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TRANSCRIPT OF PROCEEDINGS BEFORE
THE CANADIAN RADIO‑TELEVISION AND
TRANSCRIPTION DES AUDIENCES AVANT
CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
VARIOUS BROADCAST APPLICATIONS /
PLUSIEURS DEMANDES EN RADIODIFFUSION
HELD AT: TENUE À:
Metropolitan Conference Centre de conférence
333 Fourth Avenue South West 333, Fourth Avenue Sud‑Ouest
Calgary, Alberta Calgary (Alberta)
February 22, 2006 Le 22 février 2006
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
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.
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
Conseil de la radiodiffusion et des
Transcript / Transcription
VARIOUS BROADCAST APPLICATIONS /
PLUSIEURS DEMANDES EN RADIODIFFUSION
BEFORE / DEVANT:
Michel Arpin Chairperson / Président
Helen del Val Commissioner / Conseillère
Elizabeth Duncan Commissioner / Conseillère
Ronald Williams Commissioner / Conseillier
Stuart Langford Commissioner / Conseillier
ALSO PRESENT / AUSSI PRÉSENTS:
Chantal Boulet Secretary / Secrétaire
Leanne Bennett Legal Counsel /
Steve Parker Hearing Manager /
Gérant de l'audience
HELD AT: TENUE À:
Metropolitan Conference Centre de conférence
333 Fourth Avenue South West 333, Fourth Avenue Sud‑Ouest
Calgary, Alberta Calgary (Alberta)
February 22, 2006 Le 22 février 2006
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PHASE I (cont.)
PRESENTATION BY / PRÉSENTATION PAR:
Calgary Independent Radio Broadcasters Inc. 338 / 2194
Jim Pattison Broadcast Group 435 / 2865
Yadwinder S. Sivia (OBCI) 525 / 3433
Rawlco Radio Ltd. 628 / 4218
‑‑‑ Upon resuming on Wednesday, February 22, 2006
at 8:00 a.m.
2188 THE CHAIRPERSON: Please be seated.
2189 I would ask that you make sure that all cellphones, blackberries, and beepers are turned off.
2190 We will begin with Item No. 5, and I would ask Madam Secretary to introduce the Applicant.
2191 MS BOULET: Thank you, Mr. Chairman. As mentioned, we will proceed with Item No. 5 on the agenda, which is an application by Calgary Independent Radio Broadcasters Inc. for a licence to operate an English‑language FM commercial radio programming undertaking in Calgary.
2192 The new station would operate on Frequency 92.9 Mhz, Channel 225‑C1, with an effective radiated power of 100,000 watts, non‑directional antenna, antenna height of 301.7 metres.
2193 Appearing for the Applicant is Mr. Vince Tripathy. Mr. Tripathy will introduce his colleagues. He will then have 20 minutes for his presentation.
PRESENTATION / PRÉSENTATION
2194 MR. TRIPATHY: Thank you. Before we begin, we would like to indicate for the record that three documents were filed this morning, which were in response to a deficiency letter request, indicating change of directorship within our company.
2195 THE CHAIRPERSON: Thank you. The documents will be put in the public record, and they will be available to the participants at this hearing.
2196 MR. TRIPATHY: Thank you.
2197 I was thinking this morning that it was 25 years ago this September that I started my broadcast career. You are going through the butterflies and the jitters before you get up here, and it was interesting to realize how far it has been from starting in Rosetown, Saskatchewan, to being in front of the Commission this morning here in Calgary.
2198 That being said, Mr. Chairman, Commissioners and Staff, I would like to introduce our team. I am Vince Tripathy, President of Calgary Independent Radio Broadcasters Incorporated, and General Sales Manager of STAR FM.
2199 To my far right is Rick Meaney, Vice President of Calgary Independent Radio Broadcasters Incorporated, and General Manager of STAR FM.
2200 Next to Rick is Mike Bagshaw, Secretary of Calgary Independent Radio Broadcasters Incorporated, and Retail Sales Manager of STAR FM.
2201 To my immediate left is Laurie Healy, Program Director and shareholder in STAR FM.
2202 Next to Laurie is Paul Kuster, Aboriginal Liaison and co‑host of "First Nations Friday" on STAR FM.
2203 On my far left is Jim Bagshaw, shareholder and advisor to STAR FM.
2204 Directly behind me is our consultant, Shyla Dutt.
2205 Unable to be with us today, because he is out of the country, is Terry Strain, a shareholder in our company, and an advisor, with 40 years in radio.
2206 The principals of STAR FM are all long‑time residents with commitments to Calgary, all with extensive broadcast experience, all able to react to the needs of Calgarians.
2207 This experienced group represents the best of both worlds, an independent rooted in Calgary, best able to understand and react to the needs of Calgarians, with the expertise and the resources to ensure the viability of this radio station, which, in turn, will meet community needs in one of Canada's most dynamic cities.
2208 Collectively, STAR FM has over 130 years of broadcast experience. Most of that is right here in Alberta.
2209 Rick, Jim and Terry have all served on the boards of the CAB and the WAB.
2210 Jim has been the Chairman of BBM, and also received Broadcaster of the Year from the WAB.
2211 Rick received a Gold Ribbon for CTD from the CAB, and a Gold Medal for Community Service from the WAB.
2212 Aside from broadcasting, members of our group have made significant contributions on a community level, including serving on boards for Mount Royal College, the Salvation Army, 17th Avenue Rejuvenation, Junior Achievement, the United Way, and the Calgary Children's Foundation.
2213 Calgary Independent Radio Broadcasters is indeed a group of Calgarians dedicated to creating radio for Calgarians.
2214 Mr. Chairman and Commissioners, we are very excited about 92.9 STAR FM. The format will bring a new voice and a new sound to Calgarians that will fill a void in the market: yesterday's favourites and hits of tomorrow.
2215 The radio station is designed by Calgarians, for Calgarians.
2216 Its staff will reflect the diversity of the community and address community needs through our high levels of news, lifestyle and special interest programming.
2217 STAR FM will truly be a radio station that is designed to showcase Canadian talent, especially artists from Alberta, as well as Calgary.
2218 The history of broadcasting shows that through the many challenges that radio has faced over the years, it has been the independent that has helped to initiate the changes to enable us not only to survive, but to thrive.
2219 MR. J. BAGSHAW: Mr. Chairman, I am particularly excited to be in the company of these young entrepreneurs. They have dedicated a great deal of their time, imagination, and money to the development of what I believe to be an exciting new look at radio that will have significant impact in the Calgary market.
2220 My broadcast career began in 1974. I bring that up only because of the gentleman I started my career with, Dr. Charles Allard. He was a true entrepreneur. During my years with him, we built a small television station in Edmonton into what was at one point the most successful independent television station in Canada, later to become WIC.
2221 The application before you today is built in that same entrepreneurial spirit. It is local, independent, and dedicated to the Calgary market with concrete dreams to fulfill a market void in Calgary ‑‑ the dreams that Western Canadian entrepreneurs such as Dr. Allard and Frank Griffiths brought to life.
2222 As Doug Holtby, a former colleague of mine, stated in his support letter:
"In this broadcast environment of increased consolidation and concentration, I respectfully urge the Commission to license local applications whenever possible. I steadfastly believe that locally owned broadcast stations are tuned in more closely to the pulse of their community, and consequently are better equipped to recognize and respond to the community's needs. Local ownership creates more diversity in our global broadcast environment, a factor which blends to a truer reflection of the diversified Canadian society in which we live."
2223 MR. MEANEY: Mr. Chairman, local entrepreneurs have made Calgary what it is today. The frantic pace of business activity and economic expansion continues, fuelled by high energy prices, strong migration, a red‑hot construction sector, a resilient housing market, and the fastest growing retail spending in Canada. Calgary's economy has never been better.
2224 Calgary's growth and prosperity is reflected in its radio market. Calgary is the most profitable radio market in Canada, and has been for the past seven years.
2225 In 2005, radio revenues reached $76 million. To date, the market is growing at 11.6 percent. At this rate of growth, the Calgary radio market will top 100 million by 2009.
2226 Calgary is ready and able to support a new radio station; not any radio station, but a station that will program to the most under‑served demographic in the city.
2227 We have heard from many adult Calgarians, who have expressed a frustration with Calgary radio. They cannot find a station that plays their favourite music.
2228 We understand their frustration, based on our knowledge of the existing radio format and the research that we commissioned.
2229 In June of 2005, we arranged for Bannister Research to conduct a survey to determine the best music format for a new FM station in Calgary. Two formats emerged as having the greatest cume and core potential. They were modern rock and seventies and eighties soft rock.
2230 The results also show that modern rock was much easier to find on the FM dial than seventies and eighties soft rock.
2231 Therefore, our research concluded that seventies and eighties soft rock, due to its strong format viability, represents the best choice to fill the void in the Calgary market.
2232 Since our music research was conducted last June, three Calgary stations have altered their formats, creating an even larger opportunity for a seventies and eighties soft rock station.
2233 CHFM, the adult contemporary station, is playing a brighter music mix, which means that they are targeting younger.
2234 The smooth jazz station, The Breeze, has rebranded itself and is now called California 103. Ninety‑three percent of their music is from 1990 to current, and they, too, have lowered their target demo.
2235 CKMX‑AM changed its format in July from adult standards to traditional country.
2236 There is now a complete absence of popular soft music on the FM band that would appeal to a 35‑plus audience. STAR FM will fill this void with what our research shows is the most appealing music to this under‑served demographic. We will fill the need in the marketplace and have the least impact on existing stations.
2237 With a limited number of full‑power FM frequencies still available, we feel that a broad‑based format targeting the 35 to 64 demographic is the best use of the 92.9 FM frequency, and would maximize the reach of a new and distinct voice in the market.
2238 This brings us to today, to a station that we believe is the best choice for licensing and meeting the needs of Calgarians ‑‑ 92.9 STAR FM.
‑‑‑ Audio clip / Clip audio
2239 MS HEALY: Mr. Chairman, building on what is the void in the market ‑‑ yesterday's favourites ‑‑ we are adding on hits of tomorrow, those hits that have the feel and sound compatible with soft rock, that provide a suitable resonance and are similar in temperament.
2240 This combination will give listeners the old favourites they still want, yet provide rejuvenation through new and upcoming artists, whose music is in sync with the feel and experience of soft rock from the seventies and eighties.
2241 Much of that new music will come from Canadians, such as Harry Manx, The Philosopher Kings, Karla Anderson from Stoney Plain, and, of course, staying true to our local roots, music from Calgarians like James Keelaghan, Tim Tamashiro, Feist, and Tariq.
2242 Our diversity of musical selections will be a unique sound in the traditional adult contemporary genre. We will endeavour to pleasantly surprise our listeners with culturally diverse sounds that reflect our community, while providing the music that our listeners grew up with.
2243 Speaking of growing up, we propose to present a two‑hour kids' show, "Kids' Radio". It will be a music‑intensive specialty program that won't stray from our soft rock format, yet will incorporate Canadian music specifically targeted to kids.
2244 A great example comes from the Juno‑nominated CD "The Fabulous Song", featuring a number of Canadian musicians.
2245 As well, young Calgarians will be front and centre on "Kids' Radio", along with pet features, interviews with local sports heroes, school events, kids' jokes, and more.
2246 We are very excited about "Kids' Radio", as there simply isn't anything like it in the market. We are completely committed to the concept, should we be licensed for STAR FM.
2247 We will get in depth with our local artists on the hour‑long "Stars Alive on FM", a monthly program, to be recorded live at the Beach in Calgary.
2248 Our weekly half‑hour show "Your World", will bring a serious and not‑so‑serious look at global news and bring it back to a local level, while highlighting songs from our world music category.
2249 Restaurant reviews by well‑known local critic John Gilchrist is one example of our spoken word programming that will be fun and informative.
2250 STAR FM will bring a new editorial voice to the market. Currently there is no news on Calgary FM stations after 9:00 a.m. until 4:00 p.m. weekdays. We, however, will commit to hourly news packages from 6:00 a.m. to 6:00 p.m., Monday through Friday, and 6:00 a.m. to noon on weekends.
2251 In addition, we will include a comprehensive segment specifically relevant to Calgarians, called "The Morning Interview", at 10:00 a.m., which will be repeated at 6:00 p.m.
2252 "Entertainment This Evening", an hour‑long weekday show, will always present the latest events and performance calendars from venues across the city. Local interviews, news, comedy, gossip, and lots of music will all be a part of "Entertainment This Evening".
2253 Paul Kuster, our Aboriginal Liaison person and co‑host of "First Nations Friday", will now tell you about our aboriginal programming and community connections.
2254 MR. KUSTER: Mr. Chairman, we will go beyond our dollar commitment to the aboriginal community by truly supporting First Nations music with a dedicated show on Friday evenings called "First Nations Friday". Accomplished Canadian musician and actor, Tom Jackson, and I will co‑host the program, highlighting the talent of aboriginal artists, such as Calgary's Sandra Sutter and Les Jerome, along with others, like Derek Miller, and Eagle and Hawk.
2255 I would also like to talk about community involvement. There will be a seven‑member advisory committee that will provide ongoing feedback on music selections and a range of issues. Meetings with local artists and members of the community will be done in an open‑house forum twice a year.
2256 In an age of huge technological change, Calgary Independent Radio believes that the ability to truly reflect community and to be relevant to the changing make‑up of Calgary will allow traditional radio to thrive.
2257 Being local means being connected. STAR FM will be very excited to support, and have the support of, the Federation of Calgary Communities. Listeners will be automatically connected with the 137 community associations across the city through daily on‑air reports, and will be instantly linked through STAR FM's website.
2258 STAR FM will regularly air public service announcements for community organizations and community campaigns on a daily basis, for at least a total of three minutes at day.
2259 The types of organizations that will be accorded these services will include the United Way, health organizations, farmers' organizations, immigrant services centres, shelters for women, and Native Friendship Centres.
2260 MR. BAGSHAW: Mr. Chairman, as an independent we recognize the importance of this licence. Calgary Independent Radio is committed to making a Canadian Talent Development contribution that is both affordable and, for a new standalone station, meaningful. Our aim is an owned and operated Calgary company to bring our talent initiatives as close to home and make them as impactful as possible on the day‑to‑day lives of local musicians.
2261 Our proposed Canadian Talent Development package is valued at $2.1 million over the seven‑year licence term.
2262 I would like to list these for you. The Western Canadian Professional Talent Development Fund would receive $734,000. The Aboriginal Scholarship Fund would receive $56,000. Aboriginal radio would receive $70,000. The Calgary Association for the Development of Music Education would receive $250,000. ARIA, the Alberta Recording Industry Association, would receive $200,000. FACTOR would receive $160,000.
2263 We have a commitment from FACTOR. Their contributions will be used specifically for Alberta artists, as indicated in their letter.
2264 There will be a proposed part‑time Canadian Talent Development co‑ordinator, at $100,000.
2265 Local Calgary festivals would receive $560,000.
2266 Mr. Chairman, we would like to point out that these are direct cost contributions to CTD. We are confident that these substantial contributions to Canadian talent will make a difference.
2267 MR. TRIPATHY: Mr. Chairman, in conclusion, we believe that our local ownership group, with its local community roots, will deliver a different radio experience that will reflect Calgarians. We will be a new player, bringing a new, locally based editorial voice to Calgary and the Canadian radio industry, with programming developed locally.
2268 Our entry into the market will have a minimal impact on the existing stations, given their continued profitability and the prospect of continued growth in red‑hot Calgary.
2269 Our proposed musical format, designed to serve the under‑served segment in Calgary, will add diversity and competitiveness, ensuring our business success to become a stable and a growing force on the Calgary broadcast scene.
2270 Our programming format will embrace the multicultural and aboriginal diversity of Calgary, and give it a presence on our proposed broad‑based station.
2271 The Federation of Calgary Communities will be a real partner in reflecting our community.
2272 Our proposal of 35 percent commitment to Canadian content is reasonable and practical for a new station targeted at an older demographic. It becomes more meaningful when you consider that we are committed to new and emerging artists, especially those from Calgary and Alberta.
2273 We have made a substantial commitment to Canadian talent of $2.1 million, yet it is not just about writing a cheque, it is about having meaningful results.
2274 Our initiatives are intended to leverage the opportunities for artists right here in the Province of Alberta, and, in particular, here in Calgary.
2275 Actions speak louder than words. This group will prove it. We are here for the long haul, an independent that has the staying power to be here in Calgary.
2276 We thank you for your time, and we welcome your questions.
2277 THE CHAIRPERSON: Thank you. I would ask Madam Helen del Val to question you with respect to your application.
2278 COMMISSIONER DEL VAL: Thank you.
2279 Your presentation this morning has clarified some of the questions that I had anticipated asking, so thank you for that. There are a few more points, though.
2280 In your supplementary brief, it wasn't clear whether the core audience group you would be targeting would be 35‑plus or 45‑plus.
2281 It is quite clear that you would be targeting the 35 to 64‑year‑old demographic. With the presentation this morning, can we confirm that the core target group would be 35‑plus?
2282 MR. TRIPATHY: Mr. Chairman and Commissioners, in response to that answer, we do have an overall broad‑based target of 35 to 64.
2283 I would ask Laurie Healy to answer that question in a little more detail.
2284 MS HEALY: Certainly you are correct that our broad‑based and our target demo will be 35‑plus. We will specifically be looking closer at the 35 to 54 demographic, but we realize that our music will also fall into the up to 64 range, for sure, yes.
2285 COMMISSIONER DEL VAL: So you would have a broad appeal across the general 35 to 65 age group, but the programming focus would be 35‑plus, rather than a median age of 45 or so?
2286 MS HEALY: Yes, that is correct.
2287 Rick might be able to speak more to the demographics.
2288 MR. MEANEY: Our tight target is the 35 to 54 demographic. That is where we will be aiming our programming.
2289 Of course, because we will be the softest music on the dial, it will appeal to people who are over 55.
2290 COMMISSIONER DEL VAL: You are quite confident that the programming designed to appeal to 35‑plus will also appeal to the broader base?
2291 MS HEALY: Yes, I am very confident that our music will, in fact, do that.
2292 When we break down our music in terms of the areas that we will play, we are certainly looking at playing music ‑‑ our home will be the seventies, with about 30 percent of our music coming from the seventies category.
2293 We are also going to have a bit of life in the sixties ‑‑ about 10 percent. That will add some spice. Certainly, that also speaks to our 55‑plus audience.
2294 For the remainder, we will live about 25 percent in the eighties, which will be keeping true to our format of seventies and eighties music. More than 50 percent will come from those two decades.
2295 Then, of course, the remaining 35 percent we will achieve from the nineties up to today.
2296 COMMISSIONER DEL VAL: Thank you.
2297 I think you are well aware that there are at least three other applicants ‑‑ Evanov, the Pattison Group, and 1182743 Alberta Co. ‑‑ which are targeting the same group, with, more or less, a similar music format. How would your station, or your proposed format, differ from their proposed formats?
2298 MS HEALY: I think we will bring a large amount of difference.
2299 I am sure that Vince and Rick will both be able to speak to this, as well.
2300 Certainly, when we talk about the difference between the other applicants, you make a good point, straight off the top, that they are targeting specifically 45‑plus. We are actually coming down a bit lower, to 35‑plus in our music.
2301 We are not going to live in an instrumental world. That is another example, where another applicant has suggested that that will be a component to their application.
2302 Our music is mass appeal. It is soft rock music. It is mass appeal music. It is something that can reach across the generations.
2303 MR. TRIPATHY: If I could add to Laurie's comments, one of the other areas on this application ‑‑ and it is very important to us, and you will hear it over and over again in the next few minutes. This group of broadcasters is from Calgary. We recognize that.
2304 We also recognize that technology has become a very, very big part of what is going on, as has the Commission, in some of the restructuring that has been done in the last few months. As a result of that, we really feel that, as much as community has been a big part of programming in the past, it has to become even more integral if we are going to survive as traditional radio stations.
2305 To that point, our spoken word content is very much going to be Calgary based, and that will be another point of differentiation relative to some of the other applicants.
2306 Rick, I would ask you to enhance on that, if you could.
2307 MR. MEANEY: Madam Commissioner, the other three applicants are older than we are, in terms of their targeting, and in their music choices. I have noticed that they will be playing artists such as Frank Sinatra, Dean Martin, and the likes, which we will not, making them older.
2308 Also, one applicant, Mr. Evanov, has a 35 percent instrumental component.
2309 There is a smooth jazz station in the market that has an instrumental component, so we have chosen not to go there.
2310 These three formats are designed on a station in Parksville, another one in Vancouver, and then one in Newmarket. Calgary is a younger city than those three centres, and we feel that the music here should have a slightly younger appeal.
2311 COMMISSIONER DEL VAL: I will come back to the spoken word programming in a minute, but what about the existing tuning options?
2312 I think there are a few tuning options for the 35 to 44 adult demographic in Calgary right now. For example, the AC station, CHFM Classic Rock, and CFGQ. Then there is the AOR station, CJ, as well as the smooth jazz station, and there is also a classic hits station.
2313 How do you think your proposed station will differ from those?
2314 MS HEALY: I will start with your list.
2315 CHFM is living in the 1990s and beyond. As you may have heard in our presentation, we referred to it as about 93 percent ‑‑ which is an approximate number ‑‑ of their music being from 1990 and later. In fact, their music is targeting a much younger demo than what we are looking at, 35‑plus.
2316 The other stations, quite frankly, have a sound that is very much targeted to a male audience, and we are intending to skew more to a female audience.
2317 MR. TRIPATHY: If I could add to Laurie's comments, we had this discussion last night, because obviously we were anticipating a question similar to this, and I guess the discussion ultimately surrounded the fact that there is no doubt that there are other services that are delving into some of those other demos.
2318 I think the question ultimately gets down to, as great a job as the radio stations are doing in this marketplace, after taking a look at our research that came back to us, it appears that the bottom line is that there is more room for growth in those particular demos.
2319 To that point, if I could, Rick, I would ask you to enhance a bit on the research we did.
2320 MR. MEANEY: To add to what Laurie said, CHFM is a current‑based AC station. Eighty percent of their music is from 1990 to current, even the smooth jazz station's music is from 1990 to current, the bulk of it, and Q107 and CJ are both rock stations, primarily targeted to the male audience.
2321 So we believe that those stations are getting tuning in the demo that we are intending to go after, but some of those listeners may not be able to hear their favourite music on the FM band, and that is why they are listening to these stations, because they are getting some of the music they want, but not all of it.
2322 That's why we are different.
2323 COMMISSIONER DEL VAL: Where do you think your listeners will come from then?
2324 You talk a lot about the void. Where are these listeners now?
2325 MR. MEANEY: Madam Chairman, if I could, our research shows that our listeners would come from JACK FM, from CBC, from Q107, which is a classic rock station, and Country 105, and CHFM would then fall in after that.
2326 So they would come from all over.
2327 MR. TRIPATHY: I think the other point with regards to radio stations, if I may add, Rick, is that radio formatting and programming ‑‑ and we all have different lifestyles. There is music, and then there is the psychographics, the type of lifestyles that we are leading on a day‑to‑day basis. This radio station is designed to speak to some of those things, whether it is a busy parent with kids running around between sports events, or whatever happens to be going on during the day, or a business person who is going to be heading downtown for an office meeting.
2328 That is another element that comes in, aside from the music positioning on the radio station that perhaps will differentiate ourselves from some of the other competitors in this marketplace.
2329 MS HEALY: I have one further point about where our audience will be coming from. We can't forget that Calgary is a growing market. We have people migrating to this city all the time that will look for a home in terms of their radio station, and we hope that if we get STAR FM, that will be their home.
2330 COMMISSIONER DEL VAL: How does that kids' show fit into this whole picture?
2331 MS HEALY: I am very glad you asked about the kids' show, because we truly are really excited. It simply is a unique opportunity for us to play music that remains within our soft rock genre.
2332 I think we have a number of points to make about the kids' programming, in terms of that show and its music.
2333 We talk about the artists. We can bring in Canadian artists that we can highlight in that show, and there are lots of them. I can think of Connie Kaldor, for example.
2334 There is a great song, and I can't wait to hear it. I say that it's a great song. We all remember "Puff the Magic Dragon". There is a new mix of that for kids that is coming out.
2335 These are the kinds of things that we can highlight in that show, staying within our soft rock format.
2336 We are targeting an age demo, in terms of the kids, of about 12 years of age and younger. Kids listen to what their parents listen to in the vehicle. I think we listen to what our parents are listening to in that young age.
2337 As we start to get older, of course, we start to have other influences. We recognize that the 14, the 15 and the 16‑year‑olds are probably not going to be our target in terms of this group of listeners.
2338 With our spoken word content we will be targeting the 12‑and‑under group, with the opportunity to have kids on the radio. I know that we will speak to spoken word further, but definitely in terms of music, I don't think we have to stray too far from our soft rock format. We have no desire to be a CHR station for two hours in our programming. We want to stay true to our soft rock format.
2339 MR. TRIPATHY: I am going to step back for a second. If we put this into perspective and think about it a bit, this program gives us an opportunity to move into a lot of different areas.
2340 I am not going to kid you, we weren't all onside initially when we brought up the idea, but as we got thinking about it and got more and more excited about it, and thought about the soft rock component that we have spoken about, we got into spoken word and some of the other initiatives that we can take out of this and kind of move into a lot of different areas, one of which could be book clubs in this city. There are book clubs and reading programs that are currently set up with people such as the Calgary Hip and the Calgary Flames, which would be a natural tie‑in with a program like this, if we were able to secure those alliances.
2341 It moves all the way through to kids' jokes, pets ‑‑ we all have kids who are in school, who are looking for ways to try and get through school, in some cases. They are looking for ways, basically, to enjoy their lives, and this program is something that, again, will not only relate to the kids, but also to the parents, if properly programmed.
2342 COMMISSIONER DEL VAL: Just to clarify, it is 35‑plus female that is your core audience, isn't it?
2343 MS HEALY: Yes, that's correct.
2344 COMMISSIONER DEL VAL: So it's probably their kids you are targeting.
2345 MS HEALY: You are exactly bang on, yes.
2346 COMMISSIONER DEL VAL: On pages 4 and 5 of your supplementary brief you list your artists, and a number of them would be considered what we call Category 3, special interest music.
2347 What percentage of Category 3 music selection do you think you will be including in your weekly music playlists?
2348 MS HEALY: Quite frankly, I didn't figure out that percentage. I can't answer that question truthfully.
2349 COMMISSIONER DEL VAL: Counsel will correct me if I am wrong. As a commercial FM station, you cannot go over 30 percent.
2350 MS HEALY: We would certainly commit to that.
2351 COMMISSIONER DEL VAL: So you would go below that.
2352 MS HEALY: Absolutely.
2353 MR. MEANEY: Madam Chairman, it would be far below that number.
2354 MR. TRIPATHY: If I could also say, as broadcasters in this city we have an opportunity, and have had opportunities, over the last 20 years in some cases, a bit less in some others, to work with a number of broadcasters in this city, and we are very respectful of the current broadcast environment, including operators such as Newcap, which have a specialty licence here that fits into Category 3.
2355 We certainly wouldn't want to tread on their territory, so to speak.
2356 COMMISSIONER DEL VAL: Mr. Meaney, I love how you keep promoting me to chairperson.
‑‑‑ Laughter / Rires
2357 COMMISSIONER LANGFORD: I was a bit worried about that.
2358 MR. MEANEY: I know that you are new, but I have heard good things about you.
2359 COMMISSIONER DEL VAL: But I'm not the chairperson.
2360 Let's move into the local and spoken word programming now.
2361 In your November 14, 2005 letter, which was in response to deficiency questions, you indicated that you would devote 17 hours to spoken word programming, 7 hours to news and 88 hours to music programming, for a total of 112 hours of programming per week.
2362 I notice that in your package today ‑‑ and this is the one with the grid, with the timetable ‑‑ you give a more detailed breakdown of your programming.
2363 I haven't had time to add the numbers up and things like that, but in your deficiency letter your programming added up to 112 hours. The broadcast week being 126 hours, that left 14 hours unaccounted for.
2364 I am wondering how you are going to fill the 14 hours, or is the answer in what you have submitted this morning?
2365 MR. MEANEY: Madam Commissioner ‑‑
‑‑‑ Laughter / Rires
2366 COMMISSIONER DEL VAL: Thank you. I like Chairperson better, but that's okay.
2367 MR. MEANEY: That difference would be made up of commercials and music. So the music could be higher than 88 percent, based on the commercial load on the radio station.
2368 That would be the difference.
2369 COMMISSIONER DEL VAL: On your breakdown of the feature and spoken word programming, what you have provided this morning, will that still add up to 112, now supplemented with Mr. Meaney's answer, or is the 14 hours listed in what you provided this morning?
2370 MR. MEANEY: The broadcast week is 126 hours. If we have 17 hours of spoken word, then the balance would be made up of commercials and music.
2371 COMMISSIONER DEL VAL: Excluding the 7 hours of news programming, you are proposing 17 hours of other types, like the kids' show, "The Morning Interview", "Entertainment This Evening".
2372 Could you please provide more detail regarding the nature of those programs and the programming resources dedicated to each?
2373 MR. TRIPATHY: Madam Commissioner, to clarify, the 17 hours of spoken word is inclusive of news, sports and surveillance programming. So it would be the additional 10 hours over and above that, which Laurie will speak to now.
2374 MS HEALY: We have a number of initiatives to fulfil our spoken word programming. As we have clearly discussed, our 7‑plus hours in terms of news. In addition to that, we have a news interview segment, called "The Morning Interview", which we will be bringing to our programming. This is specifically targeted to Calgarians locally.
2375 One of the examples we give in the documents is that perhaps we will have a pediatrician on who has the latest advances in autism, some of the latest news, and that kind of thing ‑‑ things that specifically target our audience of 35‑plus, with a female skew.
2376 "Entertainment This Evening" will be another great example of where we will be able to incorporate our additional spoken word content outside of our, of course, unscheduled jock talk that we will have.
2377 Again, our focus will be local, because that is what we are all about, local events and what is happening.
2378 It is what we consider our opportunity to go beyond simply what was happening on TV last night.
2379 We will have "Community Calgary", and we are very excited that we have been able to hook up with the Federation of Calgary Communities ‑‑ 137 organizations here in Calgary. It is an umbrella organization, if you will, that will allow us to keep Calgarians informed with our community calendar and also via our website as to what is happening here in the community.
2380 Our aboriginal programming, which we are very excited about as well, will obviously be a music show, again fitting in with our soft rock format, but with an aboriginal flavour, because that is what the music will be. We also intend to incorporate a spoken word element into that.
2381 Some other spoken word content that we will have will be in the kids' programming, the two‑hour show. We expect, again, a music‑intensive show with great spoken word that will enhance the two hours, again bringing it back locally to what is happening for kids here in our community, as well as, of course, the trends and what is going on around the world.
2382 Other spoken word programming that we have allotted for ‑‑ we have "Stars Alive on FM". This would be a monthly show, so its spoken word content in terms of a weekly basis really becomes limited. However, again, we anticipate having perhaps four Calgary artists on "Stars Alive on FM". Not only will we have their music, but you need to get to know those people. So that becomes part of our spoken word ‑‑ and biographies, and chatting with them, and so forth.
2383 "Your World" is a global half‑hour program that we are anticipating will have a good, probably, five or so minutes of spoken word content, in addition to our unscheduled jock talk throughout our programming.
2384 We are developing ideas, such as our 60‑second restaurant review, which John Gilchrist, a local author and food critic here, is eager to participate in with us.
2385 All of our spoken word programming ‑‑ I could go through it all, but all of it is designed to enhance what is going on in our listeners' lives. It is designed to target our 35‑plus audience, and hopefully make their lives a bit easier, a bit more fun and entertaining.
2386 With our unscheduled jock talk, that will end up being approximately 17 hours of programming.
2387 COMMISSIONER DEL VAL: What about the programming resources that you are going to dedicate?
2388 Who is going to run them?
2389 MR. TRIPATHY: Thank you for that question, Madam Commissioner. We have taken that into account, and it is a terrific question. In order to get spoken word, you need people to execute it and get it looked after. To that end, we have made some decisions with regards to our programming, in particular the news area.
2390 Rick Meaney, as general manager of the operation, has put together those numbers with regards to staffing.
2391 MR. MEANEY: First, if I could address the news, we would have two full‑time news people and two part‑time news people.
2392 As mentioned by ourselves and other applicants, there is no news on FM in Calgary after 8:30 or 9:00. Typically, in those news departments, there might be one person.
2393 So the news department will handle some of the spoken word that is more in tune with the news.
2394 Also, I will turn it over to Laurie, because her programming staff will be looking after a lot of this.
2395 COMMISSIONER DEL VAL: Perhaps this might make it easier for me. I am looking at what you provided this morning on programming, where you list your spoken word programming.
2396 I don't know whether it is doable to run down the list and say what is the programming resource for, let's say, "Entertainment This Evening" ‑‑
2397 MS HEALY: Sure, we can do that, recognizing that it's fluid and ‑‑
2398 COMMISSIONER DEL VAL: Yes, of course.
2399 MS HEALY: Our goal, when we have staff, is always to marry people with the right skills to the right ‑‑
2400 COMMISSIONER DEL VAL: Of course. We could say that a news person is running ‑‑ we will just say news.
2401 MS HEALY: Absolutely.
2402 Of course, news we have already touched on.
2403 "The Morning Interview" is another program that would come from the news department.
2404 "Entertainment This Evening" would come from our on‑air staff, in terms of our jocks, if you will.
2405 "Community Calgary", actually, will be in combination with our producer and a local representative from the Federation of Calgary Communities, who will put the piece together for us, and then will call it in via the telephone. That is our vision for that.
2406 Aboriginal programming ‑‑ obviously, Paul and Tom will be a big part of how the aboriginal programming comes together, along with our music director, of course, and myself, as program director. This will be a vital show for us, so we will take good care of that one for sure.
2407 "Kids' Radio" ‑‑ one of the things that I strongly believe as a program director is that we have to develop our new DJs, our new talent in the industry. With "Kids' Radio", it only makes sense to have a young broadcaster, and it will be an opportunity for us.
2408 This will be a big project. It is not simple, something you can throw off to the side. We want someone who will be dedicated, and younger people in radio tend to be pretty exciting.
2409 COMMISSIONER DEL VAL: And you can charge him child care rates.
‑‑‑ Laughter / Rires
2410 MS HEALY: I will check on that. I will see what I can do to make it a requirement.
2411 Beyond that, "Stars Alive on FM", again, will be something that works very strongly. That will be very much in my ballpark, along with our music director.
2412 We have "Your World", which is something that I see working between the news department and our on‑air staff. I think that needs to be something that kind of goes hand‑in‑hand together.
2413 The 60‑second restaurant review ‑‑ again, John Gilchrist has expressed a desire to be part of that, along with the producer, again, and on‑air staff. They will be able to make that happen.
2414 "Nuts and Bolts" ‑‑ again, this will be our on‑air staff. "Nuts and Bolts" we haven't discussed, but this is another little feature that is designed to make lives a bit easier. It is something that would definitely be with our on‑air staff, and the jock that would be appropriate.
2415 "Talk the Walk" is something that, again, would involve our producer, as well as our on‑air staff, and hopefully experts in the field, because they know best.
2416 COMMISSIONER DEL VAL: Thank you.
2417 These programs will total 17 hours.
2418 MS HEALY: Along with unscheduled jock talk, yes, that's right.
2419 COMMISSIONER DEL VAL: What portion of the 17 hours do you think will be made up of banter ‑‑ disc jockey banter?
2420 MS HEALY: We have calculated that we suspect about 5 percent ‑‑ up to about 5 percent.
2421 That's a fluid number always, but that is pretty standard.
2422 COMMISSIONER DEL VAL: In your reply to a deficiency question, you also stated that news and related surveilling spoken word, such as weather, sports and traffic, would total 7 hours per week.
2423 Could you please provide details on the duration of the newscasts, if they haven't been provided already, and what, if any, other information, besides related surveillance, would be included in the newscasts?
2424 MS HEALY: You will note in the document we gave you today that we outline the news package, the total length of the news package, in the pretty little blue‑and‑white graph that I have for you there.
2425 For example, our 6:00, 7:00 and 8:00 a.m. hours ‑‑ morning drive ‑‑ will be five minutes in length. That includes news, sports, weather and traffic.
2426 I could certainly break down the specific times on those, if you would like me to.
2427 News in the morning will be three minutes in length. Our sports will be one minute in length. Our traffic will be 30 seconds.
2428 We will intersperse traffic, of course, with our jock talk, because it is an important part of our programming.
2429 Weather, as well, in the news package, will be 30 seconds. But, again, you will be hearing it throughout the hour.
2430 We will also have half‑hour news in our morning drive show, which will be on the half‑hour. Our newscasts will be one and a half minutes long. Our sports, again, will be one minute. Our traffic and weather, each, 30 seconds.
2431 Our newscasts become a bit shorter throughout the day, as news becomes less at the top of people's minds during their workday.
2432 We will pick up at noon, again with a slightly longer newscast, at three minutes for news, 30 seconds for sports, 15 seconds for traffic, and one minute for weather.
2433 Then, at four o'clock we will pick back up again with three minutes specifically for news.
2434 Keep in mind that in this market right now there are full newscasts ‑‑ morning newscasts ‑‑ through until 8:30. There are at least two stations that are doing a brief nine o'clock update in the market, and then you don't hear any news in Calgary, outside of breaking news stories and that kind of thing. You won't hear any scheduled news again until four o'clock, when there will be brief updates.
2435 We are proposing to not only do the news, but to do the sports, to do the weather and the traffic right through until six o'clock every weekday, and on weekends from 6:00 a.m. until noon.
2436 COMMISSIONER DEL VAL: What would be the size of your newsroom staff, and what kind of resources would you dedicate to news gathering and production and on‑air broadcasting?
2437 MS HEALY: I think that Rick could speak to that.
2438 MR. MEANEY: Madam Commissioner, there will be two full‑time news staff and two part‑time.
2439 Could I ask you to repeat your question again in regards to the news staff?
2440 COMMISSIONER DEL VAL: What would be your anticipated size of the newsroom staff and the types of resources you would allocate to news gathering, production and on‑air broadcasting?
2441 MR. MEANEY: In terms of resources, we will have Broadcast News, of course, the news that comes over the wire.
2442 Laurie, you might add to that, in terms of resources.
2443 MS HEALY: Certainly, when we talk about our news staff, one of our news people ‑‑ our news director, more than likely, will also be our morning news person, and then our other staff will ‑‑
2444 We kind of look at it as a team. Our other staff will appropriately work the afternoon news, the morning news, and so forth.
2445 MR. TRIPATHY: If I could clarify, in case we haven't made the answer perfectly clear, there would be two full‑time and two part‑time individuals.
2446 COMMISSIONER DEL VAL: Who is responsible for the news content?
2447 MS HEALY: That would be our news director. Of course, the program director would receive the entire thing as well.
2448 MR. MEANEY: And don't forget the general manager. He gets in there too.
‑‑‑ Laughter / Rires
2449 COMMISSIONER LANGFORD: You are beginning to sound more like the Commission all the time.
‑‑‑ Laughter / Rires
2450 COMMISSIONER DEL VAL: I have learned, and I have been told that the spoken word programming is very expensive to produce. Based on looking at your projected programming expenses in section 4.1 of your application, over the seven‑year period ‑‑ and I have also calculated it. I think your total programming cost is about 30 percent of your total operating costs.
2451 I am just wondering why you feel that your projected expenses will be sufficient to cover your spoken word programming, particularly because there are applicants who have proposed a less ambitious spoken word programming package and are dedicating more to programming expenses.
2452 MR. TRIPATHY: Thank you for the question, Madam Commissioner.
2453 In taking a look at the expenses and the budgeting for the radio station, we tried to be as responsible as we could in putting those numbers together, and we tried to put some thought into it, and we tried to analyze not only where we are at today, but also the costs going forward.
2454 Calgary is a dynamic market. It is a city that is currently growing.
2455 Rick Meaney could probably best address the exact percentages and why they are set up that way.
2456 MR. MEANEY: It is true that some spoken word could be expensive. Most of the spoken word that we are doing will be done by our staff in‑house.
2457 I am surprised that Laurie hasn't brought this up, but the on‑air people are typically on the air for four hours, and they have time to put together some of the spoken word programming.
2458 As well, our news department also has time during the day to put it together.
2459 When I did the budget, I made sure that we had the proper staff members in every position.
2460 From my perspective, I don't think we are low on the numbers.
2461 COMMISSIONER DEL VAL: I looked at your financials, and they show that you are projecting losses from Year 1 through Year 3, which we see a lot.
2462 I have also calculated that your average annual percentage growth in revenue over the seven‑year term would be about 19.4 percent, which seems a little high to me.
2463 I am wondering how your projected revenues are tied to your programming expenses. What if you could not meet your revenue targets?
2464 Would you be able to finance the programming expenses?
2465 MR. MEANEY: First of all, the revenue numbers we feel ‑‑ and I have heard this term used ‑‑ are responsible.
2466 We fully expect to reach those numbers, and I would hope a bit more.
2467 I don't see any reason why we can't do the spoken word. I really don't.
2468 COMMISSIONER DEL VAL: I know that you have a line of credit lined up for the first three years, so if you don't meet the targets in the first three years, I suspect that your line of credit will kick in. Beyond that, what would your commitments be if your revenues over the projected seven years did not meet the targets you have set?
2469 MR. MEANEY: Madam Commissioner, you are right, we do have a $2 million line of credit set up, and taking into account the losses in the first two years, we still wouldn't use up that entire line of credit. There would still be a fair bit of it left.
2470 So we would draw on that, if need be.
2471 MR. TRIPATHY: If I could add to Rick's comments, one of the strengths of this application ‑‑ and I am sure the Commission has recognized it ‑‑ is that we are a local group that is from Calgary, with extensive sales experience in this marketplace already.
2472 One of the benefits and strengths of this application is that we not only have the skill set and the understanding of the Calgary market already, but a set of business relationships that have been built on for years and years.
2473 We anticipate being able to get out of the gate a lot quicker than some of the other potential applicants, if they were to come into the market, simply because we have a better feel of the market and where we need to go moving forward.
2474 With regard to the situation for the company as far as dollars available and such, overall financing is sitting at $3.5 million. Worst case scenario according to our budgets ‑‑ and, again, we have tried to be responsible with them ‑‑ shows us at $2.4 million, or thereabouts, allowing for a $1.1 million cushion on financing for us to move forward.
2475 The initiatives that we are proposing are very doable, and I can assure you, knowing Mr. Meaney, that they are going to have to happen. It's not an option.
2476 MR. MEANEY: Yes, they will be out there selling. I can guarantee that.
2477 COMMISSIONER DEL VAL: On your spoken word, I looked at your Bannister Research results ‑‑ and I am sure I am missing something. It doesn't seem to measure the market's needs in terms of spoken word and what that target audience should be.
2478 I am wondering, what do you perceive to be the spoken word and information programming expectations of your target audience, and why do you feel that your proposal for spoken word programming would meet those expectations?
2479 MR. TRIPATHY: If I could start the response to that question, I would appreciate it.
2480 With regard to the research that was done, it was initially conducted based on a sense of feel, after speaking with people in this marketplace about possible needs in the market as far as format is concerned.
2481 In looking at the Bannister Research, what you will note, after the music formats were chosen, is that there are a couple of more information‑intensive radio stations that are showing up at the top of that list, which potentially could share audience with ourselves.
2482 In taking a look at that, we then went a step further, and that got back to psychographics. In looking at the research, we said, "If the individuals there are interested in information and what is going on in Calgary, perhaps we should take a little closer look at our spoken word content," and that is when we initiated some of those initiatives.
2483 MS HEALY: Speaking in terms of the programming, when I think of the 35‑plus audience, what we start to see is a greater desire to have information, but it can't just be any information. It has to be information that fits with their lifestyle. It has to be information that is relevant to what is going on in their lives. It has to be compelling. It has to be interesting.
2484 That is what our goal in all of our programming initiatives is, to have spoken word that fits seamlessly into our music‑intensive radio station.
2485 COMMISSIONER DEL VAL: Do you have any empirical data, in terms of the research, that the existing radio stations are not meeting the spoken word needs of Calgary listeners?
2486 MR. MEANEY: Madam Commissioner, when our research was done, it was a format finder, to find the best format for Calgary. Spoken word was not a component of it.
2487 However, if you look at what is going on in radio in the market, other than the morning show, there is very little spoken word.
2488 With the demographic that we have targeted, we felt, first of all, that they wanted more news, and that we could add a spoken word component to fit in with our programming.
2489 So it is based on our experience, not research.
2490 COMMISSIONER DEL VAL: Thank you.
2491 THE CHAIRPERSON: We will take a ten‑minute break. We will return at quarter to ten.
‑‑‑ Upon recessing at 9:35 a.m.
‑‑‑ Upon resuming at 9:50 a.m.
2492 THE CHAIRPERSON: Before returning to the continuation of the review of your application, I want to say that we took a small break to discuss among ourselves and to review some of the questions that we have regarding your filing of the material that you provided this morning. That is why we took a break.
2493 Also, I know that the Secretary would like to add something regarding the filing.
2494 MS BOULET: Yes. Thank you, Mr. Chairman.
2495 To be precise, with respect to the extra documents that were filed on the record this morning, I would like to describe what they are.
2496 There is a document entitled "STAR FM Feature and Spoken Word Programming". It is a five‑page document.
2497 There is also a description of the Canadian Talent Development commitments.
2498 There is a document called "Financial Operations", which is an updated document to be included in the application.
2499 Finally, there is a Unanimous Shareholder Agreement, which was signed on February 21, 2006.
2500 These documents were filed this morning and they will be placed on the public record for this Applicant.
2501 Thank you, Mr. Chairman.
2502 THE CHAIRPERSON: Ms Del Val.
2503 COMMISSIONER DEL VAL: I will move on to the Canadian Talent Development contributions.
2504 There have been a couple of changes to the numbers, so I wanted to confirm for the record what the commitments are, as they stand.
2505 Could you confirm that the commitments are as you have stated in your December 9th response to the deficiency questions, where you increased it from $756,000 to $2.1 million over the seven years?
2506 There will be $108,000 each year, from Year 1 through Year 3, $368,000 in Year 4, $440,000 in Year 5, $473,000 in Year 6, and $495,000 in Year 7.
2507 Is that correct?
2508 MR. TRIPATHY: Madam Commissioner, we are reviewing our CTD commitments, and we would like to walk through the totals on a year‑by‑year basis, to ensure that we are in fact on the same page.
2509 We are indicating a Year 1 total of $108,000, a Year 2 total of $108,000, a Year 3 total of $108,000, our Year 4 commitment is looking at $368,000, Year 5, $420,000, Year 6, $453,000, and Year 7, $475,000.
2510 As would be expected, we would honour those as a condition of licence.
2511 COMMISSIONER DEL VAL: The numbers that you just gave me, they would be in the package that you gave us entitled "Western Canadian Professional Talent Development Fund"?
2512 MR. TRIPATHY: Yes, that would be one of the components. That's correct.
2513 COMMISSIONER DEL VAL: So whatever you gave us this morning supersedes what you have provided before.
2514 MR. TRIPATHY: That's correct. We apologize for the confusion. We had an increase in our CTD at the last moment.
2515 COMMISSIONER DEL VAL: That's okay.
2516 In your earliest submission you gave a breakdown of where you are going to allocate the CTD commitment.
2517 I am going to read them from the documents you provided this morning. If you could confirm for me whether they are, in fact, correct, I would appreciate it.
2518 To the Western Canadian Professional Talent Fund, $734,000. To the area, $200,000. Festivals is $530,000. Then the Calgary Folk Festival is $10,000. The Calgary International Children's Festival is $10,000. Aboriginal festivals, $5,000. The Aboriginal Scholarship Program is $56,000, and aboriginal radio is $10,000.
2519 Is that correct?
2520 MR. TRIPATHY: I think the only total that we may have to clarify is aboriginal radio.
2521 MR. MEANEY: Madam Commissioner, if I may, those individual festivals that you mentioned are inclusive in the overall festivals.
2522 COMMISSIONER DEL VAL: You anticipated my question.
2523 So the Calgary Folk Festival of $10,000, the Calgary International Children's Festival of $10,000, and aboriginal festivals of $5,000 are to be included in your total of $530,000.
2524 MR. MEANEY: That is correct.
2525 COMMISSIONER DEL VAL: Other than for that clarification, those numbers are correct?
2526 MR. TRIPATHY: If I could, I would like to very quickly review the aboriginal radio commitment, to ensure that we are on the same page.
2527 Our overall commitment for CTD is $70,000 for aboriginal radio, and that works out to $10,000 per year over a seven‑year term.
2528 COMMISSIONER DEL VAL: I think you have lost me.
2529 MR. TRIPATHY: It wouldn't be the first time I have done that to somebody.
‑‑‑ Laughter / Rires
2530 THE CHAIRPERSON: With respect to aboriginal radio, I notice that the money will be given to AMMSA, which is the Aboriginal Multi‑Media Society.
2531 Am I right?
2532 MR. TRIPATHY: That is correct.
2533 THE CHAIRPERSON: AMMSA doesn't operate radio stations.
2534 I can see from their letterhead that they have the news source ‑‑
2535 Oh, they have CFWE. I apologize.
2536 MR. TRIPATHY: Yes, that was their initial radio station.
2537 Maybe what I could do, as long as we have this opportunity, is hand this over to Mike Bagshaw. He could clarify what their role is in that particular initiative.
2538 MR. M. BAGSHAW: Thank you, Mr. Chairman.
2539 AMMSA broadcasts to 48 communities and settlements via satellite from that central station. So those funds would be used to help develop talent in discussions with the president and CEO, Bert Crowfoot, at AMMSA. They are in the process of developing a college to help aboriginals learn radio, journalism and television. So those funds would go toward that.
2540 THE CHAIRPERSON: And they are not related to ADR.
2541 MR. MEANEY: No, they are not.
2542 THE CHAIRPERSON: Thank you.
2543 Madam Del Val.
2544 COMMISSIONER DEL VAL: That's why he's the Chair.
‑‑‑ Laughter / Rires
2545 COMMISSIONER DEL VAL: In terms of the breakdown of your CTD commitment, I should really go to the sheet where you have listed Years 1 through 7, and then the total ‑‑
2546 MR. TRIPATHY: That's correct.
2547 COMMISSIONER DEL VAL: ‑‑ rather than the prose, the description of the funds, because those do not total your commitment.
2548 MR. TRIPATHY: No, those are just some of the highlights within each of the initiatives.
2549 COMMISSIONER DEL VAL: I am sure this is a typo. I think, in this morning's presentation, in terms of festivals, you mentioned the number 560,000, but the correct number is 530,000.
2550 MR. TRIPATHY: That's correct.
2551 COMMISSIONER DEL VAL: So you would be prepared to accept as a condition of licence to spend the incremental annual CTD budget at the levels you have indicated in the documents you filed this morning ‑‑ in the documents that list the seven‑year commitment.
2552 MR. TRIPATHY: That's correct. If there were any initiatives that were deemed to be not necessarily within the CTD guidelines, we would certainly stay with that $2.1 million commitment.
2553 Again, on the CTD program, it is important with our group to emphasize that we have tried, wherever possible, to make sure those initiatives were directed back into Alberta, or back into Calgary, where possible.
2554 The aboriginal initiative, as an example, is a station that is up in the northern part of Alberta.
2555 To clarify what they do, the programming that comes out of there is a satellite broadcast throughout First Nations reserves throughout the province.
2556 MR. BAGSHAW: Madam Commissioner, if I could add, I think it is important to note, as well, that we have had the opportunity to meet with each of these individuals and we do have commitments with the dollar amounts we have allocated to them, and, in most cases, we have a letter from them indicating that they are looking forward to working with us, if we are granted the licence.
2557 COMMISSIONER DEL VAL: Thank you.
2558 I have more questions, specifically on the CTD initiatives.
2559 First, with respect to the Western Canadian Professional Talent Development Fund, you state that this fund will be managed by the station and that it will be used to help a western Canadian artist with the production and distribution of a CD.
2560 Could you please give us a budget breakdown for the recording and manufacturing of the CD; and, secondly, will a third party facility be used to realize the recording?
2561 MR. BAGSHAW: Thank you, Madam Commissioner.
2562 Yes, that would be managed by STAR FM, as well as the Beach Recording Studio. We have formed a partnership with them on that.
2563 If I could give you the breakdown for the CD production costs ‑‑
2564 COMMISSIONER DEL VAL: If I could back you up, whose studio will you be using?
2565 MR. BAGSHAW: Beach Recording Studio. They are a recording studio located here in Calgary.
2566 There will be $2,500 for musician fees; $25,000 for studio, engineering, mixing and mastering; $25,000 for producer fees; $5,000 for CD replication, artwork and production; and $15,000 for promotion and marketing.
2567 COMMISSIONER DEL VAL: How will you choose the successful recipient?
2568 MR. BAGSHAW: There are a couple of different ways that we will go about doing that. One of the advantages, and things we are excited about, with respect to working with Beach, is that Lanny Williamson has a distinguished resumé. He has been in the recording industry since 1960. With the number of up‑and‑coming talent from Calgary that comes into his studio, he will present individuals to us that way.
2569 We will also have a link on our website for individuals to apply for those funds.
2570 As a committee, we will meet with Lanny, as well as Rick Meaney, the general manager, and Laurie, the program director. They will narrow it down to five individuals. At that point they will interview those individuals, have them come into the studio, and make a determination from that point as to who that individual would be.
2571 COMMISSIONER DEL VAL: How will you promote the talent fund to the community?
2572 MR. BAGSHAW: That's a great question. Again, through the website of the radio station, and we will also support it with some on‑air, through PSAs and other promotional components of the radio station.
2573 Again, with Lanny's extensive network in the industry here in Calgary, he will certainly be able to help extend that.
2574 MR. TRIPATHY: If I could add to Mike's answer for a moment, we also have spent time over the last seven or eight months while we were putting this application together to stay in contact with local Calgarian artists, and we have been able to set up a network of sorts that will allow us to gain as much exposure as possible for this program.
2575 We want to make sure that it is as inclusive as possible, as opposed to exclusive, to potential artists.
2576 COMMISSIONER DEL VAL: You indicated that a large number of CDs will be made for distribution. How many CDs do you anticipate making? What kind of distribution are we talking about?
2577 MR. BAGSHAW: We would anticipate the production of about 15,000 CDs.
2578 COMMISSIONER DEL VAL: How would you distribute them?
2579 MR. BAGSHAW: Maybe I will have Vince respond to that question.
2580 MR. TRIPATHY: Sure. As far as distribution is concerned, again, it is one of the benefits of this group that you see in front of you. We are locally based, we have relationships within the city, and there are opportunities for distribution on a retail basis, not necessarily even in the most traditional manners.
2581 To cite a national example, you can see the CDs that are occurring, as an example, in the Starbucks outlets, and so on, down the line.
2582 We would find a local retailer that we could work with in partnership to create that exposure.
2583 COMMISSIONER DEL VAL: With respect to providing support to marquis Calgary‑based events and festivals, you have listed the Calgary Folk Festival, the Calgary International Children's Festival, and aboriginal festivals. Are they examples, or are these the ones that you will be contributing to?
2584 MR. BAGSHAW: Those three, we have committed those dollars to them, and then we would look for additional festivals that we deem we could put additional funds into.
2585 But we have committed those dollars to those festivals.
2586 MR. TRIPATHY: The additional festivals that we might look at could be of a multicultural nature. On some level we understand the initiatives that the CRTC is trying to put forward, and do believe in them, and if we are able to, we will certainly direct funds that are reflective of the community here in Calgary.
2587 COMMISSIONER DEL VAL: Could you elaborate on aboriginal festivals? Could you give some examples?
2588 MR. TRIPATHY: If I could, Madam Commissioner, I will turn that over to Paul Kuster, our aboriginal liaison person.
2589 MR. KUSTER: First of all, I am a native, and my last name is Kuster, so don't hold that against me.
‑‑‑ Laughter / Rires
2590 MR. KUSTER: It's a bad name for a native guy to have.
2591 The City of Calgary hosts a Calgary Aboriginal Awareness Week every year. It used to be held in May; now it is held in June. It is an annual festival. It is a week long, and it coincides with June 21st, which is National Aboriginal Day across the country.
2592 When I first talked to Mike about this, I was trying to think of what kind of festival would fit this kind of funding, and I thought this one would work best because it is a city‑wide celebration. There are events going on that entire week at different venues across the city, and it is inclusive. It includes everyone.
2593 Of course, the feature is aboriginal culture, which includes arts, music ‑‑ all that kind of thing. So I thought perhaps one of the best festivals would be that one to support.
2594 There are smaller festivals, including powwows, which happen during the summer at the reserves in and around the Calgary area, but this one is a city‑based festival and it includes all of the aboriginal people from this area, as well as mainstream cultures.
2595 That is the festival that we have talked about to this point.
2596 COMMISSIONER DEL VAL: That leads to my next question. What specific directions would you give to the various organizations receiving the funding on how the CTD money should be spent?
2597 For example, with respect to the festival, how would you ask them to spend the money?
2598 MR. TRIPATHY: Madam Commissioner, that was a question that we had to address in one of our deficiency letters, and we tried to put in a couple of different mechanisms, and I could let Mike speak to that directly.
2599 MR. M. BAGSHAW: There are a couple of directives that we put in place. One of them is that we would have the participants submit an application as to what the initiatives of the festival are. There would be a detailed list of where the funding would go.
2600 We would also ask, upon completion of the festival, for a report as to where the funding went, as well as an indication as to how the festival itself went.
2601 There would also be a 20 percent holdback that we would have on those funds, until we received that documentation, and we would release those funds upon receipt of those documents.
2602 MR. MEANEY: Madam Commissioner, if I might add to that, the intention of this festival fund is to support Canadian musical talent. That is the idea of the fund.
2603 COMMISSIONER DEL VAL: Thank you.
2604 Moving to your aboriginal scholarship program, I noted your response in your November 14th letter to the deficiencies, and I see that you address the question of: If this were not an eligible CTD, what you would do with it?
2605 However, I am wondering what would be your position right now. Has it changed from the letter as to whether the scholarship that you are talking about still qualifies or is eligible for CTD funding?
2606 MR. BAGSHAW: Madam Commissioner, is the question that, if it isn't eligible, would we reallocate those funds?
2607 COMMISSIONER DEL VAL: Scholarships, usually, would only qualify when they are used for studies in music, journalism and artistic studies. The Commission has not yet recognized broadcasting courses as being eligible, as it is not considered an artistic study.
2608 I am wondering if you agree with that interpretation, and how do you feel about your scholarship initiative, whether it qualifies as an eligible CTD.
2609 MR. BAGSHAW: I will let Vince respond.
2610 My one comment on that would be that, if the Commission deemed that it wasn't eligible, we could certainly move it into the journalism course at Mount Royal, where we would certainly be comfortable moving those funds to.
2611 MR. TRIPATHY: I think, at the end of the day, it is important to point out that the initiative itself is something that is very worthwhile and could be very, very beneficial.
2612 But, as Mike said, if for whatever reason it is deemed to be a little offside as far as the policies are concerned, we certainly don't have a problem in reallocating those funds to another initiative.
2613 COMMISSIONER DEL VAL: I also noted, in section 8.3 of your application, that the aboriginal scholarship program is also listed as an example of a measure to promote employment equity.
2614 Just to clarify, if the $56,000 was not CTD eligible, then would you redirect this funding, thereby maintaining your overall CTD budget at $2.1 million, or would you reduce the CTD commitment by the amount of $56,000?
2615 MR. TRIPATHY: Madam Commissioner, the $2.1 million figure for CTD is something that we want to honour and commit to.
2616 Again, if there are initiatives that are deemed to be not compliant, we have no problem reallocating them, but the number is $2.1 million.
2617 COMMISSIONER DEL VAL: Okay. Then, would you still contribute to the aboriginal scholarship program?
2618 MR. TRIPATHY: I think the initiative is a very worthwhile program. If, for whatever reason, it was deemed to be not a part of CTD, given the importance and some of the initiatives that we have within our application, we would be prepared to honour that scholarship.
2619 COMMISSIONER DEL VAL: Would you still be prepared to honour that commitment to the tune of $56,000?
2620 MR. TRIPATHY: Yes. That would be over and above the $2.1 million, if it was deemed to be that way.
2621 COMMISSIONER DEL VAL: Thank you.
2622 With respect to your contribution to an aboriginal station in Alberta, I also acknowledge your response in your November 14th letter. Have you found a station that would benefit from this contribution, and, if so, what station is it?
2623 MR. TRIPATHY: Madam Commissioner, we have found a radio station to direct that initiative toward.
2624 I will allow Michael Bagshaw to explain that a bit further.
2625 MR. M. BAGSHAW: Yes. That was the association, AMMSA, which was mentioned earlier, and Bert Crowfoot. CFWE is broadcast out of Edmonton. It broadcasts across 48 communities and settlements ‑‑ the various reserves throughout Alberta. That is where those funds would be allocated.
2626 COMMISSIONER DEL VAL: Will you sponsor a different station each year?
2627 MR. M. BAGSHAW: No, those funds would go to that station to help develop talent within that organization.
2628 MR. TRIPATHY: If I could clarify the operation, as we understand it, essentially, you have one initial radio station that is creating the product, so to speak, and then it is beamed via satellite throughout Alberta, into different First Nations areas.
2629 COMMISSIONER DEL VAL: What control mechanisms would you implement to ensure that the funds allocated to aboriginal radio would be used as directed; that is, for music recordings, CD manufacturing and talent promotion, and not for administrative or technical purposes?
2630 MR. MEANEY: In the letter from Bert Crowfoot that we submitted today, indicating that he would be willing to work with us, we would come up with a series of guidelines and initiatives as to how those funds would be spent.
2631 So we would apply the same principles that we mentioned earlier with respect to submitting a proposal and looking for progress reports as we move forward on those programs, as well as a 20 percent holdback, which would be paid upon completion of those requirements.
2632 COMMISSIONER DEL VAL: For your co‑ordinator part‑time, which came up today, there would be $100,000.
2633 Can you identify the proposed CTD initiatives that this co‑ordinator would be responsible for, which would warrant you creating such a position?
2634 MR. BAGSHAW: Thank you, Madam Commissioner.
2635 That CTD co‑ordinator position would essentially be a liaison between ourselves and the organizations that we build a partnership with for our CTD commitments.
2636 We also envision that role as being a liaison with the artists themselves.
2637 For example, if the artists have a CD release or whatnot, we could be involved in organizing interviews and helping out in any way that we could from a station standpoint.
2638 He or she would report back to us and make sure that we are doing all we can to support the artists, as well as the organizations.
2639 MR. TRIPATHY: I would like to add two particular points to Mike's comments on that position.
2640 The position we are looking at is, first of all, a part‑time position. It is designed to be specifically CTD‑related.
2641 Secondly, the position we are looking at is to come in Year 4.
2642 As the Commission reviews our CTD commitments, you will note that there is a significant increase in Years 4, 5, 6 and 7 which takes place; thus, the reasoning for the position being implemented at that period in time.
2643 MR. MEANEY: Madam Commissioner, you asked about what initiatives they would be working with. The Western Canadian Talent Development Fund increases significantly in Year 4, so they would be spending time there.
2644 Also, the festivals increase significantly in Year 4, and we see them spending a lot of time there.
2645 COMMISSIONER DEL VAL: This particular co‑ordinator would have no other duties in your station?
2646 MR. BAGSHAW: That's right, it would be specifically for CTD.
2647 COMMISSIONER DEL VAL: In the event that this expenditure is not CTD eligible, would you still maintain your commitment at $2.1 million?
2648 MR. BAGSHAW: Yes, we would.
2649 COMMISSIONER DEL VAL: Let's move on to the financials, please.
2650 The purpose of these questions is to determine how you arrived at your audience shares, and why the projected shares would be achievable.
2651 On page 11 of your November 14th letter, which was in response to deficiency questions, you included a table of audience projections. Then, on page 12 of your supplementary brief you stated that these projections may be a little conservative, but it was your preference to be cautious rather than overconfident.
2652 Your projections seem a little bit lower, compared with audience shares recorded by existing stations in Calgary that rely on the 35‑plus demographic.
2653 If you were more optimistic, what might you realistically hope to achieve in terms of the audience share of 12‑plus?
2654 MR. TRIPATHY: Madam Commissioner, you are right. We did take a very, very responsible approach in putting together our budgets.
2655 I can assure you again that one of the benefits of our organization is that we do have experience here in Calgary. We are aware of some of the potential competitors that we may be up against, and, in putting our numbers together, we took those into account.
2656 The realities of the marketplace here in Calgary are such that up to August 2005 the market was $76 million; to December 2005 the market has been growing at roughly 11.2 percent.
2657 To translate it in a share‑point‑to‑revenue position, you are looking at roughly $760,000 to $800,000 per share point, and our projection is a five share.
2658 If you were to go numbers to numbers, that would translate to $3.8 million worth of revenue in Year 1.
2659 The projection you have there is, obviously, significantly less, and that has been done for a couple of reasons. One, as a standalone station, in Year 1 in particular, there will be no access to national revenue dollars, which will play a part in what is going on.
2660 Secondly, as a standalone in this marketplace, we wanted to ensure, again, responsibility in the numbers that were presented to you.
2661 What I can suggest is that those numbers, as they sit right now, will definitely work. If those numbers are higher, it only puts our organization and this radio station in a better financial position, allowing for viability for the long term.
2662 COMMISSIONER DEL VAL: How did you translate your market study? How did you use that to arrive at your audience projections?
2663 MR. TRIPATHY: Basically what we did in taking a look at it was, we tried to blend a couple of different thought processes, I guess.
2664 Yesterday we heard "bottom‑up" and "top‑down". The way we tried to take a look at the situation was: get a sense of where the market was going to be at, and then take a look at what was happening in the marketplace, as far as other radio stations, and where they were as far as the numbers of listeners, hours tuned, and so on down the line.
2665 In taking a look at that and where we are at as far as our results on our research, we arrived, roughly, at a number of about 5 to 6 percent.
2666 Then, we wanted to ensure that we were on track, again being responsible, so we spent some time with a group of consultants out of Toronto that we have been working with, a gentleman by the name of David Bray of Hennessey & Bray Communications.
2667 Mr. Bray is a consultant in the broadcasting industry and has been in this business for quite a long time.
2668 We handed our situation over to David. He took a look at the research, took a look at the overall market, took a look at the revenue situation, and, based on his determination and his experience, we arrived at that 5 percent figure.
2669 COMMISSIONER DEL VAL: I did note the Hennessey & Bray study that you attached as one of the appendices to your supplementary brief, and I had some trouble interpreting the numbers.
2670 Do you have that study?
2671 MR. TRIPATHY: I apologize, Madam Commissioner, I wasn't able to hear the study.
2672 COMMISSIONER DEL VAL: Hennessey & Bray.
2673 MR. TRIPATHY: All right.
2674 COMMISSIONER DEL VAL: I think it was behind your market study.
2675 MR. TRIPATHY: Madam Commissioner, was there a specific concern?
2676 COMMISSIONER DEL VAL: I was wondering whether you could walk me through one or two lines, so that I could follow it better.
2677 MR. TRIPATHY: To clarify, the information I am looking at is the projected weekly tuning. Is that correct?
2678 COMMISSIONER DEL VAL: Yes, the radio buys.
2679 MR. TRIPATHY: I apologize. To clarify again, are we referring to the radio buys by demographic?
2680 COMMISSIONER DEL VAL: Yes.
2681 Let me find my copy first.
‑‑‑ Pause / Pause
2682 It doesn't have a page number, but it starts with "Calgary percentage share of all radio buys, 2004".
2683 MR. TRIPATHY: Okay, we are on the same page. Thank you.
2684 COMMISSIONER DEL VAL: How should I read this? How should I interpret these numbers?
2685 You say in the first line that 34.495 percent of radio buys are targeted toward the 25 to 54 age group.
2686 MR. TRIPATHY: That's correct.
2687 The goal of this piece was to try to show the Commission an understanding of the marketplace, and where we believe certain target demos are at.
2688 I think the reference yesterday from one of the applicants was a term referred to as "power ratio". The thinking behind it was that certain demos allow for translation into revenue at different levels. That is what this piece is designed to do.
2689 At the end of the day, what we wanted to do was show that we haven't pulled the numbers out of a hat, that we do have an understanding of where we are at in this market, and we do understand where we are at demographically, as far as where we are going to go moving forward.
2690 COMMISSIONER DEL VAL: In section 5.5 of your application, you state that revenue projections were calculated based upon assuming 2 percent of the $75 million that you estimate the Calgary radio advertising market to be worth.
2691 Why would you project just 2 percent of the advertising revenue in the market when you are also projecting to attract 5 percent of radio listeners?
2692 I know that I might be going over ‑‑
2693 MR. TRIPATHY: No, that's fine. It's a terrific opportunity to clarify these particular issues, so I appreciate that, Madam Commissioner.
2694 Again, to give the thought rationale behind it, we do project a 5 percent share of the marketplace, first and foremost. You are absolutely correct, that translates into a figure of between $3.5 million to $3.8 million.
2695 Our overall revenues in Year 1 are based on a two share of 1.5, and the factors that are affecting that, again, are, first, national dollars not coming into play in this marketplace. National dollars translate into, roughly, 25 percent of revenue for the established radio stations here.
2696 So those are dollars we wouldn't have access to until we are established and actually have numbers to show on an agency basis.
2697 That was one of the factors that came in.
2698 The other factor ‑‑ and you can appreciate that it is not one that many stations have had to deal with in this market, because, quite frankly, most of the radio stations are owned by the major groups ‑‑ Corus, Rogers, as well as Standard.
2699 We had to, in our minds, be responsible on the projection that we put forward and say: This is the business plan that will allow us to work. If there are dollars over and above that translate, because we have such strong relationships on the sales side and management side in this city, and we are able to leverage those things, that is all bonus. But for us to come in and project a high number, we thought, would have been irresponsible.
2700 COMMISSIONER DEL VAL: You are also projecting that 15 percent of your revenue will be diverted from existing radio stations.
2701 MR. TRIPATHY: That's correct.
2702 COMMISSIONER DEL VAL: In your response to deficiency questions, in your letter of November 14th, you projected that 55 percent of your first year revenue would come from incremental spending by existing radio advertisers.
2703 I am wondering how you arrived at that estimate.
2704 MR. TRIPATHY: To be perfectly honest, those numbers are not an exact science at all.
2705 Again, we took a look at our own experience and tried to get a sense of it.
2706 To suggest to you that that is something that has been studied to the nth percent would be incorrect. We are going off our market experience and our understanding of how Calgary radio works.
2707 COMMISSIONER DEL VAL: That's okay. I am probably reading too much into it.
2708 At section 5.1 of your application, on average number of commercial minutes expected to be sold per hour, you estimate in Year 1 four minutes, at $57 per minute, and then up to Year 7 it will be six minutes, at $115 per minute.
2709 I wonder how you arrived at those numbers.
2710 MR. TRIPATHY: The Calgary radio market is a bit of an unusual market.
2711 To give you a sense of that, some of the top radio stations in this marketplace, in general terms, for 30‑second ads, are charging in the order of $150, or more, per 30‑second commercial.
2712 We took a look at that and, I guess, in arriving at the number we did, said: This is something that we are going to have to try and work with. Again, how do we budget? How do we make it work? Where is the upside that goes with it?
2713 At $28 per 30‑second ad, that is a number that is very, very reasonable relative to the market.
2714 One of the things that we have sensed in this marketplace, from our experience ‑‑ and we have been in the market for a number of years ‑‑ is that at some point the cost per commercial becomes a hindrance and puts up a roadblock, as far as an entry point is concerned, for some advertisers in this marketplace.
2715 Initially we have the opportunity with this format to allow advertisers who currently cannot afford to be on radio in this great city to come on the radio station, get a sense of what radio is about, and not only from our bottom line standpoint as a radio station. Once they get a sense of radio and what it can do overall, it will allow and afford opportunities, not just on our station, but to the other radio broadcasters in the city.
2716 MR. MEANEY: Madam Commissioner, if I may add to that, these numbers, in terms of minutes sold and the amount per minute, are tied back to the budget, and then to the percentages of inventory that we would sell.
2717 As the station becomes more successful, we would sell more inventory and the rates would go up, up to Year 7.
2718 That is the rationale. It is tied back to the budget, the percentage of inventory used.
2719 COMMISSIONER DEL VAL: I might have missed this, and you could have answered it, but how do those numbers compare to the market right now?
2720 MR. MEANEY: How do they compare in terms of...?
2721 COMMISSIONER DEL VAL: Whatever your numbers were on ‑‑
2722 MR. MEANEY: In terms of other stations?
2723 COMMISSIONER DEL VAL: Yes.
2724 MR. MEANEY: The rates are on the low end. The cost for a 30‑second ad, I believe, goes anywhere from $35 all the way up to $150, $175.
2725 COMMISSIONER DEL VAL: That was what I needed. Thank you.
2726 I am looking at your financial projections, and I think you are averaging about 19.4 percent ‑‑ average annual growth in revenues. Does that seem high to you?
2727 I recognize that you are starting from a low number.
2728 The Conference Board is projecting retail growth at the rate of 5.1 percent between 2006 and 2010, and the actual radio ad revenues from 1994 to 2005 were 8.3 percent.
2729 Do you have any comment on why yours, at 19.4 percent, is realistic and reasonable?
2730 MR. TRIPATHY: If I could, Madam Commissioner, there are a couple of points there. One, you are absolutely right, we are starting at a very responsible budget for Year 1 of 1.5. Translating that forward, that obviously allows for higher percentage growth moving ahead.
2731 In addition to that ‑‑ and you have observed this already ‑‑ that 5 percent market share that we refer to in Year 1 is something that will be fully developed, fully taken care of. The potential will be fulfilled over the seven‑year duration. As a result of that, the numbers, all of a sudden, start to fall into place.
2732 COMMISSIONER DEL VAL: On those financial projections ‑‑ and, again, I am noting them year‑to‑year ‑‑ I see that they are declining, and that is reasonable, but I am wondering why the sudden drop to 5 percent in Year 7.
2733 You go from 60 percent to 21, 21, 14, 15, and then you drop to 5 percent in the last year.
2734 MR. MEANEY: Madam Commissioner, I would like to answer that question, because I was involved in some of this.
2735 Having been involved in a standalone radio station in this market, where we started off with very low revenue, when the station starts to attract numbers and starts to be successful in the market, the revenues tend to go up in the early years very quickly. However, you get to a point where you start to mature, and then your growth goes back to ‑‑ it could be back to the market or less than the market, depending on what your ratings are.
2736 So, potentially, you have steep growth in the beginning.
2737 COMMISSIONER DEL VAL: I recognize that, but there is also a very steep drop between Year 6 and Year 7.
2738 I was wondering if you anticipate something happening in Year 7.
2739 MR. MEANEY: I guess we think we have made it by then.
‑‑‑ Laughter / Rires
2740 MR. TRIPATHY: Madam Commissioner, you can appreciate that over a seven‑year term it is very difficult to see where everything is coming from.
2741 COMMISSIONER DEL VAL: Yes.
2742 MR. TRIPATHY: In taking a look at those numbers, again, we wanted to be responsible, understanding that the market has been growing where it has been growing.
2743 The decrease from Year 6 to Year 7, as Rick indicated, indicates maturation, I guess, of the radio station.
2744 COMMISSIONER DEL VAL: The frequency you have proposed as your first choice is 92.9, isn't it?
2745 MR. TRIPATHY: That's correct.
2746 COMMISSIONER DEL VAL: If that is not available as your first choice, would you consider the use of another alternative frequency?
2747 If yes, which one?
2748 MR. TRIPATHY: Our first choice would be 92.2. We made a commitment from a funding standpoint to research and choose that particular frequency, for a reason.
2749 In speaking with your technical people, as I am sure the Commission has recognized, there can be some challenges on some of the other frequencies that have been put forward by the applicants.
2750 We chose to avoid that and go with 92.9, because it has the clearest signal, and will not have interference.
2751 If, for whatever reason, the Commission was to see fit to license us and deemed that 92.9 could be used by somebody else for better use, we would obviously respect that and have a look at a particular frequency, if need be.
2752 This may be a personal thing, and I may get into trouble with my partners, but 92.9 is definitely the clearest frequency. One of the reasons and one of the benefits of this radio station securing that particular frequency is the broad‑based appeal that this format has. Understanding where we as a company are trying to go, and where the Commission is trying to go with some of its initiatives, as far as reflection on community, diversity and multiculturalism, we are of the opinion that to have a broad‑based format on that particular frequency would be in the best interests, not only for ourselves, but also for Calgarians overall.
2753 At the end of the day, though, we will respect your decision.
2754 COMMISSIONER DEL VAL: Have you identified any alternative frequency to 92.9?
2755 MR. TRIPATHY: We have spoken with engineers and we have a couple of different positions that are potentially there.
2756 As I indicated, there are some challenges on most of the frequencies with interference.
2757 It would seem to us that probably the most responsible thing to do would be to go back to our engineers and make sure we clarify the particular frequency that we want to go with.
2758 We have looked at alternatives, we are just not exactly sure what would be the best one.
2759 You can appreciate, depending on the number of applicants that are licensed, that certain frequencies will be gone, and they will also put into play a number of different dynamics, as far as what is best for our group.
2760 But, at the end of the day, we will take a look at it, if need be.
2761 COMMISSIONER DEL VAL: Did you take a look at 106.1?
2762 Do you recall?
2763 MR. MEANEY: Madam Commissioner, I believe there are some NavCan problems with that one.
2764 So, no, we stayed away from that.
2765 COMMISSIONER DEL VAL: So that would not be a viable alternative?
2766 MR. MEANEY: No. Having spoken to our engineer ‑‑ and sometimes it is hard to understand what they are trying to tell you ‑‑ he didn't indicate that there was a second full‑power frequency that would be suitable.
2767 When you get down to the third one, you start running into impaired frequencies.
2768 But our position would be, should you give us a licence and not that frequency, that we would be willing to look for another frequency.
2769 COMMISSIONER DEL VAL: I have two final questions.
2770 This one is simple. Your advisory committee of seven members, which you referred to on page 12 of your supplementary, is that separate from your board of directors?
2771 I will tell you why I ask this question. Perhaps it is just coincidence, but in your incorporating documents you have named seven as the maximum number of directors. That just made me wonder whether they are the same body.
2772 MR. MEANEY: No, that is a coincidence.
2773 The advisory board consists of seven separate people.
2774 I don't know if you want me to go through it or not ‑‑
2775 COMMISSIONER DEL VAL: No, that's okay.
2776 The last question. How many more stations do you think the Calgary market could absorb?
2777 MR. TRIPATHY: Again, this is a conversation that I am sure every applicant has had over the last few weeks.
2778 Being from Calgary, and understanding what is going on in this marketplace, and understanding the economics of this city ‑‑ and, quite frankly, the economics of the broadcast business, because there are a lot of great operators that are currently in this marketplace that have made this marketplace strong ‑‑ we are definitely of the opinion that there is room for more than one applicant to be licensed.
2779 COMMISSIONER DEL VAL: I'm sorry, one more question.
2780 Are the two young gentlemen sitting back there potential hosts for the kids' show?
‑‑‑ Laughter / Rires
2781 MR. TRIPATHY: I am hoping they will be shareholders one day in the company.
2782 COMMISSIONER DEL VAL: Thank you very much.
2783 THE CHAIRPERSON: Ms Duncan has a few questions.
2784 COMMISSIONER DUNCAN: I wanted to clarify, Mr. Tripathy, in response to Commissioner Del Val's question regarding the CTD payments for Years 5, 6 and 7, I think you stated 420, 453 and 475, respectively, for those years, and I notice that those are the totals, in fact, on the sheet you gave us this morning, except your columns are adding incorrectly.
2785 So I think the numbers she had were correct.
2786 Would you agree with that?
2787 MR. TRIPATHY: Yes, I would.
2788 We apologize.
2789 COMMISSIONER DUNCAN: That's all right.
2790 Those numbers, once corrected, then come forward to the financial statement that you gave us, the income statement ‑‑
2791 MR. TRIPATHY: At the end of the day, Commissioner Duncan, the number is $2.1 million.
2792 COMMISSIONER DUNCAN: In total.
2793 MR. TRIPATHY: Yes. And if it has been incorrectly added up, those funds will be redistributed and totalled up correctly.
2794 COMMISSIONER DUNCAN: All right. I am tying them into your statement, and it looks fine.
2795 I do notice, though, that on your pro forma statement, which was also provided this morning, I can't follow the net income as reported on 4.1 of your pro forma statement of changes in financial position. In the same vein, I can't trace the depreciation expense to your statement of changes in financial position.
2796 I just didn't know whether there was an error and ‑‑
2797 MR. TRIPATHY: In taking a look at the pro forma ‑‑ a couple of things.
2798 First, we filed a pro forma statement in response to a deficiency request from the Commission.
2799 Upon filing that, we had an adjustment in our CTD commitment, just prior to presenting, which took us up to the $2.1 million. As a result, it has had an effect on our pro forma statements.
2800 I think what probably would be best, if it is acceptable to the Commission, is if we were to review the totals, make sure they are in order, and then resubmit them so they are correct.
2801 COMMISSIONER DUNCAN: I can see that the income statement ties in with your objective. I think the problems with the pro forma statement are with changes in financial position.
2802 That would be fine.
2803 MR. TRIPATHY: Thank you. We appreciate that.
2804 COMMISSIONER DUNCAN: There is one other question that I have, which is on your opening remarks.
2805 This puzzled me ‑‑ and I am interested in your reaction. You mention on page 6 that three of the local broadcasters changed their formats since you did your music research in June. I wondered what the message is that we should take from that.
2806 They are experienced in the region, and they moved out of the area that you are wanting to move into. Do you think it is just because they wanted to concentrate on a younger audience?
2807 Why wouldn't one of the three have moved more in the direction that you people want to go?
2808 MR. TRIPATHY: I will turn that question over to Rick Meaney.
2809 MR. MEANEY: Commissioner Duncan, there was an alteration in format, not a change in format.
2810 There was one change in format, which was on the AM station, from adult standards to traditional country.
2811 The other stations ‑‑ with CHFM, because there was an opportunity, I believe, in a younger demo below them, they broadened their format so they could go younger.
2812 Why would they do that? Obviously, I think they could maximize profits.
2813 In terms of the smooth jazz station, the information I have is that it would be an improvement for them to change and, thus, have a better bottom line.
2814 COMMISSIONER DUNCAN: I suppose, with these stations putting a greater emphasis on a younger audience, it makes the opening for you people even better.
2815 MR. TRIPATHY: I think, at the end of the day, that was the point that we were trying to make.
2816 As well, Commissioner Duncan, you can appreciate that this market is a very fluid market and, as much as we are up to date today as we are speaking, there will be further changes before we move forward next year, depending on who is licensed.
2817 COMMISSIONER DUNCAN: Thank you very much.
2818 Those are my questions, Mr. Chairman.
2819 THE CHAIRPERSON: Thank you.
2820 I have one question, and legal counsel also has a question.
2821 In your opening remarks you said that there was no news on Calgary FM stations after 9:00 a.m. until 4:00 p.m. Obviously, you are making the commitment that you will have news during that time period. For how long?
2822 MS HEALY: We have made the commitment to have news while we have a licence. That is part of our commitment, to have news during the daytime.
2823 MR. TRIPATHY: To add to what Laurie said, if the Commission felt the need to, we would certainly accept it as a condition of licence.
2824 THE CHAIRPERSON: Thank you.
2825 Legal counsel.
2826 MS BENNETT: Thank you, Mr. Chair.
2827 I want to clarify, further to Commissioner Duncan's question a couple of minutes ago, about the CTD commitment reflected in the table you filed this morning, and in the revised section 4.1 of your application. I want to confirm that you understand that the CTD COL would be based on the annual commitments reflected in section 4.1.
2828 So, yes, the seven‑year $2.1 million commitment is relevant, but the actual COL would reflect those annual incremental amounts that are outlined in section 4.1.
2829 MR. TRIPATHY: I'm sorry, could I ask you to repeat the question?
2830 MS BENNETT: Sure. The revised section 4.1 that you filed this morning reflects the annual CTD amounts that were reflected in your letter of December 9, 2005. As you were discussing earlier, it is $108,000 per year for Years 1 to 3, then $368,000 for Year 4, $440,000 for Year 5, $473,000 for Year 6, and $495,000 for Year 7. The condition of licence with respect to CTD would reflect those specific annual amounts, not just the total seven‑year commitment.
2831 MR. TRIPATHY: Yes.
2832 MS BENNETT: Thank you.
2833 That is my only question.
2834 THE CHAIRPERSON: You agreed to refile the financial statement and the cash flow statement. When could we expect to receive them?
2835 MR. TRIPATHY: We would be more than happy to have those numbers recalculated and back to the Commission by week's end.
2836 THE CHAIRPERSON: Could we expect to have them at the reply time on Friday?
2837 MR. TRIPATHY: I think that would be very doable.
2838 THE CHAIRPERSON: All right. That's fair, because we need to have a complete record.
2839 This is your opportunity, in your own words, to tell us, in no more than five minutes, the reasons why you think the Commission should grant you this licence.
2840 MR. TRIPATHY: I am glad you put that time limit on it, because I would have gone on all day.
2841 First and foremost, we would like to thank everyone for the opportunity to speak here today. We believe the seventies and eighties soft rock format that we are offering is the most distinctive choice for the Calgary radio market in terms of minimum overlap and minimum impact on existing stations.
2842 Our target demo of 35 to 64 is currently the most under‑served group in the Calgary market.
2843 As far as the business plan, we filed a realistic business plan and revenue projections, based on the strength of the Calgary economy and the radio market.
2844 Our local sales, programming and management team have the experience here in Calgary and the business relationships that will make this station a success.
2845 The proposed Canadian content of 35 percent is realistic. It is practical for a new station, and it is targeted at an older demographic.
2846 We are committed to new and emerging artists. Our focus is on Canadian artists, and we will specifically seek to include artists from Calgary, as well as Alberta.
2847 Our Canadian Talent Development initiatives, totalling $2.1 million in direct costs over the seven‑year licence term, will contribute substantially to the promotion of Canadian artists.
2848 We are a new voice in the Calgary market. We are local, we are independent, and we will provide Calgarians with a new editorial voice and a new choice on the FM band for the 35‑64 demographic.
2849 The shareholders of Calgary Independent Radio Broadcasters Incorporated are longtime residents of Calgary. We have been involved in broadcasting, and we live here in this community.
2850 STAR FM will include and reflect the aboriginal and the ethnic diversity of Calgary in its programming, in its staffing, and in its management.
2851 We believe that granting an FM licence to our group would meet the objectives of the Broadcasting Act and the Radio Policy of 1998, which are: diversity of voice, fair competition, and diversity of formats.
2852 At the end of the day, Mr. Chairman and Commissioners, you have been presented a unique opportunity, and we believe that you are in an enviable position to take a look at an application that is, one, local, two, independent, and three, backed by an incredible amount of broadcast experience.
2853 We have looked at the other applications from B.C., from the groups in Saskatchewan, from Manitoba, from Ontario and the Maritimes. They are terrific applications, but, at the end of the day, what we want to emphasize to the Commission is, there is only one application here in Calgary, which is by Calgarians and for Calgarians.
2854 We thank you for your time.
2855 THE CHAIRPERSON: Thank you very much, Mr. Tripathy. We thank your group.
2856 We will recess for five minutes to allow the members of the next Applicant to take their places.
‑‑‑ Upon recessing at 1100 /
Suspension à 1100
‑‑‑ Upon resuming at 1110
Reprise à 1110
2857 THE CHAIRPERSON: Order, please.
2858 Madam Secretary.
2859 MS BOULET: Thank you, Mr. Chairman.
2860 We will now proceed with Item 6 on the agenda, which is an application by Jim Pattison Broadcast Group Limited, the general partner, and Jim Pattison Industries Limited, the limited partner, carrying on business as Jim Pattison Broadcast Group Limited Partnership, for a licence to operate an English‑language FM commercial radio programming undertaking in Calgary.
2861 The new station would operate on Frequency 90.3 Mhz, Channel 212‑C1, with an effective radiated power of 100,000 watts, non‑directional antenna, antenna height of 298.5 metres.
2862 Appearing for the Applicant is Mr. Rick Arnish, who will introduce his colleagues.
2863 He will have 20 minutes for his presentation.
2864 Mr. Arnish.
PRESENTATION / PRÉSENTATION
2865 MR. ARNISH: Thank you very much, Madam Secretary.
2866 Good morning, Mr. Chairman, Members of the Commission and Commission Staff. My name is Rick Arnish, and I am president of the Jim Pattison Broadcast Group.
2867 We are very pleased to be here with you this morning to present to you our application for a new soft vocals FM station, SILK FM, to serve the City of Calgary.
2868 Before we begin our presentation, it is my pleasure to introduce the SILK FM team.
2869 To my immediate right, and to your left, is Gerry Siemens, Vice President and General Manager of the Pattison Broadcast Group's Vancouver stations. Gerry is a native Calgarian, has been in the broadcast industry for 32 years, and was the program director for two Calgary radio stations in the nineties.
2870 His family still calls Calgary home, and he quarterbacked the development of our application.
2871 Beside Gerry is Jasmin Doobay, currently a news director within the Pattison Group, who will speak to the news, current events and arts section of our application.
2872 Jasmin has been in the broadcast industry for 14 years, and has worked as a broadcast journalist in western Canada for 12 years, the last 3 of which have been with the Pattison Broadcast Group.
2873 To my left, and to your right, is Angela Kelman, a former member of the Juno Award‑winning Canadian country music group Farmer's Daughter. Angela released a solo smooth vocal CD of pop standards a couple of years ago, has recorded a children's album, and is a professional music teacher.
2874 Beside Angela is Kat Stewart, Broadcast Group head at the B.C. Institute of Technology in Vancouver, and a graduate of the Canadian Women in Communications Radio Career Accelerator Program.
2875 In the second row, beginning at your far right, is Bruce Davis, Vice President of Sales for the Pattison Broadcast Group. Bruce is a 38‑year veteran of the broadcast industry, and has spent most of his career in Alberta, including Edmonton and Calgary.
2876 Beside Bruce is Kim McKechnie, currently a sales manager within the Pattison Group. Kim also works with the Pattison real estate division, on a part‑time basis, in land development negotiations with government, and is familiar with the Calgary market.
2877 To Kim's right is Chris Weafer, legal counsel from Owen Bird.
2878 Beside Chris is John Yerxa, President of John Yerxa Research Inc. from Edmonton.
2879 Beside John is Frank Lee, a secondary school music teacher.
2880 Completing our seated panel is Bill Dinicol, Vice President of Finance of the Pattison Broadcast Group.
2881 Standing to my right, and to give you a small taste of the Canadian talent that is being developed at the high school level, are four Grade 12 students ‑‑ Corey Hollett, Noel Hollett, David McHugh, and James Turner ‑‑ who call themselves "Synergy".
‑‑‑ MUSICAL PRESENTATION / PRÉSENTATION MUSICALE
2882 Mr. Chairman, we are now ready to begin our presentation.
2883 THE CHAIRPERSON: Thank you very much. I think that was the resurrection of the barbershop quartet.
‑‑‑ Laughter / Rires
2884 THE CHAIRPERSON: It is very good to see young people singing a cappella. I appreciate it very much.
2885 MR. ARNISH: Thank you very much, Mr. Chairman. That was truly an outstanding presentation, and Seacove Secondary in North Vancouver would be very proud of "Synergy" this morning here in Calgary.
2886 As you just said, Mr. Chairman, it is another example of Canadian talent developing in our high school systems in western Canada.
2887 We will talk more about "Synergy" and the Save the Music Foundation later in our presentation.
2888 Mr. Chairman, Commission Members, the application we have before you is very important, and it is a very important application for the Jim Pattison Broadcast Group.
2889 Approving the Pattison Broadcast Group application would add significant strength to one of the very few longstanding, western‑based, multi‑station broadcasting companies.
2890 It would allow us to strengthen connections with our existing stations in Alberta by extending our regional coverage, which is important to our news gathering and reporting structure throughout the province.
2891 It would also be our first major market station in Alberta, which would create opportunities for our employees to experience both major markets and small markets while remaining in Alberta.
2892 As the Commission is aware, we have invested heavily in smaller markets, but need the large market presence to ensure our overall stable competitive position.
2893 Licensing the Pattison Broadcast Group would also add a strongly needed western‑Canadian‑based independent voice to the Calgary market, a market that is unique to Canadian broadcasting, in that 11 of the 13 commercial stations are eastern based, and 10 of those are owned by only 3 companies, all based out of Toronto.
2894 We believe, consistent with Commission criteria, that a new station for Calgary must:
2895 One, provide a new format choice which adds diversity in the market.
2896 Two, have strong Canadian Talent Development initiatives and other tangible benefits that contribute to the Canadian broadcast system.
2897 Three, be based on a solid but realistic business plan, and have the financial resources of a strong owner to ensure that commitments are met over a seven‑year licence term.
2898 Four, have minimal impact on the existing players.
2899 Five, be of benefit to the local community.
2900 The Pattison application addresses all of those points, the highlights of which we will discuss today.
2901 The soft vocals format we have chosen would be unique in the Calgary market, and would serve an audience that is currently not serviced by existing broadcasters.
2902 To speak on the feel and flavour of the new SILK FM, here is Gerry Siemens.
2903 MR. SIEMENS: In studying the market, we determined that nearly half of the population in Calgary is between the ages of 35 and 64, and that fully 38 percent of the people in Calgary are over the age of 45, yet none of the existing Calgary FM stations focus on this ever‑increasing segment of the population.
2904 We confirmed that fully one‑third of Calgarians between the ages of 35 and 64 said they would listen to an oldies‑based, soft vocals station a lot, and that nearly 70 percent of that same demographic said they would give such a station consideration.
2905 The soft vocals format of today has evolved from what was known as "middle of the road" in the sixties and seventies. Our station will be music intensive, and will highlight music that is currently not being exposed on any station in the Calgary marketplace.
2906 The station will be targeted to the 35 to 64‑year‑old demographic, primarily those who are 45‑plus.
2907 SILK FM will highlight new Canadian music that has no other home in the Calgary marketplace. A minimum of 25 percent of the Canadian music we play will be newer Canadian music.
2908 The Pattison Broadcast Group is intimately familiar with the soft vocals format through our experience with 600 AM Vancouver, and we know that there is an ever‑growing list of Canadian artists which we have contributed to developing.
2909 To name a few, Megan Fanning, Armi Grano, Susan Arioli, Carol Welsman, Holly Cole, Tammy Weiss, Doug Lallo, Tina Moore, our friend Angela Kelman, and many others.
2910 We are encouraged to see young talent such as "Synergy", who you just heard, and look forward to adding them to our playlist.
2911 SILK FM will be an oasis of tasteful music, diverse in sound, with low repetition.
2912 It will have enough familiarity to attract and hold listeners, and enough new music to entice them to listen longer.
2913 We plan to further enhance the sound of the station through special long‑form spoken word programs, on topics of interest to the demographic, as described in our application, as well as short‑form features, such as "The Flavours of Calgary" and the SILK FM "Travel Diary".
2914 News, current events and coverage of the arts will also be central to the success of our proposed station.
2915 To comment on those components is Jasmin Doobay.
2916 MS DOOBAY: An older demographic has a greater need to know than a younger one, and SILK FM will respond with a minimum of 5 hours and 13 minutes of news per week. This will set us apart from the existing FM stations in the Calgary market, where only one station has any news after the breakfast program, and where news content is virtually non‑existent on weekends.
2917 Our newsroom will be staffed seven days a week, and newscasts will be spread evenly throughout the broadcast day.
2918 Our station will provide a new editorial and news programming voice into the Calgary market, where so many voices are controlled by so few owners.
2919 The news coverage on our station will go beyond headlines. Each day we will produce, in‑house, a 30‑minute current events program called "In Touch", which will allow us to probe deeper into stories that affect the lives of Calgarians.
2920 The best stories of the week will be expanded upon for our longer Sunday morning program, "The In Touch Weekend Edition".
2921 The 35‑64 demographic is a huge supporter of the arts, and SILK FM will have, as an integral part of our schedule, much needed coverage of arts and culture in the City of Calgary.
2922 "On the Street" is an entertainment billboard airing four times a day.
2923 "Arts and Stuff", an arts feature, will also broadcast four times a day, will highlight concert information, gallery and theatre openings, and other cultural events of interest in the community.
2924 Our arts coverage will culminate with the Sunday morning program "Into the Arts". This 60‑minute magazine program will preview the upcoming week's performances, visual and literary arts events, using on‑location interviews and coverage.
2925 MR. ARNISH: The Pattison Broadcast Group is very proud of the $7 million in CTD initiatives and tangible benefits that we have developed in support of our Calgary application.
2926 Of that amount, we have dedicated $5.6 million for Canadian Talent Development initiatives, including $3.5 million for the Save the Music Foundation.
2927 This initiative is designed to enhance and complement existing high school and secondary music education programs in Alberta and British Columbia to assist in the development of excellence.
2928 It is a unique initiative, specifically designed for western Canada, and its role will be to help identify, fund and develop the best of the best.
2929 We believe that to develop Canadian talent we must, as broadcasters, expand beyond only assisting professional and semi‑professional musicians.
2930 Many of those programs are already in place and are having a positive effect on the broadcasting and music industries.
2931 We have been active, long‑term supporters of FACTOR and similar initiatives, and will continue to be.
2932 The Save the Music initiative is based on a firmly held belief that development of Canadian talent must begin with our youth.
2933 Earlier you heard "Synergy". I am sure you will agree that, for four 17‑year‑old young adults, they have an extraordinary skill.
2934 This year they will graduate from high school. Where is the vehicle to assist them to the next level?
2935 If they were hockey players, they would move to a junior league and prepare for a possible professional career at an increased level of play.
2936 The Save the Music Foundation will be in a position to assist groups like "Synergy" with funding, mentoring, equipment purchases, and travel costs.
2937 The members of "Synergy" come from a high school with a very good music program, yet, as Mr. Lee of our panel can attest, a great deal of their time, and that of their teacher and families, is spent fundraising.
2938 The Save the Music Foundation will enable hundreds of young adults to work on their music and on their other studies, secure in the knowledge that there is a solid floor of support beneath their feet.
2939 By joining forces with the Rocky Mountain Music Festival, we have been able to access instant expertise and an established network of musical educators that has taken festival organizer Willie Connell a lifetime to build. Mr. Connell will be here to speak to you later this week.
2940 I would now ask Angela Kelman to give her perspective on the Save the Music initiative.
2941 MS KELMAN: I am here today to support the Pattison Broadcast Group for a couple of reasons.
2942 One, I am a recording artist who will potentially benefit from the station format that is being applied for today.
2943 Two, I am the product of a healthy music program in the public school system that recognized my level of talent, provided a vehicle to develop my skills, and gave me the confidence to follow my dream of having a career as a recording artist and entertainer.
2944 In my teens I had the great fortune to start a high school band that was very different from the norm. The band was the vision of a highly motivated teacher, Mr. Gerry Perkin, who donated his own time and resources. This man changed my life.
2945 By recognizing my talent and helping to develop real‑life experiences of working singers and musicians, such as live concerts at our own high school, as well as other schools around the province, our own television show at the local TV station, and setting foot in a recording studio to record our first record, I was started on the career path I follow today.
2946 I feel it is my responsibility to help guide the next generation of singers and musicians who will represent Canada on the world stage.
2947 The Pattison Broadcast Group's Save the Music program will concentrate on and foster the strengths of kids who have what it takes, ensuring that Canada has future generations of artists to be proud of.
2948 MR. ARNISH: In addition to the Save the Music Foundation, the Pattison Broadcast Group has committed funding, and additional $2.1 million, in Canadian talent initiatives.
2949 We need an early and regular supply of Canadian content recordings. Local artists can always use a leg up, so SILK FM has committed $1.19 million in direct spending and $1.75 million in indirect value to the recording of two CD compilations annually for seven years.
2950 A free concert will be held in Calgary, showcasing the artists, and broadcast as part of our regular feature "Somewhere Live".
2951 The second initiative, SILK Series ‑ Road Version, will see the station fund a series of concerts featuring Canadian artists, with a special emphasis on profiling local musicians. We will provide $50,000 to Canadian musicians annually for this project.
2952 Finally, the Pattison Broadcast Group pledges annual support of $30,000 to the Calgary Philharmonic Orchestra, and $50,000 to the Alberta Recording Industry Association.
2953 MR. SIEMENS: As proud as we are of our Canadian talent initiatives, we believe that broadcasters can and should also contribute by getting involved in other areas of the industry. That is why we have proposed $1.4 million in other tangible benefits.
2954 That figure includes a $700,000 commitment to Canadian Women in Communications, half of which will be used to save the Radio Career Accelerator Program for women, and half of which will be earmarked to launch a new career accelerator program designed to assist the careers of visible minorities, aboriginal persons and persons with disabilities.
2955 We are pleased to have with us the broadcast program head from the B.C. Institute of Technology, Ms Kat Stewart. Kat has experienced the Career Accelerator program firsthand and would be pleased to answer any questions you have on the benefits of the program.
2956 MS STEWART: Completing the CWC's career accelerator program for radio left me empowered, revitalized and energized. It enhanced my knowledge of the radio industry and broadened my ability to network with key industry representatives across Canada.
2957 The program provided an ability to utilize the guest speakers as resources for my professional enhancement, to expand my course content, and provided information on key technological changes and insight into future possibilities.
2958 The course also introduced motivational techniques to inspire personal growth and facilitate opportunities to enhance my mentorship abilities for students.
2959 As a broadcaster, my philosophy in the classroom is to encourage, excite and motivate students to pursue excellence in radio. That commitment challenges me to pursue knowledge and apply it to my personal and professional development.
2960 The CWC radio accelerator program is out of funding, and I am worried that it will soon die, which would be a great loss for all women in the Canadian broadcast industry.
2961 MR. SIEMENS: We have also pledged $700,000 to two other important initiatives: one, a strategic alliance with the Alberta Métis Association and the Alberta College of Art and Design, which will see the development of two continuing adult education programs; and two, the second commitment, the development of a new program called Broadcast Leadership Bootcamp at SAIT.
2962 The camp will be to better prepare persons employed in the broadcast industry for management opportunities.
2963 Our employment equity initiatives are designed to be of benefit and to lower entry barriers in the broadcast industry for the four designated groups, or to encourage career acceleration of the four groups for those that are already in the industry.
2964 Finally, the Pattison Broadcast Group undertakes, at a minimum, that 50 percent of the new hires for our startup operation will be representatives of the four designated groups.
2965 MR. ARNISH: Mr. Chairman, you have a large number of applicants before you for these important Calgary frequencies. We are all making promises about our contributions to the community, to Canadian talent and to the system, but to deliver on these contributions there must be a business case.
2966 The Pattison Broadcast Group has a long history of running specialized formats in our Vancouver operation, where we have operated our FM station in a country format for 20 years.
2967 Our AM station has been in a niche format for 13 years, the last 8 of which have been in a soft vocals format, very similar to what we are proposing for Calgary.
2968 We know how to successfully operate a specialized format competitively in a major market.
2969 We know that we must be patient. As a new station appealing to the upper end of a key demographic, it takes time to find its feet.
2970 We know that this format will work, given time. We are committed to making it work.
2971 We are confident in our ability to meet the ambitious commitments that we have made. We have a solid and attainable business plan, and we have the resources of the Pattison Group of Companies behind us.
2972 The Broadcast Group is at the very cornerstone of that group of companies, and we are in the broadcast industry for the long haul.
2973 In every business that the Pattison Group goes into, it does so on the premise that the business is multi‑generational, and our commitments in this Calgary process go beyond any given licence term.
2974 Mr. Chairman, we believe that the fact that we are a western‑based broadcast group is a critical component of our application.
2975 Consolidation of ownership has indeed strengthened the Canadian broadcast system, but it has also reduced the diversity of editorial voices and created an imbalance, where almost every newspaper, radio and television station is controlled by eastern ownership.
2976 That situation is exacerbated in Calgary, where 10 of the 13 commercial radio stations are controlled by 3 companies, and where 11 of the 13 have ownership in eastern Canada.
2977 As a regional player, we have experience in competing against the major eastern Canadian radio players in Vancouver. We are in the business for the long haul and have the resources to successfully compete in the Calgary market, with a format that will not impact on the existing radio stations.
2978 None of these companies has intervened against our application, recognizing that there will be no material harm caused by the addition of our station.
2979 Mr. Chairman, the Pattison Broadcast Group keeps its promises and serves its communities. We have a core belief that the more we serve our community, the more successful we will be.
2980 In the acquisition of Monarch Broadcasting in 2001, we committed over $1 million to build a state‑of‑the‑art media arts centre for young students at Pacific Academy in Surrey, British Columbia.
2981 That outstanding facility was open to students in September of 2005.
2982 In 2005 our radio and TV stations gave back $10.3 million in PSA and community service time to the towns and cities we work in.
2983 We operate excellent radio stations. New Country 93.7 JRFM has been named Canada's country music station of the year by "Canada Music Week" two years in a row, and is nominated for a third.
2984 Our group has received a number of CAB Gold Ribbon Awards, RTNDA Awards, along with many others in recent years.
2985 Recognition for this commitment was accorded Mr. Pattison, when he was awarded the Canadian Association of Broadcasters' most prestigious award, the Gold Ribbon for Broadcast Excellence.
2986 The Pattison Broadcast Group is poised for growth and is committed to continued investment in the broadcast industry, with an application pending for the purchase of Island Radio and two other applications pending for new FM stations.
2987 However, the Pattison Broadcast Group is also facing challenges in the markets we serve.
2988 In 2005, our primary competitor in Kamloops was granted a third radio licence.
2989 There are many FM applications pending in three other markets that we are licensed to serve: Grand Prairie, Medicine Hat and Lethbridge.
2990 There can be little doubt that our operations in these smaller markets are going to be challenged in the coming years, which makes our application for Calgary all the more critical to our ability to service our communities at the high level that our audience and the Commission have come to expect.
2991 As our second major market, Calgary would strengthen a growing, western‑based Canadian broadcast company.
2992 In conclusion, Members of the Commission, we have a unique format designed for an audience that is being under‑served. We have a business plan that is workable, and we have the resources to compete with the major chains from eastern Canada.
2993 We have committed $7 million in tangible benefits, including $5.6 million in unique Canadian talent initiatives.
2994 Finally, we have the very original and brand new Canadian Talent Development initiative, the Save the Music Foundation, which will impact Canadian talent where it really matters, with our youth.
2995 We submit that we will provide significant benefits to the community of Calgary.
2996 Thank you for your kind consideration. We welcome your questions.
2997 THE CHAIRPERSON: Thank you, Mr. Arnish.
2998 My questions will relate to: audience clarifications, particularly regarding your demographic; establishing the differences and the similarities between the Pattison application and the competing applications; music format clarification; CTD; your projected revenues; and some questions on alternative frequencies.
2999 I will start with my first line of questions, which have to do with your target audience.
3000 In your application you have identified the 35‑64 demographic as your target audience. In your supplementary brief, on page 14, you state that the core target audience will be the 45‑plus age group. Again, this morning in your oral presentation you mentioned that.
3001 Could you confirm to the Commission whether your core target audience is indeed 45‑plus?
3002 I think you said so in your oral presentation, but I would like you to confirm that for the record.
3003 MR. SIEMENS: The broad target, Mr. Chairman, is 35 to 64. The specific target will be adults 45‑plus. We could narrow it down further. If we had to be very precise, we would be targeting adults 45 to 54 years of age.
3004 THE CHAIRPERSON: Thank you.
3005 You describe your proposed music format as soft vocal music from a variety of genres, but predominantly classics from the fifties, sixties and seventies.
3006 As you are aware, there are three other applicants in this hearing, and we have already heard them ‑‑ they were the last three applicants ‑‑ that are proposing similar music services, and are also targeting a similar audience.
3007 Could you please explain how you believe your proposed format would be more successful in reaching the same target audience as the other three applicants?
3008 MR. SIEMENS: Thank you, Mr. Chairman. I will speak to that for a moment, and then I will ask John Yerxa for a comment.
3009 I think the difference between the Evenov, the Larson, and the Pattison applications comes down to this: it is primarily focus.
3010 The mainstay of our format is the soft vocal music of the sixties and the seventies.
3011 People develop a passion for the music they listen to when they are primarily between the ages of 12 and 20 years of age. That is about the age that a young person decides to move away from their parents' taste and develop tastes of their own, and it's that 12 to 20 age group where music is really, really important to young people.
3012 If we consider that to be true, a woman who turned 10 in 1965 is today 50 years of age. A woman who turned 10 in 1975 is 40 years of age. So the sixties and seventies were their formative years, and those were the years when they developed a passion for the music.
3013 The second focus of our station is new music from the last six years. We have committed that a minimum of 25 percent of Canadian music that we play will be from the last six years, and in fact it is likely to be much higher than that as a result of the hit/non‑hit rule.
3014 The third element of our station is the salt and pepper, if you will, which are the standards from the likes of Sinatra, Dean Martin, Nat King Cole, Sammy Davis Jr., and so on.
3015 It comes down, primarily, to focus. Our music mix will be approximately 60 percent from the sixties and seventies, 35 percent from the last six years, and then 5 percent from the fifties, which is the salt and pepper that I referred to.
3016 I think the other differentiating factors between Evanov, Larson and ourselves is that we have the money to hire professional communicators. With all due respect, in our opinion, it is not reasonable to hire 20‑year‑old students and expect them to communicate with a 50‑year‑old audience.
3017 An important part of our application is that we are committed to an employment equity initiative that will see 50 percent of our new hires be representative of the four designated groups.
3018 I think, in licensing a new operation, the Commission has a unique opportunity to meet employment equity initiatives, and our proposal is distinct in this regard.
3019 With regard to the format differentials between ourself and the other two applicants you mentioned, I will ask John Yerxa to speak to that.
3020 MR. YERXA: Mr. Chairman, just a clarification. Do you wish me to speak on what an oldies‑based AC radio station is, or do you wish me to specifically address the differences between Pattison and the other applicants in this realm?
3021 THE CHAIRPERSON: I would prefer that you address the second part, the differences between your application and the other applications.
3022 MR. YERXA: What I would like to do, then, is refer to a memo that I recently passed on to Mr. Arnish. I will refer to that in dealing specifically with the other three applicants before us.
3023 Upon examining the research done for the Calgary Independent Broadcasters' Application, and comparing it with Pattison, it is quite obvious that the difference is essentially one of sixties and seventies versus seventies and eighties.
3024 Whereas the Pattison format would attract a larger proportion of 45‑plus listeners by playing soft vocals from the sixties and seventies, the Calgary Independent format would encompass more 35 to 44‑year‑olds by playing more soft rock from the seventies and eighties.
3025 Even though seventies music is the common thread here, according to Pattison's research, there is a bigger, more distinct FM hole in the market for their format, simply because there are more FM stations playing eighties music in Calgary ‑‑ for example, JACK FM ‑‑ than there are FM stations playing sixties music.
3026 Regarding the Larson and Norscot application, when I look at their research findings ‑‑ and I note on page 23 of their supplementary brief that of all the music types which they presented to respondents in order to help them better define the musical composition of their radio station, of the 8 types presented, the top 2 most popular groups that emerged encompassed sixties and seventies vocals, those groups which perfectly describe the Pattison format, and which any broadcaster would be well advised to present if they wanted to create a popular, not to mention viable format for 35 to 64‑year‑olds.
3027 However, near the bottom of their interest rankings are the classic performances and classic re‑makes, those artists which they are actually heavily billboarding in their application.
3028 Therefore, if they do in fact end up emphasizing those kinds of artists, then they will certainly be offering more adult standards and nostalgia artists and classic re‑makes than Pattison is prepared to do, hence, skewing older.
3029 With regard to Evanov, they appear to be proposing an exceptionally broad format, one which someone on their panel described yesterday as all‑encompassing and all‑inclusive. It sounds a bit like a family union, but, from a programming perspective, it is pretty difficult to attract both 35‑year‑olds and 60‑year‑olds by playing the same music, unless maybe it's country.
3030 So you pretty well end up drifting in one direction or the other.
3031 Therefore, our analysis suggests that the Evanov format will probably end up skewing older than Pattison. After all, as Evanov says, I think, on page 5 of their supplementary brief, the ratio of classic to current will be weighted in favour of classic.
3032 I hope that helps.
3033 THE CHAIRPERSON: Thank you.
3034 My second question will be directed toward the incumbent radio stations. Some of them are already offering the type of music that you are proposing.
3035 Could you explain how you believe your proposed format will better serve that demographic than those stations are currently doing?
3036 MR. SIEMENS: Mr. Chairman, we did a two‑day BDS monitor of stations in the market that we thought might play some of the same music we do, and we found that there was only a 3 percent duplication with CHFM and a 6 percent duplication with what was then "The Breeze". Both of those stations have since altered their programming somewhat, and I don't think there will be any duplication whatsoever.
3037 With regard to the older demographic, you have JACK, which is predominantly a male station, targeting men 25 to 44. There is CJ, a rock station, targeting men. CKRY is a country station. It skews a little bit older, attracting an audience that is 25 to 54 years of age. The other FM station, "The Vibe", is very young, 18 to 34. There is Classic Rock, again a male station. And then there is the Christian station, which is a specialized audience.
3038 When we look at those radio stations and who we might impact, we might take a bit from CHFM, but ‑‑
3039 As a matter of fact, in the mid‑nineties I was the program director at CHFM. In fact, I was the program director on duty when we put it into its current "Light 96" format. So I am very familiar with the direction of that radio station, and we don't see any duplication of music there at all.
3040 Mr. Yerxa, perhaps you could comment further on where the audience will come from.
3041 MR. YERXA: First of all, when Pattison approached me, having launched three stations in the market already ‑‑ and we are in the market usually about every three months ‑‑ the first thing they asked was: Who should we survey?
3042 I said: You really have two options. You can go upper end or lower end.
3043 Based on our discussions, we decided to go upper end.
3044 Having said that, having focused on the 35 to 64 demographic, we then presented what we considered to be a fairly good group of music types that we knew appealed to those people, and we recognized that the four groups which were the most popular ‑‑ because, really, when you do these format finder studies, it all breaks down to popularity and availability.
3045 What we discovered was that the four most popular music types ‑‑ I believe they were classic rock, country, light rock, and eighties ‑‑ although they were the most popular, they were already perceived to be well served on the FM dial.
3046 However, the remaining four groups, although not necessarily able to stand individually on their own, when you amalgamated them into a group ‑‑ this oldies‑based soft AC concept ‑‑ you realized that there was definitely potential there, but, most importantly, upon examining each of those groups, you discovered that there really wasn't a specific radio station on the FM dial that was serving any of those decades, if you will.
3047 So that is how we came up with the concept of the oldies‑based AC format.
3048 As far as its impact on existing radio stations and the crossover, the fact is that this station will be primarily focused on music before 1980, apart from the Cancon, which is very important as far as flavouring and texture is concerned.
3049 These other radio stations, by and large, are offering different music, be it classic rock or country, or light rock, or eighties, and they are, of course, primarily playing music that is 1980s or more current.
3050 THE CHAIRPERSON: Thank you. We will move now to the music section of your application.
3051 You have proposed a music format, which you have referred to using various descriptions: soft vocals, timeless soft vocals, classic music, and soft vocals/adult standards.
3052 I would refer you to your supplementary brief. These can be found on pages 12 to 14, where you have used these different descriptions.
3053 Which of these best describes your proposed format, and could you give us the particular features of your chosen format?
3054 MR. SIEMENS: The descriptor we prefer is the soft vocals format, because of the primary focus, which I mentioned.
3055 Mr. Yerxa, I will ask you to comment again in a moment.
3056 It is because of the primary focus that I mentioned a few minutes ago, targeting that particular demographic: 35 to 64 in broad terms; 45 to 54 in very narrow terms; and the focus of the music being, fundamentally, from the sixties and seventies, when these people were developing an emotional tie with the music of the day.
3057 MR. YERXA: From a research standpoint, we have our own term. We call it oldies‑based soft AC.
3058 First, let me begin by saying, in this respect, that when you look at the 45‑plus demographic in many markets, apart from country, what is largely available today, what broadcasters tend to want to offer these listeners, are these niche formats, like adult standards, smooth jazz and so on.
3059 Many AC stations, for example ‑‑ adult contemporary stations ‑‑ in the past number of years have definitely drifted into more contemporary or ‑‑ I think you heard the term "brighter" used earlier. As a result, there now remains this whole batch of music that we no longer hear ‑‑ artists like Barbra Streisand, Simon and Garfunkle, and so on ‑‑ which, again, from a research perspective, we term "Square AC".
3060 Likewise, there are acts like James Taylor, Carole King, Linda Ronstadt, the Little River Band ‑‑ numerous other seventies‑based artists that AC radio has simply left behind.
3061 This sound currently represents a huge void in many markets across this country.
3062 If you want to spice it up with a few adult classic performers and classic re‑makes by artists like Michael Buble, that's great, but a specific focus on sixties and seventies music, over time, will help you to achieve your maximum share potential with 45 to 54‑year‑old listeners, and, therefore, have a significant influence within the 35 to 64 demographic.
3063 The reality is, once most people, like myself, turn 45, we don't, all of a sudden, start wanting to listen to the music our parents listened to, but we wouldn't mind listening to some of the music we heard 30 years ago.
3064 I would also like to add that this reality, this situation, in my view, partially explains the phenomenal success of the JACK format, and its various cousins or clones, because, when it comes right down to it, that concept is probably, musically speaking, offering a menu to those listeners that is closest to the era we are talking about.
3065 THE CHAIRPERSON: In reviewing the sample two‑day music playlist that you provided with your application, staff have observed that there could be some Category 3 music selections.
3066 Would you be broadcasting a minimum weekly amount of Category 3 music? If yes, what would be the amount?
3067 MR. SIEMENS: If there was any at all, it would be an insignificant amount. We don't have any plans to broadcast Category 3 music.
3068 If some of these titles fell into that category ‑‑
3069 THE CHAIRPERSON: They, more than likely, would be crossovers.
3070 MR. SIEMENS: I would think so.
3071 THE CHAIRPERSON: Are you planning to play any music of the fifties?
3072 MR. SIEMENS: Yes, Mr. Chairman. As I mentioned a bit earlier, that would be the flavouring ‑‑ the salt and pepper of our format, if you like.
3073 I don't anticipate that our music from the fifties would be more than 5 percent of our weekly playlist.
3074 THE CHAIRPERSON: In your sample playlist you didn't have any music from the fifties. That is why I am asking the question.
3075 The presence of eighties music, despite your description, that music will be played.
3076 You also mentioned in your oral presentation that you will be playing music from the eighties.
3077 MR. SIEMENS: Again, a very small amount.
3078 If you look at our two‑day list, you will see some stuff from the very early eighties that we feel fits the format quite well.
3079 I see "Bette Davis Eyes" from Kim Carnes, which is certainly the feel and the flavour of what we are talking about.
3080 There is also some Canadian music from David Foster and a few people like that from the eighties that we feel would fit.
3081 THE CHAIRPERSON: In the area of Canadian content, you have said that a minimum of 25 percent of your Canadian musical selections will be devoted to new Canadian music. You define new Canadian music as being in the last five years.
3082 Will this be the extent of the contemporary music on your station, or will you also draw from recent non‑Canadian music selections?
3083 MR. SIEMENS: We found that there is an exciting and growing list of artists that are recording music that is format compatible. We could identify the Canadian ones, if you like. It is a growing list, and we have been a part of establishing that list with our station in Vancouver.
3084 But, yes, there are also artists like Carly Simon, of course Rod Stewart is very famous for his last four albums, Linda Ronstadt, and a growing list of contemporary artists who are not Canadian who are recording this type of music, and they, too, will help to flavour our radio station.
3085 THE CHAIRPERSON: Given your proposed format, and your reliance on it, as set out in your sample playlist, what challenges do you envision in complying with the condition of licence to broadcast a maximum weekly hit level of 49 percent?
3086 MR. SIEMENS: That is a very good question, Mr. Chairman, because it is a challenge.
3087 The list that we supplied does fit hit/non‑hit compliance, but we found that to be a good mental exercise, and I think it was a good exercise to make us very aware of the challenges we will have.
3088 But that is also an opportunity to play some new Canadian music from, what is now, since we wrote the application, the last six years ‑‑ from 2000 to today ‑‑ with all of the artists that have been mentioned by some of the other applicants, which include Armi Grano, Angela Kelman, Michael Buble, Tammy Weiss, Denzel Sinclaire ‑‑ the list goes on and on.
3089 It is an opportunity for us to play that new Canadian music, and some of the Rod Stewart that we talked about a moment ago. That way we can make up our non‑hit component.
3090 There are also a fair amount of albums from the sixties and seventies. One of the best‑selling albums of all time, Carole King's "Tapestry", only has two or three hits on it, and yet every person in this room, I am sure, could sing along with every track on that album.
3091 So you have an opportunity with albums like that, and there others ‑‑ Fleetwood Mac's "Rumours", some early Beatles stuff that is very soft and fits the format. It is very popular, everyone knows it, but it's not a hit.
3092 So that will help make up our non‑hit component as well.
3093 THE CHAIRPERSON: I know that you are already broadcasting this format on your AM station in Vancouver, where you don't have the challenge of the hit to non‑hit ratio.
3094 What kind of mechanism are you contemplating putting in place in Calgary to make sure that you will not exceed the maximum level of 49 percent?
3095 MR. SIEMENS: I would like to make one point, Mr. Chairman. Certainly there are similarities between 600 AM and what we are proposing here in Calgary on SILK FM, but, in reality, 600 AM was launched as an adult standards radio station, and while we are in the process of turning the format slightly, it still is an adult standards radio station. It is distinctly older and different from what we are talking about with the new SILK FM.
3096 If I might comment, what Vancouver has taught us is how to deal with, develop and create a mature and older audience.
3097 It has also allowed us to be very familiar with and to assist in the development of Canadian talent.
3098 600 AM was the very first station in Canada to play Michael Buble. If he were here, he would tell you that very thing. We broke his career, and he has thanked us any number of times, any number of ways for the increased awareness that we made of his music. The same is true of a bunch of other artists, as well.
3099 This list of Canadian artists is growing, and I think that 600 AM has been a very big part of that. So, for that, we are grateful.
3100 With regard to monitoring the hit/non‑hit ratio, that is a matter of coding. When the music is input into the computer system, the music director knows what was a hit, what wasn't a hit, and he has but to program the computer to say that we will have no more than 49 percent hits, and we will stick with that.
3101 THE CHAIRPERSON: We will now move to local programming and spoken word.
3102 Your programming in this area is reflective of programs targeted to a more mature audience. Given the particular interests of these listeners, what role will spoken word programming play?
3103 MR. SIEMENS: As I said just a moment ago ‑‑ and I will ask Jasmin Doobay to comment in a moment ‑‑ while the station in Vancouver is distinctly different from this, it has taught us what is important to a more mature audience, what type of spoken word elements they enjoy and what is important to them.
3104 That has had a definite impact on the type of spoken word programming we have put forward.
3105 MS DOOBAY: To go into a little more detail on our spoken word, we understand that this demographic needs to know about health issues, as we are getting older.
3106 They have children, of course, and they need to worry about their health issues, but there is also an older generation of parents which is also dealing with health issues.
3107 Money, of course, is very important to this age demographic. Is the mortgage rate going up? Am I going to be in trouble financially?
3108 We want to know about our homes. This is a very hot market for people moving in, and growing. Am I going to buy? Am I going to sell?
3109 We want to know about gardening, how to take care of our homes, and we want to make sure they are beautiful.
3110 We love arts and culture as we are heading into this age, as well. There is perhaps a little more disposable income, and, of course, a bit more time on our hands, as our children are older and moving out. So we can take advantage of what this city has to offer, and there is a lot of arts and culture here.
3111 Plus theatre and travel and food, as well. All of those are very important to our demographic, and I think we very specifically target that with our spoken word.
3112 News is also very beneficial and very important to this age group. We have made a commitment to run news full days, seven days a week, and have a very substantial newsroom that can cover all of the arts and news components.
3113 We have an "In Touch" feature, which is a 30‑minute news magazine that will run daily. If we were to take a look at what is happening in the world today, the top news story right now is that two Canadians have been killed in Mexico. How do we bring that back to Calgary? We are about three weeks away from spring break, and there are a lot of people heading down to Mexico, wondering if they are going to be safe.
3114 I love the immediacy of radio. We could, in that half‑hour news magazine program, get that information to air, and perhaps calm a lot of people down who are heading away for the holidays.
3115 What we do with the "In Touch" news magazine, Monday through Friday, will culminate in the best of news stories being put together in a Sunday magazine format, which will be one‑hour long, again highlighting the best of what Calgarians really want to know about that happened in the week in Calgary, and what is pertinent to their lives.
3116 We also get to focus on arts and stuff, billboarding what is happening with 90‑second features, and focusing on interviews with directors, with performers, getting a real feel for what is happening out in the arts community, and perhaps creating more excitement and developing more of an audience for arts and theatre and culture in this community. It could help gather a greater audience from this particular market that isn't currently being marketed to.
3117 "On the Street" will focus on what is happening and when and where they should be going.
3118 We have a travel diary, of course. As has been mentioned, we are heading into spring break and people will want to go away.
3119 "Flavours of Calgary" ‑‑ wow, there is so much of an ethnic mix in this community. I love eating here. It is just amazing.
3120 As I mentioned, gardening, home improvement, art focus, and money focus, as well.
3121 MR. ARNISH: Mr. Chairman, if I could add to that ‑‑
3122 THE CHAIRPERSON: You can add, but I think you have already covered everything.
‑‑‑ Laughter / Rires
3123 I was saying to myself, when you ask the question, you should be ready to have more than a preamble.
3124 MR. ARNISH: I will let you in on a little secret. We are in front of Jimmy Pattison four times a year, and we have to be well prepared for those meetings.
3125 There is a quick point that I want to add to the discussion. When we did our market research here in Calgary, the hole was clear for this 45 to 54‑year‑old audience ‑‑ for a radio station to come into the marketplace to fill the void.
3126 We took that information ‑‑ and it stated in the information that we received from John Yerxa Research that fully 21 percent of the adults polled in the demographic that we are after stated that an FM radio station that made a mix of soft vocals from the sixties and seventies, with a bit of a blend from the fifties, would be the station they would listen to the most, while an impressive 32 percent of the people in the same demographic stated that an FM station playing that type of music would in fact be their second choice.
3127 The reason I put that on the record this morning is that we then took that information and we looked at the spoken word and said: Okay, what are the spoken word components that are going to work well and complement our music format that is going to work with this audience of 45 to 54 years of age.
3128 THE CHAIRPERSON: Thank you.
3129 You indicated that you will be devoting 14 hours and 30 minutes per week to spoken word programming, which is broken down into news, current affairs and ‑‑ we have just reviewed what it will be about.
3130 What about the non‑scripted contents, such as announcer talk and banter?
3131 Could you confirm to us what your estimated weekly total amount of spoken word programming over and above that 14 hours and 30 minutes will be?
3132 MS DOOBAY: Yes. We have a commitment to five hours and 13 minutes of news per week. That does not include interstitial or surveillance information whatsoever.
3133 Our total of the 14 hours and 30 minutes is approximately 11.5 percent of the broadcast week. When we add in what we consider to be a very low three minutes per hour of interstitial and surveillance information, we add an additional 6 hours of information packaging, news and spoken word, with news people being included as providing part of that information.
3134 THE CHAIRPERSON: In reading the deficiency materials and a reply that you sent, particularly regarding Question No. 4, I noticed that you said that the Pattison Broadcasting Group has vast experience in open line, and I know that you are planning to have an open line program. To that end, you have developed guidelines.
3135 Have these guidelines been filed with the Commission?
3136 MR. SIEMENS: No, Mr. Chairman.
3137 THE CHAIRPERSON: If not, could you provide us with those guidelines?
3138 MR. SIEMENS: Absolutely. When would you like them?
3139 THE CHAIRPERSON: When could we expect to receive them?
3140 MR. ARNISH: The middle of next week, as soon as we get back home.
3141 THE CHAIRPERSON: All right. That will be fine. Thank you. We will take that as a commitment.
3142 Included in your programming plans is a reference to some non‑locally produced syndicated music programming. Could you tell us the weekly level of station‑produced programming that would be broadcast at your proposed FM station?
3143 MR. SIEMENS: Could I ask you to rephrase the question?
3144 THE CHAIRPERSON: When we read your application, we noticed that there was a reference to syndicated programming. I am not asking you how much of it is syndicated programming, but how much is local content.
3145 MR. SIEMENS: In our broadcast schedule, which was filed as part of our application, the only program that I would identify as syndicated is "The Sounds of Sinatra", which runs for two hours on Sunday evening. Everything else is local.
3146 THE CHAIRPERSON: So you are not planning to have a programming exchange with your Vancouver station?
3147 MR. SIEMENS: There is a program that we do in Vancouver, the "Fred and Jerry's Home Improvement" show, which airs on Saturday mornings, eight o'clock in Vancouver, and it would be nine o'clock in the morning here. That is the only program we would bring from Vancouver, which would be via satellite.
3148 THE CHAIRPERSON: That would be live out of Vancouver.
3149 MR. SIEMENS: Yes.
3150 THE CHAIRPERSON: In your application you have projected your total programming expenses to be $1,034,000 in Year 1, increasing to $1,235,000 in Year 7.
3151 How much of that money is projected to be for your proposed spoken word programming?
3152 MS DOOBAY: I'm sorry, could you repeat the question?
3153 THE CHAIRPERSON: In your application ‑‑ let me start with this. The answer will be sufficient if we use Year 1.
3154 You have projected $1,034,000 in programming expenses. My question is, how much of that money is projected to be for your proposed spoken word programming?
3155 MR. SIEMENS: I don't know that we have broken down the budget in the manner that you are speaking to, but the spoken word programming that we are going to undertake, such as the daily public affairs program "In Touch" ‑‑ current events program is perhaps a better way to describe it. That will be produced by our newsroom, so that would be part of the budget.
3156 The other spoken word programming, "Gardening with Harrington Telford", would not have much of a budget. We haven't come to negotiations with Mr. Telford yet, but I don't imagine that would be an expensive item.
3157 I just don't know that the spoken word programming will impact our budget directly.
3158 THE CHAIRPERSON: How much of that would be for staff producing this programming?
3159 Obviously, you haven't done the breakdown, so you won't know how much will be staff versus programming that will be contracted out, or whatever.
3160 MS DOOBAY: I know that, as far as staff in the newsroom goes, we are committed to four and a half staff people, and that will cover a large component of our spoken word production, the way that we have broken down the week and who is responsible for what.
3161 THE CHAIRPERSON: How many programming staff have you envisioned?
3162 MR. SIEMENS: Mr. Chairman, the programming staff consists of five employees in the newsroom: a news director and morning reader is one person, two full‑time news persons, a full‑time arts co‑ordinator, and a part‑time weekend person.
3163 The programming staff would be a program director, two morning show hosts, two full‑time announcers, three part‑time announcers, two writers and one producer.
3164 THE CHAIRPERSON: Are you planning to have any voice‑tracking periods, or will it all be live‑to‑air, except for the syndicated hour and the programming coming from Vancouver?
3165 MR. SIEMENS: We are committed ‑‑ and I believe that we referred to this in our supplementary brief ‑‑ that we will not voice‑track during the normal broadcast week.
3166 THE CHAIRPERSON: How does that compare with your other Alberta radio stations?
3167 MR. ARNISH: We pride ourselves in the Pattison Broadcast Group to try and have as many hours of local programming as we can possibly achieve through our business plans. That is not to say, in some of our smaller markets, that we don't do voice‑tracking.
3168 Let me say to you, Mr. Chairman, that one of the things we really pride ourselves on in our group is the independence of the various radio stations in the markets that we are licensed to serve.
3169 We certainly give full autonomy. We have our policies, like every other company, but we give full autonomy to the management teams of our various radio divisions or television stations to run their plants properly and within all of the configurations and confines of the licence, and the marketplace as well.
3170 The one thing that we have not done is gotten into a networking of voice‑tracking various radio stations.
3171 In response to your question about what do we do in Alberta, if we were granted a licence here in Calgary, certainly the station in Calgary, SILK FM, would have the most hours of live local programming per day, seven days a week.
3172 Having said that, in stations in Red Deer and Medicine Hat, for example, we certainly air programming live into the evening, until about ten o'clock at night, in some cases, as well. And certainly live programming on the weekend, as well, throughout the day.
3173 So we do a lot of live local programming. We try not to use voice‑tracking, unless there is an absolute necessity to do it.
3174 THE CHAIRPERSON: We know that you already have 10 radio stations in Alberta, and 1 television station. Obviously, you have the potential of 11 newsrooms in all of those locations.
3175 Are you contemplating synergies between those newsrooms and the one you would have in Calgary?
3176 MR. ARNISH: Yes.
3177 From our smallest stations in Drayton Valley and Rocky Mountain House, to all of the other stations that we currently have licensed in Alberta, and to perhaps having a new station in Calgary, we have certainly talked about this, how we could have synergies between all of the stations.
3178 I would ask Jasmin Doobay to give you her overview of that and how it would work.
3179 We are very proud of what we propose to do.
3180 MS DOOBAY: We have an opportunity in western Canada to allow our voice to be heard more clearly across the country through the information that is produced by the Pattison Broadcast stations from our news departments.
3181 We have 11 radio stations and 1 TV station in B.C., and 9 radio stations and 1 TV station in Alberta, and I have had an opportunity to talk to the media market stations in Red Deer, Grand Prairie, Lethbridge and Medicine Hat, to ask how much they are currently sharing information, and whether there was an interest in being granted a Calgary licence.
3182 To give you a bit of a breakdown of how our newsroom producers ‑‑ there are little newsrooms all around the world, and we will do an interview, if there is a crisis situation ‑‑ perhaps a five‑minute interview, which would create three news stories.
3183 We can share that information across the country, but it depends on the editor on the other side whether it is picked up.
3184 Broadcast News, particularly on a weekend ‑‑ we don't even have a Vancouver voice in British Columbia any more, and we have lost our core Corus newswire service as well. So the only way that we can share is by e‑mail.
3185 Fortunately, we have this fabulous technology now to be able to e‑mail MP3s of audio and scripted stories and share between the stations, and also get clarification.
3186 From my experience in British Columbia ‑‑ you probably are familiar with the Okanagan Mountain Park fire. We had 234 homes burned out, and that story went internationally. Our little newsroom of five people in Kelowna was inundated with people wanting information, and we were able to clarify, to share, and to get that information out very quickly to our stations within the Pattison Group, and of course nationally as well.
3187 We are excited about the possibility of sharing information. We use the term "networking", not technologically, but networking as in we all know each other and we all want to build those relationships.
3188 So rather than having to send our story back to Toronto on a weekend, for example, when there are only 10 stories on their news summary, which are very eastern focused, we have an opportunity to create a western‑focused voice here, and we are really excited about that.
3189 THE CHAIRPERSON: We will now move to your CTD commitment.
3190 First, I would like to discuss with you your proposal to fund $3.5 million to Save the Music Foundation.
3191 As described in your application, in addition to the purchase of instruments, funds may also be directed to mentoring programs for music educators, mentoring programs for students with established Canadian musicians, creating opportunities for students to travel to music events and competitions, bursaries and scholarships for music programs.
3192 Does the music foundation already exist, or will it be a totally new initiative?
3193 MR. ARNISH: Thank you very much for that question.
3194 We are broadcasters, so we are always excited each and every day. You talk to a lot of people who say, "Oh, I have to go to work today," but, with broadcasting, every day is the same, but every day is different, because we are in the broadcasting industry and it is entertainment. We have fun and we do lots of great things.
3195 The reason I prefaced my remarks in response to your question, Mr. Chairman, is because the Save the Music Foundation is, in our opinion, a wonderful new initiative for the youth of Canada on a going forward basis.
3196 It is funny how seeds of time are planted and seeds of ideas are planted when you look at new initiatives, particularly the one we are talking about today.
3197 When we were looking at putting our Calgary application together, well over a year ago, amongst the team that is before you this morning, we were trying to come up with a new idea. There have been lots of great ideas over the years, some of them have worked, some of them haven't.
3198 I am a tuba player, believe it or not. I have played in a world‑renowned band out of Kamloops called "The Kamloops Rube Band", not "Rude" band, and we have played all over the world.
3199 I started music in high school back in the sixties as a tuba player. I wanted to be a singer, but I am not like the young fellows over here, "Synergy".
3200 My music teacher said, "You can't even play the trumpet, so I am going to put you on the tuba."
3201 So I have been a tuba player all my life, and I am proud of it. It's the backbone of the band.
3202 One day, last February or March, I was talking to Mr. Weafer, and I said, "How is my tuba buddy doing?"
3203 He has two sons that go to school in North Vancouver, one is a saxophone player and one is a tuba player.
3204 He said, "They are doing great," and one thing led to another, and he said, "Rick, you can't believe the program of music, frankly, that is put on at the high school that our sons go to," and where "Synergy" comes from as well.
3205 I said, "Tell me about it," so he did. He was saying that the trouble with all of these music programs is the fact that there is funding from provincial governments for certain arts and music programs in schools, but there is not enough of it.
3206 We have described some of the scenarios that parents have to go through, and teachers, in raising money.
3207 The long and the short of it is, we started talking about this amongst ourselves, and we got our team involved, and we said, "Maybe there is a great opportunity for us, on a going forward basis as the Pattison Broadcast Group, to come up with this great brand new initiative for the youth of Canada."
3208 In this particular case right now, we are talking about students in the provinces of Alberta and British Columbia.
3209 So the seed was sown through that discussion, and we have moved forward in bringing to you the Save the Music initiative.
3210 I will now turn it over to Jerry Seimens to talk more about it and to give you more finite detail.
3211 MR. SIEMENS: It is interesting how, when you start on a project ‑‑ and it has been 15 or 16 months ‑‑ you start with an idea, and then, after a few days of living with it, you say, "That is a pretty good idea," and here we are, a year and a half later, and it has become a passion.
3212 I believe so strongly in the Save the Music Foundation. If we really want to develop Canadian talent ‑‑ if we really want to develop Canadian talent ‑‑ we have to start with the kids. That is where the future stars are going to come from.
3213 The role of the Save the Music Foundation is not to take the place of government. It is government's job to supply education in the schools. The Save the Music Foundation will enhance what government is already doing, because the funds only go so far.
3214 We heard from these young lads a moment ago, "Synergy". Obviously they have talent.
3215 I am going to ask Frank Lee to comment on this in a moment, because he knows these boys very well, and he knows the music education system really well.
3216 "Synergy" was asked to represent Canada twice internationally, once in Japan and once in Belgium. Neither time could they go because there was no money. The families can only raise so much.