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Toutefois, la publication susmentionnée est un compte rendu textuel des délibérations et, en tant que tel, est transcrite dans l'une ou l'autre des deux langues officielles, compte tenu de la langue utilisée par le participant à l'audience.

 

 

 

 

 

 

 

              TRANSCRIPT OF PROCEEDINGS BEFORE

             THE CANADIAN RADIO‑TELEVISION AND

               TELECOMMUNICATIONS COMMISSION

 

 

 

 

             TRANSCRIPTION DES AUDIENCES AVANT

                CONSEIL DE LA RADIODIFFUSION

           ET DES TÉLÉCOMMUNICATIONS CANADIENNES

 

 

 

 

 

 

 

                          SUBJECT:

 

 

 

VARIOUS BROADCAST APPLICATIONS /

PLUSIEURS DEMANDES EN RADIODIFFUSION

 

 

 

 

 

 

 

 

 

HELD AT:                              TENUE À:

 

Metropolitan Conference               Centre de conférence

Centre                                Métropolitain

333 Fourth Avenue South West          333, Fourth Avenue Sud‑Ouest

Calgary, Alberta                      Calgary (Alberta)

 

February 23, 2006                     Le 23 février 2006

 


 

 

 

 

Transcripts

 

In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

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

and staff attending the public hearings, and the Table of

Contents.

 

However, the aforementioned publication is the recorded

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

either of the official languages, depending on the language

spoken by the participant at the public hearing.

 

 

 

 

Transcription

 

Afin de rencontrer les exigences de la Loi sur les langues

officielles, les procès‑verbaux pour le Conseil seront

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

membres et du personnel du CRTC participant à l'audience

publique ainsi que la table des matières.

 

Toutefois, la publication susmentionnée est un compte rendu

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

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

officielles, compte tenu de la langue utilisée par le

participant à l'audience publique.


               Canadian Radio‑television and

               Telecommunications Commission

 

            Conseil de la radiodiffusion et des

               télécommunications canadiennes

 

 

                 Transcript / Transcription

 

 

 

 

                             

              VARIOUS BROADCAST APPLICATIONS /

            PLUSIEURS DEMANDES EN RADIODIFFUSION

                             

 

 

 

 

BEFORE / DEVANT:

 

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 /

Conseillère juridique

Steve Parker                      Hearing Manager /

Gérant de l'audience

 

 

 

HELD AT:                          TENUE À:

 

Metropolitan Conference           Centre de conférence

Centre                            Métropolitain

333 Fourth Avenue South West      333, Fourth Avenue Sud‑Ouest

Calgary, Alberta                  Calgary (Alberta)

 

February 23, 2006                 Le 23 février 2006

 

 


            TABLE DES MATIÈRES / TABLE OF CONTENTS

 

 

                                                    PAGE / PARA

 

PHASE I (cont.)

 

 

PRESENTATION BY / PRÉSENTATION PAR:

 

Harvard Broadcasting Inc.                            731 / 4832

 

Newcap Inc.                                          823 / 5386

 

Tiessen Media Inc.                                   918 / 5896

 

Golden West Broadcasting Inc.                        976 / 6300

 

Newcap Inc.                                         1020 / 6619

 

 

 


                  Calgary Alberta / Calgary (Alberta)

‑‑‑ Upon resuming on Thursday, February 23, 2006

    at 0820 / L'audience reprend le jeudi

    23 fevrier 2006 à 0820

4825             THE CHAIRPERSON:  Order, please.

4826             Madam le sécretaire.

4827             THE SECRETARY:  Thank you, Mr. Chairman.

4828             We will begin this morning with item 9 on the agenda, which is an application by Harvard Broadcasting Inc. for a licence to operate an English language FM commercial programming undertaking in Calgary.

4829             The new station would operate on frequency 92.9 MHz, channel 225C1, with an average effective radiated power of 45,000 watts, maximum effective radiated power of 100,000 watts, antenna height of 160 metres.

4830             Appearing for the applicant is Mr. Bruce Cowie, who will introduce his colleagues.

4831             Mr. Cowie, you will have 20 minutes for your presentation.

PRESENTATION / PRÉSENTATION

4832             MR. COWIE:  Thank you, Madam Secretary.


4833             Good morning, Mr. Chairman, members of the Commission.

4834             This is a journey that began in June of 2004, and we hope will be the beginning of another journey once this hearing is concluded.

4835             I'm delighted to be here in the city where I live and to introduce a very strong group of people who have been working on this application for some time and are delighted, as I am, to be here.

4836             Seated on my left is Michael Olstrom.  Michael is the Harvard Station Group manager.

4837             On Michael's left is Jennifer Strain.  Jennifer is currently employed in Calgary's booming oil patch, but has significant experience in the broadcast sector and before the Commission, having served as vice‑president, Corporate and Regulatory Affairs, for Craig Media.  Jennifer is acting in a senior advisory role to Harvard's radio operations, contributing in particular to the planned expansion of Harvard Broadcasting throughout western Canada.


4838             On my far left is Garry McGowan.  Garry has spent over 20 years in the radio and music business in major markets throughout Alberta as an on‑air personality, program director, club owner, and concert promoter.  Garry has also served as a member of FACTOR's national advisory board and is a member of the board of directors of the Alberta Recording Industry Association. Garry, who led our in‑market, street‑level research on the demand for an alternative rock station in Calgary, brings a wealth of experience to our team, having lived and worked within the genre.

4839             On my right is Karen Broderick, Harvard's national sales manager.  Karen will tell you about the demand among advertisers for a radio station that serves Calgary's youth audience.

4840             In the back row, seated on the far left, is Paul Hill, president and CEO of Harvard Developments.  Mr. Hill is one of Canada's business leaders and operates a family‑owned diversified company that has just celebrated 103 years of doing business in western Canada.  The success of the Hill companies has been built on two principles, caring and commitment, and these principles guide not only the Hill's business operations, but also the sense of caring and commitment within the communities the Hill family serves.

4841             Next to Paul is Tina Svedahl, vice‑president, Investments, for Harvard Developments Inc., our parent company.


4842             Seated next to Tina is Debra McLaughlin, of Strategic Inc., the company that did our feasibility and consumer demand studies.

4843             And finally, seated next to Debra, is Rob Malcolmson, a partner at Goodman's LLP, our legal counsel.

4844             Paul will speak first to you about why Harvard has chosen to apply for a new station in Calgary and how Xtreme FM fits into our regional growth strategy; Debra will then give an overview of the Calgary market and demand for the format; and next Garry and Michael will speak to the specifics of the proposed station:  what it is, its target and the kind of programming we are proposing; and finally, I will present our locally focused, artist‑based CTD package, an initiative that will invest in local artists through three distinct development phases:  discovery, exposure and support.

4845             I will now ask Paul to begin our presentation.

4846             MR. HILL:  Thank you, Bruce.


4847             Harvard is a regional broadcaster based in Saskatchewan.  We have been in the broadcasting business since 1976 and have been serving the residents of Regina and southern Saskatchewan ever since.  Our family was drawn to the radio business because of its ability to provide local community service.  Being in radio in Regina all these years has allowed us to be heavily involved in the local community, as Bruce noted as a guiding principle behind our family's approach to the business.

4848             We would like to do more in radio business and seek your approval to contribute to the local community here in Calgary.  In particular, we are passionate about becoming a significant contributor to Canada talent development in all markets we are privileged to serve.

4849             We believe there is a place for mid‑sized regional broadcasters within the Canadian broadcasting system.  To that end, Harvard applied for new stations in Calgary and Vancouver in 2000, and in Edmonton in 2003.  We have not given up.  We are learning, and we believe that this application, along with those applications pending in other western Canadian markets, meets the needs of the local communities, as well as contributes to the development of the industry.


4850             Calgary is the linchpin of our growth strategy.  It's the largest radio market in western Canada, after Vancouver, and it's growing at an exceptional rate.  A station in Calgary will strengthen Harvard's ability to provide strong, regionally based and locally focused radio services in markets of varying sizes across the west.

4851             I should also say that, while our head office is in Regina, we have been in business in Calgary for over 50 years.  I am personally, and through others in our organization, actively involved in the Calgary community and other markets in Alberta.  Bruce Cowie lives here full time.  We know the city well and we believe we can bring a fresh, youth‑oriented station to this market and support it with our personal active involvement.

4852             We hope the Commission will endorse our regional growth strategy, recognize the role that we can play in adding diversity of ownership and editorial voices, and allow Harvard to extend its tradition of community service to Calgary.

4853             Debra.

4854             MS McLAUGHLIN:  A quick look at the key economic indicators show that Calgary is booming.  In 2004, retail sales, a key predictor of radio advertising revenue, grew by over 10 percent.  Personal income is 29 percent higher than the national average.  And Calgary is one of the strongest radio markets in Canada when it comes to PBIT margins.


4855             This is also a young market, with fully 50 percent of the population under the age of 35, yet, despite the recent introduction of new stations, the youth and young adult audience remains underserved.

4856             BBM data show that tuning among 12‑ to 17‑year‑olds has declined from 12.1 hours per week in fall 2002 to 9.7 hours per week in fall 2005.  Tuning among 18‑ to 24‑year‑olds has also dropped from 20.2 hours per week in fall 2002 to 15.8 in fall 2005.

4857             We studied the market extensively to determine what was missing, and the answer was clear.  Our research showed that almost 80 per cent of the 15 to 24 age group and 70 percent of the 25‑34‑year‑olds would listen to a new alternative rock service.

4858             MR. McGOWAN:  Thanks, Debra.

4859             Let me start by saying I have been working in Calgary for almost two years assessing the viability of our format.  I have talked to a lot of club owners, advertisers, and, most importantly, young people.  I can confirm the results of our formal research.  There is a very high level of interest for an alternative rock station in Calgary, both from the underserved youth audience and from advertisers seeking to reach them.


4860             Alternative rock is one of the top 10 radio formats in Canada and the U.S., but it's completely missing from the city's radio spectrum, despite the fact that Calgary's youth represents a greater proportion of the population than any other major market in the country.

4861             Alternative rock tracks are just not receiving significant airplay on existing stations.  In fact, our analysis, using CFNY‑FM Toronto as a proxy, shows that, on average, based on seven weeks of data, only 21.1 percent of the alternative rock songs being played on CFNY are getting any airplay today.     This means that of the 150 top alternative spins, 118, or almost 80 percent, are not on the air in Calgary.  Xtreme FM will fill this void in the programming spectrum.

4862             In fact, the level of duplication between Xtreme FM and existing stations will be even lower than this.  Our playlist will be targeted to Calgary's 12‑ to 24‑year‑olds, and will therefore play a larger amount of newly released, independent and uncharted tracks than one would hear on an alternative rock station like CFNY.


4863             The sound of Xtreme FM will be edgy, innovative and progressive, featuring Indie rock and post‑punk revival artists, such as Modest Mouse and Franz Ferdinand, and Canadian acts, such as Alexis On Fire, Metric and Broken Social Scene.  There's also renewed interest among alternative rock fans in such classic bands as New Order, The Cure, Violent Femmes and Sonic Youth, to name just a few.  It's this mix of alternative rock tracks that Xtreme FM will bring to Calgary.

4864             One of the most interesting features of the format is its durability over time.  This is due, in large part, to the evolutionary nature of the format, which is constantly reinventing itself to keep pace with the youthful audience it serves.

4865             Michael.

4866             MR. OLSTROM:  Xtreme FM will address declining tuning levels by making radio relevant to young Calgarians.  Our goals is to act as a portal or platform for Calgary's disenfranchised youth audience, an audience that is currently listening to alternative rock tracks on the Internet, MP3 players and iPods, but not local radio.

4867             By combining the alternative music our audience wants with local and feature programming that speaks to Calgary youth, Xtreme FM will reach out to our target group in a way that no other local radio station does.


4868             Xtreme FM will showcase local Canadian talent, we will offer 40 percent Canadian content, and launch four new innovative programs, the "Indie Show", the "New Rock Show", "Punkorama" and the "Xtreme Spotlight".

4869             The "Xtreme Spotlight" will consist of a short biography or interview with a new Canadian artist and will feature one of the artist's songs.  It will be mixed into the regular flow of programming six times every day, seven days a week, providing continual exposure of new Canadian alternative rock artists.

4870             One of the ways we will reach out to Calgary's youth is through podcasting.  Xtreme FM will make all of its feature programming and the Canadian music spotlight available on the web via podcast, giving our audience access to Xtreme FM on demand.

4871             The availability of Xtreme FM's programming on podcast will be an important tool in the ongoing promotion and marketing of the station to our core audience.


4872             Today's youth want programming that speaks to them.  Calgary's youth want to hear people of their own generation talking about things that matter to them most, presented in a way that will engage, challenge and stimulate their interests.  It is these principles that will guide Xtreme FM's news and spoken‑word programming.

4873             Karen.

4874             MS BRODERICK:  As the growth of the Calgary population continues to outpace the Canadian average, so too does the growth of the younger demographic Xtreme FM will serve.  As a result, we see more products and services geared to the youth market, with the corresponding increase in advertising dollars at both the local and national level.

4875             We have talked to numerous local advertisers seeking to reach the city's youth audience, and I can tell you that the level of pent‑up demand is substantial and growing.

4876             Bruce.

4877             MR. COWIE:  Thank you, Karen.

4878             Mr. Chairman, members of the Commission, our CTD package is focused on three distinctive phases in an artist's development:  discovery, exposure and support.  Our total investment will be more than $4 million over seven years.  This intensely local CTD package, which we will call "Xtreme Exposure", is designed to act as a platform for the careers of new alternative music artists in Calgary.


4879             We know from our involvement in the Calgary market that the artists see real benefit from this CTD initiative.  Let's hear what they had to say.

‑‑‑ Video presentation / Présentation vidéo

4880             MR. McGOWAN:  The artists you have just seen are on the cutting edge of Calgary's alternative and Indie rock scene and the locations we took you to in the video are just a few examples of this city's vibrant club life, Broken City, The Palomino Club, and the Liberty Lounge in Mount Royal College.

4881             Chad Van Galen is rapidly emerging as a force on the alternative rock scene and has just signed on with Sup Pop, an Indie label affiliated with Warner Music.  Hot Little Rocket is well‑known on the club and concert scene and internationally, but does not get airplay in Calgary.  You also heard from the Fake Cops, a local band which is beginning to establish a strong fan base with the release of an edgy new EP.  And finally, Danielle Haberstock, who has just signed a recording deal with Snag, an aboriginal Indie label, and is generating significant interest among alternative fans and within the aboriginal community.

4882             Despite the success of these artists, they are not well‑known to Calgary radio audience.  Xtreme FM aims to change all this, on‑air and through our ground‑breaking "Xtreme Exposure" CTD initiative.


4883             MR. COWIE:  Finding new talent, being discovered, is the critical first step in putting an artist before a mass audience.  We propose an annual high‑profile talent search in the Calgary area.  We will invite groups and solo artists to submit two recordings to a panel of expert judges, who will select 15 from that group.  All 15 artists will receive frequent airplay on Xtreme FM during the contest and we will engage our audience by having them vote for the five finalists.

4884             The finalists will perform at a local venue on the last night of the contest, where the winners will be announced and the cash prizes awarded.  The final performance will be broadcast live on Xtreme FM.

4885             The second step is exposure.  Xtreme FM will build on the success of its talent contest by producing a studio CD each year featuring two tracks from each of the five finalists.  The CD will be professionally produced and heavily promoted locally, and copies will be provided to each artist.  Any profits from the sale of CDs will be returned to the artists.


4886             Finally, we have a plan to support artists through one of their toughest stages of development, exposure beyond their own local market.  The travel assistance plan will be administered by ARIA, and will provide financial support to help artists without out‑of‑province travel expenses and to gain wider exposure in the rest of Canada.

4887             Harvard will also support artists through industry associations FACTOR and the CAB's Radio Starmaker Fund, with sponsorships for educational programs at Mount Royal College and the Southern Alberta Institute of Technology, and support the training of Calgary‑based volunteers for voice print.

4888             Michael.

4889             MR. OLSTROM:  Over and above our CTD package, Harvard has an agreement with the Aboriginal Peoples Television Network to provide a news mentoring program.  The APTN new mentoring program is put forward in recognition of the growth and importance of our indigenous people, a group that represents over 22,000 people in Calgary alone.  We look forward to discussing the program with you today.

4890             MR. COWIE:  Mr. Chairman, members of the Commission, that concludes our presentation‑in‑chief.  In closing, I would like to summarize why we believe Xtreme FM fulfils the Commission's licensing criteria.


4891             First, Harvard is a well‑established and well‑resourced company, with a solid base for this new service.  Xtreme FM will supply an alternative rock format that is completely absent from the market, geared to a youth demographic that remains underserved despite its rapid and ongoing growth.

4892             We have committed to 40 percent Canadian content throughout the broadcast day and week.  We will promote the development of Canadian talent both on‑air and off through a substantial and locally focused CTD package of more than $4 million.  This package will serve as a platform for the discovery, exposure and ongoing support of local artists, as they launch their careers.

4893             In addition, our partnership with APTN will help train a new generation of aboriginal reporters.  Harvard will bring a new editorial voice and diversity of ownership to a market dominated by a few large players, most of whom own more than one station in Calgary already.

4894             Granting our application will improve the competitive balance in the market, strengthen an independent broadcaster with deep roots in western Canada, and support Harvard's regional growth strategy.


4895             Members of the Commission, our goal with this application is to make radio a larger part of the life of Calgary's youth by increasing the time they spend with us.  In the past few years, the Commission has recognized the importance of repatriating young audiences to radio by licensing youth‑oriented services in Ottawa‑Gatineau, Edmonton, Halifax, and Kitchener‑Waterloo.  The same need for a youth‑oriented radio station exists in Calgary, and with your approval Harvard will meet this demand.

4896             We thank you for your attention to our presentation and I would ask that you direct your questions through our quarterback, Michael Olstrom, through the next phase.

4897             Thank you.

4898             THE CHAIRMAN:  Thank you, Mr. Cowie.

4899             I'm asking Mrs. Elizabeth Duncan to put the questions to your team.

4900             MR. COWIE:  Thank you.

4901             COMMISSIONER DUNCAN:  Good morning.

4902             MR. OLSTROM:  Good morning.

4903             COMMISSIONER DUNCAN:  I'm going to start off first on programming.


4904             Based on findings in your market research, you indicate your target audience of youth and young adults 12 to 34 are underserved in the current Calgary market, and we certainly heard that this morning in your presentation.

4905             The fall 2005 BBM numbers suggest that the 18‑to‑24 and 25‑to‑34 age groups are tuning in in significant numbers to the incumbent stations CIBK, which is a CHR format, CFGQ, with its classic rock format, and CJAY, with is album‑oriented rock.  Also the fall BBMs indicate that CKIS‑FM, the market class of KISS stations, also does well in the 25‑to‑34 age group.

`                So with that in mind, could you elaborate on why you feel youth and young adults are underserved in the existing Calgary market?

4906             MR. OLSTROM:  We would be happy to let you know why we believe that they are being underserved.

4907             The youth market, as we have mentioned, is growing, and there is some youth tuning, in particular to two radio stations, The Vibe being with their core demographic, which would overlap with ours, with the 12‑to‑24 demographic, and CJ, as well, to some extent, but not any part of their core demographic.

4908             I would like to turn to Debra McLaughlin to speak a little bit about that.


4909             MS McLAUGHLIN:  Our research using BBM shows that, despite some tuning to incumbent stations, the average hour per capita is declining.  I would note that when we looked at it, the two most efficient ‑‑ and we get that from looking at their distribution of hours tuned across the various demographics ‑‑ would be The Vibe and CJ.  Only 40 percent of the tuning in the market between 12 to 34 was done to those two stations.  That contrasts to Ottawa, for example, where close to 80 percent was being tuned to younger stations, where they were both targeting and affected in that demographic.

4910             But I think the key point here is not whether youth are using radio to some degree in the market and find some stations, but how they are using radio overall, and those indexes are declining.  It's not a one‑survey decline, by my tracking it's now into its sixth year of decline, and I think that is a fairly strong indicator that we have not, at least not in this station currently, or in this market currently, any stations completely focused on that youth demographic.

4911             COMMISSIONER DUNCAN:  Thank you, that's very helpful.


4912             In your supplementary brief, you identified two sub age groups within the 12‑to‑34 target demo, the 12 to 24 and the 25 to 34.  Could you explain how you would approach programming to appeal to both of these groups, youth and young adults?  Would there be an emphasis in your programming on one group over the other?

4913             MR. OLSTROM:  The emphasis of our programming is the 12‑to‑24 underserved demographic.

4914             I would like to turn to Garry McGowan to speak a little bit about the programming and how we would approach that.

4915             MR. McGOWAN:  Commissioner, we have a two‑fold strategy to programming to this group, because we know from our work in the market and some of the fine research that's been done, that we have to go to where they are right now because in large numbers they are not on the radio dial.  So we are looking at some unique approaches to programming, and in particular an online outreach program.  I want to share a little story with you by way of illustration off the top.


4916             We, for a few months now, in order to facilitate all the work I have been doing in Calgary, had established a little storefront office over in the Eau Claire Market, which is just a few blocks from here, and that allowed people who were hearing about our proposal, through some of the flyering and postering we have done and the references to the website that we put up ‑‑ it contained information about the station and a music sample ‑‑ to come and talk to us one‑on‑one and also if they wanted to actually fill out one of our support cards, quite a number of which we filed with the Commission, that they could use that method as an expression of their support.

4917             On the very last day, a great 20‑something couple came into the office and they struck up a conversation and the woman said to me, "You know", she said, "I've been listening to your radio station online", because I believe our music sample is about 120 minutes worth of proposed tracks that we would play, and she said, "The other day I got in the car and I couldn't get you.  So, I guess, does that mean that you're not on air yet?".  And I said, "Yeah".  So I went on to explain there's quite a process involved in that, and I thanked her for listening to this point and said we will see what happens.  I think that story really illustrates how this audience consumes audio currently.


4918             As Debra had mentioned, there's a declining amount of tuning to existing Calgary radio stations.  If you give people a little bit of something, there's chances are they will sample it to some degree, but they are not going to spend significant time with it.  Instead, they are going where they live, which, in large part, is on the Internet.

4919             So what I'm saying we are proposing to do is that website that's available right now, obviously, will get a lot bigger post‑licensing, and we are going to use it as part of our on‑air service.  It's going to be part of the total package, which is to create a real portal of youth opportunity in Calgary.

4920             We are going to use things like the speakers' platform, so that youth can voice their opinions and share information, both with us and with their peers.  We will offer up things like online music samples from the independent artists we play and reviews and have an online gallery so that youth can share things like their creative writing and visual art.

4921             We will have a monitored chatroom, so that the station's program director can get some immediate feedback as to what the radio station is doing against the people, because that's where they are going to tell you whether they like you or whether they are happy with what you are doing or not.


4922             We are, of course, going to use the standard website features like links to the artists websites that we play and places they can go to hear newly released material.

4923             Podcasting is a key part of marketing to this group, as Michael mentioned in our initial presentation, making our feature programs and the independent shows available to people so that they can listen in their timeframes.  Many of them work, obviously, they go to school, their hours are not necessarily the traditional radio hours.  That's again very crucial.


4924             I would share another quick story with you.  Often I get requests to go speak to broadcast school courses, and at one point when I was discussing this with somebody I was always struck by ‑‑ there was one gentleman in a little seminar group and when I explained to him that we had a concept to make radio available on his time, his face just lit up.  He said, "Really.  You mean, if I miss that show that features the music that I like because I had to study or work, I could hear it later?", and I said, "Yeah, yeah, that's what we want to do", and it was just like a revelation.  Because, again, I think the medium has suffered a little bit from a certain traditional stodgy view of it, as opposed to, you know, the three‑dimensional portal that it can be.

4925             So, again, the website part of it is very crucial.

4926             On the on‑air side, of course, first and foremost, we are going to be offering them music that they don't hear in the market right now.  Certainly, our duplication analysis indicates that 80 percent of the music we will put on the air post‑sign‑on will be music that is not currently available in Calgary, period, on any radio station, and I think that's going to be an immediate trigger for this demo to listen to this radio station.

4927             And certainly, also, we intend to present issues and have a perspective that reflects the concerns of the 12‑24s and 12‑34s.  We are not going to be a mainstream media outlet.  Certainly headlines are headlines are headlines, but it's where you go from there.  It's how you view the issues that make or break, I think, your relationship with your audience, and our relationship is going to be a very strong one with our demographic.

4928             COMMISSIONER DUNCAN:  Thank you, Mr. McGowan.  Your enthusiasm is certainly coming across.


4929             I'm just curious, then ‑‑ we will go back to this a little later, but just a couple of questions, quick questions on you have said.

4930             How much music would then be available on the website, like what percentage of the time?

4931             MR. McGOWAN:  Well, certainly we would stream the radio station, first and foremost, so, I mean, it's available, I guess, 24/7, on the basis that you can receive streaming audio.

4932             I think, Commissioner, I'm sure you are aware of how many kids, if you want to use that word, walk around and live on their laptop.  I mean, in many cases the music comes from my space and they talk to their friends on MSN and it's just ‑‑ we want them to do their homework, as it were, or sit at work with us on the streaming spectrum.

4933             COMMISSIONER DUNCAN:  So if I'm an advertiser, then, and obviously that's the key, that's the revenue, am I going to have my ads, then, as well, on the website?

4934             MR. McGOWAN:  Well, certainly on the streaming audio portion.  Beyond that ‑‑ are you referencing the podcast portion of it or ‑‑

4935             COMMISSIONER DUNCAN:  Just in general.


4936             MR. McGOWAN:  Yeah, again, there's no prohibition to putting ‑‑

4937             COMMISSIONER DUNCAN:  But it would a plus in selling to the advertiser.

4938             MR. McGOWAN:  Absolutely.  And I think, again, there's a lot of interest within the advertising community in reaching this group of people, and they know ‑‑ and they do a lot of research on that ‑‑ that it can be a difficult group to access.

4939             COMMISSIONER DUNCAN:  I don't want to show my age here, but, obviously, I'm not doing this on the Internet.

‑‑‑ Laughter / Rires

4940             MR. McGOWAN:  You can still listen the old‑fashioned way.

4941             COMMISSIONER DUNCAN:  So if I might add something, I listen to music.  Yes, that's right.


4942             So just going back to my other questions here, but we will come back to this, as mentioned, a number of the incumbent stations do well attracting listeners to the ages 18‑to‑34 group, so if licensed, how much of your projected audience do you expect to garner from existing stations ‑‑ and I know we have some information on that ‑‑ and what percentage of your audience would represent youth and young adult listeners coming back to radio?

4943             MR. OLSTROM:  Yes, Commissioner Duncan, I would like to go to Debra McLaughlin to speak to that.

4944             MS McLAUGHLIN:  We looked at this from two angles.  We looked at the impact or how much would come from other stations, from the analysis of music being currently played in the market and, as Garry had mentioned, there's less than ‑‑ or there's about 21 percent being played currently in the market.

4945             When we drill down to find out where that was played, largely the station covering any portion ‑‑ and it's a small portion at that ‑‑ of the alternative charts is CJ.  This was substantiated in our research.  When we asked our core audience ‑‑ well, we asked all respondents what they are currently listening to in the market, 40 percent of the people who said they would definitely listen to Xtreme FM said they are currently listening to CJ.  So that means 60 percent of our core audience is coming from the other stations and the Internet.

4946             COMMISSIONER DUNCAN:  So do you have some estimate of how much you think is going to be as a result of repatriation?


4947             MR. COWIE:  If I may drop in here, Commissioner, we have from the beginning believed that an unknown amount of that listening to those radio stations was by default.  Youth has not walked away from radio completely.  They have wandered away from it, and hopefully we can get them back.  And we are beginning to see some proof of that.

4948             In the latest BBM from Edmonton, where Sonic has now, I think, had two books in the Edmonton market, and is paired, as this market might be in the future, with a CHR urban station on one side and a modern rock or alternative rock on the other, in the early going it appears that tuning to the 12‑24 group has increased by just over 4 percent, 4‑and‑a‑half to 5 percent.  And in tandem with that, while it is not large, it appears that there already is a slight reduction in time spent with the Internet.

4949             So we have talked throughout our application about repatriation of this youth audience, so we are seeing a bit of each of those in the early going. They were getting some alternative tracks on these stations, but, clearly, when asked if they would listen to their own station that played their own music, that whole genre group, they clearly would vote for that.

4950             COMMISSIONER DUNCAN:  Thank you.


4951             CHUM is applying, as you know, for a Hot AC format, and they did an excellent presentation here the other day.  They are proposing to serve the 25‑ to 34‑year‑old young adult listener.

4952             Why do you feel your alternative rock format is a better choice to provide additional program diversity in the Calgary market?

4953             MR. OLSTROM:  Well, first of all, we believe that we are serving an underserved demographic.  We are targeting a different demographic as our core for the radio station, the 12 to 24s.  We also skew more male with the alternative rock format, where theirs would skew more female.

4954             I will turn to Jennifer to speak a little bit about that.

4955             MS STRAIN:  Well, first of all, with respect to CHUM, I think that there's some research that shows that a Hot AC format tends to skew quite a bit older, in the 35‑to‑44 range.


4956             But having said that, when we approached this market and the research we were going to do, we suspected that the gaps were going to be in the lower ends of the demographic spectrum.  We did the research, which Debra has spoken a little bit about already, which confirmed overwhelming that the 12‑to‑24 demographic was the preferred format for this market.

4957             That was confirmed further when we looked at the population statistics for Calgary.  Recent Financial Post data, for instance, indicates that the proportion of the population, the 12‑to‑24 segment of the population, is approaching 20 percent, which is one of the highest of the major markets in the country, and represents a population of over 200,000 kids, young adults, in that age range, 12 to 24.

4958             And then we have talked about the youth tuning.  We looked at that as well, the tuning data, that said there's been a significant decline, and we saw an opportunity there to repatriate some of that.  And, of course, the Commission has, I think, indicated in its commercial radio policy it's identified that as a challenge, as well.

4959             Then, finally, as we have mentioned in our oral, and here again, as well, we did the duplication analysis that indicated that there would only be about 21 percent of the tracks, the alternative rock tracks, are getting any airplay here in Calgary at all, so that confirmed again for us that this was the format for this market and that this market, given its demographic make‑up, is the most likely to embrace it.

4960             COMMISSIONER DUNCAN:  Thank you.


4961             MR. OLSTROM:  I would also like to turn to Debra McLaughlin to speak a little bit about the consumer demand.

4962             MS McLAUGHLIN:  We did our research in several stages, and, as mentioned in the opening presentation, this group has been here before and when we applied before it was in the Hot AC format.  So it wasn't something that wasn't considered when we came to the market this time.  And before we did any consumer research at all, we looked at BDF, and we found that there was, at that time, in 2004, a fairly high duplication between the Hot AC being played in other markets, like Toronto and Vancouver, and that which was being picked up in the stations here.

4963             We did, again, look at it post the filing and prior to this hearing, and we noted that using Mediabase just to look at the top songs that are being played, it ranges, if you look at the Hot AC stations in Toronto and Vancouver, from 45 percent duplication already in the market to 65 percent.

4964             I mean, that's a small subsample, and it's only based on four weeks, but, in terms of speaking to diversity, a large portion of that music is already here in some form on one of the stations.

4965             COMMISSIONER DUNCAN:  Thank you.


4966             I'm going to turn now to news and related spoken word.

4967             At recent radio hearings the Commission heard varying opinions from broadcasters regarding the relevance of offering news and other types of spoken word programming to a youth and young adult audience.  Some say it's not an important element, that youth‑oriented formats must be highly music‑driven, with a minimum amount of spoken word.  Other broadcasters have stressed the opposite, suggesting that quality and relevant spoken‑word material is important and necessary to successfully program to a youth and young adult market.

4968             With that in mind, as part of the Xtreme's overall programming strategy, what role will local reflection, spoken‑word programming play as a programming element ‑‑ this is on‑air, not necessarily on the website ‑‑

4969             MR. OLSTROM:  Right.

4970             COMMISSIONER DUNCAN:  ‑‑ do you consider it a minor component or an important element of your format?


4971             MR. OLSTROM:  Commissioner Duncan, it is a very important component of our programming.  Yes, the format is a music‑driven format, and that's what draws them to the radio station; however, the spoken word, news and information that we deliver to this demographic is of vital importance, that is reaching them and speaking to them.

4972             A lot of times, you will listen to youth stations ‑‑ and I have done it in this market, in our time here ‑‑ and it's the same flavour, if that's how you want to refer to it.  You need to talk about the stories that relate to them and the things that impact them.

4973             Maybe I could have Garry McGowan step in on this.

4974             MR. McGOWAN:  When I was speaking earlier, Commissioner Duncan, about perspective, I thought, "What could I use to illustrate that?", because sometimes, once again, a story or an illustration is better than speaking in the abstract.


4975             There's a wonderful strip in Calgary, down on 1st Street, where a number of sort of key clubs have existed for a long time.  There's one called The Night Gallery, that recently closed, but presented a lot of great artists over the years, and there's another place called The Castle, and there's a bunch of them in a row.  For a lot of years, for the 18‑pluses in our demo, this was a place you would go to socialize, almost, in a British sense, your local, where you would go to have that pint and meet your friends, and so on and so forth.

4976             Earlier this year there was a shooting and a stabbing on the block, and if it was in our newscast, and I think on anybody else's newscast in the marketplace, the top line would be the same.  These are terrible things, they are regrettably often a function of our growing urban centres in the country.  Usually, what happens is they are reported, and then you move on, because tomorrow there could be another one in a different part of the city.

4977             But if you are speaking to a specific community, this is one of the areas, 17th Avenue, Kensington, these are places in the city where they gather, it's a much larger story than that.  You have to go deeper.  You have to speak within the terms of reference where why I suddenly, perhaps as a 28‑year‑old who regularly goes down there on Friday and Saturday would suddenly say, "What's going on in my community?".


4978             And there's many different perspectives.  If I'm the six o'clock news/talk reporter, maybe all I want to know is:  is this the eighth time this has happened in the second month of the year?  This is terrible, Mr. Police Spokesman, what are you doing about it?

4979             Whereas, I think our question might be ‑‑ I understand from the reaction, the feedback we have getting on our website and on our phone lines, that at one point in time there were beat cops walking in that area or you had a cruiser parked there Friday and Saturday and this tended to chill any negatives that were happening.  Now, you have stopped doing that.

4980             Is that a function of:  is the service's resources stretched, I mean, are you unable to offer what you would like to offer?  Or is it a function of the people who are operating the venues?  There's a deeper story.  But again the perspective is, it's not just about these things happen and it's terrible and I'm glad I live somewhere else, it's about what can we do about it, because it's affecting our community?  I think that's the approach we intend to take with it.

4981             MR. OLSTROM:  I would like to have Debra McLaughlin, as well, talk about our consumer demand and what the youth are looking for.


4982             MS McLAUGHLIN:  Just to put some numbers to what Garry has been telling you, there is a strong interest, it's 89 percent.  It, in fact, outranks ‑‑ or is almost equal to the variety of music.

4983             And I can speak to my other experience.  I do research for youth stations as a regular part of their programming, planning and strategizing, and news and information is always one of their top interests.  Music, I have to say, is the most, but very close.  Again, it gets back to what Garry was saying, it's the relevance, it's the stories covered, and it's the perspective given.

4984             COMMISSIONER DUNCAN:  So that 89 percent is the result that you get when you asked the question:  are you interested in spoken word, 89 percent said they are interested in relevant stories?

4985             MS McLAUGHLIN:  Well, we don't ask it that way.  What we do is we ask them to rate the importance of our various programming elements, and we have a battery of about 15 of them.  So we just ask them to rate it, and then we take those elements that score in the "very important" or the scale that we put in, and we simply add that up and rank it, and news and information is at the top.

4986             COMMISSIONER DUNCAN:  Thank you.


4987             That, I think, leads well into the next question, because we are just wondering, you indicate you are going to have 4‑and‑a‑half hours ‑‑ 3 hours of news and approximately 4‑and‑a‑half hours of weather, traffic and sports each week.  So then on the point of "other spoken word", does the information or the example that Mr. McGowan gave us, would that count in your news or in the spoken word?

4988             MR. OLSTROM:  That would be part of ‑‑ what Garry was giving you was just sort of the perspective of what the youth ‑‑

4989             COMMISSIONER DUNCAN:  Yes.

4990             MR. OLSTROM:  ‑‑ are looking for in stories that they want to hear.

4991             COMMISSIONER DUNCAN:  Is that a story, though, or a news item, do you think ‑‑

4992             MR. OLSTROM:  That would be an ‑‑

4993             COMMISSIONER DUNCAN:  ‑‑ in that illustration?

4994             MR. OLSTROM:  That would be a news item.

4995             COMMISSIONER DUNCAN:  Would it?

4996             MR. OLSTROM:  Yeah.

4997             COMMISSIONER DUNCAN:  Okay, that's fine.

4998             MR. OLSTROM:  In total, we have 8 hours and 31 minutes of news and spoken‑word programming.


4999             COMMISSIONER DUNCAN:  So, then, what about the types of articles?  Because it sounds to me like your audience is interested in more than just news.  What other types of spoken programming have you considered or do you think that you might put in?  I'm thinking some of the applicants we have heard mention health, issues of health, or abuse or ‑‑ are you planning to do that type of spoken‑word programming?

5000             MR. OLSTROM:  No, we are not.  That would be probably more an add‑on to the news story, but there isn't separate features that ‑‑

5001             COMMISSIONER DUNCAN:  You are not ‑‑

5002             MR. OLSTROM:  ‑‑ go into health or ‑‑

5003             COMMISSIONER DUNCAN:  Thank you.

5004             Then ‑‑ and maybe Mr. McGowan's answer is the answer here ‑‑ but what's going to distinguish, then, your news from what this age group is currently getting in the market?

5005             MR. OLSTROM:  I think Garry hit it on the head when he said here's a story that wouldn't be covered by necessarily mainstream media in the city currently, but it is a story that may have relevance to the youth demographic.


5006             It's not that traditional stories won't be covered.  I mean, the Alberta budget comes out, those things ‑‑ I mean, they want to know that information.  It's just it's all in context, and what you can add to that.

5007             COMMISSIONER DUNCAN:  Did I understand, though, that on your website you would be maybe discussing other issues, will you, health issues, drugs, whatever, police, whatever?

5008             MR. OLSTROM:  Possibly.  I mean, what we have intended with that, with our chat space, it would be a situation, for example, if we have got an artist in for an interview and there's only so much time allotted to that on‑air interview, there's an opportunity, then, afterwards to go to the website and the opportunity to bring the listeners there to interact with that artist.

5009             COMMISSIONER DUNCAN:  All right.  Excellent.  Okay.

5010             In your supplementary brief, you refer to bringing community‑level news to your newscasts.  And maybe we have already, again, through Mr. McGowan's comments, heard what that might be, but we just want to sort of elaborate on the concept of community level news.

5011             MR. OLSTROM:  Okay, and I would like to turn back to Garry to further go on with that story.


5012             MR. McGOWAN:  Well, I think, again, Commissioner, it's a question of how it all stitches together and from what perspective it stitches together.

5013             I think, again, there's a certain ‑‑ in programming to this demographic there's a certain, shall we say, looseness to the approach.  It's not so much that the news jingle comes up, here we go for two minutes, then we go to something else.  I mean, I think there's a give and take because it's so multi‑dimensional with our audience.

5014             Maybe that issue I cited, or the fact that we had Franz Ferdinand when they come to town later this month, maybe they come into the station and there's a chance for the on‑air personality to talk to them, then they do some online chat, and then maybe for the next day we pull some clips from that interview because, again, this is pretty central to this life experience of theirs at this point in time, to keep that story, as it were, alive.  Or we continue to offer up samples of comment that people sent into us via e‑mail, to say, "Hey, this, that and the other thing" about it, or "Here's what I thought of the show when it was done".


5015             Again, back to hard news, the Speech from the Throne in Alberta happened last night and there's many different things that occur in that.  What's the perspective of our audience?  Well, in many cases it might be what's happening with post‑secondary education versus what's happening with retirement funding dollars?

5016             I mean, not that ‑‑ again, your top lines are terribly different.  The fact is that occurred, here's the big ‑‑ the stuff, where do you go from there? And the "where do you go from there" is how you connect with your audience, and that's what we want to do.

5017             COMMISSIONER DUNCAN:  So I understand what you are saying, then, probably these community‑level news clips would maybe originate from your website.  Is that what you are ‑‑

5018             MR. McGOWAN:  Potentially, yeah.  Again, I think they could come from many different sources, in our case.

5019             COMMISSIONER DUNCAN:  Okay.  Thank you.

5020             MR. OLSTROM:  With respect, I mean, we will also have ‑‑ within the website there will be links to different community groups that are of relevance or importance to this demographic.


5021             COMMISSIONER DUNCAN:  Yes, I had noticed that.

5022             This is interesting, because we had the impression from your brief, you state:

"The music component on the station's format is the more critical element..."

‑‑ and I guess that's what we have heard here today ‑‑

"...and that on‑air personalities are of lesser importance."  (As read)

5023             Would you elaborate on how this thinking will affect your programming and give us some idea of your staffing plans in the area of news and on‑air development and general programming?

5024             MR. OLSTROM:  Well, in terms of ‑‑ yes, the music is, we keep saying, is the important thing here.  I don't want to give the impression that we don't believe that personalities aren't part of where radio is going to be, but the music is important.

5025             If I could, I will go to your question with respect to staffing levels.

5026             COMMISSIONER DUNCAN:  Yes.


5027             MR. OLSTROM:  Within programming there are 14 programming staff.  That includes three news staff.

5028             COMMISSIONER DUNCAN:  These are full‑time positions?

5029             MR. OLSTROM:  Those are full‑time positions, yes.

5030             COMMISSIONER DUNCAN:  M'hm.

‑‑‑ Pause

5031             MR. OLSTROM:  Sorry.

5032             COMMISSIONER DUNCAN:  That's all right.  That's okay.

‑‑‑ Pause

5033             MR. OLSTROM:  I'm sorry, and the second part of your question.

5034             COMMISSIONER DUNCAN:  Oh, I was just wondering about the importance that you placed on the on‑air personalities, really, I mean.

5035             MR. OLSTROM:  Well, there is an importance there.  The personalities are there to talk about the music, interact with the music, interact with the audience, relate what's important to the target demographic.

5036             COMMISSIONER DUNCAN:  So the other 11 in the staffing would be, then, dealing with that ‑‑

5037             MR. OLSTROM:  Yes.


5038             COMMISSIONER DUNCAN:  ‑‑ type of stuff ‑‑

5039             MR. OLSTROM:  Yes.

5040             COMMISSIONER DUNCAN:  ‑‑ would they?

5041             MR. McGOWAN:  Commissioner, if I could just jump in?  Again ‑‑

5042             COMMISSIONER DUNCAN:  Sure.

5043             MR. McGOWAN:  ‑‑ the relationship of the on‑air people to the audience comes very much out of the way the audience relates to its music, and maybe at no time in popular music history has there been, in some sense, less of a gap between the audience and the creators.

5044             There's a very great sense of peer‑to‑peer relationship between them because, in many cases, they are of the same age, and they relate very well to each other.  And there has been a great sense of rejection of a lot of the trappings of stardom, and I think that trickles down into how our on‑air approach will take place.


5045             You know, you don't have so much the sense of "The Morning Man" speaking or being ‑‑ you know, it's more of a peer‑to‑peer thing.  So you are de facto on line with your audience or you are talking to them on the phone, and, you now, "Oh, that's an interesting bit, we'll use that", because, again, this is part of this community, this portal that we are creating and building.

5046             So it's not that we don't have on‑air personalities live and as per our regular radio station, but it's just the relationship, because that's key to serving them.

5047             COMMISSIONER DUNCAN:  All right.  Thank you.

5048             I'm wondering how many hours per week you would offer live‑to‑air programming, as opposed to prerecorded or voice‑tracking?

5049             MR. OLSTROM:  We would be full time, 24 hours a day live.

5050             COMMISSIONER DUNCAN:  Okay.

‑‑‑ Pause

5051             COMMISSIONER DUNCAN:  I think we have already answered this question, but you might want to add something else to it.  We were just wondering about the lifestyle, human interest or entertainment features, but, as I understand, most of that will be available on the website and, as appropriate, brought onto the radio station.  Is that...?


5052             MR. OLSTROM:  Well, in terms of ‑‑ yeah, I guess the feature programming that we do have is sort of laid out, and we would make those available on the website.  This is about the radio station, but the website is of vital importance, in particular with this demographic ‑‑

5053             COMMISSIONER DUNCAN:  I got it.

5054             MR. OLSTROM:  ‑‑ so we need to ensure that we sort of marry the two.

5055             COMMISSIONER DUNCAN:  So what type of ‑‑

‑‑‑ Background noise / Bruit de fond

5056             COMMISSIONER DUNCAN:  ‑‑ because I understood there earlier that you weren't really planning features.

5057             MR. OLSTROM:  Well, we do.  We do feature programming.  So, in other words, we have shows like the Indie show ‑‑

5058             COMMISSIONER DUNCAN:  Oh, yeah, no, sorry, that's not what I meant.

5059             MR. OLSTROM:  Okay.

5060             COMMISSIONER DUNCAN:  I meant like lifestyle features ‑‑

5061             MR. OLSTROM:  No, no lifestyle.

5062             COMMISSIONER DUNCAN:  ‑‑ human issues.

5063             MR. COWIE:  I think, Commissioner, I might be able to help with this.


5064             There is a segment of what we will do that is not attached to news, but it is an outreach from our street program, from the colleges, high schools and venues, of what's going on in the community ‑‑

5065             COMMISSIONER DUNCAN:  Okay.

5066             MR. COWIE:  ‑‑ which is a communication process that will be, not only on our website, but will be on our air.  That's where Garry comes from.  He has that street‑level experience.  He has those contacts.  So we will have a constant input of that kind of information, but it will not be necessarily in the news service, it will be in the jock talk on the station ‑‑

5067             COMMISSIONER DUNCAN:  Okay.

5068             MR. COWIE:  ‑‑ and upgrades of entertainment and that sort of thing.

5069             COMMISSIONER DUNCAN:  That is helpful.

5070             MR. COWIE:  Yeah.  I didn't mean to jump in there, but we were missing a very important point, I think.  Thank you.

5071             COMMISSIONER DUNCAN:  Thank you.  Yes, I've got it.


5072             With programming designed to appeal to youth and young adults ‑‑ or that programming can be edgy and walk a fine line between what is acceptable and unacceptable in over‑the‑air content.  Who will be responsible for ensuring that Xtreme FM's over‑the‑air content would not contravene accessible broadcast standards?

5073             MR. OLSTROM:  Well, we, first of all, believe that we are responsible broadcasters and the program director is the ultimate, I guess, authority or sheriff in town and they will insure that we are within all the standards.

5074             COMMISSIONER DUNCAN:  Thank you.

5075             And regarding synergies, are there any plans for your Calgary station to share programming, resources or programming content with your Regina station?

5076             MR. OLSTROM:  No.

5077             COMMISSIONER DUNCAN:  No.  Thank you.

5078             Canadian content, this just needs to be cleared up here.


5079             In your original application, you indicated you would accept a condition of license 40 percent Canadian content each week, as well as between the 6 a.m. and 6 p.m. period Monday to Friday.  In the revised brief, at page 11, you speak only of a commitment of 40 percent Canadian content level on a daily basis.

5080             Can you confirm your proposed minimum Canadian content commitment for the broadcast week and for that 6 a.m. to 6 p.m. period?

5081             MR. OLSTROM:  It should be 40 percent 6 a.m. to 6 p.m. and 40 percent for the broadcast week.

5082             COMMISSIONER DUNCAN:  Okay.  Okay, so that would be a condition of licence, then?  You're prepared ‑‑

5083             MR. OLSTROM:  Absolutely.

5084             COMMISSIONER DUNCAN:  Thank you.

5085             Now turning to Canadian talent development ‑‑ and this, again, referring to your supplementary brief, on page 14 ‑‑ you indicated that you would underwrite the production of a 1,000 CDs annually for each of the five annual talent search finalists.  So that would be 5,000 CDs.  You indicated that these CDs would be for the use of each artist, whatever they wanted to use them for.

5086             However, in your brief you also state, and I think you said something along this line this morning in your introduction that,


"all profits from any sales of the CDs through station activities will be split among the contributing artists."  (As read)

5087             So we just were wondering if you would elaborate on that statement, if you are planning to cut more than a 1,000 CDs, and how that will be administered.

5088             MR. OLSTROM:  I would like to turn to Garry McGowan to speak about that.

5089             MR. McGOWAN:  Yeah, certainly.

5090             As you heard from our visual discussion with some of the artists in Calgary and some of the challenges they face, one thing we want to do first for them is to deliver a professional recording that allows them to promote themselves.

5091             A lot of the process nowadays, just to give you an example of why we are doing this, is, if you try to get a booking somewhere else, the first thing somebody will say is, "Send me a CD".  Nowadays, you know, sometimes it's, "Send me your MP3 or the link to your website", but there's still a great requirement for a lot of free CDs to be handed out by an artist.  So we wanted to arm them with that tool.


5092             Then, secondly, as part of the exposure marketing component, we wanted to be able to offer a retail element to it so that audience in Calgary could go out and purchase the music and, de facto, register their support for these artists because, of course, they would know that the money's going back to them.

5093             Finally, we, again, as part of our commitment to making this work, want to make sure that we have sufficient copies on hand ourselves to market it elsewhere.  So that we plan on, obviously, sending this to every other alternative rock station in the world that we can source out, and that's why we are producing the CDs in the quantity that we had specified.

5094             COMMISSIONER DUNCAN:  So these are over and above the 1,000 ‑‑

5095             MR. McGOWAN:  Yes.

5096             COMMISSIONER DUNCAN:  ‑‑ that go to each artist?

5097             MR. McGOWAN:  Yeah, absolutely.

5098             COMMISSIONER DUNCAN:  And so the ones that are going to other stations, they would be complementary, I assume ‑‑

5099             MR. McGOWAN:  Yes.


5100             COMMISSIONER DUNCAN:  ‑‑ you are trying to get them to play the music. But the others that are sold, those are, like, at local retail outlets or ‑‑

5101             MR. McGOWAN:  Yes.

5102             COMMISSIONER DUNCAN:  And so how do you control the cash for things like that, for sales?

5103             MR. McGOWAN:  Usually in programs like this they go out on a consignment basis.  so an interested retailer, you will establish a price plan, let's say it's $10, and if you are the local HMV store, for example, you will deem it to be a retail face ‑‑ that's their choice, obviously ‑‑ and the station would be responsible for collecting the money against the stock imputed into the outlet, and accounting.

5104             Certainly, we would prepare an accounted statement for all the artists, to say, "Here's what was sold, ultimately, in the campaign window, and here's your cheque".

5105             COMMISSIONER DUNCAN:  So hopefully, there will be lots collected?

5106             MR. McGOWAN:  It would, and I think we will, actually.


5107             COMMISSIONER DUNCAN:  As part of the CD support for new and emerging artists, you outlined the travel assistance plan, which you indicated would be independently administered.  We wondered why this administration wouldn't fall under the auspices of the talent development coordinator, and if you anticipate a fee being paid, if it's coming off of the $105,000, and any other information that you could provide us with respect to that travel insurance plan would be helpful.

5108             MR. OLSTROM:  Okay, I will turn to Bruce Cowie to say something about that.

5109             MR. COWIE:  The talent coordinator clearly will be the liaison person with ARIA, who will administer the funding, but we thought it better to have an independent organization make the choices from those who apply as to who gets the money.  We don't think the radio station should having anything to do with that.  That's the first part.

5110             COMMISSIONER DUNCAN:  Mr. Cowie, can I just interrupt for a second?

5111             Who did you say would be ‑‑

5112             MR. COWIE:  ARIA, the Alberta ‑‑

5113             COMMISSIONER DUNCAN:  Oh, it's going through them?

5114             MR. COWIE:  Yes.

5115             COMMISSIONER DUNCAN:  Okay.  Sorry.


5116             MR. COWIE:  And they have experience at administering funds of this kind.  There is an administration fee of 10 percent, which is over and above the CTD package.  We are responsible for that.

5117             COMMISSIONER DUNCAN:  You are paying that?  Okay ‑‑

5118             MR. COWIE:  Yeah.

5119             COMMISSIONER DUNCAN:  ‑‑ that's great.  Thank you.

5120             MR. COWIE:  In fact, I have a letter from ARIA which contains that arrangement ‑‑

5121             COMMISSIONER DUNCAN:  All right.

5122             MR. COWIE:  ‑‑ and we would be prepared to file that with the Commission, if you wish.

5123             THE CHAIRMAN:  A question of clarification.

5124             Is the 10 percent within your CTD ‑‑

5125             MR. COWIE:  No.

5126             THE CHAIRMAN:  ‑‑ or outside the CTD?

5127             MR. COWIE:  No, it's outside the CTD.

5128             COMMISSIONER DUNCAN:  So, yes, that would be a good idea to file it, if you would.  Sure, it would be useful to have.

5129             MR. COWIE:  We will.

5130             COMMISSIONER DUNCAN:  Thank you.


5131             Regarding the talent search initiative, you have designated $14,000 for announcement and promotion of the contest.  So will this funding be going to third parties and, if so, how will they be using it ‑‑  I suppose they will have a free hand to do what they like with it, perhaps ‑‑ how will they use it, and will any of it be used to underwrite promotion of the contest on your own website or on air?

5132             MR. COWIE:  The answer to the second part is, no.  It will all be used for third party promotions.

5133             This is going to be a huge bet, so we will obviously do a lot of work in promotion of this event, but none of the funds will flow to us for that purpose.

5134             COMMISSIONER DUNCAN:  Thank you.

5135             With respect to your scholarship initiative, Harvard plans to award six scholarships of $5,000 each to students of SAIT, and in the cinema, television, stage and radio division you have said that this division has a program that produces broadcast‑ready news reporters, but this does not necessarily imply the study of journalism.


5136             We have asked this question of other applicants:  according to the CTD funding guidelines, funds for scholarships will qualify as CTD expenditures only when they support students engaged in music, journalism or other artistic studies, and traditionally the Commission has viewed general broadcasting studies as a vocational not an artistic study.

5137             So with that in mind, is there a program within SAIT dedicated to teaching the skills of journalism?  If so, would you confirm whether the scholarship funding will be awarded to a student to specifically study within the journalism program?

5138             MR. OLSTROM:  Yes, there is, and I will have Garry speak to that.

5139             MR. McGOWAN:  Yes, SAIT has a diploma program called Cinema, Radio and Television Arts, so it's kind of an omnibus degree, if you will.  It obviously cycles an undergrad through a lot of different components to give them a flavour, and hopefully a direction, that they might go post‑graduation, or to further specialize.  So that would be where the scholarships go.

5140             COMMISSIONER DUNCAN:  Thank you.

5141             I think that's it for that section.

5142             THE CHAIRMAN:  We will take a 15‑minute break, so we will resume in ‑‑ we will be back at 10 before 10.

‑‑‑ Upon recessing at 0935 / Suspension à 0935

‑‑‑ Upon resuming at 0955 / Reprise à 0955


5143             THE CHAIRMAN:  Order, please.

5144             We will continue with the questions of Madam Duncan.

5145             MR. COWIE:  Commissioner Duncan, with your permission, at the end of the programming section you asked a question with respect to core audience, and I'm not sure we adequately answered that question.  So if you would permit, I would ask Debra to go through that with you.

5146             Thank you.

5147             MS McLAUGHLIN:  When we look at the current tuning patterns that we can obtain from BBM, and we simply look at the distribution of hours amongst these subgroups within our broad demo, the index on 12 to 17 is 210 and the index on 18 to 24 is 257 and 25 to 35 166.

5148             Now, what this means in practical tuning is that the majority of our audience will below the age of 24.  There will be some tuning, obviously, from the 25‑34, but this is truly a youth demographic.

5149             Also, I just might add, I think I may have heard your question wrong, so correct me if I have, but I thought I heard you ask:  how can you program from 12 to 24 to 34, like how do you in one station?


5150             I think that's a question that has been asked a lot by the Commission over the years in all manners of setting:  ConnectTV, which was a speciality licence, which subsequently became MTV, in other radio hearings I have been at.

5151             I do have a lot of experience in that area, because outside of this particular hearing I have been doing the research for all of those groups.  What you find is the interest between the 12 to 17 and the 18 to 24 are not dissimilar.  If you look at their choices in music format, television programs, they are all the same.  The programs rank the same, the formats rank the same.  What you start to see in the 25‑ to 34‑year old group is a broadening of their interests and a migration to other services.

5152             But it is possible to serve all of them because, as you can appreciate, not everybody transitions at the same rate.

5153             COMMISSIONER DUNCAN:  Thank you.  That's useful, because we did have a concern that I hadn't gotten the answer to that question, so you were right on the money there.


5154             But I still don't have a clear picture ‑‑ I mean, obviously you have spoken to it ‑‑ but I still don't have a clear picture of how the programming would differentiate.  You are going to serve alternative rock music to that whole age group?

5155             MS McLAUGHLIN:  That's correct.

5156             COMMISSIONER DUNCAN:  And your news will appeal to the whole of the broad group?

5157             MS McLAUGHLIN:  Well, the news ‑‑ and just to step back, because I can rely on the researcher, I will refer back to the research that I did.  There is an interest in the top stories from across Canada, there's an interest in local news, and that's not different across all of those groups.  So inasmuch as we provide that, all groups will be able to find something, in terms of our news and spoken word.

5158             The music, itself, alternative rock, appeals across that entire age group.  What will help or result in this station skewing younger is the fact that some of the news stories will rely on the community base that Garry talked about, news that comes out of the universities, out of the club scene and event scene.


5159             It's most likely, though not improbable, but most likely that a 34‑year‑old has less interest in a skateboarding event than a 12‑ to 17‑year‑old.  But one of the questions you asked earlier about the role of the on‑air personality, I think, speaks to how we will be able to serve that full 12 to 34.

5160             The branding for this station is the music.  Unlike a lot of the ads you see for older skewing stations, they have personalities in the morning.  It's about them talking about what they did with their kids last night and the new car they bought and the movies, and it's a perspective that is very important to the programming of those stations.

5161             This format is about the music.  There will be some talk.  It will refer to the music, about the artist.  It won't turn off the 25‑ to 34‑year‑old, and, most importantly, it won't turn off the 12‑ to 24‑year‑olds.  It's because it's in the talk that differentiates the interest in this group, they will be able to serve it across the board.  But if the 25‑ to 34‑year‑old, as they are transitioning, want to get into that personality, that will be available in the market.

5162             I don't know if that answers your question.

5163             COMMISSIONER DUNCAN:  You do.  I think that's all very helpful.


5164             When Mr. McGowan gave the illustration and response, I think, to the community news idea, of a news event that might happen in the bars ‑‑ so that I gather the legal drinking age in Alberta is 18 ‑‑ but can you give me an example of an equivalent ‑‑ maybe not equivalent, but a similar event that might constitute community news in a younger group?

5165             MR. McGOWAN:  Well, yeah, I can, actually.

5166             There's another issue that's on the table in Calgary right now, and that's the question of downtown or inner city parking.  And within the city of Calgary there is a ‑‑

5167             COMMISSIONER DUNCAN:  Yeah, I know.

5168             MR. McGOWAN:  ‑‑ which perhaps you can relate to if you have been driving, and certainly we can. It's difficult to find downtown parking.  Part of the reason is because the city controls how much ‑‑ as any municipality, controls the level of parking developed.


5169             In Calgary, for whatever reason, they put a levy on developers who are proposing to build buildings like the one we are in.  They don't necessarily require you ‑‑ well, they don't require you to have parking for every person who could potentially be there, in fact, it's a fairly ‑‑ it's almost a minority number. They take a levy, and the concept is that the city, itself, will go forward and build these parking spaces.

5170             Now, a top‑line media story, again, since I believe it's about to be debated by city council, is the fact that, okay, if I am 35‑plus and I have to drive, commute into my office from a part of Calgary, and I drive, maybe I have to come and go during the day, I got to have parking, and it's expensive, and difficult to obtain, that's the top‑line story.  There is a parking issue.

5171             But for our demo, I mean, many of them are working at beginning jobs or they are students, at whatever level, secondary, post‑secondary school, it's not ‑‑ they don't have a car.  So maybe their greater issue, the other thing that's on the debating table right now in the city, is the further expansion of transit, or LRT, light rail transit, to northeast Calgary.

5172             What's more important?  Well, we will know by the feedback we get from our community, both phone calls, website, interaction with them, where they are at with it.


5173             I suspect that maybe their is, "Well, hey, if you're not building parking anyway, why isn't more of that coming to transit, because it's difficult for me to come back from studying in Mount Royal, which is down in the southwest, because transit service declines in the evening and I have to cram for examines until midnight and I have no way of getting home.  It's of greater use to me if there's better transit service".

5174             So I think, once again, there's a certain skew of how you speak and serve your community with your spoken word and news programming, and that would be another example I would use.

5175             COMMISSIONER DUNCAN:  I appreciate that, too.  I as actually trying to think of something that might be 12 to 17, but ‑‑

5176             MR. McGOWAN:  Yeah.

5177             COMMISSIONER DUNCAN:  ‑‑ if it happens, you will see us ‑‑

‑‑‑ Laughter / Rires

5178             COMMISSIONER DUNCAN:  ‑‑ but I was just trying to see what your community news might constitute for that group, that age group.

5179             MR. McGOWAN:  Well, again, I think there are issues ‑‑

5180             COMMISSIONER DUNCAN:  Maybe a rock concert ‑‑


5181             MR. McGOWAN:  Yeah, exactly.

5182             I mean, further to what Debra said, you, again, have to appreciate, and I think anyone in the room who's a music fan knows how central to your life experience music is.  You are either at some point touched by it, or probably not at all, but in your prime years, which usually fall somewhere between 12 and 34, the fact that an act like Metric or Franz Ferdinand are coming to Calgary is really important.

5183             The more contact you can have with that even, maybe the group phones in from a tour stop in advance, maybe the radio station's giving you a chance to win tickets or even meet the group, that's really important.  That could be the biggest thing of your month, if not year.

5184             Again, your job, as a broadcaster, with a focus on your audience, is obviously to serve them.  And that happens in different genres and ages in different ways, but ours, I think we are pretty focused on what we need to do to speak to them.

5185             COMMISSIONER DUNCAN:  I guess Hilary Duff might be a good example for that age group.  I don't know if she was here to Calgary recently or not.  She was in Halifax.


5186             MR. McGOWAN:  Age group, I think that belongs more to the CHR side of the spectrum.

5187             COMMISSIONER DUNCAN:  Oh, does it?

5188             MR. McGOWAN:  Yeah, absolutely.

5189             COMMISSIONER DUNCAN:  Okay.  I won't help you out, then, okay?  Okay.

5190             Now, just going to ‑‑ and thank you for adding that.  It was helpful.

5191             I just want to go to the economic analysis.  This is kind of an interesting thing because the two questions, to me, go in sort of the opposite direction, and so I will ask them both, and then you can see.

5192             We note that, in comparison with the experience of an existing Calgary station, CIBK‑FM, your overall 12‑plus audience share may be somewhat underestimated.

5193             CIBK‑FM generates a large portion of its total audience from the 12‑to‑34 demographic group, the same group you are targeting with your proposed service, although I notice that wasn't the station that you quoted in your example earlier.  But given this comparison, because they had a 9.2 percent audience share 12‑plus, we thought perhaps your audience share estimates were underestimated.


5194             But the other question I have that sort of goes the other way is then I noticed that your revenue projections, compared to all of the other applicants, are more bullish, they are highest of all of the applicants in every year, and so I was just sort of interested in your comments.

5195             MR. OLSTROM:  I would first, actually, like to turn to Debra McLaughlin to speak to the first portion of your question, and then Tina Svedahl will speak to the financials.

5196             MS McLAUGHLIN:  Commissioner Duncan, can you tell me the stat you quoted?

5197             COMMISSIONER DUNCAN:  Oh, 9.2 for audience share, the fall BBMs for CIBK.

5198             MS McLAUGHLIN:  That's a 12‑plus figure?

5199             COMMISSIONER DUNCAN:  Yes.

5200             MS McLAUGHLIN:  Okay.

5201             Yes, that format is, as I understand it from surveillance and from descriptions in the industry publications, is broader.  It's urban/hip Hop and has a bit of CHR.  So it's not alternative.  We are a much more narrow focus that serves certainly the large demographic of the 200,000, but their approach is somewhat broader in terms of what they can capture.


5202             In order to estimate our shares, we have relied on the consumer demand study.  How we do that is we ask a series of questions within the context of that study.  We asked all of our respondents their impressions of radio, the degree to which they are satisfied, do they find variety, and would they listen more?

5203             We also go through a music test, and we play samples of the music and get scores on that; we ask them for their tuning within specific genres; and finally, we describe the service in its full context, combining the spoken‑word element, what that will look like, ‑‑ or sound like, rather, and the music.  From that we get very specific responses in a definitely/probably listen category.

5204             I take those numbers, and based on all of the elements I have just described to you, plus, frankly, experience, because I have fortunately done this long enough that I can track what I say at these hearings against what actually happens, I estimate an adoption rate by demographic.

5205             The figure that I have provided here represents, on the basis of this research, about 65 percent to 70 percent of our mid‑range share, and we think that's fairly reasonable.


5206             Just to put that in contrast, if I was doing an adoption rate on a 45‑plus demo, it would be in the area of 40 to 50, because these are early adopters.  So, actually, I have taken a bit of an aggressive stance.

5207             Just again, you are comparing in that statement to a broader format.  If I compare that to a station like The Edge, in Toronto, it's always sort of ‑‑ well, I shouldn't say "always", but at least for the last five or six surveys, been hovering around a 4.5.  So for a new entrant into the market, a 3.28 I think is both reasonable and, I would say, aggressive, but fairly aggressive.

5208             COMMISSIONER DUNCAN:  Okay.  Thank you.  That's good.

5209             MR. OLSTROM:  And I will turn to Tina to speak to our financial projections.

5210             MS SVEDAHL:  Madam Duncan, as we know, the Calgary market is very strong, and getting stronger every day.  As CHOM and many others, we develop our revenues based on total market value for Calgary.  That definitely substantiates the reason why our numbers are the way they are today.


5211             When we filed, as you know, in 2004, we then subsequently sent an amended revenue projection in to increase it.  That further suggests that the market is growing, and I will just take you through that quickly.

5212             The CRTC numbers for 2004 increased, to the Calgary market, to $70 million.  That was an 8.6 percent increase over the previous year.  In conjunction with that, the Conference Board of Canada also released their information for 2004, and the retail sales for Calgary surpassed their forecast by 7 percent, totalling a 10.3 percent increase in retail sales.

5213             Those two figures alone, and in the way we do our business plan, considering total market, definitely substantiated a reforecast in our business plan and further substantiates the reason why our number is $39 million.

5214             Then, because of the top‑down approach, we simply just calculated the value of a share and multiplied it by the share point, as Debra mention, of 3.2.  Extrapolating that over the seven years you, will arrive at our $39 million.

5215             Based on that assumption alone, I'm very confident that our numbers are realistic.  However, I will pass it over to our sales expert, and she can further demonstrate our bottom‑up approach to further substantiate that is a reasonable number.


5216             MS BRODERICK:  Yes.  Thanks, Tina.

5217             We also used a second set of calculations to determine if our share estimate made sense, based on sellout rates and unit rates.  So what we did was take individual day parts, estimated sellout rates, annual rates, and multiplied by 52 weeks.  When we did this, we had a less than $9,000 difference in our $39 million budget.

5218             So on both levels, we feel that our rates are reasonable, as well reflective of the markets.

5219             COMMISSIONER DUNCAN:  All right.  That's great.  You are obviously very confident in your numbers.

5220             MS STRAIN:  If I could just add, Commissioner Duncan, I think the confidence in our numbers also reflects the fact that we ‑‑ just getting back to what we said before, we think we found the gap in this market.  Whereas, some of the other applicants in this hearing will be competing for listeners with the incumbent stations when and if they launch, we won't have that problem.

5221             COMMISSIONER DUNCAN:  All right.  Thank you.


5222             MS SVEDAHL:  Madam Duncan, if I could also add, just a point of interest, yesterday, when listening to the other applicants, there were suggestions that the market forecasts were close to $80 million.  So there, again, I think that further substantiates that we were very reasonable in our market forecast.

5223             COMMISSIONER DUNCAN:  It just begged the question cause you were number one.  I had to ask.

5224             I think maybe, I don't know ‑‑ Ms McLaughlin, you have been so helpful here today ‑‑ but we have tried from other applicants, as well, to get a better understanding of how your research ties into your revenue projections, and probably you have given me that in your last comments.

5225             MS McLAUGHLIN:  Well, as both Karen and Tina have just described, the audience research in the top‑down approach is the basis after calculating the share point value.  As she said, you just take the total values reported by the CRTC, take the total share of the originating stations, which are the only ones that contribute to that revenue summary that you provide us, you divide it in, you find a share point value.


5226             You take that number and depending on your confidence in the market, you either increase it by what you think the market will grow by, and in our case we also added an inflationary rate, assuming that because we did originally file in 2004 there would be some growth just based on inflation alone, and you multiply it by the share point value that comes directly out of the research.

5227             There's the acid test that we have described.  In terms of my share, I have not only looked at CFNY, I have had the advantage now to look at what's happening at Sonic in Edmonton, and I believe they came out over 5.

5228             We have an alternative rock coming out of Vancouver, so we can look and pretty much gauge whether I'm twice what everybody else is or half that, or whatever, and I think that we are very bang on.

5229             Then, as Karen can describe for you, once you have got all that, you go into the market, you get the cost on average unit rate, figure out what you sellout rate will be on each day part, and because of the high demand from advertisers that Karen and her team, and, frankly, I had to investigate, as part of the feasibility study, the sellout rates were about 50 percent, which seems aggressive perhaps to some for a marketed new station, but in actual fact have been achieved by other youth stations right off the mark.


5230             So it's been tested in several directions, and the audience research, the demand that we see, is the premise for the economics.  It isn't derived from the economics, it is the premise.

5231             COMMISSIONER DUNCAN:  And I did understand you to say you used 65 percent or you do temper that.

5232             MS McLAUGHLIN:  Yes.

5233             COMMISSIONER DUNCAN:  I noticed some of the other applicants referred to taking a ‑‑ they didn't like to use the word "conservative", but a more moderate approach.

5234             MS McLAUGHLIN:  Well, yeah, because ‑‑

5235             COMMISSIONER DUNCAN:  You tempered yours a bit.

5236             MS McLAUGHLIN:  Yes.  What we do, and what I was referring to, is if I was to get a score of 21 percent of all respondents saying they would definitely listen, it would be a glorious thing, and I supposed I would be much better if I could ‑‑ or, you know, busier, if I could predict bang on that what my research says is what happened.


5237             We know that there is a variation between what people state they will do and what they actually do in practice.  So we discount that.  We discount it lesser for the less competent statement of listenership, as it were, "probably listen", we discount that portion more.

5238             But I used in this area between 65 and 70 ‑‑ and, I'm sorry, that's the one last calculation I didn't manage to do ‑‑ but, again, it goes back to the experience that I have in watching the behaviour of this group.  They are really adopters, and they do take up services and new products faster.

5239             COMMISSIONER DUNCAN:  Thank you.

5240             MS BRODERICK:  If I can just add to what Debra says, early on, to determine viability, it was important for us that we do ongoing street‑level research with the potential advertisers.

5241             We have spoken with many, both traditional youth advertisers, as well as ‑‑ or traditional youth advertisers that you might expect, like Megatunes, The Union, Fido Wireless, Axe Music and The Source, just to name a few, but we also spoke with many automotive dealerships, restaurants and night clubs.  So what we heard was that the Calgary youth radio market was limited, with little or no efficiencies for advertisers trying to reach this demo.


5242             So this has created significant demand.  And I can unequivocally state with confidence that we believe that this format has sustainability.

5243             COMMISSIONER DUNCAN:  I do have one question for you, because I was curious ‑‑ and I touched on it there earlier when I was talking to Mr. McGowan ‑‑ because I do see, as a selling feature for you in this proposed formate, is hearing my ad on the website as a bonus.

5244             MS BRODERICK:  Absolutely.

5245             COMMISSIONER DUNCAN:  So you have factored that in and ‑‑ I don't mean ‑‑

5246             MS BRODERICK:  We didn't factor it in to necessarily our revenue projections, but it certainly would be an added bonus, definitely.

5247             COMMISSIONER DUNCAN:  Thank you.

5248             MR. COWIE:  If I might add one more pillar into this ‑‑ and this is not news we have at the time ‑‑ but we suspected there would be substantial growth in the 12‑24 youth target audience that we are looking for here.  We were astounded to find that, since the 2002 census, Financial Post now has taken a look at it after five years and that number has risen to over 200,000 in the 15‑24 age group, which is closing in on 20 percent of the population of the city.


5249             So we take great comfort in that.  That will again prove our financial proposals.

5250             COMMISSIONER DUNCAN:  Thank you.

5251             Now, we are getting down here on the questions.  I'm not going to bother with this one.

5252             I only have one left, actually.  You have been very helpful.  The other applicants have all been asked this.

5253             We are just curious to know how many new licensees you think the market the market could sustain.

5254             MR. COWIE:  Well, we don't agree with the Rawlco figure yesterday of 20.

‑‑‑ Laughter / Rires

5255             COMMISSIONER DUNCAN:  We didn't take that too serious.

5256             MR. COWIE:  We live in Saskatchewan, too.

5257             COMMISSIONER DUNCAN:  Yeah.

5258             MR. COWIE:  We think that the market could certainly sustain a licence in the area that we are applying for the younger demographic, and likely a licence in the higher demographic.

5259             COMMISSIONER DUNCAN:  Okay.


5260             MR. COWIE:  Beyond that, if the Commission chose to license beyond two, our view is that we can come to this market, operate successfully at whatever number you choose.

5261             COMMISSIONER DUNCAN:  That's great.  Thank you.  That's very helpful.

5262             That's all my questions.

5263             THE CHAIRMAN:  I have Mr. Langford, for you.

5264             COMMISSIONER LANGFORD:  Thank you, Mr. Chairman.

5265             I wonder if we could just sharpen the focus on that last question, if you don't mind, because we are really getting down to the sort of short strokes, as they say here.  As we are hearing more and more applicants, we are beginning to see the format pie cut in thinner and thinner slices.

5266             It's clear when you say the older demographics, that you could live happily with, say, Evanov or Larsen or Rawlco, they are way up top, and you are about as far down in the age bracket, as we have heard so far.

5267             What about with the CHUM proposal, which is somewhere in the middle, any overlap in your content with what CHUM is proposing?


5268             MR. COWIE:  I guess we would have included CHUM in that third option.  If there was a licence beyond two, we could coexist there, yes.

5269             COMMISSIONER LANGFORD:  Right.

5270             Are your divisions, which you spent quite a long time on with Commissioner Duncan this morning, and it was very, very helpful, at least for me, and I'm sure for my colleagues, but are you clear enough in your mind, in your sort of division of format, that you actually would not anticipate overlap with, say ‑‑ and I'm just choosing CHUM because they are just kind of in the middle ‑‑ no overlap at all amongst your format, CHUM's, which I see in the middle, and any one of the ones at the top, say, Larsen or Independent?  Would you see any area for overlap at all there?

5271             MR. COWIE:  I'm going to ask Debra to help me with this.  There is some overlap, clearly, at the top end of our 12‑24 or 18‑34 larger demograph, although we do see CHUM as a step higher than we are.  But at the bottom end of theirs and the top end of ours there likely would be some overlap.

5272             But if you will allow, I will have Debra speak to that.

5273             COMMISSIONER LANGFORD:  Thank you.


5274             MS McLAUGHLIN:  Commissioner Langford, I have to admit not having memorized all of CHUM's statistics, but I was present for their presentation and I thought I heard them ‑‑ and correct me if I'm wrong ‑‑ but quite clearly state that their demographic is women and 25 to 44, with maybe a focus, I believe I heard, 30‑ to 40‑year‑old women.

5275             We are clearly not there.  The music itself, as you heard, between our video and the presentation they gave you, it just doesn't sound alike.

5276             We are young, we are skewing towards males, and occasionally, and it's hoped, I supposed, by some artists, but not all artists operating in this genre, they do slip over into a mainstream or a Hot AC they become so popular.

5277             But the minute they do that, they fall off of the alternative rock charts because, by definition, the alternative rock format plays a larger range of music, they play more new music, they play less spins.  I mean, it really is almost counter programming.  They are women, we are male.  They have a higher repetition rate.  By virtue of having that, well, they say they are introducing new artists, and I'm certainly not here to contest that, it's probably not at the rate that we are, so ‑‑

5278             COMMISSIONER LANGFORD:  Thank you.


5279             What about your own video, which you showed us?  There was one aspect of it that struck me as keeping with the rest of it, and that was the young lady with the acoustic guitar, whose name I'm afraid I have forgotten.  I make not comment on her talent, which I'm sure is enormous, she just didn't seem to be a member of the same club as the rest of the people who were playing in your video.

5280             So how do we account for that in your format?

5281             MR. McGOWAN:  Well, I think, just to give you some background, we were ‑‑ of course, deadlines approach, so everyone else we were able to do a shoot live with a band, and in her case, I mean, she had no show scheduled and we really wanted to include her in our video, so we had to do a studio shoot just with her and her acoustic guitar.

5282             I think you have heard a fair amount about how music gels ‑‑

5283             COMMISSIONER LANGFORD:  M'hm.

5284             MR. McGOWAN:  ‑‑ and the gestation of it and everything and, realistically, if you write songs, you may play them with a band, but in many cases it starts at the piano or it starts on the guitar.  We captured her at that level.


5285             COMMISSIONER LANGFORD:  I see.  So she's not always playing with an acoustic?

5286             MR. McGOWAN:  No.

5287             COMMISSIONER LANGFORD:  This isn't a young Joni Mitchell we are looking at here?

5288             MR. McGOWAN:  No.

5289             COMMISSIONER LANGFORD:  Okay.

5290             And last question, if I may, always on the same topic cause we are just getting down to impact on each other, at this point, we are hearing enough now, CJAY, it's pretty clear from the charts that you handed us this morning, they are going to take the hit, if anybody in this town's going to take the hit from you arriving in town.  How big a hit?  How negatively will your station impact upon CJAY‑FM?

5291             MR. COWIE:  Again, Commissioner Langford, to give you a definitive answer, we think it's minimal.  But we will give you a number, and I will have Debra do that for me.

5292             MS SVEDAHL:  Actually, sorry, Bruce, I can speak to that.

5293             MR. COWIE:  Okay.


5294             MS SVEDAHL:  Our impact study showed that it was 30 percent.  Of that, 40 percent was going to go to the two existing stations and the two stations in the market that we have mentioned.  Our number, to quantify it, was $1.1 million.

5295             That being said, 40 percent of it was going to be shared between the two stations, which would be about $440,000.

5296             COMMISSIONER LANGFORD:  And you see no problem with them absorbing that kind of an impact?

5297             MR. COWIE:  No, it's very small.  It's an audience that was going to migrate anyway and one that is clearly nowhere near their core audience.

5298             I would point out that neither of those stations intervened against us.

5299             COMMISSIONER LANGFORD:  If I could just turn it around ‑‑ and this will be my last question ‑‑ they are not going to be blind and deaf to what's going on in this room ‑‑

5300             MR. COWIE:  No.

5301             COMMISSIONER LANGFORD:  ‑‑ and there's going to be some lag time between the time when, hypothetically, we license you and you get up on the air.  What kind of a strategy could they use to eat your lunch?  Is their format at this point malleable enough that they could push down on it and leave you less of a market to ‑‑


5302             MR. COWIE:  We think there's no danger of them doing that.  As we have said before, that many have visited the alternative rock genre in the past and had a cup of coffee and decided that there were better things where there were more people and who were a little older.  That's changed now.  Twenty percent of this marketplace is available in 12‑24s.  In order for them to do that, they would have to come and play there, and they are not going to do that.

5303             COMMISSIONER LANGFORD:  They would have to abandon their present demographic?

5304             MR. COWIE:  That's right.

5305             If you recall, Commissioner Langford, this is a wheel.  At the bottom side and on one side it's CHR urban, which is female oriented, and alternative rock or modern rock on the other side, which is male oriented.  They can coexist very nicely together and it would be tough for somebody to come in and take the two of them on.

5306             COMMISSIONER LANGFORD:  I see.

5307             Thank you very much.

5308             Those are my questions, Mr. Chair.

5309             THE CHAIRMAN:  Thank you, Mr. Langford.

5310             We will have a few questions for you.


5311             I was listening with Mr. McGowan spoke about podcasting, and while it is interesting, it also raises some issues.  And I'm understanding that currently you already have some music on your website, and that music, could it be downloaded or it's only streaming that you are doing now?

5312             MR. McGOWAN:  It's streaming.

5313             THE CHAIRMAN:  It's only streaming.

5314             Now, you have said that you are going to be making your programming available for podcasting.  Will it be all the programming or only certain segments or certain programs?

5315             MR. OLSTROM:  It would be selected segments.

5316             THE CHAIRMAN:  And have you already identified which segments it's going to be, and will it include music?

5317             MR. McGOWAN:  If I might jump ahead, I know you have some copyright concerns probably.  We wouldn't be intruding on copyright issues, so...

5318             MR. OLSTROM:  It would include our future programming, the different ‑‑ whether it be our news, for example, and young consumers like to have things on demand or at their schedule so they can download the newscast, and that would be available for them to listen to at their leisure.


5319             MR. COWIE:  To be more precise, Mr. Chairman, it would be only the feature programming.

5320             THE CHAIRMAN:  Okay, fine.

5321             Now, you also spoke, Mr. McGowan, about news coming from your community website.  Now, obviously, you were using the word "chat", but you more than likely were talking about blogs.

5322             MR. McGOWAN:  Well, not necessarily.  I mean, we actually don't at this point have a position on whether the station would have its own blog, for example.  I don't know if we would do that.

5323             I'm more referencing the fact that we see many dimensions to our points of contact, to our portal, if you will, of our community and how we reach them.  So traditionally, I think, people would look at:  how do you contact a media outlet?  It would be, well, you could write them a letter or you could phone them.

5324             Now there's many ways to do it.  I mean, you can e‑mail them.  If the station sponsors, as I say, a monitored chat facility nothing prevents the program director from spending 11 to 11:30 in the morning reviewing what the audience has to say about the radio station, in addition to those traditional methods.


5325             I'm sure people won't never write us a letter or won't ever, obviously, phone, but, again, the points of contact are multi‑faceted and from there, whether you are the program director or the news director, you reach a certain consensus and an understanding of what are the top‑line issues with your audience.

5326             THE CHAIRMAN:  Yeah.  Okay, because did I hear you also saying that you will be using that community website to do some news gathering?  Because it raises all sorts of questions regarding the reliability of the information and how it is made available.

5327             MR. McGOWAN:  Well, I don't think it usurps any traditional role that, let's say, a news director would have.  I mean, I wouldn't seen any difference, for example, between receiving an e‑mail or following an e‑mail string on a chat room, where there's some suggestion that maybe this is an issue worth following up to the due diligence that any programming or news department would do, any different from 20 years ago, when you might receive a phone call.  Is this a real tip, you know?

5328             THE CHAIRMAN:  Okay, well ‑‑ yeah?


5329             MR. OLSTROM:  Sorry, this information wouldn't be necessarily posted on the website as an e‑mail, as Garry said, it would be incoming information to the radio station, to the program director or news director.

5330             THE CHAIRMAN:  Okay, fine.

5331             Okay, thank you.  It clears up the questions that your presentation made, at least to my mind.

5332             Also, I have another question which has to do ‑‑ I read in your application, if you have been granted the licence, you are going to go on the Rogers transmitter site.  I also read in the Rogers' letter that they will facilitate you and they are ready to allow you to use antenna and transmission lines.

5333             Will you also need a combiner?  Or is there already a combiner on that site that you will be able to use?

5334             MR. OLSTROM:  Technical stuff usually goes over my head ‑‑

5335             THE CHAIRMAN:  Yeah.

5336             MR. OLSTROM:  ‑‑ but Gord Henke of DEM Allen I know is here and I could have that information provided for you.


5337             THE CHAIRMAN:  Okay.  I'm trying to relate it to the budgets that you have submitted.  Obviously, if there is the need for a combiner, your numbers are probably low.  That's why I'm asking the question.

5338             MR. COWIE:  We will have to get that answered for you, Mr. Chairman.

5339             THE CHAIRMAN:  Okay, fine.

5340             Could we expect to have that answered filed, say, at the time of the reply?

5341             MR. COWIE:  Absolutely.

5342             MR. OLSTROM:  Vice‑chair, Gord Henke is here.  I could have him come to ‑‑

5343             THE CHAIRMAN:  No, well, you will ask him and you could give us the answer at the time either if you ‑‑

5344             MR. COWIE:  We will supply that.

5345             THE CHAIRMAN:  Okay, fine.  Thank you very much.

5346             I have Mrs. Legal Counsel.

5347             MS BENNETT:  Good morning.  I have one technical question for you.

5348             As you have heard in the last couple of days, several applicants, including yourself, have proposed Calgary Rock and 106.1 as a second choice frequency.  As you would also have heard announced, Industry Canada has advised the Commission that this allotment has a history of NavCom issues in Calgary.


5349             Could you explain how this allotment is a viable alternative for your proposed service?   And would its use affect your service to the Calgary market?

5350             MR. COWIE:  Well, my understanding was that is not available.

5351             MS BENNETT:  So you have not proposed it as an alternative?

5352             MR. COWIE:  We have not proposed it as an alternative, no.

5353             MS BENNETT:  Okay.  Thank you.

5354             THE CHAIRMAN:  Okay.  Well, it's time now for the wrap‑up.

5355             So Mr. Cowie, Mr. Olstrom, in five minutes or less, could you tell us why the Commission should grant you the licence?

5356             MR. COWIE:  Well, first, we are delighted with our conversation with you this morning and we would like to leave you with these thoughts.

5357             Of the many applications before you, we believe our alternative rock proposal best fulfils the Commission's licensing criteria, as set out in the Call for Applications, PM2005‑48.


5358             Further, approval of the Harvard application meets a number of key objectives identified in the Commission's Radio Review, PM‑2006‑1 ,and here's why.

5359             First, the contribution to Broadcasting Act objective.  Section 3 of the act calls for diversity of voices, diversity of programming, and the development of local and regional talent.  Harvard offers all three.

5360             In diversity of voices, we offer a new editorial voice and diversity of ownership to the Calgary market.  We are a western regional broadcaster and Calgary is a natural fit for us.  It's a must‑have market that will form the basis for our growth strategy.

5361             In diversity of programming, of all of the applicants before you, our alternative rock format is the most in demand and represents service to the least‑served of all the demographic groups in the market.

5362             As our duplication analysis shows, alternative rock tracks are not being played to a significant degree in Calgary today and there is no alternative rock station in the city, a clear anomaly in a major Canadian market.


5363             A goal of the radio review is to provide listeners with a greater diversity of music genres and a greater variety of Canadian artists.  Harvard's proposal achieves this goal in Calgary.

5364             In terms of local and regional talent, our format, with its emphasis on new music, our commitment to 40 percent Cancon, and our CTV package are all focused on the development, exposure and support of local and regional Calgary‑area artists.  No other applicant offers a better format or a comparable CTD package in support of the exposure of new music and local artists.

5365             The Commission's recently released radio review calls for effective contributions to Canadian artists through airplay of Canadian music.  What we have proposed by way of music programming and our artist‑based CTD package is consistent with that objective.

5366             With respect to our business plan, our plan for Calgary was carefully formulated and is achievable.  We have chosen a demographic that is underserved, so we will not be competing in the 25‑54 demo that many of the existing stations already serve and a number of applicants are targeting.


5367             We are at the other end of the lake, fishing alone in the shallow end, where the fish these days are getting bigger.  We are introducing a format that does not exist in the market today and which no other applicant has proposed.  In short, we are unique both from a demograph and from a format perspective.

5368             Our one‑year revenues represent 4.1 percent of the total projected radio revenues for the Calgary market, a reasonable goal given the size of the target market and proven demand for the format.

5369             We have a market of over 200,000 to draw from, as 12‑24s represent almost 20 percent of the population.  Most importantly, this demograph is one of the key growth groups going forward.

5370             Harvard is well financed.  We have been in business for 103 years.  We have resources to achieve our goals.

5371             Finally, our APTN news mentoring program recognizes the special place of aboriginal peoples in our society, another goal of the radio review.

5372             For all of these reasons, we believe our proposal represents the best use of the frequency.


5373             Mr. Chairman, if you will allow, I'm going to ‑‑ shouldn't often do this ‑‑ but answer a question with a question.  Why Harvard in Calgary?  Where else could a stand‑alone survive if not in what is arguably the healthiest radio market in Canada, where the demand for the service we propose is obvious, definable and extends into the future.

5374             Calgary's economy is undeniably strong and our proposed format has been licensed in other markets to serve the same demographic that is most underserved here.

5375             If not here, if not now, where would a western regional broadcaster grow?  This is the market, this is the economical environment.  We think we have provided the application.

5376             Thank you very much for your attention.

5377             THE CHAIRMAN:  Thank you, Mr. Cowie.  Thank you to your team.

5378             We will take a 10‑minute break and start with the next item.

‑‑‑ Upon recessing at 1040 / Suspension à 1040

‑‑‑ Upon resuming at 1058 / Reprise à 1058

5379             THE CHAIRMAN:  Order, please.

5380             Ms Secretary.

5381             THE SECRETARY:  Thank you, Mr. Chairman.


5382             We will now proceed with item 10 on the agenda, which is an application by Newcap Inc. for a licence to operate an English‑language FM commercial radio programming undertaking in Calgary.

5383             The new station would operate on frequency 92.9 MHz, channel 225C1, with an average effective radiated power of 48,000 watts, maximum effective radiated power of 100,000 watts, antenna height of 160 metres.

5384             Appearing for the applicant is Mr. Rob Steele, who will introduce his colleague.  You will have 20 minutes for your presentation.

5385             Mr. Steele.

PRESENTATION / PRÉSENTATION

5386             MR. STEELE:  Thank you.

5387             Good morning, Mr. Chairman, members of the Commission and Commission staff.

5388             I'm Rob Steele, president and chief executive officer of Newcap Radio, and before we begin our presentation I would like to introduce our team.

5389             Seated in the front row, furthest to my left, is Stephen Peck, the general manager of our jazz station here in Calgary, CIQX‑FM.

5390             Next to Stephen is John Beaudin, program director of CIQX.


5391             Next to John, I am pleased to introduce Kathy Shane, actor, songwriter and musician.  Kathy has been a performer since she was 16 years old.  Her activities have included tours with Tom Jackson's "Huron Carole", seven years singing with Eric Friedenberg's big band and an ongoing jazz trio called Outcats.  Her new five‑song EP recording entitled, "Party of Two", will be released soon.

5392             Next to Kathy is Mark Maheu, executive vice‑president and chief operating officer of Newcap Radio.

5393             And beside me is Shaneen (ph) Carr, music director of CIQX.

5394             In the second row is Dave Murray, vice‑president of Operations for Newcap Radio, and next to Dave is Brad Boechler, Newcap's vice‑president of sales.

5395             Beside Brad is Mark Kassof, who conducted two format studies in the Calgary market in helping us prepare our application.


5396             We are here today to present our application to bring an exciting new radio station to Calgary, and adult album alternative station or, as it is know, triple A.  Triple A is a new format to Canada and although it has been in existence in the United States for over 15 years, CAFÉ92.9, as we have dubbed the station, will be a sister station for CIQX, a specialty format station which has carved out a small niche in Calgary playing jazz and blues and complementary music.

5397             You have heard from all of the applicants who preceded us this week that Calgary is a dynamic market, benefitting from the sustained growth of the Alberta economy.  A couple of quick facts.  Calgary's retail sales of $13.8 billion, projected for 2006, are expected to grow to $20.5 billion by 2011.  That's an increase of 52 percent.

5398             According to TRAM, Calgary's radio revenues have grown an average of 8.7 percent every year since 2001, while the aggregate of all Canadian markets grew at 6.5 percent.

5399             The PBIT margin in Calgary is among the highest in the country, at over 27 percent, even with the addition of four new stations since 2002.

5400             In today's presentation, we will outline how we decided on the format that would best serve the market and what that format is and how it will serve the Calgary audience and our proposals for Canadian talent development.


5401             We always like to conduct detailed and thorough research to determine the kind of station that will best serve the market and we have worked with Mark Kassof for a number of years now and Mark has prepared the research for all of our applications for some time.

5402             He also uses similar techniques and approach to helping us position our stations in markets where we have purchased a station or need to refocus our programming.

5403             A copy of the latest research has been provided in your folder.

5404             Mark.

5405             MR. KASSOF:  Thanks, Rob.

5406             Good morning, Commissioners.

5407             I would like to outline how we conduct audience research.  We believe this is important since you have seen contradictory research findings at this hearing.

5408             First is what we don't do.  We don't decide in advance what the format should be, and then seek data to support that conclusion.  We don't start with a predetermined idea about a target audience or format choice.

5409             Instead, we target a wide variety, a wide sample, in the case of Calgary 12‑ to 64‑year‑olds, and ask them about a realistic number of music formats, in the case of Calgary eight different music formats.


5410             We did 15‑minute interviews with a representative sample of Calgary listeners to describe each format to listeners, play them a montage of music from that format, ask how often they think they would listen to it, and ask whether Calgary offers any stations like that right now, in their perception.

5411             From these questions, we calculate what we call percent of format void:  the percent of all listeners who have an interest in a format and cannot name any station presently delivering it.

5412             In the case of Calgary, we did this twice, once in March 2004 and once in June 2005.  The reason we did a second test was that there were significant format changes in the market.  Not surprisingly, our results changed, as well.

5413             In our first survey, we found CHR to be the missing format following the change of an existing CHR station to another format.  However, within a year another station, The Vibe, had adopted CHR and the format opportunity had changed.


5414             In our June 2005 research, triple A's percent of format void was 8 percent overall, highest of the formats we tested, and it was even higher among people in their twenties to mid‑thirties:  13 percent are interested in triple A and don't get it from any Calgary station.

5415             We went beyond merely testing the formats.  We tested listeners' behaviour and their satisfaction with radio choices in the market.  What we learned is that the potential P1s for triple A, those we project will listen to it most, are less satisfied than average with Calgary radio.

5416             We also learned that they spent more time listening to other music sources, such as CDs and MP3s than average, and spent less time listening to radio than average.  In fact, they presently spend more time listening to other music sources than they do to radio.

5417             A new triple A station will give them a compelling reason to come back to radio.

5418             MS SHANE:  Thanks, Mark, and good morning.

5419             I would like to describe the musical sound of CAFÉ92.9.  Triple A radio focuses on the softer, more mature side of today's alternative music.  It delivers a mellower, more eclectic mix of rock, targeted at men and women in their twenties and thirties.


5420             At its heart are contemporary performers like Jack Johnson, Tracy Chapman, Dave Matthews, Kathleen Edwards, Matt Dowdy, Moby, Matthew Goode and David Gray.

5421             Triple A breaks through the barriers that put artists into rigid categories that keep them off the radio.  Triple A stations are unique because they build playlists based on the sound and content of the music, regardless of the artist.  The mix is eclectic, innovative and sophisticated.

5422             In addition to a diverse mix of rock, triple A draws music from genres as different as folk, jazz/blues and roots.  The emphasis is on the lyrics and on creative and sophisticated music.  Calgary, Canadian and international singer/songwriters will find a home on our station that they don't have anywhere else.

5423             Triple A is softer than alternative rock,leaving out the heavy edge and hostility associated with alternative.  What makes this format interesting and unique is its ability to accommodate a wide range of music by common‑threading the sounds.

5424             What other station in Calgary or Canada could boost a set of music including Sarah Slean, the Neville Brothers, Death Cab for Cutie, Sarah Harmer, Mark Knopfler, Tegan and Sara, and Newfoundland's Andrew LeDrew.


5425             While triple A targets a much different audience and has a very different sound than CHR, it does have one thing in common:  a strong reliance on newly released music.  Many Canadian artists and their new releases get significant airplay on U.S. and satellite radio.  Their exposure in Canada is limited to the CBC or campus radio, for the most part.

5426             Canadian singer/songwriters, like Ron Sexsmith, Mae Moore and Fred Eaglesmith are mainstays of these music outlets and regularly sell out their shows across the country, but are seldom heard with any frequency on commercial radio in Canada.  Calgary artists like Max Serpentini, Madison, Polyjesters and Fraid Knot will finally get the local exposure they deserve.

5427             The  nature of the format and the presence of all these great artists waiting for airplay means that we are confident that we can maintain a minimum of 40 percent Canadian content.  In addition, speciality music shows like "Acoustic Café", "Red, White and New", "Roots" and "On the Cutting Edge", will feature the full range of the music of the format, with a strong emphasis on new Canadian artists.


5428             We checked the playlists of all the other stations in Calgary last week against the triple A national airplay chart in the North American trade magazine "Radio & Records".  Only three of the 30 songs on that chart received any airplay in Calgary at all.

5429             So a different sound, based on recent releases, with lower repetition and a more diverse playlist, differentiates this format.

5430             To talk about our spoken‑word programming, here's our program director, John Beaudin.

5431             MR. BEAUDIN:  Thanks, Shaneen.

5432             We propose to provide a significant package of news, services and other spoken‑word programming on CAFÉ92.9.  Our listeners want current local and relevant news and information.  We have developed a complete and comprehensive plan to exceed their expectations.

5433             Our service of news and information to our listeners will take two forms:  81 traditional newscasts, scheduled through the week, for a total of five hours and 45 minutes per week.  These will be supplemented by information updates dropped into the program flow through the week, a combination of news bulletins, traffic and weather updates and sports information, for an additional three hours and 9 minutes per week.


5434             Along with informed talk about music, community events and local happenings, we will provide a total of over 15 hours of spoken‑word programming each week.

5435             To deliver on our commitment of spoken word, Newcap will employ an additional five newscaster reporters.  This will bring the complement of news people in our combined operation to a total of seven.

5436             The news gathering and reporting structure will be a two‑station cooperative effort.  The delivery of news on each station will be separate and distinct.  Each station will have its own dedicated newscaster on the air.  The newsroom and news reporters' assignments will be handled by one news director.

5437             This combined approach allows for a greater amount of news gathering and reporting for both stations.  Having separate on‑air newscasters for each allows for different and appropriate treatment of stories that is station and demographic specific.

5438             The end result:  more news gathering, more coverage and better service for listeners on both stations.


5439             And now to speak about the Canadian talent development, Mark Maheu.

5440             MR. MAHEU:  Thanks, John.

5441             Good morning.

5442             At Newcap, we are strong believers in Canadian talent development and all of the applications we are presenting at this hearing reflect our commitment and our willingness to invest.

5443             In our Ottawa application, you may recall, we developed a number of new initiatives aimed at helping new artists develop into viable performers.  They will also benefit from the strong support of our radio stations in many markets across Canada.  We have brought that approach to Calgary and tailored it to CAFÉ92.9's sound.

5444             We propose to direct $1 million each year to Canadian talent development initiatives, all direct spending that clearly qualifies under your rules. Our initiatives aim at three levels of talent development.


5445             First off, at the beginning level, we will provide $40,000 each year to support the development of young musicians.  In cooperation with the Calgary school system, we will run a summer clinic that will provide young local musicians with a three‑week intensive training session in developing their musical and performance skills.

5446             Secondly, we are going to provide over a half‑a‑million dollars each year to helping three artists develop over a one‑year period with one emerging with even more sustained support.  It's called our Making of a Band initiative, and it will start with the selection of three winners of the Calgary Folk Festival's song writing contest.

5447             In addition to their prizes from the festivals, these three winners will each receive $80,000 in tutoring, coaching, recording time, and the support to produce a good quality CD over the course of a year.

5448             The folk festival winners are songwriters and their level of performance skills will vary greatly.  This year's tutoring will allow them to develop or upgrade their performance skills.

5449             At the end of the year, we will hold an industry event to publicize all three and to choose one grand prize winner.  This winner will receive a little over a quarter of a million dollars to develop a high‑quality recording, video and performance presence over the course of the next year.


5450             We requested Key Entertainment, now knows and Grellin (ph) Entertainment, a Calgary artist management company, with a great track record, by the way, of developing rock, country and other Canadian music talent to manage this part of the initiative for us.

5451             To be sure that we are on the right track, we will ask the Radio Starmaker Fund to vet their plans and budgets.

5452             We will provide them with a guarantee of high‑rotation airplay for at least two cuts from the resulting album, not only on CAFÉ92.9, but on our format‑compatible stations right across Canada.  We expect that this will include our modern rock station in Ottawa, as well as our rock, top 40 and AC stations in other markets, from St. John's, Newfoundland, through Halifax, Moncton, Fredericton, Thunder Bay and Edmonton, as well as many other smaller markets right here in Alberta.

5453             As importantly, our stations will provide extensive promotional support when these artists come to town on the resulting tour.


5454             And last but not least, on the national front we will provide a contribution of $450,000 each year for seven years to the Radio Starmaker Fund.  We will ask them to direct these funds to the development of new Calgary folk, adult rock, blues and roots artists.  If there are not sufficient projects to cover the funds contributed, the fund will direct them to their general support projects for emerging Canadian talent.

5455             Kathy Shane, seated to my left, is a local Canadian performing artist, and she would like to tell you a little bit more about the impact of CAFÉ92.9 and what it might do to her career.

5456             MS SHANE:  Thank you, Mark, and good morning, Commissioners.

5457             As Rob Steele mentioned, I'm involved in the music business as a writer and as a performer.  I have regular big band gigs, a jazz trio and a guitar‑based acoustic duo.  Collaborations with my writing partner have resulted in soundtracks for videos, ad campaigns, TV and film.

5458             I have managed to make a living primarily from writing and performing, if mostly for other people's companies and projects, and I am thankful for that.

5459             A few years ago I tracked the course of an original compilation record through its various stages in an attempt to get radio airplay, and all the benefits that can bring.  This tracking process was a huge eye‑opener for me.


5460             From the calls that I was making, I gathered that it was rare that a station would or could take the chance of spinning an unknown versus slotting in the more proven Canadian artists.  It seemed that a couple of spins on CBC, CKUA, some brave but very cautious radio stations, and university radio would be the highlights of my career.

5461             I have had a relationship with the people at CIQX, who have supported my music, and they explained it the exact ways in which they are willing to roll the dice for lesser known Canadian talent, for local talent.

5462             My friends and peers, like Steve Pineau (ph), Shannon Gay, Scott Henderson, all one‑of‑a‑kind talents, would be greatly helped by shows like "Red, White and New" or "Acoustic Café", which spotlights a different artist each day.  This is the kind of thing that inspires creativity and writing on a daily basis.  It actually gives us hope.

5463             Making of a Band would leap‑frog a deserving performer into the spotlight.  The half‑a‑million‑dollar annual spending would help glue our musical community together and inspire some healthy competition.


5464             It's exciting that there are plans in the works to improve on the music scene that a lot of musicians have just grown to accept.  I hope that this may be a prototype for other markets to pick up on, cause it would enhance many lives, and I hope that mine is one of them.

5465             And now to sum up, Rob Steele.

5466             MR. STEELE:  Thank you, Kathy.

5467             We would like to present a short video that showcases the positive impact that a station like CAFÉ92.9 will have on Calgary.

5468             Run the video, please.

‑‑‑ Video presentation / Présentation vidéo

5469             MR. STEELE:  Mr. Chair, members of the Commission, we believe that the approval of our application is in the public interest for the following reasons.

5470             First, Calgary's economy leads the country, and the radio revenues and profits reflect it.  There have been year‑over‑year increases of radio revenues of almost 9 percent, and all observers predict continued growth.  We believe that the market could absorb four or five stations, and particularly a diverse one like CAFÉ92.9.


5471             Two, we filed the most comprehensive research at this hearing.  We surveyed radio listeners aged 12 to 64, the widest age range of any application at this hearing.  We also tested more format options than any other applicant, and our research indicates that CAFÉ92.9 is the right choice for Calgary.

5472             Three, our diverse format, with its emphasis on new artists, with a Canadian content of 40 percent and a variety of programs supporting local and Canadian artists, will provide a new window for critically recognized artists who go unheard on commercial radio.

5473             Four, our $1 million per year in Canadian talent development will go directly to the support of new and emerging artists, with at least a half‑a‑million dollars per year guaranteed for local Calgary artists and performers.

5474             Five, the addition of a new station will strengthen our newsroom and will allow us to provide a more comprehensive news voice and increase the editorial diversity in the marketplace.

5475             Finally, the approval of our application will go a long way to providing competitive balance in Calgary.  We will have a more equitable opportunity to compete with the national consolidated media companies, and this will mean higher levels of sustained service for Calgary listeners.


5476             Calgary has grown to the point where it deserves the diversity and choice available in other similarly sized markets.  At Newcap we are proud of our contribution to Calgary radio and we look forward to the opportunity of doing much more with CAFÉ92.9.

5477             That concludes our presentation this morning.

5478             Mark Maheu will take your questions and direct them to the appropriate members of our team, and I thank you for your time and consideration.

5479             THE CHAIRMAN:  Thank you, Mr. Steele.

5480             It's my understanding that you left with the secretary this morning and you gave all the members a copy of the July 1st market of ‑‑ new survey.  We looked into it, we accept it, and we have made available a copy of the survey in the CRTC Secretariat, so those who want to revise it.

5481             The survey supports the amendments that have been filed by this applicant during the deficiency process.  While it's new material, it is based on the same methodology and only updates the information as of July 2005.  So we have accepted it.

5482             MR. STEELE:  Thank you.

5483             THE CHAIRMAN:  I'm asking Mrs. Helen Del Val to put the first questions.


5484             COMMISSIONER del VAL:  Thank you for your presentation.

5485             I think, as you had anticipated in your presentation, one of the obvious questions that were raised were in the revised market study and your revised format.  It did raise some questions, particularly when in your 2004 study you had concluded that a new triple A station would struggle in Calgary, that only 15 percent expressed positive interest in triple A, and that a mere 3 percent would listen to that format at all times.

5486             Then, I guess 11 months later ‑‑ sorry, about 13 months later that was the format you chose.

5487             This raises obvious questions, as you had anticipated that it would.  I think in the future it would be very helpful ‑‑ and it's not your obligation, but it would be very helpful ‑‑ to offer the explanation at the time of filing the revised materials.  It would have given a little more time, I think it could have prevented some of the questions that are raised and left unanswered for so long.


5488             I acknowledge in your opening that the market has changed, but maybe you could explain that a little bit more, for example, the significance of wide changing formats, then, in March 2004, what were the formats?  Where there any sort of similar triple A formats, or the stations that were targeting that audience?  And then, what changed by the time you conducted the 2005 study?

5489             If you could just walk me through those changes, I would appreciate it, please.

5490             MR. MAHEU:  Thank you for the question, Madam Commissioner, and I will do my best to answer your question as specifically as we possibly can.  In a moment I will ask Mark Kassof, who conducted the research study, to get into some of the specifics about what has changed in the market and what we saw.

5491             First off, I would like to, on behalf of Newcap, apologize for the lateness of the filing of the research.

5492             To give you a little bit of background, maybe, for those in the room today, we originally triggered the call for a new application for a Calgary radio station.  We applied for a new radio station in mid‑2004.  So our research was conducted for the Calgary marketplace, and hopefully to put an application forth for a new Calgary radio station, in the middle of 2004.


5493             When there was a public call for applications in the middle of the year in 2005, we had already been filed for well over a year at that point.  When the public call for applications came out, I guess we could have left things they were, but we really thought about it and we thought, "You know, there's been a year that's gone by since filed", and we know, because we do business in the Calgary marketplace, that things have changed in the market and evolved.

5494             It was an expensive process for us to go back into the market and resurvey the market.  I'm glad we did because we did find some pretty significant changes that affected what we were prepared to bring forth in the Calgary market.

5495             To be able to conduct that study at the last minute, within the deadlines of the public call, that did fall through the cracks.  It was an administrative error, not filing the research.  We had thought we had filed it.  It is available in the examination room, and we understand your point of view on that, so thank you.


5496             I will ask Mark Kassof to kind of go through, if he may, for just a moment on the differences between the two studies, and what changed in that period of time and led us to the proposal before you today for a triple A, adult alternative station.

5497             Mark.

5498             MR. KASSOF:  Sure.

5499             One thing we are always looking for is the best opportunity.  Sometimes the best opportunity is different 15 months later, and that's certainly the case here.

5500             Now, let me address two aspects of your question.

5501             First of all, CHR, and what happened to CHR.

5502             CHR, in March of '04, among the people who had a positive interest in CHR, that is a 4 or 5 on a 5‑point scale, where 5 means, "I listen to this all the time", among those people only 28 percent of the people could not identify a radio station ‑‑ I'm sorry, excuse me, among those people, 43 percent could not identify a CHR station; 33 percent of those people said The Vibe was a CHR station.  Or there were changes in the market.  You had Power becoming the peak Hot AC, eventually moving on to classic rock.  And now, in '05, June 2005, now only 17 percent of the people who are interested in CHR cannot identify a CHR station.

5503             COMMISSIONER del VAL:  And so "now", that's June 2005?


5504             MR. KASSOF:  Correct.

5505             COMMISSIONER del VAL:  Okay.

5506             MR. KASSOF:  So in other words, the percent of people who are interested in the format and can't identify a station with the format went from 43 percent to 17 percent.  The Vibe's association with CHR among those folks went from 33 percent to 71 percent.

5507             Well, the net result of all of this is that the percent of format void calculation drops in half.  So what was a 10 percent of format void, and definitely number one in March of 2004, now moves right down the pack.  So that's what happened to CHR.

5508             But there's another aspect to your question, which is:  what happened to triple A?

5509             What's interesting what happened to triple A is that the interest in triple A, comparing March 2004 to June 2005, is essentially dead on in our research.  I mean, the numbers are very close.  The interest in the format didn't change.  What did change is the percent of listeners who could identify a station with the format.


5510             Now, in '04, among the people who were interested in triple A, 28 percent of those people could not identify a station with the format.  Fifteen months later, 63 percent cannot identify a station with the format.

5511             Well, in this case what changed?  And what changed is Jack's association with triple A.  In '04, 42 percent of the people interested in triple A said Jack was the station for that music.  In '05, only 11 percent of those people said that Jack was the station for that music.

5512             Now, the question arises:  well, now Jack, I don't did change format.  So what happens?  And on that I can only give you speculation, educated judgement on what happened.  Jack sold itself, positioned itself as a station that plays what we want, it plays everything.  It sold itself as a variety station.

5513             Well, when a station like that is new, people buy into the premise of the radio station.  It does sound, initially, like "We're playing everything".  Fifteen months later, people realize, "You know what, it's not playing everything".  In effect, it's a contemporary music station that plays classic hits.  It plays a wide variety of classic hits, but does it play triple A?  No.  But in March 2004, it seemed like the kind of station that would play that kind of music.


5514             So, in other words, we have a much bigger opportunity here simply because people realize that Jack isn't delivering this music and a much higher percentage of folks who say, "I don't know what station is delivering that kind of music".

5515             So those are the two changes that explain the shift in analysis.

5516             COMMISSIONER del VAL:  Thank you.

5517             What about the U.S. stations?  I heard, I have been told, that the triple A format is actually a staple in U.S. markets.  What are a few examples of the triple A stations that are operated in the U.S. which would have a similar format to what you are proposing?

5518             MR. KASSOF:  I think that probably the best known triple A stations, one of them, would be KBCO in Denver, which is number 412‑plus.  I mean, it's been around a long time and it's really developed roots in that community.  Another station of similar ilk is in Chicago, WXRT.  Those are the two that really pop into my mind first, stations that have been around a long time and really developed roots in their community and are major forces in their communities.

5519             COMMISSIONER del VAL:  Any idea how well they are doing financially?  Not that we are in the same market, but...


5520             MR. MAHEU:  We don't have specific information on how well they are doing, but if you look at Duncan's American Radio and you look at the power ratios for different formats throughout different sized markets in the United States, this format tends to index extremely well, billing over and above its share.

5521             So one has to assume that a lot of these radio stations, as Mark has mentioned, have been in triple A for a long time, and that kind of tells us that the revenue and profitability of the format is quite good.

5522             And the reason for that is they really carve out a niche.  It's a loyalty format.  It's never going to be the number one radio station in the market because it is really focused in a certain area, but it's certainly number one in the hearts and minds of the people that really enjoy that kind of music.   And when you enjoy that kind of loyalty to a radio station and the music it plays, you can monetize that to a great degree over a long period of time.

5523             COMMISSIONER del VAL:  So your core audience is 18 to 34 of the 18 to 44 range, that's what the focus is, isn't it?


5524             MR. MAHEU:  Demographically, in the research that Mr. Kassof conducted, we broke those age groups into the traditional BBM age breaks, but we know that format targeting doesn't always fall naturally in to the age breaks that BBM devises.  Eighteen to 34 is a common age break in BBM, and Arbitron in the United States.

5525             What we found through the research, though, Commissioner, is the fact that real strength of triple A demographically begins in the early twenties and goes right through to the mid‑ to late‑thirties.  So although there is some resonance for the format and some passion and loyalty for the music in that 18 to 20 age group, the real strength of the format is 20 and 30‑year‑olds, in that twenties and thirties, and it starts to trail off when you get up around 38 and 39.  So you have got that nice big middle of twenties and thirties.

5526             COMMISSIONER del VAL:  I think you probably noticed yourself, but there's quite a bit of overlap in the applications and proposed formats.  From just looking at the age groups that are being targeted, I would have thought right off the bat Harvard, whom we just heard, is aiming at the same age groups; CHUM, probably the Energy FM, I would identify as being a competitor.


5527             Also, actually, I'm glad Mr. Pringle is in the room because my ignorance is going to show, looking at your video, a lot of what you showed looked very folksy, to me, so Rawlco's station could be another competing format.

5528             How would you distinguish your format from those other stations?

5529             MR. MAHEU:  I would like to take the opportunity to do that, and just before I do, just on your question about the video, one of the things we did to generate some awareness for our application in the market is we set up in a local shopping mall and we set up, basically, an information kiosk so that people could come down and ask questions about what we had proposed. We also did some live performance, which you saw on the video.

5530             The reason it was mostly acoustic is cause we didn't set up a big sound stage, with all the power and everything that would incorporate electric guitars and so on.  So it gave you the impression that maybe it was a little more folky than it actually was, but focus certainly part of what triple A's all about, but maybe not to the extend that we demonstrated in the video.


5531             On your question of how our proposal for CAFÉ92.9 and triple A is different from the Harvard application for alternative rock, for CHUM's application for Hot AC, and even Rawlco's fine application for folk, if I could take just a couple of moments and hit really the key differentiation points, I think it will help you to understand how different triple A really is.

5532             COMMISSIONER del VAL:  Okay.

5533             MR. MAHEU:  Beginning with the Harvard proposal, which is probably most recent, it was just a few moments ago ‑‑ and we do have some experience with alternative rock.  We just launched a brand new alternative rock station in Ottawa called Live 88.5, so we are very up to date with that format and what the listenership for that format is all about ‑‑ there are some very big differences between alternative rock, as proposed by Harvard and triple A, as we propose, beginning with the name.

5534             I think the name Xtreme FM, compared to CAFÉ92.9, kind of tells you right away up front how these radio stations are going to be different.  But it goes much deeper than that.  With triple A music, it's much more mellower and it's a much more mature sound than you would find in alternative rock.


5535             Alternative rock is based on the harder‑edged, more intense and more rebellious type of music, and when you listen to the two types of music, it becomes very apparent.

5536             There's more acoustic material, as you noted in our video.  There's certainly more acoustic material generally in a triple A format, where alternative rock is very much electric guitar and drum‑driven.

5537             The other key difference here musically is that triple A draws from multiple genres, and that's what makes the format so enjoyable and so fun to listen to.  It's not one genre of music.  Triple A draws from rock, it draws from pop, blues, jazz, folk, roots, it's very song‑driven, lyric‑driven, where alternative rock is very band‑driven and sound‑driven, hard, rebellious intense and loud.

5538             So those are the real key differences.  And you notice demographically, too, a big difference there, and our research bears it out and I think the Harvard application talked about it today.

5539             Predominantly, alternative rock appeals mostly 12‑ to 24‑year‑old.  And we know through the research we have done, both here and in Ottawa, the real heart and soul and the strength of an alternative rock station is 15 to 24.  That's where it lives.  And it's generally young males, very male skewed.


5540             The skew on triple A is twenties and thirties.  So it's almost a half a generation or more removed demographically.  And the format appeal on triple A is slightly more male that female, but not to the extent that alternative is very male skewed.

5541             So that's the difference between those two, and if I could just talk a little bit about the difference, quickly, between triple A and Hot AC.  In listening to the CHUM proposal, it's a pretty traditional Hot AC application.  It's quite good.  The differences, though, are quite apparent between triple A and Hot AC.

5542             Triple A is very much a non‑hit‑driven format.  We go deep into albums, we go deep into artists that don't get a lot of airplay on radio, and a lot of this music to the general listening audience is unfamiliar.  It's music that a lot of listeners want to hear, but they have told us through the research they have to go to other sources of music to get it.  So we want to bring that to the radio.


5543             Conversely, a Hot AC format is largely driven by hits, and that's what makes Hot AC work:  hit, after hit, after hit.  And there's nothing wrong with that, but it's a different type of listening experience and a different type of expectation that listeners to Hot AC have than to triple A.

5544             Hot AC radio stations tend to work with a very tight playlist.  Smaller playlist, higher spins, high rotation, move 'em up the chart, move 'em down the chart, given the people what they want in a very mainstream popular way.  Triple A is quite different.  We have a very large playlist and it's very diverse, and we talked about the genres and the artists before so I won't go into that.

5545             Slower rotations, as well, on triple A and fewer repeats, where Hot AC really depends on the hot hits of the day for adult contemporary music and CHR, and they spin them and they move 'em up and down the charts.  Hot AC is very much a massive‑appeal format.  It's very much in the middle.  It's very much in the mainstream.  That's why it predominantly is a 25‑ to 44‑year‑old format.

5546             I think CHUM was mentioning in their application, if I'm correct, when I was hearing them, when asked, the real strength of that format is 35 to 44, which would be correct.  When you look at the most successful Hot AC radio stations across the country, they tend to be the market leaders, 35 to 44, very heavily skewed female.  That's why they are so successful, because they look very good 25 to 54.


5547             So there's a generational difference and a musical difference again.

5548             Lastly, the difference between triple A and folk.  Triple A, as a format, generally, is very new‑music driven.  In our proposal for a triple A format for CAFÉ92.9, we are proposing that 65 to 70 percent of all the songs we play on the radio station will be new or recent, so newly released or released within the past 18 to 24 months.  So it's a very new‑music focus.

5549             Folk tends to be more gold‑based than triple A.  Folk tends to be very acoustic.  In listening to the Rawlco presentation, I think I heard the figure of somewhere upward of 80 percent of their music would be acoustic‑based folk.  Folk is spice in the triple A format, to give it some texture and some feel, and is likely more in the 15 percent range than the 80 percent range.  So that's another big difference.

5550             As we talked earlier, triple A really targets people in their twenties and thirties.  Folk, as Rawlco indicated, generally targets people 45 and older. So there's a complete generational difference demographically.


5551             We took a look at the songs, in listening to the Rawlco application yesterday, the top 100 songs that the would play, and we found a 9 percent overlap between the songs that they would propose to play in a folk format and what we would propose to play in a triple A format.  So there's no song duplication there either.

5552             So that's a long‑winded way of saying I hope we have differentiated how we are unique.

5553             COMMISSIONER del VAL:  Yes, thank you.  That's a very thorough answer ‑‑

5554             MR. MAHEU:  Okay.

5555             COMMISSIONER del VAL:  ‑‑ and I'm grateful for it.  Thank you.

5556             Now, from the 2005 BBM tuning data, it suggests that the 18‑to‑44 group, and specifically the 18‑to‑34 age group, are quite well served by the incumbent stations.  They tune a lot to those stations.  And the stations that they tune to include CIBK, which offers the contemporary hits radio format; CJ, offering the adult‑oriented rock format; then CFGQ, offering a classic rock format; and CHFM, offering an adult contemporary format.

5557             In your opinion, how would your proposed triple A format differ from those existing radio stations?


5558             MR. MAHEU:  The triple A that we are proposing for CAFÉ92.9 would be very different than the four radio stations that you just mentioned.

5559             Also, you mentioned an interesting statistic about BBM tuning for them, 18 to 44.  When you look at ‑‑ we took a look at the BBM tuning in this market for 18‑ to 34‑year‑olds because it captured most of what we were trying to target with triple A, and that age break of 18 to 34 is kind of as close as we can get.  If you look at the total hours tuned by all people 18 to 34 in the Calgary market, in 2004, and then look at that same group of people again in 2005, you will find that the time spent listening to radio with 18‑ to 34‑years‑olds dropped three hours a week between 2004 and 2005.

5560             What that tells us, it confirms what we did find in the research, that these younger folks are having to seek the music they want to hear on the radio from other sources.  Triple A specifically, in our research, showed that people with a high predisposition to make triple A their favourite radio choice spend more time with alternative music sources, CDs and MP3s, than they with radio.  So it's not surprising to see that younger age group with the time spent listening fall from year to year.


5561             The radio stations that you described do have some audience in that 18‑to‑44, 18‑to‑34 age group, and undoubtedly there will be some small transfer of tuning.  Whenever a new radio station comes on, in any format, there's always a little moving around and a little curiosity, but we know through the research ‑‑ and I may ask Mark Kassof to comment on this specifically because it is in our research and we did test it ‑‑ what impact triple A would have on the incumbent radio stations, and it is a very small impact.

5562             Mark, would you be kind enough to fill in.

5563             MR. KASSOF:  Sure.

5564             One point I want to make before that is we looked at how much time listeners spend listening to radio and other music sources ‑‑

5565             COMMISSIONER del VAL:  I'm sorry, on the...?

5566             MR. KASSOF:  To radio, in other words how many hours per day to radio, how much times other music sources.  The average, for the market as whole, 12 to 64, was three hours listening to radio, 1.7 listening to other music sources.


5567             Among the people who told us that they would listen to triple A all the time, 3.1 hours listening to other music sources, 2.6 hours listening to radio.  Of the eight formats we looked at, it is the only one where they listen more to other music sources than to radio.

5568             Now, as far as the ratings projections go, this format is very different, shares very little musically with any of the formats in the market, and we found very little impact on any of the stations.

5569             Let me give you an example.  Jack, we projected before, to have a 10.6 share, 12‑64, after a 10.1 share.  Q107, 6.8 to 6.6; The Vibe, 12.8 to 12.7.  The biggest change we found actually was CBC, which went from 6.7 to 4.9.  So it's different in every other format.  It's taking a little bit from every station to build its share.

5570             COMMISSIONER del VAL:  Why CBC?

5571             MR. KASSOF:  Well, I think because you are dealing with people who are, first of all, not satisfied very much with the radio, music radio, but on the other hand they still have a need for information, so therefore CBC is certainly a choice for those folks.  I mean, that's one explanation I could give for that, one hypothesis for that.


5572             COMMISSIONER del VAL:  Thank you.

5573             Why do you consider your target audience of 18 to 34, and then the broader audience of 18 to 44, underserved?  Or am I ‑‑ because according to BBM, this target group does tune a lot to radio.

5574             MR. MAHEU:  You are correct, they do tune to radio.  As mentioned a little earlier, they do, and have started to listen to less radio.  The time spent listening in that age group is falling.

5575             Normally, when you see time spent listening fall with an age group, it's normally related to general dissatisfaction to the choices that are available.


5576             In the case of 18‑ to 34‑year‑olds ‑‑ you mentioned the four radio stations that are enjoying some tuning there ‑‑ all those radio stations have different subtargets.  And they are all going after a certain piece of that 18 to 44, but generally what we are seeing, and we have seen it in the research, as well, is that there's a dissatisfaction with this group of people, especially those who say, "Triple A is the kind of music I like the most, and there's no where I can here it on the radio in Calgary".  And we are interpreting through the data when we are asking the question that, "I love it so much that I have to spend more time listening to my iPod or my CD collection because radio isn't giving me what I want".

5577             We are pretty confident that if we are fortunate enough to be licensed, we can bring some people back to radio.  Some of them are still with radio right now, but instead of listening the Canadian average of about 20 hours a week, they are listening to half that amount.

5578             I think we can bring some more hours tuned back to radio if we do a better job for people, and that's why we believe this is a great opportunity, when new licences are available, to bring new services to the city that are not presently available, especially for people who have indicated that they are not satisfied with the choices and they have an idea of what should be offered, so...

5579             COMMISSIONER del VAL:  Thank you.

5580             MR. MAHEU:  Okay.


5581             COMMISSIONER del VAL:  So I note that you have reoriented your smooth jazz station's music offering from The Breeze to California 103.  Now, our casual tuning to the newly branded service identifies a more contemporary music offering than what was offered on The Breeze, and this music reorientation appears to be targeted to a younger audience and away from the traditional audience of smooth jazz, so mainly the 45‑plus professional demographic.

5582             Now, given that your proposed triple A station could also be in a position of targeting some of the same demographic as your California 103, can you elaborate on sort of the similarities and the differences between these two, between their formats with respect to target ‑‑ I'm sorry, can you elaborate on the similarities and differences between these stations with respect to the target audience and their format?

5583             MR. MAHEU:  Sure.

5584             Very few similarities, a lot of differences.  California 103 is a jazz radio station and our condition of licence is 70 percent subcategory 34, so there's really not a lot of flexibility there.  It's 70 percent minimum jazz/blues, that's it.

5585             So up until recently, the radio station was branded as The Breeze, and the music on the radio station was largely what is generally called smooth jazz.  Smooth jazz is basically music that has a lot of saxophone in it, it's very easy to listen to, it's usually the softest thing on the dial.


5586             And we have been doing it for a number of years now.  We are very proud of what we have been able to contribute to radio in Calgary with The Breeze.  Unfortunately, as we do continual research in the market, looking at how we can improve what we do and improve our offering, it became pretty clear, through the research that we have been doing and the rating success, or lack thereof, that we were having with that format, that we had to modify it somewhat to be a little more competitive.

5587             What we found is that the opportunity was still in jazz, because we don't have any choice, we need to be a jazz radio station, and we are fine with that, but what we try to do is find a type of jazz that gave us a better opportunity to reach a wider audience.

5588             So we rebranded the radio station away from being a softer or a sleepier smooth jazz sound into a little  more up‑front sound.  The jazz on the radio station is pretty much exclusively guitar‑based jazz now, rather than saxophone‑based jazz, and the feedback has been pretty good.

5589             We are also taking advantage of some of the contemporary blues music that is available now and is being made now and incorporating that into the mix.


5590             CIQX, or California 103, is a radio station, regardless of the rebranding and the slight adjustment in the sound ‑‑ well, it's actually more than a slight adjustment, it's a major adjustment, to be fair, but the station is still largely focused at a jazz listener and a jazz sensibility and our research indicate those people are largely 45‑plus.  That's where the relative strength of the radio station is going to be, and will remain as long as it's a jazz station.

5591             That's why we felt that triple A was very complementary to what we were already offering to the marketplace, that we wouldn't be overlapping very much and we are reaching a very different audience, but from a sales proposition point of view, because that's the other part of our business, that we could go out and offer a complementary service of jazz and triple A, where one audience leaves off, the next audience kind of begins.  There's a little gap there, but it kind of fits hand and glove.

5592             And in terms of the psychographic type of radio station that they are both going to be, if we are fortunate enough to be licensed, it was a good fit.  So in terms of overlap or similarities, there's probably a little bit, but not as much as you think, and demographically they are quite different.

5593             COMMISSIONER del VAL:  Thank you.


5594             So is this proposed station, CAFÉ92.9, quite similar to your Winnipeg station that's been rebranded as CAFÉ100.7?  Is that a triple A format?

5595             MR. MAHEU:  That is our first triple A, and it's the first triple A station in Canada, and we are quite proud of it.

5596             It will be very similar.  The music and the approach to broadcasting that format will be very much the same.  What will be different, though, is that CAFÉ100, in Winnipeg, is really focused on the type of music that Winnipegers want to hear ‑‑ and we have done homework on that ‑‑ and we also have a condition of licence in Winnipeg that we have to live to up to, in terms of the type of music that we are playing.

5597             So we are doing our very best to bring a triple A approach.  We found that is the opportunity in the marketplace, to still be softer than most things on the dial, but to provide something that had an opportunity for us to provide a sustainable, reasonable format for a long period of time.  In Calgary, our focus will strictly be on the needs and wants of Calgary, and we found that in the research.


5598             So there will be some similarities, in terms of tone and style.  Music?  A lot of it will be the same, but some of what works musically in Winnipeg won't work in Calgary, and vice versa.  And we will also do our own music research and so on.

5599             The other key thing is that what we really want to do with triple A in Calgary, as Kathy mentioned, a lot of her contemporaries and colleagues are making great music here in Calgary right now, and they don't have anywhere to get heard.

5600             We are committing to 40 percent Canadian content in this format because we know there is a tonne of music out there because we are drawing from so many genres.  We are not locked into just rock or just jazz or just blues, and we have kind of the pick of all the great new music that's being made out there.  That's going to be the difference between, say, a Winnipeg station and a Calgary station, where in Winnipeg we are trying to focus on finding some of that local Winnipeg triple A, and getting it on the air ‑‑ and our folks there are doing a good job ‑‑ and we are going to do the same in Calgary.  We want a lot of what we play here to reflect the community.


5601             We also think that's a great opportunity to build an audience and generate awareness.  The music community is kind of a tight‑knit group and they have a following, and if people know that some of the folks that they are friends with and go and see at clubs are getting played on the radio, we have a chance to bring some new listeners to our radio station.

5602             Again, it's never going to be the number one station in the market, but it's a tight, loyal following, and word of mouth is very important.  So that will be some of the differences between Winnipeg and Calgary.

5603             COMMISSIONER del VAL:  Thank you.

5604             Your answers anticipate my next 16 questions.

‑‑‑ Laughter / Rires

5605             COMMISSIONER del VAL:   I may be repeating it, but what about the sharing of programs between the Winnipeg and this Calgary station, if it were to be licensed?  I think you have answered.

5606             MR. MAHEU:  Yeah, no sharing there.

5607             COMMISSIONER del VAL:  Okay.


5608             MR. MAHEU:  Again, these are major market radio stations and they have to stand on their own.  When we put a business plan together and take a look at what the opportunity is, the stakes are too high and it's too important to kind of cut corners and, "Geez, can we save a little money over here, $20,000, by piping this?".  We don't do those kinds of things.

5609             Each station is big enough and important enough that it deserves its own service and its own focus.  So there's no sharing between the two.  They may share some ideas, but in terms of content or programming, none.

5610             COMMISSIONER del VAL:  I just have to ask this to be fair to the interventions, but I think you have answered it already.

5611             In CIRPA's intervention, they did talk about the diversity of playlists, and I will let you answer that again, I guess, in terms of will you be using different playlists in your Winnipeg station and the Calgary station, should it be ‑‑


5612             MR. MAHEU:  Yeah, the music in Winnipeg on CAFÉ100 will be different from the music on CAFÉ92.9.  Again, when we go into markets of any size, we always take a look at:  what does the market want, need and expect from this radio station?  We do that through research, and we do a lot of music research, as well, and what we found is that there is some common threads between a number of markets, a hit's, a hit, a hit in most places, but when you get into this type of music, what may work in Winnipeg, which tends to be a little bit more of a hard rockin' town, and it's demographically a little older than Calgary is, some things that work in one place don't work in another.  So we take steps to make sure that the playlist in each one of our markets reflects what listeners in that marketplace want, and that's what helps us be successful.

5613             You could save a little money and a little time by just stamping out the cooking cutter and rolling it out, but long term that's not going to make for great radio.  We are in these markets for the long haul, we are trying to build a franchise, we are trying to build a following, so it gets our full time and attention and there will be differences.

5614             COMMISSIONER del VAL:  Thank you.

5615             So now I would like to ask you some questions on local and spoken‑word programming.  In that area can, you please confirm how many hours of programming aired each week would be local station produced, please?

5616             MR. MAHEU:  Yes, I can.  I'm going to ask Dave Murray to comment on that specifically, and then if you have some news questions, et cetera, I will ask John Beaudin to do that.


5617             But, David, would you mind local station...

5618             MR. MURRAY:  Right.

5619             One hundred percent of the 126 hours of broadcast week will be live, no voice tracking, et cetera.

5620             COMMISSIONER del VAL:  Thank you.

5621             You have characterized your targeted 18‑to‑24 adult audience as being abandoned or being underserved by existing commercial stations, I guess in terms of the triple A format.

5622             Now, based on your market research, what is it that this group of abandoned audience is looking for in spoken word or programming or information?

5623             MR. MAHEU:  I think when you mentioned 18 to 24, you might have meant 18 to 34?

5624             COMMISSIONER del VAL:  I did say 18 to ‑‑ but it's okay, you can answer it as 18 to 34.

5625             MR. MAHEU:  Right.  That primarily comprises most of the key targeting for the radio station, twenties and thirties.


5626             It's interesting because, as Mr. Kassof mentioned in our research, it's quite interesting to see if CAFÉ92.9 were to be licensed and go on the air, our research indicates the radio station that would show the biggest decrease in tuning is the CBC.  That was a cue to us.

5627             Also, anecdotally, knowing a little bit about what we are doing in Winnipeg, and the types of people that are listening to triple A and calling the radio station and e‑mailing us and talking about what we are doing, we are starting to get a sense of the needs and wants of these people, and it's quite interesting that CBC would be affected most.  That tells us that there is a need and a want and an interest in spoken word and news and information.

5628             We also see that as an opportunity in this marketplace.  As time goes on, radio has become more and more a music‑focused medium and specialization has started to take place in radio, where news/talk radio stations, 24‑hour news/talk stations are on the air, 24‑hour a day sports radio stations are on the air, things that really didn't exist 10 years ago, but kind of following the trend of what's been happening with TV and speciality television, where we are in the age of specializing and diversifying.


5629             With triple A, the news and information needs of the audience, through our research and looking at CBC being the station that gets hurt, tell us that these folks want a little bit more than music from the radio station.  So we need to design a program and a plan to deliver on the needs and wants.

5630             To be fair, and to be quite forthright with you, up until this point we have done the best job we can on California 103.  This is a radio station that has struggled financially.  Not that we are complaining.  We bought it, that's the way it is, and we are living up to it.  We are doing our best.  But with more resources, we could do more.

5631             That's why we are kind of excited about this idea because, if we were able licence CAFÉ92.9, our proposal is to add five news people to the organization, which would bring it up to seven, on a combination basis.  And we believe that one of the ways that we can differentiate ourselves, now and in the future ‑‑ and I am getting to the direct answer to your question ‑‑ in the world of satellite radio, in the world of subscription‑based audio services, broadcasting to mobile phones, I see in The Globe and Mail this morning XM is talking about streaming video to their radios now, the world is changing quickly.  We are going to be facing competitive pressures.  I'm taking a look at the end of a seven‑year licence, it's going to be 2013, 2014, at the end of that licence period, and the world may be quite different then.


5632             We see spoken word as being almost a secret weapon in differentiating ourselves from other services that are out there.  It's the one thing that satellite radio, broadcasting to mobile phones and other things cannot duplicate.  And they can't compete with us.

5633             They can play all the music they want, they can play less Cancon than we do, or whatever they want to do, but they can't duplicate our people and they can't duplicate spoken word.  So we see this as the beginning of a competitive difference that, where for so long news and information was almost a condition of licence and a requirement, and it was an expense but it didn't generate a lot of audience for you, we see in the future it's going to be exactly the opposite of that.  It's going to help us hang onto an audience, it's going to help us build some loyalty, and it's going to be money well spent.

5634             So that's the reason we believe that our focus on news and information is going to be important and that listeners to CAFÉ will benefit from the amount of resources we are putting against news and spoken word.


5635             COMMISSIONER del VAL:  I can see how you see the spoken‑word content as an opportunity.  Now, what do you see as the challenges of providing relevant spoken‑word programming to your target audience?

5636             MR. MAHEU:  Well, one of the challenges is right away, and if we were licensed, what we normally do in situations is if we do receive a licence, we normally go back into the market before we launch, and we go, "Okay, we're doing triple A.  Now, let's really go in...", kind of like we did in Ottawa before we launched Live 88.5.  We were licensed, then we immediately put a new research study into the market:  what's changed,  what do we need to adjust, and how do we fine‑tune this now that we know we have got the opportunity to do it, and we would do the same thing.

5637             One of the challenges is to reach out to these folks through research, through focus groups, through a whole bunch of different types of techniques, to find out what it is they really want, need and expect from our radio station.  That's challenge number one, because although we may have good intension and good ideas, if they are not connecting with what these folks need and want, it's not going to resonate to the degree or strike the responsive cord we want it to strike.


5638             So the challenge, number one, is to go out and find out who these folks are, find out what they need and what.  Then it's going to be an ongoing challenge in a competitive environment to keep giving it to them.  We are going to try ‑‑ and I believe we will be very successful ‑‑ in building personalities on our radio station, not only in the news and spoken‑word part, but the spoken word as it relates on the air.

5639             Part of what's going to make this radio station special is we want to hire people that love the music just as much as the listeners do, and it kind of harkens back to the early days of progressive radio, where the folks on the air knew a lot more about the music than the listeners did, they had opinions about it, they got to pick some of their own songs, and they had some pretty strong opinions about the world and about the music that was being made.  The challenge there is to be able to find those kinds of people, hire them, get them on the air and retain them.


5640             One of our worries is we are going to develop some people like that, who start to build a following and they are going to start to be lured away.  Not a lot of people are doing this yet, but we believe in the future it's going go be a bigger part of what makes radio satellite‑proof, audio‑service‑proof, mobile‑phone‑proof, and it's incumbent upon us to come up with strategies and ideas to face the future.

5641             Regulatory relief if great, and we love all you can give us, but, at the end of the day, it boils down to us.  So we are taking the first step now to build ourselves a franchise that can withstand all the other options out there.  Radio has done it before, we will do it again.

5642             COMMISSIONER del VAL:  Thank you.

5643             Okay, now we can move onto Canadian talent development.

5644             So you propose a minimum of $7 million annually, it's $1 million per year, and I just want to clarify a few areas, please.

5645             Now, referring to your Radio Starmaker  Fund, you have indicated that you have asked your Radio Starmaker Fund to create a specific fund that would benefit local Calgary artists.  So my first question is:  have you entered into any formal agreement with the Radio Starmaker Fund with a board or with that organization?


5646             MR. MAHEU:    We have done a number of contributions to Radio Starmaker Fund and proposed a number of them in other applications.  Our relationship with them is quite good.  What we normally ask, and we have in this case, is if we are licensed would you please guarantee to devote the $450,000 a year that we are proposing to Calgary local artist development?  And they have been very good about that.  We will get a letter to that effect, but they have indicated it would.

5647             They have also indicated that there may not be anybody from Calgary in a particular year that is worthy or deserving of the money, and, if so, it will go into their general promotion fund.  But preference will be given ‑‑ when there is a Calgary or local project that deserves funding preference will be given to it.  And they are quite good at following ‑‑ they used to not agree to do those kinds of things, and that's started to change, and they are doing that now.

5648             COMMISSIONER del VAL:  So what benchmarks will be used in determining the number of artists who will be eligible for this particular fund?

5649             MR. MAHEU:  The Radio Starmaker Fund is a collaborative effort of broadcasters across Canada and it's largely focused and devoted to taking emerging artists that have had some degree of success really to the next level, in marketing, promotion, et cetera.


5650             The Radio Starmaker Board is comprised of a board of directors who have a lot of experience in artist management and understand what it takes to be successful in the music industry.  We are sending that money to the Radio Starmaker Fund and, based on their past track record, counting on them to make the right decisions.  There's many other broadcasters who also contribute to the fund and the broadcast interests are represented on the board of directors, and we are quite confident that they will continue to do the good work they have always done.

5651             COMMISSIONER del VAL:  Thank you.

5652             Then on your annual summer jam clinic, and you have indicated that the clinic will be similar to the one that was proposed in your application for the recently licensed alternative rock station in Ottawa, do you have more details that you can provide us with about this clinic?

5653             MR. MAHEU:  Not at present, but we are starting to actually put together our summer jam clinic in Ottawa.


5654             Just to basically give you a sense of what it is, it's largely designed for younger people.  We are going to work with the school board in Calgary and what we are really looking for are kids with promise, kids who really want to take their musical career to the next level but really don't know where to go.  A lot of them are kind of playing in loose‑knit bands or they excel in a particular area, whether it's keyboards or guitar or drums.

5655             It's been very successful in Ottawa.  What it does is it brings them together with professionals, professional producers, people who produce CDs, professionals who specialize in stage performance.  I know this from personal experience cause my son went through it.  That's how I got kind of turned on to this and came up with the idea for Ottawa to do it.  To see the kids start as individuals with some talent at the beginning of a week or two and do a live performance at the end of it as a group, and all the stuff they learned about lighting, staging, miking techniques, performance, recording techniques, is quite exciting and it gets them very jazzed and very enthusiastic.

5656             So we are going to count on the school board to help us with this and to help us coordinate it.  We want to make it available to as many people as possible and we really want it to be available to as many of those younger people that normally might not be able to afford something like this or are extremely deserving, so...


5657             COMMISSIONER del VAL:  Do you have any agreements with any of the local school boards yet?

5658             MR. MAHEU:  No, we have no formal agreements.  We have had informal discussions, there's enthusiasm, and we are very confident that we won't have any problem securing their agreement to move this forward.

5659             COMMISSIONER del VAL:  At this point, do you have any idea of approximately how many youth would benefit from this program each summer?

5660             MR. MAHEU:  Based on our Ottawa example, it works out to be about $400 per student to go through the jam clinic, et cetera, so we are anticipating at least a hundred every summer would be able to participate in this program.

5661             The other nice thing about it is if we can ‑‑ and we are looking at it in Ottawa, as well ‑‑ if we can bring some sponsors in and so on, we might be able to generate a little extra incremental money that makes the 40 that we are spending go a little further and we might be able to do 125 or 150.  Music companies and companies that are in the business of selling musical instruments, and so on, all like to participate around this, they like to sponsor that, and so on, so at least a hundred.


5662             COMMISSIONER del VAL:  And how are you making dispersements to the schools boards?  Like, how will you make it?  You say like your station in Ottawa, well, how will you be making ‑‑

5663             MR. MAHEU:  We are going to follow the same course, from the standpoint of we are going to find a company to manage it for us and to coordinate the effort to get the right people to come in and work with the kids, the right producers, the right singer/songwriter coaches, et cetera.

5664             So we are going to work ‑‑ we are going to find ‑‑ we have already identified a company that's going to help us with the artist management, and so on, for the other part of our program.  It may be this company, it may be another one, but somebody's going to run it for us, and we are going to count on the school board to help us publicize it and to really help us choose the most deserving prospects.

5665             There's a lot of music students throughout the school system and we are hoping to work with music teachers and so on and create a network of when they spot bright kids or kids who really could use a hand up or take that extra step, to recommend them for the course, and we want to make sure that it's available free of charge for them, so...


5666             COMMISSIONER del VAL:  So CIRPA, in their intervention, described the summer jam clinic as nothing more than just a summer camp, and I know that in your response to CIRPA's intervention you didn't really address that point.

5667             Do you care to comment on that point or...?

5668             MR. MAHEU:  I can tell you from personal experience and I can tell you from professional experience, it's a lot more than a summer camp.  Young people between the ages of 12 and 17, who have a passion and an interest for music, I think that description by CIRPA dishonours their enthusiasm and passion for what they are doing.

5669             They are at a very impressionable time and a very impressionable age in their life, where things like this can make the difference whether or not they want to pursue this to the next level or not.  Although from the outside looking in it may look like just another band camp summer kind of activity, we know that it's much more than that.


5670             If we can impact a few lives ‑‑ this isn't going to change every kids life who goes to it, but it's going to give them an experience they otherwise wouldn't have.  And if a few of them take it to the next level or we were part of the catalyst that kept them going to want to make sure that they pursued their art to the highest possible degree, I think that would be money well spent.

5671             COMMISSIONER del VAL:  Okay.  Then, on page 22 of your supplementary brief, you mentioned that Newcap will guarantee A‑list rotation to two singles from the winning band's CD on all its format‑compatible major market stations in Halifax, Moncton, St. John's, Ottawa, Edmonton and Calgary, as well as some of the smaller markets.

5672             Can you explain in more detail how the rotation works or will work?

5673             MR. MAHEU:  Sure.

5674             That was a question that certainly came up from the staff in deficiency ‑‑

5675             COMMISSIONER del VAL:  Yes.

5676             MR. MAHEU:  ‑‑ and just to kind of reiterate what we were talking about there, A‑list rotation is more of an acronym for real airplay, and wanted to make sure the Commission knew was that this isn't going to be token airplay, that is on the evening or the weekend or the overnight show, that when we make a commitment to get the record or the song on the radio station, we do it in a meaningful way.


5677             Part of our approach to programming in all of our markets is to let the managers and the programmers and the people who work at the stations in the market make the decisions on their radio stations to best suit the market.  This is going to be one of those cases where we have to walk the fine line.  We don't want to tell them what to play, but by the same token this is a corporate commitment we have made and we expect to honour our promises.

5678             So it is going to depend, in some cases, on how well the song fits on the radio station that it's asked to be played on.  For instance, if it's a more acoustic‑based or folk‑based type of production, it may get less airplay on an alternative rock station in our group than it would on an adult contemporary radio station in our group, so we need to leave some flexibility there.

5679             But what we are guaranteeing is on any radio station it gets played on it's going to get played on all‑day parts and it's going to get played in prime time and it's going to receive the kind of exposure that can generate awareness, and potentially sales, of either live performance tickets or CDs for that artist.  So it's real airplay.

5680             COMMISSIONER del VAL:  Okay, great.


5681             So now we are onto the economics.  You are on the home stretch now, okay?

5682             I just need some more information on your projected audience share for your format.

5683             For your triple A format, you are projecting a 4 percent audience share over the course of the seven‑year licence.  Is that correct?

5684             MR. MAHEU:  Yes.

5685             COMMISSIONER del VAL:  Can you maybe walk me through how you made that projection?

5686             MR. MAHEU:  The projection of a 4 percent audience share is based on the research that we conducted in the marketplace, and that's a 4 percent share of the 12‑plus audience ‑‑

5687             COMMISSIONER del VAL:  Okay.

5688             MR. MAHEU:  ‑‑ okay?  We know that our share in certain demographic groups will be higher than a 4, which makes us a little more competitive.  Again, when you take a look at where all the money is being spent on radio in Calgary and other markets of the same size, we know that as good a job as we can do with triple A, we are never going to be the number one biller and we are never going to be number one in the ratings, but that doesn't mean we cannot be successful.


5689             So the 4 percent share is based on the research that we have done.  We also know that when any new radio station launches, it creates a ripple effect across the market, other format adjust and change and so on and everybody finds there new pecking order and their new place.  Although do believe that during the course of the seven‑year licence that the station may achieve a higher share than a 4, there may be times during the licence where it achieves a lower share than a 4.  So we are kind of projecting that average out over the course of this seven‑year timeframe that we are going to be in and around a 4.

5690             If you looked at it in the 24‑to‑55 age group, which is the big sales demographic, or the 25‑to‑44 age group, the station will probably do a little higher, 25‑34, 25‑44.

5691             COMMISSIONER del VAL:  Okay.  Now, then at section 5.1 of your application, which is average number of commercial minutes expected to be sold per hour, in year one you have estimated 5, year 7, it's 7.

5692             On what basis were you making those projections?


5693             MR. MAHEU:  The basis on that, and it seems a little low, and the reason for that is our approach on this format is again to differentiate ourselves and keep the sensibility of the listeners in mind.  Knowing that they kind of turned away from commercial radio now, to a great degree, we are trying to bring them back.

5694             We have learned this a little bit on our jazz radio station that part of the value proposition to advertisers is not only the size of your audience, but it's the qualitative nature of your audience:  how many of them are owners, managers, professionals or graduated from university, or whatever, and how many of them average household incomes over $100,000, et cetera?  So those things become important.


5695             What we found with our jazz radio station and what we are looking at with triple A is that the type of listener it attracts is quite desirable.  What we are hoping is that we can build a larger, more loyal audience by playing fewer commercials, and if we play fewer commercials they will listen longer and they will stay with us longer.  And if we play fewer commercials, advertisers on our station will stand out a little more, and, hopefully, we get to the point where that advertising time could actually command a bit of a premium because of the loyalty of the audience, the qualitative nature, and you are not listening to 12 to 15 minutes of commercials an hour that you do on some radio stations.

5696             So that's the rational behind it:  limit supply, create demand, leverage the price over time.

5697             COMMISSIONER del VAL:  Okay.  So does that also explain why the ratio of your projected total advertising revenues to total projected audience shares, it seems to be lower than when compared to the existing Calgary radio stations?

5698             MR. MAHEU:  That's part of it.

5699             COMMISSIONER del VAL:  Okay.

5700             MR. MAHEU:  The other part is just being realistic.  Every company does their own examination and does their own business plan based on what they think the radio station can do in a competitive environment.

5701             We have a little insight because we operate a small specialty station now, so we know, to some degree, what it's like to operate at the low end of the rating spectrum which, California 103, that's where it is.


5702             One of the things that you have to factor in with a new station launch is, as big as the hole might be or as big as the opportunity presents itself, it's never that big the day you launch.  It's going to be a while before you are able to fill the hole that the research shows to the point where you will get a rating and share that you can then monetize.  Chances are it takes a year, sometimes a year‑and‑a‑half, before you can fully begin to take advantage of the full share that the radio station is going to generate.  We are talking that into account.

5703             Also, when you are in a narrow or niche format, your share tends to get discounted a little bit because you don't bring that critical mass against four‑station combos that might have a 25 share or 25‑54.  Our critical mass is going to be much smaller, and we are going to feel some pressures on that.

5704             So even though you do sometimes generate a rating and share that's a little higher than you think you are going to get, it does get discounted in the marketplace because you don't bring enough critical mass as three‑ or four‑station groups would.

5705             COMMISSIONER del VAL:  Thank you.

5706             Then the 4 percent audience share that you are projecting, how does that tie into your ‑‑ how do you use that number to project your revenues?  Or do you use it at all?


5707             MR. MAHEU:  Sure, you do, and I'm going to ask Dave Murray to comment specifically on that.

5708             This is very much a rating‑ and share‑driven market, Calgary being the size it is and the number of advertising agencies, so most of the buys are very sophisticated and rely on rating and share, and I will let Dave speak to the share correlation to the revenue.

5709             MR. MURRAY:  Sure.  Thank you.

5710             Basically, we think that the Calgary market is going to be around $80 million by the time we get to air, 4 percent would give you $3.2 million.  We don't think we will do quite as well as our share, for the reasons that Mark indicated, and you won't get it all right away.

5711             Like as soon as you get the audience, that doesn't mean you have the sales.  Like the national sales will come fairly quickly, as soon as you are rated, but the local sales take a lot of hard work and relationship‑building, et cetera.  So that's why we are saying we will probably only get $2.2 million in the first year, and then we will go up 33 percent to $2.9 million, and another 15 percent to $3.4 million, and then we will start getting our 4 percent kind of thing for future years.


5712             COMMISSIONER del VAL:  Okay.

5713             Now, when you filed your original supplementary brief, the financial projections there, the revenues projected there, when I compare that to the financial projections you made in your revised brief, the only difference that I could tell ‑‑ and I'm probably wrong ‑‑ the difference in numbers were very small, and the only thing I could attribute it to was the annual revenue reported according to TRAM.

5714             I could not see any difference in your revenue projects despite your audience share having dropped from 7 percent, which was what you projected when your format was CHR, to the now 4 percent which you are now projecting on the basis of triple A format.  So I must be missing something there.  Did you make an adjustment for that based on the decreased audience share?

5715             MR. MAHEU:  No, and it's a good observation.

5716             The difference is the CHR audience that we saw in the first research study is a different target audience and your ability to monetize that is different than triple A.

5717             COMMISSIONER del VAL:  Okay.


5718             MR. MAHEU:  So although we were going to have a larger audience with CHR, more of it was teens and younger and the sales values, so to speak, of that audience is different than triple A.  So although we are going to reach a slightly smaller audience with triple A than the proposed first CHR, the monetary opportunity there of the rating and share is certainly higher.

5719             COMMISSIONER del VAL:  I learn something new every day.  I would have thought that the CHR audience would spend more money.

5720             MR. MAHEU:  Well, actually, you are correct.  They do have a lot of disposable income, and more than ever.  That's been part of the problem that radio's had as an industry.

5721             Back in the baby‑boom days, back in the sixties, companies like CHUM and Rogers with ‑‑ or CFTR back at the time when had all these young people and kids and teenagers listening, they were a very lucrative audience.  Advertisers wanted to reach them.

5722             Unfortunately, today, that's changed quite a bit.  There are some advertisers that target teens, but nowhere near like they used to.  And part of that is there are other ways to reach them now, especially through music video, television.  Television has become the big way to reach teenagers.


5723             We have been telling that story for quite a few years, that radio is still an effective way to get your message across to teens, they still listen in healthy doses and large numbers, but it's very difficult to get advertisers to buy into that any more, so it doesn't happen.

5724             COMMISSIONER del VAL:  Thank you.

5725             Just one last housekeeping matter.  I think in your supplementary brief, in section 3.1, the list of corporations and broadcast‑related fields, I think in this application you listed that you had 61 radio licences.

5726             MR. MAHEU:  That is an old ‑‑

5727             COMMISSIONER del VAL:  Okay.

5728             MR. MAHEU:  It needs to be updated.

5729             COMMISSIONER del VAL:  Okay.  And in your application 13, I think it's 65.  So maybe at some point if you can reconcile those numbers.

5730             MR. MAHEU:  We are up to 71, so we would ‑‑

5731             COMMISSIONER del VAL:  Oh.

5732             MR. MAHEU:  ‑‑ be happy to refile the ‑‑

5733             COMMISSIONER del VAL:  Okay.

5734             MR. MAHEU:  ‑‑ refile that for you.


5735             COMMISSIONER del VAL:  Great.

5736             Okay, those are my questions.  Thank you very much for your time.

5737             MR. MAHEU:  Thank you.

5738             COMMISSIONER del VAL:  Thank you, Mr. Chairman.

5739             THE CHAIRMAN:  Thank you.

5740             Mr. Langford will have a question for you, Mr. ‑‑

5741             MR. LANGFORD:  Thank you, Mr. Chair.

5742             I don't know whether my blood sugar's low or whether I just missed kicking around good old Peter Miller ‑‑

‑‑‑ Laughter / Rires

5743             MR. LANGFORD:  ‑‑ but there's a feisty side coming out in me right now, and I can't hold it back.  So forgive me if I'm a little testy, but I don't buy the very basis ‑‑ one or two of the basic building stones of what you have presented here this morning.

5744             I have listened as carefully as I can, I have read all this stuff, of course, and looked at it.  You might have seen me going back to it and flipping through binders.


5745             I don't think ‑‑ well, let me start by saying this service that you are offering may work, but I don't think it's going to work the way you say it's going to work.

5746             Now, that takes a lot of nerve for me to say this cause you are the experts with 71 stations and I'm just up here with no stations, but I ‑‑ I think you have got the wrong demographic, and I see signs of it coming out in different places.  I know you have got the pros back there, but I think you have hit the wrong demographic with this.

5747             I don't think it's 18 to 44.  I think it's 35 to 64 is what I'm seeing here.  Oh, you will get a few younger people, but this stuff that you have got about bringing in ‑‑ in executive summary, page 3, of your supplementary brief:

"We intend to serve the 18‑ to 44‑year‑old audience segment with an emphasis on the 18 to 34‑year‑olds."  (As read)


5748             I don't see it.  And some of the signs would be, you referred to the impact you would have on CBC, and Mr. Maheu, you said, I think I have got it written almost exactly, but it's a close paraphrase, "That tells me that the 18‑ to 44‑year‑old demo is incorrect..." ‑‑ sorry, you say, wait a minute, "...tells me that there's an appetite for spoken word".

5749             Well, what it tells me is you have got the demo wrong.  I mean, 18‑year‑olds aren't looking for spoken word, and the people who listen to the CBC aren't 18, we all know that.  They are all geezers like me.  And if you are going to attract a substantial audience share from CBC, you are not in the 18‑ to 35 ‑‑ or 44‑year‑old demo.

5750             I would like you to react to that.  I would like you to rethink it.  I mean, is it possible ‑‑ that doesn't mean the thing won't work.  It may work beautifully, it may outperform even what you say, but I don't think it will work the way you say it will work.

5751             Sorry to go on so long, but I have been listening here very, very closely, taking notes, referring back to your written record, and I don't think you have got it right.

5752             MR. MAHEU:  I appreciate what you are saying.  I disagree wholeheartedly.  I don't want to fight with a hungry man, believe me ‑‑

‑‑‑ Laughter / Rires

5753             MR. MAHEU:  ‑‑ but you have asked the question, and thanks for the opportunity to respond.


5754             Let's talk about as it relates to CBC, because that seems to be kind of the hot button that's kind of triggering the train of thought.

5755             MR. LANGFORD:  Well, it's just one.

5756             MR. MAHEU:  Okay.

5757             MR. LANGFORD:  I can give you a few more, if you want, I mean, so you can give a more complete answer.

5758             MR. MAHEU:  Sure.

5759             MR. LANGFORD:  I noticed, interestingly enough, that your are putting a large slice of your CTD into the winners of a folk festival, and the Rawlco company that's been here, that wants to put on a folk‑oriented specialty station, is not talking about 18‑year‑olds, they are talking about a much older demographic than that.

5760             MR. MAHEU:  Right.

5761             MR. LANGFORD:  So in a way they are contradictory elements that ripple through this in a number of places.  It isn't just the CBC.  And as I say, it may be a wonderful format.  I just don't think that demo is right, and I'm not that hungry.

5762             MR. MAHEU:  Okay, cause this may take a while.


5763             In terms of ‑‑ listen, the CBC and the folk festival, let's address that, because this may be a case of what looks to be like circumstantial evidence, and I think when ‑‑ and I'm not a lawyer, but when you really look inside what we intend to do and what's really going on out there, I think you may see it a little bit differently.

5764             Let's talk about the CBC just for a second.  We see through our research, when we researched 12‑to‑64‑year‑olds, and specifically those people that say they would listen a lot, triple A could become a very different radio station.  And then we take a look at if that happened, what impact that would have on the rating and share of the other stations that are also in our survey, CBC came up as the big loser.  The interesting thing about it, though, is it makes sense.

5765             You are correct, Commissioner Langford, the large majority of partisans to CBC are 45‑plus.  We will be generous and say 35‑plus, but it's mostly 45‑plus.  When we see that the CBC would lose 22‑and‑a‑half share points, what we are seeing is they are losing people in that 18 to 34, let's call them twenties and thirties, they are losing people they didn't deserve to have in their rating and share to begin with, and as soon as something comes along that is even close to what they want, they bail on CBC.


5766             So CBC has some of this rating and share in our research right now by default, so obviously the first people that are going to go are the people that are now getting what they want from where they want to get it.

5767             MR. LANGFORD:  Can I interrupt with a supplemental ‑‑

5768             MR. MAHEU:  Sure.

5769             MR. LANGFORD:  ‑‑ and just probe that a little ‑‑

5770             MR. MAHEU:  Sure.

5771             MR. LANGFORD:  ‑‑ cause I know you have got more to say and I don't want to cut you off.

5772             MR. MAHEU:  That's okay.

5773             MR. LANGFORD:  How can you tell it's the younger CBC listeners, always assuming there are some, but how can you tell it's them, and not the older ones?


5774             MR. MAHEU:  Because in our research we know that the prime prospects for triple A, we use the age break of 18 to 34 ‑‑ and I will let Mark kind of comment on this a little bit in just a second ‑‑ but we are not guessing this, we know from the research we have done that the people with the high predisposition who want a triple A radio station are also the same ones leaving the CBC, because it all connects in the research that we have done.  This isn't something we are guessing.

5775             MR. LANGFORD:  And you know how old they are, the ones leaving the CBC?

5776             MR. MAHEU:  Mark.

5777             MR. KASSOF:  Well, first of all, I have to correct one thing.  It's not 2‑and‑a‑half points off the CBC, it's actually less than 2 points off the CBC.  What my statement was is that the biggest single station that would lose share would be the CBC, but that's not to imply it's going to lose a lot of share, okay?

5778             What we do in order to identify and project ratings in this research, and what we have done before, is we identify what we think will be the P1 listeners to the radio station, the people who will listen to it most.  And the way we do that is to find people who are interested in the format, have positive interest in the format, and who are not fans of other formats.


5779             So we identify those as the P1 listeners to the format, we look at their time spent listening and we make a projection for share.  Then, we look at the people in that group, and of the people in that group, the predominant sell is 25‑34, and a quarter of them are 25‑34 men.

5780             Now, again, CBC's share may be heavily driven, and is, of course, by older demographics, but that doesn't mean that other people aren't popping in to CBC to get a piece of information that they are not getting anywhere else.  It's important to realize that these are people who are not spending a lot of time with radio, they are spending more time listening to CDs, MP3s.  There's got to be a reason for that.  And we see the reason in our research, which is that they are less satisfied with Calgary radio than the average Calgary listener.

5781             MR. LANGFORD:  Well, maybe I can go at this from a different direction, cause I don't want to keep everybody from lunch here, and we have got a heavy afternoon schedule, but I will tell you why I think this is important.


5782             I don't think it's important because I'm worried about Newcap not knowing how to run a radio station.  Newcap knows how to run radio stations.  I have got no problem there.  And I'm not thinking it's important because I'm worried Mr. Steele won't be able to buy nice suits or something like that.  I think he will be okay.  There's no tag sales here for Mr. Steele.

5783             But I will tell you why I think it's important, because this is a strong market here, very strong, so likely ‑‑ I'm not making any predictions, I'm only on person on this panel and we haven't discussed what will come out of this until we have heard the whole week ‑‑ but it sounds like people are telling us we could license three stations and everybody would be happy.

5784             But, then, we have got to pick the stations, and we got to pick compatible stations, and we got to try to ‑‑ or complementary rather than compatible, and we have got to pick stations where, hopefully, everyone will do well.  We want our licensees to succeed in Canada.  We don't want them to fail.  That's axiomatic.

5785             So if you have got your demographic wrong and we pick, let's just take as an example, Rawlco and you as two of three, and I have got your demographic right, somebody's going to be in trouble.  So I guess maybe one way to ask my question is this.  The Rawlco folks said they could live with anybody.  They didn't care.  Can you live with Rawlco?

5786             MR. MAHEU:  Absolutely.


5787             MR. LANGFORD:  You have got no ‑‑ you are that confident in your 18 to 44 that you could live with Rawlco?

5788             MR. MAHEU:  Commissioner Langford, these two radio stations, I know you are having a hard time differentiating ‑‑

5789             MR. LANGFORD:  I am.

5790             MR. MAHEU:  ‑‑ and I apologize for that because obviously ‑‑

5791             MR. LANGFORD:  That's not your fault.

5792             MR. MAHEU:  No, it is, because obviously we, and I specifically, have not differentiated this in your mind, and I thought I did, but obviously I apologize for that.

5793             MR. LANGFORD:  Well, I don't think they are the same, but I think there's a huge overlap.

5794             MR. MAHEU:  Night and day.  Night and day.

5795             MR. LANGFORD:  And yet you are going to put all that money into the folk festival ‑‑

5796             MR. MAHEU:  Well, here ‑‑

5797             MR. LANGFORD:  ‑‑ something doesn't connect here.


5798             MR. MAHEU:  Here goes the second point, because I think you raise a good point, and, again, it's kind of circumstantial, when you hear folk festival, you think, "Oh, well, all the money's going to folk".

5799             MR. LANGFORD:  No, I didn't say all ‑‑

5800             MR. MAHEU:  No, no, but that genre.

5801             MR. LANGFORD:  ‑‑ but a big slice.

5802             MR. MAHEU:  Yeah, and that's a fair assumption.  But the interesting thing about the Calgary Folk Festival is it is a gigantic music festival, and when you go to the folk festival in Calgary it's very similar to what you would find in other cities, where all sorts of different genres of music are represented at the folk festival.  It's not just the folky granola small‑stage folk festival.  This is a world‑class music production, with artists from all sorts of different genres.

5803             MR. LANGFORD:  But Mr. Maheu, if you are choosing to give your loot to a songwriter rather than some song players, you really are focusing more on lyrics and message, and that's an older demographic.

5804             MR. MAHEU:  No, on the contrary ‑‑

5805             MR. LANGFORD:  I really don't miss Peter Miller.  This is just about as much fun.

‑‑‑ Laughter / Rires


5806             MR. MAHEU:  I have got the same haircut, but I think that's where the similarity might end.

‑‑‑ Laughter / Rires

5807             MR. MAHEU:  With due respect, Commissioner Langford, as we said earlier in our remarks, and as I think as I have responded earlier, one of the strengths of triple A, albeit the greatest strength, is this is a song‑driven format.  They lyrics of the songs are what drives this format.  So there's some similarity there in terms of folks, folk is a song‑driven format, but the kinds of songs that each of these formats plays is very different.  It should not be surprising that in a song‑driven format we would want to devote a large amount of our Canadian talent development to the people who create songs.

5808             Now, we also know from practical experience that a lot of these songwriters are also performers, and what we want to do is help get them to the point where they can perform in public at a high degree of competency, record a great album, get some support across the country.


5809             Conversely, if you gave it to a band, that isn't really any better or any worse, but in terms of ‑‑ what I'm saying is it's a song‑driven format and it should not be surprising that the money that we would devote in the Canadian talent development for the local portion would be devoted to songwriters.

5810             MR. LANGFORD:  I'm not surprised, I'm delighted.  I just think it indicates something that, for some reason, you and I see differently.

5811             And don't take that as a worry when you walk out of here this afternoon.  It's just something I want to push you on and explore ‑‑

5812             MR. MAHEU:  Sure.

5813             MR. LANGFORD:  ‑‑ cause we got to come out of here with a clear understanding.  And I must say, you keep saying things that say to me, "Older demo.  Older demo.  Older demo", which is fine, but ‑‑ anyway, I will leave it.  I don't want to beat it to death with a stick and everybody's got a right to have lunch, and I know Mr. Steele wants to say something, and that's great.

5814             MR. MAHEU:  Well, I think he wants me to say something, but go head.

5815             Yeah, what I was ‑‑ 15 seconds, and then we can ‑‑

5816             MR. LANGFORD:  Oh, look, I don't want to cut you off either.  If you need more time, you take the time.


5817             MR. STEELE:  I think one of the things we need to elaborate on here are the playlists.  The playlist of the Rawlco application and ours is very, very different.  Is it fair to say Ian Tyson, Gordon Lightfoot, all those artists, they are not going to be played on triple A?  They screen older demographic.

5818             You look at the artists that we are proposing ‑‑ and Shaneen and Mark may want to elaborate ‑‑ they appeal directly to this ‑‑ this demographic is right for this triple A format.  The triple A format is new to Canada, but it's not new ‑‑ obviously, there's plenty of stations in the U.S., and that's the demographic that they attract.

5819             You may want to just elaborate on that.

5820             MR. MAHEU:  Yeah, just going back to what Rob mentioned about the Rawlco, there's 9 percent duplication in the songs ‑‑ 9, 9 percent.

5821             MR. LANGFORD:  That would be the Bruce Cockburns and stuff like that?

5822             MR. MAHEU:  Yeah, 91 percent different between triple A songs and the folk music.


5823             The other thing is, where folk is largely 45‑plus, when we took a look at ‑‑ when we did the most comprehensive research in the market, we surveyed from 12 to 64, we looked at all the different avenues, we didn't go in and say, "Okay, we are going to survey 18 to 49 or 12 to 34 and find the best opportunity there.  We looked at all the opportunities, and this is very, very clear.

5824             This also, by the way, mirrors research we have done in Winnipeg for CAFÉ100 there.  Triple A is twenties and thirties, and they love it.  It's not being done on radio right now and it sounds very, very different, very different, from a folk‑oriented proposal or a Hot AC proposal.  When you do a run and take a look at the proposed songs on CAFÉ92.9, and compare it against all the other applicants, it's very, very different.

5825             We know that that's the only way we are going to have a shot at being successful:  we have to differentiate ourselves.  And believe us when we say the research and our practical experience, twenties and thirties, that's the demo for triple A.

5826             MR. LANGFORD:  One last question, if the chair will allow, and it's probably a question he was going to ask, but we haven't consulted so I had better be careful.


5827             If Rawlco doesn't worry you, who of the applicants would be the most difficult ‑‑ and there may be more than one ‑‑ who would have the biggest impact on a triple A business plan?  Who don't you love, to paraphrase Ronnie Hawkins?

5828             MR. MAHEU:  There aren't a lot of folks that we don't love here, in terms of hurt.  We are proposing a radio station that really is a niche radio station, it's a four‑share radio station, so there aren't really any applications that we couldn't live with, because each one is carving out its own niche, and many of them are smaller niches.

5829             I think CHUM's application is probably the biggest, in terms of rating and share niche, that could probably ‑‑ in terms of what you could do 25‑54 with a radio station like that, but our proposal is very focused and very specific about the kinds of people it's going to reach.

5830             Demographically, we have been going through this ourselves.  In terms of the Harvard proposal, we are night and day.  They are younger than we are.  They don't present a problem to us at all.  The folk, not a problem at all.  Any 45‑plus format, no problem at all.  And when you take a look at Hot AC, 35 to 54, 35 to 44, tight playlist, lots of hits, versus wide playlist, lot of non‑hits, we are not worried about it.


5831             MR. LANGFORD:  You are just not filling in for Peter Miller at all.  You are not doing it for me.  You are too nice.

‑‑‑ Laughter / Rires

5832             MR. LANGFORD:  Those are my questions, Mr. Chair.

5833             THE CHAIRMAN:  Thank you, Mr. Langford.

5834             Well, he took one question from me, but I had another one, and it's a take‑off on the first part of Mr. Langford's question.

5835             Perusing with the market study that you filed this morning, obviously, as you say, you cover the 12 to 64, but you never gave any breakdown by subcategories.  It's obvious to me that what I'm seeing on page 26, the 12‑44 share projection of the triple A, the impact on it, the only impact is on CBC One, where prior they will have a 7 share and after the launch they will have a 5 share.

5836             As a matter of fact, when I'm looking at the actual fall BBM of 2005, it won't leave much to the CBC, because they only had the 4.9 share.  But only the future will tell.

5837             But I'm sure that you have done some breakdown.  Could you make them available?


5838             MR. MAHEU:  In terms of the ‑‑ by age group, age break?

5839             THE CHAIRMAN:  By age group.

5840             MR. MAHEU:  Yes, we can.

5841             THE CHAIRMAN:  You can.

5842             MR. MAHEU:  We would be happy to do that.

5843             THE CHAIRMAN:  Okay, please.

5844             MR. MAHEU:  And Mr. Chair, if I can, just on your point about CBC, in terms of their share now, were you looking at a 12‑plus share?

5845             THE CHAIRMAN:  Yes.

5846             MR. MAHEU:  Okay.  I think you would find if you narrowed that to 64, that share might be a little higher.  So when you take that ‑‑

5847             THE CHAIRMAN:  Obviously, there are two methods of ‑‑ the BBM methodology ‑‑

5848             MR. MAHEU:  Right.

5849             THE CHAIRMAN:  ‑‑ and the survey methodology.  I'm not here to confront that, I'm only saying that, obviously, that you are coming up with different numbers.  So if we could have the breakdown between the various demographics, it will help us to better understand your real target.


5850             I know that legal counsel has a question for you, but I want to make a statement here.

5851             I notice that there's a lot of broadcasters in the room, and many of you have used TRAM results to update your numbers.  And that's fine.  But the CRTC doesn't access TRAM's numbers.  Every time we have asked the RMB for the TRAM numbers, we have always been told that the board of the RMB is forbidding us to have access to that information.

5852             I'm making a plea, not only to you, but to all the others who have board members at RMB to agree to at least make those monthly reports available to the staff of the CRTC.  It will help over time and, obviously, it will give more credibility to the argument that you are making, that the actual December numbers are...

5853             So, please, if you could ask your representative on the RMB board, it will be very appreciated by the CRTC ‑‑ by the CRTC, period.

5854             Mrs. Counsel.

5855             MS BENNETT:  Just a couple of loose ends.

5856             On the age breakdown that you just undertook to provide, could you provide that before reply?  Would that be possible?


5857             MR. MAHEU:  We will endeavour to do that.

5858             Mark?

5859             Yes, we can.

5860             MS BENNETT:  Okay.  And earlier you mentioned that you planned to file a letter from the Radio Starmaker Fund with respect to the specific fund that you had discussed with them.  Is that a letter you have already that you could provide soon or ‑‑

5861             MR. MAHEU:  No, but I think we could do it within the week.

5862             MS BENNETT:  Okay.  Thank you very much.

5863             MR. MAHEU:  You are welcome.

5864             THE CHAIRMAN:  So, Mr. Maheu, or Mr. Steele, it's the time for the wrap up.

5865             I'm giving you five minutes to give us the reasons why you shall get the licence.

5866             MR. MAHEU:  Thank you for the opportunity.  We will take two.

5867             I am on the board of directors of the Radio Marketing Bureau, and I will take your comments to heart and see what we can do to get that changed immediately.


5868             Thank you for your time this morning.  Thank you for the questions, tough or otherwise.  It's good to get it on the record, and it's all fair.

5869             Obviously, we believe strongly in the format that we have chosen.  We have done a lot of homework on it, we have some experience with it, and we are confident that this will be a great radio station for Calgary.

5870             We believe we have the best idea for a format, because this is all about ideas that translate into great sounds on the radio and entertain and inform people.  We have got this idea through the extensive research we did and we have got feedback from people in Calgary.

5871             The twenty and thirty‑somethings are listening to a lot less radio now, as we have talked about this morning.  They are telling us very clearly that in some cases with triple A listeners they are listening to other sources of music, even moreso than they listen to radio now.

5872             CAFÉ92.9 is a great opportunity to bring these people back to radio again, because our future is based on these younger people continuing to use radio at the levels they are today, or greater, for us to have a sustainable future.  And we are confident that stations like CAFÉ92.9 will help do that.


5873             This is a new idea that brings some real diversity to the Calgary market.  The music that's being played in the marketplace now doesn't include triple A.  As we said earlier, when you take a look at the top 30 songs on the triple A chart this week, compared to what was played in Calgary last week, only three of those songs were played in Calgary at all.

5874             Inside of that it gives a great opportunity to the people making music here in Calgary that are looking for a voice on the radio they presently don't have.

5875             We have heard from Kathy, and the impact it would have on her and her colleagues.  We are looking forward to playing this music, in fact, it is part of the essence of what makes this format so fun, so unique and so different.

5876             It emphasizes airplay for not only Canadians, but Calgarians.  It provides $7 million in direct cash Canadian talent development contributions, and we are going to put that money to work to develop tomorrow's stars and we are going to assist Starmaker to keep making the stars that have already had an opportunity.


5877             CAFÉ92.9 complements our existing radio station.  Formatically, demographically, it's a nice fit, and the two of them will do great things together.

5878             We will put our heart and soul into making this radio station one that we can all be proud of, but especially the people of Calgary will be proud of.  It's something new for Canada.  It's a new format and it's a new idea.  We are willing to put our capital, our know‑how and we are willing to roll up our sleeves and get behind this and do whatever it takes to make it a success, and we look forward to the opportunity of doing that right here in Calgary.

5879             Thank you very much for your time, your questions and your patience.

5880             THE CHAIRMAN:  Well, thank you, Mr. Maheu, thank you, Mr. Steele, thank you to your team.

5881             We will adjourn until 2 o'clock this afternoon, and we will hear the three applications for Airdrie this afternoon.

‑‑‑ Upon recessing at 1255 / Suspension à 1255

‑‑‑ Upon resuming at 1400 / Reprise à 1400

5882             THE CHAIRPERSON:  Order, please.

5883             Mrs. Secretary, could you introduce the next item.

5884             THE SECRETARY:  Thank you, Mr. Chairman.


5885             Perhaps before we go on to the next application, I would just like to indicate that the applicants that have appeared for the Calgary application will be appearing for the Airdrie application.

5886             Those applicants that do not intend to participate or appear in Phase 2 of the proceedings, I would appreciate if you could let me know before the end of the day.

5887             Thank you very much.

5888             And a second announcement regarding Tiessen Media, just to indicate that the next applicant has filed a revised confidential financial network statement which will be placed on the confidential file for this application.

5889             So, now we are ready to proceed with Phase 1 of the application for the Airdrie Market.

5890             The first item for that is item 11 on the agenda, which is an application by Tiessen Media Inc. for a licence to operate an English language FM commercial radio programming undertaking in Airdrie with a transmitter in Cochrane, Alberta.


5891             The new station would operate on frequency 106.1 megahertz, channel 291A with an average effective radiated power of 3,600 watts, maximum effective radiated power of 6,000 watts, antenna height of 35 metres.

5892             The Cochrane transmitter would operate on frequency 99.1 megahertz, channel 256LP with an effective radiated power of 15 watts, non‑directional antenna, antenna height of 116.5 metres.

5893             Appearing for the applicant is Mr. Jamie Tiessen.

5894             Mr. Tiessen, you have 20 minutes for your presentation.

5895             Thank you.

PRESENTATION / PRÉSENTATION

5896             MR. TIESSEN:  Good afternoon, Mr. Chair, ladies and gentlemen, Commissioners and broadcast colleagues.

5897             My name is Jamie Tiessen and I'm the president of Tiessen Media, and I'm here and pleased to have the opportunity to present today Tiessen Media's application for a licence to serve the Airdrie and Cochrane areas, along with the Municipal District of Rocky View.


5898             At this time I'd like to make a few introductions.  In the audience today is my consulting engineers, D.E.M. Allen & Associates and my accountant who has worked with me on this project, Mr. John DeGrath, along with various other supporters of this application.

5899             Should we have technical or accounting questions that I'm not able to answer, we may try to call on them for their assistance.

5900             Additionally, my advisory board who has assisted me with this application, has provided letters through the intervention process.

5901             Before diving into the details of this application, I'll give you a little information about Jamie Tiessen and Tiessen Media.

5902             Tiessen Media manages, produces broadcast projects for radio stations and businesses throughout Western Canada.  We provide services in commercial voice‑over, audio production, marketing, promotion, special event management and planning, along with media project management.

5903             We have provided broadcast services for a variety of clients, including radio stations throughout Western Canada and, for the past several years, we've looked after the management and production of the sales of the 53 nightly radio broadcasts for the World Professional Chuckwagon Association.


5904             As the president and founder of Tiessen Media, I have a passion for all things radio and, as a certified marketer ‑‑ radio marketer that is, I have professional experience in all areas of broadcasting, programming, sales management and I'm eager to share my services and experiences with the communities proposed in this application.

5905             I'm also heavily involved in public service.  I'm a twice‑elected municipal councillor for the Town of Okotoks, a volunteer with several organizations and I sit on numerous committees and boards throughout Alberta.

5906             As I hope you will see, it is this personal and professional background that brings this application forward and drives the application.

5907             Now, to the application itself.  This application is all about local service.  Tiessen Media is proud to introduce the RANGE, a station that will provide local news, information and programming to the communities of Airdrie, Cochrane and the Municipal District of Rocky View.

5908             Currently, local broadcasting is non‑existent in these communities.  The RANGE will provide these rapidly growing unique communities with local programming that is clearly needed.


5909             As we take a look at the marketplace, the communities of Airdrie and Cochrane are located directly north and northwest of Calgary.  Both communities have strong community identity and are perfect locations for a local radio service.

5910             The City of Airdrie is a vibrant community of more than 25,600 located a short drive north of Calgary on the Queen Elizabeth II Highway.  Airdrie's economic sectors encompass all that Alberta has to offer; oil and gas, technology, manufacturing and more.

5911             The community also has several shopping centres, commercial strip centres, an enclosed mall and several clusters of new retail development.  An excellent mix of independent regional and national retailers have established a presence in the City of Airdrie.

5912             Located northwest of Calgary, the Town of Cochrane, population 12,700, is a community full of energy and still noted for its western heritage and small‑town hospitality.

5913             With the Rocky Mountains only an hour away and all the conveniences of the city 20 minutes away, the population has doubled within the last 10 years.  Cochrane is regarded as one of the fastest growing communities in Canada.


5914             Cochrane's economy is based mainly on tourism, ranching, construction, oil and gas, wood products, manufacturing and hospitality.

5915             The Municipal District of Rocky View surrounds both the communities of Cochrane and Airdrie, and the MD of Rocky View is home to hundreds of prosperous farms, impressive small acreages, commercial developments, as well as natural resource extraction and light industry related to the petroleum sector.

5916             Main industries in the Municipal District of Rocky View include ranching, agriculture, natural resource processing as well as light manufacturing, tourism, aerospace and light industries.

5917             The market area of these three communities combined has had huge increases over the last 10 years.  From 1996 to 2001 these communities, according to Statistics Canada, are three of the top 15 fastest growing municipalities in Canada.

5918             Our application caters to a rapidly growing population area.  Our current coverage derived from population in the region is estimated at 91,000.  Conservative projection growth rates at 5 per cent annually lead to serving an estimated population of 128,300 by the year 2012.


5919             The RANGE will provide local effective news and community programming, increasing and enhancing local communication for the entire region.  Our format will be based on vision.  This station will become all things local for these communities.

5920             Our music format is an eclectic adult contemporary format.  We will feature a blend of pop, soft rock, country and roots‑oriented music and artists.  The key is to provide a spectrum of demographic appeal that is community based, not format based.  By providing an eclectic adult contemporary format, the RANGE would appeal to a wide range of listeners, specifically age 25‑54.

5921             Additionally, we will commit to devoting 40 per cent of our musical selections from Category 2 Canadian selections.

5922             This station will be all local all the time.

5923             The RANGE will be built around a commitment to the communities it will serve.  Local events and stories will form the basis of our news programming.  Our news team will cover local happenings including sports, politics and lifestyle stories.

5924             Our news programming will also include local and national newscasts along with local weather forecasts, local traffic and world reports.


5925             Our community information programming will include morning show PSAs and interviews, community events, sports programming, an active community cruiser, radio auctions and charity fund‑raising activities as laid out in our broadcast plan.

5926             We will also have a strong commitment to local talent development and cultural diversity.  Local artists will be provided with many opportunities for on‑air exposure and financial contributions will be made for local talent development.

5927             Our unique plan of Canadian talent development includes a two‑minute feature, aired daily, seven days a week profiling local arts, culture and music and the RANGE will also feature a weekly one‑hour Rocky Mountain High radio program promoting local artists.

5928             We also intend to create an internship program for local high school and college students who are interested in radio broadcasting to help them pursue their blossoming broadcasting careers.


5929             Our Canadian talent development contribution will exceed CRTC guidelines.  We've committed to the Canadian Association of Broadcasters Talent Development Plan and we plan to support it with various other financial contributions.

5930             Over the next seven years funding will be provided for music program scholarships and musical instrument purchases for schools in these communities.

5931             This financial assistance will mean $13,000 towards these communities and the region over the next seven years.  This does not include the contribution of in‑kind air time for arts, music, culture, promotion or the development of our internship program.

5932             Let's talk specifically about technical service coverage.  D.E.M. Allen & Associates, this project's consulting engineers, have provided a plan that will provide coverage to the areas of Airdrie, Cochrane and the MD of Rocky View meeting the objectives of the business plan that is presented.

5933             This coverage will be provided by a transmitter in Airdrie broadcasting at 106.1 and a low power repeater in Cochrane at 99.1.

5934             Cochrane's location in the valley provided us with challenges for coverage and, based on all of the options we reviewed, this is why we've provided the low power repeater option.


5935             We do not intend to provide service to Calgary, instead we'll focus on the growing needs of Airdrie, Cochrane and the Municipal District of Rocky View.

5936             Tiessen Media is the only application proposing service to Cochrane and would be the only proposal that services both of these communities.

5937             Our on‑air studio sales and administration offices would be located in Airdrie and a future satellite location for on‑air sales is planned for Cochrane as soon as resources allow.

5938             Through our community consultation process and the CRTC public hearing process, Tiessen Media has actively consulted with these communities.

5939             Our wide range of interventions of support come from all areas of broadcasting and community and we're very pleased with the support that has been submitted to the Commission.

5940             From delivering pamphlets to both communities, to discussing our plan with local business and residents, we are very excited about the prospect of local radio service just as both of these communities are equally.

5941             So, what makes Tiessen Media's plan different from other applications?


5942             First, there are currently no commercial radio stations operating from these communities.  Cochrane is the only ‑‑ no, let me just go back, let me try that again.

5943             First, there are currently no commercial radio stations with local programming to serve both of these communities.  Cochrane is one of the, if not the fastest growing municipality in Canada and this is the only submission that provides a presence in that local community.

5944             Secondly, this application has a strong focus on local programming.  We would not target the Calgary market and we would refrain from soliciting advertising from outside of our principal marketing areas.  And by our business plan, it would be difficult for us to be able to service the Calgary market.

5945             Additionally, local ownership, programming participation and employment are amongst the core values of this application.

5946             Our service will be based on respective and responsive community centric radio.  This local focus truly is an important part of Tiessen Media being independently owned and operated.

5947             When you're local, you respond to the community needs and contribute to the economic well‑being of these communities.


5948             This application is the only one that brings diversity of voice and ownership, which is a benefit not only for these communities, but for Alberta and the Canadian broadcasting system.

5949             I'm born and raised in the Calgary area.  I have a passion for radio and I have hands‑on experience in radio and media management.  This kind of grass roots ownership is an important component of this operation to provide a radio service to these communities.

5950             If there's one single point to stress let it be this:  We believe that the success of this proposed station is in its ability to cater and respond to the needs of the community it serves and our new voice will confidently deliver this.

5951             We understand that both of these communities work together through regional partnerships and efforts and both want this radio service.

5952             Tiessen Media believes this application addresses all of the Commission's evaluation criteria.


5953             In terms of quality, we've developed a detailed business plan.  We have local knowledge of the area and we received clear feedback from local businesses and residents that a local FM station is what these areas need.

5954             We've also met the objective of editorial diversity and news and all of our on‑air programming and we are the only independent application.

5955             Our programming will be reflective of the community and we plan to become a favourite source of information for local residents and business.

5956             An important point to consider is that we expect to have little or no impact on local radio stations and market capacity.  Currently there are no commercial stations operating from these areas and our technical patterns have shown a clear commitment to stay out of the Calgary marketplace.

5957             We'll refrain from soliciting advertising from outside of our principal marketing area and we believe that we will have no negative impact on Calgary broadcasters.

5958             Not only do the communities of Airdrie and Cochrane have the market capacity to handle their own FM service, but they're waiting for a local radio service.


5959             In meeting the objectives of the Broadcast Act, Tiessen Media has provided you with a plan of sound quality and judgment and we believe our plan proves to the Commission that independence and diversity in the broadcast marketplace, especially while so close to a metro centre like Calgary, will provide an important missing link to the broadcast world.

5960             For the communities of Airdrie and Cochrane, it means they will finally be offered the local, community‑based programming that they've all been waiting for.  This application will give these communities what they want.

5961             Thank you for your time in allowing Tiessen Media to present our plan at today's public hearing.

5962             THE CHAIRPERSON:  Thank you, Mr. Tiessen.

5963             Just for the record, I know that you still currently are a municipal councillor for the Town of Okotoks.

5964             MR. TIESSEN:  That is correct.

5965             THE CHAIRPERSON:  And will the coverage of one or the other of these stations cover Okotoks?

5966             MR. TIESSEN:  No, neither would.


5967             THE CHAIRPERSON:  Neither one.  So, the issues related to municipal or elected members doesn't apply here.

5968             I think you have already answered yourself.

5969             I am just perusing back your oral presentation, and I noted some of the things that I underlined were handled in the following paragraphs, so that is why ‑‑ okay, but I will get back to one of course in due time.

5970             As you know, the two other applicants will cover various issues, programming, format and target audience, will cover music, will cover Canadian content, will cover CTD and the financial analysis and the target audience that you are looking at, and we may have a question on technical.

5971             As you know, there are two other applicants for Airdrie and they are appearing in this portion of the public hearing and they are proposing somewhat similar adult contemporary music format designed to serve a similar audience.

5972             We are, of course, referring obviously to Golden West which is proposing another contemporary music format that will target an audience of 25‑50 and Newcap which is proposing an Hot AC where the aim will be 25‑40 and you are aiming at 25‑54 as you said in your oral presentation.


5973             Could you, for our benefit, explain how your format proposal defers, if at all, from these two others in the context of music programming and overall feel and presentation?

5974             MR. TIESSEN:  Just to provide a little bit of additional comment there, obviously we're all very close to understanding what the needs are of those communities, both Golden West and Newcap, and we do need to target that age group of approximately 25 through to about 54 and the programming would vary.

5975             We've proposed an eclectic mix of music.  In the proposal that I've given you, it proposes artists such as Billie Joel, the Rankin Family, Nora Jones, Willie Nelson, Bryan Adams, Michelle Wright, Huey Lewis, The Corrs, Don Henley, Blue Rodeo.

5976             What I see are different with the format that's proposed is where we're going to do the local programming that I've committed to within the application.  By pitching an eclectic format, it really allows us to blend the Rocky Mountain High program and some of the, what I might call, cowboy‑oriented culture of both ‑‑ well, for sure the community of Cochrane and the region.


5977             So, you know, I believe there's a really, really strong mix there and that was the purpose for picking a format that provides quite a broad range.

5978             And my second part to answering your question, Mr. Chair, is the format ‑‑ you know, it's not as much about the format is it about giving these communities a local voice.  And, again, I've reiterated that in my presentation but, you know, it's more format based than music based, and that's going to be the focus in providing that local information programming through this application.

5979             THE CHAIRPERSON:  Well, you are just saying you are format based but you are also calling yourself eclectic and, generally speaking, eclectic means that you are going to take here and there ‑‑

5980             MR. TIESSEN:  Yes.

5981             THE CHAIRPERSON:  ‑‑ in various forms.  So, why do you think an eclectic adult contemporary format will better serve the community and is the best choice to serve these communities?


5982             MR. TIESSEN:  Well, additionally it does allow us to pick up some of the rural listeners that are in the region, providing them with an opportunity to listen.  They'll listen to more than eclectic based music format than the folks that would be listening within the cities within, you know, the Town of Cochrane or the City of Airdrie.

5983             They've got quite a variety to choose from.  They can all catch their programming from Calgary but none of it's going to be (1), locally based and (2), we're trying to find a spectrum that allows a wide variety of people to hear and also that caters to the MD and the municipalities.

5984             So, we're trying to find that mix by providing that eclectic mix of music.

5985             THE CHAIRPERSON:  Okay, thank you.

5986             I note also that you have agreed ‑‑ we will move now towards another section and it has to do with the local programming and spoken word and also somehow to advertising questions.

5987             But I note that you have agreed by condition of licence to broadcast a standard minimum of 42 hours of local programming, but you also said you will be local all the time.

5988             And you also said in your supplementary brief that everything will be produced locally.


5989             I also note that Tiessen Media manages and operates the Chuckwagon Radio Network and you also talk about it in your oral presentation, and it is a network that reaches 53 radio stations throughout Western Canada.

5990             For the record, over and above the 42 hours requirement, can you confirm how many hours of programming will air each week will be local station produced?

5991             MR. TIESSEN:  Well, just to clarify.  The Chuckwagon Radio Network, just so you have a bit of a briefing on it, is 13 stations, they're Newcap's rural stations where we do a sharing agreement in purchasing their air time.

5992             So, when I say 53 nightly Chuckwagon radio broadcasts, it's 53 nightly Chuckwagon radio broadcasts on their network.

5993             THE CHAIRPERSON:  Oh, I see.

5994             MR. TIESSEN:  Okay.

5995             THE CHAIRPERSON:  On those 13 radio stations?

5996             MR. TIESSEN:  That's correct, yeah.  No, that's okay though, I can understand how that would come forward.

5997             Where I'm coming from from the 42 minutes that you're talking about ‑‑

5998             THE CHAIRPERSON:  42 hours.


5999             MR. TIESSEN:  ‑‑ 42 hours of local programming.  And, again, we're challenged in the definition of maybe what that means because in review of several other applications, when I say local all the time, I mean everything's going to be locally based from this community.  All our programming is going to be sourced from this community, all our news is going to be from these communities and area.       So, that's what I'm referring to when I say that.

6000             When I'm referring to the 42 hours, that was a breakdown, I believe, that I provide on request of the deficiency report, getting into details of specific programming elements that we would be providing.

6001             Now, that probably doesn't even include the banter that they would do in the mornings about the local programming and that sort of thing.

6002             I'm more than happy to recalculate and provide you with a more detailed statement, but I'm confident that the programming overall is going to be locally oriented all the time, Mr. Chair.

6003             THE CHAIRPERSON:  The 42 hours comes from the standard form application where the Commission says, in order to sell locally you have to broadcast a minimum of 42 hours of local programming in a week.


6004             Obviously ‑‑ and so in order to solicit advertising in a competitive market, and the question we also could ask here is, will you consider Airdrie and Cochrane are part of the Calgary CMA; am I right?

6005             MR. TIESSEN:  Probably, but I don't believe they are.  I don't know that answer.

6006             THE CHAIRPERSON:  You don't know that answer?

6007             MR. TIESSEN:  Yeah.  This is a specifically local service for those two areas.

6008             THE CHAIRPERSON:  Yes, I understand that, but ‑‑ and today, do you know if the Calgary stations do solicit advertising in Airdrie and in Cochrane?

6009             MR. TIESSEN:  Yes, they do.

6010             THE CHAIRPERSON:  They do, because they are covering the area.

6011             MR. TIESSEN:  Well, they say they're covering the area, sir.

6012             THE CHAIRPERSON:  Well, if they didn't go with field strength to measure the quality of the signal ‑‑

6013             MR. TIESSEN:  Both.


6014             THE CHAIRPERSON:  ‑‑ in those areas, but obviously if they do solicit advertising in Airdrie and in Cochrane, it is because there are solicitors that live in Airdrie and Cochrane that are listening to the stations of Calgary.

6015             MR. TIESSEN:  That would be correct.

6016             THE CHAIRPERSON:  Yes, that appears to me to be obvious, anyhow.

6017             MR. TIESSEN:  Yeah, very obvious.

6018             THE CHAIRPERSON:  That being said, so I am coming back to the notion of local programming.

6019             Will you be doing some voice tracking or will you have on‑air personnel during all the hours of broadcast?

6020             MR. TIESSEN:  There will be some voice tracking mid‑day, it is in my business plan for this operation.

6021             THE CHAIRPERSON:  Mm‑hmm.

6022             MR. TIESSEN:  We are planning a morning show with two people, one's like a morning person and then a morning co‑host doing the news, and then we're going to have somebody throughout the mid‑day to host the mid‑day show, and then we're going to have somebody in the afternoon.


6023             So, we see somebody there from 6:00 in the morning until 7:00 at night on the weekdays, and then we would see somebody in the station from 7:00 in the morning until 7:00 at night on weekends.

6024             That would be the commitment and we would utilize the voice track programming after those hours.

6025             THE CHAIRPERSON:  And the voice track, obviously, will be produced locally but by the same announcers that will be there during the daytime?

6026             MR. TIESSEN:  That is correct.

6027             THE CHAIRPERSON:  That is correct.  Okay.

6028             MR. TIESSEN:  And, sorry, Mr. Chair, now I understand what you're saying when you referring to local programming as I read from that. And, yeah, we'll meet the commitment so that we'll be able to solicit it relating to local advertising.

6029             THE CHAIRPERSON:  Okay, fine.  Okay.

6030             Is it your intention to affiliate the new station if it was otherwise to the Chuckwagon Radio Network?

6031             MR. TIESSEN:  I haven't thought about it and my answer at this point would be no.


6032             THE CHAIRPERSON:  I see.  In your deficiency reply letter you indicated that the station will offer 26 hours and 34 minutes of weekly news and related surveillance support such as sports, weather and traffic information and 22 hours and 38 minutes of community‑related spoken word programming.

6033             You also indicated in your deficiency letter that the station will be staffed by four full‑time and two part‑time employees in year one, rising to eight employees by year three.

6034             Given your aggressive plan to provide such a substantial level of station to produce local news programming each week, could you explain how your local programming proposals including news content and community‑oriented information spoken word will address the unique needs of the 25‑54‑year‑old listener in Airdrie and Cochrane?

6035             MR. TIESSEN:  I understand that the plan is somewhat aggressive to the use of the amount of staffing that I've put on, but when taking a look at trying to utilize this with an operation as an independent it's, in my opinion, very fair and responsible.

6036             So, I guess to get to how we're going to do it all, it's definitely my feeling that with the use of technology and with the plan that I've put forward we would be able to successfully deliver what I've stated in this application.


6037             So, I don't know ‑‑ maybe I've missed something specific in your question, Mr. Chair, but...

6038             THE CHAIRPERSON:  Only to ‑‑ I don't know if you have attended the first three days of hearings that we had ‑‑

6039             MR. TIESSEN:  Yes.

6040             THE CHAIRPERSON:  ‑‑ where we heard most of the applicants saying that they will be broadcasting somewhere between five hours and a half to seven hours of news for service to the whole Calgary CMA, and you are coming with 26 hours and 34 minutes of news for Airdrie and Cochrane.

6041             Unless you can tell me that you are going to cover the municipal base and maybe on average you may be able to make up for 26 hours, but it appears to me to be a very high number, and not only to me but the Commission.

6042             MR. TIESSEN:  So, those calculations of 26 hours, can we discuss where those are derived from so there's an understanding of how and why I would come up with a number of hours such as that?


6043             THE CHAIRPERSON:  Well, they are derived from your reply to the deficiencies and I will draw your attention specifically to your answers in the letter that you sent to the Commission on October the 28th, where in answering Question No. 8, you say here:

"The local news programming and the other spoken word news...",

And I'm quoting you here:

6044             MR. TIESSEN:  Yeah.

6045             THE CHAIRPERSON:

"...will total 26 hours and 34 minutes average weekly.  A breakdown is attached as attachment No. 3."  (As read)

6046             So, I am really asking you in using your own reply.

6047             MR. TIESSEN:  Attachment No. 3 shows our commitment to a major local newscast throughout the morning, mid‑day and afternoon, major local sports, local weather, traffic and road reports, and then it shows our commitment to local related weekend minor and major news reports and local weather programming.

6048             That's all added up to commit to the 26 hours and 34 minutes which we're committing to doing in a week.

6049             THE CHAIRPERSON:  And how many news people will you have?


6050             MR. TIESSEN:  The number of news staff scheduled is, the first year I believe two people.

6051             THE CHAIRPERSON:  Two people.  And so they will have ‑‑ two people to produce 26 hours and 34 minutes of news over a seven‑day period.

6052             So, will they be sleeping at the station?

‑‑‑ Laughter/Rire

6053             MR. TIESSEN:  No, they won't be because there's specific parts of that news programming initiative that would be probably done by regular staff that would be outside of the newsroom, for example.

6054             Those local weather reports, those would be done ‑‑ traffic reports would probably be done by the other staff that will be on staff.

6055             So, proportionately speaking, I do know ‑‑ it sounds like they're going to be spending some over‑nighters at the station, and I'm not trying to say that it isn't going to be difficult for us to work with them over the first few years but, again, the key of my business ‑‑ this comes a little bit into my business plan, Mr. Chair, and that's the fact that I have to start utilizing my resources and building as we go along, especially as an independent business plan.


6056             I can't go in and have a whole bunch of people in the newsroom.  I'm committed to doing what I'm showing on this page and believe we can do it by using all the resources in the station, whatever they may be.

6057             THE CHAIRPERSON:  But even if you were to do that to achieve that number, only starting by year three or year five when you have broken even and the things are settled down, I'm suggesting to you that ‑‑ I understand weather, traffic and the other material could be done by the on‑air persons rather than by the newsperson, but you seem to have a very aggressive number of newscasts and time periods dedicated to news, to the extent that we're questioning ourselves if really you will be capable to do that.

6058             Taking into consideration that the other broadcasters that have been around for many years, we heard numerous ‑‑ we heard CHUM, we heard Harvard, we heard Newcap, we heard that Pattison, to name only those ‑‑ the ones that were here, and their general commitment was between five and seven hours of news on a weekly basis.

6059             So, remove the traffic and the weather out of your list ‑‑ your 26 hours, you probably still have 16 hours.


6060             MR. TIESSEN:  And that's the proposal about doing the local programming.  And if you feel that those objectives could be possibly too much and you want me to reassess this and provide that information to the Commission, I'm more than happy to do so.

6061             THE CHAIRPERSON:  The thing is that that is what we are doing today, because that wastes ‑‑ this is a public process, this is a process with ‑‑ a competitive process.  We will hear two other applications.

6062             So, we need your answer now and your commitment.  We cannot wait until later, we need to do that now.

6063             MR. TIESSEN:  Well, I'm committing to what's on this page.

6064             THE CHAIRPERSON:  Okay.  Because the other part of my question now has to do with your 22 hours and 38 minutes of community‑related spoken word, which is also a very huge number.

6065             And I am wondering if you will be able ‑‑

6066             MR. TIESSEN:  Some of these in here, Mr. Chair ‑‑ some of these, for example, if you look at your local info and promotion, interview and local events, some of these may be repeat programming.


6067             So, from a production standpoint, you know, it's not all brand new programming.

6068             So, even if you split that in half and we were to repeat during any given week some of the stuff that others may have missed, you'd be looking at doing it about 11 hours and trying to repeat some of the features and programming for people to listen to later on in the day, that sort of thing, at least in this particular instance.

6069             THE CHAIRPERSON:  Okay.  Well, we are accepting your answer.

6070             Now, regarding the coverage of Airdrie and Cochrane with two journalists, approximately how much of your newscast content will be devoted on one hand to Airdrie, on the other hand to Cochrane?

6071             MR. TIESSEN:  We would like to provide equal service to both communities.

6072             THE CHAIRPERSON:  To both communities.  If we were to put a condition of licence requiring that a minimum number of hours, that you propose 26 hours per week of news content be devoted to reflect Airdrie and Cochrane stories, could it be a possible means of ensuring that your station programming focus remains on those communities?

6073             MR. TIESSEN:  Yes.


6074             THE CHAIRPERSON:  Will you be willing to operate under such ‑‑ well, you have obviously just said yes.

6075             And are you planning any national news; are you planning to subscribe to ‑‑

6076             MR. TIESSEN:  Yes, broadcast news wire service, probably do an audio update from BN during certain times of the day.

6077             THE CHAIRPERSON:  So, if we were to split between what will be coming ‑‑ the number of hours coming from BN versus the number of hours locally produced, what will be the number of hours locally produced?

6078             MR. TIESSEN:  I would probably say, Mr. Chair, in the range of 20.  By the looks of this I've got ‑‑ down here when we did the calculation, 54 minutes estimated of national newscast from any given day.

6079             So, if we'd say anywhere between 20 and 23, I'm still comfortable with that.

6080             THE CHAIRPERSON:  So, will you accept a condition of licence saying that you will devote, say ‑‑ I'll be fair with you, I'll split it in two ‑‑ at 21 hours and a half.

‑‑‑ Laughter/Rire


6081             MR. TIESSEN:  Yeah, 21 and a half, I'll commit to that.

6082             THE CHAIRPERSON:  ‑‑ of time ‑‑

6083             MR. TIESSEN:  Yeah.

6084             THE CHAIRPERSON:  ‑‑ devoted to local news for Airdrie and Cochrane?

6085             MR. TIESSEN:  Correct.

6086             THE CHAIRPERSON:  Now, talking about your community programming, your 22 hours of community programming, what will that be?

6087             MR. TIESSEN:  In the community programming section that I provided you, it included the general information on local events, public service announcements, the community cruiser and the culture calendar.

6088             What I did not include in there is that commitment that we're planning to do relating to the Rocky Mountain High program which is the one‑hour show featuring locally‑oriented music and artists.

6089             That is not calculated within that 22 hours that was provided to you.

6090             THE CHAIRPERSON:  Am I clear ‑‑ did I understand clearly that those 22 hours will be your spoken word, not with music?

6091             MR. TIESSEN:  That is correct.


6092             THE CHAIRPERSON:  That is correct.

6093             And obviously part of it will be live‑to‑air and part of it will be voice tracking or pre‑taped materials that will be repeated?

6094             MR. TIESSEN:  Correct.

6095             THE CHAIRPERSON:  Now, as you know ‑‑ well, you have ‑‑ as I said earlier with more than 48 hours of spoken word, it is a very substantial commitment and we have been told over the years by the broadcasters that quality local station produced spoken word programming is very expensive to produce.

6096             Looking at your projected annual programming expenses over a seven‑year period, I see that your estimated expense goes from $171,000 in year one right to $292,000 by year seven.

6097             Could you comment on your projected expenses and why you feel that they are adequate to allow ‑‑ to realize the commitment of 48 hours per week of station produced news and information spoken word?

6098             It is already bigger than the 42 hours of local programming commitment that you have made.

6099             MR. TIESSEN:  So, in the projections for programming, year one shows $171,000, year two shows $211, year three shows ‑‑


6100             THE CHAIRPERSON:  Well, it goes up to $292,000.

6101             MR. TIESSEN:  Yeah.  But strategically placed where there are significant increases will see our staffing increase as per the ‑‑ as I reported in the deficiency.

6102             THE CHAIRPERSON:  But my question is, do you think you have allocated sufficient funds to finance the ‑‑

6103             MR. TIESSEN:  Yes.

6104             THE CHAIRPERSON:  ‑‑ production of 48 hours?

6105             MR. TIESSEN:  Yes.

6106             THE CHAIRPERSON:  Let's now look at your commitment to not solicit local advertising from Calgary.

6107             As you have heard, Calgary is growing and there is no reason to expect that over the next few years it will not grow northward along Highway II corridor towards Airdrie, just as it is growing southward, westward and northwestward towards Cochrane.

6108             One might also reasonably expect that Airdrie and Cochrane to continue to benefit from this growth pattern.  To some extent you also said there is Calgary migration towards both localities.


6109             As larger markets grow towards smaller communities, there can be programming pressures put on smaller market broadcasters to reflect this growth.

6110             In light of your commitment to serve the communities of Airdrie and Cochrane, will you agree to a condition of licence forbidding the solicitation of, or acceptance of advertising or anything from the City of Calgary?

6111             MR. TIESSEN:  That is what I put in my application, is that I am willing to accept that condition of licence.

6112             However, I do want to make one statement that there is a challenge and I think there could be a current challenge for existing broadcasters relating to stopping an advertiser in the Calgary market from coming to you to say, I want to promote my product to my specific target area.

6113             So, I'm willing to put that in as a condition and follow the rules that the Commission sets out ‑‑

6114             THE CHAIRPERSON:  Is that so.

6115             MR. TIESSEN:  ‑‑ but I'm just saying that there would be challenges that you'd have some upset advertisers that would come from Calgary.


6116             THE CHAIRPERSON:  So, what you are saying, in other words, you will not solicit Calgary advertisers but you will accept Calgary advertising if the advertiser comes to you because he wants to address himself specifically to the Airdrie/Cochrane and Rocky View area?

6117             MR. TIESSEN:  That would be a fair statement.

6118             THE CHAIRPERSON:  Okay.  And you will accept that as a condition of licence?

6119             MR. TIESSEN:  I will accept that as a condition of licence.

6120             THE CHAIRPERSON:  I have a further question, now that you made that commitment, but as you probably are aware, communities like Airdrie and Cochrane, there have been similar communities around the markets like Toronto, Montreal and Vancouver and over the years these communities have started to be included more actively into the markets of those major centres, metropolitan centres.


6121             And we also have seen some of those broadcasters seeking power increases in order to reach the growing community and eventually going a step further even, asking that remote ‑‑ asking the Commission to otherwise relocate on the main towers of the bigger markets.

6122             I have here in mind CFNY who was licensed at the outset as a Brampton station and when Toronto reached Brampton, CFNY asked the CRTC to relocate on the CN Tower.

6123             The same occurred in the Montreal area where a station by the name of CIEL‑FM was located in St. Bridoux, today CIEL‑FM has changed called letters, but they are now broadcasting from the Mount Royal tower.

6124             Airdrie may be faced with a similar situation.

6125             Are you making the commitment that you will never request such a change and you will remain dedicated towards serving the Airdrie/Cochrane area, even if the Calgary market grows towards and even eventually encompasses Airdrie and Cochrane?

6126             MR. TIESSEN:  Yes, I would be willing to make that commitment.  However, I do want to make an additional comment on that.


6127             And the engineers can provide more information but, regardless, the reason that we did what we did from a technical perspective in covering Airdrie with the 106.1 and Cochrane with the 99.1 is that the valley provides us with a significant challenge to provide coverage into Cochrane.  That's why we did the low power repeater in there and there still may need to be some adjustment of towers, but we showed our commitment by this proposal to stay out of the Calgary market and I would commit to what you just said, Mr. Chair.  I wouldn't have any problems with that as a condition of licence.

6128             THE CHAIRPERSON:  And you commit to keep serving the Airdrie/Cochrane area?

6129             MR. TIESSEN:  That is the commitment and that is what I tried to show by my technical plan.

6130             THE CHAIRPERSON:  Okay, fine.

6131             We will now move to Canadian talent development, if I may.

6132             I note that in addition to the minimum 400 hours required by the CAB plan for small market stations, you intend to direct funding to local schools in the communities of Airdrie and Cochrane.

6133             The funding will be in the form of a music program scholarship and the purchase of musical instruments.

6134             I think you reviewed your proposed initiative.  I would like to obtain a few more details.


6135             In your deficiency reply letter you mentioned that funding for your annual music program scholarship initiative will be shared among school music departments of the communities of Airdrie and Cochrane.

6136             Furthermore, you indicate that you will provide funding in year four to seven to schools in Airdrie and Cochrane to purchase musical instruments.

6137             My first question to you is, could you provide us with more details on these initiatives?

6138             MR. TIESSEN:  I don't have a lot of details on this initiative at this time.  I've just had general discussions with a variety of people within the music and education music world and they both believe that this initiative is a very strong initiative, it is supported by both the one school division which wrote in a letter of intervention.

6139             Outside of that, I haven't got into a significant program of how we're going to pick the schools and deliver the instruments and, you know, we'd be more than pleased to provide more details on that, but what I've done is I've provided you with a generalized idea of what our commitment is going to be to those communities.


6140             If the Commission feels that there needs to be more of a commitment, I'm willing to work with them on that, or if they feel that outside of the CAB and music scholarship and instrument purchase program plan there's something else I should do, I'm more than happy to listen.

6141             THE CHAIRPERSON:  Okay.  Well, will the funding be shared equally between Airdrie and Cochrane or would it ‑‑

6142             MR. TIESSEN:  That would be correct.

6143             THE CHAIRPERSON:  That is what your intent is.  And what control mechanism will you implement to ensure that the funds allocated to the local educational institutions will be used by the institution as directed?

6144             MR. TIESSEN:  If you could just say that one more time for me, Mr. Chair.  I didn't hear the end of your sentence.

6145             THE CHAIRPERSON:  Okay.  What I was saying, what kind of a mechanism will you put in place to make sure that the money that is allocated really goes to the purpose to which it is aimed?


6146             MR. TIESSEN:  My hope and intention is that myself or any of the staff at the station would be actively participating in maybe MC'ing the event where those scholarships are given out, and those scholarships will be directly given to those individuals with appropriate follow‑up from those individuals on where they utilize those dollars.

6147             That would be the hope that we would do for that program.

6148             Instrument music purchases, we would give that to the school division and specifically earmark it and have them prove back to us that they went and purchased instruments with that particular dollar.

6149             THE CHAIRPERSON:  With respect to your contribution to local schools, have you reached any agreement with the local school boards or schools themselves at this stage?

6150             MR. TIESSEN:  No, but I've had solid discussion and believe there is significant solid support for this type of initiative.

6151                  And this initiative, it's pretty personal to me because I started when I was in high school my own jazz band and was actively involved in music, so I want to be able to see kids in high school succeed, and that's what makes the initiative that I put in here strong because I helped work and coordinate and put together a jazz band in my high school, and I love to see music continue in communities.


6152             That's why the initiative is here and I know there is strong support for it, Mr. Chair.

6153             THE CHAIRPERSON:  Thank you.  For the purpose of establishing your annual minimum direct CTD contributions, will you be prepared to accept as a condition of licence to spend the incremental annual CTD budget at the levels identified in your letter dated the 28th of October, 2005; that is, $1,000 in year one to three, $2,000 in year four and five and $3,000 in year six and seven?

6154             MR. TIESSEN:  Yes, I would follow that commitment, sir.

6155             THE CHAIRPERSON:  Thank you.  We will now talk about your targeted audience.

6156             Will you please discuss the factors you took into account for choosing to offer an eclectic music mix format to the residents of the communities of Airdrie and Cochrane?

6157             MR. TIESSEN:  I spoke a little bit about this before, Mr. Chair.

6158             THE CHAIRPERSON:  Yes.

6159             MR. TIESSEN:  And I guess I'll sort of clarify it and repeat it again.


6160             The area is quite diverse.  So, for example, it's diverse in the same in many ways, they share ‑‑ Airdrie and Cochrane do share many regional alliances, however, they are different by the way that Cochrane is a western atmosphered community and Airdrie is more of what I might term as an urban atmosphered community.

6161             So, I believe that the eclectic mix of music will provide something that everybody in those communities can listen to in their home or office and provide them with the local news and programming that they need as part of the eclectic mix of music and that we can put a mix of music together that, you know ‑‑ I can't tell you how many times I've been personally getting my oil changed or whatever and you're listening to a station and it's not what you want to listen to but it's something that you want ‑‑ you know, that easily ‑‑ people can easily deal with, even if you don't necessarily like the music, if you know where I'm going.

6162             Try to provide them with something that, you know, even if you don't like it, it's not going to offend you.


6163             I don't want say family friendly, but it could be community friendly I guess, but that's really where I'm going, to try to get something that really provides a good balance in the community from a format perspective.  That's why the eclectic mix is in front of you.  And that's from the discussions that I've had with many residents from that region as well.

6164             THE CHAIRPERSON:  You didn't conduct any survey except that, as you said, you have walked around the area and spoke with a lot of people and you have intimate knowledge, as you say, of what the population will be interested in.

6165             But could you help us in how you came to determine the estimated size of the population that you expect will be listening to your station because, as you said earlier ‑‑

6166             MR. TIESSEN:  Yeah.

6167             THE CHAIRPERSON:  ‑‑ you are going to be competing at least for their ears with the Calgary stations.

6168             MR. TIESSEN:  As presented in the report, Mr. Chair, you're correct and those are best estimates based on other markets of like size population, and so those are the best estimates that I can provide.

6169             I didn't do significant market research.  I am, again, an independent application and resourcing is ‑‑ we're doing the best we can to provide you with everything we can.


6170             So, those are our best estimates based on what I've seen in other markets of like size population, Mr. Chair.

6171             THE CHAIRPERSON:  So, you are of the view that, say, by year seven close to ‑‑ well, a quarter ‑‑ a bit slightly above a quarter of the population will be listening to the Airdrie station rather than the Calgary one?

6172             MR. TIESSEN:  That would be a fair assumption.

6173             THE CHAIRPERSON:  Now, I note that ‑‑ well, in your oral presentation you said that you delivered pamphlets in both communities, obviously, so the experience that you have as a city councillor while walking through the community to be elected and re‑elected, and you did discuss your business plan with the residents and the businesses of both communities.

6174             But could you explain to us how you arrive at establishing your advertising revenue projections?

6175             MR. TIESSEN:  Advertising revenue projections are arrived at ‑‑ unless you want me to get into specifics, I won't, I'll just tell you how generally I came up with the numbers, Mr. Chair.

6176             THE CHAIRPERSON:  Okay.  Well ‑‑


6177             MR. TIESSEN:  Or do you want me to go ‑‑

6178             THE CHAIRPERSON:  No, no, start with the generality and if it is not enough, I will ask a subsequent question.

6179             MR. TIESSEN:  Okay.  So, generally they are arrived from, again, a very similar look at other markets that are now operating successfully.

6180             One example is now, a recent approval a few years ago that you had with OLDS Alberta and they're just north of these communities.  These numbers are arrived at very similar estimates to that.

6181             And, for example, estimates to communities of like size of Okotoks and High River are south of Calgary.

6182             So, that's where that comes from, and then if you want me to get into specifics on it, it's laid out in the application and then I'm more than happy to.

6183             THE CHAIRPERSON:  I know that ‑‑ well, you said that you are a CMR, so you have been working for a radio stations before because that's the program of the R&B; am I right?

6184             MR. TIESSEN:  Yes, that is correct.

6185             THE CHAIRPERSON:  So, when did you have that course?


6186             MR. TIESSEN:  When did I have that course?

6187             THE CHAIRPERSON:  Yes.

6188             MR. TIESSEN:  I probably had it four years ago.

6189             THE CHAIRPERSON:  Four years.  So, at the time you were working for a radio station?

6190             MR. TIESSEN:  No, Tiessen Media became a member of the radio marketing ‑‑

6191             THE CHAIRPERSON:  Oh...

6192             MR. TIESSEN:  ‑‑ as an associate member and I took the course on my own initiative.

6193             THE CHAIRPERSON:  I see.  Okay.

6194             MR. TIESSEN:  Now, my radio sales experience, Mr. Chair, relates specifically to selling the programming that I produce.

6195             So, I do understand that is slightly different than the radio advertising that's been done in the past, but I also did have some experience in sales previously at the radio station in High River where I did do street sales.

6196             THE CHAIRPERSON:  I see.  So, you are comfortable with the numbers that you have provided us and you think they could be met?


6197             MR. TIESSEN:  Yeah, I'm very, very comfortable and I was very careful.  These numbers have both been reviewed by my accounting team and also by the banks that loaned me the finances for this application.  They're comfortable with them as well.

6198             THE CHAIRPERSON:  Okay, fine.

6199             How did you arrive at the value of the advertising spot rate that you have included in your project and the projects that you submitted in section 5.5 of the application?

6200             MR. TIESSEN:  I arrived at those specifically because ‑‑ they're not exact, but they're similar rates to, for example, other stations within the Calgary market area that are serving small markets.

6201             Now, whether that be OLDS or whether that be Golden West, the Eagle, I arrived at those rates by doing that and also by reviewing what my expenses and other revenues would be and what other opportunities we could offer to put the whole package together.

6202             THE CHAIRPERSON:  Okay, thank you very much for that.

6203             And we will now go to the end of the questions and they are the technical questions.


6204             What are, in your view, the compelling reasons to grant you the requested 99.1 megahertz frequency in Cochrane?

6205             MR. TIESSEN:  Again, the significant reason for the 99.1 in Cochrane is because this community clearly wants a service.  I spent significant time in this community and they would like a local radio service as well.

6206             And by the options that I looked at with my engineers to meet the objectives of my business plan, which was to serve both communities, the only way we felt we could do it reasonably within the resources we had to us was to look at the low power repeater option in Airdrie.

6207             So, based on whether or not other applicants could say they cover Cochrane or not, it would be every difficult for them to cover Cochrane properly just basically because they are in the valley.

6208             So, it's an important component of the overall business plan in providing viability to the station that I've proposed to you and the Commission.

6209             THE CHAIRPERSON:  And in what ways does your proposed use of 99.1 constitute the best use of the spectrum?


6210             MR. TIESSEN:  It's a low power frequency, there are a variety of other low powers that are available, we don't have to stick to 99.1.  Should we look at other ‑‑ I've talked to Mr. Henke at D.E.M. & Allen, we can provide other options for low power, as we are aware that there could be some other potential challenges on 99.1 with other applicants.

6211             But there are other low power FMs available that don't have any impact on the Calgary market relating to spectrum or frequency.

6212             THE CHAIRPERSON:  I see.  And at this stage you haven't identified any such alternative frequency?

6213             MR. TIESSEN:  No, we've identified the alternatives for the 106.1 but none at this time for 99.1 as this application was in your hands, I believe, possibly before the other application from, I believe CBC was gazetted.

6214             THE CHAIRPERSON:  Yeah.

6215             MR. TIESSEN:  So, we can do it as per your request, just advise.

6216             THE CHAIRPERSON:  Okay, fine.

6217             So, and I think this is with regards to technical questions and obviously you are competing against ‑‑ do you think Airdrie and Cochrane could support two radio stations or three ‑‑ there are three applicants?


6218             MR. TIESSEN:  I believe that Airdrie/Cochrane can support one radio station.

6219             THE CHAIRPERSON:  One.

6220             MR. TIESSEN:  And that it would be important that Cochrane is covered as part of any application process.

6221             THE CHAIRPERSON:  So, I have asked all my questions.  I will ask Mr. Langford.

6222             COMMISSIONER LANGFORD:  Well, thank you, Mr. Chair.

6223             Just one question arising from your discussions with the Chair just a few minutes ago when he was talking about your experience in radio and you are a marketer and you have taken that course, and you went ‑‑ I think if I heard you correctly, you said much of my experience ‑‑ present experience in radio is selling the programs I produce.

6224             Did you say that?

6225             MR. TIESSEN:  Yeah.  So...

6226             COMMISSIONER LANGFORD:  Can you tell me a little more about ‑‑

6227             MR. TIESSEN:  Yeah, just to give you a little bit of a background.


6228             Tiessen Media has a sharing agreement with the World Professional Chuckwagon Association and Newcap Radio for their radio stations where we produce Chuckwagon radio programming that goes on the air in the evening.

6229             So, I look after sales, management and production of the whole component that I provide to Newcap and then they make their revenue off of the sales ‑‑ some of the sales that I make and the WPCA, they get a high quality produced product that goes on the air that promotes the sport of chuckwagon racing throughout Alberta.

6230             We do 53 nightly radio broadcasts of that.

6231             COMMISSIONER LANGFORD:  Sorry, could you go a little slower.  53...?

6232             MR. TIESSEN:  53 nightly radio broadcasts, so 53 nights each year.

6233             COMMISSIONER LANGFORD:  And what were those initials, WP something?

6234             MR. TIESSEN:  WPCA is the World Professional Chuckwagon Association.

6235             COMMISSIONER LANGFORD:  I don't know why I didn't know that.

‑‑‑ Laughter/Rire

6236             MR. TIESSEN:  Next to football and hockey, it's the third highest spectator activity in Alberta, it's quite a world draw.


6237             COMMISSIONER LANGFORD:  You do 53 a year of these programs?

6238             MR. TIESSEN:  53 a year and I look after all the production, programming and management.

6239             COMMISSIONER LANGFORD:  How long is each program?

6240             MR. TIESSEN:  Each program goes on the air for about two and a half hours.

6241             COMMISSIONER LANGFORD:  I beg your pardon?

6242             MR. TIESSEN:  About two to two and a half hours.

6243             COMMISSIONER LANGFORD:  Is this radio or television?

6244             MR. TIESSEN:  It's radio.

6245             COMMISSIONER LANGFORD:  Two and a half hours on the subject of chuckwagon racing?

6246             MR. TIESSEN:  Yes, sir.

6247             COMMISSIONER LANGFORD:  53 times a year?

6248             MR. TIESSEN:  53 nights and we do the 10 days from the Stampede.  So, you can understand that putting my program together is much like putting a radio station together in some ways because we've got a whole lot of time to fill.


6249             COMMISSIONER LANGFORD:  It must feel like writing War & Peace every night or something.

‑‑‑ Laughter/Rire

6250             MR. TIESSEN:  No, we do features on the drivers, we do features on the excitement behind wagon racing.  We do additional features on the horses and participants, the participating chuckwagons.

6251             It's quite a unique and interesting project that I've been able to work on developing over the last five years.

6252             COMMISSIONER LANGFORD:  If you can do 53 two and a half hour pieces on radio and no pictures on chuckwagon racing, Mr. Chairman, this guy can do anything.  That's my assessment.

‑‑‑ Laughter / Rires

‑‑‑ Applause / Applaudissements

6253             COMMISSIONER LANGFORD:  Thank you very much.  Those are my questions.

6254             MR. TIESSEN:  Thank you.

6255             THE CHAIRPERSON:  So, picking up on Mr. Langford's questions, and it's not once a week, you just said during the chuckwagon ‑‑

6256             MR. TIESSEN:  Season.

6257             THE CHAIRPERSON:  ‑‑ season.


6258             MR. TIESSEN:  So, the season goes from usually the start of June until the end of August, and so that's where there's a condensed 53 nights.

6259             Most of them are weekends, so it will go on Friday, Saturday, Sunday.

6260             The tour goes all over the place, goes from ‑‑ its starts up in Grand Prairie and goes to Lethbridge, Medicine Hat, Ponoka, High River, it tours the entire province and we produce sometimes five nights, sometimes four, sometimes six from each of these locations.  It's live on the Alberta Radio Group Cat Country Network, they're great partners in their broadcasts.

6261             THE CHAIRPERSON:  Are you buying the airtime from the Newcap stations and selling it yourself to other advertisers?  Is it a broker program or...

6262             MR. TIESSEN:  I wouldn't call it broker, it is but it's not, Mr. Chair, because when we sat down and formed the relationship, the relationship sees some of their client dollars and their advertising that want their programming on our program and it also sees that they get a percentage of the dollars that I sell for their airtime.

6263             So then, if I make more, they make more; if I lose, they lose with me.


6264             So, it's a very good relationship that's not just a straight buy‑out of airtime and I applaud Newcap and I've just been so excited to work with them on that project, and I mean that genuinely, not just because I'm in front of the Commission.

6265             THE CHAIRPERSON:  And are you planning a sixth year?

6266             MR. TIESSEN:  I am.  We've got this year coming and we just continue to do quite the unique project.

6267             THE CHAIRPERSON:  So, it's a good business to be in?

6268             MR. TIESSEN:  It's very good.  I really do enjoy it.  It's a lot different than working at the radio station with all the travel, but I do like it.

6269             THE CHAIRPERSON:  If you were granted the licence, will you still remain in Okotoks, or will you relocate in the Airdrie or Cochrane area?

6270             MR. TIESSEN:  Obviously I would have to significantly consider moving to the region that these communities would serve, and I mean that genuinely.


6271             My term of municipal elected official is up on October, 2007 and ‑‑ geez, I didn't think being an elected official would make me cry ‑‑ but anyway, so I would complete my term and my commitments and then...

6272             THE CHAIRPERSON:  Well, Mr. Tiessen, we are at the end of the presentation, so you have an opportunity to say to us in less than five minutes, I think the passion you have already put into it, I think you are so capable of doing more than five minutes, but you will restrict yourself to more than five minutes to explain to us why the Commission should consider your application.

6273             MR. TIESSEN:  How about one minute and a half or so, Mr. Chairman?

6274             THE CHAIRPERSON:  Fine.

6275             MR. TIESSEN:  I hope I've been able to answer and address some of the questions that have been provided by the CRTC staff and Commissioners.

6276             I love radio, I have a passion for this application ‑‑ and I don't know why I'm tearing ‑‑ and I hope this has been shown through my presentation.

6277             Here are the reasons why Tiessen Media should be licensed for Airdrie/Cochrane and the MD of Rocky View.


6278             Tiessen Media has shown significant commitment to this application.  We will become all things local for these communities ‑‑

6279             COMMISSIONER LANGFORD:  You know, if I could suggest something, you are going to have a Phase 4 here.

6280             If you want to just break it here and give us your little patter tomorrow, that would work as well.  There's a Phase 2, 3 and 4.

6281             MR. TIESSEN:  That's a little intervention, it's all I needed.  I'm good now.

6282             COMMISSIONER LANGFORD:  You're good?

6283             MR. TIESSEN:  I'm good.

6284             COMMISSIONER LANGFORD:  Happy to oblige.  We can put you down in the undecided character as well ‑‑ category, like that other guy yesterday.

6285             Okay.

6286             MR. TIESSEN:  Here are the reasons why Tiessen Media should be licensed for Airdrie and Cochrane and the MD of Rocky View.

6287             Tiessen Media has shown significant commitment to this application and the area to serve.  We will be all things local to these communities, we will provide a respective and responsive community‑centred radio.


6288             Our Canadian talent contribution and development is very strong.  We do not intend to provide service to the Calgary market, nor will we have the capacity to do so as an independent broadcaster, and we're the only applicant providing a service to the Cochrane region.

6289             And, finally, our application is the only one that brings diversity of new voice and young ownership to these communities, and I would close with that.

6290             And thank you very much for allowing me to speak to you today.

6291             THE CHAIRPERSON:  Thank you very much, Mr. Tiessen.

6292             We will break for 10 minutes, so we will get back here at 3:30 for the next application.

‑‑‑ Upon recessing at 1520 / Suspension à 1520

‑‑‑ Upon resuming at 1530 / Reprise à 1530

6293             THE CHAIRPERSON:  Order, please.

6294             Mrs. Secretary.

6295             THE SECRETARY:  Thank you, Mr. Chairman.

6296             We will now proceed with item 13 ‑‑ I'm sorry, did it again, item 12 on the agenda, which is an application by Golden West Broadcasting Limited for a licence to operate an English language FM commercial radio program undertaking in Airdrie.


6297             The new station would operate on frequency 99.5 megahertz, channel 258K with an average effective radiated power of 1,200 watts, maximum effective radiated power of 3,200 watts, antenna height of 87.8 metres.

6298             Here for the applicant is Mr. Elmer Hildebrand who will introduce his colleagues, and you will have 20 minutes for your presentation.

6299             Mr. Hildebrand.

PRESENTATION / PRÉSENTATION

6300             MR. HILDEBRAND:  Members of the Commission, Commission staff, thank you for having us here today for this important hearing.

6301             First of all, I need to start with an apology.  We have no signs, we have no band, we have no power points, we have no consultants and we have no lawyers.

6302             My name is Elmer Hildebrand ‑‑

6303             COMMISSIONER LANGFORD:  So, what are you apologizing for?  So far you've done nothing wrong.

‑‑‑ Laughter/Rire


6304             MR. HILDEBRAND:  My name is Elmer Hildebrand.  I'm the president and CEO of Golden West Broadcasting.  I'm also on the CWC Board.  I'm the secretary/treasurer of BBM and I'm the secretary/treasurer of the Radio Bureau of Canada and we have a meeting on Friday and your request will be on the agenda for the TRAN Report, Mr. Chair.

6305             With me are Lyndon Friesen, executive vice‑president of Golden West Broadcasting and Keith Leask, long‑time manager of Golden West's High River Okotoks radio operation and a resident of High River.

6306             I have been in the small market radio business since 1957, so it will be 50 years in 2007.

6307             Lyndon Friesen has been with Golden West since 1975, and Keith Leask joined Golden West in 1983.  So, you see we have a bit of history and stability going for us.

6308             The first point we want to make is this:  Even though we are lumped together with 10 other broadcasters looking for Calgary licences, we are not seeking a licence to serve Calgary, we are looking to serve the Airdrie and surrounding areas.

6309             Here's a little background on Golden West.  Our company has made a living on serving non‑metro markets across the Prairies.  We started in 1957 with a small AM station in Altona, Manitoba.  Altona is still the site of our head office and the community has seen steady growth since 1957 and today there are 3,500 people in the community.


6310             From the austere beginnings in '57, our organization has continued to grow, always by serving non‑metro markets.

6311             Today we operate AM stations in Altona, Steinbach, Linker/Morden, Boissevain and Portage au Prairie in Manitoba, plus AM stations in Estevan, Weaver and Moose Jaw, Swift Current, Shaunavain, Louistown and Kenderslie in Saskatchewan, plus one AM station in High River/Okotoks in Alberta.

6312             Twenty years ago we started providing FM service to some of our rural communities and today we operate FM stations in Steinbach, Linker/Morden and Portage au Prairie in Manitoba and FM stations in Estevan, Moose Jaw, Swift Current and Kenderslie in Saskatchewan, plus one FM station in High River/Okotoks, Alberta.

6313             We also have one specialty FM station in southern Manitoba programming all gospel music out of Winnipeg.

6314             We are steadily trying to increase the number of our FM stations so that our company will have long‑term viability, if and when AM radio  eventually fades off into the sunset.


6315             This brings us to the plan to provide local radio service to Airdrie.  Airdrie has grown dramatically as a community in the last 10 years and now it needs a local radio station.

6316             Today people in Airdrie have a choice of many radio signals emanating from Calgary, but as we all know major broadcasters ‑‑ major market broadcasters are looking for the market share in Calgary and, therefore, do not provide any local service to outlying communities.

6317             The only time Airdrie residents are likely to hear news from their community is if there's a fire, an accident or some other major calamity.

6318             What we will provide is local, every day, seven days a week.

6319             The best example we can provide to the Commission that this works is our current FM radio service in High River/Okotoks.  High River/Okotoks is south of Calgary, about the same distance as Airdrie is north of Calgary.


6320             In 2001, when we applied for the High River/Okotoks licence, we were also part of a Calgary hearing.  We told the Commission at that time we did not want to be in Calgary even though our signal would obviously cover the city.  We staked our future on serving High River/Okotoks.       We were ultimately granted the licence and have been serving the area ever since.

6321             The station is doing very well today and, to this day, we do not solicit advertising in Calgary.

6322             There are numerous letters of support the Commission has seen that have confirmed the kind of local service we have been providing.  We will do no less for Airdrie.

6323             We note that there are two other applications for Airdrie that the Commission is considering.  Both of these applications are asking for higher powers than our application.

6324             We would anticipate that Newcap would be looking to augment their existing Calgary operation, Tiessen Media would be a new operator in the market and would need lots of patience and capital to build up the business.

6325             Given Golden West's track record, we submit our application would best serve Airdrie for the long haul.  We are a hundred per cent Prairie broadcasters and we live up to our slogan, Community Service Radio.

6326             Thank you.


6327             THE CHAIRPERSON:  Thank you, Mr. Hildebrand.  I will ask Mr. Langford to ask the first questions.

6328             COMMISSIONER LANGFORD:  Thank you, Mr. Chair.

6329             And welcome, Mr. Hildebrand, and your colleagues.  You had 50 years of this, so I think we can probably move along quite smartly, we'll know how to talk to each other.

6330             And you don't have to be told, but for the benefit of those who have had only a few years, I will be just taking a very usual approach, talking about format and audience focus and spoken word and trying to con you out of a little more Canadian content, wherever I can, the usual sort of regulatory approach to this sort of thing, just in case you miss on Andrée Wylie or something, you know.

6331             MR. HILDEBRAND:  Did I mention we would be doing 40 per cent Canadian content.

6332             COMMISSIONER LANGFORD:  I'm going to get you to mention it again and we will maybe tie it down tight.  It's music to my ears, so, let's just use that as a segue to our first question then.

6333             Will you accept 40 per cent Canadian content as a COL, condition of Licence?


6334             MR. HILDEBRAND:  Sure.  We do that in all of our stations across the Prairies and we find it is not a hardship.

6335             COMMISSIONER LANGFORD:  Okay.  And just for the record, out there you are into an adult contemporary format, but I have a further question on the 40 per cent, because 40 per cent, as you know, can be distributed in many ways and what we really admire is people who distribute it evenly.

6336             So, I was wondering if you would also accept a COL to provide that 40 per cent CANCON between 6:00 a.m. and 6:00 p.m. Monday to Friday?

6337             MR. HILDEBRAND:  Sure.  As a matter of fact we do that already in our operations and, as I said before, this is not a hardship for us.

6338             COMMISSIONER LANGFORD:  Okay, great.  I think this is going to be easy and fun.

6339             The second sort of line of questioning on format, I wondered why you had chosen the adult contemporary.


6340             And before you answer it in a general way, specifically my curiosity was piqued because of the signals from three Calgary stations, CFGQ‑FM and CKIS‑FM and CHFM‑FM ‑‑ a lot of FMs ‑‑ all have ‑‑ well, the last one's all adult contemporary and the other two have a good swack of adult contemporary, and I just wondered in that light why you thought it was a good business plan to add more?

6341             MR. HILDEBRAND:  You know, basically that is the format that we use in our FM stations and at the end of the day we have found that to be a really local radio station like we're proposing to be, music is the secondary piece of what we are.

6342             People will listen to us because of our local news, our local content and all of that, music will be holding it together.

6343             But we have found, just like in High River/Okotoks, it's the local information that makes people want to listen to it.

6344             Music is available from so many locations that, again, we really don't ‑‑ as we say, we don't take that into account.

6345             We like to program something that's you know, fairly solid, that a broad cross‑section of the community can listen to and then we make our bread and butter with the community service which is outside the music, but that's the most important part of the radio station as opposed to music.

6346             I think in many instances ‑‑ in a major market setting music is the most important; for us, music is secondary to the information that we provide.


6347             COMMISSIONER LANGFORD:  Still, and I'm certainly not going to presume to tell you how to run a radio station, sir, but looking at it from a kind of academic perspective, if I can put it that way, why would anyone take the chance?

6348             I mean there are a good many formats out there, any one of which I am sure with your experience you can put together into an attractive package, diversity is a big ‑‑ you know, a kind of comforting element that the Commission likes to see a community getting as much ability as possible to access different formats.

6349             And, of course, from a perspective of marketing and keeping your customers, why give them something that essentially they're already getting?  Why not ‑‑ I mean, I just don't understand it as a marketing approach, as a business approach.

6350             MR. HILDEBRAND:  Well, as I said, that's basically what we've found works.  And, you know, that particular format is very broad and our station will sound different than the stations in Calgary and we will have our own stamp on the musical talent.


6351             What I keep coming back to, it's the rest of the material that will retain the audience, that will make the audience come back again and again.

6352             And so we're comfortable with that, and when we put this presentation together, we didn't look at the landscape, what they're doing in Calgary, because that's not our style.

6353             I mean, Calgary will do what they do.  The next consultant will come in and provide another format and they'll change formats, between the stations in Calgary and other major markets change formats regularly.

6354             We try to develop a format or a musical style that we stay with and we rarely change that.

6355             COMMISSIONER LANGFORD:  Did you do any comparisons between the kind of playlists you like to utilize and the playlists of some of these services that I've mentioned?

6356             MR. HILDEBRAND:  No.

6357             COMMISSIONER LANGFORD:  No comparison?

6358             MR. HILDEBRAND:  No.

6359             COMMISSIONER LANGFORD:  Okay.

6360             MR. HILDEBRAND:  As I said before, we don't use consultants, we sort of do our own thing we have found works ‑‑


6361             COMMISSIONER LANGFORD:  Mm‑hmm.

6362             MR. HILDEBRAND:  ‑‑ and, you know, we find it's a simple business if we stick to that.

6363             COMMISSIONER LANGFORD:  Okay.  Well then, let's move on to spoken word.  I've got you on that.

6364             I must say, I find it a little surprising, but then you are in the business and I'm not.  If there were three stations playing Beethoven, I think I might go with Mozart but, you know, if you think more Beethoven would work, I guess that's your call, you're the one that has to pay the rent.

6365             Let's turn to spoken word then, if I may.  You indicate generally the amount of news and weather and whatnot that you're going to do, but I'm not sure how you break it down per day or per week and how you break it down Monday to Friday and on weekends.

6366             Have you planned any of that, or can you help me with getting a sense ‑‑

6367             MR. HILDEBRAND:  Sure.

6368             COMMISSIONER LANGFORD:  ‑‑ of how much and where it will be located or how much in each slot?


6369             MR. HILDEBRAND:  I think if you look at our deficiency letter where these are outlined what we plan to do, we plan hourly newscasts between 6:00 and 10:00 in the morning, from 12:00 to 2:00, 4:00 to 6:00 seven days ‑‑

6370             COMMISSIONER LANGFORD:  Can you just go a little slower ‑‑

6371             MR. HILDEBRAND:  Sorry.

6372             COMMISSIONER LANGFORD:  ‑‑ if you don't mind.  Hourly newscasts...?

6373             MR. HILDEBRAND:  Between 6:00 and 10:00 a.m..

6374             COMMISSIONER LANGFORD:  Right.

6375             MR. HILDEBRAND:  12:00 to 2:00, 4:00 to 6:00 seven days a week.  There will also be news and sports updates at 7:30 in the morning, 12:30 noon and 5:30.

6376             In addition to this, there will be ongoing surveillance by our program host throughout the day part.


6377             So, what Golden West believes one hundred per cent that news is the difference, news is really what makes us relevant and so we have staked our future on news and we have found in many places where we operate if it wasn't for our local news presence, we would be irrelevant and, however, because all of the other signals that come in with music formats of every genre, but nobody else can touch us on local news.

6378             COMMISSIONER LANGFORD:  Okay.  Well, I'd say it's not a formula that we haven't uttered before.

6379             How long might each of these newscasts be, the ones on the hour seven days a week?

6380             MR. HILDEBRAND:  They would be three minutes in length, and the ones at the half‑hour would probably be five.

6381             COMMISSIONER LANGFORD:  And does that include news, weather, traffic, whatever you want to do, or is it just straight news?

6382             MR. HILDEBRAND:  No, that would be news.  The weather and traffic would be outside of that.  And if there were sports, it would be outside of that.

6383             COMMISSIONER LANGFORD:  All right.


6384             MR. HILDEBRAND:  The other thing that we have done for many years, we have basically eliminated any use of broadcast news, our newsrooms provide and have to dig up their own news.  Broadcast news is used for top of the hour news update, which gives a national/international flavour and we generally have the opinion that listeners have many venues for information, newspaper, television, and they can get a full smattering of all of the national or international news every night on television and the next day in the newspaper, so we, by and large, stay away from that and just do a brief update.

6385             COMMISSIONER LANGFORD:  Just generally, I'm certainly not going to hold you to seconds here, but taking one of your three‑minute newscasts, how much of it would be national/international?

6386             MR. HILDEBRAND:  None.

6387             COMMISSIONER LANGFORD:  No, none at all?

6388             MR. HILDEBRAND:  No, this is all local.

6389             COMMISSIONER LANGFORD:  It's all local?

6390             MR. HILDEBRAND:  Yes.

6391             COMMISSIONER LANGFORD:  Oh, okay.  That's where I thought you were getting some from the broadcast services, but it's none whatsoever.

6392             So then, how many people would you have working in this newsroom?


6393             MR. HILDEBRAND:  We expect to have three full‑time people in the newsroom and we expect to have a variety of other individuals that are part of the program mix also will help us gather information because they attend events every day and every evening, so we like to have all of our people actually help in gathering the news and information.

6394             COMMISSIONER LANGFORD:  And are you going to share any news with the High River station?

6395             MR. HILDEBRAND:  You know, very little actually because High River/Okotoks is another market.  My guess, there could be regional stories that are applicable to all of southern Alberta, we would truly share.

6396             COMMISSIONER LANGFORD:  Right.

6397             MR. HILDEBRAND:  And if there are meetings that we need to attend in different parts of the province, we can certainly share them.

6398             COMMISSIONER LANGFORD:  Share them.  Are there any other synergies in your local programming with High River?

6399             MR. HILDEBRAND:  No, I don't think so, not other than in the overall management of how we do it.

6400             But, no, each community is very separate and has its own identity and we want to make sure that, you know, that identity is underlined every day.


6401             COMMISSIONER LANGFORD:  And I'm getting off the subject of content, but would that be the same for sales and marketing and whatnot?

6402             MR. HILDEBRAND:  Sure.

6403             COMMISSIONER LANGFORD:  Each community would have their own distribution?

6404             MR. HILDEBRAND:  Oh, very much so.  And the only area where we might be able to do something together would be in regional sales.

6405             COMMISSIONER LANGFORD:  Okay.  There was a term used in some of your written submissions, the Golden West Prairie system, and I wasn't quite sure what that meant.

6406             MR. HILDEBRAND:  Well, I guess what I was trying to say there and I explained this to a variety of Commissioners over the years and we were fortunate enough to have three of the Commissioners on the panel visit one of our southern Manitoba operations before Christmas and so where we could actually show what we were doing and what we meant.

6407             COMMISSIONER LANGFORD:  Mm‑hmm.


6408             MR. HILDEBRAND:  That whole philosophy is encompassed, as I said before, where we years ago decided to get rid of broadcast news and focus totally on local events in the community, and local events means everything from news and information, sports events and the church events, and the high schools we involve with all of that and we have staked our future on being local.

6409             And that's sort of very Golden West philosophy ‑‑

6410             COMMISSIONER LANGFORD:  Philosophy rather than a method of delivering kind of groups of news or groups of information?

6411             MR. HILDEBRAND:  Well, I guess it's a system that, you know, we identified for all of our managers across the Prairies and that's a system that we use in all of our radio stations and we found that it works very well.

6412             COMMISSIONER LANGFORD:  Okay.  What about other spoken word, you know, the typical stuff, lifestyle, community information, phone‑ins, any other type of spoken word programming?

6413             MR. HILDEBRAND:  We generally do very little phone‑in, we do not operate open line shows, but we are, again, totally involved.  There will be a variety of local material that will be on, we will try and have two or three different voices from the community on every day.


6414             Our morning show will have interaction with community leaders, be they aldermen, chamber people, business people, educators.  So, we will weave that through the whole morning and afternoon, so that we're really tied to the community all the time.

6415             We become part of the fabric of the community.

6416             COMMISSIONER LANGFORD:  What is the ‑‑ I saw specific reference to a weekly one‑hour on sort of local musical artists.  Is that a specific show, or is that just something you expect to normally do?

6417             MR. HILDEBRAND:  No, it's a very specific show and it was done years ago in Manitoba where we provide a weekly half‑hour time slot for a local musical group, be they vocal, instrumental, and we have continued that and developed that into all of our other radio stations as well and we just set aside half an hour every week for local talent.

6418             And we then also record that, provide the group with a CD of that program and then, in many cases, use that material in our playlist the next week or occasionally we get some really good stuff that we use all the time.


6419             And we have been amazed at the impact that this kind of program has and we now have waiting lists of organizations ‑‑ groups that want to appear.

6420             COMMISSIONER LANGFORD:  Wow.

6421             MR. HILDEBRAND:  And so ‑‑

6422             COMMISSIONER LANGFORD:  There's no lack of ‑‑

6423             MR. HILDEBRAND:  ‑‑ when people say there's no talent in small communities, we disagree.  There's an excerpt of talent and we've seen some great talent.

6424             A young gal by the name of Amanda Stott off a farm in southern Manitoba, you know, recently signed a record deal with one of Canada's leading labels.

6425             She's been touring, entertaining the troops in Afghanistan and she's, you know, just a real charm.  And those are the kind of things that can develop from that kind of local program.

6426             COMMISSIONER LANGFORD:  And when you speak about local, because I noticed this in some of the correspondence between you and the Commission, you refer of course to broadcasting to Cochrane, Crossfield and is it Irricana; am I pronouncing that right?


6427             How are you going to define local?  Does that kind of ‑‑ I know they're not that far apart, I've seen the maps, but still Cochrane is Cochrane and Airdrie is Airdrie.

6428             MR. HILDEBRAND:  We would be talking to their City Council and their Chamber of Commerce and to their school divisions on a regular basis as well.

6429             Again, we use the example of High River/Okotoks where there are eight or nine other communities of significant size around it there and we interact with all of them.

6430             So, that's the Golden West philosophy and style.

6431             COMMISSIONER LANGFORD:  If I were to ask you for an example, because you speak eloquently about your dedication to local, if I were to ask you to agree to a condition of licence to keep your informational programming, your local spoken word programming local, how would I explain, in a sense, what would be a fair definition of local in your mind?

6432             MR. HILDEBRAND:  Well, anything that happens within, let's say, 25 or 30 miles of the studio is local, and some distance, maybe a little farther.

6433             COMMISSIONER LANGFORD:  And would it be fair ‑‑


6434             MR. HILDEBRAND:  If it was to the north it would be a little farther; if it's to the south then it wouldn't be because we're not going to provide service for Calgary.

6435             COMMISSIONER LANGFORD:  So, I could say anything within your signal range, excluding Calgary, and you would be agreeable to that?

6436             MR. HILDEBRAND:  For sure.

6437             COMMISSIONER LANGFORD:  Okay.

6438             MR. HILDEBRAND:  Yeah.

6439             COMMISSIONER LANGFORD:  Well, I think I can see a lawyer writing right now, so I'm sure someone will ask you something when we're all done.

‑‑‑ Laughter/Rire

6440             MR. HILDEBRAND:  It would be interesting to see the legalese on that.

6441             COMMISSIONER LANGFORD:  Yeah, it would be.  See, you don't bring lawyers, but we do.

6442             MR. HILDEBRAND:  Yeah, I know.  But I think what is more important, whether it's a condition of licence or not, we have made our living on doing this.

6443             COMMISSIONER LANGFORD:  All right.

6444             MR. HILDEBRAND:  And the Commission  know what we've done over the years, and basically what we say to the Commission here is what we go back and do.


6445             COMMISSIONER LANGFORD:  Right.

6446             MR. HILDEBRAND:  That way we don't have to try and remember what we said last, we just do what we always do.

6447             COMMISSIONER LANGFORD:  It's the Will Rogers approach, yeah.

6448             MR. HILDEBRAND:  It seems to work.

6449             COMMISSIONER LANGFORD:  Probably works.  I've tried to impress my children with that, with mixed success, I would add.

6450             MR. HILDEBRAND:  We work on common sense mostly and then we find that common sense may not be that common.

6451             COMMISSIONER LANGFORD:  It might be more rare than that.

6452             Will you be using voice track at all in the station or some other form of pre‑recorded programming?

6453             MR. HILDEBRAND:  We expect to be live from 6:00 in the morning through 6:00 in the evenings.  We will likely do some voice tracking in the evening if it makes some sense, but we are not taking programs from any other source, all of the programming will be local.


6454             COMMISSIONER LANGFORD:  It will be all your own voice track that you have on file?

6455             MR. HILDEBRAND:  Yes.

6456             COMMISSIONER LANGFORD:  And what would you do in case of an emergency, do you have some sort of a plan ‑‑

6457             MR. HILDEBRAND:  Then, I mean, you obviously don't voice track it, and we have a contingency plan if something happens, one of our people can get into the programming from anywhere, so we haven't found it to be an issue.

6458             COMMISSIONER LANGFORD:  Like, having the alarm go off or something, you have a list of people who get called?

6459             MR. HILDEBRAND:  For sure.

6460             COMMISSIONER LANGFORD:  Okay.  Now, I want to look into another area of programming which may seem a bit odd in light of the fact that it's not mentioned anywhere in your application, but I know that you do some religious programming, spoken work programming in some of your other stations.

6461             And I wonder whether you have plans to do anything like that, brokered sort of programming?

6462             MR. HILDEBRAND:  We don't do any on our FM stations, so we wouldn't do any here.


6463             COMMISSIONER LANGFORD:  You do nothing on your FM stations?

6464             MR. HILDEBRAND:  No.

6465             COMMISSIONER LANGFORD:  It's only on your AM?

6466             MR. HILDEBRAND:  Yeah.

6467             COMMISSIONER LANGFORD:  You do do some, though; right, some of those ‑‑

6468             MR. HILDEBRAND:  On our AMs we do, but not on our FMs.  Our FMs are music driven.

6469             COMMISSIONER LANGFORD:  Okay.  And just for the record, I mean, with your experience you must be familiar with our religious programming policies regarding balance and ethics and that sort of thing.

6470             MR. HILDEBRAND:  For sure.

6471             COMMISSIONER LANGFORD:  In case you ever did, right.

6472             MR. HILDEBRAND:  But we don't plan to.

6473             COMMISSIONER LANGFORD:  You don't plan to.  So, that's pretty clear then.


6474             Let me ‑‑ you have mentioned Calgary a couple of times and so have I, so let's talk about sleeping with the elephant here, as one of Alberta's favourite Prime Ministers, Mr. Pierre Elliott Trudeau used to say.

‑‑‑ Laughter/Rire

6475             COMMISSIONER LANGFORD:  There are a number of problems, not the least of which I'm sure you'll understand, it's just the kind of temptation.  You know, as Oscar Wilde said, "I have no trouble with temptation, I just give into it".

6476             But, the temptation must be almost overwhelming, to be sitting there with a signal, you know, that goes into Calgary.  You'll have a sandwich from both sides, it will be the meat between your two hamburger buns.  The temptation to mine that field must be overwhelming, and it can come from sources outside.

6477             I'm sure some of your faithful listeners who commute every day into central Calgary to work will inevitably complain to your station manager, gee, I wish your signal was a little stronger, I lose you as I get down among the towers and I want to listen to my signal, I don't want to listen to somebody in Calgary.


6478             So, the temptation must be overwhelming, and I know that it's out there because we get innumerable applications from small towns, bedroom communities, whatever you want to call them, licensees and the Chair mentioned a few of them with the previous applicant, who say, look, you know, we started off wanting to serve Brampton or Richmond or Smith Falls or whatever, but it's too much now, we really, really have to be realistic, we need an increase of power, our listeners are screaming for more and let us in the back door.

6479             And I take your clear statement that that's not your plan, and I take the clear precedent of High River that so far you've done nothing in that direction, but would you take a COL, for whatever it would be worth, I suppose ‑‑ I mean, these things don't last forever, nothing lasts forever ‑‑ (my marriage, dear, if you're listening, it's forever)  ‑‑ but would you accept a COL that that is not your intention and that you're not predisposed to make an application?

6480             MR. HILDEBRAND:  Well, we would maintain that our track record already says that, what we do without a COL.

6481             COMMISSIONER LANGFORD:  Right.

6482             MR. HILDEBRAND:  I mean, we ‑‑ Moose Jaw is beside Regina, you know, we have many stations in southern Manitoba that are close to Winnipeg.  We make our business in our communities, we don't make our business in the major markets.

6483             COMMISSIONER LANGFORD:  Okay.


6484             MR. HILDEBRAND:  That's just not where we live and that's just not where we want to be.

6485             COMMISSIONER LANGFORD:  All right.  So, maybe I'm asking too much.  Even I admit it might be difficult to draft.

6486             How about something like this:  That you would neither solicit nor accept advertising from Calgary?

6487             MR. HILDEBRAND:  I mean, I think certainly we do that now.  I think it may be difficult to say we wouldn't accept something if it comes along.

6488             We can easily see an arrangement where there's a regional organization that has outlets across the province and is headquartered in Calgary, it would be difficult to say, well, we don't want to do business with you.

6489             COMMISSIONER LANGFORD:  Mm‑hmm.

6490             MR. HILDEBRAND:  And so, I mean, how you craft that I guess is going to be difficult, but I think we live by what we've done in the past.

6491             We live by what we've told the Commission we were going to do, and I think the fact that on this hearing we have an application for a second FM station in High River/Okotoks ‑‑

6492             COMMISSIONER LANGFORD:  That's right.


6493             MR. HILDEBRAND:  ‑‑ which is not appearing.

6494             COMMISSIONER LANGFORD:  Right.

6495             MR. HILDEBRAND:  None of the Calgary broadcasters intervened.  They know what we do.

6496             COMMISSIONER LANGFORD:  Right.

6497             MR. HILDEBRAND:  They know where we are, they believe what we say and they see us do this every day.

6498             So, I think that's better affirmation than ‑‑

6499             COMMISSIONER LANGFORD:  Well, I take your point.  Your track record has been impeccable to this point.

6500             How about something just simple like you wouldn't solicit advertising?

6501             MR. HILDEBRAND:  For sure.  No, we don't.

6502             COMMISSIONER LANGFORD:  All right.  Well, we'll go that far and maybe Ms Bennett will want to ‑‑

6503             MR. HILDEBRAND:  Your lawyer is going to have like pages of COLs to ‑‑


6504             COMMISSIONER LANGFORD:  If you dragged the lawyer all the way out here, you might as well get some value for it, you know.  They're not on hauls.

‑‑‑ Laughter/Rire

6505             COMMISSIONER LANGFORD:  If you start feeling sorry for lawyers, sir, and I think it may be time to just get out of business really and start thinking about that retirement program you've been dreaming about.

6506             Okay.  Let's move on to CTD, Canadian talent development.  And I was looking at your correspondence of November 10th, '05, reply to some correspondence from the Commission.

6507             And you say at that point that you are agreeing to $10,000 each year and then you have the clause:

"In cash plus additional expenses for years 1 to 5, and then rising to $25,000 for year 6 and 7."  (As read)

6508             And I just want to be clear in my own mind what that means, in cash plus additional expenses?

6509             MR. HILDEBRAND:  The hundred thousand will go directly to the production and the facility of Canadian talent development.


6510             We'll obviously do far more than that because every day we're going to be promoting events, groups on the air that will be far in excess of the hundred thousand dollars.

6511             COMMISSIONER LANGFORD:  But the pure CTD will be the $10,000 rising to 25?

6512             MR. HILDEBRAND:  Right.

6513             COMMISSIONER LANGFORD:  That would be the best way for us ‑‑

6514             MR. HILDEBRAND:  Right.

6515             COMMISSIONER LANGFORD:  ‑‑ to characterize that in a decision?

6516             MR. HILDEBRAND:  Exactly.

6517             COMMISSIONER LANGFORD:  Let me just touch on a couple of your projects, your initiatives.

6518             The high school initiative under this, I'm just wondering how that would work, how do you choose schools, or how do you say which schools are ‑‑ can come within it?

6519             MR. HILDEBRAND:  Again, we have found in the communities there, in every school there are groups, musical groups that go on tours, either to band festivals, or there are choirs that go ‑‑ some choirs even go internationally and we can help them raise funds for their ‑‑ for the students, for the performers.  There are many ways of doing that.


6520             I mean, again, we've done that for many years in our other markets so we, again, want to be part of all of those things.  So, it's not really difficult to find recipients and, in some cases you need more money, I mean, there's a demand for more than what you have.

6521             COMMISSIONER LANGFORD:  Right.

6522             MR. HILDEBRAND:  So...

6523             COMMISSIONER LANGFORD:  Well, it seems to me there's two possibilities here and I just want to make sure I'm clear in how the actual, you know, earmarked CTD funds will work.

6524             I mean, obviously if you see a great need in some school or some band that's got a chance to travel to Europe or whatever you might have a special event, you can have an on‑site event, you can have a fundraiser just for them, that would be outside CTD, but this school initiative is part of the Canadian talent development.  How would that be administered?

6525             MR. HILDEBRAND:  Well, we would ‑‑ what we've done in many cases, we've recorded the group, facilitated the CD that they could then either sell in their schools, at a fundraiser or do whatever they want, and those are the kinds of things that we've been doing and will be doing here.


6526             COMMISSIONER LANGFORD:  And you just have one of your managers administer this or...

6527             MR. HILDEBRAND:  Yes.  Again, we pay very close attention to this other company and so, corporately, we are involved with that company all the way down the line, so...

6528             COMMISSIONER LANGFORD:  I see.

6529             MR. HILDEBRAND:  I personally have some interest in all of that, so...

6530             COMMISSIONER LANGFORD:  Right.

6531             MR. HILDEBRAND:  And I also wanted to make a point here of mentioning, we have allocated some money here to FACTOR ‑‑

6532             COMMISSIONER LANGFORD:  Right.

6533             MR. HILDEBRAND:  ‑‑ but we are doing that reluctantly because the last FACTOR annual report you know showed pages and pages of contributions or donations to groups, but I think only two were from the Prairies, so...

6534             COMMISSIONER LANGFORD:  Yeah.

6535             MR. HILDEBRAND:  So, we would want to underline that the money that we want to send to FACTOR, we want to say should be spent on the Prairies.


6536             COMMISSIONER LANGFORD:  I can assure you that my colleague, Commissioner Barbara Cram, is making that point loud and clear at every opportunity, she is certainly leading the charge on that, so it's not a message we haven't heard and I think we're very sensitive to it.

6537             But I thank you for mentioning it.

6538             With regard to the CD production, I just would wonder again ‑‑ I'm just looking for some sense of how it would work, because from the CTD we tend to think of it as a third party kind of initiative, it's out there.

6539             So, who would choose the artist and how would you produce the CD and would you distribute it?  Can you just give me a little flesh on those bones?

6540             MR. HILDEBRAND:  Sure.  We have a close working relationship with a group called Avante Records that are in the production of managing small groups, they are doing some touring and they're putting on some concerts and so we work closely with them.

6541             They also have already a distribution system that they can get some of these Cds out into the marketplace, because obviously these aren't going to be picked up by any of the major labels.


6542             So, we are working closely with a group like that so that we can have a third party do this.

6543             COMMISSIONER LANGFORD:  Okay.  Have you broken down a budget for any of these either high school or CD production initiatives, or are they just something that you can do almost in your sleep so that you work on it that way?

6544             MR. HILDEBRAND:  No, we can do that very easily.

6545             COMMISSIONER LANGFORD:  Right.

6546             MR. HILDEBRAND:  So...

6547             COMMISSIONER LANGFORD:  All right.  We're almost there.

6548             I'm wondering just quickly ‑‑ and I suspect the answer is going to be I've been doing it for 50 years, that's how I did it ‑‑ but I'm going to ask anyway.

6549             You made a business case and you've shown revenues of $325,000 first year and rising to $425,000 in year seven, profitable by year three.

6550             And I'm just wondering, do you use a system to calculate this sort of thing, do you survey, or is it just simply sort of walk through the town like sort of Matt Dillon and get a feel for it?


6551             MR. HILDEBRAND:  Pretty much like that, but what really we can use in addition to that is knowing what we've done in other similar size communities.

6552             And, you know, I've had discussions with Commission staff at various times, you know, on this seven‑year projection.  We do them but we also say, like, nobody's bright enough to know what's going to happen seven years from now, and so we can put numbers down there.

6553             You know, we show that we have a small loss in year one, but we will work very hard not to have one and so, we are confident that the numbers that we have used here are very conservative because we want to show the Commission that we have a business case that is level.

6554             But we will work hard to achieve all these numbers and, in many cases, we do, but we are not bright enough to see seven years out.

6555             COMMISSIONER LANGFORD:  I wouldn't be bright enough to recognize whether you had seen clearly either, so it's probably still ‑‑ and nobody's having a tag sale for Golden West I notice, so you must be doing something right.

6556             But essentially you don't do any what we might call empirical research or surveying?

6557             MR. HILDEBRAND:  No.


6558             COMMISSIONER LANGFORD:  However.  So, how do you pick your towns?

6559             MR. HILDEBRAND:  Well, we pick our towns generally on the basis of where they're growing.  We have been growing dramatically in Manitoba/Saskatchewan and we have, you know, started to grow more in Alberta now, so basically because there aren't too many towns left in Manitoba/Saskatchewan where we see growths, both of those provinces don't have great population increases and so right now we're looking to fill the void in places like Airdrie which doesn't have a radio station and we're hoping that we'll be able to do that here, plus in some other Alberta communities outside of their metropolitan areas.

6560             COMMISSIONER LANGFORD:  Now, let me ask you a question, I'm going to ask it about High River where you're already licensed, so that I'm not sneaking up behind you on Airdrie at all.

6561             Does there come a time in a situation like High River, Calgary where urban sprawl, suburban encroachment, whatever, finally leads any reasonable person to say, this fiction must stop, this is all one city?


6562             MR. HILDEBRAND:  There may come a time.  We've been operating in High River since the late 70s when ‑‑ and Keith should just say briefly, the growth that's been in High River since that time.

6563             Keith?

6564             MR. LEASK:  Well, since I moved to High River in 1983, High River at that time was at a population of 4,300, now High River is just over 11,000.

6565             Okotoks by the same token had a population of about 3,600 when I moved there, and Okotoks is now just over 13,000.

6566             Airdrie, conversely, in speaking with some of the town officials there, has grown from a population of 5,000 in that same year to a population now of over 27,000.  So, it has a huge growth and is very similar to the High River/Okotoks market in that it's the same proximity to the city and it's the same sort of commuter base and we sure want to do something similar there that we've done with High River and Okotoks.


6567             MR. HILDEBRAND:  So, whether ultimately 50 years from now these communities will all be one, probably, and will the same model still work then that works now?  Again, I don't know who can really substantiate or quantify that, but what we do know that under the current environment it does work for us to stay in those communities and ignore the city.

6568             COMMISSIONER LANGFORD:  It's still reasonable to be a High River radio station?

6569             MR. HILDEBRAND:  One of the things, I mean, even when they all grow together, my sense is there will still be a community in High River/Okotoks that's different from down around Calgary, and there will be a community in Airdrie that's different from Calgary and so maybe another community gets established to the east of Airdrie, there are other communities that are growing because not everybody wants to be in the city.

6570             COMMISSIONER LANGFORD:  Right.  Mr. Chairman, those are my questions.

6571             Thank you very much, gentlemen.

6572             THE CHAIRPERSON:  Thank you very much.

6573             I have only one question, Mr. Hildebrand, maybe I will have two, but you have heard the proposal of Lincoln that is also applying for Cochrane and you were ‑‑ but your group didn't apply for Cochrane.


6574             Do you think ‑‑ do you have specific reasons why you didn't apply for Cochrane or...

6575             MR. HILDEBRAND:  No, maybe down the road it will make some sense to apply for a separate radio station in Cochrane because Cochrane is getting to a size where they need to have their own.

6576             THE CHAIRPERSON:  That is why I'm asking the question.  And I heard the High River general manager talking about the growth of High River and Okotoks and making some comparison with Airdrie, and my feeling was that Cochrane, it was also growing in a very similar fashion.

6577             MR. HILDEBRAND:  Right.  My sense is they would need their own radio station and maybe that's where our next application will be for.

6578             THE CHAIRPERSON:  Okay.  Now, I have heard also ‑‑ I have heard you saying that you have a second application, an application for a second FM in High River and you also said that Airdrie is a community of the very same size.

6579             Do you think that two broadcasters could live in Airdrie and compete?

6580             MR. HILDEBRAND:  I would have no objection to, you know, if you licence another operator.


6581             THE CHAIRPERSON:  Okay, fine.  Those are my questions.

6582             We will go to the legal counsel and get back to me.

6583             MS BENNETT:  Thank you.  I do have a couple of questions, thanks to Mr. Langford.

6584             Mr. Langford was asking you about ways to ensure that continued local reflection of the Airdrie area and surrounding communities.

6585             And I was taking notes when you were talking and what I got was something like, anything within 25 to 30 miles of the studio but not Calgary, and gave up on the idea of trying to come up with a condition of licence around that.

6586             But what about having a condition of licence around a minimum number of hours per week out of your weekly news programming to reflect Airdrie and surrounding area stories.

6587             Could you comment on the possibility of a condition of licence around that and perhaps the number of hours that might be appropriate?

6588             MR. HILDEBRAND:  I've never actually heard of a condition of licence on news content.  I think that would be very difficult because I'm not sure you can manage the news that way.


6589             But, again, our commitment is that we are looking to provide service to Airdrie and the environment to the north.

6590             Again, there are some smaller communities to the north that don't have any service other than, they have a lot of signals, but no service, and so we would certainly provide some of those communities with that service.

6591             If we go to the High River/Okotoks example, we provide service to Claresholm and Vulcan and Turner Valley and Nanton and these are all communities that are south of High River and they're ‑‑ and we provide regular service to all of those communities as well.

6592             Our concept is really to provide service to areas that are void of real service, and we would do the same here and will do that without a condition of licence.

6593             MS BENNETT:  Okay, thank you.

6594             Another question, and you did comment on this earlier, but I just wanted to confirm that you would have no objection to a condition of licence prohibiting soliciting advertising from the City of Calgary?

6595             MR. HILDEBRAND:  No.


6596             MS BENNETT:  Okay.  And one last question.  A number of your other conventional stations offer some level of religious programming.

6597             Do you intend to offer any religious programming on the proposed Airdrie station?

6598             MR. HILDEBRAND:  No, I think I already answered that for Mr. Langford before.

6599             MS BENNETT:  Okay, thank you.

6600             THE CHAIRPERSON:  Mr. Hildebrand, it is now the time to do a wrap‑up and tell us why we should grant you the licence.

6601             MR. HILDEBRAND:  Well, I think we've probably said that already, but I'll recap just briefly and here are some of the reasons.

6602             Golden West have demonstrated its commitment to community service for many years, so you can take that to the bank.

6603             Our track record of serving non‑metro markets is probably second to none and we have the expertise to provide the best local service for Airdrie and we have experienced people, we have a history and we know what we're doing.


6604             Another item which I didn't mention before but which I think is important, and we have a policy in our organization that we try to hire local people, so we will be hiring people from Airdrie as opposed to parachuting them in and what we find, that many times provides long‑term careers for local people who then actually can stay right in that community, don't have to move.  And, again, we see that as one of the cornerstones of our organization.

6605             We are a Prairie‑based, family‑owned broadcast company that is committed to long‑term growth.  We have the experience and the resources to keep those commitments and we have the infrastructure to provide a unique and unparalleled radio service.

6606             We have a strong, dynamic leadership team to provide direction and training of local operators across the Prairies that we work with.

6607             And maybe lastly I will finish with just a brief line.  Two weeks ago we were honoured by the National Post as one of Canada's 50 best managed companies and following that I got an e‑mail from a long‑time broadcaster with a congratulatory note and he said:


"I've always felt that you and your people at Golden West especially have had a deeper understanding of the true essence of radio where the magic really is.  It's about the local connection.  You don't just talk local at CRTC hearings, you live it day in and day out."  (As read)

6608             And I'll end with that.  Thank you.

6609             THE CHAIRPERSON:  Thank you very much, Mr. Hildebrand.

6610             A matter ‑‑ I think I want to say something.  You said that prior to Christmas you had the visit of three Commissioners.

6611             For the record I want to say that it was much before Christmas, it was prior to the CTD convention in Winnipeg where a certain number of Commissioners went to visit AM operations and AM transmitters and FM transmitters for their own knowledge, because I noticed that the public notice for the public hearing was released on December 20th, so the visit that took place where no business matter was discussed took place in early November.

6612             We will break for five minutes in order to allow the next applicant to take place.

‑‑‑ Upon recessing at 1630 / Suspension à 1630

‑‑‑ Upon resuming at 1640 / Reprise à 1640

                 THE CHAIRPERSON:  Order, please.

6613             Mrs. Secretary.


6614             THE SECRETARY:  Thank you, Mr. Chairman.

6615             We're at item 13 on the agenda which is an application by Newcap Inc. for a licence to operate an English language FM commercial radio programming undertaking in Airdrie.

6616             The new station would operate on frequency 100.3 megahertz, channel 262A with an average effective radiated power of 3,600 watts, maximum effective radiated power of 6,000 watts, antenna height of 62.5 metres.

6617             Appearing for the applicant is Mr. Rob Steele who will introduce his colleagues and you will then have 20 minutes for your presentation.

6618             Mr. Steele.

PRESENTATION / PRÉSENTATION

6619             MR. STEELE:  Good afternoon, Mr. Chair, members of the Commission and Commission staff.

6620             I'm Rob Steele, president and chief executive officer of Newcap Radio and I'd like to introduce our team.

6621             Seated in the front row to my far left is Mark Maheu, executive vice‑president, chief operating officer of Newcap Radio.


6622             Next to Mark is Rob Mise, our group program director for Newcap Radio, and next to me is Al Anderson, the general manager of our Alberta Radio Group which is the operational unit that runs our small market stations here in Alberta.

6623             In the second row, starting from your left, is Dave Murray, vice‑president of operations for Newcap Radio and next to Dave is Mark Kassof who we introduced this morning.

6624             And in your folder is a copy of the research we conducted for Airdrie.

6625             This is our second of three appearances before you at this hearing and each of the communities that we are applying to serve is quite different from the others.

6626             In Airdrie we are applying to bring first radio service to a growing community that is in the shadow of Calgary.  The challenges presented by serving this kind of community are very different from those of serving a major metropolitan area like Calgary or a mid‑sized city like Lethbridge.


6627             Airdrie started as a small, suburban city of a few thousand people, but has mushroomed in population along with Calgary's growth.  Between 1996 and 2001 its population grew by 27 per cent.  For 2001 to 2005, it grew a further 32 per cent to reach 27,000 and it is expected to continue to grow by about 5 per cent per year.

6628             Airdrie has grown well beyond bedroom community status.  Along with the rapid growth in population, Airdrie's business space and independent economy has also grown greatly.

6629             Airdrie is now an emerging centre for manufacturing, agriculture and agri‑business as well as oil and gas exploration services.  Large parcels of less expensive service land have attracted business and employers driving retail growth and expansion.

6630             Airdrie is an affluent community with an average household income projected to be $87,977 this year, which is more than $9,000 per person above Alberta's already high average.

6631             Consequently, the retail sales projected by Financial Post markets for 2006 are 6 per cent higher per capita than the Canadian average reaching 303‑million and they are projected to grow by 52 per cent by 2011.

6632             Airdrie is a small city which has carved out an identity separate from Calgary's with its own museum, theatre, multiple recreational sites and a number of festivals and cultural events aimed at its own community and the surrounding area.


6633             On New Year's Eve its Festival of Lights celebrates the holiday season and draw large crowds.  Like many small communities, Airdrie has its own Canada Day celebration and is quite proud of its annual Pro Rodeo on the Canada Day weekend.

6634             What Airdrie does not have is its own radio station.  It receives all of Calgary's radio stations with the many formats available in the city, but none of them focus on Airdrie's local news, events, organizations and cultural activities.

6635             And I would now like to ask Al Anderson to outline our approach.

6636             MR. ANDERSON:  Thanks, Rob, and good afternoon, Mr. Chair, members of the Commission.

6637             When we first looked at serving this area we considered three options:  an Airdrie only station, a Cochrane only station, or a station that would jointly serve the two centres.

6638             Contrary to the usual research that we usually undertake, such as the studies submitted for Calgary and for Lethbridge, our motivation here was not focused on finding the music niche that we should serve, rather we were looking for information as to which of the three options to take.


6639             In addition, we wanted to know the kind of programming that would best meet the needs of the community.  Of course, we also wanted to know what kind of music would best complement that approach.

6640             We asked Mark Kassof to undertake the necessary research and here's Mark.

6641             MR. KASSOF:  We asked citizens in both Airdrie and Cochrane about their current listening habits, about their interest in a local radio station, their interest in the other community and, finally, their interest in different music genres.

6642             What we found was very interesting.  Airdrie and Cochrane do not form a community, residents in each centre have minimal interest in the other.

6643             Residents of Airdrie identify themselves as residents of Airdrie rather than of the Calgary area.

6644             One third of Airdrie residents tell us they are very interested in an Airdrie station, significantly more than the 22 per cent of Cochrane residents who are very interested in a station there.

6645             There is less overall interest in a station that attempts to serve both Airdrie and Cochrane than an Airdrie station alone.


6646             The Airdrie station should focus first and foremost on local services and Hot AC music is the top music genre of those who are very interested in an Airdrie station.

6647             MR. ANDERSON:  At the Alberta Radio Group we have a lot of experience in serving small Alberta communities such as tiny Athabasca and then the little larger areas like Wainwright and Cold Lake, populations there of about nine to 10,000.

6648             Our approach in these areas is to become part of their community.  We do this through carefully researching what each community is looking for and we keep Mr. Kassof busy by doing that and by providing the best quality of signals and programming and by focusing on local services through news, community events coverage and local fundraising.

6649             In Airdrie we, again, intend to take a proactive and aggressive approach to establishing a strong community presence.  We will provide a full range of news, information and community service and we will become involved in the social, cultural and charitable life of the community.


6650             A few examples.  In Cold Lake we recently launched our station there CJXK‑FM and it was named as Ambassadors for the City by Cold Lake's Economic Development Advisory Committee for activities including on‑air fundraising for the United Way and a large drive for their food bank.

6651             Our Wainwright FM station, CKWY, known as WAYNE‑FM, has become a major centre of support for community events and causes from fundraising for cancer research to promoting the local Chamber of Commerce trade show, to supporting the local schools.

6652             There are many more examples that we'd be pleased to share that demonstrate how Newcap Radio has made a difference in these communities.  We intend to bring this approach to a new radio station in Airdrie, if we are licensed.

6653             Our hometown radio station will be the electronic town hall for Airdrie.  To be successful, we must build our audience in Airdrie by meeting the needs we have identified.

6654             Airdrie residents will tune into our station because we will provide them with information that they can only find in one place, on our station.


6655             News is one of the anchors of this approach.  We will have three full‑time news people whose mandate will be focused on Airdrie and the immediate surrounding area.  We will provide 53 newscasts per week, totalling a minimum of three and a half hours of news content.  75 per cent of that news will be local and the newscasts will be compiled and assembled by Airdrie staff.

6656             But news is really only the beginning of that effort.  Airdrie sits on the busy Highway II corridor between Edmonton and Calgary and its residents are often on the road, whether going into Calgary or just down the road to a nearby smaller community.

6657             Mr. Kassof's research indicated that traffic and weather reports ranked very high, higher than local news for Airdrie listeners.

6658             To meet this need, we will provide the kind of traffic reporting usually only seen in larger markets.

6659             During morning and afternoon drive, we will provide four traffic reports per hour, one per hour for the rest of the day and during the day on the weekends as well.  In total four hours of traffic reporting per week.

6660             In addition to news, weather and other survival information, we will provide a variety of features that will contribute to the community life in Airdrie.  Eight times a day we will broadcast Airdrie Today, a feature on the community events and functions in the area.


6661             Each newscast will include the Airdrie cause of the day, promoting a local charity event that needs community support.

6662             We expect the mayor, the MLAs, the MPs, the chief of police, the fire chief as well as the presidents and executive directors of service clubs, community organizations and other local groups to be regular visitors on the station, particularly in the drive periods.

6663             In keeping with the interest of the many young families in Airdrie, we will provide Eco Edge which will outline the positive activities to ensure a greener town.  We will also provide a regular feature for the older residents of the city, Seniors' Outreach.

6664             Enterprising Alberta citizens will appreciate our weekly feature of a small business in Airdrie that demonstrates outstanding achievement.

6665             Students will be able to nominate their teacher for the teacher of the week award.  Each week we will ask a question of our listeners and compile their responses into another feature.

6666             Newcap has a special interest in children's charities and we will develop a children's trust fundraiser to help those who are in need.

6667             And now to speak on our music and talent development plans, here's Rob Mise.


6668             MR. MISE:  Thanks, Al, and good afternoon.

6669             As Al noted, the primary focus of this radio station will be local information, but we also want to provide a mainstream music choice that will reach as many people as possible throughout the day, so we asked Mr. Kassof to include music preference research in his survey.

6670             The format we chose is essentially a hit format for adults with strong attraction for those aged 25‑40 years old.  Women will be more interested in the station than men, in fact, we believe that we'll have a strong presence in women 25‑54 years of age.

6671             The format includes a significant amount of contemporary new music from artists like Avril Lavigne, Cheryl Crowe and also Alanis Morriset.

6672             Contemporary music from artists like this will make up about 65 per cent of the music playlist.  The remainder of the music will come from the 80s and the 90s.

6673             The emphasis will be on bright, up‑beat music, avoiding the harsher and more strident rock and hip‑hop music heard on CHR stations.


6674             To ensure that our audience will get a range of the music that they like, we will also run a number of speciality programs including a noon hour 90s retro show featuring the music of that decade along with anecdotes about the entertainment and other happenings of that era.

6675             Also an evening hour‑long 80s retro show at 8:00 p.m. focusing on that decade.     We also expect to broadcast longer form programs featuring the music of that era on the weekends.

6676             Each day we will focus on a new song and feature of the day, we expect to put a strong emphasis on new material from Albertans and other Canadian artists.

6677             Each day at 5:00 during the afternoon ride home, we will feature a three‑song music sweep submitted by one of our listeners.

6678             We will also broadcast a weekly one‑hour program on local and regional artists.

6679             We propose to devote a total of $245,000 for two initiatives for Canadian talent in Airdrie.  Half of this money or 17.5 per year will be directed to the Radio Starmaker Fund to assist in its work to help new and emerging artists become more successful.


6680             The other half of the contribution, $112,500 over the term of the licence will be directed to supporting the earliest stage of music talent development in the schools.

6681             We have entered a partnership with the Airdrie School Board.  Our contribution will be used in three ways.  First, over the course of the licence, $35,000 will go towards the purchase of quality music instruments for talented students who cannot afford them.

6682             The School Board will identify those meriting the support and we will purchase the instruments for the kids.

6683             Second, another $35,000 will be spent by the School Board to either award scholarships for promising students or for development of a musical curriculum at their discretion.

6684             Third, the remaining amount, $52,500     will be spent to support Airdrie's school musical festivals and competitions.

6685             We believe that our contributions are well aimed and will help in getting some kids started into a life of music appreciation and even into music careers.

6686             And now Mr. Steele would like to sum up.


6687             MR. STEELE:  Thank you, Rob.

6688             Mr. Chair and members of the Commission, our decision to apply to serve Airdrie preceded your call for applications for Calgary.  We have had quite a bit of experience in serving smaller markets, both here in Alberta and in Atlantic Canada and Airdrie is clearly a developing community which deserves its own station.

6689             In preparing for this hearing, Al Anderson went to Airdrie to meet with local people and seek their feedback.  The response has been strong and interventions that you received support what the research showed, the people of Airdrie have a strong interest in a local radio station, one that reflects their lives.

6690             The robust economy in the city and area with its ongoing population growth demonstrate clearly that Airdrie can and will sustain a local radio station, one that is focused on it with strong news and local services.

6691             And as Al Anderson pointed out, 75 per cent of our news content will be local.


6692             We can meet our revenue projections with advertisers from this market and, as you know, in reply to a letter from Commission staff, we made it clear that we would be pleased to accept a condition of licence not to solicit local advertising revenue in Calgary.

6693             The business plan I have submitted in this application proposes to spend $2.1‑million on programming over the seven years of the first term of licence, 600,000 more than the next nearest applicant and our proposal to spend $245,000 on the development of Canadian talent is almost two and a half times the next applicant.

6694             In fact, the local component of our proposal is larger than either of the other applicants' total spending.

6695             We have an excellent record of serving listeners in small markets in Alberta with news, information and community services.  At Newcap Radio, we understand that it takes patience, expertise, capital and passion to meet the needs of local listeners to make hometown radio successful.

6696             Thanks for your time and attention today, and Al Anderson and our team will be pleased to answer any questions you may have.

6697             THE CHAIRPERSON:  Thank you, Mr. Steele.


6698             For the record, we have received a copy of the research report that we received on December 13th, '04, it was attached with the oral presentation and the staff has the sense to look into it and if we are accepting it.

6699             For the persons that want to consult it, it is available at the examination room.

6700             Mrs. del Val will question your application.

6701             COMMISSIONER del VAL:  Welcome back.

6702             Maybe I will just start with where you left off in your presentation, because that will knock off some of my questions.

6703             Now, in your letter of September 26 where you talk about the condition of licence not to solicit local advertising revenue in Calgary, now in your letter it was prefaced with, if you were approved for a new FM station in Airdrie and in Calgary.

6704             So, can I clarify right here that you would be willing to accept such a condition of licence, which is not to solicit local advertising revenue in Calgary, even if you were licensed only for Airdrie?

6705             MR. ANDERSON:  That is correct, we would not solicit for advertising in Calgary, either way.

6706             COMMISSIONER del VAL:  Thank you.


6707             Just some questions on your programming right now.  So, you are proposing a Hot AC format and targeting 25‑40‑year‑olds, mainly female.

6708             And now could you elaborate on how and why you chose the Hot AC format that would target the 25‑40‑year‑olds only, which is only approximately half of the general 24‑54 demographic that is served by, say, a conventional adult contemporary format.

6709             And the reason why I ask is most of the formats ‑‑ many of the proposed formats that we see for smaller markets usually target a much broader range and you seem to be targeting the core group is half of that range.

6710             MR. ANDERSON:  I'm going to refer this question to Mark Kassof.

6711             MR. KASSOF:  Well, the research we did, first and foremost, looked at the interest in a local station.  That's really what it was all about and to say, should it be positioned as a Cochrane station, as an Airdrie station, or a station that serves both markets.

6712             And what we determined was that an Airdrie station was definitely the highest potential here.


6713             As far as the music goes, the music is really not the format of the station, in my opinion.  The format of the radio station is a full service radio station.

6714             With the music, what we're looking for is music that will just be basically very broad based and inoffensive to many of the people who turn in for the information elements.

6715             What we found when we isolated the people who were most interested, very interested in an Airdrie station, their No. 1 music was Hot AC and the appeal of the music ‑‑ the strongest appeal of music through is 25‑44, however, the appeal of this radio station will be much broader than that.

6716             Even listeners who don't like Hot AC who are interested in local information, will tune into this radio station.

6717             So, Hot AC was really picked as the best fit for a full service radio station, but it's certainly not a Hot AC first and foremost radio station.

6718             COMMISSIONER del VAL:  Okay.  So then, how did your survey translate into the format that you picked?  It's really broader ‑‑ is it Hot AC that is the proposed format?


6719             MR. KASSOF:  The music it plays would be Hot Ac, a very broad interpretation of Hot AC.  And what we found was of all the nine music genres that we looked at, that was the best fit for the people who are really interested in this local station.

6720             But the station will definitely ‑‑ I can tell you both from the research and my own experience, it will have much broader appeal than 25‑44.

6721             COMMISSIONER del VAL:  Well, I don't know if that answers the next question, but how would you ‑‑ obviously there's a lot of tuning into the Calgary stations right now by the Airdrie residents, and there's the ones that we would have identified as serving the ‑‑ as the AC stations would be CHFM and then the contemporary hit radio format at CIBK, so how would your station differentiate itself from those stations?

6722             MR. MAHEU:  Madam Commissioner, if I may, just to pick up on Mark's comments and answer your question as specifically as we can.


6723             As Mark mentioned, when we did the research it wasn't so much to find a music format hole, it was really to find out, is there room for a radio station in a city this size, it's a little bit different than a competitive market, and what types of things would be important to these folks in the city.

6724             Obviously we're not proposing a new talk format, so there is going to be some music.

6725             And, as Mark mentioned, Hot AC came up as the format of choice, to call it, for the greatest number of people who said that they would really like to have an Airdrie radio station, but the design and the sound of the radio station is going to be much different that what you might find on the two stations that you just mentioned.

6726             Those stations operate in a very competitive environment and they do a lot of homework and research and they tailor their sound to be competitive with all the other radio stations in Calgary for rating and share.

6727             In a city the size of Airdrie, when we're playing music, we're not going to be anywhere near as music intensive as a big city competitive radio station.  There's going to be much more spoken word, there's going to be more talk from the personalities.

6728             Part of the reason is, is that we're not going to subscribe to BBM, so we're not in a ratings battle with anybody here, what we really are is in a battle for the hearts and minds of listeners in Airdrie, try to build some good will with these people.


6729             So, we want to try to find a format that is all‑encompassing as we possibly can, so that the opportunity for as many people as possible to listen to us would exist, and we found that the listeners were telling us Hot AC was the answer.

6730             And inside of that, as Mark said, I think we're going to stretch the bounds of the Hot AC format well beyond the edges of what you normally would in a competitive environment.

6731             COMMISSIONER del VAL:  How would you do that?

6732             MR. MAHEU:  We would probably ‑‑ the most obvious way to do that is to play music inside of the Hot AC format that is acceptable to the largest possible group of people.

6733             In a competitive environment, you really use your research to find out where the opportunity exists inside of maybe eight or 15 radio stations in a market and how you can own a very small slice of the demographic group.

6734             The approach in a city the size of Airdrie is quite different.  It's almost the reverse actually, we want to be the radio station of choice at least at some point in the day to the largest group of residents in Airdrie we possibly can.


6735             We know they're tuning us in for a lot more than music, but we want to make sure that the music that we're playing at any given time doesn't give them any cause to want to tune away in a hurry.

6736             So, if we were fortunate enough to be awarded the licence, what we would very likely do as we do in a lot of situations with new licences, is go back into the market, do some additional research inside of ‑‑ we know Hot AC's a good starting point, and then we'd probably test a number of variations of AC to see which one we could service the most people by playing and then we would play that kind of music.

6737             It would be of Hot AC genre for sure, it might be a little softer, it might be a little older, it might be a little newer, it might be a little more intense depending on what the feedback is.

6738             COMMISSIONER del VAL:  Now, CHUM has applied for, in the Calgary market, a Hot AC format.  Will that ‑‑ if CHUM were to be licensed in Calgary, would that have any impact on your plans to operate a Hot AC format in Airdrie?


6739             MR. ANDERSON:  No, it would not.  As a matter of fact, I don't think we are in a position to really worry about any Calgary format because our mandate is to be local, local, local in Airdrie and the music end of it is, I think, very secondary to the main reason we're going in there to super serve the City of Airdrie and not Calgary.

6740             COMMISSIONER del VAL:  Now, moving onto the local and spoken word programming, you have stated that you would provide 14 hours of overall spoken word programming per week on your Airdrie station and that this would include 3.5 hours of news programming and you have made a commitment that 75 per cent or 2.5 hours per week of news content would be devoted to local Airdrie stories.

6741             So, I just want to get a little bit more information on your spoken word plans.

6742             What do you think would be the challenges, if any, in developing relevant news and general interest spoken word programming for the 25‑40‑year‑old Airdrie audience that you are targeting?

6743             MR. ANDERSON:  The challenge would be, you know, soliciting the stories that serve that particular area, but having started my radio career 47 years ago in a small market in northern Alberta, I have found that the smaller markets really haven't changed that much over the years and what the smaller markets really have to have is the local content, and in smaller centres, smaller news is bigger news.


6744             So, there isn't an amazing police raid in the east end of the city every night, there aren't 47 accidents to report, but what there is are smaller items that are really large items to these people.

6745             So, a lot of the news will be proactive versus reactive.  I think in a smaller market, unlike a large city, your news department has to be proactive rather than reactive.

6746             What does that mean?  That means you don't just report on things that happen, you look at uncovering things that may have happened, may happen in the future and it takes some creativity within that news department and there's no room for laziness either, because you know some days there's not that much news that is immediately happening at that particular time, but there's things like follow‑up programs.

6747             And just to get back to my comment that smaller items are bigger items in that type of area, looking at some of the items that could have been covered in Airdrie today range from a very serious thing like the remains of an Airdrie woman missing since early January having been identified through DNA.


6748             Two of Airdrie's newest communities are semi‑finalists for prestigious home builder's award.  That's news.

6749             The George McDougall for Change group that is looking to raise not only awareness but money as well as holding the breaking bread potluck dinner.  Small item, fairly large news in a smaller centre.

6750             Propac employee Nigel Sadler takes the plunge and sheds his locks to raise money for non‑medical expenses for co‑workers who have been diagnosed with cancer.

6751             Now, there's more, but I think that will set the picture that there is news in Airdrie, there is news in smaller areas.  It's a different type of news and a different approach has to be taken to report that.

6752             And we are going to have a staff of three full‑time multi‑tasking news people, so that does give us the news power to cover Airdrie and area very sufficiently.

6753             COMMISSIONER del VAL:  Thank you.

6754             MR. MISE:  If I may as well, Al, by the way, you're hired, great job.


6755             We also promise news on the weekend as well and as many stations have, you know, have dropped news on the weekend, we're going to bring it back.

6756             COMMISSIONER del VAL:  Thank you.  Now, would you accept a condition of licence to devote 75 per cent of weekly news content to the coverage of local Airdrie news stories?

6757             MR. ANDERSON:  Yes, we would.

6758             COMMISSIONER del VAL:  As part of your 14‑hour per week spoken word commitment, outside of news programming and related surveillance, you offer general interest spoken word features such as Seniors' Outreach.

6759             Why ‑‑ well, I think I know the answer, but why do you feel that the spoken word features, focusing on seniors' issues, would have ‑‑ would find an audience on the Hot AC format?

6760             MR. MISE:  If I may, the Seniors' Outreach feature, which will be daily by the way, is not just targeted at seniors but, you know, also children who are, you know, under 25‑year‑old and maybe the 50‑year‑old who would be looking after it, you know, and their parents as they get older.

6761             COMMISSIONER del VAL:  I thought you were going to say the children who will become seniors.

6762             MR. MISE:  It's a matter of time.


6763             COMMISSIONER del VAL:  Could you provide us with some more details on your non‑news spoken word programming and what role it will play in attracting your target audience, what role it will play in attracting the 25‑40‑year‑old Airdrie listeners away from Calgary stations?

6764             MR. MISE:  Because the station will be full service, we have to have the, I guess, the benchmark ‑‑ as Al just said, local, local, local ‑‑ that's the only way that this station is going to survive.

6765             So, features like Airdrie Today which will be daily updates talking about local public service announcements like maybe a skating festival, if that's happening on the weekend.

6766             We are really looking forward and really excited about a one‑hour weekly news magazine on the weekend which is kind of a retrospective look‑back but also look ahead, which will be produced by our news department locally and, of course, the cause of the day, and it's just a matter of making us connect with the local audience.

6767             COMMISSIONER del VAL:  Now ‑‑ sorry.

6768             MR. MAHEU:  I'm sorry, Madam Commissioner, if I could just add on very quickly to what Rob was mentioning too.


6769             Aside from scheduled features and things like that, the real essence of this radio station is we keep talking about service and, as I said, that's a wonderful word, but it's in the ear of the beholder so to speak, and for us to be successful and do our job properly in Airdrie, we're going to have to engage the community.

6770             And the only way to do that is not by playing Celine Dion and Avril Lavigne and some great adult contemporary music ‑‑ you know, that might be part of it ‑‑ but how we're going to engage that community is through what we're talking about on the radio station.

6771             We referred to it in our opening comments as a bit of an electronic town hall.  And that's kind of the way we're thinking about it, because this is a gathering point for folks who live in Airdrie, who are very proud of their city, to really connect to what's going on in the community.

6772             We know full well that they have radio stations that they listen to and are maybe favourites of theirs in Calgary.  If they like classic rock or whatever, they're going to listen to that radio station where they can get it.


6773             But what we are shooting for is at a time, especially in key drive times, in the morning when they're waking up or when they're coming home from work or on the weekend when they have more time to spend with radio, that we're doing things on the radio station that engage them and give them what they want to reconnect to the community.

6774             Our morning show is largely going to be a lot of talk and it's the kind of thing that wouldn't be competitive, necessarily, in a big city when you're competing against other radio stations and it's very music intensive, but it's nothing for us to go, you know, eight or nine minutes with a local business owner, or a politician or a volunteer who's doing something that needs to be recognized and sharing that with the community.

6775             And those kinds of things, unscheduled, on a regular basis I think are what the radio station will end up being famous for.

6776             COMMISSIONER del VAL:  Thank you.

6777             Now, I'm going to ask you some questions that I've asked this morning, but we need the answers for this record, so just bear with me.

6778             So, will there be any sharing of programming with other Newcap stations?


6779             MR. ANDERSON:  No, there will not be any sharing, it will be a totally local, self‑standing radio station in Airdrie.

6780             COMMISSIONER del VAL:  And what about the sharing of other types of resources for, say, your Calgary ‑‑ with other Alberta stations or elsewhere?

6781             MR. ANDERSON:  They will be there for more of a resource than for an exchange of any kind of programming.

6782             We will have resources within our news departments to share stories.  If there's a big news story in Lloydminster or High Prairie or Slave Lake, we will have the advantage of having a live real reporter in that area because we have them in that area.

6783             So, it lends good credibility to the news and, here again, if it's of any interest to the people in Airdrie, you can bet your bottom dollar we'll be able to source it one of the other centres because of our news people being scattered throughout the province.

6784             COMMISSIONER del VAL:  And this is addressing the same concerns of CIRPA, which is diversity of playlists.  Will the playlists be shared or to what extent will they be?


6785             MR. ANDERSON:  No, there's no sharing of playlists.  And, again, this is going to be a stand‑alone radio station with its own staff and the music mix on this radio station is going to be a bit out of the norm as it would be compared to a competitive situation.

6786             So, no, it's going to be self‑generated and looked after locally.

6787             COMMISSIONER del VAL:  Thank you.

6788             Now, I know you weren't in the room, but you might have heard Mr. Arpin's and Mr. Langford's questions about in the past how we've seen situations of licensees, applicants being granted licences in smaller communities bordering on larger communities, and then after that coming in to apply for an increase in power and then once the increase in power is granted, the station would also serve the listeners in the larger centres.

6789             Now, could you give us any assurance that that scenario will not unfold here, if you were to be awarded a licence for Airdrie?

6790             MR. MAHEU:  We can give you our absolute assurance that that is not the plan.


6791             We were very careful when we applied for a radio station in Airdrie, we were the first application in and we wanted to make sure, because we knew this question would come up and it's a fair question, we didn't want this to look like or seem like any sort of back door into Calgary, and that's why we chose the frequency we did and the signal that we did so that the 3‑millivolt curve doesn't come anywhere near Calgary and the .5 basically stops pretty much at the city limits.

6792             So, this is an Airdrie only radio station.

6793             We also, as you know, have a number of radio stations across the country.  It's the business we're in and we do understand the sensitivity to that, and we as a company are in front of you for many things at many different times, and we know that our credibility and our reputation is what we trade on and we're not going to jeopardize that on a signal increase or anything like that.

6794             So, you know, please for the record take us at our word that it is what it is, it will always be an Airdrie radio station and, if 20 years down the road the satellite radio has changed anything and the Commission changes its rules and you're opening things up, we'll look at it, but we certainly wouldn't be initiating it for any reason.

6795             COMMISSIONER del VAL:  Thank you.


6796             Now, onto the economics, so you're on the home stretch.

6797             Now, what is the projected audience share; what is your projected audience share in Airdrie?

6798             MR. ANDERSON:  Are you speaking of audience share in terms of listening, or in our financial?

6799             COMMISSIONER del VAL:  In listening.

6800             MR. MURRAY:  Eleven per cent.

6801             COMMISSIONER del VAL:  Okay.  Do you anticipate that you would receive any audience share that is significant in Calgary from this Airdrie station?

6802             MR. MAHEU:  No, because the signal does not get into Calgary with any strength whatsoever.

6803             And, again, even if it did, the type of programming that we're going to be airing on this radio station would not be attractive to a lot of metropolitan Calgary listeners, because it's going to be very Airdrie specific.

6804             COMMISSIONER del VAL:  Would you be able to provide a breakdown of the anticipated total annual listening hours by the Airdrie listeners?


6805             MR. MAHEU:  Based on the research that we conducted?

6806             COMMISSIONER del VAL:  Yes.

6807             MR. MAHEU:  Mark, we could ‑‑ yeah, we could file that, sure.

6808             COMMISSIONER del VAL:  When do you think ‑‑ how much time do you think you'll need?

6809             MR. MAHEU:  I think we could do it in 24 hours, 48 hours?   Yeah, within the next 24 hours.

6810             COMMISSIONER del VAL:  Okay, thank you.

6811             Do you have any specific research yet on sort of how the Airdrie business community will support this Airdrie station?

6812             MR. ANDERSON:  The actual research in real numbers is not there.  Myself personally I visited, you know, a very good number of retailers in Airdrie along with service clubs, schools and just people in general, and the reaction is overwhelming as the research said.

6813             They would really welcome their own radio station for obvious reasons, they are not receiving any coverage from the Calgary stations, which is understandable, and the reaction is very, very good.


6814             And as far as the retailers are concerned, the ones that we are going to be soliciting for advertising and the ones that are going to let us live happily ever after, they are ready and willing to welcome us simply because they don't have an avenue to advertise on right now.

6815             Yes, they could advertise in Calgary, but the Calgary rates are considerably higher than our rates would be and we're going to have a lot of first‑time radio users in Airdrie for, you know, those and other reasons.

6816             COMMISSIONER del VAL:  Then on your answer to section 5.1 of the application which is average number of commercial minutes expected to be sold per hour in year one you said five, year seven you said eight.

6817             Could you elaborate on the basis for those estimates, please?

6818             MR. MURRAY:  Yes.  That's just our experience in the many markets that we serve and we try to be ‑‑ we try to, you know, limit those so that the quality of the other programming isn't inhibited by the commercials, so...

6819             COMMISSIONER del VAL:  Now, you have indicated that your revenue projections include only revenues generated from the Airdrie market.


6820             With an advertising rate which in general is much lower than the Calgary radio service in general, would this not make it attractive for the Calgary businesses seeking to reach the northern portion of the City of Calgary, to advertise on the Airdrie station?

6821             MR. MAHEU:  The simple answer to that would be not likely.  Our focus as an Airdrie radio station, as we talked about earlier, is not to solicit advertising in Calgary, we have a radio station presently in Calgary that has a full‑time job doing that and we'd like them to keep doing it.

6822             We believe that the best way to build some good will and build a small franchise in Airdrie is to try to keep it as local as we possibly can.

6823             And, as David mentioned, we've been, you know, fairly conservative in our projections for revenue in Airdrie based on the fact that we're going to be selling commercials mostly to small businesses in Airdrie.


6824             It's kind of a double‑edged sword when you're in a satellite market, so to speak, as Airdrie.  On the one hand you need to have enough revenue on the radio station to provide the kind of services that the community needs and wants, and at the same time, as a small town or hometown radio station, you want to be very supportive of the small local retailers that are living in the shadow of some of the larger retailers in Calgary.

6825             So, it's always a bit of a dilemma on being able to make everybody happy.

6826             Suffice it to say, though, that our business strategy and our whole plan going forward is to really focus largely on the Airdrie retail community and we think over time there are lots of opportunity for Calgary businesses to buy a plethora of Calgary radio stations, print, outdoor, yellow pages, direct mail and bus advertising and so on.

6827             So, we don't anticipate a lot of that, but that's a bridge we'll have to cross if and when it ever comes.

6828             COMMISSIONER del VAL:  But this is not a trick question.

6829             MR. MAHEU:  No.

6830             COMMISSIONER del VAL:  Say, if I were a Calgary business and I wanted to sell my business in Airdrie, I know that you've agreed to a COL that you will not come solicit my advertising dollars, but if I came to you, would you let me advertise on your station?


6831             MR. MAHEU:  We likely would, it would be something that we promise not to actively go out and do.

6832             COMMISSIONER del VAL:  Mm‑hmm.

6833             MR. MAHEU:  We obviously want to do what we can to protect the retailers in Airdrie because they're going to be pretty much the life blood of our business, but from a fairness point of view and a fair trade point of view, it's hard to turn down advertisers who want to target a particular group of people geographically, and we do that a lot within the Alberta Radio Group, some companies want to reach people in Athabasca and Lloydminster and they can buy our radio stations.

6834             But I think that's a judgment the local management of the radio station have to make, given the circumstances.  But we wouldn't anticipate a lot of that.

6835             COMMISSIONER del VAL:  Okay.  And the condition of licence is simply not to solicit, it's not to solicit Calgary advertisers?

6836             MR. MAHEU:  That's correct, we will not solicit advertising from Calgary for the Airdrie radio station.

6837             COMMISSIONER del VAL:  Now, how did you arrive at your advertising revenue projections?


6838             MR. MURRAY:  Primarily from our experience in many markets in Alberta and Atlantic Canada with populations of this size.

6839             We also took into consideration the amount of out‑of‑market tuning that would be in existence in Airdrie because, you know, a city with 27,000 people would generally garner significantly higher revenues than this but, you know, there will be businesses in Airdrie that will still buy Calgary radio.

6840             So, we think this is fairly realistic.  There's no more science than that.

6841             COMMISSIONER del VAL:  Did you take into consideration the projected 11 per cent audience share?

6842             MR. MURRAY:  Yes and no.  You know, like we really think we're going to be the radio of record in Airdrie and we will get a lot of revenue from that and from our community service and all of these things, so it's not going to be so much a matter of share, we're not going to be in the BBM, so it's not going to be measured, you know, we're just going to be ‑‑ you know, we're going to do it by providing results to advertisers.


6843             COMMISSIONER del VAL:  So, in your revenue assumptions you provided in your application, you project selling 28,180 minutes of advertising year one at the rate of $22 per minute.

6844             So, on what basis did you arrive at the projected total number of minutes sold and advertising rate of $22 per minute?

6845             MR. MURRAY:  And once again, you know, our experience in Cold Lake and Lloydminster and Athabasca and all of these markets, that seemed like a reasonable level of minutes to provide good solid local programming and not overrun the radio station with commercials, but also a reasonable rate given the population and retail base, et cetera.

6846             COMMISSIONER del VAL:  So, if you were granted a licence in Airdrie, do you anticipate you will joint sell advertising with your existing jazz service in Calgary, and also would you expect to benefit from any other additional operating synergies from your existing service?

6847             MR. ANDERSON:  I'm sorry, Mr. Arpin, I did not hear the question.

6848             COMMISSIONER del VAL:  Sorry.  Okay.


6849             If you were granted a licence in Airdrie, do you anticipate you will joint sell advertising with your existing jazz service in Calgary ‑‑ that's the first part of the question.

6850             MR. ANDERSON:  No, I don't see that happening at all.

6851             COMMISSIONER del VAL:  Would you expect to benefit from any other additional operating synergies from your existing service, which we haven't talked about to now?

6852             MR. ANDERSON:  There will be some back office synergies, you know, payroll and some accounting factors and that type of thing.

6853             And, as I mentioned earlier, you know, some synergies in the on‑air performance in terms of being able to access a big news story from some other part of the province quickly and efficiently and with credibility.  But that's about it.

6854             COMMISSIONER del VAL:  Thank you.  Last question.

6855             Now, your answers to the deficiencies regarding CTD were very sound, so I only have one question on it.

6856             Now, I note there's no contribution to FACTOR; is that correct?

‑‑‑ Off Microphone / Hors microphone


6857             COMMISSIONER del VAL:  Okay.  Then, I guess it's just to answer CIRPA's intervention 445 where they commented that you were not contributing to FACTOR.

6858             Do you care to reply, because in your reply to CIRPA's intervention you didn't really address that issue.

6859             I was just wondering whether you want to address it here?

6860             MR. MAHEU:  We did reply.  On behalf of ‑‑ no, we didn't address that specific issue.  We did reply, but you're right, we did not address that specific issue with CIRPA.

6861             And as we very similarly noted this morning, it is our opinion ‑‑ not to discount the good work that FACTOR does ‑‑ the Radio Starmaker Fund has had a very good track record of providing an excellent level of support, so that's part of it.


6862             And, secondly, we like to take whenever possible the CTD money that we are putting towards or new licence and try to put it into the community in a very tangible way to help people in the local community, musicians, singers, songwriters and artists achieve the level of success that they're looking for, we like to provide that financial helping hand up in the local markets where we're working and be able to see the results down the street from where we do our business.

6863             So, we feel that the initiatives that we've outlined in our Canadian talent development meet the objectives of the Commission and with respect to what CIRPA is talking about in their intervention, we respectfully disagree in this particular case and we believe that the money that we're devoting is going to do a great job and what it's intended for.

6864             COMMISSIONER del VAL:  Thank you.  Those are my questions.

6865             Thank you for your time.

6866             Those are my questions, Mr. Chair.

6867             THE CHAIRPERSON:  Thank you, Mrs. del Val.

6868             Mr. Langford and Madam Duncan want to ask questions, but only for a matter of curiosity, Mr. Murray, in answering one of the questions of Mrs. ‑‑ Madam del Val said that you were expecting an 11 share.

6869             The research that you have filed today, page 10, is suggesting the projected performance being a cume of 34 per cent with a share of eight.

6870             Does that have an impact on what you said regarding to, Mr. Murray, in here?


6871             MR. MURRAY:  The eight per cent is both Airdrie and Cochrane together, so it's eight per cent of Airdrie and Cochrane, which works out to 11 per cent in Airdrie alone.

6872             THE CHAIRPERSON:  Okay, fine.  Thank you for your reply.

6873             I'm asking Mr. Langford to put his questions.

6874             COMMISSIONER LANGFORD:  Before I ask my questions, I'll make a comment, which is not that usual.

6875             I agree absolutely that you're spot on with your format and your demographic on this particular application, so you can sleep well in your beds tonight.

‑‑‑ Laughter/Rire

6876             COMMISSIONER LANGFORD:  You're batting 500 in my view, and that's not bad.

6877             On advertising, I think I'm just looking for some of your experience, because you folks are in a lot of small towns, and why would people in small towns advertise on a radio station anyway, since everybody knows everybody and you know where the hardware store is, and you know where the Ford dealership is, so why bother?


6878             MR. ANDERSON:  I think for the same reasons people advertise in larger centres; No. 1, just having your name out there and having people being aware that there is a Big Al's Shoe Store on the corner of 1st and 7th, and that is part of it.

6879             And there is a factor in small towns that if there's more than one particular retailer, that is competition right there, so the retailer is front of mind more often than the other one is definitely going to have a better chance, and to be totally honest, it's kind of catchy too.

6880             You know, you happen to get one hotel in a small town on the air, and the next guy wants to be just as big as the next guy and part of it, to be totally honest, it's a little like me too, I want to be there too.

6881             And that may not be a really good answer, but it's an honest answer in terms of how things do transpire and they do get results.

6882             That's the No. 1 reason that they will continue to advertise and we have found that in most of our areas, actually all of the areas that are similar to this size.


6883             If you give them a good enough advertising campaign with enough commercials in one particular week and, as long as the message is right, it does work, or everybody in this room would be out of business.

6884             COMMISSIONER LANGFORD:  So, you're not ‑‑ like, just between the two of us, I wouldn't mention this to anybody, but they're not wasting their money, is what you're saying?

6885             MR. ANDERSON:  Exactly.  They're really getting their money.

6886             COMMISSIONER LANGFORD:  They're really getting something for this money; right?

6887             MR. ANDERSON:  And they get good return on their dollars.

6888             COMMISSIONER LANGFORD:  And do they trace it?  I mean, do you have reactions from long‑time clients in small towns saying, you know, since we've been doing this we're in better economic shape?

6889             MR. ANDERSON:  Oh, absolutely, to the point where, you know, one business will refer us to another business, and this has happened just very recently in our new FM in Camrose and other places where, again, small town, word gets around fast.

6890             COMMISSIONER LANGFORD:  Hmmm.

6891             MR. ANDERSON:  You do something really well for this person, the other person will know pretty fast.  And they're vocal.  One thing about smaller markets, they're vocal.


6892             You can't hide from them because you're going to run into them on the street and they're not afraid to tell you whether it worked or didn't work, and what's wrong with your radio station, what's right with your radio station.  So, there's a real pulse on the radio market in smaller and medium centres as compared to larger cities, to be totally honest.

6893             COMMISSIONER LANGFORD:  Final question.

6894             When we were speaking to Mr. Hildebrand about his sense of confidence in his own ability, he led us to believe that he could live with a competitor, that we could licence two of the applications before us and we didn't nail him down as to which one he'd feel most comfortable with, but how do you feel about that?

6895             Can Airdrie handle you and somebody else?

6896             MR. ANDERSON:  Go ahead, Mark.

6897             COMMISSIONER LANGFORD:  Tired of being totally honest.


6898             MR. ANDERSON:  I'm going to say, no, I think there's room for one.  I think I would have to agree with Al, and that's not to say that our friend and colleague Mr. Hildebrand is incorrect, I think it's a bit of a coin toss.

6899             We're in a very robust economy and Airdrie is certainly enjoying a rising tide, let's sell boats, and Airdrie is enjoying a great level of prosperity as virtually most of the province has, it continues to grow.

6900             If two radio stations like the ones proposed, any of the two, two of the three proposed went on the air at the same time, it would certainly cause more hardship for both of the radio stations because there is a finite amount of revenue in that market.

6901             We're all I think ballparking how much revenue we feel there is in the market based on the retail sales projections that are in the market,

our overall feel, our feedback from people that we've talked to there.  If you're asking us a straight question about, can two survive there?  We would have our doubts about that.

6902             If the two were licensed and could sustain the losses over a longer period of time, I think the market would grow to the point where it might be able to absorb both some years out right now.


6903             The problem is, is that you run the potential of service suffering, depending on who gets licensed, because all of our promises and our projections are based on what we believe to be good projections for revenue and we tend to take a pretty conservative route there, although the Golden West application, you know, I believe it's really conservative in terms of the revenue that they're looking to do there.

6904             So, it's a bit of a coin toss and if pressed, it would be difficult for two.

6905             COMMISSIONER LANGFORD:  Thank you.  Those are my questions, Mr. Chair.

6906             THE CHAIRPERSON:  Thank you, Mr. Langford.

6907             Mrs. Duncan.

6908             COMMISSIONER DUNCAN:  That's fine, I've answered my own question.  Thank you.

6909             THE CHAIRPERSON:  Thank you very much.

6910             Maybe I have one question but probably Mr. Anderson or Mr. Mise will be able to answer that question.

6911             We heard earlier today that some 13 of your Alberta radio stations were carrying the World Professional Chuckwagon program.


6912             Are you planning to have that type of program on your Airdrie radio station?

6913             MR. ANDERSON:  The Chuckwagon races?

6914             THE CHAIRPERSON:  Yes.

6915             MR. ANDERSON:  No.  At this stage of the game we're ‑‑ I think the answer to that would be no, unless ‑‑ and the reason I say unless ‑‑ we find out that there's a real need in that particular town in that particular area for that coverage, because we do it on other radio stations of ours in Alberta.

6916             THE CHAIRPERSON:  Thank you.  It's now the end, so it's time to wrap up.

6917             I don't know who is going to make the wrap‑up, if not yourself, Mr. Maheu.

6918             You have five minutes.

6919             MR. MAHEU:  Thank you, Mr. Chair, members of the Commission, it won't take five minutes.

6920             For the record though, we have a policy within Newcap that are local radio stations are run by local management and they know the market and they have the best feel for what needs to be done in these cities, and I tend to disagree with Al on that one, I think the Chuck races ‑‑ they're not on our radio station ‑‑ but that's a decision that whoever ‑‑ if we were fortunate enough to be licensed, they would make that decision based on what was best for the city.


6921             Thank you for your attention to our comments today.

6922             Like Golden West, we have a long history of serving small, medium‑sized markets, we understand the sensibilities and what it takes to make small town hometown radio successful.

6923             We've done it for several years now throughout Alberta with the small communities that we serve, we've done it for a number of years throughout the Newfoundland and Labrador and there are similarities and it's a different type of radio that needs to be done in small markets to be able to be successful and serve the needs of the community and we certainly have a track record and the experience to do that.

6924             Our focus is going to be on Airdrie only.  We took a good look, as you know, through the research to see, could we serve two markets at the same time, which market really wanted a radio station.

6925             It became quite clear that Airdrie wants its own radio station and we've made a commitment to serve Airdrie.  We made sure that our signal didn't infringe upon Calgary and there would be no temptation to try to do more than just a great job for Airdrie and that is our goal and that is our desire.


6926             We're also committing to $245,000 in Canadian talent development that we believe will certainly benefit the development of emerging Canadian artists with a focus on the youth in Airdrie, and you have our commitment to spend that money over the course of our seven‑year licence.

6927             Our program spending over the first seven years of licence in Airdrie is clearly the largest of any of the applicants.  We feel that's necessary to do the job, to go into the market and build good will.

6928             Three full‑time news people, live originating program in the market, lots of spoken word, lots of community outreach and interaction, and that is the kind of money we feel will be necessary to create the electronic town hall type of atmosphere in a smaller town in Airdrie.  And we think that's a very important benefit to the listeners of Airdrie and will result in greater service and we'll be able to build some listenership there and do an excellent job for all those who are living and working and commuting from Airdrie.


6929             They're a city that's grown up, they're telling us that, the research, it's time that they joined the ranks of other towns their size and have their own radio service and we would be very proud to be the first originating service in Airdrie.

6930             And thank you very much for the opportunity.

6931             THE CHAIRPERSON:  Thank you, Mr. Maheu.  Thank you, Mr. Steele, and thank you to your team for your presentation.

6932             We will start tomorrow at 8:30 a.m. with Part 2 of this hearing for the Calgary and Airdrie application.

6933             Will you inform the Secretary of the hearing if you have decided not to intervene.

6934             The meeting is adjourned until 8:30 tomorrow morning.

‑‑‑ Whereupon the hearing adjourned at 1740, to resume

    on Friday, February 24, 2006 at 0830 / L'audience

    est ajournée à 1740, pour reprendre le vendredi 24

    fevrier 2006 à 0830

 

 

 

 

 

 

 


  

 

 

 

 

                      REPORTERS

 

 

_____________________     _____________________

Doug Lebel                Lynda Johansson

 

 

                     

_____________________     _____________________

Beverley Dillabough       Sharon Millett

 

 

 

 

 

 

 

     

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