that a
condition should be put on NOWTV to ensure they fulfil their promise to
contribute to their local market by producing local programming..."
6803 Clarify
for me the connection between local programming and what I assumed from your
intervention was your concern for a condition which relates to the religious
programming.
6804 You
seemed here to be putting the emphasis on local programming.
6805 MR.
REITMAYER: Are you speaking to item 4
or item 5? Sorry.
6806 COMMISSIONER
PENNEFATHER: I am on page 5
actually. I am not on your list at this
point. I am in the narrative at page 5,
second paragraph.
6807 MR.
REITMAYER: Thank you.
6808 COMMISSIONER
PENNEFATHER: And it comes up in your
interpretation obviously of the programming mandate.
6809 Here
as a solution I think you are proposing a condition which focuses on local
programming.
6810 MR.
REITMAYER: It all goes back to again we
looked back to the licence application as it was originally submitted by the
Thiessen family and looked to see what they were looking to accomplish with the
service. If you looked at that
programming schedule and the commitments that were made, there was a
significant amount of programming that was to originate and reflect the Fraser
Valley.
6811 To
date, we have not seen that on the schedule and we feel it is important that if
the station is going to be sold and it is going to be the service that it was
actually approved for, that those types of conditions should be put in place.
6812 COMMISSIONER
PENNEFATHER: So again it comes down to
what you see as the evolution of the programming as we see it now. As was discussed this morning, we don't have
a schedule going forward.
6813 In
your intervention you do in fact say ‑‑ I don't have the quote
right in front of me, but you do see this transformation continuing. Am I correct?
6814 And
on what do you base that assumption that the transformation, as you call it,
would continue?
6815 MR.
REITMAYER: As you have noted, we didn't
receive a programming schedule going forward.
The easiest determinant of that programming schedule maintaining what it
is and going forward, there were a number of comments today at the table with
respect to the types of programming that under the Rogers ownership the station
would look to pursue. And simultaneous
programming is indicative of U.S.
6816 To
my knowledge, there isn't a religious service across the border to simulcast
with, so I suspect that would be U.S. syndicated.
6817 When
you look at the revenue numbers that Rogers projects going forward, those would
also be indicative of a schedule that is populated with U.S. syndicated
programs as opposed to local Fraser Valley based programs or religious programs
that are brokered.
6818 COMMISSIONER
PENNEFATHER: One final question just to
clarify.
6819 On
page 6 of your remarks this afternoon you say in the last sentence of the first
paragraph:
"... given that the licence was
not to be competitive with other market stations..."
6820 In
terms of the Vancouver licence, what do you base that comment on? In the licensing decision?
6821 MR.
REITMAYER: Yes. It is actually in the licensing decision.
6822 COMMISSIONER
PENNEFATHER: Can you point us to what
exactly you are referring to?
6823 MR.
REITMAYER: If you give me a second,
yes, I can.
‑‑‑ Pause
6824 MR.
REITMAYER: If you look on page 2 of 6
of the original decision, at paragraph 6 ‑‑ it starts actually
on page 1 on my printout anyway. It
reads through and the last part of it says:
"...and which projects modest
audience levels and advertising revenues will not affect the financial
viability of the commercial television stations operating in the market."
6825 And
the preamble to that actually gets into the fact that there would be little
advertising and the majority of the dollars would come from brokered
programming.
6826 COMMISSIONER
PENNEFATHER: As has been indicated to
you before, it is less a limitation let's say that you cannot be competitive;
it is more an understanding of the nature of the programming as originally
submitted.
6827 Am
I correct? I think that is an opinion
that has been presented to you before.
6828 In
other words, as you say later, it is an assumption based on the fact of
donations and the projections going to the licensee.
6829 MR.
REITMAYER: Sorry, I missed the opening
part.
6830 COMMISSIONER
PENNEFATHER: What I am saying is that,
from my understanding, it is less a specific prohibition on being commercial
and competitive ‑‑ I don't see that as such ‑‑
but rather your interpretation and what is said here in this paragraph of the
nature of the donations component of the revenues and the nature of the service
programming.
6831 MR.
REITMAYER: I think it is a combination
of all of that.
6832 The
competition, if it's to come, should come from some semblance of a programming
schedule with respect to what was actually filed to obtain the licence.
6833 What
you are looking at today bears no resemblance to that. Like I say, it was licensed as 100 per cent
religious service, and that is not the case of what we are seeing here.
6834 COMMISSIONER
PENNEFATHER: Thank you very much.
6835 Those
are my questions, Mr. Chairman.
6836 THE
CHAIRPERSON: Commissioner Williams.
6837 COMMISSIONER
WILLIAMS: Good afternoon, Mr.
Reitmayer.
6838 Let's
talk about the proposed broadcast transmitter in Victoria.
6839 I
note in your remarks you say:
"The issue of extending the
reach of NOWTV into Victoria is about advertising, not service."
6840 Are
you suggesting there is no demand for religious programming in the Greater
Victoria Area?
6841 MR.
REITMAYER: What I am suggesting is that
barring a clear definition of religious programming, I certainly don't see that
the applicant has proven what would normally be expected: that there is demand
for its programming.
6842 We
filed with our intervention ratings numbers that you do see for the religious
programming currently. If those are the
only numbers we have to go on ‑‑ again, Rogers in their
submission suggested that based on ratings, there would be demand in that
market. If you actually take the
religious component of that schedule and look at the ratings that it is
achieving, I am not sure that you could conclude that there is a large amount
of demand in that market.
6843 And
again, they didn't file any market research to back that up. Anecdotal phone calls, we all receive those.
6844 COMMISSIONER
WILLIAMS: Do you also believe there is
no need similarly for the Winnipeg market then?
6845 MR.
REITMAYER: Again, I am not sure that it
has been proven. I think what we see
with respect to Winnipeg is the fact that the authority to launch was granted
to Trinity Television. That was granted
a number of years ago. There has been
no stride toward launching that service and to ensure the integrity of the
entire process, the licence authority should be returned.
6846 If
there is still a sense that the market can support and has the desire for the
service, then a new hearing should be convened based on applicants.
6847 COMMISSIONER
WILLIAMS: Thank you,
Mr. Reitmayer.
6848 I
have no further questions, Mr. Chairman.
6849 THE
CHAIRPERSON: Thank you.
6850 MR.
KANE: Mr. Chairman, before we complete
our intervention, there will be a considerable amount of information filed by
the applicant in response to requests by the Commission in the questioning this
morning. In fairness, we would like an
opportunity to review that and have the opportunity as well to make written
submissions on it.
6851 It
goes to fundamental issues, Mr. Chairman, relative to the
application. There are some significant
parts of what otherwise would be in an application that will be in the material
to be filed.
6852 We
submit that, in fairness, we should be given that opportunity.
6853 THE
CHAIRPERSON: Why don't we do it this
way. When you have reviewed those, if you
wish to bring that matter to our attention and request the ability to reply, we
can deal with it at that point rather at this stage, not having seen it, trying
to rule on something that remains somewhat hypothetical.
6854 MR.
KANE: That is acceptable; thank you.
6855 THE
CHAIRPERSON: Thank you.
6856 Mr.
Secretary, please.
6857 MR.
LeBEL: Thank you, Mr. Chairman.
6858 The
next appearing intervention will be prevented by Dr. John Burns.
INTERVENTION
6859 DR.
BURNS: Mr. Chairman, Commission staff,
thank you for this opportunity to speak on behalf of NOWTV and thank you for
awarding the licence to NOWTV.
6860 I
am not here as a business person. I am
a pastor. I was born and raised in
Vancouver and I graduated as a dentist from UBC, and over the next few years I
just got more involved in trying to help people and I ended up becoming a
pastor in 1986.
6861 I
say all that just to say my only purpose is to serve people.
6862 I
have actually been on television in our nation since 1986, first as a pastor
trying to do the best I could and ending up trying to purchase air time to say
something that would help people.
6863 I
must admit over the last 19 years I have learned a lot. I think I have done almost everything that
the religious sector has done.
6864 When
NOWTV started they approached my wife Helen and I to host a new program with a
very interesting title: "Pure Sex and Relationships". At first, what in the world do I want to do
something like this for? You set
yourself up for everybody that sees you on the street saying: "There's the sex people". It's maybe not the most comfortable place.
6865 But
I look at our nation and I look at what is needed. I have grandchildren and someone needs to just put hopefully some
moral commonsense out there.
6866 So
when they approached us, we took it and we started this program "Pure Sex
and Relationships", different from any religious program I have ever done
and any that I know of. I think that
NOWTV and what you have been listening to, the philosophy behind NOWTV, is
ingenious.
6867 When
I was on television as a pastor preaching from a bible, telling everybody what
I believed, very few people wanted to listen and very few people would actually
be impacted by it. But when we started
our program with one goal, and that was just to answer people's questions about
the whole moral relationship spectrum, it is amazing the people that watch the
program, the numbers of people that watch it, and across every boundary that
watches it.
6868 We
go throughout our city and we are recognized by everyone. I don't know if I have ever had anybody come
up and say a negative word, but I have had an awful lot of positive from an
awful lot of people other than just Christians.
6869 We
have Muslims that love our program, Sikhs that love our program, and I could go
on.
6870 What
I am saying is that NOWTV and their philosophy of religious broadcasting isn't
narrow‑minded. I think narrow‑minded
doesn't serve anybody's purpose.
6871 I
think what you are hearing also in that it is a story‑telling ministry is
really true. It has to be something
that touches everybody in every facet of their lives. To have someone stand up and just preach a very narrow‑minded
this is the way it is, it is not really going to affect our society.
6872 I
am on television for one purpose: my grandchildren. It's not about me. I
don't need to be on. But I have found
that it has been very valuable in our society, what we are doing today.
6873 I
just want to add my hope that it continues.
I want to thank you and congratulate you for the licence. Even watching today, I have been very
impressed. I feel very safe that you
are actually protecting and ensuring that we are going to continue to have
programming that is going to meet the needs of the generations to come.
6874 I
believe, because of the financial situation, that this transaction is a good
transaction.
6875 Thank
you.
6876 THE
CHAIRPERSON: Thank you.
6877 Commissioner
Wylie.
6878 COMMISSIONER
WYLIE: Good afternoon, Dr. Burns.
6879 Is
NOWTV the only station on which you appear?
6880 DR.
BURNS: Right now we are. We have been on other stations and never
anywhere close to prime time or anything where there would be a lot of people
watching, basically because to pay the dollars ‑‑ you are
slotted in a pay‑per‑view thing and to pay those dollars for the
normal church that is not just realistic.
6881 COMMISSIONER
WYLIE: Are you on the air now on the
basis of brokerage?
6882 DR.
BURNS: No. I am on the air on the basis of people watching it. There is enough people watching it, I guess. The ratings are good enough, I guess, that
it proves that people want to watch something that we have to say, but it also
helps me do what I want to do.
6883 COMMISSIONER
WYLIE: You get paid by the station?
6884 DR.
BURNS: No. What they are doing is bartering and giving us air time that we
would normally have to pay for. We have
a program that we produce called "Family Success", which is all about
the same thing. We would normally have
to purchase air time. So instead, they
put that program on and we do the other program.
6885 No,
we don't get paid for it.
6886 COMMISSIONER
WYLIE: All I can say, Dr. Burns,
is if people say "there's the sex people", that's better than
"there's the dentist".
‑‑‑ Laughter /
Rires
6887 DR.
BURNS: Thank you.
6888 COMMISSIONER
WYLIE: Thank you for your appearance.
6889 THE
CHAIRPERSON: Thank you.
6890 Commissioner
Langford.
6891 COMMISSIONER
LANGFORD: You must have heard the
intervenor that was on before you.
6892 DR.
BURNS: Yes.
6893 COMMISSIONER
LANGFORD: Because you obviously must
watch, I assume, NOWTV; not just your own show but you must watch NOWTV.
6894 DR.
BURNS: Yes.
6895 COMMISSIONER
LANGFORD: The intervenor before you
made a number of points, but one of the points made by that team was that they
could not quite understand how anybody could include shows like "Andy
Griffith", "Dick Van Dyke", "Leave it to Beaver",
"60 Minutes", "Everybody Loves Raymond",
"Dateline", and a number of others in a religious broadcasting
service.
6896 DR.
BURNS: I just wonder if any one of
those men have a purpose like I do, which is to communicate to people
values. If you did, you would realize
that those shows are some of the best communicators.
6897 I
think if Jesus was alive today, he would be a movie producer or a television
producer, because it is the medium of communicating values.
6898 I
am thrilled for what they have done in that arena.
6899 COMMISSIONER
LANGFORD: You would take umbrage with
that position. You see these as having
religious value, as being in keeping with the spirit and the vision of a
religious broadcasting service.
6900 DR.
BURNS: Absolutely, especially when they
take it and they have commentators that are on talking about those values. We have done that.
6901 "Everybody
Loves Raymond" is one of the best shows to bring to light different topics
that our world is really dealing with.
It is not a religious narrow‑minded topic. It is a real world topic.
6902 But
our value system, which is what we call religion, has to apply to those. So it is a great way to do it.
6903 COMMISSIONER
LANGFORD: Thank you very much. That is my question.
6904 Thank
you, sir.
6905 THE
CHAIRPERSON: Thank you, Dr. Burns.
6906 DR.
BURNS: Thank you.
6907 THE
CHAIRPERSON: Mr. Secretary.
6908 MR.
LeBEL: Thank you, Mr. Chairman.
6909 The
next appearing intervention will be presented by Irene Chu.
INTERVENTION
6910 MS
CHU: Mr. Chairman, Madam Vice‑Chair,
Members of the Commission, thank you for allowing me to appear before you
today.
6911 My
name is Irene Chu. I have been in
Canada for over 40 years. In that span
of time I have been privileged to serve as a Canadian Citizenship Court judge,
as well as a member of the Immigration and Refugee Board. At present I am on the Board of Governors
for George Brown, the Toronto city college which is one of the most ethnically
diverse learning institutions in Toronto.
6912 As
well, I am the Vice‑Chair of the Hong Fook Mental Health Foundation,
which serves the Cambodian, Thai, Vietnamese, Korean and Chinese communities.
6913 Also,
I am the Vice‑Chair of the Advisory Board to Rogers Media OMNI
Television.
6914 When
the Advisory Board was made aware of Rogers Broadcasting's intention to acquire
the religious channels, the board members were absolutely positive in their
support for this initiative and encouraged management to move forward with the
proposal.
6915 Most
of us have been advisors for the past 15, 16 years and we are totally certain
of the capabilities of the applicant.
6916 The
applicant consists of a group of award‑winning innovative broadcasters
who are socially responsible and forward‑thinking Canadians. They are known for their thoughtfulness,
their principles of fairness and balance, and their dedication to the under‑served. They are also the same people who
reinvented, reinvested and turned OMNI Television into the exemplary multilingual
TV that not only ethnic Canadians like myself but all Canadians are proud to
call their own.
6917 We
know that the applicant can and will bring new and exciting ideas to the
Religious Channel, but we also know they will respect the traditions and be
mindful of the sensibility and sensitivity of the diverse viewership.
6918 Mr.
Sorbara, the board Chair, is unable to attend today because he is out of the
country, but he asked me to specifically emphasize on the substantive
investment that the applicant has pledged toward this project, both in terms of
advanced training technology and in invaluable human resources, both of which
would no doubt bring NOWTV to the same level as other major networks.
6919 Mr.
Chairman, Madam Vice‑Chair and Members, I know that you can depend on the
applicant to follow regulations and to take the mandate of NOWTV with earnesty
and sincerity. We implore that you
approve this application. In so doing, you
will be approving experience, fairness and financial stability. And more than other things, you will be
granting an opportunity for NOWTV to look forward with hope and confidence
toward a promising and productive future.
That surely will contribute to the Canadian broadcasting system in a
unique and meaningful way.
6920 Thank
you.
6921 THE
CHAIRPERSON: Thank you very much, Ms
Chu.
6922 As
I said yesterday to intervenors, the fact that we don't ask you questions only
means that your written and oral presentations were very clear.
6923 MS
CHU: Thank you.
6924 THE
CHAIRPERSON: Thank you.
6925 Mr.
Secretary, please.
6926 MR.
LeBEL: Thank you, Mr. Chairman.
6927 The
next appearing intervention will be presented by the OMNI Television Advisory
Board.
6928 Mr.
Chairman, Madam Chu was appearing for both of these intervenors.
6929 The
next one will be presented by Reginald. W. Bibby.
INTERVENTION
6930 DR.
BIBBY: Good afternoon, Commissioners.
6931 My
name is Reginald Bibby. I am a sociologist. I hold the Board of Governors Research Chair
in the Department of Sociology at the University of Lethbridge in Alberta.
6932 I
very much appreciate having the opportunity to appear before the Commission.
6933 For
three decades I have been studying religious developments in Canada through a
series of well‑known national surveys of adults and youth. These surveys have been monitoring social
trends with a strong emphasis on religion and quality of life. The findings have been disseminated through
12 books, some 70 articles and many presentations in academic settings.
6934 The
dissemination has also included extensive media coverage and an extremely large
number of personal presentations in a variety of settings across the country.
6935 I
have reviewed and discussed the plans of Rogers Broadcasting to enter into
religious telecasting, and I am pleased to support Rogers' application to
acquire NOWTV with plans to extend service to Winnipeg and Victoria.
6936 My
support is tied directly to my research findings. The research to date shows that Canadians have significant
interests and needs relating to spirituality and personal life and relationships. Let me briefly elaborate.
6937 The
majority of adults and teenagers explicitly acknowledge that they have
spiritual needs, with their conceptions of spirituality varying considerably
from fairly conventional to highly individualistic expressions.
6938 The
survey findings remind us that all Canadians know what it is to have times of
personal need. We sometimes find life
difficult for any number of reasons: concerns about our health or the health of
a loved one; a problem with a child or a parent; anxiety about our finances and
perhaps our careers; from time to time experiencing loneliness, a sense that we
should be getting more out of life, with some people experiencing depression
and even despair.
6939 The
surveys also document the fact that there is nothing that Canadians, young and
old, value more than relationships.
Teenagers report that number one on their value rankings list is
friendship, followed closely by being loved.
6940 Adults
tell us that there is nothing more important to them than family life, their
children, their parents, their partners.
Without question, the research findings document the reality that
spirituality, personal needs and the desire for good relationships are
centrally important to Canadians.
6941 It
is highly significant that these three themes are also three central themes and
goals of religious groups: spiritual nourishment, helping people live life,
enhancing interpersonal life at the individual, community, national and global
levels.
6942 Consequently,
religious groups are in a position to make an important contribution to all
three of these areas.
6943 As
I have noted from time to time, it seems like a match made in heaven. The net result of religious groups
responding would be a considerable enhancement of personal and social life in
Canada.
6944 However,
my research and that of others suggests that to date such an apparent perfect
match, like all perfect matches, is not without its glitches. For one thing, religious groups frequently
are not doing a perfect job of addressing spiritual, personal and relational
needs. But even if they were, their
ministries are not touching everybody.
6945 It
is true that a noteworthy proportion of Canadians, about four in ten, have
contact with religious groups at least once a month. However, the flip side of that figure is that six in ten
Canadians have little or no involvement, even though most of them claim to
identify with specific religious traditions.
6946 I
have spent a fair amount of my life trying to encourage Canada's religious
groups to give much higher priority to locating those six in ten people and
responding to their interests and needs.
My research over time has also reminded me that I have had limited
success. The failure of groups to
locate and minister to the six in ten has not merely resulted in groups failing
to put more people in the pews, but more seriously large numbers of Canadians
who could have benefited from good ministry have been largely untouched by the
country's religious bodies.
6947 This
brings me back to the Rogers application.
6948 The
collective failure of religious groups could well open up an extremely
important opportunity for religious television. The market is there.
6949 As
I have been emphasizing, some 60 per cent of Canadians who readily
acknowledge spiritual, personal, relational needs are not being served very
well by religious organizations. Our
data suggest that television programming that effectively responds to such
interests and needs is programming that potentially has a sizable market. It also is programming that could elevate
personal and collective life in Canada.
6950 Such
a possibility of course is also not without its glitches. Presently viewers of religious programs tend
to be individuals who are actively involved in religious groups. Our surveys show that 8 per cent of
Canadians currently watch religious programs at least once a week. They are comprised of about 25 per cent of
those who attend services every week but only 2 per cent of the six in ten
Canadians who are not active in groups.
6951 The
inability of current religious programming to appeal to more inactives appears
to be linked to some fairly clear factors.
Those factors include: limited financial and human resources; symbiotic
ties with fairly narrow audiences; and, I think, the lack of explicit
recognition of the six in ten market that exists.
6952 It
also needs to be pointed out that to the extent existing programming attempts
to provide resources for religious leaders, an additional shortcoming is that
the resources are heavily American, excessively southern evangelical, and
typically oblivious to the Canadian context.
6953 In
my opinion, Rogers Communications has the credibility, the expertise, financial
resources and commitment necessary to make a significant contribution to
religious broadcasting in British Columbia, Manitoba and beyond. Rogers has the potential to enhance and
complement the activities of religious groups, with explicit consciousness of
the Canadian context, thereby contributing to stronger and healthier
organizations and better served memberships.
6954 That
in itself would be a major contribution.
But Rogers also has the potential to do much more. It has the proverbial wherewithal to access
and serve people who have little or no interest in religious group involvement.
6955 Further,
its sensitivity to the diversity of the population and its experience and
success in multicultural broadcasting with OMNI 1 and OMNI 2 makes Rogers ideal
for serving the religiously diversified populations of B.C.'s Lower Mainland,
as well as a city such as Winnipeg.
6956 What
this all adds up to in my mind is the unique and intriguing possibility of a
well‑run, well‑respected and well‑funded religious television
service contributing significantly to Canadian lives and to Canadian life.
6957 I
hope that the Commission will recognize and endorse that possibility.
6958 I
thank you very much for allowing me to express my support for these
applications filed by Rogers Broadcasting.
6959 THE
CHAIRPERSON: Thank you.
6960 Commissioner
Williams.
6961 COMMISSIONER
WILLIAMS: Dr. Bibby, I was intrigued by
some of your remarks on the demographics of the typical Christian television
viewer.
6962 Do
you have any information on the age distribution? Are they targeted to younger or older?
6963 DR.
BIBBY: Our analyses have suggested over
the years we have been charting that, going back to 1975, disproportionately
old.
6964 COMMISSIONER
WILLIAMS: Disproportionately old.
6965 DR.
BIBBY: Disproportionately old, actively
involved in religious groups and specifically evangelical groups.
6966 COMMISSIONER
WILLIAMS: So I guess areas of
retirement, like the southern portion of Vancouver Island, the service may in
fact have some appeal there then.
6967 DR.
BIBBY: Presumably, again particularly
if these people are actively involved in groups.
6968 Of
course, what I am trying to stress so much, as should be obvious to all through
the presentation, is that apart from the kinds of success that religion on
television is having right now, there is this remarkable untapped market that I
think simply represents remarkable potential as far as what, not a Christian
station as such but a religious station could do.
6969 COMMISSIONER
WILLIAMS: So the religious stations are
kind of here and there, I guess. In
Canada do you see an opportunity for a network, for example, of Christian
services across the country?
6970 DR.
BIBBY: I think this market that I am
talking about in terms of the six in ten is so pervasive across the whole
country. It is certainly not obviously
something that is located in one particular region.
6971 My
own hope is if in fact the kind of model that we are talking about could
actually get off the ground and have some of the impact that we are talking
about, it could be something. It
certainly goes well beyond a region, well beyond Manitoba, ideally perhaps
right across the whole country.
6972 COMMISSIONER
WILLIAMS: Thank you very much.
6973 I
have no further questions.
6974 THE
CHAIRPERSON: Thank you very much, Dr.
Bibby.
6975 Mr.
Secretary, please.
6976 MR.
LeBEL: Thank you, Mr. Chairman.
6977 The
next appearing intervention will be presented by Mr. Darrell Peregrym.
INTERVENTION
6978 MR.
PEREGRYM: Mr. Chair, Madam Vice‑Chair,
Members of the Commission, ladies and gentlemen, thank you for the opportunity
to present today on behalf of Rogers and NOWTV.
6979 I
am here with regard to predominantly being the elected Chair of the Balanced
Programming Committee for NOWTV, which is in compliance with the CRTC
recommendations and requirements when NOWTV originally was presented with its
licence.
6980 Before
you I have given you a copy of five different thoughts I will present: a unique
product; a unique approach; the challenge; the opportunity; and then my
concluding challenge.
6981 NOWTV
has provided a very unique product to the Fraser Valley over the last few
years, very religious, a very unique religious approach compared to a number of
religious programs and/or stations in other areas, which meets a very real and
relevant spiritual component and sector of our Canadian society.
6982 Spirituality
is a very important component of the human make‑up that the Balanced
Programming Committee has recognized and has always tried to keep as a part of
our focus when we met.
6983 NOWTV
is also a religious broadcast service which has been a positive contributor to
the multicultural reality of Canada as well, where faith is also an important
component of most cultures represented in this country. We believe it is effectively applying it
there.
6984 It
also promotes a positive cross‑religious dialogue and increased
understanding. I will clarify that a
little more as I talk about my experience with the Balanced Program Committee.
6985 We
have also found that it has reduced silent tension or begrudging tolerance
which we often see within our organization, or facility I mean, and rather
promotes respect and openness to communication.
6986 Because
of its unique approach of having a Balanced Programming Committee, which
consists of five major faith groups at the moment, which are Jewish, or
Judaism, Sikh, Hindu, Muslim and Christian, we have seen an increased relationship
built just amongst even the members who represent their respective cultures
and/or faiths.
6987 We
have seen a very positive, supportive and respectful interaction. I personally have found I have gained a
great deal of understanding by communicating and working with these gentlemen
and lady from the other faiths and have also found that because of our
communication and expectations with the programming as we have checked the
programming that has been put out by all the different faith groups to meet the
criteria that has been put forward by the CRTC, we have been able to eliminate
stereotyping, eliminate marginalization, eliminate curtailing of different
religious openness toward one another.
6988 One
such example of collaboration and creativeness has been in December of this
past year, 2004, we put on an online program which dealt with the concept of
"merry Christmas" and the political correctness of that term. We found that we had four guests on the
program representing Christian ‑‑ well, actually all five of
the faiths. And all of them, to a
person, indicated that their feeling was that "merry Christmas", for
example, was not something that was intolerable or offensive to them; that it
wasn't their faiths that were finding that that should be pushed forward but it
was a different issue.
6989 Because
of the discussion and the phone calls that came in and the feedback from it, we
have found that through this type of programming and the programming that NOWTV
presents, we are finding that all of the faiths are having a greater
understanding, finding a better openness to one another.
6990 And
even through the dialogue that is happening at the Balanced Programming
Committee, we are finding an increasing response to one another with different
events and religious celebrations that take place around our respective
communities, to the point where they would like to see us do some programming
that would involve some of these other religious celebrations as well.
6991 The
challenge has been that Trinity Television has operated NOWTV and produces a
quality product with limited financial resources, and the costs continue to be
a severe challenge.
6992 Our
concern at the Balanced Programming Committee is we would hate to see this
program and this whole focus of NOWTV be eliminated. The limited budget has prevented also the station from reaching
its full potential.
6993 Because
of that, we and I as the elected Chair of the Balanced Programming Committee
speak for the committee when I say we are very pleased and impressed, first of
all, with the calibre of the leadership of NOWTV and their commitment to serve
the community, to respect the various faith groups and comply with the balanced
requirements as set out by the CRTC.
6994 We
are pleased also that Rogers Broadcasting has made that same commitment to
honour the focus and mission of NOWTV, stayed true to the conditions and terms
of the CRTC licence and to continue NOWTV operations under the same terms and
conditions as at present.
6995 This
commitment ensures the continuity and success of a very unique and balanced
religious broadcast service in the marketplace.
6996 Rogers'
ability to provide increased funding and financial investment would also
provide for the NOWTV potential to be fully realized.
6997 Our
conclusion, and my conclusion personally based on my personal experience with
NOWTV and with the Balanced Programming Committee, the positive collective
experience that we have felt as a committee, both in the community and our
experience with the station, the positive service that NOWTV is providing to
the community at large, and Rogers Broadcasting Limited's ability to ensure
continued success, I very strongly recommend that the CRTC approve Rogers'
application now before you with regard to NOWTV.
6998 Thank
you very much.
6999 THE
CHAIRPERSON: Thank you, Reverend
Peregrym.
7000 Commissioner
Williams.
7001 COMMISSIONER
WILLIAMS: Good afternoon, Reverend.
7002 Does
NOWTV, the current NOWTV, reach out to all demographic groups in the area that
they serve?
7003 MR.
PEREGRYM: We have found that to be
so. Part of our role when we would get
together as a committee is they would provide us with some of the samples of
the programming, some of the samples of the complaints that would come in, the
positive observations and some of the demographics. And we have found that it has been respective and inclusive of
all the different faiths that we were able to track, and especially of those
that were on the committee.
7004 We
also found that it was affecting a number of the different age groups as well.
7005 COMMISSIONER
WILLIAMS: Thank you.
7006 THE
CHAIRPERSON: Thank you very much.
7007 Mr.
Secretary, please.
7008 MR.
LeBEL: Thank you, Mr. Chairman.
7009 The
next appearing intervention will be presented by the Aboriginal Peoples
Television Network.
INTERVENTION
7010 MR.
LaROSE: Qwe, Mr. Chair, Madam Vice‑Chair,
Commissioners.
7011 I
appreciate the opportunity to speak to you today on the proposed acquisition of
NOWTV by Rogers Media.
7012 Mon
nom est Jean LaRose. Je suis un citoyen
abenaki de la première nation d'odanak situé au Québec.
7013 As
the CEO of APTN, I am keenly aware of the need of our network to reach out to
all Canadians, not only through our own network and our programming, but also
through partnerships with other key players in the industry.
7014 This
year we celebrate our fifth anniversary in great part thanks to the Commission,
which had the vision and courage to recognize that Aboriginal peoples in Canada
needed an outlet to share their stories amongst themselves but also with all
Canadians.
7015 We
are living up to our commitment to share our stories with all Canadians in ways
that are now transcending our network.
7016 Over
the past few years we have sought to build bridges with other major
broadcasters to widen the reach of our story‑tellers. One of the bridges we have worked hard to
build was with a component of Rogers Media, OMNI Television.
7017 Our
common vision over a year ago was to find a way to allow our story‑tellers
to tell new stories that would reach into the homes of recent and not‑so‑recent
newcomers to our land. Our partnership
is seeing ten programs being produced jointly by APTN and OMNI, programs that
APTN on its own could not afford.
7018 The
producers are First Nations, Inuit and Métis.
They will see their stories told, not only in some of our rich
languages, as well as either English or French, but also in some of the
languages of newcomers to our land.
7019 These
stories will be versioned in other languages, such as Polish, Mandarin, Italian
or Portuguese, for example.
7020 They
will be aired by APTN in either our languages or in English or French, and also
by OMNI in the languages of their audiences.
7021 To
us at APTN this is an incredible opportunity to reach into the hearts and minds
of new audiences and let them share our stories. We have a history that reaches into time, languages and cultures
that echo and breathe life into our beings and make us the unique peoples that
we are. Our alliance with OMNI allows
us to share this with new Canadians in a new and innovative way. They will hear our stories through our
words, our perspective and from our hearts, but in their language so they can
understand in their own words who we are and where we come from.
7022 Too
often the images they see of our peoples are only an incomplete, biased and
unfair portrayal that is reflected through news clips that do not tell the
whole story. We need to break that
cycle of stereotypes that is perpetuated all too easily. This is one way of doing it.
7023 In
our proposal before you Rogers Media and OMNI are proposing to purchase
NOWTV. As part of that purchase they
will offer APTN and its producers the opportunity to produce a series on
Aboriginal spirituality.
7024 This
is one area that holds much mystery and interest with non‑Aboriginal
people. We will now have the
opportunity to let Canadians understand a bit more about the spirituality that
lies deep within the reality of First Nations, Inuit and Métis peoples in
Canada.
7025 It
will allow us to chip away at the misunderstanding that is too often the root
of the mistrust that Canadians have of our peoples. Mistrust is a byproduct of ignorance, not mean‑spirited
ignorance necessarily, just a lack of knowledge about who we are and what makes
us unique and different from others.
7026 Sharing
our stories with all Canadians is one of the key components of our mission
which the Commission so readily and strongly endorsed in 1999. Since then we have been working hard to
allow our producers the opportunity to tell the stories of our peoples from
coast to coast to coast, amongst ourselves and also with all Canadians.
7027 Now
we are going beyond that and reaching to new Canadians who know very little, if
anything, about who we are.
7028 APTN
is certain that the relationship that it has developed with Rogers and OMNI
will continue to evolve. It is based on
mutual respect, their support of diversity and inclusiveness and a strong
desire to allow Aboriginal peoples greater opportunities in telling their
stories and reaching out to all audiences.
7029 Rogers
has always delivered on their commitment to APTN, whether it was through the
Rogers' Fund For New Productions, through management sharing experiences by
allowing the senior management team at APTN to attend their strategic planning
retreat, or by providing APTN with space to develop its sales opportunities in
Toronto.
7030 Rogers
and OMNI have always walked the talk.
We are confident that this new venture will further strengthen the
relationship and that the commitments made by Rogers and OMNI will not only be
fully respected but will lead to new opportunities for APTN and Aboriginal
peoples in Canada.
7031 APTN
and OMNI face the same challenges in reaching their audiences since the
measurement systems used by the industry do not make justice to our actual
reach. We believe that by joining
forces in specific endeavours such as this we can start to demonstrate that
there are many more individuals out there who are not only watching us but are
seeing themselves in the programming we put forward. And that is a richness that is specific to APTN and OMNI to reach
their audiences in languages and with the people who are part of the cultural
diversity of this country.
7032 I
can only hope that the Commission will recognize this opportunity as another
milestone in our continuing and expanding search to build understanding and
goodwill amongst ourselves and all Canadians.
7033 I
am certain that if this transaction meets with the Commission's approval, the
stories of Aboriginal peoples in Canada will continue to reach into more and
more homes and hearts across this land.
7034 Thank
you.
7035 LE
PRÉSIDENT: Merci, Monsieur LaRose.
7036 Madame
Wylie.
7037 COMMISSIONER
WYLIE: Bonjour, Monsieur LaRose.
7038 Do
you have a relationship with the OMNI stations at the moment?
7039 MR.
LaROSE: Yes, we do. We struck an alliance over a year ago, in
which the purpose of it was to allow us to produce ten new shows that at the
time APTN could not afford to produce, shows that will be aired by APTN in
either the Aboriginal language or French or English‑language that it was
produced, and will also be versioned by OMNI in other languages to be shown on
OMNI either as a simulcast or at a later date.
7040 COMMISSIONER
WYLIE: So the $300,000 proposed for the
Aboriginal faith and spirituality series is another series altogether?
7041 MR.
LaROSE: It is a completely different
proposal, yes.
7042 COMMISSIONER
WYLIE: Do you have a relationship with
the NOWTV station at the moment?
7043 MR.
LaROSE: No.
7044 COMMISSIONER
WYLIE: Have you ever attempted to
develop one?
7045 MR.
LaROSE: No, not with NOWTV.
7046 COMMISSIONER
WYLIE: These are our questions. Merci beaucoup.
7047 M.
LaROSE: Merci beaucoup.
7048 THE
CHAIRPERSON: Thank you very much.
7049 Mr.
Secretary, please.
7050 MR.
LeBEL: Thank you, Mr. Chairman.
7051 The
next appearing intervention will be presented by the Global Television Network.
INTERVENTION
7052 MS
BELL: Good afternoon, Chairman Dalfen,
Madam Vice‑Chair, Commissioners and Commission staff.
7053 My
name is Charlotte Bell, and I am Vice‑President of Regulatory Affairs,
Television and Radio, for CanWest MediaWorks.
7054 With
me today, starting at my immediate left, is ‑‑ sorry, they
have all moved around ‑‑ Ron Eberle. To my immediate right is Chris McGinley and to my far right is
Brett Manlove.
7055 First
and foremost, we would like to thank the Commission for the opportunity to
appear before you today in order to discuss this important transaction.
7056 Commissioners,
you may be wondering why one of Canada's largest broadcasters is concerned
about the purchase and expansion of religious television stations in B.C. and
Manitoba. Our concerns are twofold:
first, the service you licensed in Fraser Valley known as NOWTV, in our view,
has already deviated from its original mandate to provide a purely religious
broadcasting service that complies with the Commission's religious broadcast
policy, in spirit and in practice ‑‑ that is, to provide, as
Mr. Thiessen told you in February 2000, a service dedicated to airing
"religious programs that meet the criteria of religious programming set
out by the CRTC", and as confirmed in the Commission's decision ‑‑
and I quote:
"... establishing a television
station that would broadcast only religious programming."
7057 Second,
the potential buyer has already confirmed that it intends to continue operating
this station in the same manner; that it plans to expand its reach into
Victoria and launch a similar service in Manitoba; and that it sees this
acquisition as an opportunity to increase its foreign program buying power.
7058 In
our view, this transaction raises a number of competitive and public policy
considerations.
7059 We
have yet to see a detailed programming plan from Rogers though Commission
policy requires that applicants for religious programming services provide
detailed programming plans outlining the religious programming they propose to
air.
7060 But
as we've said, Trinity is already offering a wide range of mainstream U.S.
entertainment programming that competes directly with incumbents in the Vancouver
market. In fact, according to their
website today, 50 per cent of their prime time schedule includes mainstream
programming that is not, or never would be considered to be religious
programming by conventional or specialty broadcasters.
7061 As
discussed this morning, programs such as "Everybody Loves Raymond",
"Fresh Prince of Bel Air", "60 Minutes" and "Leave it
to Beaver" make up half of their prime time schedule. NOWTV rationalizes the airing of such
programs by broadcasting interstitials with hosts who discuss the content of
these shows within a moral or ethical context.
7062 This
morning Rogers stated that violent programs and certain sitcoms such as
"The Drew Carey Show" would not find a place on their schedule due to
the questionable language or content of such programs. But let's face it, virtually all mainstream
programs deal with issues that could be placed in a moral or ethical context.
7063 Therefore,
the definition of "religious" seems far and wide.
7064 We
must then ask ourselves where the line is: first, in terms of what is
appropriate mainstream content within the religious policy; and secondly
whether limits should be imposed on the amount of mainstream content permitted
on religious stations.
7065 In
the absence of any limits, theoretically the station could provide significant
amounts of mainstream programming because the only other restriction on the
licence is to broadcast 18 hours of balance programming per week.
7066 So
far, the impact on CanWest has not been significant simply because Trinity, or
NOWTV, as a stand‑alone has not been in a position to cross‑promote
and increase its viewing share, nor has it been in a position to aggressively
compete for broadcast rights. It also
has not expanded its reach beyond the Vancouver/Fraser Valley area.
7067 But
this may change under Rogers ownership.
When one of the largest media conglomerates in Canada purchases a
religious broadcasting service that has begun to morph into a mainstream
programming service, it raises certain competitive and policy issues.
7068 As
the Commission knows, we filed a detailed written intervention that focused on
a number of concerns. I would now ask
Chris McGinley to discuss the economic ramifications of this transaction.
7069 MS
McGINLEY: Commissioners, this morning
you heard from Rogers that the B.C. television market is the fastest growing
market in Canada. However, based on TVB
numbers over the last six years, the market has been flat or in decline and
only this past year returned to revenue levels of 1998. At the same time, programming, sales and
promotion expenses have continued to rise sharply, resulting in significant
declines in profitability.
7070 While
B.C., and in particular Vancouver, remains a major economic driver for the
television sector, second only to Ontario, it plays a vital role in our
continued ability to subsidize small and medium market stations across Canada.
7071 With
the addition of Rogers as a major bidder for program rights, prices will
continue to rise.
7072 Furthermore,
NOWTV could become more attractive to mainstream viewers and have the ability
to garner larger audiences. As a
result, revenues will become increasingly fragmented, thus impacting not only
the local market but the system overall, given the role of B.C. in subsidizing
markets throughout Canada.
7073 In
terms of Winnipeg, as stated in our written intervention, the market continues
to lag behind the Canadian average in all key economic indicators. It is also worth noting that home station
share percentage in the Winnipeg market, including the CBC, has already fallen
from 56.1 per cent in Fall 1997 to 37.4 per cent in Fall 2004.
7074 While
the Commission was well aware of the financial state of this market when it
originally licensed Trinity to serve Winnipeg, it did so on the basis that
Trinity's business plan contemplated a large portion of its revenues being
generated from donations as opposed to advertising. The Commission also noted in its decision that Trinity did not
have the resources to compete with existing licensees for the acquisition of
popular foreign programming.
7075 In
our view, under Rogers' ownership, the Commission's rationale for licensing in
Winnipeg is no longer valid.
7076 MR.
MANLOVE: In terms of sales, it is
important to note that the Vancouver/Victoria market has experienced slow to
stagnant growth over the last six years.
In fact, since 1998, four new stations were added to the market,
resulting in fragmented viewing and revenues.
7077 Since
national advertising is by far the dominant revenue source for broadcasters in
B.C., representing 74 per cent of revenues, the protection Rogers proposed in
Victoria to abstain from soliciting local advertising is of little help to the
overall financial picture.
7078 Furthermore,
with the addition of a transmitter in Victoria, NOWTV will be in a position to
significantly increase its national revenues, thus further fragmenting our main
source of revenue.
7079 As
a result, while we maintain our opposition to the addition of a transmitter in
Victoria, should the Commission decide to approve that request, we would ask
that a condition be imposed to disallow the solicitation and acceptance of
local advertising in Victoria.
7080 MR.
EBERLE: In conclusion, we believe that
the Rogers proposal as filed raises concerns in terms of Commission policy for
religious broadcasting. We further
believe that approval of this application in its entirety could have a negative
and unintended consequence on the broadcasting system as well as on local
incumbents in the markets where it plans to operate.
7081 As
a result, we continue to oppose the addition of a transmitter in Victoria, as
well as the launch of NOWTV in Winnipeg as stated in our intervention.
7082 In
addition, in order to address the potential for this service to morph into an
increasingly mainstream service, we would ask the Commission to impose a 10 per
cent limit on the amount of mainstream programming that Rogers could broadcast
on NOWTV. We would define mainstream programming
as anything that would not be categorized at 040 by any conventional television
broadcaster.
7083 We
would further recommend that the programming within that 10 per cent comply
with the religious policy definition of religious programming.
7084 We
appreciate your attention and we are ready to answer any questions.
7085 THE
CHAIRPERSON: Thank you very much.
7086 This
is truly a case where your written and oral presentation need no clarification. I think we perfectly understand your
position and your points are made well.
7087 So
thank you very kindly.
7088 MR.
EBERLE: Thank you.
7089 THE
CHAIRPERSON: Mr. Secretary, please.
7090 MR.
LeBEL: Thank you, Mr. Chairman.
7091 The
last appearing intervention will be presented by CHUM Limited.
INTERVENTION
7092 MR.
SWITZER: Good afternoon,
Mr. Chair, Madam Vice‑Chair, Members of the Commission.
7093 For
the record, my name is Jay Switzer, and I am President and CEO of CHUM Limited.
7094 Before
we begin our presentation, I would like to take a moment to introduce my
colleagues here.
7095 To
my left, your right, is Brad Phillips, Vice‑President and General Manager
of our B.C. based local television stations, Citytv Vancouver and The NewVI in
Victoria.
7096 To
my right is Peter Miller, Vice‑President, Planning and Regulatory Affairs
for CHUM.
7097 Our
presentation today will follow the format of our February 3rd written
intervention which dealt with these three areas: the overall impact of this transaction; why Rogers' proposal to
add a rebroadcast transmitter at Victoria should be denied; and why Rogers'
proposal to acquire NOWTV Manitoba, licensee of the unlaunched station CIIT‑TV
Winnipeg, should be denied.
7098 CHUM
has not opposed Rogers' proposed acquisition of CHNU‑TV Fraser
Valley. We do, however, believe it is
important to highlight that this transaction will result in CHNU becoming a
fundamentally different station than was licensed less than five years ago,
from both a programming perspective and in terms of its potential sources of
revenue.
7099 As
they discussed with you this morning, Rogers interprets a religious program to
encompass a wide range of programming, including entertaining and engaging programming
that addresses issues and themes that are spiritual, moral or religious in
nature.
7100 We
believe this definition is extremely broad.
7101 As
M Channel noted earlier today and in its intervention, this is not how
religious programming is defined under the Commission's Religious Broadcasting
Policy, which defines the concept more narrowly.
7102 CHNU
already pushes the envelope with respect to what it considers to be religious
programming. Rogers will take this even
further.
7103 Given
what Rogers stated earlier today about the application of their religious
program criteria, it is clear that they essentially want to define religious
programming to mean family programming: the bread and butter of The NewVI and
other NewNet stations programming and a significant profitable part of our
programming on CHMI in Winnipeg.
7104 That
puts Rogers/NOWTV head to head with CHUM on many U.S. programming acquisitions,
and Rogers' comments this morning about increasing simulcast programming only
amplify that impact.
7105 With
Rogers' financial muscle behind it, CHNU will much more closely resemble a
mainstream over‑the‑air station once this transaction is
completed. Rogers has confirmed that
the station will continue to air and increase the amount and quality of
entertainment programming, such as sitcoms, dramas, made‑for‑television
movies, as well as theatrical releases.
7106 The
massive increase in revenues Rogers is projecting for the station, from just
over $6 million annually to almost $17 million, cannot be done without
such a major change in the nature of the service. This will have a strong negative impact on incumbents, especially
given the flat conventional television market.
7107 We
recognize that NOWTV British Columbia is in financial trouble and that the
Commission needs to be pragmatic when licensees experience such circumstances. Moreover, we understand that there are
tradeoffs in the regulatory system: that the Commission may make decisions that
have benefits for the system but perhaps disadvantages for certain licensees.
7108 Rogers'
acquisition of CHNU will ensure that CHNU is viable going forward. It will also give Rogers a foothold in
Canada's two largest English‑language markets. More importantly it will give Rogers an additional platform
across which to amortize the cost of the programming it acquires for its
important Toronto‑based OMNI stations.
7109 These
latter two developments will impact the conventional television sector and CHUM
specifically at a time when conventional television is at a crossroads.
7110 Revenues
for the sector are flat and PBIT is in decline. Moreover, as the Commission is well aware, our conventional
television division at CHUM continues to struggle with average PBIT levels well
below industry average.
7111 A
stronger Rogers will put greater pressure on our stations in British Columbia,
Manitoba and Ontario.
7112 Based
on the foregoing, we wholeheartedly agree with M Channel that the Commission
should require Rogers‑owned CHNU to fully comply with the Religious
Broadcasting Policy, therefore fulfilling the station's original mandate, as
opposed to allowing the station to morph into a family programming station.
7113 Moreover,
given that this is an asset transaction, it would be fully appropriate in our
opinion, and we believe within the Commission's power, to impose conditions of
licence to this end.
7114 MR.
PHILLIPS: As Jay noted, Rogers has
applied to add a transmitter in Victoria that will rebroadcast the signal of
CHNU to residents on Vancouver Island.
Rogers has suggested that this transmitter is essential to put CHNU on
equal footing with the other players in the Vancouver‑Victoria extended
market with respect to national sales.
7115 CHNU
was licensed five years ago as a niche religious broadcaster. The bulk of the station's revenue was to be
derived from charitable donations and payments from producers. Revenue from national sales was not a major part
of the equation.
7116 While
the station is considered part of the Vancouver‑Victoria extended market
and is therefore entitled to cable carriage on the mainland, it was to be first
and foremost a Fraser Valley station.
Rogers is now arguing that CHNU needs a rebroadcast transmitter on
Vancouver Island to put it on equal footing with the other stations in the
market.
7117 With
respect, CHNU was never supposed to be on equal footing with the other stations
in the market. To get into this market,
CHUM invested over $180 million to acquire one station and launch another. These stations remain unprofitable. Both have significant requirements relating
to local programming.
7118 CHNU
does not have such requirements. It has
limited requirements related to balance programming. In effect, Rogers wants a Vancouver Island transmitter to help
get as much as possible out of the top‑rated mainstream programming it
intends to air on CHNU.
7119 Rogers
has suggested that a transmitter on Vancouver Island will result in an increase
of 10 per cent in the station's revenue.
This is likely accurate.
However, this is not a small number: an additional $500,000 in year two,
growing to $1.2 million by year seven.
7120 On
their own these amounts would result in CHUM's The NewVI going from
unprofitable to profitable.
7121 In
addition, Rogers has understated CHNU's revenue potential with a schedule full
of popular family programming. This
will impact all the stations in the market but will have a disproportionate
impact on those stations like CHUM that also air the types of programming
Rogers can be expected to go after, in particular profitable U.S. strips.
7122 At
the end of the day Rogers is almost treating CHNU as a traditional over‑the‑air
station. It is not. As we have discussed, Rogers should be
required to return CHNU to its original mandate of religious programming, not
the even more mainstream schedule that Rogers will bring.
7123 Traditional
religious programming tends not to attract national advertisers. Therefore, a rebroadcast transmitter is
unnecessary.
7124 MR.
SWITZER: The final aspect of our
intervention this afternoon relates to Rogers' proposal to acquire CIIT‑TV
Winnipeg. The station was licensed in
2002 but is not yet launched.
7125 At
the time the initial application for the station was considered, the
broadcasters in the Winnipeg market opposed its licensing, arguing that it
would compete with them for programming.
The Commission did not accept this argument at that time, concluding that
it was unlikely that NOWTV would compete with the incumbent broadcasters for
program rights. This would clearly not
be the case with Rogers.
7126 The
Winnipeg market is a challenging market.
Since the Commission's consideration of the NOWTV application, the
market has experienced below average PBIT levels and flat growth. Over the last two years CHUM's station CHMI‑TV
in Manitoba has experienced significant declines in revenue and PBIT.
7127 Rogers
has filed aggressive revenue projections for NOWTV Manitoba which would have
the station growing from effectively zero to $6.6 million, not far off the
revenues of our Winnipeg station. The
only way they will be able to achieve these numbers is if they intend to air
programming that competes directly with the programming on the existing
stations in the market. As the market
is not growing and the programming they will be able to acquire will be similar
to what we air, the bulk of their revenues we believe will come from our
station.
7128 In
their reply to our intervention Rogers suggested that their acquisition of the
station would have no impact on the programming decisions of the other stations
in the market as those decisions are made elsewhere.
7129 Rogers
conveniently misses the point. The fact
that Rogers, CHUM and others may make some programming decisions in Toronto is
irrelevant. However, another station
for them will mean another opportunity to amortize programming costs and hence
more opportunity for even more aggressive purchasing decisions on their part.
7130 Our
submissions relating to Rogers' programming plans are not just
speculative. In recent years we have
been outbid by Rogers for a number of programs, and they have also bid on
programs that we have wanted to hold onto or acquire.
7131 For
example, OMNI in Toronto airs "Inside Edition", which was formerly a
solid prime time performer for our NewNet stations and a program we tried to
keep.
7132 In
addition to this program, Rogers has acquired, or bid against others and
acquired, syndication rights to shows such as "Friends",
"Frasier", "Simpsons", "Law and Order Special Victims
Unit", to name a few.
7133 CHUM's
increased reach resulting from your approval of the Craig transaction means
that we can and do find ourselves of course outbidding OMNI on occasion. However, our 85 per cent audience reach,
which translates into about a 75 per cent economic reach, does not enable us to
compete fully with global and CTV for top tier programming.
7134 Rogers
is the real threat to us in the programming environment that we operate. Rogers' aggressive buying tactics, their
smart operators, will now only increase and it will result in millions of
dollars of additional U.S. programming costs for us and the system.
7135 Given
these concerns and the fact that CIIT‑TV has not yet launched, we submit
that this part of the Rogers application should not be approved.
7136 In
conclusion, Rogers' acquisition of CHNU will ensure the long‑term
viability of a local television station.
However, Rogers should not be allowed to use the proposed acquisition of
a religious broadcaster as a back door to convert itself into a national
television player with drastic results for CHUM, Multivan and others,
particularly without the commensurate offsetting benefits and safeguards that
the Commission might expect.
7137 We
would like to thank the Commission for this opportunity and of course we would
be happy to answer your questions.
7138 THE
CHAIRPERSON: Thank you.
7139 Vice‑Chair
Wylie.
7140 COMMISSIONER
WYLIE: Good afternoon.
7141 Your
written intervention, as well as your presentation this afternoon, is clear but
for one aspect of it.
7142 Do
you have the written one with you, at page 4, the first full paragraph?
7143 You
believe that it would be inappropriate in these circumstances to allow Trinity
to transfer the licence to Rogers, and you submit that if Trinity does not want
to operate NOWTV the licence for the station should be revoked.
7144 I
am wondering what is intended by that since in the initial decision, at
paragraph 46, the Commission said:
"The licence for this
undertaking will only be issued when the licensee has informed the Commission
in writing that it is prepared to commence operations."
7145 This
sentence in almost the same terms was repeated in Decision 2004‑481,
which approved the corporate reorganization of Trinity into NOWTV Manitoba and
NOWTV British Columbia, as well as in Decision 2004‑279, which extended
the deadline to commence operations to the benefit of Trinity Television to 30
November 2005.
7146 So
I have difficulty understanding the need for revocation or the comment about
Trinity transferring the licence.
7147 MR.
MILLER: I would suggest our wording was
perhaps less than what it should have been.
I think given what we have learned since we have written this
intervention, the mere not issuing of the licence is perhaps the better route.
7148 COMMISSIONER
WYLIE: Thank you, Mr. Chairman.
7149 Thank
you, gentlemen.
7150 THE
CHAIRPERSON: Mr. Switzer, it is ironic,
I suppose, but I recall being at a hearing where you were seeking the renewal
of your educational service in Alberta.
Was it a year or two ago?
7151 That,
too, is a niche service and I believe you have a condition of licence that
requires you to do only educational programming. There was a discussion about movies that you carried and a number
of intervenors suggested how can ‑‑ the name escapes me. I don't think it was "The Texas Chain
Saw Massacre"; it was something else that clearly one would not normally
find in the educational category.
7152 The
answer that you gave was that it was introduced by I think a professor and
there was a discussion that followed.
In the end, the Commission showed some flexibility, I suppose, and said
that's fine. The condition stays as it
was written, and yet these films with their wraparound are deemed to be okay.
7153 Today
the applicants are making a similar kind of point regarding religious
programming, and you are holding their feet to the fire of the strict
definition.
7154 MR.
SWITZER: Mr. Chair, of course that is a
fair question, and we had that discussion not very many years ago.
7155 I
think, if memory serves ‑‑ I would have to check the
transcript ‑‑ it was an action/adventure film or a fantasy
film, and it was "Athabaska".
The university in Athabaska had created a course around it with the
professor that introduced it.
7156 I
think it has to do with performance. I
think it has to do with the finances. I
think the record ‑‑ we are now ten years operating in Alberta
successfully. It has remained a very
small business.
7157 Others
have noted that we have not been able to ‑‑ let me put it
another way. The revenues have been
appropriate to the niche service. It
has not grown, neither with its original decision nor in its renewal, nor in
the past year. It remains a focused,
dedicated and specific niche service where revenues have not grown.
7158 The
difference here is that we see from the applicant a model that specifically has
a huge expected and forecast and discussed increase in revenues and an
admission that the program schedule, as confirmed today, will become more
American and more simulcast, if possible.
That is the difference for us.
7159 THE
CHAIRPERSON: So it is less a
definitional issue than it is an overall nature of service.
7160 MR.
SWITZER: Yes, sir.
7161 THE
CHAIRPERSON: Thank you.
7162 Mr.
Secretary, please.
7163 MR.
LeBEL: Thank you, Mr. Chairman.
7164 This
completes Phase II of the hearing of this application.
7165 THE
CHAIRPERSON: If the applicants wish to
have a break, I will be happy to call one now.
7166 We
will resume in 15 minutes with the Reply by Rogers.
7167 Thank
you.
‑‑‑ Upon recessing
at 1500 / Suspension à 1500
‑‑‑ Upon resuming
at 1520 / Reprise à 1520
7168 THE
CHAIRPERSON: May we have order, please.
7169 Mr.
Secretary, please.
7170 MR.
LeBEL: Thank you, Mr. Chairman.
7171 We
will now ask Rogers Broadcasting Limited to respond at this time.
7172 You
have 10 minutes to make your response.
7173 THE
CHAIRPERSON: Could we have order,
please. Thank you.
REPLY / RÉPLIQUE
7174 MR.
MERSON: Thank you, Mr. Chair, Madam
Vice‑Chair, Commissioners.
7175 I
have been listening to the interventions and I have tried to extract from the various
interventions the key issues raised by intervenors. There seems to be two major issues raised with Rogers' potential
ownership of the NOWTV stations.
7176 The
first is that the competitive dynamics in the television marketplace will be
upset by this transaction. That is
simply not the case.
7177 The
major networks are the only companies that can afford to compete for the
national rights for popular U.S. programming.
Without their reach and ability to manage their schedules to maximize
the value of that schedule of any acquired programming, it would be economic
suicide to compete for major simulcast programming.
7178 Every
once in a while, as was mentioned, OMNI does come into competition with some of
the local broadcasters, particular in Toronto, but only in the case of
syndicated second run programming for the local marketplace.
7179 In
order to give additional comfort that we would never compete for simulcast
programming, we have a proposal that we will introduce in one second to limit
and effectively eliminate our ability to run simulcast programming between 8
o'clock at night and 10 o'clock at night on NOWTV.
7180 Alain
will explain our proposal a little further.
7181 The
second major issue raised by intervenors is the notion that Rogers cannot be
trusted and will morph NOWTV into something entirely different.
7182 First,
I would point out that we have described a set of criteria and a framework for
analyzing programming that would severely limit what it is that we would be
able to run on NOWTV and find acceptable.
That, combined with the conditions of licence that we currently have to
carry balanced programming, the limitation on non‑Canadian programming in
prime time, really would not allow NOWTV to become a viable competitor in the
time blocks that were described.
7183 Secondly,
and more importantly, we really stand on our record at OMNI Television. Eighteen years ago when we acquired OMNI
Television, or what was CFMT at the time, many people thought it was only a
short matter of time before we evolved the station into something entirely
different. We haven't done any of
that. We have remained true to the
mandate. We remained true to the
mandate because it is a good business proposition for us. It is a mandate we believe in, and it is a
business model that has equipped us well to deal with the issues we would face
at NOWTV.
7184 So
more than anything else, our record at OMNI Television we believe really speaks
to what it is we would do and how it is we would manage NOWTV.
7185 I
am going to ask Alain to address some of the issues that were left over from
the morning's presentation.
7186 MR.
STRATI: Thanks, Rael.
7187 Commissioners,
you have in front of you a list of responses.
I understand they are brief, but I think some of them will respond to
many of the issues that we discussed this morning.
7188 There
are two issues which we have agreed with counsel and staff that we would
provide further after this presentation, but we will try and discuss that issue
as well.
7189 I
will start with No. 1.
7190 In
terms of local programming and Canadian program expenditures, we are prepared
to commit to 25 hours of local Canadian programming for NOWTV in the Fraser
Valley and 12.5 hours of local for NOWTV in Winnipeg.
7191 Just
to put that in terms of Canadian programming expenditures, we would expect the
hours to amount to approximately 25 per cent of gross revenues.
7192 In
terms of the $4.1 million commitment for priority programming, as we discussed
this morning, as a stand‑alone station NOWTV is not required to provide
priority programming. The commitment
was made at the time because programming produced in Winnipeg would qualify as
a regionally produced program.
7193 In
terms of the NOWTV schedule for Winnipeg, we will file a revised schedule for
Winnipeg. Unfortunately, we were not
able to get the format for the schedule in order to provide that, but we will
do so very shortly.
7194 However,
there seemed to be a misunderstanding this morning about our programming
schedule. The schedule was filed with
our application and it is NOWTV's current schedule. It is a schedule that we intend to stay with over the licence
term, with a very few exceptions; most notably an increase of Canadian balance
programming and some changes to the U.S. family oriented programming.
7195 We
apologize for not filing a schedule for NOWTV Winnipeg. It is our intention, if approved, that the
schedule for Winnipeg would reflect the Vancouver schedule. The difference in the two would largely be issues
such as local programming in each market and certainly some different acquisitions
for each of those two markets.
7196 In
terms of the local programming overlap between NOWTV in Vancouver and NOWTV in
Winnipeg, we have said that there will be no local programming overlap in terms
of meeting the requirements for local programming.
7197 It
was also discussed in terms of a limit on ethnic programming of 10 per
cent. We are willing to agree to
that. That 10 per cent would be
approximately 12 hours per week.
7198 We
also discussed the total of six hours for third language programming, or 5 per
cent, which would amount to six hours per week.
7199 In
terms of a limitation on foreign programming in prime time, we are willing to
commit to a minimum of 50 per cent Canadian content in the peak prime time
period of 7:00 to 11:00. To put it
another way, that is a maximum of 50 per cent foreign programming.
7200 In
terms of simulcast programming, as Rael mentioned, we are prepared to agree to
no simulcast between the peak prime time hours of 8:00 to 10:00 p.m. with a
maximum of 2.5 hours per week in the total evening broadcast period from 6:00
to midnight.
7201 In
terms of the Canadian content share between OMNI and NOWTV, as we have
discussed, six hours per week. I think
we discussed it this morning in terms of some of our assumptions that were
provided, given that this amount would be the maximum amount of programming
from OMNI that we feel would fit potentially in any given week within the
religious program mandated on NOWTV.
7202 In
terms of restrictions on the sharing of foreign programming acquired, we
believe the restrictions are provided by the different programming mandates and
requirements for both stations. To the
extent that we can, we would purchase foreign programming that could be carried
on both stations. A restriction will
require us to purchase separate programming for each station, resulting in
increased programming and acquisition costs for broadcasters in the markets.
7203 I
also mentioned that that is also dealing with simulcast restriction which I
talked about.
7204 In
terms of the Thiessen Consulting Agreement, we did file one earlier today.
7205 In
terms of any Canadian Talent Development initiatives or additional benefits
accruing from the increased value of the transaction, any additional benefits
should be directed to the NOWTV Documentary Fund.
7206 In
terms of the reconciliation of the CRTC numbers with the numbers that we had in
terms of the market size, I would ask Malcolm Dunlop to elaborate on that.
7207 MR.
DUNLOP: Thanks, Alain.
7208 When
we give numbers, we give TVB numbers, which we will file with you later on
today.
7209 We
understand that you are using the recently published financial summaries for
conventional television. Vancouver network,
according to the TVB reports, includes CTV, CBC, Specialty and Digital, which
we understand is not included in the CRTC summaries.
7210 CTV
and CBC in the TVB reports, are broken out with what is booked national and
what is booked as selective sales.
7211 For
specialty television, TVB for network allocates the dollars based on the hours
tuned into the marketplace. Digital is
the same as specialty. When we talk
about the spot market or selective market, the selective markets in the station
reported are CBUT, CHAN, CHEK, CKVU, CKVI, CHNU, Channel M and KBOS.
7212 According
to TVB, the rolling 12‑month spot market is $259 million. The network total is $121 million; totalling
$380 million.
7213 Thank
you.
7214 MR.
STRATI: Thanks, Malcolm.
7215 For
the question on the investment analysis for the costs incurred to date for the
unlaunched Winnipeg station, after reviewing the investment analysis we had
filed, it did include a small line item for Winnipeg. What we have done is we have revised the analysis to show costs
for both. So it is split.
7216 I
have it here with me and I will file it.
7217 There
was a question on the price reduction in content or program acquisition rights
if there was severability between Winnipeg and Vancouver, the Fraser
Valley. For those foreign programs
where we are able to purchase national rights, the availability of a station in
Winnipeg we believe would reduce the overall rights costs for the Vancouver
station by about 5 per cent.
7218 For
those foreign programs where we were able to purchase rights at the Vancouver
and Winnipeg markets, in essence there is no market as each station would have
to pay market rates for those rights.
7219 Rights
cost reductions occur as a result of national rights and national distribution.
7220 I
also have, as requested, an executive copy of the Agreement of Purchase and
Sale that we will file as well.
7221 There
was also a question on the financial impact on Vancouver in terms of
severability for the Winnipeg station.
Again, much like the programming schedule for Winnipeg, we will
undertake to revise our financial projections as need be, and we are prepared
to file them as quickly as possible.
7222 I
hope that takes care of many of the questions.
7223 THE
CHAIRPERSON: On that point, you did
have the application costs for NOWTV Manitoba, but you didn't have the impact
of interest on cash outlays, and so forth.
7224 So
you didn't have the full financial picture other than those two figures for
2003 and 2004 for NOWTV Manitoba in that investment analysis. Right?
7225 Because
you then combined the figures for the rest of your analysis ‑‑
and the discussion had been focusing on what the 750 represents.
7226 MR.
STRATI: That is laid out there. It is put into that context.
7227 I
would like to turn it over to Tony.
7228 MR.
VINER: I would like to finish off, and
I am sure the Commission has questions.
7229 In
response to a question posed by Commissioner Williams this morning about why we
were here, why we were interested in buying the station, I talked about our
desire to grow in niche television broadcasting, which is a core
competency. I talked about how exciting
it would be to be here in Vancouver.
Vancouver is the fastest growing television market in Canada, and it is
the second‑largest English‑language television market.
7230 I
guess I didn't impress upon ‑‑ the elephant in the corner is
that this is a failing station. This is
a failing station. I must say, when I
heard the litany of my competitors come before you, I truly wish I struck fear
into their hearts in the same way that they described to you. I was unaware of my influence.
7231 They
are asking you to further reduce the programming flexibility for this station
which is already failing. Their idea is
to throw a drowning man an anchor. We
believe that our application complies in every respect with the Religious
Policy. It has been exhaustively
examined by the Commission, both today and at other times.
7232 I
want to tell you that we are enthusiastic about this. We are optimistic but we are also realistic about our
prospects. It is something that we
believe we can do a good job at, and we have demonstrated that we can do a good
job.
7233 I
just wanted to leave you with that single thought. We would be delighted to answer any questions that you may have.
7234 THE
CHAIRPERSON: Thank you.
7235 To
pick up on your last point on the issue of definitions and flexibility, I think
while I take your point, we run into a regulatory integrity kind of issue here
if indeed in one of the intervenor's points ‑‑ I don't know
whether you have it or not. I will just
read the line and get your reaction to it.
7236 This
is page 5 of the intervention of Multivan.
They show the definition of religious programming and then say under
this definition they fail to understand how "60 Minutes" and
"Everybody Loves Raymond" qualify.
7237 And
here is the sentence. They say:
"If these programs were to run
on other services in the market, one would not expect the station to classify
them as religious programs. Why then is
it appropriate for NOWTV?"
7238 I
think that is a valid question in terms of the integrity of the process.
7239 You
have a condition or requirement that says all religious programming. If you code this as religious programming,
as I suppose you must to qualify with your condition, if it were on another
station, would it ever get coded that way?
If not, Houston, we have a problem.
7240 I
would like your reaction to that and how you see a way through this so that
people can rely on definitions and conditions that are imposed.
7241 MR.
VINER: This is Rael's hearing, not
mine, but I will answer anyway.
7242 The
definition of religious programming is programming that deals with moral,
ethical or spiritual issues. We believe
that that kind of programming does deal with exactly those issues.
7243 I
think it is important to understand the context. It is in the context of NOWTV and a religious television
station. But it is also, I think as
Jeff described, and we said we would continue to do, is that we agreed to put
those kinds of programs in context and we agreed that we would continue that
practice, which follows that kind of programming, with a discussion of the
issues raised.
7244 I
would further point out that those kinds of programs, we understand what the
difficulty is. It is one of the reasons
why we proposed we advance to but we clearly are interested in providing
balanced programming from 6:00 to 11:00 in the numbers as described.
7245 I
would respond that it fits the definition because I think that this has been a
subject of prior discussion. We believe
it fits it, for the reasons that I mentioned, plus the context. I think the problem might go away if the
second of our two proposals related to balanced programming were adopted.
7246 THE
CHAIRPERSON: I have your answer. Thank you very much, gentleman.
7247 I
should make a procedural point here.
7248 The
remaining documents that you are required to file, you have left some blanks:
no. 13, no. 16, and so forth.
7249 When
do you think you will be able to file those?
7250 MR.
STRATI: We discussed either later this
week, but we were told probably early next week would be probably appropriate.
7251 THE
CHAIRPERSON: Shall we say by end of
business Tuesday.
7252 We
therefore can't adjourn this hearing at this point. What will follow is you will file those. The Commission may wish to examine them and
have further interrogatories on the additional filings.
7253 If
not, we will let parties know; whether we do or we don't, we will let parties
know, and setting out a timetable for replies if there are interrogatories and
then for intervenor comments and reply.
7254 That
will all be set out in a letter to the appearing intervenors and yourselves,
once we have the documentation next Tuesday.
Then we will just have to take it from there.
7255 I
would add that the interventions, as will the interrogatories, we all have to
discipline ourselves to only address the issues that emerge as a result of the
additional filings and not to rehash or re‑debate issues that we have
already heard fairly fulsomely.
7256 I
hope I can count on everyone's cooperation for that.
7257 Thank
you very much.
7258 MR.
STEWART: Mr. Chairman, I have two
questions, if I may.
7259 THE
CHAIRPERSON: Go ahead.
7260 MR.
STEWART: Thank you.
7261 For
the record, the piece of paper that you have filed entitled "Responses to
the CRTC Questions", to the extent that they deal with commitments, I take
it that you would be prepared to accept these commitments as conditions of
licence?
7262 MR.
MERSON: Yes, we would.
7263 MR.
STEWART: Thank you.
7264 This
question has already been put to you, but again if you could confirm for the
record: Would you proceed with the
transaction if the application for the Victoria transmitter were denied?
7265 MR.
MERSON: Yes, we would.
7266 MR.
STEWART: All right; thank you.
7267 Thank
you, Mr. Chairman.
7268 THE
CHAIRPERSON: Thank you.
7269 We
will not adjourn but what is the other word that you would use, Mr. Viner?
7270 MR.
VINER: I don't know. I am not nearly the word sniff that you are,
Mr. Chairman.
7271 Before
we do, let me thank you very much for your time and attention to this. We appreciate it.
7272 THE
CHAIRPERSON: Discontinued?
7273 Thank
you.
‑‑‑ Pause
7274 THE
CHAIRPERSON: Order, please. A l'ordre, s'il vous plaît.
7275 Mr.
Secretary, would you announce the next item.
7276 MR.
LeBEL: Thank you, Mr. Chairman.
7277 THE
CHAIRPERSON: Excuse me. The troops are little restive this
afternoon.
7278 MR.
LeBEL: Mr. Chairman, we will now
proceed with items 10, 11 and 12 on the agenda.
7279 These
items are competing applications to operate English‑language commercial
FM radio programming undertakings in Kamloops.
We will therefore proceed as follows.
7280 First,
we will hear each applicant in the agenda order, and each applicant will be
granted 20 minutes to make his presentation.
Questions from the Commission will follow each presentation.
7281 In
Phase II the applicants re‑appear in the same order to intervene on the
competing applicatoins, if they wish.
Ten minutes are allowed for this purpose. Questions from the Commission may follow each intervention.
7282 In
Phase III other parties will appear in the order set out in the agenda to
present their appearing intervention.
Again questions from the Commission may follow.
7283 In
Phase IV we provide an opportunity for each applicant to reply to all of the
interventions submitted on their application and applicants appear in reverse
order. Ten minutes are allowed for this
reply. Again, questions may follow.
7284 Mr.
Chairman, we will proceed with Item 10 on the agenda, which is an applicatoin
by Standard Radio Inc., for a licence to operate an English‑language
commercial FM radio programming undertaking in Kamloops.
7285 The
new station would operate on frequency 95.9 MHz (channel 240B1) with an
effective radiated power of 5,000 watts.
7286 The
applicant proposes a new country music format.
7287 Appearing
for the applicant is Mr. Don Shafer, and Mr. Shafer will introduce his
colleagues. You have 20 minutes to make
your presentation.
PRESENTATION / PRÉSENTATION
7288 MR.
SHAFER: Thank you.
7289 Good
afternoon, Mr. Chairman, Madam Vice‑Chair, Members of the Commission and
staff. My name is Don Shafer and I am
the Vice‑President and General Manager of Standard's radio and television
stations within the interior of British Columbia.
7290 Our
President and CEO Gary Slaight is unable to be with us today. Tonight he is being inducted into the
Canadian Music Industry Hall of Fame for his contributions to Canadian music
and to his commitment to developing Canadian talent at this year's Annual
Canadian Music Week Conference.
7291 He
has asked that I send his regrets.
7292 Before
we begin our presentation, I would like to introduce you to the members of our
team who have played an integral role in developing our application for a new
FM station in Kamloops.
7293 To
my right is Betty Selin, our Regional News Director who assists and supervises
our Kelowna news staff as well the news directors at our B.C. stations.
7294 To
Betty's right is Roy McKenzie, the Regional Sales Manager for our group, who
has over 20 years of experience in retail radio sales. Roy specializes in sales training and
developing sales strategies throughout the markets in British Columbia.
7295 To
my left if Tom Tompkins, a Senior Programming Consultant with Standard
Radio. Tom is a past president of the
Canadian Country Music Association and one of Canada's most respected country
music programmers, with over 35 years of experience.
7296 To
Tom's left is Reeny Chew, our Regional Finance Manager and Comptroller. Reeny is responsible for all of Standard's
radio and television properties within the B.C. Interior.
7297 In
the row behind me, on the far right is Joan Phillip, the Penticton Indian Band
Lands Administrator and board member of the En'Owkin Centre, who is the first
member of our Kamloops station's advisory board. Joan has also agreed to work with Standard Radio in collaboration
with other First Nations Groups to develop various initiatives at all of our
stations in British Columbia.
7298 To
Joan's left is Dr. Gordon Tarzwell, a Professor of Economics at Thompson River
University, which was formally UCC. Dr.
Tarzwell was commissioned by Standard Radio to assess the economic indicators
in Kamloops and to determine the market's viability.
7299 To
Gordon's left is John Yerxa, the President and CEO of John Yerxa Research Inc.,
who was commissioned by Standard Radio to conduct audience format and sales
research in the Kamloops market. John
has first‑hand knowledge of Kamloops, as his father was the former owner
and operator of CHRK, which is now known as The River.
7300 John
has been conducting independent market research studies since the mid‑1980s,
and he is also recognized as a country music expert within the broadcast
community.
7301 Beside
John is Lori Pierson‑Mataj, our Human Resources Manager and the key
administrator of our employment equity program and training for the B.C.
Interior.
7302 Next
to Lori is Kerry Pelser for DEM Allen & Associates, who developed our
technical brief.
7303 This
is the team that dreamed up Kamloops Country, and we are now ready to begin our
oral presentation.
7304 We
are here today to apply for a new FM country station. Country music is one of the richest formats in North America,
with increasing popularity in cities all across Canada.
7305 Unfortunately,
this format is missing in Kamloops.
7306 We
understand that this is a difficult decision for you to make. However, we believe that our application
will be the most beneficial to Kamloops, and it will have a minimal impact on
the current broadcasters in the market.
7307 Standard
Radio is a family owned and operated business and a leading Canadian
broadcaster. We have been providing
high quality radio services for nearly eight decades. With 51 radio stations, almost half of which are in British
Columbia, we have a history of public and community service. We also fully understand the importance of
local radio in smaller communities.
7308 Over
the past three years Standard Radio has made a significant effort building and
developing B.C.'s interior radio system.
We operate 21 radio stations that employ 225 staff in small and medium
sized markets in this province.
7309 Since
Standard's purchase of the Telemedia properties in 2002, we have been dedicated
to improving the quality of radio in the Interior. To this end, we have invested over $4 million in capital to
improve infrastructure. We have hired
more staff to improve the quality of our services, and we have converted a half
dozen tired AM stations to dynamic FM stations.
7310 Our
proposal for Kamloops is part of Standard Radio's strategy to improve and
enhance the radio services in communities in British Columbia. Should the Commission approve our
application, this licence will allow us to provide better continuity throughout
the B.C. Interior.
7311 We
are very excited about our country music proposal and know that it will succeed
in Kamloops. Country music is one of
Canada's and indeed one of North America's most popular formats. In fact, the latest ratings in Canada and
the U.S. show country music stations with significant increases in popularity
and hours of tuning. With more music,
new and old, country resonates with its heartfelt approach and is reaching more
audiences than ever before.
7312 In
preparing our application, we evaluated and applied all of our experience and
the lessons we have learned in the B.C. Interior to develop a comprehensive,
viable and realistic business plan. We
commissioned extensive research to determine the format most appropriate for a
new radio station in the Kamloops market, and we developed an application that
will make a significant contribution to the system and to the residents of
Kamloops.
7313 I
will now ask other members of our team to speak to the individual areas of our
application in which they are most knowledgeable and passionate.
7314 I
will first ask John Yerxa to speak to you about our research.
7315 MR.
YERXA: Mr. Chairman and Members of the
Commission, John Yerxa Research carried out an extensive audience survey for
Standard Radio in Kamloops last summer.
The purpose of the study was to identify the most appropriate format for
a new station to serve Kamloops.
7316 The
results of our study were impressive.
Country music received the second highest support of all formats
selected by Kamloops listeners 18 years of age and older. Not only did approximately one‑quarter
of all adult radio listeners select country as the type of music they would
like to listen to most, but equally impressive was our discovery that country's
appeal extends right across the age spectrum.
7317 Our
research demonstrated that this significant demand for country is not now being
served. Fully 73 per cent of country
respondents indicated that they were unable to find a local FM radio station
that plays country music in Kamloops.
Suffice it to say that from a research standpoint, this desire for
country music in Kamloops represents one of the most glaring holes that I have
witnessed in a market study in some time.
7318 Consequently,
I have concluded that there is significant opportunity for a new country radio
station in Kamloops, B.C.
7319 I
would now ask Tom Tompkins to talk about the sound of Kamloops Country.
7320 MR.
TOMPKINS: Thank you, John.
7321 Mr.
Chairman and Members of the Commission, I am extremely pleased to have this
opportunity to talk to you today about our exciting programming ideas. As Don said earlier, I have not only been
programming the country music format for many years, but I have also been
involved in the Canadian country music industry for just as long.
7322 What
we propose for Kamloops is exciting because it takes place at a time when
country music is starting to make a refreshing comeback.
7323 The
programming on Kamloops Country will be unique to the Kamloops market. At present no other station programs
country, neither in Kamloops itself nor in the area. Our blend of country music will feature the newest country music
of today with the best of the past.
With our commitment of 40 per cent Canadian content, we will get the
opportunity to play Canadian country music at a time when it has never been
more popular.
7324 With
a new country station in Kamloops, we have committed to finally give a much
needed opportunity to Kamloops and regional artists, something they currently
do not have.
7325 Canadian
artists that will be showcased on our station include the likes of George Canyon, Lisa Brokop, Aaron Pritchett, Deric
Ruttan, Doc Walker, Corb Lund, and of course our international stars such as
Shania, Terri Clark, Carolyn Dawn Johnson, Michelle Wright and Paul Brandt.
7326 It
is a very impressive list, and that is why we are more than comfortable with
our 40 per cent Canadian content commitment.
7327 Specialty
and feature programming will also be an integral part of our station's
schedule. We will have something for
all types of country music fans, from our "Canadian Top Ten" and the
highly rated "American Country Countdown", which both feature the top
songs of today, to the more rootsy and traditional shows of "Country A to
Z" and "Spirit of the West".
7328 We
will also provide programming and features that will allow for local reflection
to help our station develop a personality unique to Kamloops. I am very enthused about the opportunity of
programming this station.
7329 Our
research tell us that Kamloops desperately wants and needs a new country music
station.
7330 Along
with our aggressive approach to music and developing Canadian talent, news is
going to be an integral part of our programming plans, and our B.C. Regional
News Director, Betty Selin, would like to talk to you about that.
7331 MS
SELIN: Thank you, Tom.
7332 Mr.
Chairman and Members of the Commission, our application offers an opportunity
for diversity in the market, bringing a new news voice to the region. With the availability of information from so
many mediums, our focus is on local news with a goa of 70 per cent local stories.
7333 Our
Kamloops news centre will be able to reach into almost every region of the
province, with our newsrooms in the north, Peace, Kootenay, Shushwap and
Okanagan. We can show regional stories
that are important to Kamloops listeners like no other applicant.
7334 This
news station would offer diversity of voice and a new outlet for the
community's issues. We plan to give the
underserved, those people in the community that are not heard, access.
7335 Our
plan includes 78 live newscasts per week.
Our news centre will also provide traffic and road information, sports,
weather, business and agricultural reports.
Our news component consists of six hours per week. We will also make available on a weekly
basis one hour for community programming, designed specifically for those who
currently don't have a voice.
7336 Standard's
commitment to information in the B.C. southern Interior can best be
demonstrated by our coverage during the devastating Okanagan Mountain Park wild
fire in Kelowna in August 2003. Our two
music intensive stations dropped all programming and went to 24‑hour news
and information. With almost 30,000
people under evacuation order and more than 230 homes destroyed, radio was
their only connection to what was happening.
7337 We
were able to bring our staff to Kelowna from throughout B.C., with people
coming from Terrace, Vancouver, Salmon Arm, Vernon, Penticton and Trail. While I hope it never happens in this region
again, we could draw on that expertise should a disaster hit the area.
7338 Our
peers have recognized our efforts during the fire. We received a B.C. and two national Radio‑Television News
Directors Association awards, as well as the Canadian Association of
Broadcasters Gold Ribbon Award for Breaking News.
7339 These
four awards are the latest in more than 30 news awards our B.C. stations have
received in the past ten years.
7340 By
awarding this new licence to Kamloops Country, the Commission will be giving
radio listeners a new news option, with the most experienced and best news
people in the B.C. Interior.
7341 We
would like to share our passion for broadcasting with the residents and
businesses of the North Thompson region.
It is our belief the strongest option for bringing diversity to the
Kamloops market is a third voice, Standard Radio's Kamloops Country.
7342 Our
B.C. Interior Sales Manager, Roy McKenzie, will now speak to you about sales.
7343 MR.
McKENZIE: Thank you, Betty.
7344 Mr.
Chairman and Members of the Commission, for the past 20 years I have been
selling radio advertising in markets just like Kamloops. Of all the cities in our province, Kamloops
is one of the most vibrant. I am
certain it can support the licensing of a new Country FM.
7345 Data
provided by Venture Kamloops, The Financial Post and the local Chamber of
Commerce confirm that the Kamloops economy is doing very well. Retail spending, population growth, building
permits, housing starts and new business licences show steady increases year
over year.
7346 We
know from other communities that when you add a new format that is not
available, the whole market benefits because of increased in‑market
tuning and decreased out‑of‑market tuning.
7347 Our
knowledge in the B.C. Interior, with 21 stations in 17 different communities
and over 60 sales representatives, gives us an excellent perspective when it
comes to radio advertising.
7348 In
preparing our application we conducted sales research and I also met with a
number of national advertising agencies and media buyers, and without exception
they were very supportive of a new country music station in Kamloops.
7349 Our
research and analysis also show that approval of our application will have
minimal impact on existing stations. We
project that our new Kamloops station will attain a 13 per cent market share of
tuning. Of that 13 per cent, 9.4 per
cent will come from new and repatriated tuning to local radio. The remaining 3.6 per cent of our new
Kamloops station's audience will come equally from the existing four stations
in the market.
7350 Our
revenue projections for the station are conservative. They are realistic and achievable.
7351 Lori
Pierson‑Mataj will now talk to you regarding our human resource
practices.
7352 MS
PIERSON‑MATAJ: Thank you, Roy.
7353 Mr.
Chairman and Members of the Commission, I am excited to be associated with
Standard Radio, an organization that while large in a national sense operates
their B.C. market stations in an independent, entrepreneurial manner with
respect to operations and managing resources, particularly our human resources:
our people.
7354 Standard
is committed to its diversity plan, which is very specific. It has six key points encompassing
recruitment, selection and hiring, training and development, promotion,
retention, accommodation, plus short and long‑term numerical goals. Each of these areas has defined procedures
and policies.
7355 We
will implement these policies in Kamloops and plan to work with all members of
the community we serve to ensure our workforce is representative of the public
we serve.
7356 I
would like to introduce Joan Phillip, who is here to represent our advisory
board.
7357 MS
PHILLIP: (Native language spoken /
Langue autochtone parlée)
7358 I
would like to first thank my Coast Salish relatives for the opportunity to
speak within their territory. Thank
you, Lori.
7359 Mr.
Chairman and Members of the Commission, I am a member of the Penticton Indian
Band, which is a part of the Okanagan Nation.
I am very pleased to be with you here today.
7360 For
many years I have worked to help support and empower Aboriginal communities in
British Columbia. While the situation
is improving, there continues to be a great need for more outreach initiatives
to Aboriginal people and in particular to our Aboriginal youth in this
province.
7361 This
proposal by Standard Radio I believe is a step in the right direction to
provide support for my people on radio.
Standard is committed to working with Aboriginal groups in order to
attract Aboriginal youth to broadcasting.
7362 It
also has proposed a number of important Canadian Talent Development initiatives
that will provide strong support to Aboriginal artists and students over the
course of a seven‑year period, if licensed in Kamloops.
7363 As
a member of the Kamloops Country's Advisory Board, I will be working with
Standard to ensure that Aboriginal talent have a voice in the station. I also look forward to providing the station
with insight into the needs and issues that our communities face on a daily
basis. This station will provide a much
needed outlet that is welcoming to Aboriginal people in the B.C. Interior.
7364 I
would like to now hand the floor over to Don Shafer.
7365 MR.
SHAFER: Thank you, Joan.
7366 We
have presented what we consider to be a well thought‑out application that
makes a significant contribution to the system and in particular makes a
significant contribution to the community of Kamloops.
7367 Our
proposal for Kamloops is an important part of Standard's strategy to build
bridges between the communities we serve.
By licensing Standard, you will allow us to provide more unique services
to residents of Kamloops than any other applicant.
7368 We
commissioned research in the market. We
used our experience in other B.C. Interior markets to ensure our assumptions
were right. We built a business plan
that we know is realistic and achievable, and we chose a format that was
missing in the market that would have the least impact on existing radio
stations.
7369 Standard
Radio currently operates seven country music stations across Canada. This expertise and many years of experience
in the country format will allow us to build a new station in Kamloops on a
strong foundation. We will do it right
and we will not abandon the format.
7370 Our
level of no less than 40 per cent Canadian content shows our commitment to
showcasing and supporting Canadian country artists on our country station. In addition to bringing a new voice to the
market and providing unique and informative programming, Kamloops Country will
also provide extensive support for the development of Canadian country music
artists.
7371 Standard
has proposed a benefits package that is unmatched within this proceeding. As part of our application we have committed
to contributing $1 million over the seven‑year licence term to the
development of Canadian country music.
It's a big number. But it is
what we determined we needed to do if we were going to make a significant
impact developing Canadian country music.
7372 $860,000
has been targeted to local initiatives while $140,000 will assist regional and
national organizations.
7373 The
key component of our benefits package is our Developing Country Stars
Initiative. This initiative will
support a live concert series, the production and distribution of a compilation
CD, as well as touring and recording opportunities for a winning country artist
each year for seven years.
7374 Other
initiatives include support for the Merritt Mountain Music Festival, an
important country music festival in the region; a scholarship program for
Aboriginal youth; funding for our Designated Group Fund; as well as support to
FACTOR and Canadian Music Week.
7375 Standard
Radio also proposes to contribute major non‑cash benefits valued at over
$1 million over the licence term to support various initiatives. These initiatives include support for
Standard's Country Music Ad Plan, our Public Service Announcements Program and
our Standard Cares Initiatives.
7376 To
ensure our commitment to diversity and local reflection, our new station will
create an advisory board to meet the needs of the Kamloops community. Joan Phillip is a key member of this board
and will also assist us with other Standard stations throughout the Interior.
7377 We
would like to thank the mayors, Chambers of Commerce, charitable organizations
and residents of Kamloops for their endorsement and over 170 letters of support
for our application.
7378 Please
allow me to quote from a few of these supportive letters.
7379 First
is a quote from Venture Kamloops Business Development's Executive Director Mary
Jane Cousins:
"Venture Kamloops supports the
Standard Radio application for Kamloops Country. Their particular commitments to developing country music stars
from the Kamloops area and to community fund raising efforts are especially
important to a growing community such as ours."
7380 Next
is a quote from Paul Brandt, a Canadian country music artist:
"Standard Radio has put forward
a plan to be extremely involved and supportive of a local hospital in the area
and of the local community. They have a
wonderful track record of doing this in other markets and would clearly be an
incredible asset to the wellbeing and future enhancement of the Kamloops area. I applaud Kamloops Country and Standard for
their foresight and sense of community and responsibility."
7381 Next
is a quote from Kelowna‑Mission MLA, Sindi Hawkins:
"The Standard radio stations
throughout the Okanagan have demonstrated the best of local and regional
associations in good times, as well as with crises like the fires in Salmon Arm
and Kelowna. They have demonstrated
repeatedly how useful this connectivity can be, making valuable information
available to the communities they serve and assisting communities,
organizations and our citizens throughout the valley."
7382 Finally,
this last quote is from Samantha Canonns, a radio listener from Kamloops, who
would very much like to see us licensed in this market:
"I have read and experienced
Standard Radio's amazing ability to start something from nothing and make it
huge. I believe that Standard Radio is
the only answer to Kamloops' problem of not being able to attain a permanent
country radio station."
7383 In
conclusion, the time is right for the Commission to license a new country radio
station in Kamloops. It has been over
20 years since a new station was licensed in this market.
7384 Our
application makes sense as there are already two strong broadcasters in the
city. It is natural to add a new voice.
7385 There
is room in the Kamloops radio market for a new station, and our proposed
service will have a minimal impact, if any, on existing Kamloops radio
stations. Our proposal will make a
significant contribution to the broadcasting system and to the Kamloops
community.
7386 Standard's
application meets the objectives of the Broadcasting Act, and our application
addresses the issues of diversity of editorial voices, ability of the market to
support a new station, and initiatives for Canadian Talent Development.
7387 We
appreciate the opportunity to answer any questions you may have about our
application.
7388 Thank
you very much.
7389 THE
CHAIRPERSON: Thank you.
7390 Commissioner
Langford.
7391 COMMISSIONER
LANGFORD: Thank you, Mr. Chairman.
7392 Good
afternoon, folks. I want to start ‑‑
and I am sure everybody would join me in this ‑‑ by sending
our congratulations to Gary Slaight for the honour that is being bestowed on
him today. We will miss him at the
table, but his team is here.
7393 So
congratulations to him.
7394 We
also have to congratulate Commissioner Williams, who is a year older
today. It is his birthday.
‑‑‑ Applause /
Applaudissements
7395 COMMISSIONER
LANGFORD: He didn't have a grey hair on
his head when he started here.
7396 COMMISSIONER
WILLIAMS: I would suggest that Gary
Slaight's achievement is a far loftier one than just becoming a year older.
7397 COMMISSIONER
LANGFORD: I don't know, Ron. Anybody who knows you well, just staying
alive this long is quite an achievement.
‑‑‑ Laughter /
Rires
7398 COMMISSIONER
LANGFORD: Your remarks today helped
fill in some of the questions I had.
Your application is very clear. Standard knows how to make a radio application. You have been at this for a long time.
7399 But
I do have some questions. I don't think
we will be very long this afternoon, but I have a couple of questions in two or
three areas.
7400 I
want to look a little more closely at the Kamloops radio market with you. I want to get a few more answers, probably
from Tom Tompkins, on this type of programming that you plan to do. And I think I will probably end up having a
short discussion with Betty Selin about news.
There were some answers today, of 78 broadcasts and six hours, but I
still have a few more; not too many.
7401 Let
me start with the Kamloops radio market generally. You are enthusiastic about it.
You are enthusiastic here this afternoon, and you were enthusiastic in
your supplementary brief, where you say on page 3‑7:
"The Kamloops radio market and
revenue base is robust and strong."
7402 Unfortunately,
when we look at the PBIT performances in Kamloops over the last four years,
that becomes a debatable point, in my view.
So I want to get some of your input on that.
7403 I
take your point that the community itself may be strong and robust, but
sometimes that doesn't transfer to every industry's health on the bottom line.
7404 I
would just throw out to you a couple of numbers that concern me.
7405 The
2003 PBIT margin for Kamloops radio market was 9.53 per cent, and that was the
highest it had been in four years. At
the same time, the Canadian average for that same year was 19.3. The 2004 PBIT for Kamloops radio market
dropped over a per cent, to 8.02.
7406 A
one percentage drop doesn't mean necessarily Apocalypse but it is not going in
the right direction. I guess I would
just like to have an in‑depth discussion with you on this notion that
this is a robust and strong radio market when it really doesn't appear to be.
7407 MR.
SHAFER: Thank you for the opportunity
to answer that question.
7408 In
the absence of having financial data for that market, for the radio market, we
have had to make our assumption based on what we know. We didn't have those figures.
7409 I
can't comment on how the other operators run their businesses. We can talk to how we operate our
business. But based on what we know
about the economy and what radio should be earning, they should be more
profitable than that from our account.
7410 I
may ask Dr. Tarzwell to help shed some light on that.
7411 DR.
TARZWELL: I would just like to speak to
the strength of the Kamloops economy.
7412 My
role here was to see and to explore the strength of the Kamloops economy, and I
was very pleased to see that in fact in the important areas that you need to
look at to see where the economy is growing, the Kamloops economy is certainly
growing and it is growing fairly strongly.
7413 There
certainly was a bit of a downturn that occurred in the 1990s, but we have been
growing quite strongly since 2001. The
major indicators are certainly reflective of the fact that it is going to
continue in that direction.
7414 I
am confident that these values that have been presented in the report dealing
with the retail sales, I would say that those are on the low side. Actually, I have seen some data that has
been presented since then that actually have larger values than those.
7415 So
the growth of the Kamloops economy is certainly there. The size of it is substantial, and there is
no emphasis or view at this particular instance that it is going to slow down.
7416 COMMISSIONER
LANGFORD: And yet the figures are
clear. I have access to confidential
returns of all of the players, which of course I can't share with you. I'm sorry to tantalize you with that. But I can tell you some of them are
grim. Grim is the word.
7417 MR.
SHAFER: We would like to see them.
7418 COMMISSIONER
LANGFORD: Grim is the word. And maybe even you wouldn't want to see
them. They are just not a pretty sight,
some of them.
7419 We
are dealing with experienced broadcasters in the community now who know the
community. They didn't just drop in
from another planet. And they seem to
be having a hard, hard slog of it.
7420 When
I see you project revenues of over $6 million over seven years and then make
the statement in your supplementary brief, at page 6, that there will be
relatively little impact on existing stations, it just seems hard to believe
when you see the condition they are in.
7421 I
don't know how you can comfort me with the notion that somehow you can extract
from what may be a robust market revenues and not put at risk stations that at
this point some of which are not in a position to lose a penny more.
7422 How
do you do that?
7423 MR.
SHAFER: Commissioner Langford, if you
assume that our assumptions are correct with regard to what the radio market is
worth ‑‑
7424 COMMISSIONER
LANGFORD: I don't. I assume that your assumptions may be
correct about the strength of the Kamloops economy. It may be a bustling town and a great place to live and full of
people who go shopping a lot and therefore should inspire advertising. But I am not seeing that in the statistics
transferring to the radio market for some reason.
7425 I
wonder whether you have a formula that would convince us that somehow you could
kick‑start a whole bunch of new radio revenue because taking it from the
existing players, even the 4 per cent you are talking about, might be a
dangerous formula.
7426 MR.
SHAFER: I might try giving you some
comfort with John Yerxa, who might be able to give you what you are looking
for.
7427 MR.
YERXA: I am going to try and provide a
few answers here but prior to doing so, I would like to give you a quick
background.
7428 In
1977, 25 years ago, I began my career in radio at CFCW, which was Canada's
first country and western fulltime radio station founded by my father. What I would like to do here is first
outline a couple of reasons why I think country didn't work for Pattison,
because that obviously impacts the performance of those radio stations in the
near term, and then I want to give you a couple of reasons why I think that the
format would work very well.
7429 At
the outset, let me just say that given my background, one of the things that I
have learned is that country music, like most other formats, tends to go
through about eight to ten‑year life cycles. Country is certainly no exception.
7430 At
around the time of the exit from Pattison of the country format, they were
actually in the doldrums phase of this music cycle which, as other clients of
mine can attest to, made things a lot tougher in that time period.
7431 Having
said that, I think the truth of the matter is ‑‑ and this also
impacts on the performance of these radio stations at that time ‑‑
that if the truth be known, that station was not really a pure country radio
station. In fact, at the time, B100 was
actually delivering a whole hodgepodge of music ranging from country to rock,
all types of different genres, and consequently, if you are speaking as a
country radio station, would not have been performing as a pure country station
at that time.
7432 While
we should not doubt Pattison's commitment in other radio markets, in my view
this hybrid experiment did not succeed very well. That is because the loyalty shown by country listeners to their
format is rarely seen in any other music format if you give them what they
want, which is precisely what Standard is proposing to do.
7433 I
guess to wrap this up, what I would say is to be able to provide a distinct
alternative in the market to access a group of listeners that are up until now
disenfranchised, the most important thing is that a majority of the radio
advertisers whom I contacted and interviewed would be delighted to see a pure
country radio station in the market. In
fact, two‑thirds of the people that I contacted and interviewed indicated
that they would actually spend more on radio advertising than they do now if
the CRTC goes ahead and licenses a country FM in the market.
7434 That
may help to shed some light on the potential of this format and the success or
lack of success of the existing stations in the market up until now.
7435 COMMISSIONER
LANGFORD: You have built a strong case
on country. You have built it in your
application and you have built it here today.
But then you put in a kind of alternative proposition that you build
into your supplementary brief at page 6‑2 where you say basically that we
recognize that country has such a big hold on the market that somebody might
grab it before we get there. And if
they do, we will do something else. You
just refer to it as an alternative.
7436 Well,
that's logical. You would have to do
something else, wouldn't you.
7437 But
you don't say what it is, so I don't have any idea what No. 2 is and whether it
has the same legs for financial success as you believe country does. It must, I guess, because you commit to all
the same commitments on this unknown alternative. You say we will do the million dollars and all the same spending
on the mystery alternative format.
7438 I
am not trying to be sarcastic here in any way.
I understand the problem you have.
One of the existing players could grab that format, could look at your
research and say: "Holy mackerel,
let's grab it."
7439 I
just wonder whether it is realistic. If
country really is the answer, if country is the missing hole here, the missing
format, is it realistic for us to believe that not only can a reasonably
fragile radio market take a new player at this time but take a player that
doesn't have access to the country format?
7440 MR.
SHAFER: Commissioner Langford, I want
to close the door on your first question.
We are absolutely confident that the market is large enough to support a
fifth station based on our experience across B.C. and the markets that we
operate in every day. We can't see how
the other four stations frankly are not more profitable.
7441 With
regard to an alternate format, in the event that one of the other players would
in fact change format, John Yerxa has done sufficient research to determine
what the next format would be. Perhaps
he would speak to that.
7442 MR.
YERXA: Once again, let's be clear that
country music is really what this market needs, as our market research
indicates.
7443 My
recommendation, however, is that if the CRTC denies this application, then I
would ask Standard to consider a soft AC station as my research also reveals
that there is a significant percentage of those partisans who feel that no
local FM stations adequately serves their needs.
7444 Given
Standard's tremendous experience with the soft AC format, coupled with what I
believe will be the same financial commitment that they have made in the
country application, this would be a tremendous addition to the Kamloops
airwaves.
7445 COMMISSIONER
LANGFORD: Let me try another scenario
on you.
7446 What
if we approve your format, you convince us and we approve it and we license
you, but before you launch somebody switches what they have now to country and
steals it out from under you. Would you
go then with the soft AC or would you stick with country and go head‑to‑head
with them?
7447 MR.
SHAFER: I think we would have to see or
we would have to know what the competitor's format was. If it was exactly the same as what we were
proposing, we would obviously have to move to another format.
7448 COMMISSIONER
LANGFORD: All right. That's an answer.
7449 Let's
look at the format. You call it New
Country, but some of the names you listed today are not new to me. Perhaps you could give me some guidance on
what New Country means.
7450 MR.
SHAFER: I will ask Tom Tompkins to
answer that.
7451 MR.
TOMPKINS: That is probably the best
question in country radio and country music over the last 15 years. I think it kind of got misguided and kind of
got off the rails as it went along throughout the 1990s.
7452 At
the very beginning of the 1990s actually New Country wasn't really a type of
music or a type of format. New Country
was meant to be a marketing term to try and get a younger demographic to listen
to country music radio, because it had the stigma of being an older skewed demo
format.
7453 However,
what happened is when a lot of the new artists starting coming out in the 1990s
all of a sudden that kind of music that was coming out in the 1990s became
known as New Country when actually I have been working in country radio now for
25 years, in country music for just as long, and I kind of have the same
question you have about New Country:
What is New Country?
7454 To
me New Country is more of a marketing term to try and change the impression
that some people still tend to call it country and western.
7455 I
have a bit of an adage that I like to say: that western died when they stuffed
Trigger. And that's kind of what ‑‑
sorry.
‑‑‑ Laughter /
Rires
7456 COMMISSIONER
LANGFORD: Maybe we should just wrap
this up. There is never going to be a
better line this afternoon.
7457 MR.
TOMPKINS: But that is a fact. There aren't any country and western radio
stations any more, and there haven't been any country and western radio
stations for a number of years. It was
country and western, then it became town and country, and then it became just
country, and that's what it is today.
7458 So
in terms of what is New Country, I guess you could say pretty well every artist
from the last 15 years since the beginning of ‑‑ well, I could
even say 20 years now, since the advent of Randy Travis and his popularity in
the mid‑1980s. Everything since
then people have tended to lump in as New Country.
7459 That
is about as close as I can give to you as a definition of New Country.
7460 COMMISSIONER
LANGFORD: But you are going to put in
some pretty old country too, bluegrass and Acadian music and Legends of the
Depression and Legends of Canada.
7461 How
does that work with New Country?
7462 MR.
TOMPKINS: That is simply because we
feel that a New Country format is not all totally new music.
7463 COMMISSIONER
LANGFORD: Will that be played in the
regular rotation, or is it going to be special shows for that?
7464 MR.
TOMPKINS: They will be totally special
shows for music of going to the past.
7465 COMMISSIONER
LANGFORD: When will we see those? When will we listen to those?
7466 Sorry,
we have been doing television today. I
have to switch back to listening.
7467 MR.
TOMPKINS: If you refer to our program
schedule, most of those types of special shows will be on the weekends.
7468 Part
of the concert series on Saturday nights, half of those concerts are going to
be the concerts that we have proposed under our Canadian Talent Development
banner. The other will be archived
concerts, such as "The Road", that is still available, and our shows
that have been in the can recorded for quite some time.
7469 Our
"Spirit of the West" is Hugh McLennan, who is a local Kamloops fellow
who we have spoken to and he has agreed that if we do get this station, we can
speak to him about playing his show, which deals very much in the old
traditions of country and is played on a number of stations throughout Canada.
7470 And
our "Country A to Z" show is a show that is going to feature more of
the roots of country music, everything from what you consider alternative
country, to bluegrass to more of the traditions of country music and how we got
to where we are today.
7471 COMMISSIONER
LANGFORD: Back when everybody was
called "Hank", I think. They
all seemed to be called "Hank".
7472 MR.
TOMPKINS: Either that or
"Bubba".
7473 COMMISSIONER
LANGFORD: I think that is more urban.
7474 Excuse
me. Somebody just passed me a note, so
I might as well do them the courtesy of reading it.
‑‑‑ Pause
7475 COMMISSIONER
LANGFORD: While we are on this program,
I will just jump ahead a little. I like
to be nimble when I can.
7476 You
said that some of this programming was going to be a product of Canadian Talent
Development. Which one of these would
that be, which ones?
7477 MR.
TOMPKINS: The concert series ‑‑
7478 COMMISSIONER
LANGFORD: Where it says concert?
7479 MR.
TOMPKINS: Where you see concert on
Saturday nights, that is going to be the result of our 26 concerts that we are
proposing to do under CTD.
7480 COMMISSIONER
LANGFORD: And nothing else?
7481 MR.
TOMPKINS: In that show?
7482 COMMISSIONER
LANGFORD: No. Anything else coming out of CTD?
Any of these other shows coming out of CTD?
7483 MR.
TOMPKINS: In there, no.
7484 COMMISSIONER
LANGFORD: Then you said we have some of
these in the can. So I guess this is
stuff you have recorded for other radio stations or whatever?
7485 MR.
TOMPKINS: That's right.
7486 COMMISSIONER
LANGFORD: Which shows would those be?
7487 MR.
TOMPKINS: Are you talking about
concerts or are you talking about other programs?
7488 COMMISSIONER
LANGFORD: Some of the programming as
you went through the list, on one of them you said we have a lot of that in the
can.
7489 MR.
TOMPKINS: I don't recall.
7490 COMMISSIONER
LANGFORD: Well, we can't get the
transcript typed that fast.
7491 MR.
TOMPKINS: Where we said we had it in
the can?
7492 COMMISSIONER
LANGFORD: Isn't that an old news
expression for sort of a program that you have had lying around for a while?
7493 MR.
TOMPKINS: Yes, prerecorded.
7494 COMMISSIONER
LANGFORD: Yes. Are some of these shows already done?
7495 MR.
TOMPKINS: No, none of them have been
done.
7496 COMMISSIONER
LANGFORD: This will all be brand new.
7497 MR.
TOMPKINS: Oh, "The Road",
which is also part of the concert series.
7498 I'm
sorry, I just misunderstood you.
7499 COMMISSIONER
LANGFORD: "The Road".
7500 MR.
TOMPKINS: You see, 26 weeks are going
to be taken up in the concert series by the live concert series we have
proposed under CTD.
7501 COMMISSIONER
LANGFORD: Yes.
7502 MR.
TOMPKINS: The other shows will be shows
such as "The Road", which is a concert series that is available and
have been prerecorded.
7503 COMMISSIONER
LANGFORD: So those are in the can, as
we say.
7504 MR.
TOMPKINS: Yes, they are; sorry.
7505 COMMISSIONER
LANGFORD: That's all right. It's a good thing I'm not hearing things.
7506 I
will get back to that CTD thing a little later. It is good to have that pointed out.
7507 With
regard to these Bluegrass, Legends of the Depression, Acadian music, would any
of this be Category 3 music?
7508 MR.
TOMPKINS: I don't believe so.
7509 COMMISSIONER
LANGFORD: Not at all?
7510 MR.
TOMPKINS: No.
7511 COMMISSIONER
LANGFORD: All right. It's a little different than the other
stuff, so I wasn't quite sure. If it
was, we would like to know how much and track it, and that sort of thing.
7512 Again,
all of this will be special shows. I
won't be driving home one day and hear anybody named "Hank".
7513 MR.
TOMPKINS: You might hear Hank Williams
Junior.
7514 COMMISSIONER
LANGFORD: I see. But not Hank Snow.
7515 MR.
TOMPKINS: You won't hear Hank Snow,
that's for sure.
7516 COMMISSIONER
LANGFORD: You make a statement on
programming. You say that 40 per cent
of all your Category 2 will be Canadian, and you made it here again.
7517 I
just want to know how you are going to count that. Does this 40 per cent commitment apply both overall and to the
Monday‑to‑Friday between 6:00 a.m. to 6:00 p.m. slot as well?
7518 MR.
TOMPKINS: Definitely.
7519 COMMISSIONER
LANGFORD: Thanks very much.
7520 One
last question on this format, if I can go back to it.
7521 There
are other applicants who are looking at this country format. Does your differ in any way from theirs?
7522 MR.
TOMPKINS: I don't think it is going to
differ a whole lot. We will be playing
predominantly most of our music from the last 20 years, as I said, with the
advent of Randy Travis and since. We
will be basically a 55:45 current to gold rotation with 40 per cent Canadian
content. Much of the Canadian are acts
that have been developed and have become popular within the last 15 to 20
years.
7523 COMMISSIONER
LANGFORD: Thank you.
7524 Can
we move on to spoken word. Why don't we
start with news.
7525 You
did fill in a couple of stats, as I said earlier. I now know that you are going to have 78 newscasts, and I now
know that you are going to have six hours total a week.
7526 What
I don't know is how many hours per weekday and how many hours per weekend day.
7527 This
may be on this schedule that you filed today.
7528 MS
SELIN: We did provide you with a news
schedule. There will be 14 casts on
each weekday and four on each weekend.
So that is where we get our six total hours per week of news.
7529 COMMISSIONER
LANGFORD: Did you just provide that
today or did I have it earlier?
7530 MS
SELIN: No. It was provided with your package today.
7531 COMMISSIONER
LANGFORD: Excellent; thank you.
7532 MS
SELIN: It looks like this.
7533 COMMISSIONER
LANGFORD: Right. I think that covers everything I need in
terms of numbers.
7534 Staff
can look it over while I am asking you other questions, and if they have
something more they can ask it themselves.
7535 Let's
talk about your pledge to kind of local coverage, regional coverage, part of
which is news, part of which is information.
I want to know a little more about how you are going to gather it, how
many reporters you will have, and that sort of thing.
7536 MS
SELIN: All right. Our news room will have a news director, who
we anticipate will be the morning news anchor.
It will also have an afternoon anchor, a fulltime reporter and then a
part‑time producer/weekend news person.
7537 In
news these days everybody does double duty.
You pull an anchor shift and you produce two or three stories.
7538 Most
of them will be produced in‑house.
One of the advantages that we do have is that we have news centres
throughout other areas of the province.
One of the benefits of technology, I guess, is that you can see what the
other news rooms are doing.
7539 For
example, we will be able to go into our news room for system and see what
stories are created in Salmon Arm or Kelowna or down in Trail or Nelson. So we will be able to see what kind of
stories might be of interest to Kamloops listeners and either use them directly
or maybe find what we would call a Kamloops angle to that story.
7540 COMMISSIONER
LANGFORD: As you know, we are very keen
on local and regional at the Commission.
7541 MS
SELIN: And so am I.
7542 COMMISSIONER
LANGFORD: And yet what I am hearing
from you seems to be somewhat in conflict.
You have a very lean news staff, and it is easy for me to spend your
money, so that's fine. You are talking
about a couple of announcers who are also going to read the news. And you have one reporter, did you say?
7543 MS
SELIN: One fulltime reporter, yes.
7544 COMMISSIONER
LANGFORD: One fulltime reporter. You have a lot of newscasts. That is local. But then you are filling it, it seems, or could be filling it
with a lot of stuff from other Standard stations. I don't question the quality, but I wonder whether that then does
take away from the local and give it just a kind of B.C. flavour.
7545 MS
SELIN: I'm sorry, I have misled you
there. It was more of an idea
generation or if a story would be of interest to Kamloops.
7546 I
guess I am just really good at hiring news people. The folks who work for me just tend to generate a lot of
stories. We really get into
communities. We develop contacts. We cover school boards and council
meetings. At one council meeting you
can walk out of there with ten stories in a good week.
7547 Really
our focus will be local, as it is in all of our other stations.
7548 COMMISSIONER
LANGFORD: Can you give me any idea of
how many non‑Kamloops created news stories might be running in a
newscast? Will you actually be bringing
them in from other stations at all?
7549 Will
you go to "we'll now take you to reporter X in Nanaimo".
7550 MS
SELIN: If it was a really big story
would be the only time we would do that.
7551 COMMISSIONER
LANGFORD: More fires or something.
7552 MS
SELIN: Absolutely. If it was more fires or maybe if it was a
forestry‑related story that made sense in Kamloops. It would have to make sense to those
listeners because that is one of the criteria that we base our newsroom on.
7553 COMMISSIONER
LANGFORD: You are lean; you are not
mean.
7554 MS
SELIN: We are always lean.
7555 COMMISSIONER
LANGFORD: I have a question about your
programming expenses, which seem in comparison to the other applicants very
low. They are certainly the lowest, and
they are very low compared to some of the others.
7556 I
am looking at a year two expense of $139,900 that you have. Newcap is not with us any more, but their
application came in at $381,000. The
Evanov application is $438,900, and NL Broadcasting is $245,500‑and‑a‑bit.
7557 Why
are yours so low? This is what got me
thinking, if you want to know. I
thought maybe you were borrowing programming from somewhere else, from some of
your other stations.
7558 MR.
SHAFER: Commissioner Langford, if you
know my boss and our owner, you will understand why they are less. We also figure that is what we need to do.
7559 This
model that you have in front of you is modelled over other stations that we
have in B.C. So we know it works and we
know the costs are accurate.
7560 I
can ask Reeny Chew to walk you through the programming expenditures.
7561 COMMISSIONER
LANGFORD: If you could give me some idea. We don't have to go to every nickel and
dime.
7562 As
I say, I am just looking at them in comparison. I don't have the experience you have of hands‑on running a
station in Kamloops or a city like Kamloops, but I do have questions that arise
when you see such a large gap among the different applications.
7563 MS
CHEW: We have our announcers in the
budgets, but as well as in the programming budgets some of these announcers
would have other responsibilities. So
we would assign their salary, allocate it to the other departments, such as
promotions.
7564 The
news people are in the programming budget, and the news director, as this is
considered management, shows up under our administration budget.
7565 COMMISSIONER
LANGFORD: So if you were to plunk him
into the programming, the news director ‑‑
7566 MS
CHEW: It would probably be consistent
with the other applicants.
7567 COMMISSIONER
LANGFORD: At least perhaps with NL,
unless it's a career opportunity we should all be thinking about. I don't think that is going to bring you up
to $438,000.
7568 That
is helpful. I just couldn't help but
notice that discrepancy.
7569 Finally,
in the area of Canadian Talent Development, most of what you have given us is
very clear and it is very impressive but I have a few questions.
7570 One
them actually comes out of our earlier discussion on this live concert.
7571 It
is difficult to know ‑‑ and I don't want to diminish the value
of getting your concert played and all that sort of thing. But it is difficult to know whether this is
Canadian Talent Development or simply the price of buying some programming for
your station.
7572 Maybe
you could respond to that difficulty I am having.
7573 MR.
TOMPKINS: This is not going to be
anything really that is existing in one way or another. It is going to be a very difficult
task ‑‑ we are not saying it is not ‑‑ to go
out and record, in one way or another, 26 concerts a year. But that is what we are going to do.
7574 We
have discussed at length in terms of how we are actually going to achieve
it. What we are going to do is we are
going to go to various venues throughout Kamloops, the region, the Mountain
Music Festival, and we are also going to have acts that are in the radio station
that we will also record live as well which would fall under this criteria.
7575 We
have done some research in the Kamloops area and we have talked to a number of
the promoters, and we have come up with about six or seven different venues
that are available in the area that would suffice quite well in terms of doing
our concert series.
7576 We
realize it won't be exactly every other week for one year, for 26 weeks, there
will be an act to record. In some times
of the year there will be more groups than others, specifically in the summer
when bands and groups and artists tend to tour more than in the winter.
7577 We
are going to be a little bit behind on how we gather it, but we have all intentions
of making them all brand new concerts and running every other week.
7578 COMMISSIONER
LANGFORD: So what is the $30,000 going
to be spent on?
7579 MR.
TOMPKINS: The $30,000 is basically
going to be spent on production of the concerts. Occasionally there are going to be some talent fees based on
whether it is going to be an existing show that we just go in and record, for
instance in a club, or it could be a concert that we have to produce on our own;
in other words, bring in the talent on our own.
7580 COMMISSIONER
LANGFORD: I must say I find it a little
tough. Nobody can overestimate the
chance to be heard and the chance to be recorded and to get some play time, but
I wonder how we define that as talent development.
7581 They
will enjoy it and they will be glad you are doing it. But essentially you go out with a truck and you record a concert,
or you bring them in and you record it.
7582 MR.
TOMPKINS: I think the talent
development aspect of it, first of all, is that they get airplay on the
radio. Of those 26 concerts, we then
take the best ten songs of those 26 concerts and produce our annual CD
compilation. We get that annual CD
compilation distributed by Maple Music.
It is distributed across Canada.
We have a promo schedule on the air promoting the compilation, and it
becomes available for sale.
7583 Then
the overall winner of those ten tracks we take into the studio to record a full‑fledged
CD project. We work on a tour for
them. We have distribution set up for
them, through Maple Music once again, and we also have a promo schedule for
them as well. Merritt Music have agreed
to book that act for the Merritt Mountain Music Festival.
7584 So
they get a chance to go into the studio, record, get airplay and tour. They get a chance to do interviews.
7585 To
us, we figure that is pretty good Canadian Talent Development.
7586 COMMISSIONER
LANGFORD: Before you jump in, Mr.
Shafer -- I am finding it harder and harder to keep things in my mind these
days -- the point you have made is interesting, Mr. Tompkins, but that is
another $35,000, which is great for the people getting it.
7587 MR.
TOMPKINS: Yes.
7588 COMMISSIONER
LANGFORD: I want to get back to the
original $30,000, where you are actually doing this live country series. It is that one that I don't quite see as
talent development.
7589 I
see the value of it. I am not trying to
minimize its value. I just wonder
whether it fits within the parameters of actual talent development.
7590 MR.
SHAFER: Commissioner Langford, I would
like to try answering that question.
7591 Radio
stations have been doing this for the last hundred years, back to the early
days when live programming was all that they ran. In the last 20 to 30 years more and more radio stations and
markets across North America have created platforms or battle of the bands or
showcases for new emerging talent in their own markets.
7592 I
note in the intervention by CIRPA that they question the value of those
contests or those showcases.
7593 COMMISSIONER
LANGFORD: Not all my ideas are original
here.
7594 MR.
SHAFER: But having seen them work in so
many markets across Canada and across the United States, those showcases and
those platforms create an opportunity for talent to at least step forward and
try their material and be heard and hopefully through the competition move
forward.
7595 So
I think it is a very valuable first stage in that process.
7596 COMMISSIONER
LANGFORD: Okay. That's your answer and we will look at it;
thank you.
7597 To
jump back now to the $35,000, you say that will be spent on CD costs and
touring.
7598 Will
there be a cash prize as well for that?
7599 MR.
TOMPKINS: No, there won't be a cash
prize. Would you like me to break down
the $35,000?
7600 COMMISSIONER
LANGFORD: Sure. Why not.
7601 MR.
TOMPKINS: Of the $35,000, we have gone
out and we have estimated that $24,000 of that will be used for the production
of the CD: going into the recording studio and the cost of doing same. The talent and musician costs are going to
cost approximately $5,000. The
mastering of the project is going to be $2,000; the art work, $2,500. Then it is going to cost us about $1,500 to
manufacture 1,500 CDs under an initial release.
7602 COMMISSIONER
LANGFORD: What are you going to do with
those CDs? You say Maple Music is going
to distribute them. Where do you see
them going?
7603 MR.
TOMPKINS: Of the 1,500 that we will
initially manufacture, 100 will go to the artist to do as they wish. The additional 1,400 will go to Maple Music
to be used to distribute for promotion and sales.
7604 COMMISSIONER
LANGFORD: You will be able to at least
get them on 51 stations around Canada, I assume.
7605 MR.
TOMPKINS: No. We only have seven country stations.
7606 COMMISSIONER
LANGFORD: You could stretch it.
7607 Why
does the $35,000 jump to $55,000 in year seven? Just inflation?
7608 MR.
TOMPKINS: We were just trying to get
the number to round out to a million dollars at that point.
7609 COMMISSIONER
LANGFORD: So there would just be more
promotion, whatever.
7610 How
do you pick the winner here? What are
the criteria? Where do you get your
judges? How do they judge? The nicest cowboy boots, shiniest
guitar? What are we looking at here?
7611 MR.
SHAFER: Tom has quite an elaborate
schedule here.
7612 MR.
TOMPKINS: A good portion of our
advisory board is going to be made up music‑related professionals. These people, along with the music and
programming staff of the radio station, will be involved with the selection
process.
7613 The
only criteria ‑‑ and this is for the compilation at
least ‑‑ will be that at least 80 per cent of the final
ten tracks must be local or B.C. artists and that it must be considered country
music.
7614 COMMISSIONER
LANGFORD: I have a couple of quick
follow‑ups on a couple of other initiatives.
7615 The
$15,000 to the Merritt Mountain Music Festival, how do you ensure that it goes
to talent development and not to the cost of putting up a tent or something
like that?
7616 MR.
TOMPKINS: Actually, we have been
meeting with the Merritt Mountain Music Festival people, and we are discussing
various initiatives actually, as we talk.
Merritt Mountain will be appearing before you in the intervention
process, and they will probably elaborate a little bit more.
7617 They
came to us actually, and they don't like the idea of us just giving them
$15,000 to go towards the payment of Canadian acts at Merritt. They would like to get much more creative
about it, and it looks like we are discussing the possibilities of doing a
talent contest through Merritt at Merritt annually.
7618 COMMISSIONER
LANGFORD: And you will keep us posted
on that, or they will.
7619 MR.
TOMPKINS: Certainly.
7620 COMMISSIONER
LANGFORD: The Designated Group Fund, I
am not entirely sure what the cost breakdown on that is: what you are going to
allocate to scholarships or technical assistance or promotion assistance, that
sort of thing.
7621 MR.
SHAFER: I would like to answer that.
7622 The
idea we had in mind with the two scholarships -- the $10,000 a year towards the
Aboriginal scholarship for Thompson River University was seen as a mechanism to
attract Aboriginal youth into journalism and hopefully at some point into
broadcasting.
7623 The
Designated Group Fund is pretty straightforward in that we saw that as money
being allocated to the designated groups, assisted by the advisory board to
help determine what kinds of music programs we could initiate in the community.
7624 Sprott‑Shaw
College and a number of schools have music programs that we thought would be
appropriate to attract the designated groups or some of those members into
those programs.
7625 COMMISSIONER
LANGFORD: You don't have a focus on
what sort of activities they might be using that money to further?
7626 MR.
SHAFER: We could come up with some
parameters and some ideas. But no,
honestly, we thought again the advisory board would offer us a fresh
perspective on what would be best in those communities.
7627 Part
of our mandate for the advisory board would be to have at least two members of
each designated group on the board.
7628 COMMISSIONER
LANGFORD: I don't mean to sound
pessimistic about any of your initiatives, but this is a fairly standard
question. As a process of evaluating
and analyzing everything you have given us, if we feel that we had to reject
one of the initiatives for some reason, it just didn't qualify as talent development,
would you be willing to redirect it to some other source?
7629 MR.
SHAFER: Yes, we would.
7630 COMMISSIONER
LANGFORD: Thank you very much.
7631 My
final question ‑‑ my colleagues may have others ‑‑
is about cultural diversity. You speak
very eloquently about it in your supplementary brief, about the inclusive
perspectives of Kamloops Country. But I
would like you to flesh it out a little.
I would like to know how your cultural diversity plans are going to be
captured maybe in news, music, promotion of artists. Put a little more flesh on the bones, if you could.
7632 MR.
SHAFER: I think to answer the question
we have to look at going to the very beginning of the station before it goes to
air in terms of how we hire.
7633 Lori
may care to comment on the hiring practices, but it is a fairly extensive
process that would make sure we reach into the community and reflect it
appropriately so that those voices are heard on the air to talk about the
different communities.
7634 That
is pretty common throughout our group in terms of how we hire and how we ensure
diversity or local reflection.
7635 We
have a couple of unique initiatives that I would like Betty to talk to with
regard to how do we make sure that that comes through in our music programming,
what is in between the songs, and what does the news sound like.
7636 MS
SELIN: Thanks, Don.
7637 One
of the things that we talked about was we would like to develop some specialty
programming with regard to news and public information. The idea that we came up with is a one‑hour
program that would air every Sunday morning, and we are going to call it
"In The Loop". We thought
that was very clever, actually.
7638 Basically
it is a one‑hour program that we would make available to local groups,
certainly in the four designated areas and any other community groups that
might want to have a voice. It would be
prerecorded, not live, interviews. It
could be if there was a big news story that week, we might have both sides to
discuss it. It could be a huge
community event.
7639 It
is just wanting to make available air time to groups who right now maybe don't
feel that they have an opportunity for that.
It would be kind of a really local, rootsy feeling kind of show is what
I visualize or hear in my head anyway.
7640 COMMISSIONER
LANGFORD: Do you have a policy of
trying to kind of make the sounds of the news more reflective of your
community?
7641 In
other words, you can always go to Lawyer Sam for a legal comment, but maybe it
would be good to go to Lawyer Barbara once in a while, or something like that,
so people hear a woman lawyer on the news giving the clip, or whatever.
7642 Do
you build that into your programming policies?
7643 MS
SELIN: Absolutely. We have a fairly substantial newsroom
guidebook that every new employee reads that has everything from use of a
scanner to gender‑neutral language.
7644 I
have been at this for a long time, and I think I am pretty careful to make sure
that we do reflect the community. Our
contacts are extensive. We might not
just have one contact say at a women's centre but we would have two or three
people there that could comment on child care programs in the budget, that kind
of thing.
7645 I
personally make a very special effort to make sure that those kinds of contacts
are within our contact file so that all of our news people have access to that.
7646 COMMISSIONER
LANGFORD: Those are my questions,
unless you have further comments.
Perhaps some of my colleagues will have questions. I am not sure.
7647 Thank
you very, very much.
7648 THE
CHAIRPERSON: Thank you.
7649 Commissioner
Pennefather.
7650 COMMISSIONER
PENNEFATHER: Thank you, Mr. Chairman.
7651 Just
a quick question on the programming schedule that came with the presentation
today to make sure I am reading it correctly.
7652 Monday
to Friday, 7:00 to midnight is "Voice Track"?
7653 MR.
TOMPKINS: Yes, it is.
7654 COMMISSIONER
PENNEFATHER: The ACC, "American
Country Countdown", where is that from?
That is a syndicated program obviously.
7655 MR.
TOMPKINS: That is a syndicated program;
yes, it is.
7656 COMMISSIONER
PENNEFATHER: From...? Is it American?
7657 MR.
TOMPKINS: From Los Angeles.
7658 COMMISSIONER
PENNEFATHER: Sort of like a Casey
Kasem.
7659 MR.
TOMPKINS: It is like a Casey Kasem.
7660 It
is the highest rated Country Countdown show in Canada.
7661 COMMISSIONER
PENNEFATHER: The "Voice
Track" programming is done where?
7662 MR.
TOMPKINS: It will all be done locally.
7663 COMMISSIONER
PENNEFATHER: Thank you.
7664 THE
CHAIRPERSON: Thank you.
7665 Counsel.
7666 Me
STEWART: Merci, Monsieur le Président.
7667 I
have just one quick question.
7668 Can
you provide for the Commission a cost breakdown for the annual $30,000 live
concert series, the first item in your CTD commitment?
7669 MR.
SHAFER: Yes, we can.
7670 Just
give us a minute and we will get it for you.
‑‑‑ Pause
7671 MR.
TOMPKINS: It was difficult for us to
come up with a cost breakdown for each concert, because each one is going to be
so different. We have averaged it out
to $1,153 per show minimum. However,
some shows won't cost us next to anything.
And we will take money from that to use against shows that will cost
more, because there will be certain shows where we are going to have to pay the
talent and there will be some shows where we won't have to pay the talent. It depends on the type of show that we go in
and record.
7672 It
could be somebody doing a live show from our own studios where there is going
to be no payment of talent at all.
7673 MR.
STEWART: The concern really is whether
this money is going to a third party as distinct from being seen as more part
of your regular programming expense.
7674 Can
you provide an example of the breakdown of the costs ‑‑ I
realize it is a fluid thing ‑‑ to reassure the Commission on
that point?
7675 MR.
TOMPKINS: The breakdown will be either
talent, production or recording costs.
They will be the three areas that we will be spending the money on.
7676 MR.
STEWART: Those recording costs would be
paid to a third party?
7677 MR.
TOMPKINS: To a recording company from
Kamloops.
7678 MR.
STEWART: Thank you.
7679 Thank
you, Mr. Chairman.
7680 THE
CHAIRPERSON: Thank you very much,
ladies and gentlemen. Those are our
questions.
7681 Mr.
Secretary, the next item, please.
7682 MR.
LeBEL: Thank you, Mr. Chairman.
7683 Item
11 on the agenda is an application by Evanov Radio Group Inc. for a licence to
operate an English‑language commercial FM radio programming undertaking
in Kamloops.
7684 The
new station will operate on frequency 92.5 MHz (channel 223A) with an effective
radiated power of 1,860 watts.
7685 Mr.
Chairman, Mr. Bill Evanov will introduce his colleagues.
7686 You
have 20 minutes to make your presentation.
PRESENTATION / PRÉSENTATION
7687 MR.
EVANOV: I have been in Vancouver for
three days now, and the last two hours is the only time I have been out of bed,
due to a heavy cold and flu, and I think it has spread to some our staff here
who also have it. So I am not sure what
condition we are in, but we are going to do the best we can. If I sort of sound hollow from time to time,
please tell me.
7688 COMMISSIONER
WYLIE: You have obviously been together
too much.
7689 COMMISSIONER
LANGFORD: You get extra points if you
don't give us the bug.
‑‑‑ Laughter /
Rires
7690 MR.
W. EVANOV: I would like to introduce my
panel before we begin our presentation.
7691 Mr.
Chairman, Madam Vice‑Chair, Commissioners and Commission staff, my name
is Bill Evanov and I am President of the Evanov Radio Group.
7692 To
my left is Carmela Laurignano, Vice‑President and Radio Group
Manager. To my right is Ky Joseph, Vice‑President
of Sales; to her right, Paul Evanov, Vice‑President of Programming and
responsible for the launch of our Halifax FM station.
7693 In
the second row, to my left, is Mike Kilbride, our VP Finance; Debra McLaughlin,
President of Strategic Inc., the author of our Demand Study; Gary Gamble, News
and Spoken Word Programs; Natasha Marchewka, our Music Programmer; and Stuart
Robertson, our legal counsel.
7694 We
are an independent broadcaster operating three radio stations in the Toronto
CMA: CIAO‑AM, an ethnic radio station; CIDC‑FM, a CHR dance format;
and CKDX Foxy FM, a station which programs a format created by us, which is an
updated version of the easy listening format.
7695 This
format blends a large variety of soft melodic musical genres. We are proposing a similar format for
Kamloops. It will blend of pop‑classics,
adult standards and instrumental music which will include some light classical,
jazz and folk roots based music. We
call this format Today's New Easy Listening format.
7696 In
fact, it is uplifting, it is fresh and it is definitely foreground. It is music that endures, that evokes
passion and is exciting. Our blending
of several music genres will produce a melodic, easy listening sound that will
appeal to the 45‑64 age demo, with lyrics that might be meaningful to
that age demo or lyrics that would touch something within that person in terms
of either memory or lifestyle.
7697 Our
programmers promote it as music with class because we play great music.
7698 The
Jewel will not be locked into any single time period but rather will present
the very best musical recordings from the past four or five decades, but always
with an emphasis on the new soft melodic music of today.
7699 Over
40 per cent of our music will be new or relatively new, meaning released
following 2000; and 25 per cent will be from the 1980s and 1990s; and 33 per
cent will be pre‑1980s, which includes our classic crooners.
7700 Of
the Canadian music played, we are proud to say that 70 to 80 per cent of the
selections will be new or relatively new.
7701 The
Jewel in Kamloops will also give greater weight and airplay spins to new and
emerging Canadian recording artists.
Our format is both a blend of music styles and music eras.
7702 As
we mentioned in Ottawa to you when designing the playlist ‑‑
you are all here and you will all remember; Mr. Dalfen wasn't ‑‑
we took to heart Frank Sinatra's advice to Tony Bennett on how to have
longevity with a musical career.
According to Tony Bennett, Frank Sinatra said: Only sing great songs and don't sing to a single narrow
demographic.
7703 Our
format will have longevity because we play only great songs and we broadened
our audience base by playing a large variety of music genres.
7704 These
assertions are supported by our Research and Demand Study in Kamloops and by
the real market testing of CKDX Foxy in Newmarket. There, restricted by a signal that only reaches 16 per cent of
its market, CKDX Foxy in the BBM released after the Ottawa hearings showed an increase
in audience by 37 per cent, from 148,000 listeners to 203,000 listeners.
7705 Equally
important, its revenue also increased by 49 per cent in the last fiscal. Foxy is now on a strong upswing with
listenership and revenue. We made it
work in Toronto and we can make it work in Kamloops.
7706 MR.
P. EVANOV: Instrumental music is a
major component of our format. Today's
new easy listening format on The Jewel will program 35 per cent from this
genre.
7707 During
the 1980s the availability of instrumental music decreased due to an increase
in production costs and the fact that radio stations started to target younger
audiences. Instrumental music
disappeared from radio. Since that
time, the majority of Canadian instrumental artists have had to work within a
cottage industry. They produce, they
market and they sell their recordings themselves via the Internet, flea
markets, small concerts and word of mouth.
7708 Instrumental
music is very much alive and in demand.
7709 You
will find in these artists performing at hundreds of Ukranian and Italian
weddings. You will find instrumental
artists performing in lounges, nightclubs and live theatre, but commercial
radio today does not give support, nor airplay, to instrumental artists. The slight exception is jazz and smooth jazz
artists.
7710 The
Jewel believes that the vast majority of instrumental artists also need a
broadcast platform. Our experience on
CKDX‑FM in Newmarket, and our research in both Ottawa and Kamloops,
confirm a demand for instrumental music.
7711 MS
McLAUGHLIN: The Jewel is an excellent
fit for Kamloops. The market is growing
at a steady pace, but it is not attracting substantial youth migration. As a result, the market is slightly
older. The median age is 38.4 compared
to the national average of 37.6. Almost
half of the 15‑plus population is over 45 years of age.
7712 Our
view of the market indicated two critically important facts. The three existing FM stations are most
efficient in the younger demographics and the CBC from Vancouver is one of the
predominant stations for the mature listener in the market. When you combine these market statistics
with the profile of the audience for The Jewel, it is easy to see where the
format fits.
7713 One
of the notable findings of the Demand Study is the popularity of the styles of
the music that make up The Jewel playlist: crooners, timeless standards and
instrumental music scored almost as high as the most popular music format in
Canadian radio, adult contemporary, in terms of reported frequency of
listening.
7714 This
is a clear indication of the potential for a service providing access to this
type of music. Most telling, however,
was the overwhelmingly positive response that was given when the respondents
were asked the likelihood of them listening to The Jewel if it were
licensed. The survey of the 45‑plus
demographic was conducted in August and an impressive 83 per cent of our sample
felt that they would definitely or probably listen to the service.
7715 Interest
in this proposal grew proportionate to age.
In the 55‑plus demographic well over 80 per cent stated that they
would definitely or probably listen.
Interest was only somewhat less in the 45‑to‑54‑year‑old
demo, with 70 per cent stating that they would definitely or probably listen.
7716 The
demand study showed that the people of Kamloops who want to hear the music the
Jewel offers must seek other sources like the Internet, CDs or tune to several
out‑of‑market services.
7717 To
a demographic where local news is critically important, this is a tough choice
to make. Do you listen to the music you
love or the news and the information that you require?
7718 The
proposal for The Jewel resolves this conflict by offering both on a local
station.
7719 MS
MARCHEWKA: The Jewel is today's easy
listening, including soft and melodic vocal and instrumental music. The Jewel will blend standards, pop classics
and easy pop with light classical, crossover and smooth jazz, folk roots and
instrumental into a single sound.
7720 The
demand and appeal for the vocal music we are presenting with The Jewel is clear
by the recent popularity of the new or newly recorded adult standards and
classic pop selections by such artists as Rod Stewart, Michael Buble, Harry
Connick Jr. and Renee Olstead. And the
demand for this music has renewed the popularity of classic performers such as
Frank Sinatra, Tony Bennett, Nat King Cole and Bobby Darren.
7721 Examples
of standards that The Jewel will play are "As Time Goes By", "La
Vie en Rose", and "It Had To Be You". Pop classics could include Joni Mitchell's "Big Yellow
Taxi" and Amy Sky singing "We've Only Just Begun" or Bette
Midler performing The Beatles classic "In My Life".
7722 We
would also play new easy pop selections like Marc Anthony's "I Need
You" or Norah Jones' "Sunrise".
7723 Also
included in the music mix will be duets from such class acts as Ray Charles and
KD Lang, groups such as Chicago and Abba, show tunes and film soundtracks
from "Beauty and the Beast" to "West Side Story",
"Shall We Dance" to "Breakfast at Tiffany's".
7724 The
mix will include songs or artists that may be considered a crossover into pop
from several genres, including light classical performers like Andrea Bocelli,
jazz artists like Ella Fitzgerald, smooth jazz artists like Diana Krall and
R&B's Tony Brackston.
7725 As
earlier stated, The Jewel will play 35 per cent instrumental music. This is blended throughout the broadcast day
and also includes block programming in the evenings. The majority of instrumental music will be derived from pop
music, as well as light classical and smooth jazz. The selections come from a number of sources, including
instrumental renditions of recently composed music, within the past decade,
familiar popular music, and music composed hundreds of years ago by the great
masters.
7726 These
instrumental selections will represent a wide variety of music genres that will
engage the listener, evoke passion and emotion. This broad variety of instrumental music could include a Strauss
waltz performed by Andre Rieu, or "Penny Lane" performed by the Boston
Pops. It could be a Canadian pianist
John Arpen's rendition of "Call Me Irresponsible" or a version of
Offenbach's "Barcarolle" performed by Richard Abel.
7727 Our
proposal provides 40 per cent Canadian content each broadcast day. Specialty Canadian programs will air on
Saturdays and Sundays. They will
include a Canadian Spotlight program that will run twice on weekends.
7728 Following
Canadian Spotlight will be a two‑hour folk and roots feature that will
include artists that are known as local talent in the region but seldom, if
ever, are heard on radio.
7729 Rarely
heard artists include British Columbia's Guy Langlois, Jay Hines and Kamloops'
own Peter Soberlak and Jack Rea.
7730 What
separates our new easy listening from traditional easy listening is that we
will go further into the repertoires of artists playing their uncharted songs,
as well as their familiar selections.
7731 Further,
The Jewel will also air newly released music and new artists, predominantly new
Canadian artists.
7732 Our
company has a history of seeking out emerging talent, interviewing local and
regional artists and posting artist information on our website. Clearly there is a resurgence of interest in
this music that has never really gone away:
the softer side of popular vocal musical styles that listeners connect
with no matter what the era.
7733 The
Jewel's music makes listeners say "I haven't heard this song in so
long" or "I've never heard that song before but I love it" or
"I haven't heard that version before".
7734 MR.
GAMBLE: The Jewel will make a
significant commitment to news. We
recognize the opportunity and obligation inherent in being a new voice in this
market. To that end and to meet the
interests of our target market, we will provide regularly scheduled newscasts
13 times per day, Monday through Friday, focusing heavily on local news in the
city of Kamloops.
7735 On
the weekends our focus will shift slightly towards more music and we will
schedule fewer but longer news breaks with our announcers ready to provide
rolling talk on an informal basis, keeping our listeners aware of happenings
within the community.
7736 We
will also provide an extensive information package. During the week we will air daily business reports with reference
to the Vancouver Stock Exchange, along with major business stories, and a
healthwatch segment, spotlighting the latest breakthroughs in health related
issues.
7737 Since
our core audience has moved beyond the young family stage and will be finding
more time for leisurely pursuits in life, The Jewel will keep them up on
conditions that affect their outdoor activities. Several times daily throughout the week The Jewel will update its
active listeners on ski, marine or golf conditions.
7738 Similarly,
the Community Calendar will feature happenings in and around Kamloops, and our
daily Theatre and Arts report will provide information on cultural events and
entertainment, such as the Western Canada Theatre and the Kamloops Theatre.
7739 Twice
weekly our Book of the Week feature will spotlight Canadian authors and their
works. Through this program we hope to
expand our listeners' knowledge of new releases by providing reviews, as well
as inviting listeners to make suggestions on books to be reviewed.
7740 MS
JOSEPH: The strength of radio
advertising is based on the strength of the local retail market, and in
Kamloops the market is very impressive.
Retail sales, according to FP Markets, was 36 per cent above that of the
national average in 2004. The older
skew in the market suggests that while incomes may not be as high as in other
markets, disposal income is much higher.
This creates an opportunity for retailers to develop and sell products
and services that target an older, more mature, consumer.
7741 In
North America, according to a report in the Globe and Mail in June 2004,
another baby boomer celebrates his or her 50th birthday every 8.5 seconds. It is estimated that by 2010 the spending of
the 50‑plus demographic will be a trillion dollars more than that of the
18‑to‑44‑year‑old demographic, arguably the current
focus of many radio stations.
7742 With
this kind of spending power, there is no doubt that what the economists predict
will happen in North America will be reflected on the market level.
7743 Kamloops
is already showing the signs of this shift in consumer power, and The Jewel can
be a service to this consumer base without unduly impacted existing services.
7744 Recently
we were in the market and received great support from several local retailers
and other businesses, including Michael Ungrin, owner of Marjon Jewellers in
the Aberdeen Mall, who agrees that he has no radio station to target the older
end of his consumer market; or Phil Askin of Kamloops Mazda, who tells us that
reaching the 40‑plus demographic is a challenge and that The Jewel will
be a welcome addition to Kamloops.
7745 MS
LAURIGNANO: In all our commitments to
Canadian Talent Development, regardless of the market, Evanov Radio Group has
specific criteria for CTD development.
They are that each initiative is substantive and appropriate for the
local market; that each fits with the format and can benefit from inclusion in
our promotional plans; and that each can be sustained through our business
plan.
7746 In
Kamloops we are proposing that the largest portion of our commitment be
invested in an annual concert. This
event will showcase Canadian talent, both established and emerging. Similar to The Jewel format, instrumental
music will be included along with vocal performances. We envision four to five acts with at least one well‑known
headliner.
7747 Our
first emphasis will be in recruiting acts from the Kamloops region, such as
Peter Soberlak and Roxanne Pall.
Second, we will broaden our search throughout B.C. and beyond.
7748 Our
first priority, however, is to give exposure to local and regional musicians.
7749 Over
80 per cent of the funds we have set aside for this initiative will go directly
to the artist. We will use The Jewel
and other traditional media to promote the concerts so that the artists we
bring to Kamloops will have the greatest opportunity to expand their audiences.
7750 We
expect that this 100 per cent locally‑planned and produced concert will
be very popular and will grow year after year, attesting to both the talent of
the artist and Kamloops' appetite for this style of music.
7751 In
Ottawa, by way of introducing The Jewel format, we provided you with a first‑hand
taste of some great Canadian instrumental music. Instrumentalist Richard Bell ‑‑ who, by the way,
sends his regards. He is on tour in
Florida as we speak. He would have come
to perform, but he was getting paid out of the country, so he felt he had to
take that gig.
7752 COMMISSIONER
WYLIE: Not in the casino.
7753 MS
LAURIGNANO: No. He is doing that in the afternoon when he
wakes up after the concert.
7754 Instrumentalist
Richard Bell is just one of dozens of Canadian artists who are internationally
and regionally renowned for their artistry and musical genius. And yet, as he submitted to you in his
intervention, Richard is largely ignored on radio. He told you that, to the best of his knowledge, the only station
in English Canada that has played his work is our own Foxy 88.5 in Newmarket.
7755 Because
instrumental music has not been promoted, and indeed almost abandoned by
Canadian programmers, it could be argued that it is less popular than other
music styles. Remarkably, despite being
ignored, artists such as Richard Bell, Leona Boyd and Pablo, sell out their
concerts wherever they tour, and some of them sell sufficient CDs to warrant
distribution with major record stores.
7756 This
just simply ignores the very real power of the medium in providing consumers
with introductions to new music and new artists.
7757 We
believe more sales would be possible if the medium most noted as being the
source for new music, radio, took a hand in promoting these talented
Canadians. We applaud their success
abroad but feel quite strongly that is Canada that should be giving them the
most support. The Jewel will.
7758 We
have also set aside an amount in support of an initiative we announced in
Ottawa: that is the Catalogue of Canadian Instrumental Music. We believe in the necessity of this
catalogue. In a country as vast and
diverse as ours, sourcing Canadian instrumental artists is no small task.
7759 The
Catalogue of Canadian Instrumental Music will be a national resource that will
benefit, first and foremost, the artist and will also benefit the industry,
such as music and video producers, promoters, publications, writers and
editors ‑‑ and yes, even radio programmers.
7760 The
catalogue would house as well as take the burden out of sourcing and accessing
one of the most underserved music styles and its performers. Our annual contribution for Kamloops, and we
hope other markets and from other broadcasters in future years, in addition to
the full seed and funding provided in Ottawa by us, will help enhance the
coffers of the Catalogue of Canadian Instrumental Music.
7761 MR.
W. EVANOV: The Jewel is an easy
listening format that is by all accounts a new programming paradigm. What is remarkable is that despite being
new, it will have a very quick acceptance by audiences. It is the blending of recognizable melodies
or titles which are outstanding with new and current recordings that give the
listeners an instant sense of connection.
The consumer demand test and our real market experience attest to this.
7762 Our
proposal for Kamloops meets all the criteria set out by the Commission. We will further the objectives of the
Broadcasting Act through:
7763 (1)
bringing diversity into the market by offering a new and unique format and
providing a relevant lifestyle spoken word service to an underserved 45‑plus
demographic;
7764 (2)
offering a comprehensive news package which will increase the diversity of
voice and perspective in the market;
7765 (3)
investing the bulk of our Canadian Talent Development Funds into the local
market and region;
7766 (4)
addressing consumer demand for a style of music that cannot be found in the
Kamloops radio market; and
7767 (5)
providing exposure for a group of talented Canadians, instrumental artists
whose body of work reflect Canadian culture to its fullest on a medium that has
not recently given them any support.
7768 For
all these reasons and the arguments articulated in our filed application, we
urge the Commission to license The Jewel in Kamloops.
7769 Thank
you for your attention, and we welcome your questions.
7770 THE
CHAIRPERSON: Thank you very much.
7771 Vice‑Chair
Wylie.
7772 COMMISSIONER
WYLIE: Thank you, Mr. Chairman.
7773 Good
evening, ladies and gentlemen.
7774 MR.
W. EVANOV: Good evening.
7775 COMMISSIONER
WYLIE: I take it this is an identical
schedule to the one that I have in the application?
7776 MS
LAURIGNANO: Yes. We wanted to provide a colour copy because
in the last hearing somebody made black and white copies and they were not
legible.
7777 COMMISSIONER
WYLIE: I stomped my feet until I got a
coloured copy as well, because all your Canadian content had somehow
disappeared into a black hole.
7778 The
music format that you are proposing is described by you today and also at page
3 of your supplementary brief as a broad set of musical styles, including
crooners, standard ballads, love songs, contemporary hits, music from current
and past eras, from charts such as AC, smooth jazz and uncharted styles such as
folk, world music, instrumental and soundtracks.
7779 It
is also described at page 1 as more mature radio, more romantic, more melodic,
softer and somewhat like Foxy in Newmarket, which has been a success for you.
7780 You
also have, in response to a deficiency question, said that it would be 90 per
cent Category 2 and 10 per cent Category 3.
7781 Is
that still correct?
7782 MS
LAURIGNANO: That is correct.
7783 COMMISSIONER
WYLIE: How different will that style be
from CHNL‑AM which is adult contemporary and showed a 27 per cent share
in Kamloops, I think in the BBMs of the spring, and 28 per cent in the BBMs of
the fall; or from CKBZ‑FM, which is also adult contemporary, which had a
16 per cent share in the spring and down to 14 in the fall?
7784 How
different will this sound be from these stations which are adult
contemporary ‑‑ and we can get into that later, but especially
in the case of CHNL appears to me to attract a fair interest from your target
demographic?
7785 MR.
W. EVANOV: CHNL‑AM is
predominantly a news-sports-talk radio station with some music. We on the other hand would be music
intensive.
7786 When
we looked at the market last September, we looked at BDS reports and then we
looked again in January. There were BDS
reports for the FM stations but not the AM stations, so we monitored the AM
station.
7787 I
am going to ask Gary Gamble to walk you through the research.
7788 MR.
GAMBLE: Thanks, Bill.
7789 In
terms of duplication of the existing stations already within the market, the
three FM stations we had access to BDS reports. We took two samples, one from last September and the other from
the beginning of February.
7790 Duplication,
first of all, within two of the stations which were a rock format, it was a
zero per cent. With CKBZ‑FM,
which is more of a hot AC format, there was a 5 per cent duplication. As it matches our Foxy library, what we play
in Newmarket, that is what we measured it against.
7791 When
it comes to CHNL, news talk gold station, we monitored that, as Bill said, by
listening to it at various hours and found that they are more of a news,
information, talk format. When we
listened to it, it was less than 10 per cent music duplication.
7792 When
they are playing music, it is more of a rock and roll oldies type format. We are more of a softer format. So the duplication, when it comes to CHNL,
was less than 10 per cent.
7793 COMMISSIONER
WYLIE: How much music is on CHNL, since
you monitored it? You gave me the
duplication, but how much music compared to spoken word?
7794 MR.
GAMBLE: For example, in a morning drive
that we listened to on a Friday, between 8 o'clock and 9:00 on CHNL, there were
five music selections. The rest was
either a news‑sports feature, a "Don Cherry Grapevine" or a
"Paul Harvey" talk format type of thing, rolling through about 18, 19
minutes in there along with commercial time.
7795 So
in the first half hour there would be two music selections and then back at the
bottom of the hour a news sweep again for about 15, 16 minutes and then about
three selections at the top of hour.
Whereas at The Jewel, we would be playing approximately 12 selections in
there, with also our spoken word packages.
7796 COMMISSIONER
WYLIE: And CKBZ is music mostly.
7797 MR.
GAMBLE: Yes, it is.
7798 COMMISSIONER
WYLIE: And the duplication there was
also ‑‑ I think you have that attached here.
7799 MR.
GAMBLE: We have that on the chart, yes,
on the last page of the chart.
7800 MS
LAURIGNANO: It's 5.5 per cent. It's a hot AC format.
7801 Madam
Chair, if I could just add one thing, the description of the adult contemporary
format that we included as being what CHNL was doing came from publications and
things, and we sort of took it at face value at the time. When we actually did an analysis of it, we
would question whether it is an adult contemporary, although it does target an
older type of audience than CKBZ or CIFM‑FM.
7802 COMMISSIONER
WYLIE: One of the premises underlying
your application is that that older target demographic, which you describe as
45‑to‑64 in your assumptions, is underserved in the market.
7803 I
would like some explanation of some of the tables that are in Strategic Inc.'s
Consumer Demand Study.
7804 For
example, if I go to page 10 and I look at the table, this was as a result of
questions that were asked. Why can't I
conclude that CHNL is doing fairly well in that target, in radio stations
listened to in the last week?
7805 You
conclude from this that it is not appealing to that demographic. I think you said somewhere today or
somewhere in your application that people have to listen to the CBC. I assume that that is CBCV, is it?
7806 MR.
W. EVANOV: CBC out of Vancouver.
7807 COMMISSIONER
WYLIE: Yes, which has a fairly lower
response to "listened to last week" by that demographic than CHNL.
7808 MR.
W. EVANOV: I will ask the author of our
research ‑‑
7809 COMMISSIONER
WYLIE: And then explain to me also in
that table what "other" is.
What are these other stations that the 45‑to‑65‑plus
demographic listens to?
7810 I
may not be reading this properly. Help
me if I am not.
7811 MS
McLAUGHLIN: The two tables on page 10
refer to two different types of measures.
7812 One
was "did you listen to it last week". It doesn't speak to any time spent, which is of course crucial
when determining if there is service in the market. So the first is an indicator.
7813 As
I mentioned in the text that accompanied it, it was a peculiar finding in that
it was directly in opposition in some cases to what the BBM was reporting.
7814 If
you go down to the next table, it sort of supported the fact that CHNL was the
one that most time was spent listening to.
7815 When
you start looking at these demographics, it splits out over a lot of stations as
opposed to being a clear favourite.
7816 But
it wasn't only these charts. It wasn't
this information that determined whether there was a hole in the market. It actually goes back to an earlier page in
the report that charts what the average hours per capita were in these
demographics two years ago as opposed to what they are now. And it shows a decline.
7817 Our
contention is that in a radio market ‑‑ and I am not speaking
about Kamloops specifically; I am speaking about the industry at large ‑‑
that is challenged by a lot of listening options, radio is under threat. The most stable of the demographics tends to
be the 35‑plus because they have grown up with radio. It's a medium that they are familiar with.
7818 When
we see declines in that area, it becomes more problematic. It is not because they are actually choosing
to get their information as much off the Internet as you would from a younger
demographic. That is our basis, not these
charts per se, that there was a hole in the market.
7819 COMMISSIONER
WYLIE: And 39 per cent of the
population is in that demographic in Kamloops, or 38‑point‑something? Am I correct?
7820 MS
McLAUGHLIN: Something in that area.
7821 COMMISSIONER
WYLIE: Look at page 6 and the second
table there. Is the 12‑plus
Kamloops spring 2004?
7822 MS
McLAUGHLIN: Yes.
7823 COMMISSIONER
WYLIE: And these are the demographics
of the whole of Kamloops.
7824 MS
McLAUGHLIN: It's the full measured
market, the 12‑plus.
7825 COMMISSIONER
WYLIE: So what am I supposed to read
from that with regard to CHNL's 27 per cent share?
7826 MS
McLAUGHLIN: This is a 12‑plus
number.
7827 COMMISSIONER
WYLIE: Yes.
7828 MS
McLAUGHLIN: The tag line ‑‑
and I am probably going to get this wrong for CHNL. I just today received an information kit from them. It is the first news. I think it is very critical that you
understand that that is an excellent brand to have in a small market like that.
7829 They
do play music but their marketing piece is a news brand. So I would expect that they would have a
share just as you see, a share in other markets for a predominantly news
service.
7830 COMMISSIONER
WYLIE: Suppose you were licensed and
you started The Jewel, Mr. Evanov put The Jewel on air, what would prevent CHNL
from putting more music on and increase its popularity with that demographic?
7831 MR.
W. EVANOV: I am not sure what they
would program. It would seem to me if
it's an AM station, they would program very much oldies, rock and roll oldies,
or very older type ‑‑
7832 COMMISSIONER
WYLIE: Unless they read your
application.
7833 MR.
W. EVANOV: Unless they read the
application or came down to the Newmarket area and tuned into Foxy.
7834 We
think we have hit on a formula that is wonderful, that is very good. It is a blending of new and the past,
something elegant to it.
7835 They
would probably do well with the format, but we don't think they are going to
switch.
7836 COMMISSIONER
WYLIE: The reason for these questions
obviously is, as Commissioner Langford was discussing with the previous
applicant as well, is the relatively unappealing level of PBIT in this market
and the fact that you are counting on serving an underserved demographic and
also the fact that any of these three applicants, if licensed, would face a
combo in the market from both of the incumbents with one station only.
7837 MR.
W. EVANOV: Yes. That can be good and I will tell you why.
7838 Here
is a problem with PBIT ‑‑ and I have been in the business for
many years.
7839 If
you have a market and you have two ownership groups in that market, after a
period of time it becomes like two people in a sandbox. Things are sort of sorted out, and everybody
knows where their areas are, et cetera.
If you want to create dynamics and change the whole dynamics, then you
put a third person in the sandbox and you are going to get a lot of activity.
7840 It's
a true story. We believe that the
advertising pool ‑‑
7841 COMMISSIONER
WYLIE: Sand in your eyes.
‑‑‑ Laughter /
Rires
7842 MR.
W. EVANOV: I know I'm sick but...
7843 We
believe that if you license one station, the advertising pool will grow. If you even license a second station, we
still think the advertising pool will grow.
And the activity would make the radio station PBIT catch up to what
retail sales are in that area.
7844 As
Ky mentioned when she was giving her speech, I think it is 36 per cent of the
Canadian average or something like that.
That's incredible.
7845 I
am not knocking the broadcasters there.
I am sure they are doing a good job.
But sometimes you get into a situation in a market where there is only
two, you need a third to get things motivated.
7846 MS
LAURIGNANO: With regard to the other
issue of what could be a possible concern about any existing broadcaster
flipping format and getting there before, unfortunately it is a standard fear
in all applications that have come forward and in all licensing decisions. Anybody can do it. It is something that we have looked at and we are prepared to
handle.
7847 We
think we are the best applicant for this particular format. In the case of NL, we think they are doing a
phenomenal job with what they are doing right now and they have their
area. We are looking to attract those
almost 40 per cent of our core demographic who are tuning out of market back to
Kamloops.
7848 If
we can force revenue into broadcasting, everybody will win.
7849 MR.
W. EVANOV: Could I just ask Ky to
comment quickly.
7850 MS
JOSEPH: When you asked the question
about basically can you make money in this market when you looked at the PBIT
information that you have, when we looked at all the research, we believed that
the only format that can make money in this market is one that targets the 45‑to‑64
demographic.
7851 A
healthy retail market is a good indicator for us that radio sales exists. Kamloops' index is 36 per cent, as I had
mentioned earlier, above the national average for retail sales, and that makes
for a very healthy retail market.
7852 Combine
the fact that almost half the population are mature in age, and that 83 per
cent of all of respondents in our survey said that they would definitely or
probably listen to The Jewel is a good indicator.
7853 As
well, in any small market, smaller markets tend to be more retail‑driven. This is one of our company's biggest
strengths. When you look at our
financials, you will see that 75 per cent of our revenues are generated from
new business.
7854 COMMISSIONER
WYLIE: Ms McLaughlin, at page 6 I think
of your market study, what does this mean at the bottom: target demographic
efficiency?
7855 When
I look at the success, for example, of CHNL in that demographic, what does
"efficiency" mean here?
7856 MS
McLAUGHLIN: When our radio station
designs a programming grid, they are doing it with a specific demographic in
mind typically, whether it is female or male or it's a social economic
statement.
7857 In
this case I have simply taken the age groups and this is taken directly from
BBM runs and it shows how a station indexes within a particular group vis‑à‑vis
the distribution within the population.
So if a radio station was serving the entire market, what this would say
right across the board, and they were doing it proportionate to the market,
would be a hundred.
7858 Anything
below a hundred is under‑serving; anything over a hundred is over‑serving.
7859 I
have updated these charts. Just by way
of explaining what has happened here, in fact CHNL has become even more
efficient in the older demographics since we applied, whereas two of the other
stations have become more efficient in the younger demographics, which is expected
after you file.
7860 COMMISSIONER
WYLIE: I was going to ask you whether I
had understood what you are driving at if I said that CHNL was very efficient
in reaching the older demographic.
7861 MS
McLAUGHLIN: Yes. And that has to do with their brand of news
as opposed to the music.
7862 To
your point about could they shift, they could but they would harm what is
arguably the most valuable brand to have for this demographic simply because
news is so critically important.
7863 So
yes, they could, but I don't know from a business perspective that it would
make lot of sense. I would leave them
to answer, but this would be a desirable brand to keep.
7864 COMMISSIONER
WYLIE: In your supplementary brief, at
page 7, you told us what the music mix would be like in the evening, in the
programming after 9:00.
7865 What
will be the mix during the day? Will
you also have programming blocks of this sort?
7866 MR.
W. EVANOV: No. In day from 6:00A to 7:00P, 77 per cent of
the music we air will be vocal selections and 23 per cent will be instrumental
selections. As well, blended in there
will be our 40 per cent Canadian content.
7867 Then
we get to the specialized programs after 7:00 p.m.
7868 COMMISSIONER
WYLIE: So during the day there will be
no block comparable to after nine.
7869 MR.
W. EVANOV: There is no block. It is a total blending of the music styles
that that we propose.
7870 COMMISSIONER
WYLIE: To the extent that CHNL has
music on, do they have blocks of music or is it interspersed with the spoken word?
7871 MR.
W. EVANOV: I think it is at random when
there is time for it.
7872 To
us, when we did listen to them ‑‑ and we have been in Kamloops
many, many times ‑‑ they are basically a very good news‑talk‑sports
program. They carry live hockey
games. I have a listing of everything
they carry here.
7873 They
carry the play‑by‑play for the Kamloops Blazers, the Vancouver
Canucks, the B.C. Lions; their sports talk Open Line show. There is a number of talk programs.
7874 Our
format is very different because we are on FM and it is very music‑intensive
versus the spoken word content.
7875 COMMISSIONER
WYLIE: Yes. Which leads me to ask you what is approximately the level of
music? Am I supposed to take your
spoken word and deduct that from 126 and say once I have ascertained the spoken
word, the rest is music?
7876 MR.
W. EVANOV: I will give you the exact
answer, or Gary Gamble will.
7877 COMMISSIONER
WYLIE: Minus, of course, the ads, et
cetera.
7878 MR.
GAMBLE: Yes. Spoken word totals 13.2 per cent of the program schedule. I will give you a rundown as to how we,
being a music‑intensive station, do our newscasts and how we come to
that.
7879 In
the "Morning Drive", for example, we are running three‑minute
newscasts at the top of the hour, a 90‑second update at the bottom ‑‑
7880 COMMISSIONER
WYLIE: Three minutes?
7881 MR.
GAMBLE: A three‑minute newscast.
7882 COMMISSIONER
WYLIE: If you want to speak about
spoken word, that's fine. I was looking
at your supplementary brief, at page 8, where you talk about 90‑second
update formats, 13 times a day, Monday to Friday, and expanded three‑minute
features.
7883 Tell
me what you arrive at and how from what you have told us on the supplementary
brief at page 8. It is difficult to
make this calculation from the schedule.
7884 MR.
GAMBLE: I will break it down for you.
7885 We
have a little over three hours of news, 189 minutes, or 74 newscasts per
week. How that is broken down is: Morning Drive, we provide a three‑minute
newscast at the top of the hour; a 90‑second update at the bottom of the
hour, telling our listeners what we are working on for the top.
7886 Also
a noon newscast. This is Monday to
Friday. In the afternoons a three‑minute
newscast at the top of the hour.
7887 We
also run eight newscasts on the weekends on Saturdays and Sundays, four per
day.
7888 Also,
our news is broken down from 50 per cent local, 30 per cent national and
20 per cent international.
7889 Besides
that, our daily features also include ski and golf reports as one of the major
areas for golf is of course Kamloops.
We are running 19 one‑minute segments, whether that be seasonally,
if it's ski or if it's golf.
7890 Community
Calendar reports letting people know what is going on within the Kamloops area,
if it's charity events or special events, events for the family, or whatever. There are 21 of those spread throughout the
week according to the program schedule.
7891 Business
Reports are run Monday through Friday, one in the morning, one in the
afternoon, specifically in the 9 o'clock and the 4 o'clock hours. Those Business Reports are two minutes in
length.
7892 Theatre
and Arts Report, we will focus on entertainment, things that are happening in
the Kamloops Theatre, the Western Canadian Theatre, or anything new that is
coming to the area in that specific block.
There are 11 of those reports, one minute each.
7893 And
a Book of the Week format that we run twice per week on the weekends that lets
our listeners know what is new when it comes to authors, what the latest
releases are, and a little bit about those authors also within that two‑minute
feature.
7894 And
of course there is our Healthwatch feature.
We found people in this specific demographic are extremely concerned
about what is happening with health issues, how it affects their life, and
anything new that might be emerging. We
felt that was important. There are
seven of those and they are 90 seconds.
7895 The
total of that is 13.2 per cent of those features and news along with
surveillance. The news and news
updates, surveillance, those features that I just talked about total 13.2 per
cent of the week.
7896 COMMISSIONER
WYLIE: Now tell me how ‑‑
unless the Chairman can do it ‑‑ of 126 hours how much time is
13.2 per cent?
7897 MR.
GAMBLE: 16.7 hours.
7898 COMMISSIONER
WYLIE: Good. Of spoken word.
7899 MR.
GAMBLE: Yes.
7900 COMMISSIONER
WYLIE: All these are the programs
described at page 9 of your supplementary brief, these lifestyle features. What you have added here is when and the
length of time that they will be.
7901 MS
LAURIGNANO: At pages 9 and 10.
7902 COMMISSIONER
WYLIE: They will be spread in the
schedule; right?
7903 I
find this difficult to read.
7904 Or
will they be after the news, around the news, the features?
7905 MR.
GAMBLE: The features are spread
throughout the day, not necessarily within the news. The news package itself, a news, weather and sports package is
simply that.
7906 These
features, for example, the Business Report is a self‑contained report
which will run in the 9 o'clock and 4 o'clock hour. The Community Calendar reports once again are outside of that and
would run, for example, at 7:45 in the morning and then again at 1:30 in the afternoon,
seven days a week.
7907 COMMISSIONER
WYLIE: So someone who is looking for
them would know when to tune in if it was helpful to them.
7908 MR.
GAMBLE: Yes.
7909 COMMISSIONER
WYLIE: I am impressed that you didn't
seem to be reading all of that, so obviously you don't have the flu. You seemed to be able to tell us without
reading it off.
7910 Category
2 and Category 3 music, it's 90:10 per cent, and you have confirmed that.
7911 Will
that be spread throughout the day?
7912 MS
LAURIGNANO: Yes, it will be. It will be blended in all day parts as all
the music genres that we have identified.
In addition to that, we will also dedicate a special program, the
"Folk and Roots" program which airs on the weekends. That will be exclusively a Category 3
program.
7913 But
that does not account for the full 10 per cent. It is a one‑hour block twice per week on the weekends.
7914 COMMISSIONER
WYLIE: Which one is that?
7915 MS
LAURIGNANO: The "Folk and
Roots".
7916 COMMISSIONER
WYLIE: The "Folk and Roots";
okay.
7917 MS
LAURIGNANO: There is an exclusive
program there, and then there is a blend of some Category 3, including
"Folk and Roots", throughout the broadcast week.
7918 COMMISSIONER
WYLIE: "Canadian Spotlight"
would be devoted to?
7919 MS
LAURIGNANO: "Canadian
Spotlight" is a container, is a show that will feature artists on a weekly
basis. It could be one. It could be two.
7920 COMMISSIONER
WYLIE: It's a showcase type of thing.
7921 MS
LAURIGNANO: Yes, it's a showcase.
7922 COMMISSIONER
WYLIE: So it will vary.
7923 MS
LAURIGNANO: That's right.
7924 COMMISSIONER
WYLIE: It could be someone who is
Category 3.
7925 MS
LAURIGNANO: Right. And there will be some information, perhaps
information on tours, interviews, that kind of thing.
7926 COMMISSIONER
WYLIE: It's more intended to showcase.
7927 MS
LAURIGNANO: Exactly.
7928 COMMISSIONER
WYLIE: You say at page 10 of your
supplementary brief that this will be a format which is close to Foxy in
Newmarket.
7929 Will
there be some sharing of programming between the two stations?
7930 MR.
W. EVANOV: No, there won't be. There may be in terms of some content. In other words, if there is a good book, in
the book reports we may share information; or on the health issues we will
definitely share information. But each
station will program and produce their own programs.
7931 COMMISSIONER
WYLIE: Are you convinced, seeing your
state of discomfort, that the diseases on the west coast are the same as in
Newmarket?
7932 MR.
W. EVANOV: It is restricted to the west
coast right now.
7933 MS
LAURIGNANO: Don't let him fool
you. He is playing the sympathy card.
7934 COMMISSIONER
WYLIE: Mrs. Laurignano is going to
settle him down.
7935 Other
than the health issues and so on, to what extent have you researched to date
what is more likely to be appealing to Kamloops citizens as opposed to
Newmarket citizens, especially with regard to the lifestyle features, which is
a lot of your spoken word programming?
7936 MR.
W. EVANOV: Well, Newmarket is one
area. There is a greater emphasis on
skiing in this particular area. In
Kamloops ‑‑ and we know it fairly well because we have friends
here; we have been to Kamloops dozens of times. So we know the market to a large extent.
7937 Services
we would provide that are unique to Kamloops.
7938 I
guess in terms of music, once you go on the air then you get the feedback from
the audience. When we launched Foxy, we
had no crooners program; we had no instrumental program. We just played the odd instrumental, whether
it was Henry Mancini, or this or that, but suddenly we started getting phone
calls and people starting asking for this type of music. We put more on the air and then we expanded
the numbers of hours we were doing it.
7939 Then
we met the various different instrumental performers who would come to the
door, who would phone us up.
7940 So
I think once you go on the air in a market, you will get instant feedback from
the people you are trying to serve and what their preferences are or how you
will weigh things.
7941 MS
LAURIGNANO: I was just going to say
that generally speaking what we found too is that it is a different community
in terms of activities and how they spend their free time. There is more likelihood that they will be
outdoors doing things like hiking, fishing, golf and ski, as Bill said.
7942 We
found that there is a bit more of an active lifestyle over there. It is not to say anything against Foxy, but
it seems to be a more vigorous, active type of community.
7943 Also,
it is very different in terms of local in that of course it lives around
certain other areas but it is not part of a big metropolis in a CMA. So there are things that will have to be
extremely different in terms of really localizing it, both in terms of its
geography and its distance to the large cities.
7944 For
example, travel, we found that most people would travel down the coast and head
to perhaps California versus Florida from Newmarket, that kind of thing.
7945 COMMISSIONER
WYLIE: All this spoken word programming
will be produced locally.
7946 MR.
W. EVANOV: It will be produced locally
by local staff. All our staff will be
local. They will be people from the area. And the spoken word will definitely reflect
Kamloops.
7947 COMMISSIONER
WYLIE: The interests of Kamloops.
7948 MR.
W. EVANOV: Yes.
7949 COMMISSIONER
WYLIE: What are your means of getting
feedback once you go on the air?
Hopefully you have guessed it right to begin with, what are your means
of getting feedback?
7950 MR.
W. EVANOV: To begin with, we have
already formed an advisory board or an advisory committee, consisting of six so
far Kamloops residents. We have already
had our first meeting with them back in January, during a major snowstorm in
the city there. They had more snow in
those three days than they did all last winter.
7951 That
is one sense of feedback, and we are going to enlarge that committee and we are
going to meet with them regularly.
7952 They
have a lot of input and we are going to share ideas and thoughts.
7953 MS
LAURIGNANO: Besides that, we intend to
hire staff, sufficient staff to help us gather, not only gather but establish
the contacts that we will have the information flowing to the station as well
as us going out.
7954 The
other thing is we found that our success in the past has always been that of
marketing from the street up and just being there. It is a pretty small town in comparison to CMA. They will know where we are and how to get
hold of us, including access through the Internet, telephone lines, faxes and
that sort of thing.
7955 COMMISSIONER
WYLIE: After today's sunny weather, Ms
Laurignano, are you planning to come and spend some months here and test it
out?
7956 MS
LAURIGNANO: I intend to go between
Halifax, Ottawa and Kamloops.
7957 COMMISSIONER
WYLIE: Yes, I have noticed you are
turning into a coast‑to‑coast lady.
7958 MS
LAURIGNANO: They call me the
"A&P lady" now; Atlantic and Pacific.
7959 COMMISSIONER
WYLIE: As long as you don't ask us to
turn Lake Ontario around, which I think you did a few years ago, to my dismay,
so that your signal would reach better.
7960 In
your supplementary brief, at page 10, you said that you would commit to a
Canadian content level of 40 per cent, which is 5 per cent more than the
regulation.
7961 You
would be prepared to accept this as a condition of licence?
7962 MS
LAURIGNANO: Yes, we would.
7963 COMMISSIONER
WYLIE: What is your success with the 45‑plus
demographic in Newmarket?
7964 MR.
W. EVANOV: The problem is the
measurement. Newmarket is measured as
part of the Toronto CMA in BBM, but yet the Newmarket signal only covers 16 per
cent of the Toronto CMA.
7965 COMMISSIONER
WYLIE: That's where the lake comes in.
7966 MR.
W. EVANOV: No, the lake is even
farther.
7967 MS
LAURIGNANO: And that was CIDC.
7968 COMMISSIONER
WYLIE: That was Orangeville.
7969 MR.
W. EVANOV: But whatever numbers you get
in BBM, you then have to project and extrapolate over the total population of
the Toronto CMA.
7970 So
I have, overall, a 1.5 share in the Toronto CMA. I don't even reach 80 per cent of it. Therefore, the numbers I am attaining in my own area where the
signal is are very good. But it puts a
station like ours at a disadvantage.
Remember this is a radio station that lost money for 12‑15 years,
when through a dozen ownerships, or half a dozen.
7971 COMMISSIONER
WYLIE: I knew your cold would get
better if you started talking about that.
‑‑‑ Laughter /
Rires
7972 MR.
W. EVANOV: You hit the right button.
7973 COMMISSIONER
WYLIE: But you do get feedback. You have some sense of how well you are
doing.
7974 MR.
W. EVANOV: We get feedback. I am going to ask Gary Gamble to make one
comment.
7975 There
are two things that people say to me and to my announcers when they see us at
remotes, at promotions, at charity events, or whatever. They come up and they say, number one:
"I love the music you play. Don't
change the format." And number
two: "When are you going to get a
better signal?"
7976 Gary,
could you please comment on your experience as a broadcaster in terms of really
a type of passionate response.
7977 MR.
GAMBLE: I have worked, done morning
shows or whatever for five or six different formats now, and the latest of
course being this format we have at 88.5 in Newmarket. Never before have I seen people get so
passionate.
7978 If
we are presenting a concert or we are doing a live remote broadcast, people
come out just to say: "I just
wanted to meet you guys and thank you for putting this music on the air. We don't get to hear it anywhere else. And we've got you on all the time. It's not that we go back and forth. We have you on in the morning and you are on
at night when we go to bed."
7979 And
these people would just come out, not to win something but just to say: "I really want to thank you for putting
this format on. I've never see on any
other type of format."
7980 MS
LAURIGNANO: The other thing that we do
in terms of financial success is we don't rely on or we couldn't live on the
share that we had at the beginning with this radio station. If we just sat back and waited for national
buys to come in or went to some advertiser who had a budget committed somewhere
else and they are covering Newmarket anyway through their CMA, they would just
slam the door in our face.
7981 What
we do is we knock on doors. We identify
who the supporters are. Often it is the
advertisers who like the station themselves and say put it on. And from there you build relationships. It is a growing process.
7982 Again,
it is from the street up and it is going door to door and making it happen.
7983 COMMISSIONER
WYLIE: In your application at 7.3 you
talk about cultural diversity and your intention to focus on it and to focus on
issues that are important to the Kamloops multiracial multi‑ethnic
communities. You obviously operate at
CHOW so you have some experience.
7984 How
will you go about assessing the extent to which that type of coverage here is
different from Newmarket?
7985 MS
LAURIGNANO: There are some basic
guidelines and indicators, such as Statistics Canada. We know, for example, that the largest mother tongue in ethnic
groups tend to be German. There is some
Dutch. Whereas say in Toronto there
might be Chinese, East Indian type of population.
7986 We
are sensitive as to the ethnic composition there what the mother tongue is.
7987 Members
of our advisory committee will be representative of the community and the
designated groups.
7988 We
have also identified a number of organizations and individuals, community
leaders, in the market that we intend to work with and get feedback from them,
advice, consultation, as well as our hiring process; that the staff itself will
be reflective of the community by encouraging the applications of the
designated groups.
7989 COMMISSIONER
WYLIE: I have a few questions on your
CTD although you have given us more information today.
7990 So
it will be $150,000 over the period.
7991 MS
LAURIGNANO: Yes.
7992 COMMISSIONER
WYLIE: Basically there are some details
in today's presentation and the rest is at pages 17 and 18 of your
supplementary brief.
7993 MS
LAURIGNANO: Right.
7994 COMMISSIONER
WYLIE: I have just a few details.
7995 The
Jewel Concerts, you have devoted $136,000 to it over seven years.
7996 MS
LAURIGNANO: Yes.
7997 COMMISSIONER
WYLIE: That will be an annual showcase
for established and developing artists.
7998 Can
you tell us more about this initiative and how you will spend this $136,000.
7999 If
I recall, you have given a breakdown of what percentage of that money will go
where.
8000 MS
LAURIGNANO: Yes. Of that, approximately 80 per cent will be
directed to the artists themselves for appearance fees. And 10 per cent we expect for the venue, for
the engagement of the venue, and 10 per cent to the staging and the lighting of
the concert.
8001 There
will be other costs we anticipate, but we intend to offset those through
exchange of promotion and strategic partners, which we do on a regular basis
with other such initiatives in other markets.
8002 COMMISSIONER
WYLIE: These percentages will be the
same over the period: 80‑10‑10.
8003 MS
LAURIGNANO: We hope to make the 80
higher. If we can engage a venue and we
can engage staging and lighting on a trade basis, then 100 per cent would be
devoted.
8004 That
is something that we have done very successfully with our other things. If you look at our returns, for example, for
last year for some of the stations, we doubled our commitment through such
ways.
8005 COMMISSIONER
WYLIE: The other initiative is the
Catalogue of Canadian Instrumental Music for which you have given us some more
information.
8006 In
the response to deficiency questions, at Question 3, you have said that it was
based on whether you received the licence in Ottawa.
8007 MS
LAURIGNANO: Right.
8008 COMMISSIONER
WYLIE: So is developing this
conditional on you having a licence in Ottawa as well?
8009 MS
LAURIGNANO: Yes, it is, for the simple
reason that it is a very ambitious project.
It requires an investment of about $1 million to start it, to run it, to
make sure it is in peak shape for at least seven years and then beyond. So it would be foolish of us to think we
could do that with this sort of commitment.
8010 COMMISSIONER
WYLIE: Where is the million dollars
going to come from?
8011 MS
LAURIGNANO: That would be from the
Ottawa commitment.
8012 COMMISSIONER
WYLIE: I see. I have a better idea now of you would go about this.
8013 My
understanding is if you didn't get Ottawa, this money would go to the Canadian
Ethnic Recording.
8014 MS
LAURIGNANO: Yes, it would. The reason for that, as you know, we are
very happy with the progress of that and it would help with the diversity
across the country. It is not just
something for ethnic broadcasters; it is something for everybody.
8015 COMMISSIONER
WYLIE: How successful is the other one,
the Ethnic Recording?
8016 MS
LAURIGNANO: It is very successful. We have identified to date over 4,000
titles, artists, record labels. It is a
work in progress. We are extremely
happy.
8017 As
some of you know, it was an initiative of the Ontario arm of the CAB and after
that it has been adopted by a number of new licensees, including the Ottawa
one, the ethnic one, including the one that was licensed subsequent to that in
Vancouver.
8018 I
note as well that all the applicants for the Vancouver ethnic, with the
exception of one, all committed at least a minimum commitment, if not more.
8019 COMMISSIONER
WYLIE: And this is useful, as far as
you know.
8020 MS
LAURIGNANO: Yes. And I might as well add that there was a
minimum commitment for three years for the founding members, but we have all
chosen to voluntarily contribute to it above and beyond that. So we are doing that.
8021 COMMISSIONER
WYLIE: If I look at your financial
projections, we see that you would spend $21,400 from year one to year six and
then, to round it off, $21,600 in year seven.
8022 Would
you accept a condition of licence that there be this minimum amount per year
rather than a ballooning ‑‑
8023 MS
LAURIGNANO: I'm sorry?
8024 COMMISSIONER
WYLIE: I think your financial
projections show that your Canadian Talent Development will be at least spread
$21,400 in year six and then $21,600 in year seven.
8025 MS
LAURIGNANO: Yes.
8026 COMMISSIONER
WYLIE: Would you be prepared to accept
that this is something you would be bound by to avoid a ballooning?
8027 MS
LAURIGNANO: Absolutely. We can accept that. We do accept that.
8028 COMMISSIONER
WYLIE: And you would accept a condition
of licence or requirement that there be a minimum of this amount spent per
year.
8029 MS
LAURIGNANO: Yes.
8030 COMMISSIONER
WYLIE: Let's look at your projected
shares.
8031 In
your underlying assumptions for the preparation of your projections you have
16.3 per cent in year five, and I gather then your projected revenues have been
built according to these shares, your projected revenue.
8032 MS
JOSEPH: Yes, they have.
8033 COMMISSIONER
WYLIE: Is that the same 16.3 per cent
that is in year three in the study, Ms McLaughlin, at page 4?
8034 MS
McLAUGHLIN: Yes, it is.
8035 COMMISSIONER
WYLIE: Why did Strategic Inc. say you
would reach that in year three and you have it in year five instead?
8036 Presumably
year five is the applicant's choice.
Correct?
8037 MS
McLAUGHLIN: It is the applicant's
choice in consultation with Strategic Inc.
8038 As
you noted yourself, CHNL has a very strong brand image. It is reflected in their share and it is
reflected in their reach, and particularly reflected in their last week
tuning. That is where these charts make
an impact.
8039 The
8.2, for example, in year one is 50 per cent of the projected maximum
reach. This is a group that has some
fairly established tuning habits and it is going to take a while to pull them
over. No matter how you market, they
are established and it will take a while to change their listening patterns.
8040 So
unlike a youth format where you would have 60 or 70 per cent of the achievable
reach based on what you have in the survey happening within two years, this is
a lower rate.
8041 Why
this application differs in terms of how they put it together because there has
been, as this has evolved ‑‑ post supplying this study to the
applicant there were discussions about what the brand meant, and it was their
decision that it would take a little bit longer, given that they were not going
to be news intensive and they could not hope to replace CHNL's role in the
listener's life.
8042 COMMISSIONER
WYLIE: So the shares on the financial
assumptions is what was used to project the revenue. Right?
8043 MS
JOSEPH: That is only one of the ways
that we would project revenue.
8044 COMMISSIONER
WYLIE: To the extent that the expected
share was used, it was the year five instead.
8045 MS
JOSEPH: That's correct.
8046 COMMISSIONER
WYLIE: Let's have a look at your
revenues.
8047 In
your assumptions on page 8 you have your 60‑second rate, which is lower
than the other applicants, which I am sure you have noticed. You probably looked at the other
applications.
8048 Why
the lower rates?
8049 MS
JOSEPH: When we determine what our spot
rate is going to be, we look at all of the retail rate cards of the other
stations in the market. Realistically,
what we do is we look at the lower end of their grid and then the higher end of
their grid.
8050 What
we also do is we are clients and we call the radio stations and we say: We are interested in advertising and could
you send us some packages.
8051 You
will notice, as with a lot of radio stations, that perhaps if a published would
be $60, at the end of the day when you divide your spots out it works out to be
$20.
8052 So
a published rate and an actual rate are two different things.
8053 We
felt $22 was within the market norm for a new radio station. Yes, it is a little bit low as an initial
start‑up, but we are going to be selling with absolutely no ratings. We are going in specifically with
projections, like any new radio station would.
8054 Not
only that but when we were out talking to the advertisers who do not currently
use radio, they felt that $22 would be a realistic entry level rate for them to
try radio and feel comfortable with this marketing medium.
8055 COMMISSIONER
WYLIE: On the same page of your
financial assumption, you have your expected revenue sources and only 25 per
cent from local radio stations. The
impact will be only 25 per cent.
8056 What
stations in particular do you expect it from?
8057 MS
JOSEPH: The quick answer is CHNL and
CKBZ will have impact, and CHNL will have the most impact. It is also important to note that the best
way to identify impact is to find out who your listeners are going to be and
then ask them who they currently listen to.
8058 The
interesting thing is the fact that 39 per cent of all respondents in our survey
indicated that they listed to "Other" as a category, and that would
include Internet or spill market radio stations.
8059 Equally
interesting is the fact that only 26 per cent of the core demographic, being 45‑to‑64,
reported even listening to a Kamloops station frequently.
8060 Yes,
listeners of CHNL said that they would listen to The Jewel, and out of that I
think it was 29 per cent, it is unrealistic for us to believe or for them to
believe that just because they said that they would definitely or probably
listen that they are going to automatically abandon CHNL.
8061 There
will be some sharing of reach, yes. We
estimate it will be 10 per cent, so it is minimal: $163,000 to be exact.
8062 MS
LAURIGNANO: If I might just add, the
other 75 per cent is going to come from other sources other than local radio
stations.
8063 One
of the big benefits of us going into the market is that we are going to bring
new advertisers. So while CHNL may feel
a bit of an impact at the beginning, we can expect that they are going to knock
on the doors of some of the advertisers that we will bring to radio who are
going to be new to radio.
8064 It
is our intention to increase the PBIT so the pie is going to get a little
bigger if we get the licence.
8065 COMMISSIONER
WYLIE: One last question, as a follow‑up
on Commissioner Langford's question about the ability of this market to absorb
a new station, or more. There are three
frequencies involved here. So two
formats I guess are head‑on competitive.
Yours is not.
8066 What
is your view about the Commission licensing one and I suppose ‑‑
and I don't want Mr. Evanov to faint ‑‑ more. In other words, in your view, are those
three applications mutually exclusive despite the fact that they are not on a
frequency basis?
8067 MR.
W. EVANOV: If you decide to license one
station, we think it should be a format that has not been in the market before;
that we have shown through our research there is a demand for in the
market. And that would be our format.
8068 If
you decide to also license another station, a country station, we would expect
that there would be impact. It is not
going to put us out of business, and we don't believe it is going to put any of
the existing broadcasters out of business.
It might take us a little bit longer to get to where we are going, but I
think we have the financial resources to stay the course. I think Standard must have the same and NL,
because they are there, must have the same to stay the course.
8069 Those
who would benefit the most would be the listeners of Kamloops. They would end up with two formats in
addition to what is in the market now.
8070 COMMISSIONER
WYLIE: So you are positive enough that
even that would not dissuade you?
8071 MR.
W. EVANOV: No. We would have to work harder. We would have to be a little more
creative. But we have done this before.
8072 COMMISSIONER
WYLIE: And this is despite, as
Commissioner Langford pointed out, the relatively PBIT average compared to the
average PBIT for Canada in this market.
8073 MR.
W. EVANOV: I think if you put a third
person into the sand box, the dynamics change drastically. I have seen it happen before.
8074 COMMISSIONER
WYLIE: When I did that with my
children, all I had was trouble.
‑‑‑ Laughter /
Rires
8075 MR.
W. EVANOV: There can be a complacency
with only two there and they are there for years and years and years. Maybe the listener will benefit more by
maybe more, that's all, and maybe more activity.
8076 COMMISSIONER
WYLIE: One last question. A lot is made of the fact that the retail
numbers here are higher. Is that only
in the last year or has that been a phenomenon over time?
8077 MS
JOSEPH: You are talking about the
retail numbers in the market?
8078 COMMISSIONER
WYLIE: Yes, the retail power of the
market that we often use to try to project how much advertising there would be.
8079 MS
JOSEPH: As the Commission knows,
advertising revenues for Kamloops are not published. What we are also aware of
is that radio sales are not contained in a vacuum.
8080 What
I mean by that is advertising sales are directly related to a healthy retail
market. That would be Kamloops.
8081 We
looked at other markets with published ad sales, and we took into account
retail sales in those markets and reviewed those. We took several samples of markets in western Canada, as well as
markets in B.C. And finally, to be on
the conservative side, we chose a western market with the lowest ad sales
versus retail sales as a ratio. We
applied that as an indicator. We used
actually Kelowna.
8082 We
established revenues to be roughly at around $8 million in our first year of
start‑up.
8083 COMMISSIONER
WYLIE: My question was more: Is this a phenomenon that is recent or did
you test that out for a few of the past years?
8084 The
reason I am asking is I had lunch with my colleague Commissioner Williams, who
raised an interesting question: that with the unfortunate disasters in this
area with the recent fires, there could have been more retail activity to
replace lost goods, et cetera.
8085 Do
you have it for years back, the fact that it is higher; just that Kamloops
people shop more?
8086 MS
LAURIGNANO: First of all, I hope you
paid for lunch. It was his birthday.
8087 I
believe Debra has ‑‑
8088 COMMISSIONER
WYLIE: He didn't tell me until after he
paid the bill.
8089 MS
LAURIGNANO: I think you have to buy him
dinner now.
8090 MS
McLAUGHLIN: Actually, Commissioner
Wylie, there is a relationship here because, as we mentioned in the
presentation, this is an older market.
If you look at the average incomes, they are somewhat lower than the
national average. So it sort of begs
the question: How do the retail sales
get that high?
8091 It
is a phenomenon you tend to find in communities where there is an aging
population, because in fact they don't have the expenses. So while their income isn't as high, they
can spend more on durable goods and other like products.
8092 It
isn't something that has happened this year.
It is something that has been trending.
And with the forecast for this market in terms of the aging population,
we expect it to hold.
8093 COMMISSIONER
WYLIE: Thank you, ladies and gentlemen.
8094 Mr.
Evanov, if I have your cold, you're in trouble.
--- Laughter / Rires
8095 MR.
W. EVANOV: I would like to thank you
for your time.
8096 I'm
sorry, are there more questions?
8097 THE
CHAIRPERSON: Counsel.
8098 Me
STEWART: Merci, monsieur le Président.
8099 I
have just a very quick question. Will you accept as a COL your commitment to
play a minimum of 35 per cent instrumental music?
8100 MR.
W. EVANOV: Yes, we would.
8101 MR.
STEWART: Thank you.
8102 Thank
you, Mr. Chairman.
8103 THE
CHAIRPERSON: Thank you very much,
ladies and gentlemen.
8104 MR.
W. EVANOV: Mr. Chairman, before we go,
I just have a last comment.
8105 THE
CHAIRPERSON: Go ahead.
8106 MR.
W. EVANOV: We are a company that will
persevere and overcome any obstacle to come to a hearing. I want to mention that, aside from three of
us having terrible colds, Ky became a mother in January and the baby is at our
meetings at the hotel room. In four
months our music director, Natasha, will be a mother.
8107 So
really we don't stop at any event, and neither do you by the length of your
hearings.
8108 MS
LAURIGNANO: We are going to populate
Kamloops ourselves.
8109 MR.
W. EVANOV: Thank you very much.
8110 THE
CHAIRPERSON: In our budget for next
year at the Commission, there is a little child care corner at the hearing
room.
8111 MR.
W. EVANOV: And a sand box.
8112 THE
CHAIRPERSON: And a sandbox, right.
‑‑‑ Laughter /
Rires
8113 THE
CHAIRPERSON: Thank you very much. That concludes today's proceeding. We will resume at 8:30 tomorrow morning with
the NL application.
‑‑‑ Whereupon the
hearing adjourned at 1825, to resume
on Friday, March 4, 2005 at 0830 / L'audience
est ajournée à 1825, pour reprendre le vendredi
4 mars 2005 à 0830
- Date de modification :