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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 DEVANT
LE
CONSEIL DE LA RADIODIFFUSION
ET
DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT
/ SUJET:
VARIOUS BROADCASTING APPLICATIONS /
PLUSIEURS DEMANDES EN RADIODIFFUSION
HELD AT: TENUE À:
Best Western Inn Best Western Inn
2402 Highway 97 North 2402, autoroute 97 Nord
Kelowna, B.C. Kelowna (C.-B.)
October 30, 2007 Le 30 octobre 2007
Transcripts
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
Contents.
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Transcription
Afin de rencontrer les exigences de la Loi sur
les langues
officielles, les procès‑verbaux pour le
Conseil seront
bilingues en ce qui a trait à la page
couverture, la liste des
membres et du personnel du CRTC participant à
l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un
compte rendu
textuel des délibérations et, en tant que tel,
est enregistrée
et transcrite dans l'une ou l'autre des deux
langues
officielles, compte tenu de la langue utilisée
par le
participant à l'audience publique.
Canadian
Radio‑television and
Telecommunications
Commission
Conseil
de la radiodiffusion et des
télécommunications
canadiennes
Transcript
/ Transcription
VARIOUS
BROADCASTING APPLICATIONS /
PLUSIEURS
DEMANDES EN RADIODIFFUSION
BEFORE / DEVANT:
Rita Cugini Chairperson
/ Présidente
Ronald Williams Commissioner
/ Conseiller
Michel Morin Commissioner
/ Conseiller
ALSO PRESENT / AUSSI PRÉSENTES:
Cindy Ventura Secretary / Secrétaire
Véronique Lehoux Legal Counsel /
Conseillère juridique
Francine Laurier-Guy Hearing Manager /
Gérante de l'audience
HELD AT: TENUE
À:
Best Western Inn Best Western Inn
2402 Highway 97 North 2402, autoroute 97 Nord
Kelowna, B.C. Kelowna (C.-B.)
October 30, 2007 Le 30 octobre 2007
- iv -
TABLE
OF CONTENTS / TABLE DES MATIÈRES
PAGE
/ PARA
PHASE I
PRESENTATION BY / PRÉSENTATION PAR:
Vista Radio Ltd. 5 / 26
Sun Country Cablevision Ltd. 46 / 256
Harvard Broadcasting Inc. 89 / 494
CTV Limited 123 / 678
Clear Sky Radio Inc. 205 / 1080
Touch Canada Broadcasting 246 / 1292
Kelowna,
B.C. / Kelowna (C.‑B.)
‑‑‑ Upon
commencing on Tuesday, October 30, 2007
at 0930 /
L'audience débute le mardi
30 octobre 2007 à 0930
LISTNUM
1 \l 11 THE
SECRETARY: Attention, please. Please be seated, we are preparing to start.
LISTNUM
1 \l 12 THE
CHAIRPERSON: Good morning,
everyone. Welcome to this public
hearing.
LISTNUM
1 \l 13 My
name is Rita Cugini and I am the CRTC Regional Commissioner for Ontario. I will be presiding over this hearing.
LISTNUM
1 \l 14 Joining
me on the panel are my colleagues Michel Morin, National Commissioner, and
Ronald Williams, Regional Commissioner for Alberta and the Northwest
Territories.
LISTNUM
1 \l 15 The
Commission team assisting us includes Francine Laurier‑Guy, Hearing
Manager and Senior Radio Analyst; Véronique Lehoux, Legal Counsel; and Cindy
Ventura, Hearing Secretary. Please speak
with Ms Ventura if you have any questions with regard to hearing procedures.
LISTNUM
1 \l 16 At
this hearing the panel will consider ten applications to operate a new English‑language
FM commercial radio station in Kelowna.
We will also study an application to operate a new English‑ and
native‑languages FM Type B native radio station in the same market.
LISTNUM
1 \l 17 We
will begin with the application by Vista Radio Limited and then examine the
applications in the order presented in Broadcasting Notice of Public Hearing
CRTC 2007‑12.
LISTNUM
1 \l 18 Some
applications are competing technically for the use of the same frequencies.
LISTNUM
1 \l 19 We
will then review an application by the Community Media Education Society for a
licence to operate a community programming television station in certain areas
of British Columbia and Alberta.
LISTNUM
1 \l 110 Finally,
we will examine two applications by Jim Pattison Broadcast Group Limited. The
first application is to acquire the assets of CKIZ‑FM in Vernon and its
transmitter from Rogers Broadcasting Limited, and the second is to acquire the
assets of CIGV‑FM Penticton and its transmitters from Great Valleys Radio
Limited.
LISTNUM
1 \l 111 I
will now invite the Hearing Secretary, Ms Ventura, to explain the procedures we
will be following.
LISTNUM
1 \l 112 Ms
Venture.
LISTNUM
1 \l 113 THE
SECRETARY: Thank you, Madam Chair.
LISTNUM
1 \l 114 Before
beginning, I would like to go over a few housekeeping matters to ensure the
proper conduct of the hearing.
LISTNUM 1 \l 115 Le
service d'interprétation simultaneé est disponible durant cette audience. Vous pouvez vous procurer un récepteur auprès
du technien à l'arrière de la salle.
L'interprétation anglaise se trouve au canal 1 et l'interprétation
française au canal 2.
LISTNUM
1 \l 116 When
you are in the hearing room, we would ask that you please turn off your cell
phones, beepers, BlackBerries as they are an unwelcomed distraction and they
cause interference on the internal communication system used by our
translators. We would appreciate your
cooperation in this regard throughout the hearing.
LISTNUM
1 \l 117 We
expect the hearing to take approximately four days, starting today and ending
on Friday. Starting tomorrow, we will
begin each morning at 8:30 a.m. We will
take an hour for lunch and a break in the morning and in the afternoon. We will let you know of any schedule changes
as they may occur.
LISTNUM
1 \l 118 The
North Ballroom will serve as the examination room where you can examine the
public files for the applications being considered at this hearing.
LISTNUM
1 \l 119 As
indicated in the agenda, the telephone number of the examination room is 250‑860‑8056.
LISTNUM
1 \l 120 There
is a verbatim transcript of this hearing being taken by the court reporter
sitting at the table to my left. If you
have any questions on how to obtain all or part of this transcript, please
approach the court reporter during a break.
Please note that the full transcript will be made available on the
Commission's website shortly after the conclusion of the hearing.
LISTNUM
1 \l 121 For
the record, we wish to inform you that the Applicant, Corus Radio Company, has
submitted an updated market research study which will be added to the public
examination file of its application.
Copies are available in the examination room.
LISTNUM
1 \l 122 In
addition, please note that the Commission published the application by Touch
Canada Broadcasting as an English‑language FM commercial religious radio
programming undertaking, when in fact the proposed service should have been
described as an English‑language FM commercial specialty radio
programming undertaking, proposing a contemporary gospel music service with 95
per cent of its weekly total music drawn from subcategory 35, non‑classical
religious.
LISTNUM
1 \l 123 Now,
Madam Chair, we will proceed with item 1 on the agenda, which is an application
by Vista Radio Limited for a licence to operate an English‑language
commercial radio programming undertaking in Kelowna, British Columbia.
LISTNUM
1 \l 124 The
new station will operate on frequency 96.1, channel 241C, with an average
effective radiated power of 19,900 watts, maximum effective radiated power of
50,000 watts, antenna height of 506 metres.
LISTNUM
1 \l 125 Appearing
for the applicant is Ms Margot Micallef.
Please introduce your colleagues, and you will then have 20 minutes for
your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM
1 \l 126 MS
MICALLEF: Thank you, good morning.
LISTNUM
1 \l 127 I
am Margot Micallef, Chair and CEO of Vista Radio Limited and a founding
shareholder of the company.
LISTNUM
1 \l 128 To
my left is Paul Mann, Executive Vice‑President of Operations for
Vista. From 1995 to 2003, operating from
a head office in Kelowna, Paul held various executive positions with Standard
and the three previous owners and ultimately became Vice‑President and
General Manager of Standard Radio's Interior Division.
LISTNUM
1 \l 129 To
my immediate right is Glenn Hicks, Regional News Director for Vista Radio. After 20 years with the BBC and South African
television, Glenn came to our stations in 2004.
LISTNUM
1 \l 130 Beside
Glenn is Jason Mann, our Vice‑President of Programming and also a
founding shareholder. Jason was Director
of Programming for the B.C. Interior for Standard and its predecessors, also
headquartered in Kelowna.
LISTNUM
1 \l 131 Next
to Jason is John Yerxa, who has been researching Canadian radio since the mid‑80s.
LISTNUM
1 \l 132 Directly
behind Paul is Barb Fairclough, also a founding shareholder and out Controller
and Corporate Secretary. Prior to the
founding of Vista, she was Corporate Controller of Standard and its
predecessors' Interior division, again headquartered in Kelowna.
LISTNUM
1 \l 133 Beside
Barb is Ingrid Vaughan who is Director of Human Resources and Diversity for
Vista Radio.
LISTNUM
1 \l 134 As
you can see, the script calls for me to introduce another of our founders,
Bryan Edwards. Bryan is Vice‑Chair
of vista. In 1990, Bryan was President
of Okanagan Skeena Group and I was a communications lawyer. Together we acquired for Okanagan Skeena an
interest in CKIQ, Kelowna. In 1996, OSG
then acquired control of Four Seasons Radio, the licensee of CKIQ and CKBL‑FM. Within two years Bryan and his team,
including Paul, Jason and Barb, brought that station to profitability.
LISTNUM
1 \l 135 Bryan
is here at the hotel and is available if we need him. However, he's not feeling well this morning,
so is in his room and, with your permission, will not join us on this panel.
LISTNUM
1 \l 136 Madam
Chair, we are now ready to begin our presentation.
LISTNUM
1 \l 137 From
our introduction you will appreciate that we are very excited to be here today
because of our very special connection to Kelowna. You won't be surprised when I tell you that
our founders have been involved in radio in Kelowna for an aggregate of over 40
years.
LISTNUM
1 \l 138 This
experience, along with the representation of our shareholders who are resident
in Kelowna, and our seven employees who make Kelowna their home, gives us
considerable knowledge of this region.
We have been studying this market for some time with a view to determine
its readiness for an additional radio station.
That is why we triggered a call for a new radio station in Kelowna. I.
LISTNUM
1 \l 139 I
would now like to ask Paul Mann to outline for you our assessment of why the
Kelowna radio market is ripe for new competition, as well as provide you with
an up‑to‑date economic analysis of this area.
LISTNUM
1 \l 140 MR.
PAUL MANN: Madam Chair and members of
the Commission, it is great to be back in Kelowna, applying for a radio licence
on behalf of Vista.
LISTNUM
1 \l 141 Shortly
after my departure from this community in 2003 to found Vista Radio, I felt
there was room for another commercial FM station offering more diversity and
competition. After reviewing the
economic data for this market, we are convinced there is room for at least one
more commercial FM.
LISTNUM
1 \l 142 The
Commission is likely aware that, on a population‑per‑station basis,
the Kelowna radio market is underserved.
How underserved? Well, if the
CRTC decided to licence only one more commercial station, Kelowna would still
have more residents‑per‑commercial station than cities such as
Charlottetown and Saint John in the Maritimes, Belleville‑Trenton and
Kingston in Ontario or nearby Kamloops here in British Columbia. And if you examine the retail sales figures
for these markets, they are 40 to 50 per cent lower than Kelowna.
LISTNUM
1 \l 143 BBM
data for Kelowna has recently shown a dramatic trend away from the existing
commercial market. According to the
spring BBM survey of 2007, Kelowna residents spend about 27 per cent of all
their listening time with out‑of‑market signals.
LISTNUM
1 \l 144 In
Vista's view, these results signify a serious lack of choice.
LISTNUM
1 \l 145 Just
prior to this hearing being gazetted, the Okanagan Economic Development
Commission, the EDC, released its 2007 economic profile.
LISTNUM
1 \l 146 A
quick review of the EDC's 2007 economic profile clearly indicates a rapidly
growing and diversified economy that is running strong. Not only are current conditions favourable,
but given the range of economic sectors active in the region, Kelowna's future
prospects are excellent.
LISTNUM
1 \l 147 According
to this latest report, more than $5 billion in major projects are now underway,
including significant expansion of the local UBC campus, new residential,
commercial and retail development.
LISTNUM
1 \l 148 Demand
for new and resale homes will remain strong in Kelowna over the next couple of
years.
LISTNUM
1 \l 149 Business
licences have increased 7 per cent from 2006.
LISTNUM
1 \l 150 Retail
sales were up another 10 per cent in 2006, compared to a 5.9 per cent increase
for the province overall.
LISTNUM
1 \l 151 Retail
sales in the Central Okanagan district outpaced provincial retail sales growth
in the ten‑year period from 1997 to 2007, increasing by 146 per cent
compared to 69 per cent for the province of British Columbia.
LISTNUM
1 \l 152 Today,
FP Markets estimates 2007 total retail sales in the Kelowna CA are $2.7
billion. Moreover, it anticipates they
will top $3 billion by 2009, and increase further to approximately $3.7 billion
by the year 2012.
LISTNUM
1 \l 153 Also,
let's not forget that Kelowna is the central shopping hub of a trading area now
encompassing up to a half million people.
LISTNUM
1 \l 154 The
CA population itself has increased by over 10 per cent in the past five years,
making Kelowna one of the fastest growing census areas in Canada. According to FP Markets (2007), Kelowna's
population growth will continue at double the Canadian average growth rate from
2007 through 2012.
LISTNUM
1 \l 155 In
view of the economic strength of this region and the lack of choice on the
local radio dial, we submit there is now room for at least one more commercial
FM station.
LISTNUM
1 \l 156 In
2006, once we determined that Kelowna could support another FM competitor, we
commissioned Banister Research to work with John Yerxa in determining what the
best format opportunity is in Kelowna.
LISTNUM
1 \l 157 MR.
YERXA: Madam Chair and members of the
Commission, let me explain how we conduct our research.
LISTNUM
1 \l 158 First,
we never select just one or two formats to test. We usually present up to six formats to a
random sample of 400 local residents 18 plus years of age.
LISTNUM
1 \l 159 Second,
in a small or medium market like Kelowna, we always test mainstream
formats. Wherever a limited number of
commercial signals exist, it does not make sense for us to propose a niche
format if a significant segment of the population is not being served.
LISTNUM
1 \l 160 Third,
when presenting a group of mainstream formats, we not only test their
popularity, but, more importantly, their availability. After all, simply testing popularity by
itself does not identify whether a music hole exists for a particular
format. Therefore, our technique enables
us to identify the existence and size of any music holes, thereby allowing us
to create a pecking order of formats, should the first choice ever be taken.
LISTNUM
1 \l 161 Using
this approach, Banister identified two very good format opportunities in
Kelowna: Classic Hits and Country.
LISTNUM
1 \l 162 Classic
Hits exhibited the highest popularity of all six mainstream formats tested and
was also perceived to be fairly difficult to find on the local FM dial.
LISTNUM
1 \l 163 However,
Country emerged as the number one option, because, apart from its relatively
high popularity, it filled the largest format hole on the local radio dial.
LISTNUM
1 \l 164 MS
MICALLEF: We were certain that Country
was a good choice since no local station provided that format and Pattison
Broadcasting had been clear in its conversion application that it would stay
the course with its existing format.
LISTNUM
1 \l 165 But
in mid‑August, they completed the conversion of CKOV to the FM band and
launched it as a Country station.
LISTNUM
1 \l 166 In
a way, this was a compliment to our research.
We had identified the largest music hole and Pattison had seen the clear
opportunity.
LISTNUM
1 \l 167 Format
changes by incumbents are not new to us.
In fact, we faced this very issue in Grande Prairie when just weeks
before our launch of CFRI‑FM, an incumbent switched its format to the one
that we had identified in our application.
LISTNUM
1 \l 168 So
just as we did in Grande Prairie, we returned to our research in Kelowna.
LISTNUM
1 \l 169 On
page 5 of the research submitted with the application, Banister had identified
Classic Hits as:
"...a strong second choice
format, given its high popularity and the fact that it is also perceived to be
relatively difficult to find on the local FM dial."
LISTNUM
1 \l 170 We
studied our application and the market and determined that adjusting our format
to the alternative identified by Banister would have a negligible impact upon
our business plan. After all, the size
of the hole for Classic Hits had been second only to Country, while the format
itself was even more popular than Country.
LISTNUM
1 \l 171 We
realize that a key question before the Commission this morning is whether the
opportunity for Classic Hits is still as significant today as it was back in
2006.
LISTNUM
1 \l 172 Our
answer is a resounding yes, especially in light of the programming changes that
have recently taken place in the Kelowna market.
LISTNUM
1 \l 173 MR.
JASON MANN: Madam Chair and members of
the Commission, less than two weeks ago I completed an extensive two‑week
BDS monitor of the Kelowna radio market, and compared it to my previous two‑week
analysis taken in June of 2006 when we submitted our application.
LISTNUM
1 \l 174 The
results show that since 2006, three incumbent FM stations in Kelowna have
substantially reduced their 80s music, a core decade for Classic Hits stations,
while considerably increasing their spins from 2000 forward.
LISTNUM
1 \l 175 With
CKFR having just abandoned Oldies, and with CKOV now taking Country, this means
there is no local station focusing its music on the 70s or 80s.
LISTNUM
1 \l 176 Even
CKLZ has dramatically reduced the amount of Classic Rock it plays in favour of
Newer Rock. In fact, the number of 80s
spins on both CKLZ and CILK has dropped by more than 50 per cent on each
station since June of 2006.
LISTNUM
1 \l 177 Our
monitor, coupled with these recent format changes, lead us to conclude that the
opportunity for Classic Hits has increased in this market because there is no
station playing rock‑based Classic Hits such as the one we propose.
LISTNUM
1 \l 178 We
would be pleased to provide further details during the question period, if the
Commission so desires.
LISTNUM
1 \l 179 From
a programming perspective, we must remember that 44 per cent of the Kelowna
population is 45 years of age or older.
LISTNUM
1 \l 180 Therefore,
in line with the Classic Hits audience profile identified in the research,
Vista will be presenting a Classic Hits format primarily geared towards a 45
plus listening audience. In fact, our
core target will be 45‑54 years of age, leaning more male.
LISTNUM
1 \l 181 Given
that three out of four of the incumbent FMs ‑‑ CILK, CHSU and
CKOV ‑‑ are now primarily targeted at women, our Classic Hits
station will position itself between those stations and CKLZ, which now devotes
over half of its music to the current decade and a combined three‑quarters
of its total spins to the 1990 and 2000 decades.
LISTNUM
1 \l 182 Classic
Hits 96.1 will focus on the 70s and 80s, with an emphasis on rock‑based
hits, reintroducing many songs that are not being aired locally in any
significant numbers.
LISTNUM
1 \l 183 Specifically
Classic Hits 96.1 will play a mixture that is approximately 35 per cent music
from the 70s with artists like Trooper, April Wine, The Eagles, Journey, and
Super Tramp; 40 per cent from the 80s with artists like Doug and the Slugs,
Loverboy, The Police and Foreigner; 10 per cent from the 90s with artists like
the Tragically Hip, Colin James and Alanis Morissette; and 15 per cent current
compatible music including emerging Canadian artists likely Liam Titcombe, Rex
Goudie, Brian Melo and Jeremy Fisher.
LISTNUM
1 \l 184 There
will be very little song duplication between Classic Hits 96.1 and the incumbents
because, while some of the artists played on our station might appear
elsewhere, the tracks we will play will not.
LISTNUM
1 \l 185 We
have committed to 40 per cent CanCon. In
order to do this, we will present newer Canadian artists who are compatible
with the overall sound of the station.
The insertion of more up‑to‑date Canadian acts will add
variety and freshness to our format without violating the overall premise of
Classic Hits 96.1. This commitment will
give us the opportunity to put the spotlight on emerging, local, regional, B.C.
and Canadian artists. We are proud of
our station's support for a Campbell River band called Mr. Completely. We just discovered a new artist from
Vancouver Island whose name is Justin Hewitt, and we hope that you will be
hearing lots of them in the future.
LISTNUM
1 \l 186 MR.
HICKS: Madam Chair and Commissioners, as
is consistent with Vista's philosophy, News and Spoken Word programming will
also be a key component of our station.
LISTNUM
1 \l 187 Our
intention is to establish Classic Hits 96.1 as a significant source for local
and regional news with sports coverage with over six hours each week. Vista has made its news mandate across its
entire family of stations to produce on average 80 per cent local audio content
in all newscasts. We will bring the same
approach to Classic Hits 96.1. To do
this, we will employ three full‑time and one part‑time news staff.
LISTNUM
1 \l 188 We
will broadcast a number of structured spoken word features each week,
encompassing regular weather and road conditions, community service
announcements, ski and marine reports, entertainment and community events, as
well as specialty information specifically designed for the Kelowna region.
LISTNUM
1 \l 189 The
station will be lively, entertaining and interactive. We most recently demonstrated this approach
to community‑based radio when we entered Grande Prairie. We invited representatives of charities,
school organizations, community programs, amateur sports and cultural groups,
as well as elected officials, to come on the air in morning drive and
throughout the schedule. To Vista, this
is an everyday practice, but to the people of Grande Prairie, this was a whole
new kind of radio.
LISTNUM
1 \l 190 In
addition, we have approached the Westbank First Nation, right across the lake
here, to develop a new feature, and their reaction was enthusiastic. Each week we will provide cultural and
community news from the band and will broadcast it in various time periods
throughout the day and the week, including both morning and afternoon drive.
LISTNUM
1 \l 191 MS
VAUGHAN: Madam Chair and members of the
Commission, Vista's HR strategy is in a continual state of renewal and re‑evaluation
as we continue the development of framing and adapting our processes to remain
faithful to our core values, as we develop and enhance existing training
opportunities for Vista employees, and as we demonstrate our strong commitment
to increasing diversity in all our markets.
LISTNUM
1 \l 192 Given
that Vista has entered new markets primarily through acquisition, we have had a
greater challenge in shaping a diverse work place. To address this challenge and to demonstrate
our commitment, we have recently researched and produced a comprehensive three‑year
diversity plan that addresses how we intend to grow and maintain a diverse work
place culture. This document will
empower our area managers to fulfil our commitment to work place diversity.
LISTNUM
1 \l 193 We
are also committed to building a dynamic, supportive and cohesive corporate
culture, which empowers our employees to be the best they can be through
training, performance evaluation, feedback and mentoring.
LISTNUM
1 \l 194 Further,
we have implemented an employee share purchase program and are proud to say
that 100 per cent of our senior management and 25 per cent of our general
employee population are now shareholders of our company.
LISTNUM
1 \l 195 If
licensed in Kelowna, these initiatives and those still to come will build an
equally dynamic corporate culture committed to strong local presence, as well
as a barrier‑free respectful work place that offers equal opportunity and
reflects the diversity of Kelowna. From
its first day of operation, our proposed station will employ 16 people,
including on‑air announcers, news and sports reporters, creative writers,
sales people, administrative and promotional personnel.
LISTNUM
1 \l 196 MR.
PAUL MANN: The incumbents in Kelowna are
well positioned to face new competition.
The research indicated that a Country station would receive a 14.5 per
cent share of hours tuned in its first year of operations. When we looked at the demand for Classic
Hits, we concluded that our proposed Classic Hits station would meet this
threshold. Our recent music monitor
confirmed this.
LISTNUM
1 \l 197 The
research indicated that fully one‑third of the core listeners to Classic
Hits 96.1 would be drawn from out‑of‑market stations and those
listeners who currently do not have a favourite station.
LISTNUM
1 \l 198 Our
2006 research indicated that the remaining two‑thirds of the listeners
would come primarily, in relatively equal proportion, from four local stations,
without impacting any one station head on.
LISTNUM
1 \l 199 With
the format changes in the market, there are now three FM stations focusing on
women, while another focuses on younger men.
There is a significant opportunity to serve a 45‑plus male group
who do not really have a station that serves them directly.
LISTNUM
1 \l 1100 In
our supplementary brief, we estimated that upon our new station's arrival, the
annual radio revenue would be approximately $10.5 million. According to the 2006 TRAM report, the market
had already reached that number by the end of 2006. Given the rate of growth of retail sales, we
can expect that that market will have grown by about $1.5 million by our first
year of operations, and this does not include the stimulative effect of a new
station.
LISTNUM
1 \l 1101 We
further estimated that $1 million of our year one revenues would come from the
incumbents. While this number might seem
high, it represents just 9.6 per cent of Kelowna's 2006 annual revenue and only
8 per cent of our projected year one market revenues. This revenue will come at no significant
detriment to any one station.
LISTNUM
1 \l 1102 Astral
Media and Jim Pattison Broadcasting are well positioned to deal with a new
entrant.
LISTNUM
1 \l 1103 Pattison
has been able to convert its AM station to the FM band, and it could be
expected that Pattison will increase its revenues.
LISTNUM
1 \l 1104 Both
companies now have the possibility of combination selling in both Kelowna and
the Central Okanagan marketplace, giving them access to expanded revenues.
LISTNUM
1 \l 1105 These
are big consolidated companies with synergies from their national and regional
reach, enabling them to further drive sales and save expenses.
LISTNUM
1 \l 1106 With
our experience in markets where we compete with these operators and our
association with Kelowna, we are certain that renewed competition in Kelowna
will increase tuning and spur advertising growth.
LISTNUM
1 \l 1107 MS
MICALLEF: Madam Chair and members of the
Commission, Kelowna's economy is one of the most dynamic in B.C. and its
residents are eager for new radio choices.
LISTNUM
1 \l 1108 Our
business plan is robust and credible. We
have picked the largest format opportunity and have the resources necessary to
provide a strong competitor to the incumbents.
LISTNUM
1 \l 1109 Vista
will restore competition in advertising and diversity of voice to the Kelowna
market.
LISTNUM
1 \l 1110 Through
a strong emphasis on News and Spoken Word programming, we will bring a new and
independent editorial voice to Kelowna.
LISTNUM
1 \l 1111 In
addition to a $700,000 CCD commitment, we are promising 40 per cent CanCon.
LISTNUM
1 \l 1112 We
are committed to creating a fair and balanced work place with a significant
local presence.
LISTNUM
1 \l 1113 Vista
is no longer the new kid on the block.
We have established ourselves as high‑quality operators, raising
the bar in the markets we serve by investment of financial and human
resources. In all our markets, we have
restored and increased local service. As
a result, we have returned the stations we have acquired in challenging markets
to profitability.
LISTNUM
1 \l 1114 This
application will contribute significantly to the objectives of the Broadcasting
Act, but it also truly reflects the commitment Vista Radio brings to all of its
stations and the communities we are licensed to serve.
LISTNUM
1 \l 1115 I
wish to thank the Commission for this opportunity to explain our proposal, and
we would welcome your questions at this time.
Thank you.
LISTNUM
1 \l 1116 THE
CHAIRPERSON: Thank you, Ms Micallef, and
to your team. Good morning once again
and welcome. This is all your fault. No, just kidding.
LISTNUM
1 \l 1117 I'm
going to begin the questioning this morning with the most obvious, and that is,
of course, your request for change in format from Country to Classic Hits and
the commitments that you made in your application as they relate to your
business plan.
LISTNUM
1 \l 1118 I
know you say both in your letter, in your reply comments and this morning, that
it has a negligible impact on your business plan, but I just want to go through
some of the details, how the change in format will in fact have that impact.
LISTNUM
1 \l 1119 You
did commit this morning to 40 per cent Canadian content and that is during each
broadcast week and between 6:00 a.m. and 6:00 p.m. Monday to Friday.
LISTNUM
1 \l 1120 MS
MICALLEF: Yes, we did.
LISTNUM
1 \l 1121 THE
CHAIRPERSON: And that you will accept as
a condition of licence?
LISTNUM
1 \l 1122 MS
MICALLEF: Yes, we will.
LISTNUM
1 \l 1123 THE
CHAIRPERSON: Will the station's
programming continue to be 100 per cent local?
LISTNUM
1 \l 1124 MS
MICALLEF: Yes, it will.
LISTNUM
1 \l 1125 THE
CHAIRPERSON: Your CCD contribution, you
committed to an over and above contribution of $700,00 over seven years. Is that still the case?
LISTNUM
1 \l 1126 MS
MICALLEF: Yes, it is.
LISTNUM
1 \l 1127 THE
CHAIRPERSON: Just while we are on CCD,
you say in your application that you will make the basic annual CCD
contributions in line with the new contribution system put in place by the
Commission in its Commercial Radio Policy of 2006 and that that $700,000 is the
so‑called over and above, but in your financial projections on the CCD
line, I just see $700,000 each year as opposed to ‑‑ I mean
$100,000, plus the base contribution.
LISTNUM
1 \l 1128 MS
MICALLEF: That's because our application
was filed before the new rules.
LISTNUM
1 \l 1129 THE
CHAIRPERSON: So, can you file revised
financial projections that show the base amount, plus $100,000 per year?
LISTNUM
1 \l 1130 MS
MICALLEF: Yes, we will.
LISTNUM
1 \l 1131 THE
CHAIRPERSON: Is it possible for you to
file those before the end of Phase I of this hearing?
LISTNUM
1 \l 1132 MS
MICALLEF: Yes, it is.
LISTNUM
1 \l 1133 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 1134 In
your reply to deficiencies dated July 20th, you detail your plan for the
airplay of emerging artists. You say
that you will feature musical selections by emerging artists four times per
day, seven days per week, and this would equate to approximately 2 per cent of
the musical selections aired in a broadcast week. Is that still your plan, given your change in
format?
LISTNUM
1 \l 1135 MS
MICALLEF: Yes, it is.
LISTNUM
1 \l 1136 THE
CHAIRPERSON: On page 14 of your
application you say that the Country format audience is known for its loyalty
and that this makes the format very attractive to advertisers.
LISTNUM
1 \l 1137 Would
you say the Classic Hits audience is more or less or equally as loyal and,
therefore, more, less or equally as attractive to advertisers?
LISTNUM
1 \l 1138 MS
MICALLEF: I would say that, firstly, the
loyalty would come to the station from the manner in which we play the music,
the manner in which we format and program the station.
LISTNUM
1 \l 1139 I
would also say that the Classic Hits listeners are attractive to advertisers
for other reasons. John, can I ask you
to comment on that?
LISTNUM
1 \l 1140 MR.
YERXA: The loyalty is something that we
take into account when determining the share.
For example, we noticed that with the Country listener, or with the
Country format, the popularity was lower than Classic Hits, but when we take our
ratios of conversion into account, we usually take anywhere from two‑thirds
to three‑quarters of their core percentage to determine share and, given
their loyalty, they are right at the high end.
We take the full three‑quarters which is what converted into about
a 14 and a quarter to a 14 and a half share.
Whereas, with the Classic Hits, we took about two‑thirds of that,
given the availability of the market.
LISTNUM
1 \l 1141 Having
said that, it again is well known the loyalty of Country, mainly because it is
such a distinct format. However, the
Classic Hits listener, the audience profile, is a little bit younger, which
would mean that you may not have the degree of loyalty, but the core audience
profile is perhaps a little bit more appealing to the advertiser out there. So, one kind of cancels out the other. You can monetize that much more easily.
LISTNUM
1 \l 1142 THE
CHAIRPERSON: Is that what led you to
still maintain that you will be able to achieve a 14 and a half ‑‑
LISTNUM
1 \l 1143 MR.
YERXA: Right. In other words, because we took, say, two‑thirds
of 22, which is exactly 14 and a half actually.
So, that is how we estimated that there would be no real material impact
on the business plan, that it could stand.
LISTNUM
1 \l 1144 THE
CHAIRPERSON: And in terms of the target
demographic group, however, Country does tend to skew a bit older. You did talk about what your core demographic
group is for Classic Hits and it seems to be somewhat similar to that of
Country, and if Vice‑Chairman Arpin were here, he would ask you what is
the median age of your typical ‑‑
LISTNUM
1 \l 1145 MR.
YERXA: The Country target is 55‑plus
years of age. The Classic Hits target
here in this market for us, given the demography, is 45‑54. So, it is younger, and that is what I
mean. You may not have the degree of
loyalty, but the ability to monetize that is greater, I think, for most
advertisers. So it kind of balances out.
LISTNUM
1 \l 1146 You
want the median age. I would assume
probably late forties, say 49.
LISTNUM
1 \l 1147 THE
CHAIRPERSON: Skewing male?
LISTNUM
1 \l 1148 MR.
YERXA: Yes, in this market, with our
research, about 55 per cent male.
LISTNUM
1 \l 1149 THE
CHAIRPERSON: And you did say in your
opening statement today that you didn't feel that there would be an impact on
the incumbents, given the formats that currently exist in the market. But now that you have said that this does
skew younger than Country, are you saying that this will not have an impact on
the adult contemporary station operated by Astral in this market?
LISTNUM
1 \l 1150 MR.
YERXA: Exactly, because first of all we
looked at two things. We looked at the
2006 research, which indicated that the impact would be fairly evenly spread
amongst four stations, no station directly being hit.
LISTNUM
1 \l 1151 We
then realized, after the duplication analysis, that even though the target had
moved younger, not dramatically, in other words from 55‑plus to 45‑plus,
the one station in the market that was a Classic Rock station has gone very
heavily, I think three‑quarters of their repertoire now ‑‑
and Jason can speak to this, to the duplication analysis ‑‑ is
now 1990‑2000 decade. You have
three stations now that are essentially targeted at women.
LISTNUM
1 \l 1152 You
now have a station that was covering Classic Rock that has now moved lower and
is much more current based. So, there is
this huge hole now for men, 35‑45‑plus years of age.
LISTNUM
1 \l 1153 THE
CHAIRPERSON: Do you have anything you
would like to add?
LISTNUM
1 \l 1154 MR.
JASON MANN: It depends on how many more
details you would like to propose.
LISTNUM
1 \l 1155 THE
CHAIRPERSON: All right. Obviously, the impact that you will have on
incumbents leads to the revenue that you think you will generate from those
existing radio stations, and in your original application, you projected a
level of revenue to come from those stations at 65 per cent, which some would
say is rather high and that it is a significant impact on incumbents.
LISTNUM
1 \l 1156 How
did you arrive at 65 per cent and is that still the case now that you are
requesting a change in format to Classic Hits?
LISTNUM
1 \l 1157 MS
MICALLEF: I'm going to ask Paul to
respond to that.
LISTNUM
1 \l 1158 MR.
PAUL MANN: As I stated in the oral
presentation this morning, that translated to about 9.6 per cent of what we
believed to be the annual revenue at the time on radio in Kelowna. Looking of course with the TRAM information
that has subsequently come to the front, knowing it was in fact about $10.5
million in fiscal 2006, our comment now would be if we look at realistically a
2009 fiscal year for a new licence starting up in this market, probably a $12
million market or about 8 per cent of the revenue, based on $1 million.
LISTNUM
1 \l 1159 Do
I believe that the first $1 million will come from the existing market and the
incumbents? Yes, we stand on that. I guess we could fudge that answer, but on
the street, it is the truth. Will it be
the same in year two? Definitely
not. But the early adopters and the
successful business and entrepreneurs in any market, the first 50, 60 clients
are going to be the big guys who want to be with the hot new brand. We have seen that in other markets where we
operate, including Grande Prairie where we recently launched. We are opening a new business now, but the
first $1 million didn't come from people who had never been on radio.
LISTNUM
1 \l 1160 I
think if you were to ask year two, will it look the same? No. It
will probably drop by $400,000 or $500,000 as the market grows and as we attack
new clients.
LISTNUM
1 \l 1161 THE
CHAIRPERSON: I just want to say, Mr.
Mann, that despite the fact that tomorrow is Halloween we don't like
fudge. So we are not fudging.
LISTNUM
1 \l 1162 Because
of this great impact that you will be making or ‑‑ let me
rephrase that ‑‑ because of the impact, because there is
always an impact and qualifying that impact can be a skill, how will your
station differentiate itself in the market to attract this level of advertisers
and of listeners?
LISTNUM
1 \l 1163 MS
MICALLEF: We actually have some very
interesting ideas on the programming side, and I will ask Jason if he could
speak to that.
LISTNUM
1 \l 1164 MR.
JASON MANN: I think first and foremost
we are talking format and the differences between the existing formats as they
stand today and what we propose in our application.
LISTNUM
1 \l 1165 All
things being equal, our station essentially would come into the marketplace and
have an inverse relationship with what is already here. While we are proposing approximately 75 per
cent of our music from the 70s and 80s, 75 per cent of the music currently
being played in the marketplace by the three mainstream FMs, their incumbent
here, is 75 per cent. So, that is music
from the 90s and 2000s. So it is almost
a perfectly complimentary fit.
LISTNUM
1 \l 1166 So,
starting there, that would be I guess the biggest point of differentiation.
LISTNUM
1 \l 1167 Just
the style in bringing a station to the marketplace and with all of our stations
is to be very engaged in the community, be leadership oriented in the
community, taking on community events and identifying areas where we can help
improve the fabric of the society, where we can help in exposing new and
Canadian emerging artists.
LISTNUM
1 \l 1168 I
don't know if that totally differentiates us from any other panellists or any
other existing station, but it is certainly our deep commitment. We do it well and we do it with vigour.
LISTNUM
1 \l 1169 THE
CHAIRPERSON: You did say in your oral
presentation that while there may be some overlap in the artists that will be
played on the radio stations, the difference will be the decade of music?
LISTNUM
1 \l 1170 MR.
JASON MANN: That is right. In fact, I have a sample playlist that I can
file, if you wanted to see, that gives you a sense a couple of hours in each
day part. I can file that today.
LISTNUM
1 \l 1171 THE
CHAIRPERSON: That will be
appreciated. Thank you very much.
LISTNUM
1 \l 1172 MR.
JASON MANN: Sure. We also have specific programs that are
interesting. The Stars of Tomorrow
program is one that I am pretty excited about.
LISTNUM
1 \l 1173 I
would say that Vista is kind of a forerunner, in fact, in supporting the
concept of emerging artists.
LISTNUM
1 \l 1174 This
application was filed a year and a half ago, and really there was no premise or
definition put around what an emerging artist is or what it would look
like. We just took an approach where we
probably play a lot of emerging artists and a lot of music from emerging
artists on a lot of our stations, but what can we do to schedule them in and to
really make a big deal about it. With
the Stars of Tomorrow program that we are proposing that would air four times
through the day in various day parts, including prime time, we would in fact
marry the concept of exposing emerging artists with, I guess, an element that
harkens back to the day of mosaic programming, where we would introduce some
spoken word around that as well. I think
that would be useful, inasmuch that we would be helping to establish and help
to orient our audience with these unfamiliar names and sounds, thereby more
quickly forging a relationship between the two.
I think that is important.
LISTNUM
1 \l 1175 We
do a program on a number of our stations, here we would call it Organic
Tuneage. Formerly in the brief it was
called Songwriters' Cafe, but essentially the same sort of level of commitment
to supporting emerging and local artists where we really open the doors and
say, what do you have, was this recorded in your basement, great, let's get it
on the air and see what it sounds like and get some response from the public.
LISTNUM
1 \l 1176 THE
CHAIRPERSON: How will you give emerging
artists that access to your station?
LISTNUM
1 \l 1177 MR.
JASON MANN: We promote it on the radio
station to start with, to try and attract local musicians. Because we have some stations elsewhere in
B.C., we will interlink and interfeed some of these tracks where they might be
appropriate on stations of similar format.
LISTNUM
1 \l 1178 Actually,
we have just entered into a one‑year agreement with B.C. Musicians
magazine where we have an agreement where we provide editorial content every
month. This is a one‑year
agreement currently, editorial content every month, which has our program
directors actually write articles and explain to early musicians how they can
best get their foot in the door to radio, what types of programs that each of
the different stations and different formats do to support emerging artists and
how to make contact with us.
LISTNUM
1 \l 1179 We
also have an advertising campaign running in the program. This year I believe through all of our CCD
commitments, through benefits and everything else, it is about $175,000 that we
will pay to organizations like FACTOR and Radio Starmaker. So, we are helping those musicians; we are
reaching out to them and saying, this money is available, and e‑mail me,
call me, let me know if you are interested and I will help you find a way to
get to that money.
LISTNUM
1 \l 1180 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 1181 Given
everything that we have discussed so far, your original application, the
financial projections anticipated that you would achieve positive feedback of
6.6 per cent by year two, increasing to 17.9 per cent by year seven, do you
still think that is achievable with the change in format?
LISTNUM
1 \l 1182 MS
MICALLEF: Yes, we do, and Paul can
provide some details.
LISTNUM
1 \l 1183 MR.
PAUL MANN: Save and except for the minor
adjustment that would come by adding the year‑over‑year regular CCD
numbers in the adjusted financial statement, we are very comfortable with the
operating side and the revenue side of it in that; yes, we are.
LISTNUM
1 \l 1184 THE
CHAIRPERSON: I would like to move on now
to your programming commitments.
LISTNUM
1 \l 1185 On
page 19 of your application, you say that the Country audience is interested in
greater amounts of spoken word programming, particularly local news and
information, and as such you estimate that you will present over ten hours of
spoken word content and a further six hours and 45 minutes of special music
foreground programming.
LISTNUM
1 \l 1186 Will
there be any changes to that amount of spoken word programming?
LISTNUM
1 \l 1187 MS
MICALLEF: No, there won't be. We can provide some additional details to
you.
LISTNUM
1 \l 1188 Glenn.
LISTNUM
1 \l 1189 MR.
HICKS: That has no bearing at all. The Vista Group of stations has a very, very
clear mandate when it comes to local radio news. We have really pushed this massively in the
last couple of years with all our stations.
It is all about local, local, local.
There is a mandated 80 per cent local audio news content.
LISTNUM
1 \l 1190 As
far as we are concerned, we would have driven the news agenda in terms of its
local community news base regardless of what format it was. So it has no bearing.
LISTNUM
1 \l 1191 THE
CHAIRPERSON: How much of the ten hours
of spoken word content is strictly news and how much is surveillance material?
LISTNUM
1 \l 1192 MR.
HICKS: Six hours.
LISTNUM
1 \l 1193 THE
CHAIRPERSON: Six hours is strictly news?
LISTNUM
1 \l 1194 MR.
HICKS: Strictly news, and that would
include, of course, local news and local sports. We regard those all as a package as
news. So, over and above that, you have
your weathers and your traffics and your special spoken word featurettes, if
you like.
LISTNUM
1 \l 1195 THE
CHAIRPERSON: You did say in your opening
statement that 80 per cent of the news items would be local, the balance of
course being national and international.
LISTNUM
1 \l 1196 MR.
HICKS: That is right. You can speak to all of our news
directors. That is a very powerful
mandate that we have in place at every one of our nations. Four out of every five stories in every
newscast has to be local.
LISTNUM
1 \l 1197 THE
CHAIRPERSON: Do you anticipate any
synergies with your other radio operations?
LISTNUM
1 \l 1198 MR.
HICKS: Yes, very much so. It wouldn't necessarily be cost saving
synergies, but there would be what I call enhancement of enrichment synergies,
certainly. As a regional news director,
I go around all of our operations and I make sure that people are getting the
right sort of training, people are sharing the right sort of ideas, the sort of
quality community local radio follow and angle ideas that every regional small
community newsroom should have, making sure people come up through the ranks.
LISTNUM
1 \l 1199 We
have a great reputation of taking people in from BCIT or whatever, and as those
people flourish and grow, we move them out; we spread the word about our
colleagues throughout the group.
LISTNUM
1 \l 1200 So,
yes, synergies, in terms of growth, but not particularly in terms of story
sharing because, again, we drive that point home in all of our individual local
newsrooms, that guys, focus on your local area.
There is no point in stealing a story from Smithers if you are in Nelson
and vice versa unless, of course, we can think of a logical common link.
LISTNUM
1 \l 1201 THE
CHAIRPERSON: Your CCD commitments, do
you anticipate any changes to the organizations that will be receiving funding
as a result of your format change?
LISTNUM
1 \l 1202 MS
MICALLEF: No, we don't.
LISTNUM
1 \l 1203 THE
CHAIRPERSON: You made quite a case this
morning for saying that we should licence one commercial FM radio station in
Kelowna. How be two? Can the market sustain two?
LISTNUM
1 \l 1204 MR.
PAUL MANN: I think our portion would be
we wouldn't be afraid to stand alone in this market and succeed if two licences
were granted.
LISTNUM
1 \l 1205 THE
CHAIRPERSON: And that is for two
commercial FM?
LISTNUM
1 \l 1206 MR.
PAUL MANN: Yes.
LISTNUM
1 \l 1207 THE
CHAIRPERSON: Would you have any issue if
we were to licence one commercial FM plus one of the specialty radio stations
that have a better part of these proceedings, say one of the three specialty
formats? There are three specialty
formats.
LISTNUM
1 \l 1208 MR.
PAUL MANN: We would have no problem in
any of the specialties being licensed.
LISTNUM
1 \l 1209 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 1210 Do
my colleagues have any additional questions.
LISTNUM
1 \l 1211 COMMISSIONER
MORIN: Yes.
LISTNUM
1 \l 1212 THE
CHAIRPERSON: Commissioner Morin.
LISTNUM
1 \l 1213 COMMISSIONER
MORIN: On page 12 you are talking about
specialty information specifically designed for the Kelowna region. What do you mean by that? On page 12.
LISTNUM
1 \l 1214 MS
MICALLEF: Of our supplementary brief?
LISTNUM
1 \l 1215 THE
CHAIRPERSON: Yes. It is in your oral presentation.
LISTNUM
1 \l 1216 MS
MICALLEF: Oh, I am sorry.
LISTNUM
1 \l 1217 You
are looking for details of what that programming would look like?
LISTNUM
1 \l 1218 COMMISSIONER
MORIN: Yes.
LISTNUM
1 \l 1219 MS
MICALLEF: Jason, you can outline
that. We have also provided you a
summary sheet in your materials that outlines the programming ideas that we
have.
LISTNUM
1 \l 1220 MR.
HICKS: Perhaps, Margot, I can just move
in here.
LISTNUM
1 \l 1221 We
have a matrix programming document for you.
For example, we mentioned the marine situation, we mentioned the ski
reports, the outdoor recreational type of reports.
LISTNUM
1 \l 1222 Really,
we are always looking in the spoken word market that we are in to think of
featurettes that are specifically directed for the area. So, again, I would think of specific Chamber
of Commerce, tourism type of reports, in this sort of environment, the
construction industry, small business reports, things like that.
LISTNUM
1 \l 1223 Jason.
LISTNUM
1 \l 1224 MR.
JASON MANN: I think what it is really
meant to say there is it is underscoring the fact that we are not going to pad
our spoken word content with national generic syndication features. This is about creating local content.
LISTNUM
1 \l 1225 COMMISSIONER
MORIN: Thank you.
LISTNUM
1 \l 1226 THE
CHAIRPERSON: Legal counsel.
LISTNUM
1 \l 1227 MS
LEHOUX: Just one brief question.
LISTNUM
1 \l 1228 In
your oral presentation you have attached at least five documents. I know you just spoke to the matrix one, but
for the public record I would like you to describe them because they will be
available in the public exam room and they will also be put on the public
record, but please describe them.
LISTNUM
1 \l 1229 MS
MICALLEF: Two of the sheets relate to
population matrix, the CA population as well as the number of stations for
various markets, which we spoke to in our oral presentation. One of them is the BBS monitor that we
referred to in our oral presentation that updated the formats in this market.
LISTNUM
1 \l 1230 The
other one is the spoken word programming matrix that we spoke to.
LISTNUM
1 \l 1231 The
last one is the samples of our feature programming, the changes from the
Country to the Classic Hits format.
LISTNUM
1 \l 1232 MS
LEHOUX: Thank you.
LISTNUM
1 \l 1233 THE
CHAIRPERSON: Ms Micallef, you have been
here before, so you know that this is your final two minutes to tell us why
your format is the best one for this market and why you are the best applicant
for this market.
LISTNUM
1 \l 1234 MS
MICALLEF: Thank you.
LISTNUM
1 \l 1235 There
are three reasons. The first is the
format hole that we have identified. We
have been very clear in our research and in our presentation that there is a
format hole in the 45 to 54‑year old male demographic that is not being
served in this market.
LISTNUM
1 \l 1236 There
are four incumbents in this market.
Three focus on the female audience and one focuses on the young male
audience.
LISTNUM
1 \l 1237 Of
the ten commercial applications that you have before you, only three of them
have selected a format which caters to the 45‑54‑year old male
demographic. Those are Vista, Sun
Country and the Northern Native Broadcasters.
LISTNUM
1 \l 1238 Of
these three applicants, Vista is the best capitalized. Vista offers double the CCD of the
others. Vista has committed to spend
more on programming. Vista's format has
the widest appeal to fill this format void with the least duplication in terms
of the music that is being played on the incumbent stations.
LISTNUM
1 \l 1239 Vista
is also a proven operator. We operate in
difficult markets with unique challenges.
In one case, prior to our acquisition, one of the stations had abandoned
the local community. In another, the
station was losing money and had been for a number of years. And in a third, the technical challenges that
that station faced made the signal inaudible in the very market that it was
serving.
LISTNUM
1 \l 1240 In
every instance Vista reconnected with the community, improved the level of
service to the local community, and returned those stations to profitability.
LISTNUM
1 \l 1241 We
did this by knowing the markets we serve and by galvanizing our listening
audience, much like we did in Kelowna.
You probably know that Vista garnered over 1,000 letters of support for
this application. The letters of support
supported Vista, supported a new entrant, and supported our County format. No other applicant was able to generate this
level of grassroots support, and for that we thank our supporters.
LISTNUM
1 \l 1242 While
we can't give them a Country format, we can certainly give them Vista and we
can certainly give them a new entrant into this market.
LISTNUM
1 \l 1243 The
last reason is our founding group's commitment to local content, to local radio
and to the local community. When we got
together, the five of us to agree and invest our money in a company that would
support radio broadcasting in western Canada, we did so with the commitment to
local radio. That has been our guiding
principle that has guided us in our operating decisions and framed our
culture. We promise that if licensed in
Kelowna, we will bring that same level of commitment to Kelowna and we will
continue to raise the performance bar for all of the stations that are here in
this market.
LISTNUM
1 \l 1244 Thank
you.
LISTNUM
1 \l 1245 THE
CHAIRPERSON: Thank you, Ms Micallef, and
to your team.
LISTNUM
1 \l 1246 Legal
counsel has another question.
LISTNUM
1 \l 1247 MS
LEHOUX: I would just like to confirm
your commitments that you will submit the sample playlist and also your revised
financial projections by the end of Phase I.
LISTNUM
1 \l 1248 MS
MICALLEF: Yes, we will.
LISTNUM
1 \l 1249 MS
LEHOUX: Thank you. Thank you, Madam Chair.
LISTNUM
1 \l 1250 THE
CHAIRPERSON: Madam Secretary.
LISTNUM
1 \l 1251 THE
SECRETARY: I would now ask Sun County
Cablevision Limited to come forward to the presentation table.
‑‑‑ Pause
LISTNUM
1 \l 1252 THE
SECRETARY: Please be seated. We will proceed with the next presentation.
LISTNUM
1 \l 1253 We
will now proceed with item 2, which is an application by Sun Country
Cablevision Limited for a licence to operate an English‑language FM
commercial radio programming undertaking in Kelowna British Columbia.
LISTNUM
1 \l 1254 The
new station would operate on frequency 96.3, channel 242B, with an average
effective radiated power of 7,100 watts, maximum effective radiated power of
20,000 watts, antenna height of minus 89 metres.
LISTNUM
1 \l 1255 Appearing
for the applicant is Mr. Ted Pound.
Please introduce your colleagues, and you will then have 20 minutes for
your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM
1 \l 1256 MR.
POUND: Thank you.
LISTNUM
1 \l 1257 Madam
Chair, members of the Commission, Commission staff, welcome to Kelowna. It is one of the most beautiful communities
in Canada in which to live, work and play.
We hope you will have an opportunity to visit a little bit of Kelowna
while you are here.
LISTNUM
1 \l 1258 My
name is Ted Pound and I am the President of Sun Country Cablevision. I am proud to introduce our Sun Country team.
LISTNUM
1 \l 1259 With
me today, seated to my left is Walter Gray, a director of Sun Country and a
life‑long resident of Kelowna.
Walter recently finished nine years as Mayor of this city and four years
as Alderman. Before that he started and
operated Four Seasons Radio here in Kelowna, which I also had the pleasure of
working for ten years as its Program Director and General Manager.
LISTNUM
1 \l 1260 Walter
is also known in Kelowna as the former President of the Chamber of Commerce and
an enthusiastic fundraiser for local causes.
This year as the volunteer fundraising chair, he helped raise $3.7
million for the Hospice House. He is
also proud of raising over $4 million for what is now the UBC Okanagan campus.
LISTNUM
1 \l 1261 To
Walter's left is Mr. Garry Barker, the President of Atlantic Media Institute, a
career college specializing in training for careers in radio and
television. Garry is augmenting the
research and programming expertise of our team.
LISTNUM
1 \l 1262 Beside
Garry is Judy Good Sky. She is the
Education and Employment Coordinator of the Westbank First Nation, and she has
served on many Kelowna boards and committees, from the arts to literacy to
chairing the local United Way campaign last year. Judy was the inaugural chair of the Okanagan
University College Board of Trustees.
She will head our local advisory committee.
LISTNUM
1 \l 1263 In
the second row we have Mike Hall, born in Kelowna and the Managing Director of
Sun Country. Under his direction, Sun
Country has won a number of Shuswap Business Excellence awards, including Best
Corporal Stewardship. He has been with
us since 1984.
LISTNUM
1 \l 1264 Beside
Mike is Kelly Sitts, a Senior Manager with McKay LLP accounting firm here in
Kelowna.
LISTNUM
1 \l 1265 Commissioners,
we are very excited to be here. We
believe in the importance of local radio and we believe in the future of
Kelowna.
LISTNUM
1 \l 1266 Sun
Country Cablevision is a small independent cable operator serving 7,000
subscribers in Salmon Arm, Enderby and Armstrong, all within Kelowna's greater
trading area. We have successfully
introduced digital cable, high definition television and digital telephone,
while earning accolades as Employer of the Year in Salmon Arm last year.
LISTNUM
1 \l 1267 We
believe Kelowna would benefit from a local, independent radio station. We are here to ask you to licence our
proposal to give the residents of Kelowna a distinctive new local FM station
with strong local ownership.
LISTNUM
1 \l 1268 Walter
is the visionary behind our application, and I will turn our presentation over
to him.
LISTNUM
1 \l 1269 MR.
GRAY: Thank you, Ted.
LISTNUM
1 \l 1270 Madam
Chair, members of the Commission, I appreciate that the CRTC has chosen to come
to my home town, Kelowna, for this hearing.
Our team is excited to have you consider our independent, locally owned
and operated FM radio proposal for Classic Rock 96.3.
LISTNUM
1 \l 1271 The
last time a new radio station was licensed in Kelowna was in 1994. Since then, our population has grown by
45,000 and the economy has expanded and diversified.
LISTNUM
1 \l 1272 There
are now five commercial radio stations serving Kelowna. While there are no obvious demographic gaps
in the services provided, there is evidence that today's stations are not
meeting local audience needs. More than
one‑quarter of radio listening in Kelowna is to stations other than the
commercial stations that originate here.
Overall radio listening has dropped by nearly 10 per cent in the last
two years alone. Garry Barker helped us
to determine how to repatriate the lost listeners with our new radio proposal.
LISTNUM
1 \l 1273 Garry.
LISTNUM
1 \l 1274 MR.
BARKER: Thank you, Walter. Good morning, Commissioners, bonjour.
LISTNUM
1 \l 1275 We
started our research by testing four mainstream formats that are unavailable in
the Kelowna radio market. The hands‑down
winner was Classic Rock. 72 per cent of
survey respondents said they would listen to a new station featuring Classic
Rock, and two‑thirds also told us having a new station that is locally
owned and managed was also important to them.
So we designed an application that provides the sound local audiences
want, which includes substantial local reflection through strong news and a
variety of regularly scheduled locally produced features.
LISTNUM
1 \l 1276 Classic
Rock is everybody's favourite guitar legends and super groups. It appeals to men and women ages 25 to
54. The Synovate survey research showed
the format appeals almost equally to both men and women in Kelowna.
LISTNUM
1 \l 1277 We
want Kelowna airwaves to rock with the sounds of familiar rock selections from
the 70s, 80s and 90s. That is the music
of Canadian icons such as Bryan Adams, Honeymoon Suite, Chilliwack, and foreign
acts from Led Zeppelin to The Eagles and the Rolling Stones.
LISTNUM
1 \l 1278 We
will complement our roster of classics by playing and promoting newer Canadian
artists who offer tunes with a Classic Rock essence like the Tragically Hip,
Rush, The Trews or Sam Roberts. And we will
play new music from enduring Canadian rock bands who keep on producing, like
Vancouver's Loverboy, which just released a new album.
LISTNUM
1 \l 1279 We
will keep a lookout for emerging artists that fit our musical format, and
especially local ones. We will play
selections from Ryan Donn's new CD, This Life, which is being released November
24th ‑‑ he is from Kelowna ‑‑ and tunes like
Last Regrets by Redfish, who are from nearby Vernon.
LISTNUM
1 \l 1280 The
key to our sound and format will be music with a Classic Rock feel that our
research says people want.
LISTNUM
1 \l 1281 Classic
Rock 96.3 intends to incorporate a broad and rich Classic Rock library into a
large playlist. Emerging Canadian
artists will be played in more frequent rotations.
LISTNUM
1 \l 1282 Walter.
LISTNUM
1 \l 1283 MR.
GRAY: Our vision for a successful
station isn't just about the music. It
is also about a partnership with the community and celebrating our local roots. It is about 100 per cent origination in
Kelowna, and being live‑to‑air.
When you listen to our station, you will know you are in Kelowna.
LISTNUM
1 \l 1284 Local
reflection starts with news. We have
promised over 90 newscasts a week, adding up to five hours and 32 minutes of
news, 70 per cent of which will be local.
LISTNUM
1 \l 1285 We
also plan an extensive community calendar to be broadcast four times
daily. Kelowna has 100 local festivals,
performances and exhibits at the Rotary Centre for the Arts, big name concerts
at Prospera Place, as well as local clubs.
We will give extra air time to major festivals such as Celebrate Canada
Day, the Life and Arts Festival, Folk Fest, the wine festivals, and of course
Parks Alive, with 65 live musical performances each summer.
LISTNUM
1 \l 1286 Two
other daily features will reenforce our sense of community.
LISTNUM
1 \l 1287 In
Touch will feature local vignettes and human interest stories, sometimes
probing city issues such as traffic congestion and sometimes looking on the
lighter side, such as Ogopogo sightings.
LISTNUM
1 \l 1288 Personality
Profile will uncover interesting people that live here, young and old, and
their claims to fame. For example, we
will interview three local entrepreneurs that just sold their Club Penguin web
business for $350 million to Disney. And
the Athans family which boasts five family members who are world‑ranked
athletes from water‑skiing to synchronized swimming to free‑style
and downhill skiing. We will talk to
award‑winning wine makers, high school track stars. We want our listeners to get to know their
neighbours.
LISTNUM
1 \l 1289 On
Fridays, we will air three wine and food pairing features. With more than 80 wineries in the Okanagan,
world‑class chefs and a bounty of fresh local fruit and vegetables, there
will be no shortage of input as our listeners make their weekend plans.
LISTNUM
1 \l 1290 On
the weekends, Blast From Our Past will highlight local history, exploring the
areas roots and rich heritage, with the help of area museums and the Okanagan
Historical Society. Classic Rock 96.3
will have vignettes such as The History of the Okanagan Nation, the stern
wheelers that plied the lake from Vernon to Penticton, or recent history like
the Kelowna fire in 2003.
LISTNUM
1 \l 1291 We
will offer an afternoon drive feature called My Story, My Music, to highlight a
local artist or touring band passing through Kelowna, with interviews and
music. This way the newcomers will be
featured, as well as the major stars.
LISTNUM
1 \l 1292 Many
of our weekend features will be music oriented, often with a local focus.
LISTNUM
1 \l 1293 Fresh
Rock will be a half hour weekly showcase of newcomers to the Canadian rock
scene that fit our format. A good local
interview would be with the Sleddogs, an amazing up‑and‑coming rock
band who cleaned up at the Okanagan Music Awards just three weeks ago.
LISTNUM
1 \l 1294 Our
feature Then and Now will profile performers across their careers and right up
to the present, with a focus on Canadian musicians like Randy Bachman and Neil
Young.
LISTNUM
1 \l 1295 We
also plan a three‑hour music program called Decades on Saturday nights,
in which we will not only relive great rock music decade by decade, we will
highlight what were the events and the lifestyles in Kelowna at the time. What were the headlines in the Courier and
what was the price of a three‑bedroom house on Pandosy Street when April
Wine brought their farewell tour to this city in 1984.
LISTNUM
1 \l 1296 Members
of the Commission, Sun Country Classic Rock 96.3 is committed to 40 per cent
Canadian content for the whole week, and Monday through Friday, 6:00 a.m. to
6:00 p.m. Our commitment to emerging
artists is 10 per cent of our Canadian content, and we will proudly focus on
local bands such as Sleddogs and Redfish.
We want to play a major role in the development of local, emerging
talent through airplay and our Canadian Content Development initiatives.
LISTNUM
1 \l 1297 We
have put a lot of thought into our package of four CCD initiatives. They total $315,000 over the licence term, in
addition to the basic contribution of more than $24,000. We are amplifying them in every way we can on‑air
to create a multiplier effect.
LISTNUM
1 \l 1298 Our
annual Home Grown CD initiative will offer significant exposure to Kelowna and
area rock musicians. We consulted with
artists and promoters to determine how to make our $175,000 investment in the
CD initiative pay the most dividends for the emerging artists. Through a juried process, we will pick ten
local selections from the rock genre each year.
The winning artists will have their work professionally recorded and
included on the album. They will also
benefit from all the proceeds from the CD sales. The compilation will be promoted both on‑air
and through paid media. But it doesn't
stop there.
LISTNUM
1 \l 1299 It
is one thing to have songs recorded, but it is quite another to translate this
into radio airplay. We believe we are
one of the first to introduce an innovative enhancement to further the Canadian
exposure of these local emerging artists beyond just our radio station or this
market.
LISTNUM
1 \l 1300 All
ten cuts of Sun Country's Home Grown CD initiative will be digitally
distributed to every Canadian rock‑based radio station complete with
individual press kits. Every Music
Director and every Program Manager at rock stations coast to coast will have
the new music in a ready‑to‑use format, along with background
material on the artist.
LISTNUM
1 \l 1301 We
will also fund Canadian rock artists through a $42,000 contribution to Parks
Alive. It is a series of 65 free,
outdoor summer concerts held in downtown Kelowna. When I was the Mayor of Kelowna, the Downtown
Business Association sponsored these concerts as a safe streets initiative,
with funding coming from the city and the downtown business community. It was a huge success and has expanded every
year, turning our city into a destination for live music entertainment. It is a great opportunity for new bands to
build fan support and many have gone on to win the Okanagan Music Awards.
LISTNUM
1 \l 1302 We
are proud to be the first radio applicant to make a Canadian Content
Development commitment to NARIA. That is
the National Aboriginal Recording Industry Association. We will invest $35,000 over the licence term
to help showcase emerging aboriginal artists at events such as Canada Music
Week, where they can get exposure to record companies and to champions within
the radio industry.
LISTNUM
1 \l 1303 Finally,
we are making an additional $63,000 contribution to FACTOR, for a total amount
of $77,000. Our contribution is pledged
specifically to B.C. artists with priority to the Okanagan.
LISTNUM
1 \l 1304 In
addition to airplay and CCD initiatives, we will lend our support to Canadian
artists through features and promotion, from the Community Calendar to our two
series, My Music ‑ My Story and Fresh Rock. Our station's website will include a Classic
Rockers of Tomorrow section for Canadian artists, with links to websites and
information about seeing them in concert or buying their CDs.
LISTNUM
1 \l 1305 We
plan a strong and focused local radio service to compete against Pattison and
Astral. We have a solid and conservative
business plan, with an appealing mainstream music format that is in high
demand ‑‑ the key to success for an independent station. And it is our plan to build a strong local
team to attract the best radio people available.
LISTNUM
1 \l 1306 Our
entire application is based on being relevant to the community. Our goal is to super serve and over deliver
on all our promises, from top local news, to our CCD, and helping emerging
artists.
LISTNUM
1 \l 1307 In
addition, our local reflection will be enhanced by our local advisory
committee. We believe that people on the
street, given a forum, can really enrich our community reflection.
LISTNUM
1 \l 1308 We
are very pleased that Judy Good Sky, the Education and Employment Coordinator
for the Westbank First Nation, a highly respected community leader, has agreed
to head that committee for us. We are
honoured to have Judy here.
LISTNUM
1 \l 1309 Judy.
LISTNUM
1 \l 1310 MS
GOOD SKY: Thank you, Walter.
LISTNUM
1 \l 1311 I
was delighted to be asked to chair Sun Country's local advisory committee. It was a sounding board for community issues,
from sponsoring local music organizations and being the champion for causes to
deeper issues involving community standards and diversity.
LISTNUM
1 \l 1312 I
believe Sun Country's Classic Rock 96.3 will give the people of Kelowna a new
way to interact with each other.
Integrating newcomers and involving them in both our heritage and our
future is important to maintaining a strong sense of community as our city
grows. Kelowna is prosperous, but we
still deal with difficult issues from literacy and residential school impacts
in our native community, to homelessness and drugs on the streets downtown. These are areas where we can all pitch in,
and focused radio campaigns will make a world of difference.
LISTNUM
1 \l 1313 Our
advisory committee will help to ensure that programming and station activities
reflect Kelowna's diverse interests and are a positive force in the community.
LISTNUM
1 \l 1314 Sun
Country is a company with integrity. I
have known Walter Gray for many years. I
know the values he stands for and I share them.
I am proud to be part of his team in Kelowna.
LISTNUM
1 \l 1315 MR.
POUND: Thank you, Judy.
LISTNUM
1 \l 1316 Kelowna
is a dynamic and growing city and it deserves a radio company with a local
heart and local leadership. Sun Country
has the resources, the experience, the vision, and will deliver everything we
have in our application as outlined today.
LISTNUM
1 \l 1317 The
Kelowna market is underserved compared to other cities with similar or smaller
populations, including Fredericton, Prince George and Red Deer. Each of these cities has more choices of
private commercial radio stations per capita than Kelowna. They also have two rock stations each, one
Modern or Alternative and one Classic Rock.
LISTNUM
1 \l 1318 We
think there are five key reasons Sun Country Classic Rock 96.3 is the right
format for Kelowna and why we are the preferred applicant.
LISTNUM
1 \l 1319 Number
one, our application responds to the overwhelming desire of Kelowna residents
for a Classic Rock station. It is the
music they most prefer that is currently unavailable in the market, as
demonstrated by the Synovate research.
It will add diversity to the Kelowna radio spectrum.
LISTNUM
1 \l 1320 Number
two, Sun Country will be a strong locally owned, independent radio station,
with an independent news voice featuring strong local news and local
features. Our local reflection includes
five and a half hours of news over a seven‑day schedule, and a commitment
to more than 13 hours of spoken word.
LISTNUM
1 \l 1321 Number
three, we have extensive community reflection.
It is demonstrated by the 100 per cent local programming, with live
programming from 5:30 in the morning to 10:00 at night during the week, and we
are live from 6:00 a.m. until 6:00 p.m. Saturdays and Sundays. That is more than 100 hours of live‑to‑air
local programming during the broadcast week.
Our community reflection is further enhanced by the guidance of our
local advisory committee.
LISTNUM
1 \l 1322 Number
four, we offer a $340,000 Canadian Content Development program that focuses on
the Okanagan and that will amplified by the on‑air support we give
Canadian artists. Our initiatives
include the Home Grown CD initiative, funding to artists showcased at Parks
Alive, FACTOR support for the Okanagan
and B.C. artists, and a contribution to the National Aboriginal Recording
Industry Association. Clearly supporting
the development of emerging artists with innovative and original concepts and,
in addition, our commitment to 40 per cent Canadian content.
LISTNUM
1 \l 1323 Number
five, we have a realistic business plan that ensures we will meet our commitments
as an independent local licensee and be a strong competitor to Pattison and
Astral. According to the Synovate
Research survey of Kelowna residents, two‑thirds feel it is important
that the new FM station be locally owned and operated.
LISTNUM
1 \l 1324 We
believe it is fundamental to the listening public and to the ownership of
Canadian broadcasting that the voices of smaller, independent broadcasters be
heard. In consolidating times, it is
smaller broadcasters who will contribute to the growth and who will strengthen
Canada's broadcast system, just as small business contributes most effectively
to job creation and growth in the Canadian economy.
LISTNUM
1 \l 1325 MR.
GRAY: Members of the Commission, Sun
Country's Classic Rock 96.3 will produce high quality programming that is
reflective of the Central Okanagan and its cultural diversity, make a
substantial contribution to Canadian musical talent, achieve financial
viability without material impact on the existing radio stations, and increase
ownership, competition and diversity.
LISTNUM
1 \l 1326 I
would like to thank the many people from my home town Kelowna who wrote in and
supported us. We are getting great
community feedback and encouragement from local residents, wherever I go
through this community. It is truly
inspirational for me and for our team.
LISTNUM
1 \l 1327 Madam
Chair, Members of the Commission and CRTC staff, I would like to thank you
again for coming to Kelowna. We are
honoured. We look forward to responding
in whatever way you wish to questions you may have. Thank you so much.
LISTNUM
1 \l 1328 THE
CHAIRPERSON: Mr. Pound, Mr. Gray and to
your team, welcome.
LISTNUM
1 \l 1329 Commissioner
Williams will begin the questioning this morning.
LISTNUM
1 \l 1330 COMMISSIONER
WILLIAMS: Good morning, Mr. Pound, Mr.
Gray. Perhaps I will address my
questions to Mr. Gray and you can assign them as appropriate.
LISTNUM
1 \l 1331 Picking
up on some of the information in your opening presentation and as provided
earlier in your supplementary brief, and a letter of support from the local
Mayor suggesting that there is no longer any independent regional or local
radio ownership in this marketplace, and you talked about a company with local
heart and local leadership, could you please expand on the comments that you
made and how Kelowna would benefit from a local, independent station?
LISTNUM
1 \l 1332 What
would be some of the specific benefits I guess to Kelowna in the first part of
the answer, and then to the Canadian broadcasting industry in the broader view,
the importance of smaller local, independently‑owned broadcasting
company.
LISTNUM
1 \l 1333 MR.
GRAY: Thank you very much for the
opportunity, Mr. Williams.
LISTNUM
1 \l 1334 First
of all, I think we made it quite clear that I have a personal knowledge of the
community. I know what is happening
here. I know who the contact people
are. Every contact you have helps, of
course, improve your product on the air.
LISTNUM
1 \l 1335 In
addition to that, of course, we have formulated the committee we have, the
local advisory board. So, we will be the
applicant that really has feet on the street and our ears to the ground in
terms of this community.
LISTNUM
1 \l 1336 It
will be particularly important with this local knowledge when it comes to our
spoken word and our news contacts and our ongoing commitments in those areas.
LISTNUM
1 \l 1337 With
respect to your second question, why would independent ownership make it better
for Kelowna, I would take your question that way.
LISTNUM
1 \l 1338 COMMISSIONER
WILLIAMS: Kelowna, and then for the
Canadian broadcasting system as well in the second part of that.
LISTNUM
1 \l 1339 MR.
GRAY: In the first place, through
consolidation ‑‑ and that word was referred to in the
presentation ‑‑ if you don't have new players, and in our case
new players with experience, eventually the thing is played right out to the
end, there will be one radio company in Canada.
I am sure the CRTC wouldn't allow that.
But we had the merging of Standard Radio from Kelowna with Astral. Standard was already the biggest radio
company, and now it is even bigger with Astral, 80 stations across Canada. They are a great company, no question about
that, and we have no difficulty with that; and Pattison, one of the largest
western Canadian companies as well, the two broadcast companies in this
community.
LISTNUM
1 \l 1340 So,
if we are licensed, that then gives the opportunity to bring along a new sort
of attitude, a new sort of approach to radio so that it isn't all about big
business on the radio dial.
LISTNUM
1 \l 1341 I
think this reflects well all across the country. These sort of local applications are
important, whatever community you have to consider, I fully believe. We feel very privileged and fortunate with
respect to the timing that we are able to be here and offer our past
experience, and bring my brief removal from the radio industry, if you like,
for the nine years when I was the Mayor, but that will even further embellish
our opportunities to lead a great radio team with a great new locally owned and
operated radio station.
LISTNUM
1 \l 1342 COMMISSIONER
WILLIAMS: In your presentations, you
described a program called Blast From Our Past.
How did you determine this type of programming would be in demand by
your Classic Rock listeners in the Kelowna area? Could you maybe give a couple of examples of
the type of programming this would provide?
LISTNUM
1 \l 1343 MR.
GRAY: I will turn that over to Garry
because that just flows out, of course, our research. Once we did our research to find out what the
market was all about, we then said well, how would we fill the need identified
by the research.
LISTNUM
1 \l 1344 Garry.
LISTNUM
1 \l 1345 MR.
BARKER: Thank you, I think, Walter.
LISTNUM
1 \l 1346 Blast
From Our Past ties in nicely with our Classic Rock format. Classic Rock will have songs that people grew
up with in the 70s and 80s, and the Blast from Our Past, in terms of spoken
word, is supposed to reflect the same thing.
LISTNUM
1 \l 1347 Walter
and I were chatting yesterday in regards to an article in the Courier. I was asking Walter, I said, do you remember
this day 25 years ago? And Walter
did. It was just in regards to the
Kelowna hockey team losing for the first time in 13 games and there were 914
people at Memorial Arena.
LISTNUM
1 \l 1348 I
think even just that story, as trivial as it may seem, can conjure up stories
about Memorial Arena and the history behind that.
LISTNUM
1 \l 1349 We
believe that the spoken word fuses nicely with our proposed programming.
LISTNUM
1 \l 1350 MR.
GRAY: There is a million great stories
from the past in every city, but our resources and depth of knowledge in the
community will add to that. We have had
two past Premiers of British Columbia both from Kelowna. You know, how did their political careers
start?
LISTNUM
1 \l 1351 When
did the first cable station come here? I
mean, they just took signals off the top of the hill and fed them down a thin
wire. To remind people of their past,
providing you don't live there, is a tremendous opportunity for radio and we
are going to seize on that.
LISTNUM
1 \l 1352 COMMISSIONER
WILLIAMS: So, this Blast From The Past
programming will go back as far as the beginnings of Classic Rock or are you
going to go further into the history of Kelowna and the area?
LISTNUM
1 \l 1353 MR.
BARKER: I think it is strictly a matter
of whether it is relevant and interesting to our target audience, but I don't
think we would tie ourselves to saying it has to start in 1972, no.
LISTNUM
1 \l 1354 COMMISSIONER
WILLIAMS: Kelowna grew twice as fast as
the Canadian average from 2001 to 2007 and it is forecast to continue to double
the Canadian average for the next five years going forward.
LISTNUM
1 \l 1355 What,
in your opinion, is driving this population growth? What are the demographics of the people who
are coming here, and how does this match up with the type of format that you
plan to offer?
LISTNUM
1 \l 1356 MR.
GRAY: I will make some comments and if I
miss anything, because you really had three questions there, maybe Garry can
jump in.
LISTNUM
1 \l 1357 Yes,
you are certainly right about our growth pattern. A lot of it has to do with in‑migration,
there is no question about that.
LISTNUM
1 \l 1358 Also,
a lot of the youngsters graduating from high school or now either the college
or university, we have a University of British Columbia here now, have had for
two years, they have no reason to leave our community. But what we are discovering about the inward
migration is, first of all, these are not typically from years ago your prairie
wheat farmer who eventually, when his bones get tired and he is 65, retires to
the Okanagan. Those are the old days.
LISTNUM
1 \l 1359 People
are moving here because they can afford to move here. They move here younger. They figure they will spend the rest of their
lives golfing and going to the 80 wineries, quite frankly, and after a year or
so they realize that that is not what retirement is about. They are healthy, they are still too young,
and they themselves start new businesses as entrepreneurs in our
community. So, that really leads to the
dynamics with regards to the energy and the economy.
LISTNUM
1 \l 1360 I
believe the population growth is sustainable into the future, and I believe
statistical data forecasting into the future will bear that out. We have grown, as we said in our
presentation, since the last radio station went on the air 12 years ago. We have grown by 45,000 population, but we
are not an old town.
LISTNUM
1 \l 1361 COMMISSIONER
WILLIAMS: Thank you.
LISTNUM
1 \l 1362 In
your presentation you also stated this is a mainstream format, not currently
available. Where do your listeners or
proposed listeners receive this programming now?
LISTNUM
1 \l 1363 MR.
GRAY: Garry is going to comment on this
because he is our research expert. I
think I will let him get right into it.
LISTNUM
1 \l 1364 MR.
BARKER: I am not sure about the term
"expert."
LISTNUM
1 \l 1365 If
we look at, for example, BBM and radio listening, with over 25 per cent of all
tuning to out‑of‑market stations in Kelowna, for one, also from the
standpoint that over the last two and a half years radio listening has declined
in Kelowna by over 10 per cent, we analyzed the marketplace back in April in
terms of what was available and what wasn't.
LISTNUM
1 \l 1366 One
of the things that we were searching for was the availability of a mainstream
format. We have to realize that, if
licensed, we are competing against Astral and Pattison. We have to, in terms of survival, be able to
program a mainstream format. We looked
at statistics, we looked at the marketplace, and we discovered that there were
at least four mainstream format opportunities available. Synovate did the search. Classic Rock came back as the overwhelming
choice.
LISTNUM
1 \l 1367 We
did monitors back in April; we did monitors in September. We were absolutely convinced in April that
Classic Rock is not available in this marketplace and with the research showing
what it did, therefore our proposal for Classic Rock.
LISTNUM
1 \l 1368 MR.
GRAY: If I could just add to that, the
other radio station that may be more closely identified to what we propose, at
that time when we were taking the advice from Synovate was Power FM, which is
on the station today, but has skewed much younger in the last month or five
weeks.
LISTNUM
1 \l 1369 At
that time, its positioning statement on the air was "All kinds of rock,
one station." They were not a
Classic Rock station. They were an all
kinds of rock radio station. That has
changed. They have now skewed much
younger.
LISTNUM
1 \l 1370 COMMISSIONER
WILLIAMS: Thank you, Mr. Gray.
LISTNUM
1 \l 1371 Given
that your proposed format would seem to somewhat overlap the already offered in
the market by CKLZ, what differentiating factors would compel listeners to out‑of‑market
and non‑commercial stations to choose your station rather than theirs,
and on what assumptions are you basing estimates of deriving 5.6 percentage
points of share from out‑of‑market and non‑commercial
stations?
LISTNUM
1 \l 1372 MR.
GRAY: Garry will respond to the share question.
LISTNUM
1 \l 1373 With
regard to the first part of your question, I think maybe I must have
anticipated that. Would I have answered
that previously?
LISTNUM
1 \l 1374 COMMISSIONER
WILLIAMS: Yes.
LISTNUM
1 \l 1375 MR.
GRAY: Thank you. Garry, is there anything further to add for
Mr. Williams?
LISTNUM
1 \l 1376 MR.
BARKER: I don't believe so.
LISTNUM
1 \l 1377 MR.
GRAY: I hope we have answered your
question.
LISTNUM
1 \l 1378 COMMISSIONER
WILLIAMS: You anticipate generating 30
per cent from year two revenues from other forms of media. From which media do you plan to derive these
revenues, and how did you arrive at these projections?
LISTNUM
1 \l 1379 MR.
GRAY: There will be two parts to that.
LISTNUM
1 \l 1380 One
is just the rough numbers, and I am going from memory. 40 per cent of our revenue would come from
radio. There would be 30 per cent coming
from new money, some of it because of previous relationships with advertisers
and people and for other good broadcast reasons, 10 per cent from television
and 20 per cent from print.
LISTNUM
1 \l 1381 To
maybe further sub‑divide that, if you wish, Garry could go into that, or
did you just need the rough big numbers?
LISTNUM
1 \l 1382 COMMISSIONER
WILLIAMS: I think Garry should
elaborate.
LISTNUM
1 \l 1383 MR.
BARKER: Thank you, Mr. Williams.
LISTNUM
1 \l 1384 You
are asking specifically in regards to the 30 per cent new?
LISTNUM
1 \l 1385 COMMISSIONER
WILLIAMS: 30 per cent total year two
revenues, yes.
LISTNUM
1 \l 1386 MR.
BARKER: One of the ways we came up with
that percentage was again looking at the radio listening in Kelowna as it
currently stands. With over 25 per cent
of tuning to non‑commercial radio stations from Kelowna, I think it is
reasonably safe to assume that if there is such a high level of dissatisfaction
with the current radio offerings in Kelowna, that may transpose itself to
advertisers within Kelowna as well.
LISTNUM
1 \l 1387 There
is also new product categories that we are excited about in radio in terms of
advertising that has been traditionally the domain of newspapers, and that is
real estate, housing development, and with this buoyant economy in Kelowna,
jobs, advertising for employees.
Therefore, that is why we came up with the 30 per cent.
LISTNUM
1 \l 1388 COMMISSIONER
WILLIAMS: Thank you.
LISTNUM
1 \l 1389 Mr.
Gray, how many new undertakings can the Kelowna market support, and can it
support two rock stations?
LISTNUM
1 \l 1390 MR.
GRAY: If your question is can it support
two, meaning the one that exists here now and ours?
LISTNUM
1 \l 1391 COMMISSIONER
WILLIAMS: Yes.
LISTNUM
1 \l 1392 MR.
GRAY: Absolutely, absolutely it can.
LISTNUM
1 \l 1393 MR.
BARKER: If I might just add, Prince
George, Fredericton, Moncton, markets smaller than Kelowna, significantly
smaller, with two rock stations.
LISTNUM
1 \l 1394 MR.
GRAY: And Victoria has two rock stations
by the same owner.
LISTNUM
1 \l 1395 COMMISSIONER
WILLIAMS: Would the licensing of any
other applicants negatively affect your business plan?
LISTNUM
1 \l 1396 MR.
GRAY: We weren't anticipating that there
would be other licences granted, but if the Commission chose to licence another
applicant, we are up for the challenge.
We are good competitors. We know
this market. We know that local
programming and local ownership is important, and we will do just fine.
LISTNUM
1 \l 1397 COMMISSIONER
WILLIAMS: In your opinion, how many new
stations can this marketplace absorb?
LISTNUM
1 \l 1398 MR.
GRAY: We would like to think it would be
ours and ours only, but as I have already said, ours and another of the
Commission's choosing would be fine, and that other station probably should be
one that isn't after the same advertising domain we are. If you are trying to lead me to say could it
handle three stations, I would say for us, competition will be very, very
keen. It will be for the other two as
well, but we are up for the challenge.
LISTNUM
1 \l 1399 I
mean, this is our town, we know it, we will do well, not as well if there is
more than one station, of course.
LISTNUM
1 \l 1400 COMMISSIONER
WILLIAMS: Thank you very much, Mr. Gray,
Mr. Pound and panel members. That
concludes my line of questioning, Madam Chair.
LISTNUM
1 \l 1401 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 1402 Commissioner
Morin.
LISTNUM
1 \l 1403 COMMISSIONER
MORIN: During your oral presentation you
probably identified with the community, and you have given a lot of examples of
your identity with the localisms, if I may say.
LISTNUM
1 \l 1404 How
do you explain that you weren't the first to trigger the process of a new
licence? It was Vista, wasn't it? How do you explain that you weren't the first
to trigger the process of a new licence?
LISTNUM
1 \l 1405 MR.
GRAY: It is true, Vista triggered the
licence a year and a half ago. We simply
responded to the CRTC call.
LISTNUM
1 \l 1406 I
suppose if much more time had gone by, we could have been the one that
triggered the licence, but we were not.
LISTNUM
1 \l 1407 COMMISSIONER
MORIN: But for you, do now have an idea
that in the few years you would trigger the process or not?
LISTNUM
1 \l 1408 MR.
GRAY: I don't think I could say yes to
that because, frankly, that hadn't gone through my mind.
LISTNUM
1 \l 1409 What
made us look for the opportunity is firstly, and speaking from a personal
basis, I have been a radio guy from grade 12 and I took nine years out of my
life to be the Mayor of Kelowna, and, for me, it was time to go back into
radio. But you don't just do it because
you love radio, which I do, you do it because you love radio and you can succeed
at it.
LISTNUM
1 \l 1410 I
am very, very aware of what has been happening in terms of the revenues in this
market. It has increased by over $1
million a year for at least the last three years. Certainly this year just concluded will be
another $1 million year, and I have no reason to believe the future years won't
be.
LISTNUM
1 \l 1411 But
having said that, our business plan was predicated on a $700,000 increase in
our first year in terms of the overall market and then out through the next six
years of the seven‑year format, half a million dollars.
LISTNUM
1 \l 1412 So,
it was really a case of the market is ready for another radio station and am I
personally up for the challenge, is Mr. Pound and I, who have been associated
in business for many, many years, up for the challenge, is the son of my
partner in radio for many, many years, Mike Hall back here, is he up for the
challenge? And the timing is perfect for
us. We are up for the challenge. We are ready to broaden our cable business
experience back into what we do very, very well and practice very well in this
market, and that is radio.
LISTNUM
1 \l 1413 COMMISSIONER
MORIN: Thank you.
LISTNUM
1 \l 1414 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 1415 I
just have a couple of clarification questions to ask.
LISTNUM
1 \l 1416 Mr.
Gray, in response to Commissioner William's question on the sources of revenue
for your advertising, you said that 40 per cent would come from radio, but your
application actually says 26 per cent would come from existing radio stations.
LISTNUM
1 \l 1417 MR.
GRAY: You will have to respond to
that. That is some information that is
sort of further subsidized ‑‑ sub‑divides earlier
information.
LISTNUM
1 \l 1418 MR.
BARKER: Madam Chair, the question that
you are asking I believe was answered in our deficiency response, but I do
appreciate the opportunity perhaps to explain it a little bit further.
LISTNUM
1 \l 1419 THE
CHAIRPERSON: Please.
LISTNUM
1 \l 1420 MR.
BARKER: Of the 40 points from radio, 14
points will come from increased budgets from existing radio advertisers, 26
points will come from existing radio stations.
Of these 26 points, we estimate that a half or 13 points will come from
CKLZ, 40 per cent or 10.4 points from Astral's CILK and Sun, and 10 per cent or
2.6 points from other Kelowna radio stations.
LISTNUM
1 \l 1421 THE
CHAIRPERSON: So you make that
distinction. Existing advertisers who
currently advertise on radio will increase their budgets and then there is a
further breakdown, of course, of just new advertisers who are knew to the
genre.
LISTNUM
1 \l 1422 MR.
BARKER: Correct.
LISTNUM
1 \l 1423 MR.
GRAY: Yes, correct, thank you.
LISTNUM
1 \l 1424 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 1425 In
terms of spoken word programming, today in your oral presentation you said that
there is a commitment of more than 13 hours of spoken word.
LISTNUM
1 \l 1426 MR.
GRAY: Correct.
LISTNUM
1 \l 1427 THE
CHAIRPERSON: Of which five hours and 32
minutes is news and surveillance, and I have the details here on my laptop from
your supplementary brief. So I don't
need to go into that detail.
LISTNUM
1 \l 1428 But
in response to deficiency question dated July 10, you say there is a total of
25 hours and 39 minutes of spoken word programming.
LISTNUM
1 \l 1429 MR.
BARKER: Walter, I will kind of jump in
on this.
LISTNUM
1 \l 1430 MR.
GRAY: Go ahead. You found your place faster than I did.
LISTNUM
1 \l 1431 MR.
BARKER: What we tried to do on that is
we were thinking that the Commission was after as to how much music programming
we would have. So we broke it down two‑fold
in terms of spoken word programming which totalled just slightly over 13 hours,
and then we put in commercial, station promotion and public service
announcements, for an additional 12 hours and 36 minutes.
LISTNUM
1 \l 1432 THE
CHAIRPERSON: So, the 13 hours referred
to in your oral presentation is your spoken word commitment because we have to
subtract the commercials and station promotions?
LISTNUM
1 \l 1433 MR.
GRAY: And that is the way we got to the
amount of music that we would have on the 126 hours a week.
LISTNUM
1 \l 1434 THE
CHAIRPERSON: So your commitment is five
hours and 32 minutes of local news, and announcer talk and surveillance six
hours and 18 minutes?
LISTNUM
1 \l 1435 MR.
GRAY: Correct.
LISTNUM
1 \l 1436 THE
CHAIRPERSON: And then your features for a
total of one hour and 13 and a half minutes?
LISTNUM
1 \l 1437 MR.
GRAY: That is correct.
LISTNUM
1 \l 1438 THE
CHAIRPERSON: Okay, thank you very much.
LISTNUM
1 \l 1439 You
heard Vista's presentation this morning.
Do you see any similarities between your format and the new Classic Hits
format as proposed by them?
LISTNUM
1 \l 1440 MR.
GRAY: That will be a demographic and
music question. Garry.
LISTNUM
1 \l 1441 MR.
BARKER: Well, there have to be some
similarities, I guess, particularly compared to Country.
LISTNUM
1 \l 1442 We
looked at what they presented today in terms of era balance and era balance is
not unlike our era balance.
LISTNUM
1 \l 1443 I
will read a definition of Classic Hits and see how it goes over.
LISTNUM
1 \l 1444 Classic
Hits is a variation on the Classic Rock theme which provides most of the
playlist of Classic Rock, with the addition of contemporaneous R & B and
Pop Hits, striking a balance between the Classic Rock format and the more
broadbased Oldies format.
LISTNUM
1 \l 1445 I
go to two sources in terms of Classic Rock versus Classic Hits, and one is from
the CRTC database, with format shares.
The latest available showed Classic Rock in Canada with 9.4 per cent of
tuning and Classic Hits at 4.3 per cent.
I also go in terms of our own research, where Classic Rock was the
overwhelming number one choice, Classic Hits at times came in number four.
LISTNUM
1 \l 1446 I
think the biggest question here would be the demand for the format.
LISTNUM
1 \l 1447 THE
CHAIRPERSON: Could the Kelowna market
sustain both of those services being licensed as presented, both yours and that
of Vista?
LISTNUM
1 \l 1448 MR.
BARKER: It is Walter's city.
LISTNUM
1 \l 1449 MR.
GRAY: If the Commission is already
thinking about more than one licence, I have to ask myself and ask the
Commission would Sun Country and Vista be the wrong fit?
LISTNUM
1 \l 1450 We
are in large manner going after the current void.
LISTNUM
1 \l 1451 THE
CHAIRPERSON: You are the local experts,
as you have so expressly told us this morning.
I am not sure if you had an opportunity to read the intervention from
Standard Radio, and it is not just an intervention opposing your
application. It is an intervention to
anything being licensed in the Kelowna market.
LISTNUM
1 \l 1452 What
has changed, in your opinion, in the Kelowna market in the last year or 18
months to generate the kind of interest that we have here before us today,
thanks to Vista, not because of Vista's triggering for the call, but really,
thanks to Vista filing their application, it generated the level of interest
that we have before us this week.
LISTNUM
1 \l 1453 So,
if you did have a chance to read Standard's intervention, can you explain to
us, being the local experts, what has changed?
LISTNUM
1 \l 1454 MR.
GRAY: Yes, I have. Thirty‑five pages. We have the right one?
LISTNUM
1 \l 1455 THE
CHAIRPERSON: Yes.
LISTNUM
1 \l 1456 MR.
GRAY: First of all, the local expert
would say that the outstanding revenues in this market the last three years
have been certainly a ‑‑ would make anybody start to say,
Kelowna, it is ready for another radio station, and obviously you have had 11
people respond.
LISTNUM
1 \l 1457 In
terms of what has happened in the market, I believe it all started when
Pattison, and they did the right thing, but the two AM stations, the Pattison
station and the Standard station, AMs, were both really suffering. Maybe one was breaking even. The other would have been losing money. They just weren't cutting it.
LISTNUM
1 \l 1458 Yet,
here was this robust radio market. So,
Pattison made the decision wisely ‑‑ this is just from the
outside looking in ‑‑ to flip to FM, and they identified the
market at that time and they appeared before the Commission and they said it
would be soft vocals, I believe.
LISTNUM
1 \l 1459 So,
everybody knew that something was going to start to change.
LISTNUM
1 \l 1460 Then
they got the licence and whatever happened between them and the Commission, I
don't know, but certainly in the market they re‑thought the format and
they chose Country because our research showed us too, Country was clearly a
void, no question. So I think they
probably did the right thing.
LISTNUM
1 \l 1461 Then
Standard, now Astral, responded to that change.
I could see all this coming and it just happened to be when applications
were being put together. They said, ah‑hah,
one AM station that really focused on news talk, local, national,
international, personality talk radio, the whole thing, could really make a go
of it. So, they did the right thing too. They said, okay, we have got it all to
ourselves, and they have been on the air maybe now for a month or six weeks or
less, whatever, with that format, and just as a listener listening, one, I like
the station and two, they are doing very, very well, in my view. I think they know they have made the right
decision.
LISTNUM
1 \l 1462 In
the meantime, not in the meantime, but also in this past year or so, you had
SILK‑FM, which was the only independent at the time, and it really did
quite well as an independent, Nick Frost's radio station, it was sold to
Standard. So, now Standard had control
of two of the very dominant radio stations in the community, made I would say,
as a listener, some massaging moves.
They didn't make the wholesale changes because they didn't need to; they
just had to make some subtle moves because they could in order to package those
two stations well.
LISTNUM
1 \l 1463 So,
that, in itself, didn't change how the radio market would go.
LISTNUM
1 \l 1464 But
in the meantime, and this would be on August whatever when they had their press
conference and launched their Country station they, at about that time, made
the conscious decision to skew their all kinds of rock radio station, Power
104, they skewed that much younger, and I would probably guess ‑‑
and Gary, you may want to comment ‑‑ 15 to 34, just pulling it
out of the air, but much, much younger, just to give you a flavour for it.
LISTNUM
1 \l 1465 So
what has happened in the market?
Everything has happened in the market.
But what it has done, and even more so since we first applied, even more
so than our research would show, is that our Classic Rock format is staring at
this big void that was bigger than when we surveyed the market with Synovate.
LISTNUM
1 \l 1466 So,
two things have changed. Everything and
the opportunity for Sun Country to fill the void.
LISTNUM
1 \l 1467 THE
CHAIRPERSON: Well, thank you very much
for that response.
LISTNUM
1 \l 1468 I
am going to give you your two minutes to tell us why your format is the best
and why you are the best applicant for the Kelowna market.
LISTNUM
1 \l 1469 MR.
GRAY: And our President, Mr. Pound, will
do that.
LISTNUM
1 \l 1470 MR.
POUND: Thank you.
LISTNUM
1 \l 1471 Sun
Country's application to serve the Kelowna and Central Okanagan market has the
financial resources. We bring a new
local ownership group with a tradition of broadcast excellence in this
market. We bring a substantial
contribution to the development of Canadian musical talent.
LISTNUM
1 \l 1472 Sun
Country will be the Okanagan's most committed advocate of our region's new
songwriters, artists and performers. Our
local emerging Canadian talent will enjoy endless opportunities of financial
and promotional support in their budding careers.
LISTNUM
1 \l 1473 We
have targeted our Kelowna market with the optimum format, Classic Rock,
responding to the strong demand as outlined in the Synovate survey, while
adding diversity and choice for our Kelowna listeners.
LISTNUM
1 \l 1474 We
bring a new independent newsroom to reflect and report back to Kelowna. Our community advisory board will help to
ensure that our programming and station activities reflect Kelowna's diverse
interests and are a positive force in the community.
LISTNUM
1 \l 1475 We
propose a realistic business plan, based on sound judgment and successful
business experience.
LISTNUM
1 \l 1476 Madam
Chair, Commission members, Commission staff, we are proud and passionate about
our application before you today. If you
grant us the privilege to serve our friends and neighbours of Kelowna with Sun
Country's Classic Rock 96.3, you will be strengthening local broadcast
ownership, which we firmly believe will be very good both for Kelowna radio
listeners and the Canadian broadcast system.
LISTNUM
1 \l 1477 Again,
a sincere thank you for bringing this hearing to Kelowna. Thank you.
LISTNUM
1 \l 1478 MR.
GRAY: Thank you.
LISTNUM
1 \l 1479 THE
CHAIRPERSON: My apologies. I will get this right sooner or later. Legal counsel has a question.
LISTNUM
1 \l 1480 MS
LEHOUX: It won't be long. It is just a few clarifications, and since
they are on condition of licence, it is important to get them on the record.
LISTNUM
1 \l 1481 I
just want you to confirm that you agree to have a condition of licence to
devote in a broadcasting week a minimum 40 per cent of Canadian content and 40
per cent of Canadian content Monday to Friday 6 a.m. to 6 p.m.?
LISTNUM
1 \l 1482 MR.
GRAY: Yes, we do.
LISTNUM
1 \l 1483 MS
LEHOUX: And the second one is: Do you agree that you are over and above CCD
$315,000 will be imposed as a condition of licence?
LISTNUM
1 \l 1484 MR.
GRAY: Absolutely. We are very excited about that component.
LISTNUM
1 \l 1485 MS
LEHOUX: Thank you very much.
LISTNUM
1 \l 1486 THE
CHAIRPERSON: Thank you very much.
LISTNUM
1 \l 1487 We
will now take a 15‑minute break and come back at 11:30. Thank you.
‑‑‑ Upon recessing
at 1117 / Suspension à 1117
‑‑‑ Upon resuming
at 1134 / Reprise à 1134
LISTNUM
1 \l 1488 THE
SECRETARY: Could you please be seated
and we will begin.
LISTNUM
1 \l 1489 THE
CHAIRPERSON: Madam Secretary.
LISTNUM
1 \l 1490 THE
SECRETARY: Thank you, Madam Chair.
LISTNUM
1 \l 1491 We
will now proceed with item 3, which is an application by Harvard Broadcasting
Inc. for a licence to operate an English‑language FM commercial radio
programming undertaking in Kelowna, British Columbia.
LISTNUM
1 \l 1492 The
new station would operate on frequency 96.3, channel 242B, with an average
effective radiated power of 7,100 watts, maximum effective radiated power of
20,000 watts, antenna height of minus 89 metres.
LISTNUM
1 \l 1493 Appearing
for the applicant is Mr. Bruce Cowie.
Please introduce your colleagues, and you will then have 20 minutes to
make your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM
1 \l 1494 MR.
COWIE: Thank you. Good morning, Madam Chair, members of the
panel, Commission staff, legal counsel.
LISTNUM
1 \l 1495 My
name is Bruce Cowie and I am the Vice‑President of Harvard
Broadcasting. I am pleased to be here
today to present our application for Timeless 96.3, a new Adult Standards/Easy
Listening FM station, targeting the 45‑plus audience in the growing
market of Kelowna, British Columbia.
LISTNUM
1 \l 1496 Before
beginning our presentation, I would like to introduce the members of our panel.
LISTNUM
1 \l 1497 Seated
on my right in the front row is Michael Olstrom, Harvard Station Group
Manager. On my left is Tina Svedahl,
Vice‑President, Investments at Harvard.
Next to Tina is Larry LeBlanc, one of Canada's best known music
journalists and broadcasters. Larry
helped design the format and will have an ongoing role in programming Timeless
96.3.
LISTNUM
1 \l 1498 Seated
in the back row on my left is Paul Hill, the President and Chief Executive
Officer of Harvard Developments, our parent company. Mr. Hill is one of Canada's business leaders
and operates a family‑owned diversified company that has recently
celebrated 103 years of doing business in Canada.
LISTNUM
1 \l 1499 Next
to Paul is Robert Malcolmson of Goodmans LLP, our legal counsel. Seated next to Rob is Deborah McLaughlin of
Strategic Inc., the company that did our consumer demand and economic study.
LISTNUM
1 \l 1500 Michael
will first give you an overview of the growing Kelowna market and our target
audience. I will then summarize the high
demand for our proposed format. Larry
will describe the kind of music we are proposing and explain why this unique
format will meet the needs of Kelowna radio listeners. Next, Michael will provide additional details
about the station and talk about our feature programming. Paul will talk about why Kelowna is an
essential component in our western regional growth strategy. Then I will present our package of Canadian
Content Development initiatives.
LISTNUM
1 \l 1501 Michael.
LISTNUM
1 \l 1502 MR.
OLSTROM: Kelowna today is a story of
growth: Growth in population, growth in
economic development, and growth in retail sales.
LISTNUM
1 \l 1503 Population
in the Kelowna CMA has grown at almost double the rate of British Columbia and
has increased by 10 per cent between 2001 and 2006. Moreover, it is growth in a very specific
demographic. According to the 2006
census, Kelowna is the oldest market in Canada, with a median age of 43, almost
four years older than the national average.
And the largest projected population increases are anticipated to be in
the 45 to 64 and 65‑plus age brackets.
This clearly continues an aging trend.
LISTNUM
1 \l 1504 Kelowna
serves as the economic hub of the Central Okanagan region. The region's Economic Development Commission
has been actively engaged in business development and the area boasts a
diversified industrial base. According
to the EDC, there are 28 major projects underway in the area, representing over
$5.5 billion worth of investment, and there are a further 22 projects proposed,
injecting an additional $3.9 billion in infrastructure development.
LISTNUM
1 \l 1505 The
retail sector has also grown, posting a 22 per cent gain between 2005 and
2006. Retail sales are robust, with per
capita expenditures of 27 per cent above the national average. These expenditures are forecast to increase
by more than 12 per cent in the next two years.
LISTNUM
1 \l 1506 Despite
this steady growth, radio advertising revenues are underdeveloped relative to
retail sales. According to our economic
analysis, the very healthy retail sector, high population growth, new job
creation rate and projected increases in retail sales all lead to the
conclusion that radio is underperforming.
Accordingly, it is our view that competition will stimulate radio
revenues in this two‑player market, and we believe there is room for
expansion in Kelowna's radio advertising base.
LISTNUM
1 \l 1507 Bruce.
LISTNUM
1 \l 1508 MR.
COWIE: Kelowna has the oldest average
age in Canada. The proposal for an Adult
Standards/Easy Listening format addresses this demographic skew by providing a
mature sound that will appeal primarily to a 45‑plus audience.
LISTNUM
1 \l 1509 Tuning
in Kelowna has declined across all sub‑groups, including people age 55
and over. Our search revealed that there
was a large subset of that population that is dissatisfied with existing
services. Several measures pointed to a
portion of the population that was not being well served.
LISTNUM
1 \l 1510 Sixty‑five
per cent chose other media to hear the music they liked, and only 22 per cent
report being very satisfied with radio in Kelowna.
LISTNUM
1 \l 1511 The
consumer research identified strong demand for a format with almost two‑thirds
of the respondents reporting high levels of interest in this service. All of this suggests that Harvard's Timeless
96.3 could repatriate a significant number of listeners.
LISTNUM
1 \l 1512 Larry.
LISTNUM
1 \l 1513 MR.
LeBLANC: Thanks, Bruce.
LISTNUM
1 \l 1514 I
am going to speak about the format that Harvard has chosen, what it is, why it
will fill a unique niche in Kelowna, why it is a good fit with this
market. I have been a music industry
trade journalist for 40 years. For the
past 16 years, I was the Canadian Bureau Chief for Billboard magazine.
LISTNUM
1 \l 1515 Timeless
96.3 will incorporate a wide variety of music and a wide variety of
artists. What is notable is the broad
mix of decades and sub‑genres of music that it represents: New crooners, traditional crooners, folk,
world music, instrumental and light jazz, with hits and artists from the 50s to
the current day.
LISTNUM
1 \l 1516 This
format is aimed at mature adults, meaning mainly those 45 and older. It is one of the very few formats that can
combine current artists with artists from multiple decades in a seamless
presentation.
LISTNUM
1 \l 1517 Adult
Standards first became a popular format in the late 1970s and early 1980s. It was a way to reach mature adults who came
of age during the rock era, but were too
young for Adult Contemporary or Beautiful Music. Today there are about 200 Adult
Standards/Easy Listening stations in the United States, and a growing number in
Canada.
LISTNUM
1 \l 1518 A
popular misconception about the Adult Standards/Easy Listening format is that
few artists are making this kind of music today and yet nothing could be
further from the truth. Canadians
Michael Buble, Diana Krall, Mat Dusk and Holly Cole, as well as such
international acts as Rod Stewart, Cindy Lauper and Carly Simon are all
recording songs within the format and, in many cases, they are giving new life
to songs first made popular in the 40s, 50s and 60s.
LISTNUM
1 \l 1519 These
tracks, mixed with classic performances from such musical icons as Frank
Sinatra, Dean Martin and Barbra Streisand, will sit comfortably alongside light
jazz artists like Norah Jones.
LISTNUM
1 \l 1520 World
artists such as Il Divo, soft pop groups like the Bee Gees and Air Supply will
mix with timeless Canadian artists like Gordon Lightfoot and Anne Murray, and
Canadian instrumental music artists like Loreena McKenna, Pavlo, Michael Jones,
Michael Kasehammer, and Jesse Cook.
LISTNUM
1 \l 1521 While
some of these artists are heard on other formats, like AC and even Rock, you
won't find the same tracks being played.
Rod Stewart, for example, may get airplay for such rock anthems as
Maggie May and Young Turks. But on
Timeless 96.3, we will play classic selections from his Great American Songbook
series, such as Time Goes By and The Way You Look Tonight.
LISTNUM
1 \l 1522 This
format also holds a special place for new and emerging Canadian artists like
Emily Barlow‑Clare, Michael Massaro and Dean Nesbitt Jr., who are now
developing their own timeless musical styles within the Adult Standards/Easy
Listening genre.
LISTNUM
1 \l 1523 Timeless
96.3 will attract listeners with its broad blend of enduring, soft melodic
music and meaningful lyrics. Let's look
and listen to why Timeless 96.3 is the right sound for Kelowna.
‑‑‑ Video
presentation / présentation vidéo
LISTNUM
1 \l 1524 MR.
COWIE: The Adult Standards format will
fill a gap that Harvard's research identified in the Kelowna market in three
very specific respects.
LISTNUM
1 \l 1525 First,
respondents to the consumer demand study identified a large variety of music as
a very important element in their station selection. Mixing current with contemporary artists will
create a larger playlist which will address that key programming consideration.
LISTNUM
1 \l 1526 Second,
a combination of vintage and contemporary artists will meet the needs of
established fans, bring back disenfranchised listeners, and help develop new
listeners in Kelowna.
LISTNUM
1 \l 1527 And
third, this format will meet not just the needs that are being expressed today,
but those of tomorrow's audience, based on what we anticipate will be a growing
audience of aging baby boomers in the Kelowna market.
LISTNUM
1 \l 1528 Michael.
LISTNUM
1 \l 1529 MR.
OLSTROM: Thank you, Bruce.
LISTNUM
1 \l 1530 Let
me start with our Canadian content commitment.
Timeless 96.3 will maintain 40 per cent Canadian content over the
broadcast week and day, giving both established and new artists the widest
possible exposure. Within the format, a
minimum of 25 per cent of our Canadian content, or 10 per cent of the station's
broadcast schedule, will be assigned to new and emerging artists to ensure they
receive effective airplay.
LISTNUM
1 \l 1531 In
addition to rotation in the playlist throughout the broadcast day, Timeless
96.3 will offer special programming features that will contribute directly to
exposure for Canadian artists.
LISTNUM
1 \l 1532 For
example, Canadian Spotlight will profile artists in a 90‑second feature
airing six times daily. And New Crooners
will cover the careers and works of these artists with special emphasis being
placed on Canadian performers.
LISTNUM
1 \l 1533 Our
consumer research also demonstrated the importance of news to the target
audience. In order to meet this
interest, Harvard will schedule 104 newscasts in prime listening times, for a
total of just over nine hours of news each week. Throughout this schedule, emphasis will be
given to local news and to covering regional events from Kelowna and the
Okanagan Valley. Each weekday at noon,
Timeless 96.3 will provide a 30‑minute program in which we will explore
the events making headlines. Expanded
news coverage, coupled with interviews from local news makers, will provide
more in‑investigation of the stories shaping the community. With a fully staffed newsroom, Timeless 96.3
will provide diversity to news in Kelowna by providing a fresh new editorial
voice.
LISTNUM
1 \l 1534 Paul.
LISTNUM
1 \l 1535 MR.
HILL: Thank you, Michael.
LISTNUM
1 \l 1536 Harvard
Developments is a family‑owned diversified company that has been doing
business in western Canada for over 100 years, including 30 years in the
broadcast business. Harvard's radio
stations are local, community‑based, consistent with the community
service principle that has always been part of our family's approach to
business. In fact, our family has been
doing business in Kelowna for a number of years through our real estate and
surety businesses. My uncle and
currently my sister, husband and nephew reside in Kelowna.
LISTNUM
1 \l 1537 As
the Commission knows, Harvard has been aggressively pursuing a regional growth
strategy in recent years. In this ever
consolidating media environment, we need to achieve critical mass and the
system needs the diversity of voices that new ownership brings. This is particularly true in Kelowna, where
all five stations are controlled by two major radio companies, Pattison and the
newly approved Astral/Standard.
LISTNUM
1 \l 1538 Today,
Harvard owns and operates three stations in Regina, an FM station in Calgary,
and we will launch new FM stations in Fort McMurray and Saskatoon by the end of
the year. This application is important
to our continuing growth and development as a mid‑sized western regional
broadcaster and a significant contributor to Canadian Content Development. A Kelowna station would mean our entrance
into the British Columbia market, a logical and important move for a company
that prides itself on its distinctly western voice.
LISTNUM
1 \l 1539 Bruce.
LISTNUM
1 \l 1540 MR.
COWIE: Harvard will contribute $900,000
over seven years in CCD. Just over
$330,000 will be designated for FACTOR.
Harvard will continue to focus on activities that support the
cornerstones of artist development:
Discovery, exposure and support.
LISTNUM
1 \l 1541 We
commit to provide incremental funding to several initiatives, including
Mountain Fest. We will fund the Little
Big Stage which features artists under the age of 20 who are beginning their
careers by augmenting artist fees.
LISTNUM
1 \l 1542 Parks
Alive, an initiative of Festival Kelowna, a summer‑long concert series in
the parks. Harvard proposes to provide
funding to bring Canadian artists performing in the Adult Standards or Easy
Listening style to the market.
LISTNUM
1 \l 1543 The
Aboriginal Media Education Fund. AMEF is
dedicated to providing aboriginal artists and youth, in particular, with
training for careers in the broadcasting and performing arts fields. Harvard will continue its commitment to
aboriginal people by sponsoring AMEF's audio production training courses in
British Columbia.
LISTNUM
1 \l 1544 The
Canadian Catalogue of Instrumental Music.
The CCIM is a catalogue dedicated to the promotion and support of
Canadian instrumental artists. Harvard
is pleased to provide funding to ensure it can continue to promote these
performers both within Canada and abroad.
LISTNUM
1 \l 1545 Madam
Chair, members of the Commission, Harvard's application for Timeless 96.3 will
meet the needs of Kelowna's listeners and will be of benefit to the Canadian
broadcasting system. We are here today
to offer a fresh option to Kelowna listeners, with a unique musical format, in‑depth
local news and feature programming, and a new perspective that will add
diversity in all forms to the market.
LISTNUM
1 \l 1546 Our
proposal for an Adult Standards/Easy Listening station meets all of the
Commission's licensing criteria.
LISTNUM
1 \l 1547 Our
business plan is sound and can be achieved with minimal impact on the incumbent
broadcasters. We have chosen a format
that is not present in the market and we are targeting a demographic that is
not well served by the incumbents.
Timeless 96.3 will therefore complement existing services, not compete
with them.
LISTNUM
1 \l 1548 Harvard
will bring diversity of ownership and add a new editorial voice to Kelowna, a
market that is currently dominated by two large players, Pattison and
Astral/Standard.
LISTNUM
1 \l 1549 Our
impact will be minimal as our core audience is readily distinguishable from the
incumbents.
LISTNUM
1 \l 1550 Growth
in the overall economy and in retail sales in particular indicates that this
market can accommodate new entry.
LISTNUM
1 \l 1551 And
finally, the incumbent operators are well positioned to respond to competition.
LISTNUM
1 \l 1552 Madam
Chair, this is the right proposal at the right time and in the right
place. Our format choice serves the
largest and fastest growing demographic segment in Kelowna and all the economic
indicators demonstrate that now is the time for new entry. It is clear that this two‑owner market
will benefit from increased competition and from new editorial diversity.
LISTNUM
1 \l 1553 For
all of these reasons we hope the Commission will endorse our proposal and allow
Harvard to extend its tradition of community service to Kelowna with Timeless
96.3 FM.
LISTNUM
1 \l 1554 Thank
you, and we are ready for your questions.
LISTNUM
1 \l 1555 THE
CHAIRPERSON: Thank you, Mr. Cowie. I will ask Commissioner Morin to begin the
questions.
LISTNUM
1 \l 1556 COMMISSIONER
MORIN: Good morning.
LISTNUM
1 \l 1557 I
would like to discuss with you your choice of music format for your proposed
radio station, given the presence of SILK‑FM in the market. Firstly, can you describe how your Adult
Standards/Easy Listening format will defer from SILK‑FM Adult
Contemporary format, and secondly, why do you believe that your format will
provide the greatest degree of programming diversity and represent the best
choice of format to serve the adult population of Kelowna?
LISTNUM
1 \l 1558 MR.
OLSTROM: Commissioner Morin, I will be
pleased to start the process here.
LISTNUM
1 \l 1559 Whenever
Harvard Broadcasting goes into a marketplace, we look at a number of
things. Obviously the demographics, and
what we came out with our research was definitely there was a missing link to
the listeners of the 45‑plus demographic that this format, Adult
Standards/Easy Listening targets.
LISTNUM
1 \l 1560 The
second step that we take is a look at a duplication analysis in terms of music
and the incumbents that currently exist in the marketplace. What we did was we took the Jewel in Ottawa
as a proxy playlist and we did an analysis over a five different week period,
the most recent being October 15th through 29th, and determined that the
duplication of artists within the marketplace is in the neighbourhood of 16 and
a half to 17 per cent, which indicates a fairly low duplication of artists
being played and tracks being played in the marketplace.
LISTNUM
1 \l 1561 Our
format also giving a wide range of different types and styles and genres of
music and sub‑genres of music. Our
non‑hit‑to‑hit ratio is going to be much higher. Our inclusion of instrumental, folk music,
world music, jazz, all lend itself to different music than what is currently
being play by the incumbents in the marketplace.
LISTNUM
1 \l 1562 What
I would like to do is I would like to turn to Larry LeBlanc to speak a little
bit further about the specific format and how it differentiates itself from
those incumbents currently in the market.
LISTNUM
1 \l 1563 MR.
LeBLANC: Commissioner, one thing we must
understand here is the Adult Standards/Easy Listening format is distinct. It is not Easy Listening by itself. It is not Adult Contemporary. It is not Hot AC, Light AC, however you want
to name it. It is a throwback in one
sense to Beautiful Music and Easy Listening formats that were available, widely
available in North American radio markets in the 1950s and 60s. I would make note that I appeared before the
Commission in the 1970s, after writing a paper called The Demise of the Easy
Listening Instrumental, as radio stations were bailing out of that format at
that particular time and bailing out of their commitments that they had to be
instrumental category.
LISTNUM
1 \l 1564 While
the instrumental category did disappear from radio for some time, and the
format itself disappeared, or certainly evolved, and it evolved into Light AC,
AC to some degree, as the rockers that were around at that particular time or
grew up with it, they had their own choices of music. The Easy Listening/Beautiful Music format
that was available within that period of time reached back into the 30s and
1940s for its music.
LISTNUM
1 \l 1565 I
am 60 years old next month. I grew up
with different types of music.
Everything from the Beetles, Rolling Stones to Led Zeppelin, but I also
grew up with Perry Como. I also grew up
with music that I heard like Dean Martin, like Frank Sinatra. I can probably trade off that music, and that
music has endured.
LISTNUM
1 \l 1566 I
would argue that my age demographic, as we grew older, that was just one part
of the music that we have listened to over a period of time. Yes, we are fighting to go see Neil Young as
he plays in concert or Led Zeppelin, but I think I would give anything to see a
Neil Diamond concert at the same time or Diana Krall or a number of these
different people. So the music itself
hasn't changed.
LISTNUM
1 \l 1567 I
would even point out to you that in the 1960s, what knocked off the Beetles I
Want to Hold Your Hand off the Number 1 spot on the charts was Dean Martin with
Everybody Loves Somebody Sometime. So,
we have had this music in our demographic for some time.
LISTNUM
1 \l 1568 But
why is this format unique? Well, it
starts with the fact that there is an instrumental component of 15 per
cent. No other format plays
instrumentals today, or certainly don't play them in abundance. They may have a few here and there. The instrumental disappeared basically off
the radio dial for two or three decades.
You are not likely to hear Percy Faith on the radio any more. You are not likely to hear an artist like
Michael Jones, who is a Canadian from Orilla.
He has put out six albums. He
sold over a million units, and yet most people don't know who the heck he is
because he doesn't get that much radio play or press attention.
LISTNUM
1 \l 1569 The
other thing that is interesting about Adult Standards/Easy Listening as well
too is it picks from a number of different musical genres. We are proposing and looking at playing 70.1
per cent Adult Standards, 5 per cent Light Classical, 10 per cent Jazz
Oriented, 9.9 per cent of the music would be Folk or Roots Oriented, and World
or International, 5 per cent. That is
why we can play newer artists or different things like that that haven't been
heard. Virtually 40 per cent of the
titles we will play will be since year 2000, and less than 15 per cent of that
will be from the past two years, 26 per cent will be from the 80s and 90s, and
16 per cent from the 60s and 70s, and 18 per cent from the 1950s, where
obviously the roots of this format were born.
But they have grown and they have also evolved as well.
LISTNUM
1 \l 1570 For
a number of years, particularly with the instrumental artists, they have been
living in a cottage industry, trying to get their music out.
LISTNUM
1 \l 1571 We
are lucky today to have something like the Canadian Catalogue of Instrumental
Music, where people can tap into that.
They can go on line and hear samples.
I know from working in this format a few years ago, we had trouble
finding instrumental artists. It wasn't
that they weren't there. It is just that
they were not showing up on the radar of the record industry, while in the last
couple of years they are, and thanks to the Canadian Catalogue of Instrumental
Music they are more readily available today.
LISTNUM
1 \l 1572 In
fact, I would also say that with the music education programs in a lot of high
schools and colleges today, now that this format is becoming more available, we
are seeing the emergence of a lot more artists as well.
LISTNUM
1 \l 1573 MR.
OLSTROM: Thank you, Larry.
LISTNUM
1 \l 1574 If
I could also add, Commissioner Morin, the differentiation between ourselves and
what CILK is currently doing, we are projecting the median age for Timeless
96.3 to be approximately 58 years of age, where if we do a calculation on
SILK's audience, difficult to nail it down, but it is somewhat below 50.
LISTNUM
1 \l 1575 Also,
a very significant difference is going to be, as much as the artist, it is the
tracks from the artists. As you may have
noticed in the video, artists like Shania Twain or Alanis Morissette, who come
from maybe different genres, but fit into the genre of what we are presenting
here, but doing different tracks that wouldn't normally be played on a
mainstream format in the marketplace today.
LISTNUM
1 \l 1576 MR.
LeBLANC: If I can add, Commissioner, in
looking at the CILK playlist, we couldn't obviously pick out selections all the
way through, but we could pick out artists.
LISTNUM
1 \l 1577 In
fact, there would be a duplication of maybe 15.2 per cent artists, that is it,
and that is minimum. If you look at the
breakdown of airings, it is quite a bit different too. For example, from '69 or earlier, they are
playing 4.9 per cent. We would be
playing 70.5 in 1970. There is a
separation there as well.
LISTNUM
1 \l 1578 As
I said, that duplication of 15.2 per cent, that is only artists. That doesn't mean we would be playing the
same selections.
LISTNUM
1 \l 1579 I
dare say that they might be playing, as we indicated in our oral, a Rod Stewart
track, but they sure the heck are not playing As Time Goes By. It is not likely. They might be, but I don't think so.
LISTNUM
1 \l 1580 The
same thing with other selections and other artists as well too. Certainly they might be playing a Celine Dion
track, but they might not be playing, say, Celine sings Luc Plamondon. You might not find that track available on
there.
LISTNUM
1 \l 1581 Each
artist, don't forget, on an album has 10, 12, even 14 tracks. There are other selections that are available
quite often. The interesting thing about
this format is it is not necessarily a hit‑driven format. It can go other places as well.
LISTNUM
1 \l 1582 COMMISSIONER
MORIN: How do you intend to schedule the
40 per cent Canadian content? You state
that new and emerging artists will receive effective airplay. During what time slots will new and emerging
artists receive airplay?
LISTNUM
1 \l 1583 MR.
OLSTROM: They will receive airplay
throughout the entire broadcast day. In
fact, if you take a look at our Canadian Spotlight feature, it runs six times
daily. Four of those features run before
6:00 o'clock in the evening. So, not
only do they get their music played, they get a profile of what they are about
and introducing them to the audience.
LISTNUM
1 \l 1584 Also,
our New Crooners feature, which is focused primarily on the new up and coming
artists and, in particular, those new Canadian artists.
LISTNUM
1 \l 1585 COMMISSIONER
MORIN: You are aware of the 2006 policy
revised criteria by which initiatives would be considered eligible. In other words, under the 2006 policy, your
CCD contributions are no longer eligible initiatives. Could you confirm if the CCD sums will be redirected
to eligible projects?
LISTNUM
1 \l 1586 MR.
OLSTROM: Bruce, would you speak to that?
LISTNUM
1 \l 1587 MR.
COWIE: If any of the initiatives that we
have presented to the Commission today are not acceptable under the changed
criteria, those would be directed to FACTOR.
LISTNUM
1 \l 1588 COMMISSIONER
MORIN: Could you provide us with a
revised copy of your financial projections that reflects this change?
LISTNUM
1 \l 1589 MR.
COWIE: I am not sure, Commissioner, what
the changes would be.
LISTNUM
1 \l 1590 THE
CHAIRPERSON: I think there are two
issues here.
LISTNUM
1 \l 1591 If
we go back to what you just said, what you presented today in your oral
presentation are your CCD initiatives.
LISTNUM
1 \l 1592 MR.
COWIE: Right.
LISTNUM
1 \l 1593 THE
CHAIRPERSON: What I think the other
question is: What is your over and above
CCD contribution, over and above the base required amount?
LISTNUM
1 \l 1594 MS
SVEDAHL: It is $634,706.
LISTNUM
1 \l 1595 THE
CHAIRPERSON: And your financial
projections, as filed with the application, show the base amount plus that over
and above each year or for seven years?
LISTNUM
1 \l 1596 MS
SVEDAHL: Our application showed $900,000
for CCD. That is inclusive of the FACTOR
plus the $634,706.
LISTNUM
1 \l 1597 THE
CHAIRPERSON: And you are willing to
accept those as conditions of licence?
LISTNUM
1 \l 1598 MR.
COWIE: Yes.
LISTNUM
1 \l 1599 COMMISSIONER
MORIN: Thank you.
LISTNUM
1 \l 1600 COMMISSIONER
MORIN: You have already a station in
Regina, one in Calgary, and you are in the process of launching new stations in
Fort McMurray and Saskatchewan. It
sounds like you have a lot on your plate.
LISTNUM
1 \l 1601 Given
your other commitments, can you handle a new licence?
LISTNUM
1 \l 1602 MR.
COWIE: Yes. There is still a lot of room on our
plate. We have not had an opportunity to
speak to you, Commissioner Morin, about our regional strategy of the Harvard
Broadcasting Company.
LISTNUM
1 \l 1603 We
have been in the business for more than 30 years now. In recent years we decided that there were
two or three things that we needed to accomplish. One was to become a significant player, but
in the western Canadian region. That
would be from Manitoba west.
LISTNUM
1 \l 1604 The
reason for that was that in small markets, it is difficult to become
significant contributors to Canadian Content Development. We wanted to do that. So, as we build our number of stations into a
larger strategic group, we accomplish that.
LISTNUM
1 \l 1605 The
Calgary station that we put on the air last year will be a very major
contributor to Canadian Content Development, as will this station, if we are
successful here.
LISTNUM
1 \l 1606 So,
the strategy is ongoing. It is well‑funded. You will hear from us again in other
places. We are also looking at the
opportunity of purchasing radio stations where it is strategically within our
purview. So, we hope to meet you many
times in the future.
LISTNUM
1 \l 1607 COMMISSIONER
MORIN: Good.
LISTNUM
1 \l 1608 In
your presentation, the written one, you state that you will bring a new
perspective on news and information.
Could you explain in some detail and even with some examples, if
possible, what you mean by a new perspective on news and information?
LISTNUM
1 \l 1609 MR.
OLSTROM: I think a perspective that we
will bring is a perspective that is targeted towards an older demographic.
LISTNUM
1 \l 1610 We
are a music‑based radio station.
However, we are not going to be here to compete with the News/Talk
station. However, we will have concise
news that covers the Okanagan and Kelowna and the Central Okanagan Valley.
LISTNUM
1 \l 1611 Maybe
I will turn to Bruce just for a moment to talk a little bit about his history
and his perspective on that.
LISTNUM
1 \l 1612 Just
before I do that, I meant to say that one of the other things that will be a
little bit distinctive of our format is during the noon hour, between noon and
12:30 we have a half hour program that gives us a little bit more time and we
have put more resources into evaluating and talking about and exploring the
different things that are going on in the Okanagan and that impact the
community of Kelowna and the Central Okanagan.
LISTNUM
1 \l 1613 I
will have Bruce speak a little bit to his experiences with that.
LISTNUM
1 \l 1614 MR.
COWIE: I think, Commissioner, what led
us to begin to talk about a different perspective on news was when we first got
involved with the application for Fort McMurray. Here is a city which is going through
tremendous change. Kelowna is not very
much different.
LISTNUM
1 \l 1615 Many
of the news stories here have to follow what people are saying to each other on
a regular basis: What is going on
here? Where is all of this development
going? How is it affecting the prices of
homes? How is it affecting the health
services? I remind you that we are
talking to an older audience here. They
need to know what their place is in this new Kelowna, how it affects them.
LISTNUM
1 \l 1616 They
are interested in health issues. I
shouldn't say health. I should probably
say wellness issues. They are certainly
in this market interested in traffic and the building that is going on around
them.
LISTNUM
1 \l 1617 So,
the influx of baby boomers here is changing Kelowna, and it is changing it in a
very positive way. They are coming here,
they are investing. They have had
successful careers and they are joining the older demographic. This is becoming a very powerful economic
group. So, they have something to say
about what goes on here.
LISTNUM
1 \l 1618 So,
our job, we think, as a licensee here, is to chronicle daily for those folks
what is going on, how it affects them.
We will talk to them, both through our website and through our on‑air
personnel, as to how we can be of assistance in making sure that this
transition, which for older people can be unsettling, can be understood and
they can be made more comfortable by it.
LISTNUM
1 \l 1619 That
is one perspective of the news and features.
LISTNUM
1 \l 1620 But
the other part of that is nine hours of news on an FM station is a lot of news
on an FM station. We are doing that
because the people we interviewed in our research, and I can let Deborah
McLaughlin speak to this, identified news as very, very important to them. So, we are building a larger newsroom than we
have in any of our other FM stations at the moment, with the exception of
Calgary, which is a major market in order to, in effect, take care of that
request of this demo.
LISTNUM
1 \l 1621 COMMISSIONER
MORIN: But you didn't provide any
staffing plans about this.
LISTNUM
1 \l 1622 MR.
OLSTROM: We have four individuals, four
staff in our newsroom.
LISTNUM
1 \l 1623 COMMISSIONER
MORIN: And you will be able to produce
and offer quality newscasts, addressing the needs and interests of the
community you propose to serve?
LISTNUM
1 \l 1624 MR.
COWIE: Yes, we will. That is to provide the on‑air news
gathering group.
LISTNUM
1 \l 1625 In
addition to that, the thing I have noticed in Kelowna in the time I have been
here is there is a very large group of people who are deeply involved in this
marketplace who know it inside and out, you know, people that write in
periodicals here and in tabloids and those sorts of things.
LISTNUM
1 \l 1626 We
want to attract them to our station as regular guests and with input into the
kind of information that we are going to disseminate for this group of people.
LISTNUM
1 \l 1627 COMMISSIONER
MORIN: Thank you.
LISTNUM
1 \l 1628 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 1629 Mr.
Leblanc, in response to a question by Commissioner Morin, said that 15 per cent
of the content on this radio station would be instrumental music. Is that correct?
LISTNUM
1 \l 1630 MR.
LeBLANC: Yes.
LISTNUM
1 \l 1631 THE
CHAIRPERSON: Do you plan on programming
this instrumental music throughout the day or will it be in a specific time
block?
LISTNUM
1 \l 1632 MR.
LeBLANC: It will be throughout the day.
LISTNUM
1 \l 1633 THE
CHAIRPERSON: Would you accept 15 per
cent as a condition of licence?
LISTNUM
1 \l 1634 MR.
OLSTROM: As long as it was a condition
of licence within the format.
LISTNUM
1 \l 1635 THE
CHAIRPERSON: Can you explain that to me,
please?
LISTNUM
1 \l 1636 MR.
OLSTROM: As you are aware, we wouldn't
want to be saddled with a condition of licence if, for example, one of the
incumbents in the marketplace who has much greater resources decided that they
wanted to do this format and take this audience away from us. We may be challenged a period of time down
the road to have to make a format change.
LISTNUM
1 \l 1637 We
don't foresee that. In fact, we are well
behind this format, we are believers of the format and we don't anticipate that
happening, however, we would hate to have a condition of licence that prevented
us from running a business.
LISTNUM
1 \l 1638 THE
CHAIRPERSON: In other words, if one day
you had to change to an Alternative Rock format, you wouldn't want that 15 per
cent of instrumental music to carry over to Alternative Rock?
LISTNUM
1 \l 1639 MR.
OLSTROM: That is correct.
LISTNUM
1 \l 1640 MR.
COWIE: Thank you for your
understanding. The answer is yes.
LISTNUM
1 \l 1641 THE
CHAIRPERSON: I remember, Mr. Olstrom, I
think it was in Edmonton when you were describing the Fort McMurray proposal,
that you were stoked.
LISTNUM
1 \l 1642 MR.
OLSTROM: I was. I am stoked about this format.
LISTNUM
1 \l 1643 THE
CHAIRPERSON: You are just as stoked
about this format?
LISTNUM
1 \l 1644 MR.
OLSTROM: Yes.
LISTNUM
1 \l 1645 THE
CHAIRPERSON: Good to know.
LISTNUM
1 \l 1646 As
we heard already this morning, there have been format changes in the market
since you submitted your application of the incumbents.
LISTNUM
1 \l 1647 How,
if at all, will these format changes impact the business plan because they are
arguably going after the same demographic group that you are going after.
LISTNUM
1 \l 1648 MR.
COWIE: Well, they are. I think their focus is younger, and I don't
think the changes made will affect our business plan in any way.
LISTNUM
1 \l 1649 In
fact, the separation between our demographic group and if there had been two
Country stations, for example, in the market, has improved, if that is not the
answer at the end of the day. So, we are
fine with that.
LISTNUM
1 \l 1650 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 1651 So,
you are still convinced that you will reach positive PBIT by year four?
LISTNUM
1 \l 1652 MR.
COWIE: Yes.
LISTNUM
1 \l 1653 THE
CHAIRPERSON: Those are all my questions.
LISTNUM
1 \l 1654 Legal
counsel.
LISTNUM
1 \l 1655 MS
LEHOUX: No questions.
LISTNUM
1 \l 1656 THE
CHAIRPERSON: Now I can say with
confidence, Mr. Cowie, you have your two minutes.
LISTNUM
1 \l 1657 MR.
COWIE: Thank you, Madam Chair, members
of the Commission.
LISTNUM
1 \l 1658 The
Commission has been asked to review the opportunity for a new licence for
Kelowna three times in as many years.
The reason for the enduring interest is easily understood by anyone who
spends any time in this market.
LISTNUM
1 \l 1659 I
have had a residence here since 2003, the year of the wild fires. I was here two weeks and then evicted from
our new home. So I have had a front row
seat from which to view the growth, the phenomenal expansion of the Central
Okanagan. It was because I was
witnessing the increases in the price of housing, noted the entry of new
businesses and seeing the influx of people moving into the market that in each
of the past three years we examined the potential for a new radio station here
in Kelowna.
LISTNUM
1 \l 1660 Like
the Commission in 2005 and 2006, we decided after each review that despite what
we were seeing firsthand, the data necessary to demonstrate this growth did not
yet exist. So, we waited.
LISTNUM
1 \l 1661 In
2005, we noted the beginning of positive change, with a better than
inflationary increase in retail sales.
LISTNUM
1 \l 1662 In
2006, we saw a phenomenal 22 per cent jump in retail sales in Kelowna,
evidencing an ever‑expanding economic base.
LISTNUM
1 \l 1663 According
to our interviews with advertisers, this expansion of sales continues in 2007.
LISTNUM
1 \l 1664 So
now the data finally reflects that which we have been witnessing in recent
years.
LISTNUM
1 \l 1665 Our
choice of Adult Standards/Easy Listening reflects another important fact about
this market. Census Canada data shows,
and I can confirm, much of the market growth has been among those persons who
have retired or are approaching retirement age.
All forecasts suggest this trend of attracting older residents will
continue.
LISTNUM
1 \l 1666 So,
our proposal is clearly the most appropriate for Kelowna. The market needs a diversity of voices and we
provide that. The older demographics are
growing, but remain underserved.
Licensing Harvard will resolve that gap in the market.
LISTNUM
1 \l 1667 Timeless
96.3 provides increased choices for consumers, while creating the least
disruption for the current broadcasters.
We will serve a demographic that is not the core audience for any of the
existing broadcasters. Timeless 96.3,
therefore, has the greatest potential for developing new revenues in a market
where radio is clearly underperforming relative to the overall economy.
LISTNUM
1 \l 1668 Harvard
has the ability to face the challenge of a start up in a market dominated by
two large players. As a small
independent broadcaster, we strive to be innovative and look to serve niche
markets with our extensive formats.
LISTNUM
1 \l 1669 In
Calgary, where we operate a stand alone, we described our strategy as fishing
in the shallow end of the pond. In
Kelowna we will dive a little deeper into the pool, but with the same net
results: Service to an increasingly
disenfranchised demographic through the creation of a distinctive music format
that will compliment existing services.
LISTNUM
1 \l 1670 Members
of the Commission, we said in our presentation, we believe it bears repeating
here, Timeless 96.3 is the right format at the right time and in the right
place. Harvard is the right broadcaster
with the appropriate vision for this market, and the credentials to fulfil our
commitments to Kelowna.
LISTNUM
1 \l 1671 Thank
you for your time and attention.
LISTNUM
1 \l 1672 THE
CHAIRPERSON: Mr. Cowie and your
colleagues, thanks you very much.
LISTNUM
1 \l 1673 We
will now break for lunch and we will resume at 1:30. Thank you.
‑‑‑ Upon recessing
at 1224 / Suspension à 1224
‑‑‑ Upon resuming
at 1333 / Reprise à 1333
LISTNUM
1 \l 1674 THE
SECRETARY: Order, please be seated. We will begin.
LISTNUM
1 \l 1675 We
will now proceed with item 4, which is an application by CTV Limited, formerly
CHUM Limited, for a licence to operate an English‑language FM commercial
radio programming undertaking in Kelowna, British Columbia.
LISTNUM
1 \l 1676 The
new station will operate on frequency 96.3, channel 242B, with an average
effective radiated power of 7,100 watts, maximum effective radiated power of
20,000 watts, antenna height of minus 89 metres.
LISTNUM
1 \l 1677 Appearing
for the applicant is Mr. Paul Sparkes.
Please introduce your colleagues, and you will have 20 minutes to make
your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM
1 \l 1678 MR.
SPARKES: Madam Chair, members of the
Commission, Commission staff, good afternoon.
LISTNUM
1 \l 1679 My
name is Paul Sparkes and I am Executive Vice‑President, Corporate Affairs
for CTVglobemedia.
LISTNUM
1 \l 1680 When
we acquired CHUM, one of the most attractive aspects of the company was the
radio business and its outstanding management team represented here today by my
colleagues on the panel.
LISTNUM
1 \l 1681 To
my far right is Duff Roman, Vice‑President of Industry Affairs. As one of the founders of FACTOR and other
Canadian talent development initiatives, Duff will help with any questions on
Canadian Content Development.
LISTNUM
1 \l 1682 Next
to Duff is Kerry French, our Vice‑President, Business Analysis. Kerry will answer questions on our market and
economic research, as well as the financial aspects in our application.
LISTNUM
1 \l 1683 To
Kerry's left, your right is Paul ski, President of CHUM Radio and one of
Canada' most recognized and successful radio operators, who will be the Chair
of our panel today.
LISTNUM
1 \l 1684 On
Paul's left is Rob Farina, our Vice‑President of Program
Development. Rob has been Program
Director for some of Canada's top radio stations, including CHUM‑FM in
Toronto and has now taken on a more senior role providing programming support
to our radio stations across the country and leading our innovation process for
developing new formats.
LISTNUM
1 \l 1685 Rob
will walk you through the ground‑breaking concept that is AIR‑FM.
LISTNUM
1 \l 1686 Next
to Rob is David Goldstein, Senior Vice‑President, Regulatory Affairs for
CTVglobemedia.
LISTNUM
1 \l 1687 CHUM
Radio has built one of the most successful radio groups in this country. This success is based on the ability to blend
industry leading research with a passion for building intensely local and
popular stations in large and small communities from coast to coast.
LISTNUM
1 \l 1688 The
CHUM Radio Group is, and will continue to be, at the forefront of community
support, programming invasion and the promotion of emerging Canadian talent.
LISTNUM
1 \l 1689 These
are shared values for us at CTVglobemedia.
Our priority is to ensure that our new radio group has the support and
the resources needed to innovate and grow in this very competitive sector.
LISTNUM
1 \l 1690 Setting
trends and changing the radio landscape is part of CHUM Radio's DNA. At CTVglobemedia we celebrate that sense of
innovation. Today we are here to present
a cutting edge proposal that will reshape radio for a new generation of young
Canadians. Paul Ski will now lead our
presentation and discussion of this very exciting opportunity for the residents
of Kelowna and the Central Okanagan.
LISTNUM
1 \l 1691 Paul.
LISTNUM
1 \l 1692 MR.
SKI: In our presentation this afternoon,
we will demonstrate how our proposal for Alternative Interactive Radio or AIR‑FM
will provide first an innovative approach to a radio station for Kelowna's
significantly underserved youth audience; second, a multi‑pronged support
proposal for Canadian talent, our 40/40 plan, Canadian music, and of that, 40
per cent dedicated to emerging artists; third, a direct response to the key
challenge raised by the Commission in its commercial radio policy; and fourth,
the most diversity to the Kelowna market with the least impact on the two well‑established
players.
LISTNUM
1 \l 1693 I
spent just over 20 years of my career in broadcasting here in B.C. I have watched the remarkable growth of
Kelowna and the Okanagan Valley with keen interest.
LISTNUM
1 \l 1694 Local
radio in Kelowna is strong in the wake of consolidation with two large and well‑resourced
players, each with two FM stations. This
has allowed for revenue growth to outpace the provincial average.
LISTNUM
1 \l 1695 Kelowna
is the fastest growing Metro area in B.C. and the fifth fastest growing metro
area in Canada, but a drill down into those numbers tells an interesting story.
LISTNUM
1 \l 1696 In
fact, the population numbers tell a tale of two cities. One that is increasingly older and one that
is increasingly younger, both growing dramatically. The growth of the younger demographic is why
Olympian, Ross Rebagliati, is leading an investment group to build Kelowna
Mountain, the world's largest snowboard park; why there has been dramatic
interest and investment in local ski
hills, such as Big White, now the second largest ski resort in B.C.; and why
UBC has recently invested almost $300 million in capital and program upgrades
to the UBC Okanagan campus.
LISTNUM
1 \l 1697 Currently
in Kelowna, there are just over 48,000 people between the ages of 12 and 34, a
number that is expected to grow to almost 54,000 by 2015.
LISTNUM
1 \l 1698 Imagine
a town of 48,000 people without a radio station to call their own. That is the reality for young people in
Kelowna. According to BBM, tuning by
audiences from 12 to 34 across the country has declined nearly 16 per cent
since 2000. The situation in the Kelowna
market is even worse, where tuning is off a dramatic 20 per cent since the
spring of 2000. What is even more
telling is that residents age 12 to 34 are spending four hours less each week
with radio than they were in 2000.
LISTNUM
1 \l 1699 Radio's
reach in this demographic has declined by 11 per cent during the same time
frame. Over 15 per cent of that audience
in Kelowna are not listening to radio at all.
LISTNUM
1 \l 1700 When
it comes to tuning to radio over the internet, our research shows that 13 to 30
year olds are going out‑of‑market to fill their needs. Of the 36 per cent who listen on‑line,
almost half of their tuning is to stations outside of Kelowna.
LISTNUM
1 \l 1701 We
do not believe young people have given up on radio. We believe they are simply looking for a
radio experience that reflects their world.
LISTNUM
1 \l 1702 In
its 2006 commercial radio policy, the Commission highlighted the following as
one of its overall objectives:
"A commercial radio sector that
provides listeners with a greater diversity of musical genres, and airplay for
a greater variety of Canadian artists."
LISTNUM
1 \l 1703 Later
in the same public notice, the Commission goes on to say:
"The key challenge facing the
radio industry is to keep radio relevant and local in an environment of rapidly
changing technology and consumer behaviour."
LISTNUM
1 \l 1704 This
key challenge outlined by the Commission is most acute with young Canadian
audiences and was a framing principle for this application.
LISTNUM
1 \l 1705 In
fact, CHUM Radio has a long track record of programming innovations that
reinvented the radio experience for successive generations of young Canadians.
LISTNUM
1 \l 1706 The
most recent example of this is the creation of our station The Bounce, a new
style, youth driven Urban/Contemporary Hit radio station in Edmonton. In three short years, with key leadership
provided by James Stuart, General Manager of The Bounce who is here with us
today, The Bounce has changed the local radio landscape and is one of the most
popular stations in Edmonton with listeners 12 to 34. In fact, BBM has found that despite a general
downturn in youth tuning to radio across Canada, in Edmonton, the average hours
of tuning in this demographic has actually gone up 10 per cent between 2005 and
2007.
LISTNUM
1 \l 1707 Based
on that success, we have set out to create something unique for the young
listeners in Kelowna.
LISTNUM
1 \l 1708 While
statistics helped us determine the size of the underserved market of young
people, it was our community research and consultations that helped us
understand their thirst for a local media source that was tailored to their
world. This was noted in several
interventions, but perhaps best exemplified by the UBC Students' Union
Okanagan, who stated:
"We believe the 4,000
university students at UBCO would welcome a station that was focused on young
people in our community and that played the kind of music young people want to
hear. It would also be great to have a
station in the Central Okanagan that covered news, issues, sports and current
events that impacts young people here on campus and throughout community."
LISTNUM
1 \l 1709 We
agree. Kelowna is a city with a clearly
underserved youth demographic that is technologically savvy. It is an ideal place to address the
Commission's key challenge of how to continue to make radio relevant in the
face of changing technological trends and consumer behaviour.
LISTNUM
1 \l 1710 I
would now like to turn to Rob to outline for you how this truly innovative
approach will work.
LISTNUM
1 \l 1711 MR.
FARINA: AIR‑FM or Alternative Interactive
Radio, represents the first fully realized integration between radio, the
internet and the local community.
LISTNUM
1 \l 1712 A
radio station with a website is not new.
One that provides a 360 degree interactive experience that draws local
audiences into the programming of the radio station is unprecedented.
LISTNUM
1 \l 1713 AIR‑FM
will be mostly a mix of Alternative Pop and Modern Rock. Our key demographic demands a deeper and less
predictable music mix. This station will
not be reliant on hits, but will showcase unreleased tracks. The programming will also feature live
recordings, listener created mixes and in‑studio performances promoting
local emerging talent.
LISTNUM
1 \l 1714 We
would now like to show you a brief video presentation that will give you a
better sense of how the AIR‑FM concept will work.
‑‑‑ Video
presentation / présentation vidéo
LISTNUM
1 \l 1715 MR.
FARINA: As you can see, this is much
more than a simple proposal for a radio station, but a means to build a
community that supports Canadian talent and adds a true new level of media
diversity.
LISTNUM
1 \l 1716 Delivering
a deep and meaningful experience to the audience is not limited to music
alone. Our news and information
gathering will be providing a new platform for expression for a generation that
is not consuming traditional media.
LISTNUM
1 \l 1717 As
the Commission is aware, interest in traditional news and information
programming among younger listeners is a challenge. Youth put social issues, the environment,
music and entertainment news first. By
providing a focused news approach covering the stories that Kelowna youth are
passionate about, we can engage our listeners, and tell the stories which are
not being told from their perspective.
LISTNUM
1 \l 1718 Seventy‑five
per cent of the news on AIR‑FM will be local and regional news
stories. Stories such as the toll
crystal meth is taking on young lives, stories about the crisis in affordable
housing, and stories about an inefficient transit system which leaves a large carbon
footprint. We believe these are the
stories not being heard and that national and international stories are readily
available from thousands of other sources.
LISTNUM
1 \l 1719 AIR‑FM
will tell these local and regional stories, and tell them on the audiences'
terms, reaching them not only on radio but linking the stories on‑line to
provide listener commentary, polling and blogging. Young media consumers want information on
their terms. Because of this concise,
yet meaningful news and information approach, we believe the diversity of
voices in Kelowna will be greatly enriched by AIR‑FM.
LISTNUM
1 \l 1720 This
was best outlined by intervenors like the Okanagan College Student Union who
wrote:
"The idea of alternative
interactive radio is appealing because our generation has different listening
habits than our parents' generation. We
do not plan our day around scheduled newscasts or the morning paper..."
LISTNUM
1 \l 1721 Air‑FM
will increase editorial diversity in the marketplace with three and a half hours
of news and current affairs each week, delivered in a style and presentation
aimed directly at the key demographic.
AIR‑FM'S personalities will engage them by sharing information and
content that is very targeted and relevant to their lives.
LISTNUM
1 \l 1722 Adding
to the musical diversity in the marketplace, AIR‑FM presents a unique
proposal to support the next generation of Canadian talent. Supporting the next generation of Canadian
talent cannot be done through just airplay or Canadian content development
initiatives. It requires a focused and
coordinated effort. To that end, this
application involves a four‑pronged proposal to support Canadian talent.
LISTNUM
1 \l 1723 Number
one, our 40/40 plan for CanCon and emerging artists. Given our chosen format, for AIR‑FM, we
have made a two‑fold commitment to support Canadian artists. Forty per cent of the songs on the playlist
will be Canadian content, higher than the requirements under the radio
regulations, and within that Canadian content, we will dedicate 40 per cent of
those tracks to emerging Canadian artists, a focus that was identified as a
priority in the Commercial Radio Review.
LISTNUM
1 \l 1724 Second,
a deeper playlist equalling more choice.
This station, by its nature, will have a much larger playlist than
traditional stations. It will have an
audience base that will demand less repetition and more new music to keep them
engaged, and it will offer the AIR‑FM community an opportunity to push
emerging artists on to the playlist through their on‑line relationship
with the station's programmers. As well,
the on‑line functionality will facilitate listener dialogue about music,
bands, and the thriving local music scene.
LISTNUM
1 \l 1725 AIR‑M
artists will include titles by Gym Class Heroes, Muse, and the Arctic Monkeys,
and a myriad of emerging Canadian artists like Tegan & Sara, Thousand Foot
Crutch, Tokyo Police Club, Evans Blue, and many, many, more, none of which are
currently receiving radio airplay in Kelowna.
LISTNUM
1 \l 1726 Third,
Canadian Content Development. On top of
the normal CCD component of any license, we are committing $700,000 over the
first seven‑year licence term to targeted initiatives and events to
support emerging B.C. artists.
LISTNUM
1 \l 1727 Fourth,
the CHUM Emerging Indie Artist Initiative.
The Chum Emerging Indie Artist Initiative is a national initiative that
flowed from our successful Calgary radio application. With this initiative, CHUM stations across
the country profile an emerging Canadian artist each month with promotional
announcements and dedicated airplay, creating enough spins nationally to
actually move those artists on to the charts.
This has created huge national profile for such artists as State of
Shock, Elise Estrada, Live on Arrival and Suzie McNeil, whose song Believe was
picked under the CHUM Emerging Indie Artist Initiative and has gone on to be
chosen as the official song for the 2010 Winter Olympics, as well as Shiloh,
whose song Alright was played during last week's broadcast of Gossip Girl, a
new U.S. television program.
LISTNUM
1 \l 1728 We
are extremely excited that in less than a year this initiative has already made
a huge contribution to emerging Canadian talent. We look forward to making Kelowna's AIR‑FM
part of that success story.
LISTNUM
1 \l 1729 MR.
SKI: One of the Commission's key tests
for licensing is to determine the best possible use of a frequency to advance
the objectives of the Broadcasting Act and to increase service to the local
community.
LISTNUM
1 \l 1730 While
others have chosen to come forward in this competitive process with more
conventional formats, targeted at older and more affluent audiences, we are
prepared to commit the resources and talent to execute this ground‑breaking
offering targeted at a clearly underserved market.
LISTNUM
1 \l 1731 We
believe this hearing represents one of those unique opportunities where the
Commission's objectives and our desire to create a truly new kind of radio
community fit hand in glove.
LISTNUM
1 \l 1732 In
short, AIR‑FM will deliver the following:
LISTNUM
1 \l 1733 Programming
designed for an underserved demographic that will reflect the local live music
scene, clubs, campus life and community events through the station, as well as
through on‑line, interactive and mobile technology.
LISTNUM
1 \l 1734 Support
for Canadian talent, emerging and local talent through:
LISTNUM
1 \l 1735 Our
40/40 plan: 40 per cent Canadian
content, of which 40 per cent will be emerging Canadian artists; a more
extensive playlist with more variety; targeted CCD initiatives; and
participation in the CHUM Emerging Indie Artist Initiative.
LISTNUM
1 \l 1736 Diversity
with a news and current affairs service that appeals to our key demographic.
LISTNUM
1 \l 1737 We
will create a radio station that is built around the way the young people of
Kelowna live and, in turn, they will make AIR‑FM a part of their
lives. We will connect to them the way
they connect with each other. We will be
able to attract them back to radio by giving them a station that understands them,
that respects them and that reflects them.
LISTNUM
1 \l 1738 Finally,
we have provided an innovative response to the key challenge outlined in the
Commercial Radio Policy, that is, to make radio relevant in the face of
changing technology and consumer behaviour.
LISTNUM
1 \l 1739 AIR‑FM
will provide a truly underserved segment of the market with a truly local
voice. We hope the Commission agrees.
LISTNUM
1 \l 1740 We
thank you for this opportunity and we look forward to your questions.
LISTNUM
1 \l 1741 THE
CHAIRPERSON: Thank you, Mr. Ski, and to
your colleagues, good afternoon. I will
ask Commissioner Williams to ask the first set of questions.
LISTNUM
1 \l 1742 COMMISSIONER
WILLIAMS: Good afternoon, Mr. Ski and
CTV panellists.
LISTNUM
1 \l 1743 Your
application and presentation today has been very thorough. However, as is our custom, I have a number of
detailed questions to help us better understand your proposal. This may of course cause some repetition of
points that you have made either in whole or in part. However, I will try and focus the questions
as best I can, and hopefully you will do your part to focus the answers
accordingly.
LISTNUM
1 \l 1744 I
will begin with a few questions from your supplementary brief.
LISTNUM
1 \l 1745 In
your supplementary brief you indicated you devote a minimum of 90 per cent of
the broadcast week or approximately 113 hours to local station produced
programming. However, section 8.3(a) of
your application, you committed to provide a minimum level of 81 hours and 54
minutes of local programming.
LISTNUM
1 \l 1746 For
the record, could you confirm your local programming commitment for the
broadcast week?
LISTNUM
1 \l 1747 MR.
SKI: Certainly, Commissioner Williams.
LISTNUM
1 \l 1748 The
commitment is the 113 hours or 90 per cent.
LISTNUM
1 \l 1749 COMMISSIONER
WILLIAMS: Thank you.
LISTNUM
1 \l 1750 You
have committed to provide a minimum of three hours, 30 minutes of news and
surveillance spoken word per broadcast week.
You have indicated also that three hours and 30 minutes would consist of
a minimum of two‑plus hours of news and a minimum of one hour of traffic
and weather surveillance weekly.
LISTNUM
1 \l 1751 However,
these minimum news and traffic/weather surveillance given total only three
hours per week and not three hours and 30 minutes. Could you provide us with figures for news
and traffic/weather surveillance that would more accurately reflect your three
hour, 30 minute minimum commitment, please.
LISTNUM
1 \l 1752 MR.
SKI: Commissioner Williams, I will have
Duff Roman run you through those numbers.
LISTNUM
1 \l 1753 MR.
ROMAN: Yes, Commissioner Williams, just
to give you the details, as you said and as focused as possible, here is how
the news is comprised, along with the surveillance.
LISTNUM
1 \l 1754 Starting
with the news, AIR‑FM will broadcast 11 newscasts a day, Monday through
Friday, and three per day on Saturday and Sunday, for a grand total of 61
scheduled newscasts during each broadcast week.
That will comprise two hours and 17 and a half minutes of news content.
LISTNUM
1 \l 1755 For
traffic and weather surveillance, on week days AIR‑FM will broadcast two
60 second traffic and weather reports per hour each weekday morning between
6:00 a.m. and 9:00 a.m. Between 9:00
a.m. and 4:00 p.m. and 6:00 p.m. and midnight, there will be one 30 second
weather report minimum per hour.
LISTNUM
1 \l 1756 On
weekends, AIR‑FM will broadcast one 30 second weather report every hour
from 6:00 a.m. through midnight each of Saturday and Sunday.
LISTNUM
1 \l 1757 That
brings the total of traffic and weather surveillance to one hour and 20 and a
half minutes. That would bring the news
and surveillance combined to a total of three hours and 38 minutes.
LISTNUM
1 \l 1758 COMMISSIONER
WILLIAMS: Thank you, Mr. Roman.
LISTNUM
1 \l 1759 As
a percentage of your overall weekly news content, how much of your news
programming would be devoted to local and regional stories?
LISTNUM
1 \l 1760 MR.
SKI: Essentially most, if not all. Normally it is in the 75 per cent or 80 per
cent range as local or regional news.
All of our radio stations are local by their very nature. That is all we do is local radio. So, the majority of the news would be
local. It has to be to reach the
underserved market that we have been talking about.
LISTNUM
1 \l 1761 COMMISSIONER
WILLIAMS: Thank you, Mr. Ski.
LISTNUM
1 \l 1762 On
pages 9 through 11 and 17 through 20 of your supplementary brief ‑‑
I will give you a moment to find it ‑‑ you emphasize the
importance of listener interactivity with the station to develop relevant and
meaningful spoken word and music on‑air content for your target audience,
the 12 to 34 age group.
LISTNUM
1 \l 1763 Could
you elaborate on the type of spoken word content you would offer this age group
in order to make your proposed station relevant and meaningful to them? I am specifically interested in the type of
on‑air news, information and surveillance content you would offer your 12
to 34 year old listener.
LISTNUM
1 \l 1764 MR.
SKI: Certainly, Commissioner Williams.
LISTNUM
1 \l 1765 Let
me maybe start with the news portion of that, just to give you some flavour for
how we see this being done a little bit differently. I think we have to remember that the majority
of these people, young teens and young adults, their priority in listening to
radio is listening to their favourite music and listening to new music. But within that context, obviously we want to
provide the type of information that is relevant to them, that kind of reflects
their particular world, because we believe that these richer experiences that
we think we can bring to them will help us to promote engagement, and we need
engagement from this particular audience.
LISTNUM
1 \l 1766 On
the news side, the news is going to be a little different. It is more of an integrated communications
approach with these people or experience.
LISTNUM
1 \l 1767 Let
me divide it up into maybe three different segments. One is content, context and process.
LISTNUM
1 \l 1768 The
content is really the editorial process.
What stories are important to this particular demographic, and we will
find that out by our constant research, by listening to them and by finding out
what is important on a day‑to‑day basis.
LISTNUM
1 \l 1769 Secondly,
it is context. How does the story relate
to that particular audience, because nobody is really relating to them in this
particular market now, from the spoken word and from an information
standpoint. That determines our approach
as to how each of these stories fits into their lives.
LISTNUM
1 \l 1770 The
third is really the process through some of the interactive comments that we
get some engagement as I mentioned earlier, and that is the start of the
experience.
LISTNUM
1 \l 1771 If
I could, I would like maybe to have Duff and Rob give you examples of how our
news would be a little bit different than what is currently existing in the
market.
LISTNUM
1 \l 1772 COMMISSIONER
WILLIAMS: Please do so.
LISTNUM
1 \l 1773 MR.
SKI: Thank you.
LISTNUM
1 \l 1774 MR.
ROMAN: Here is an example. For instance, a news story might be local
parents and concerned groups gathering in Kelowna, as they did recently, to
discuss local use and abuse and problems associated with one of the fastest
growing drugs crystal meth. While not
yet an epidemic, it is a problem.
LISTNUM
1 \l 1775 So,
AIR‑FM'S News Director makes his editorial decision that the story or
content, as Paul mentioned, is air worthy.
Conventionally the context of the story could be criminal gangs, could
be policing awareness or education. But
for our AIR‑FM listeners the pressing issue in the context of impacting
their lives is the unrelenting peer pressure of classmates or co‑workers
to be a user, to be hip, to be cool.
LISTNUM
1 \l 1776 For
AIR‑FM, the process of getting the content and context of this story out
to the listener launches a dialogue where the station receives revelations of
school yard or work place experiences and coping strategies that are shared
through the reciprocal communication of chats, blogs, podcasts, text messaging
and other interactive touch points, part of the 360 degree experience fuelling
a constantly revolving circle of communication.
LISTNUM
1 \l 1777 MR.
FARINA: Further to what Duff says, we
also don't want to underestimate the power of blogs in terms as an opportunity
for listeners to be able to share information and for that information to turn
into news stories on the air on AIR‑FM.
LISTNUM
1 \l 1778 In
researching for the kind of news stories we would be covering, it is amazing
how many of the stuff existed on blogs but wasn't being reported on traditional
media.
LISTNUM
1 \l 1779 A
great example I have for you is School District 23 right here in Kelowna
initiated a laptop program for the students, where students had a laptop for
their studies at school and to bring home for homework. While I think everybody loved the idea at
first, a semester in, the reality of it was a completely different story. Laptops didn't cut down on the amount of
textbooks kids had to carry to and from schools. The lockers at the school were so small that
it was hard enough to fit their backpack in there, let alone the laptops, so
they had to lug it around. More
importantly, the laptops made them a target for assault and theft on their way
to and from school from bullies.
LISTNUM
1 \l 1780 The
other side of that is research studies have shown where the laptop program was
put into place, that it had no effect on reading and comprehension skills on
students.
LISTNUM
1 \l 1781 This
story did not come through traditional media.
It is a story that affects the people that we are targeting. It is a story that affects that environment
in that school, but it is not a story that is making it to traditional
media. When we talk about this being the
tale of two cities, it is on this end of the spectrum where the stories and the
reflection does not seem to be embraced on radio in this market.
LISTNUM
1 \l 1782 THE
CHAIRPERSON: We can relate, because as
you can see our laptops didn't eliminate the omni present binder.
LISTNUM
1 \l 1783 Go
ahead.
LISTNUM
1 \l 1784 COMMISSIONER
WILLIAMS: This is a pretty innovative
concept. What can you tell us about the
challenges of meeting this 12 to 34 listening market? How do you create and develop relevant and
meaningful on‑air news and spoken word programming for this group?
LISTNUM
1 \l 1785 MR.
SKI: We do it in a number of different
ways, Commissioner Williams, but I think your are right, it is certainly not an
easy task. It is certainly a task that
we are up to. As you know, we have
developed formats in the past that have been very successful and we have a lot
of experience in it.
LISTNUM
1 \l 1786 One
of the things that we did, we looked at a study from the University of
California Media Lab, and that particular study was entitled "How to make
radio more appealing to the next generation." As I mentioned earlier, the primary reasons
they listen to radio were to hear their favourite music and to hear new music.
LISTNUM
1 \l 1787 So,
certainly the spoken word content is important.
It is important that it be relevant.
We have to get them into the tent. We have to get them back to radio or keep them
engaged in radio before we can do anything else.
LISTNUM
1 \l 1788 In
terms of that relationship, it is part of our 360 degree experience, which I
will have Rob tell you a little bit more about, because if we can reflect their
world, if we can mirror what is happening in their lives in providing
information, and helpful information, in part, on how they get through their
daily lives, then we will engage them and we will have them as listeners.
LISTNUM
1 \l 1789 Rob.
LISTNUM
1 \l 1790 MR.
FARINA: Maybe to start, I want to frame
this in that who we are talking about here is the cultural navigators of our
time. That is the audience we are trying
to reach through this. It is an audience
that studies on the media habits that consume 20 hours of entertainment in
seven hours. What that means, and
anybody that has children can attest to this, is they are on the TV, on the
laptop, on the cell phone, at the Gameboy within arm's reach, and they are
doing all these things simultaneous, much to our chagrin.
LISTNUM
1 \l 1791 When
we look at that kind of experience that they have, that need of being connected
at all times and also the need ‑‑ technology has allowed them
to access anything they want instantaneously.
So, there needs to be a level of control and interaction with whatever
service we design for them.
LISTNUM
1 \l 1792 As
Paul mentioned, we operate successful youth formats across the country. We also operate successful television youth
formats, and within that, we also have a great interactive department that is
targeted at youth and, through that, we have learned a lot about the habits and
what it takes to engage them.
LISTNUM
1 \l 1793 We
know that providing traditional news, they don't have an appetite for it. They have a rejection towards traditional
news. But I don't want that to be
confused with that this audience is disinterested. Quite the opposite. They are very engaged. They crave information, but they crave
information on their own terms.
LISTNUM
1 \l 1794 So,
with AIR‑FM, it isn't about outside of the news and traffic, about us
saying this was, that is, you know. It
is about engaging people at all times and we engage them by talking about what
is affecting their lives at this moment in time.
LISTNUM
1 \l 1795 The
difference is the values that they place.
There is a strong value on the environment, strong value on social
issues, particularly in this market of Kelowna.
When we keep going back to the fact that it is a tale of two cities, it
is also a tale of two cities in the business community. You have some young entrepreneurs looking to
capitalize on the thriving music scene in Kelowna, and then you have another
segment that would want to curtail that expansion.
LISTNUM
1 \l 1796 There
is a lot of differences in the needs of this audience, and this market in
particular seems to be a perfect location for this format, based on the fact
that the music isn't available, based on the strong support of local talent,
the amazing roster of local artists and the amazing vibe being created in this
city through the live music scene.
LISTNUM
1 \l 1797 In
the audience today is Ryan Abougoush and Dan Wetjen, who is the editor for
Event. Ryan runs the Grateful Fed here
in the Okanagan. Ryan and Dan got
together, and noticing this unbelievable music scene that is happening in this
market and started the Rockanagan Festival this fall. They had 30 acts over two nights. They had to turn down a lot of acts because
they didn't have room, and already they have enlisted three more clubs for next
year's and Molson's has hopped on board as a major sponsor.
LISTNUM
1 \l 1798 There
is an incredible vibe here. There is an
incredible popular event, But it is not the Kelowna we are hearing about, but
it is the Kelowna that therein exists, and we feel this is a perfect offering
for a new generation in an underserved market.
LISTNUM
1 \l 1799 COMMISSIONER
WILLIAMS: Thank you.
LISTNUM
1 \l 1800 This
programming that you are developing to fill that need, how do you develop
programming that is relevant to appeal to an 18 to 24 year old that is
attractive at the same time to the further end of your demographic, to a 30 to
34 year old? Aren't these different
demographic groups?
LISTNUM
1 \l 1801 MR.
SKI: Commissioner Williams, I will
comment and then have Rob provide you with a few comments.
LISTNUM
1 \l 1802 If
you look at the core audience, and every radio station has a core audience
which normally has about a ten‑year span, so while the audience overall
is 12 to 30, 12 to 34, the core audience is 15 to 25.
LISTNUM
1 \l 1803 One
of the things we have to remember is that we are not appealing to all of the 12
to 30 year olds in the market. When you
look at the research we did, we are appealing to a 12 to 30 year old who says a
station like AIR‑FM would be their favourite. So there is a big difference. This is a group that in fact says yes, we
like to listen to this particular radio station, the core audience in the 15 to
25 range as I mentioned, and peripherally there is listening on either sides of
that.
LISTNUM
1 \l 1804 It
is not unlike a 25 to 54 year old target audience. Are 25 year olds and 54 year olds the
same? No, they are not. But within that cohort, there are people who
have similar likes, similar dislikes and similar likes, and we are saying it is
the same thing with this group too, although there may be some generational
differences. One of the things that can
bring these people together is music. Music
can be a common denominator for people to listen to a radio station. That is normally what it is.
LISTNUM
1 \l 1805 Rob
can maybe give you some examples of how we see that from the information.
LISTNUM
1 \l 1806 MR.
FARINA: I will just add to that. We are looking a lot more at life stage
demographics as well as age as a tool. By life stage demographics I mean people could
be of different ages, there could be a ten or 20‑year span, but their
interests and the kind of media and information they are accessing is the same
thing.
LISTNUM
1 \l 1807 For
this particular demo, a good example is a 15‑year old and a 25‑year
old, while the 15‑year old is well into their high school years and
thinking about career and what to take in university, the 25‑year old may
be starting their life and new career.
So, they are going to be very focused and interested in items about the
job market and career options of the like.
You know, 15 and 25‑year old men generally index really high on
electronics and gadgets. They would be
interested on that kind of thing. Gaming
for this particular audience is a big thing.
Entertainment news and lifestyle issues, social issues also very
important for this audience.
LISTNUM
1 \l 1808 We
try as best we can to bridge the gap with that life stage demographic, knowing
the different and varied interests of the audience. But the one defining motivator to the radio
station, and as our research shows, is these are people that said they were
interested in this format. So, because
of the music we play, that is the one thing that binds them to the radio
station.
LISTNUM
1 \l 1809 MR.
SKI: If I could too just mention what
got us very excited about this opportunity was the fact that in the research
almost 90 per cent of the people in that age group said they would listen to a
station of this type.
LISTNUM
1 \l 1810 The
other part which is even more important, 70 per cent of those people said that
they would listen often. What that means
is that this station would become their favourite. So, that becomes the core audience, and that
is what drives the success of any station, those people who would listen often.
LISTNUM
1 \l 1811 Because
of the ongoing research that we do and that we have always done, but especially
in this market, in order to fine tune what we are doing with the radio station,
what we look for in the research is where there is agreement within this
particular age group and we focus our product or a lot of our product on those
areas of agreement. That is again how
you maintain that core or keep that core as high as it is, and the ongoing
research helps a lot.
LISTNUM
1 \l 1812 COMMISSIONER
WILLIAMS: So, 70 per cent of the
approximate 48,000 members I guess of that demographic is 33,000, 34,000
people. Is that enough of an audience
for your business plan to survive?
LISTNUM
1 \l 1813 MR.
SKI: Remember it is more than that. It is enough of the audience for our station
to survive, but those are the people who are the core. You have to go beyond the core because while
every radio station has a core, they also have peripheral listening. So, we expect the listening to be higher than
that because, as I said earlier, 90 per cent said they would listen to the
station at some point or another. So,
the vast majority of them would be listening to the station.
LISTNUM
1 \l 1814 But
the core are the people who keep the station alive, quite frankly. As Rob said earlier, they are the taste
makers. They are the people who tell
other people about the radio station.
They are the people who are there day after day after day to make sure
that this station is successful over the long term while others go in and out.
LISTNUM
1 \l 1815 COMMISSIONER
WILLIAMS: I would like now to have a
better understanding of how and to what degree you will develop your listener
generated interactive news and spoken word content into programming that is
appealing to this group and how this interactive content will be integrated
into your regular programming mix.
Obviously the station's programming staff will also be responsible and
create and deliver on‑air spoken word programming.
LISTNUM
1 \l 1816 How
will the station produced content and listener generated content be blended to
provide the 360 degree AIR‑FM format listening experience you have
described earlier today?
LISTNUM
1 \l 1817 There
is a couple main questions in there. I
didn't know whether you got them when I was going through, but I will go back
to them.
LISTNUM
1 \l 1818 First,
we want to have a better understanding of how and to what degree you will
develop your listener generated interactive news and spoken word programming,
and how it will be integrated.
LISTNUM
1 \l 1819 Then
compare that with the station programming staff produced material and how is
that blended into the final product?
LISTNUM
1 \l 1820 MR.
SKI: Thank you very much.
LISTNUM
1 \l 1821 We
talked a little bit about the content, context, process in terms of the spoken
word, but I will have Rob give you an idea of how those two work, both the user
generated and the on‑air generated or what is generated from the staff.
LISTNUM
1 \l 1822 COMMISSIONER
WILLIAMS: Thank you.
LISTNUM
1 \l 1823 MR.
FARINA: Thank you, Paul.
LISTNUM
1 \l 1824 In
many ways what AIR‑FM represents is before radio was marginalized in its
role of being the only source for information for a long time, for being the
only source for music and new music to a listener in the sense of community
that radio built itself around, in many ways, what AIR‑FM does is go back
to the essence of what made radio fantastic and re‑invent it for a new
world, a world that demands deeper interaction, a deeper relevance and in some
ways immediate gratification with its needs, which is a big hill to climb.
LISTNUM
1 \l 1825 So,
when the development of this came and really technology and marrying technology
with what we do in radio was what turned the light bulb on on connecting the two
on AIR‑FM, in terms of how we interact that content, there is two sides
of it.
LISTNUM
1 \l 1826 First,
there is the news content that comes from our audience. When a news story or a news idea comes from
the audience, they could text message or e‑mail or call into the newsroom
or post a blog or a commentary or a podcast on a specific issue. Before that information is loaded, it is
important that if it is a news story, that the news department checks it for
facts and accuracy.
LISTNUM
1 \l 1827 We
don't imagine that to be a huge portion of the listener supplied or listener
generated content on line.
LISTNUM
1 \l 1828 What
we expect to be a bigger part of the listener‑generated content is blog,s
posting opinions, podcast on specific interests or community issues that are
facing Kelowna, that people want to post and have other listeners comment on.
LISTNUM
1 \l 1829 We
use the internet portion of the service to feed the on‑air portion of the
service. All our personalities and news
people, their job is to moderate and engage the audience on a variety of levels
at all times. So, for example, we might
have local Kelowna band Secret and Whisperer in the radio station. We are taking calls from fans. At the same time the band is chatting with
fans on the Message Board. While the
band is in there, we happen to know because previously we had promoted that we
were going to debut Feist's new album and ask people that were huge Feist fans
if they wanted to be alerted about it to text us. At the same time, this whole other group is
getting a text message that the new Feist CD is debutting on the next
hour. At the same time there are some
listeners that have an interest in a new business initiative the city of
Kelowna and the Chamber of Business is initiating and decide they want to put
together a podcast on doing that.
LISTNUM
1 \l 1830 So,
there is varied and multiple levels of things going on at all times with the
radio station, with it all leading to people coming back to the radio station
for the content. We want the radio
station to be the hub and then engage people and connect them to each other and
their community using the on‑line and on‑air in a very symbiotic
fashion.
LISTNUM
1 \l 1831 I
don't know if that answers your question.
LISTNUM
1 \l 1832 COMMISSIONER
WILLIAMS: I think that gives us a good
indication of where you want to go. I
think how you began was I guess it is Saturday Night Request Show goes high
tech and in many different directions and a full 360 with many different types
of interactive ‑‑
LISTNUM
1 \l 1833 MR.
FARINA: Right. On that note, Commissioner, I am happy to
talk about the Saturday Night Request Show because one of the things we are
able to do now with the developments in technology that I spoke of is this
virtual auditorium we are able to create.
LISTNUM
1 \l 1834 This
software which users decide they can opt in on to become a taste maker for AIR‑FM
and feed into the music they are going to hear on the radio station, the way it
works is the software detects the play counts in either their iTunes folder or
RealPlayer or QuickPlayer, whatever they use on their PC or MP3 player to
listen to music.
LISTNUM
1 \l 1835 COMMISSIONER
WILLIAMS: And they have to give you
their permission for you to access that?
LISTNUM
1 \l 1836 MR.
FARINA: Absolutely. They consent to being part of this. We see a huge buy‑in on that because it
allows them to have a real opportunity to influence what they are getting out
of the radio station, and it is also an important selling proposition because I
think for the first time we could actually create a radio station around a
specific demographic and build a radio station specifically for their needs
because all the information that we are getting from them is based on their own
music habits. Within those music habits,
we are able to find the relationships between the artists they already love and
listen to and introduce new artists to them, both on the air on the radio
station and also on‑line.
LISTNUM
1 \l 1837 At
the same time, they are able to influence our programming staff in a very
symbiotic fashion about new music they have heard of or discovered and be able
to push that music to be on the air.
LISTNUM
1 \l 1838 COMMISSIONER
WILLIAMS: Thank you.
LISTNUM
1 \l 1839 Let's
talk now about the level of live‑to‑air programming. Could you please provide the amount of time
broadcast per week that you would offer live‑to‑air programming,
voice track programming and any automated programming? We could not find this anywhere in your
application.
LISTNUM
1 \l 1840 MR.
SKI: Commissioner Williams, we expect
that approximately eight hours of the broadcast week would be potentially voice
tracked. This is the type of format
that, again, as we say, if we are trying to repatriate youth, teens and young
adults, the important thing is that interactivity. So, in order for that to happen, we need to
be live. We need to be live; we need to
be interactive. That is the only way
that we can establish what radio has done so well over the years is some type
of psychological affiliation with the listener.
We have lost that with the young people.
LISTNUM
1 \l 1841 COMMISSIONER
WILLIAMS: Do you see that live
interactivity taking a form of one of your on‑air personnel are working
their way through a program and a listener can MSN them and somebody will
receive that and respond to that as quickly as they had received it or within a
reasonable period of time?
LISTNUM
1 \l 1842 MR.
SKI: That is correct. It is going to be, as Rob said earlier,
interactive and almost immediate and also spontaneous at the same time. That is important for this relationship.
LISTNUM
1 \l 1843 I
mentioned the study from the University of Southern California. One of the key findings in that study was
that radio needed to completely embrace all of the technology available as
extensions of the radio station, and that is what we are trying to do.
LISTNUM
1 \l 1844 COMMISSIONER
WILLIAMS: Let's spend a bit of time now
on music format and target audience.
LISTNUM
1 \l 1845 You
have described your music mix as being a blend of Modern Rock and Pop
music. Do you envision both styles of
music being blended more or less equally in a broadcast week or is one style
going to be more prominent than the other?
LISTNUM
1 \l 1846 MR.
FARINA: I think one of the problems we
face is the labelling of music, which younger music fans are generally
disregarding, the whole thought of putting things into genres.
LISTNUM
1 \l 1847 It
is tough to answer the question because a lot of the music could be classified
as an Alternative Rock or an Alternative Pop, but just based on the current
music trends right now, and the kind of music that is being accessed in on‑line
music experiences, I think it is probably going to be a mix of about 60 per
cent Alternative Rock and 40 per cent Alternative Pop. That all depends on the available music that
is out right now. The trend may change a
year from you. Trends change quickly,
and there may be, with the success of acts like Amy Winehouse and Groove Armada
and Mika in the Alternative Pop genre, there may be many more of those kind of
acts a year from now.
LISTNUM
1 \l 1848 But
we believe that right now it looks like about 60 per cent Alternative Rock, 40
per cent Alternative Pop.
LISTNUM
1 \l 1849 COMMISSIONER
WILLIAMS: So, that is today and if you
are successful and you get licensed and launched, your audience will let you
know what they are listening to and what they prefer, and you will adjust
accordingly?
LISTNUM
1 \l 1850 MR.
FARINA: Right.
LISTNUM
1 \l 1851 COMMISSIONER
WILLIAMS: How do you expect this blended
music format, the one you envision today, to skew amongst male and female
listeners? Is it 50/50 or more one than
the other?
LISTNUM
1 \l 1852 MR.
FARINA: It is virtually the same. There is a slightly more male skew, but there
is great appeal for both young males and young females.
LISTNUM
1 \l 1853 COMMISSIONER
WILLIAMS: In terms of market impact, I
note that incumbent station, CHSU‑FM, is currently offering a CHR Hot AC
format music mix. Could you describe any
similarities or differences between your proposed AIR‑FM music mix and
what is currently programmed on CHSU‑FM?
LISTNUM
1 \l 1854 As
well, I would be interested in your view on the degree of audience overlap with
since CHSU‑FM since CHR Hot AC format also draws listeners from the same
age 18 to 34 age group although as a rule generally more female listeners than
male.
LISTNUM
1 \l 1855 MR.
SKI: Commissioner Williams, we don't
think there is going to be much duplication.
Rob has done quite a bit of analysis over the last several months.
LISTNUM
1 \l 1856 If
you look at the target audiences of these radio stations, the one that you
mentioned, SUN and the others, their target audiences are normally from 35 to
45 to 55, but there is nobody down in the 25 or 15‑year old sort of
median range. That is where we think we
fit in.
LISTNUM
1 \l 1857 As
we mentioned from the research, it appears that 90 per cent of the people in
that range believe there is not a radio station of that nature available.
LISTNUM
1 \l 1858 Rob
will give you an idea of some of the duplication that we don't find in this
market.
LISTNUM
1 \l 1859 MR.
FARINA: Further to what Paul said, CHSU
is a Hot Adult Contemporary station. We
operate several of those in a bunch of markets.
The core of that format generally leans female and is 25‑44. We are slightly male skewed and target 15 to
25.
LISTNUM
1 \l 1860 Presentation
on CHSU and AIR‑FM would be worlds apart.
The audience demands a much more interactive and less structured and
less produced presentation. They crave
something that is a little more real. So
the presentation is different.
LISTNUM
1 \l 1861 The
playlist on CHSU is actually comprised of Hot Adult Contemporary hits and they
do a great job at that.
LISTNUM
1 \l 1862 AIR‑FM'S
music is very different with Alternative Pop and Alternative Rock.
LISTNUM
1 \l 1863 When
we looked at artist duplication in the market and specifically with CHSU, we
found that nine of the 40 most played artists were artists that would
potentially be played on FM. I think
there is a huge difference in how we approach the music on a station like AIR‑FM.
LISTNUM
1 \l 1864 The
audience we are going after are really the taste makers. They are on the first wave. When a hot new band comes out, they are not
interested in just hearing the single that the record company is pushing. They want to hear three or four or five
tracks off that record. They want a
deeper experience with it.
LISTNUM
1 \l 1865 Even
when a single comes out for an act like, I will use the example of a band like
Muse or Arcade Fire, there is a process that a single goes to. First it goes to the core audience, and in
the case of an Arcade Fire, that core audience resides on Alternative Rock
radio. Then once the song builds, it may
move on to other formats. The next
obvious one is CHR. Then the longer legs
a song has, the more it moves up the food chain in terms of formats, and Hot AC
is very much a mainstream hit driven format.
LISTNUM
1 \l 1866 That
is all to say that while there might be a duplication in nine out of the top 40
artists of artists we play, the actual selections are vastly different because
the song they would be playing on CHSU is probably a song we have established
and has moved off the playlist anywhere from one year to 18 months ago. So, very different there.
LISTNUM
1 \l 1867 Obviously
our news and information, with the different targets, the way we deliver the
news and the kind of stories we talk about are very different, and also
important to note that AIR‑FM'S programming is 100 per cent Kelowna
focused. A good portion of CHSU's
programming is networked between Kelowna, Penticton and Vernon.
LISTNUM
1 \l 1868 MR.
SKI: Commissioner Williams, if I could
ask Kerry to just comment briefly.
LISTNUM
1 \l 1869 MS
FRENCH: Mr. Commissioner, when we looked
at the duplication between these formats in other markets, we find that there
is very little overlap between Alternative and Hot AC.
LISTNUM
1 \l 1870 In
Toronto, we operate the number one Hot AC station in the country. The only audience we share with The Edge,
which is a long‑established Alternative station, the audience we share is
only 14 per cent.
LISTNUM
1 \l 1871 In
a market like Ottawa, where we operate Magic 100, another AC station, the
duplication between Live 88 Five, another alternative station, is even less at
9 per cent. So, we see very little
duplication of audience with those formats.
LISTNUM
1 \l 1872 COMMISSIONER
WILLIAMS: Thank you for that.
LISTNUM
1 \l 1873 Let's
talk a little bit about how current the station will sound. If I understand, the music portion of your
application correctly, your weekly music list will be comprised between 800 and
1,000 distinct selections, an element you suggest would distinguish your
station from other mainstream FM formats.
As well, you indicate that 75 per cent of material programmed will
consist of music released within the past three years. This is all from your application.
LISTNUM
1 \l 1874 Of
interest to us is your gold music library, since it will have upwards of 700
selections. How will gold music be
defined on your proposed station. On
average, what percentage of your weekly music list do you anticipate devoting
to gold and will the presence of gold music detract from the proposed air
format's ability to sound highly current and contemporary, two elements that
you have identified as being critical to your target audience.
LISTNUM
1 \l 1875 MR.
SKI: Certainly, Commissioner
Williams. I will have Rob explain that
to you. We will go through the
definition and also the percentages for you.
LISTNUM
1 \l 1876 I
think we have to look at gold in maybe a slightly different context because
essentially with this particular audience, we are hardly playing any gold
because these gold songs are really what are termed recurrent in this
particular type of format. So it may be
a misnomer. Rob will explain that.
LISTNUM
1 \l 1877 MR.
FARINA: First let's talk about the age
of the songs. A lot of the records we
are talking about are records that have come out within the past five years
that would be known as essential tracks and probably in most other formats
would be referred to as recurrent.
LISTNUM
1 \l 1878 In
this format and for the purposes of the application, we would look at them as
gold.
LISTNUM
1 \l 1879 Every
hour is comprised of 75 per cent new music as opposed to older titles. The reason for that is the audience craves
it. This is a very important
aspect. The reason some of those older
songs get put into the mix is basically that creates the glue that builds some
familiarity on the radio station and keeps people engaged with familiarity to
link them to the unfamiliar songs. There
is a tremendous amount of them.
LISTNUM
1 \l 1880 In
most formats, you look at 30 to 40 songs at the upper end to be on the current
playlist. This format, 200 songs are in
the current playlist. The amount of
diversity in the music and the amount of airplay of new music, I would go as
far to say, hasn't been seen in Canada in a long time.
LISTNUM
1 \l 1881 When
we talked about the approach we are taking to music on this radio station, the
only thing it reminds me of, and this may be a bad comparison for some members
of the Commission, but CFNY, specifically 25 years ago had a huge reputation
for alternative music, and a lot of that music wasn't heard anywhere else. What is interesting about that is a lot of
that music is now on rock playlists 25 years later.
LISTNUM
1 \l 1882 We
see a lot of the same things happening with the alternative music revolution,
which started in the late 70s, and went through to the mid 80s. We see a lot of that happening right now in
music. We see a lot of artists, both
domestically and nationally, that are breaking out, and this is a perfect
format for this time in this market to showcase that music.
LISTNUM
1 \l 1883 COMMISSIONER
WILLIAMS: So, the gold doesn't take as
long to be gold. Is that because the
changes are moving so quickly?
LISTNUM
1 \l 1884 MR.
FARINA: That is because their appetite
for older music ‑‑ young people have an appetite for older
music. We don't want to say they don't,
but when they want to access that, they disconnect from us and we can't be all
things to all people.
LISTNUM
1 \l 1885 What
they really want, what they want more than anything in this demographic and the
people we are going after, new music and alternative music, the sense of
discovery, the sense of independent music, the feeling of championing for the
underdog are the hot points when it comes to the music.
LISTNUM
1 \l 1886 Playing
titles from the 70s and 60s does not help our cause in this market.
LISTNUM
1 \l 1887 When
we look at the era balances on the radio station in this market, and I am aware
that CKLZ in August moved their format from a classic rock to a mainstream
rock, they are still 60 per cent a gold‑based radio station, meaning that
in any given hour 60 per cent of the music you are hearing is gold as opposed
to new music.
LISTNUM
1 \l 1888 This
format is completely different than that.
There is already a format like CKLZ in this town that does a great job
of playing a lot of Classic Rock titles, and it is not what our audience wants.
LISTNUM
1 \l 1889 COMMISSIONER
WILLIAMS: Thank you.
LISTNUM
1 \l 1890 Moving
to the area of Canadian content now, I have a number of questions relating to
your commitment of 40 per cent Canadian weekly content between 6:00 a.m. and
p.m. Monday to Friday.
LISTNUM
1 \l 1891 My
first question is related to the lower spin repeat factor on current
selections. As a rule, mainstream radio
tends to keep two current playlists, one for international selections and one
for Canadian selections. Will this be
the case with your AM/FM format?
LISTNUM
1 \l 1892 MR.
FARINA: No. There will be no distinction spins between
Canadians and internationals.
LISTNUM
1 \l 1893 There
will obviously be a distinction in categories in order for us to manage that we
are reaching our benchmarks, but no distinction in spins.
LISTNUM
1 \l 1894 A
heavy rotation international will be a heavy rotation Canadian. They will receive the same amount of
exposure, and also the category sizes we anticipate specifically in the heavy,
medium and light categories to be identical as well.
LISTNUM
1 \l 1895 COMMISSIONER
WILLIAMS: In your proposal you talk
about a spin rate, a maximum repeat factor of 25 spins for current selections
and an expanded playlist size between 80 to 100 and 1000 selections per week
and a higher percentage in new and emerging music.
LISTNUM
1 \l 1896 Will
your maximum weekly spin factor of 25 spins be applied equally to both your
international and your Canadian current playlists?
LISTNUM
1 \l 1897 MR.
FABRO: That is correct, Commissioner.
LISTNUM
1 \l 1898 COMMISSIONER
WILLIAMS: Perhaps you could outline the
mechanisms you have in place to ensure that the 25 spins maximum weekly repeat
factor will not affect your ability to meet your weekly and daily Canadian
content requirements. Is there enough
product out there?
LISTNUM
1 \l 1899 MR.
FARINA: There is definitely enough
product out there specifically for this format.
As I said, there is a strong music movement going on right now.
LISTNUM
1 \l 1900 I
have been blown away by specifically the local community here, and I urge any
members of the Commission or staff to just do a My Space search for Kelowna
music and see the wealth of talent that is out here and, more importantly, it
is great music.
LISTNUM
1 \l 1901 Maybe
it would be of benefit to the Commission if I stepped back. When I talk about the database of information
that we are getting by consent from our listeners, that database is not married
to the music scheduling system. What we
do is we receive all that information and then our programming team is
responsible for putting that information into play on the radio station. So, we break things down into different
categories, rotations, making sure we have the right balance each hour, and
also making sure that we are able to schedule the minimum benchmarks of
Canadian content throughout each day and throughout the week.
LISTNUM
1 \l 1902 Within
that are personalities, and especially for a format like AIR‑FM, we want
to really embrace spontaneity and innovation.
So, if a listener sends a text message in or there is a posting on the
Message Board on‑line or a phone call comes in where there is a great
story or a unique perspective that is tied to the playing of a certain song,
the personality would be able to implement that song into that hour's
programming, but they would also know which category that song would have to
replace, just to make sure that we don't fall short of our commitments.
LISTNUM
1 \l 1903 COMMISSIONER
WILLIAMS: It appears, through our
discussion this afternoon, that you will rely on listener requests in
developing your weekly music playlists.
You suggest that, along with other programming elements, such as the
maximum spin factor and expanded playlists being responsive to listener
requests will add to the diversity, unpredictability, spontaneity and the
interactive nature of the station's music programming and sound, elements that
you have described as being essential in trying to parallel the iPod and MP3
listening experience and bring these young listeners back to radio.
LISTNUM
1 \l 1904 You
indicated in July 10, 2007 deficiency response that your music database and
music selector system will be programmed to take into account listener requests
and to give priority, but not exclusivity, to these songs.
LISTNUM
1 \l 1905 How
will listener requests be scheduled?
Will they be incorporated randomly into the regular music lists as they
come into the station or will they be inserted into some form of block
programming? How are you going to
integrate these requests?
LISTNUM
1 \l 1906 MR.
FARINA: Requests is a bit of a misnomer
in that with the information we are getting ‑‑
LISTNUM
1 \l 1907 COMMISSIONER
WILLIAMS: It may not be a specific
request. It may just be a type of music.
LISTNUM
1 \l 1908 MR.
FARINA: That is right.
LISTNUM
1 \l 1909 COMMISSIONER
WILLIAMS: I understand.
LISTNUM
1 \l 1910 MR.
FARINA: But on that note, we are dealing
with an audience that can get what they want, when they what, wherever they
want.
LISTNUM
1 \l 1911 COMMISSIONER
WILLIAMS: So, are you going to be able
to give them the same?
LISTNUM
1 \l 1912 MR.
FARINA: We are trying to on as many
levels, but they are also drawn to the feeling of community networking, which
is what a radio station does best in terms of championing the market, informing
and entertaining.
LISTNUM
1 \l 1913 If
we could give them that at the core and at the same time connect them to each
other and to the radio station using technology that is available, we believe
we will do that.
LISTNUM
1 \l 1914 Now
I have forgotten your question.
LISTNUM
1 \l 1915 COMMISSIONER
WILLIAMS: The requests for similar type,
how are you going to incorporate that?
LISTNUM
1 \l 1916 MR.
FARINA: Now I remember where I was going
with the requests.
LISTNUM
1 \l 1917 So,
when you put into context who the audience is and the cultural navigators of
our time that are growing up in a world of technology that we didn't even dream
of when we were their age, the whole notion of a radio station doing a request
hour used to be a great thing 20 years ago.
Now it is a who cares because if I want to hear a song, I could access
it on several places.
LISTNUM
1 \l 1918 So,
what we want to do is use their personal habits to create a product for them,
and this is when we allude to requests, it is alluding to that deeper control
of the radio station that we talk about with this service.
LISTNUM
1 \l 1919 COMMISSIONER
WILLIAMS: Will it be put into some form
of block programming or just randomly inserted?
It is a lead in to a next question.
LISTNUM
1 \l 1920 MR.
FARINA: It would be randomly inserted
throughout, but the personalities would know how to slot that in the hour and
assure that all our commitments are being met within the hour and that the hour
is balanced.
LISTNUM
1 \l 1921 COMMISSIONER
WILLIAMS: That clearly is our concern,
and the focus of the next question is the obvious concern here is the degree to
which weekly pre‑coded Canadian content levels in either the music
database, the music selector system or program thought may or may not be
affected by insertion of a high number of listener requests, requests inserted
randomly, as you have answered.
LISTNUM
1 \l 1922 What
mechanisms will you have in place to compensate for any disruption of pre‑determined
Canadian content levels that may be caused by the insertion of listener
requests as part of daily or weekly music programming? How will you balance that?
LISTNUM
1 \l 1923 MR.
SKI: Commissioner Williams, we handle
those kinds of things in a few different ways, kind of our fail safe approach.
LISTNUM
1 \l 1924 First
off, the software that we use determines the amount that we need to play in
terms of CanCom commitments, et cetera.
LISTNUM
1 \l 1925 On
top of that, the Program Director and the Music Director on a daily basis watch
those levels to ensure that we are meeting any of our commitments. On a weekly basis, that information is
provided to the manager of the radio station, who is in essence responsible for
making sure that we live up to our commitments, and then at the end of the week
I get that information in a weekly report to make sure that all of our stations
have lived up to those commitments.
LISTNUM
1 \l 1926 COMMISSIONER
WILLIAMS: So there is a lot of checks
and balances, I think is what you have just described.
LISTNUM
1 \l 1927 MR.
SKI: Yes, we don't want to make any
mistakes so there are several along the way.
LISTNUM
1 \l 1928 Again,
since it is a weekly commitment, we want to be able to adjust. If on one day it is off a little bit
especially because of this particular type of format, we can adjust on the next
day or the next hour if that happens.
LISTNUM
1 \l 1929 COMMISSIONER
WILLIAMS: Thank you, Mr. Ski.
LISTNUM
1 \l 1930 Projected
revenues and profitability, I will spend a question or two on that.
LISTNUM
1 \l 1931 Your
business plan indicates you are expecting to attract close to $600,000 a year
to revenues from new advertisers and other forms of media, hoping to repatriate
advertisers who have abandoned radio for other interactive approaches. What are the differentiating factors that
will prompt advertisers to gravitate back to radio and to your proposed
station?
LISTNUM
1 \l 1932 MR.
SKI: I think it is two things and I will
let Kerry go through the approach that we use when we develop our numbers. We kind of use two approaches, kind of a top
down and bottom up approach.
LISTNUM
1 \l 1933 I
think we should remember that this is a very underserved market so that there
are very few ways to reach these particular people, this particular audience,
certainly not through radio, but I will let Kerry provide maybe some insight
into that.
LISTNUM
1 \l 1934 MS
FRENCH: Commissioner Williams, we have a
great deal of experience in running radio stations and launching radio
stations. We bring all of that
experience to bear when we create audience and revenue projections for any
licence.
LISTNUM
1 \l 1935 There
are six areas that we investigate: The
current market conditions, audience projections and revenue projections,
advertiser demand, our experience in other markets, and the effect our proposed
service will have on the market.
LISTNUM
1 \l 1936 If
I could just quickly go through those six areas.
LISTNUM
1 \l 1937 First
of all, the market conditions. Many of
the applicants today have suggested, and we agree, Kelowna is a very robust
market. The compound annual growth rate
for revenues between 2001 and 2005, the last published revenue figures for
Kelowna, show a growth rate of 4.7 per cent.
In that last published year 2005 it was up to 10.7 per cent. We think that growth will continue, and we
are projecting in year two of our operation the growth rate will be 6.5 per
cent.
LISTNUM
1 \l 1938 In
audience projections, we used our demand study and BBM and they both show that
the target group of 12 to 34 is well underserved. They are tuning an average of four hours less
each week to radio. So, we look at those
two methods by using the research from ARI, our demand study. It tells really the potential for the format
from a listening perspective, and we analyzed BBM tuning patterns to the
stations that are currently in the market.
LISTNUM
1 \l 1939 That
tells us, because we are targeting a completely different demo, that the impact
we will have on their tuning is going to be minimal.
LISTNUM
1 \l 1940 COMMISSIONER
WILLIAMS: So advertisers that are trying
to reach the 12 to 34 year old demographic, how do they reach them now? What methods are they using?
LISTNUM
1 \l 1941 MS
FRENCH: If they are using radio it is a
very inefficient method to reach the 12 to 34‑year olds.
LISTNUM
1 \l 1942 COMMISSIONER
WILLIAMS: But if we are going to bring
them back to radio, what are they using now other than radio?
LISTNUM
1 \l 1943 MS
FRENCH: There are other opportunities
with direct mail or newspaper. Those
aren't terribly efficient methods to reach them either, and some of them may be
using the internet. Some of them aren't
using advertising at all because this demographic in this market is so hard to
reach, there is no specific source.
LISTNUM
1 \l 1944 COMMISSIONER
WILLIAMS: So, advertisers catering to
that age group have no real way of reaching them, is that what you are
suggesting?
LISTNUM
1 \l 1945 MS
FRENCH: Exactly, they don't. I think that was reflected in a lot of the
intervenors who supported our application.
LISTNUM
1 \l 1946 There
is two that I will mention, Greg Evtushevski from Chefy Source for Sports and
Caroline Greyell from West 49. They both
really highlighted the fact that it is not only an underserved market for the
demographic, it is underserved for the advertisers. They have no vehicle to reach this
demographic. There just isn't one in the
market.
LISTNUM
1 \l 1947 So,
we think we are offering that ability to reach the demographic.
LISTNUM
1 \l 1948 Further,
when we look at our experience in other markets, particularly our recent
success with The Bounce in Edmonton, we were not only just successful in
increasing tuning by 12 to 34s, we were incredibly successful in bringing new
advertisers into the media, advertisers that had never used radio before. That is reflected in the TRAM figures.
LISTNUM
1 \l 1949 In
2005, radio revenues in Edmonton grew by 10 per cent, in 2006 by 14.3, and in
2007 by 9.6. We know that our station in
Edmonton contributed to that lift.
LISTNUM
1 \l 1950 We
think the same thing is going to happen in Kelowna. Because we are offering the advertisers a
vehicle to reach this demographic that they have never had before, we think
there will be a great amount of new advertisers to radio, and that we will lift
that total market spend in radio for Kelowna.
LISTNUM
1 \l 1951 MR.
SKI: Commissioner Williams, if I could
just add to that, unless an advertiser is trying to reach a 12 to 44 or 54‑year
old audience, it is very inefficient, as Kerry said, for them to buy radio in
this market. Even though they may only
want to reach 12 to 30‑year olds, they have to pay for that peripheral
audience because that is where most of the radio stations in this market tend
to be. They tend to be older than 25 in
terms of where their skew is.
LISTNUM
1 \l 1952 So,
obviously they are going to charge clients based on where the bulk of their
audience is, otherwise they would be charging a lot less.
LISTNUM
1 \l 1953 Advertisers
tend to shy away from that because they are having to pay a premium in order to
get the audience that they want.
LISTNUM
1 \l 1954 COMMISSIONER
WILLIAMS: Thank you, Mr. Ski.
LISTNUM
1 \l 1955 We
will spend a minute on market impact.
Given the potential overlap in target audience and music mix between the
proposed CTV station and incumbent station CHSU, CKLZ, please clarify why you
are estimating audience impact to CHSU 2 percentage points of audience share,
and to CKLZ 1 percentage point of audience share to be somewhat modest?
LISTNUM
1 \l 1956 MR.
SKI: I think we said, and I will let
Kerry give you some of the background information, that nobody really targets
this audience. There may be some
overlap. There is in every market with
every radio station, so it is a matter of looking at how much overlap there may
be.
LISTNUM
1 \l 1957 What
we have been saying is that there may be some tuning, but this isn't the prime
audience of any of the radio stations in this market.
LISTNUM
1 \l 1958 Kerry.
LISTNUM
1 \l 1959 MS
FRENCH: Paul explained it very well in
that because there is no outlet currently in the market for the 12 to 34s to
listen to, some of the stations are getting tuning by default because there is
no where else for them to go. I think it
is really telling how much the tuning has declined in this market more than in
Canada because they don't have the choice.
LISTNUM
1 \l 1960 Some
of that tuning will come back to a station that is programmed directly to them,
like AIR‑FM, but what we will impact, we don't think the impact will be
large and it will be on the lower end of their demographic groups. They have some 18 to 24 tuning, some teen
tuning. We won't impact their core
demographic. We will take some of the
tuning away that is in the younger end of their demo that they are not really
monetizing anyway.
LISTNUM
1 \l 1961 MR.
SKI: I guess what we are saying is that
to my previous comment, those radio stations should not lose advertisers
because of the fact that we have some of the lower end of their audience
because that is not the bulk of what they are selling.
LISTNUM
1 \l 1962 COMMISSIONER
WILLIAMS: Understood.
LISTNUM
1 \l 1963 In
your estimation, how many new undertakings can the Kelowna market support? If we were to licence more than one, which
would have the least negative impact on your business plan and which would have
the most negative impact on your business plan?
LISTNUM
1 \l 1964 MR.
SKI: Commissioner Williams, we think
that the market possibly could have two licences. The market is robust and it is growing. As we have said earlier, the existing
stations are well resourced and well positioned in the market.
LISTNUM
1 \l 1965 We
think the PBIT in the market is good and we also think it may be better than it
really seems given what we see in some of the other markets that we happen to
operate in, such as Kingston.
LISTNUM
1 \l 1966 Certainly
if the Commission feels there should only be one licensed, we obviously think
it should be AIR‑FM because we think we brought forth a compelling
argument for a very underserved market and a segment of the population, and we
think we are responding to the Commission's radio policy, to bring this
particular demographic back to radio.
LISTNUM
1 \l 1967 That
is where, as we have said, the decreases in tuning are most notable.
LISTNUM
1 \l 1968 COMMISSIONER
WILLIAMS: Thank you, Mr. Ski and your
team of panellists for your responses. I think we have had a complete airing of
your application. That completes my line
of questioning.
LISTNUM
1 \l 1969 THE
CHAIRPERSON: Thank you.
LISTNUM 1 \l 1970 Commissioner
Morin.
LISTNUM 1 \l 1971 COMMISSIONER
MORIN: Mr. Goldstein, avec le genre de
marché que vous cherchez à conquérir, est‑ce qu'il n'y a pas un danger
qu'il y ait certaines nouvelles qui soient privilégiées, des nouvelles qui
intéressent les jeunes, et, enfin, quel genre de mesures vous allez prendre
pour que les nouvelles qui peuvent intéresser les jeunes, à moyen ou à long
terme, que ces nouvelles là aussi aient leur place et soient bien jouées dans
vos bulletins de nouvelles?
LISTNUM
1 \l 1972 THE
CHAIRPERSON: Mr. Goldstein, before you
answer that, do any of your panel members want to take some time to get a translator? Do you need some translation facility? We have them in the other room. You are okay.
LISTNUM
1 \l 1973 Thank
you. Go ahead, Mr. Goldstein.
LISTNUM
1 \l 1974 M.
GOLDSTEIN : Merci, Monsieur Morin. Si je comprends la question, c'est la nature du service de nouvelles,
c'est si la jeunesse de Kelowna fait partie du service de nouvelles, et c'est
quoi nos aspects de contrôle éditorial.
Est‑ce que c'est ça la question?
LISTNUM 1 \l 1975 CONSEILLER
MORIN : Est‑ce que les jeunes, finalement, parce qu'ils risquent de vous
interpeller d'initier des nouvelles. On
a parlé de hub tout à l'heure. Ils
risquent d'être intéressés par certaines nouvelles plutôt que d'autres, mais la
réalité n'est pas juste des nouvelles pour les jeunes. Il y a des nouvelles qui
intéressent, qui peuvent intéresser, qui peuvent être importantes pour les
jeunes aussi.
LISTNUM 1 \l 1976 M.
GOLDSTEIN : Certainement.
LISTNUM 1 \l 1977 Premièrement,
je pense qu'il y en a des services de radio ici dans le marché qui... on a une
fondation pour les nouvelles internationales, les nouvelles nationales, et,
enfin, aussi locales.
LISTNUM 1 \l 1978 Mais
franchement, comme monsieur Farina a dit et monsieur Roman a dit, il y en a des
nouvelles qui ne sont pas partie du mainstream, qui ne sont pas peut‑être
construites... ont le même poids que les autres stations plus traditionnelles.
LISTNUM 1 \l 1979 Monsieur
Farina a étudié l'exemple de Notebook, mais c'est différent sur la couverture
des nouvelles. Comme il a dit, c'est une
différence entre leurs priorités.
LISTNUM 1 \l 1980 Ça
ne veut pas dire que s'il y a un feu ou il y a un accident sur le pont qu'on ne
va pas couvrir ça, mais franchement, on va prendre peut‑être une autre
perspective sur les nouvelles, et ça donne un aspect de connexion avec le marché,
avec les jeunes de Kelowna, qui n'existe pas sur les autres stations.
LISTNUM
1 \l 1981 CONSEILLER
MORIN : Merci.
LISTNUM
1 \l 1982 THE
CHAIRPERSON: Thank you. I do have a couple of questions. One is a follow up to a conversation you had
with Commissioner Williams. I apologize,
but I just don't get it.
LISTNUM
1 \l 1983 It
has to do with the spins and the number of titles and in particular your
response to deficiencies of July 10. It
is in response to question number 6, if you have that paragraph. It is just that there is a heck of a lot of
numbers in this paragraph.
LISTNUM
1 \l 1984 You
say that you predict that the number of weekly distinct titles on AIR‑FM
will be in the range of 800 to 1,000 songs and that is across all the formats,
whether it is Alternative Rock, Alternative Pop. Correct?
That is your entire playlist, right, 800 to 1,000 songs?
LISTNUM
1 \l 1985 MR.
FARINA: That is what we anticipate. That is what we anticipate.
LISTNUM
1 \l 1986 It
is important to note that conventional radio format has between 300 and 500
songs in rotation. So, we anticipate
because of the appetite for music among this demographic, that there will be
more selections.
LISTNUM
1 \l 1987 THE
CHAIRPERSON: The bigger number of titles
is what you will allow you to have a lower repeat factor?
LISTNUM
1 \l 1988 MR.
FARINA: Correct.
LISTNUM
1 \l 1989 THE
CHAIRPERSON: So that is the relationship
there.
LISTNUM
1 \l 1990 MR.
FARINA: And the bigger number of titles
specifically in the current music.
Rather than having a current playlist of 20 to 40 titles, we are looking
at 150 to 200 titles in the current rotation alone.
LISTNUM
1 \l 1991 THE
CHAIRPERSON: And that is your current
Spice category? That is how you defined
it in this same paragraph. I wanted to
get a better understanding of what this Spice category is.
LISTNUM
1 \l 1992 MR.
FARINA: Absolutely. What the Spice category is is the category of
new tracks that are getting introduced to us either from our programmers or the
audience and putting those tracks into rotation and seeing how they fare with
the audience.
LISTNUM
1 \l 1993 One
of the many interactive applications with AIR‑FM is with every song being
played and more and more the computers becoming the appliance of choice to
listen to the radio on, with every song being played, the audience is able to
rate the song, whether they love it, don't care for it, unfamiliar. Those songs in our Spice give us an
opportunity to try those songs out, warm them out and also access the listener
information to find out if there is appetite for them, in which case they move
into a more substantial rotation on the radio station.
LISTNUM
1 \l 1994 THE
CHAIRPERSON: How does that 100 to 150
titles compare to other radio stations in Canada that target this same demo
group?
LISTNUM
1 \l 1995 MR.
FARINA: Usually across every new music
format the playlist usually consists of about 40 titles. An AC station or a Classic Rock station may
be as low as seven to ten, sometimes even five titles, but generally an
Alternative Rock station, a CHR station would have 30 to 40 titles in their
current music rotation, playlist.
LISTNUM
1 \l 1996 THE
CHAIRPERSON: And in the Spice category,
the repeat factor could be even lower than 25 per cent because if you are not
getting the listener feedback, it is going to come off the air?
LISTNUM
1 \l 1997 MR.
FARINA: Most definitely.
LISTNUM
1 \l 1998 THE
CHAIRPERSON: Then you anticipate a gold
universe of approximately 700 titles consisting of alternative tracks from the
90s and 2000s. Is that part of the 800
to 1,000?
LISTNUM
1 \l 1999 MR.
FARINA: That is part of the 700.
LISTNUM
1 \l 11000 THE
CHAIRPERSON: This is where I lose
it. The first line of that paragraph
says the number of weekly distinct titles on AIR‑FM will be in the range
of 800 to 1,000 songs.
LISTNUM
1 \l 11001 MR.
FARINA: Correct.
LISTNUM
1 \l 11002 THE
CHAIRPERSON: Where does the 700 ‑‑
LISTNUM
1 \l 11003 MR.
FARINA: The 700 are the essential tracks
we talk about. So they are the tracks
from within the last five to seven years.
They will be album tracks from Arcade Fire that were never singles.
LISTNUM
1 \l 11004 Good
example is, well, for example, when the Radiohead record came out a couple of
weeks ago, on on‑line music habits the entire album was being
streamed. They weren't streaming one or
two songs, the entire album was being streamed.
The week the Radiohead records comes out on AIR‑FM, we know there
is an appetite there, so one of the things we are going to do is rather than
put the lead track on the radio station, we are going to be featuring the
entire record, not in its entirety, but it is in pieces weaved throughout the
programming because there is tremendous appetite for it.
LISTNUM
1 \l 11005 THE
CHAIRPERSON: Thank you. That clarifies it for me.
LISTNUM
1 \l 11006 Because
you did talk with Commissioner Williams about the element of interactivities,
and I get it, I get the blogs and I get the listener requests, but will the
interactivity also involve new artists, for example, being able to upload their
music to the radio's website?
LISTNUM
1 \l 11007 MR.
FARINA: Absolutely. Really, there are two focuses on the
website: Building a community in Kelowna
among music fans and developing a richer experience around music.
LISTNUM
1 \l 11008 So,
being able to recommend music that we know fans are going to like, because we
already know the kind of music they are already listening to is incredible, and
also in my work with the music industry and seeing how things are changing and
there has been a shift of power that has gone from the record label to the
artist, and there is a lot of inventive ways that they are looking at engaging
audiences, and one of the ways they are looking at engaging audiences is it is
quite common now for a band to release some songs before their album comes out,
to release one or two songs, to release the work pods on the internet and allow
fans to create their own remixes of that song.
LISTNUM
1 \l 11009 Because
people in this age group have easy access to music software, high passion for
the music and the engagement, that is one of the many ways we are going to be
engaging people through music, not only in enjoying it, but also in sharing in
the creation of the content.
LISTNUM
1 \l 11010 THE
CHAIRPERSON: You talked about being able
to access the music files with this proprietary software. Good luck analyzing mine, but I am not your
target demo.
LISTNUM
1 \l 11011 But
is this proprietary software or is this software that has been developed for
other ventures like this one?
LISTNUM
1 \l 11012 MR.
FARINA: There is a number of similar
software out there. My Strands, Music
Dis‑covery, Last fm, Pandora.com.
LISTNUM
1 \l 11013 The
version that we are looking at is Last fm.
They are a UK‑based company.
I have had a number of meetings with them. They never even dreamed that what they
created would have an application for radio, and at this point we feel that
they have developed the best software and that is the software we are going to
be licensing from them.
LISTNUM
1 \l 11014 THE
CHAIRPERSON: Have you done a sample of
this kind of analysis with a focus group or a sample group? What I am getting at is I am wondering how
you came up with this sample playlist that you have included in your
application.
LISTNUM
1 \l 11015 MR.
FARINA: The sample playlist, and more
than that, the entire format, was devised from the kind of music that a lot of
these existing sites for Music Dis‑cover, My Strands, pandora, Last fm,
the kind of music that is rising to the top of the list, what titles are being
the most played.
LISTNUM
1 \l 11016 So,
that is how we came up with the format, looking at the on‑line habits of
the listener, where they are going for their music because they can't get it
anywhere else and being able to create something on terrestrial radio for them.
LISTNUM
1 \l 11017 THE
CHAIRPERSON: Mr. Ski, you talked about a
core and a peripheral audience, but you have potentially a much bigger audience
than either core or peripheral through the website, which unless you are going
to geogate it just to the Kelowna market and to the contours that you have
applied for, you could be national and beyond as a result of the website, which
is such an integral part to the success of the radio station.
LISTNUM
1 \l 11018 So,
how do you, at the same time, when you have national exposure through the
website, and obviously through the streaming, but people in Halifax can
contribute to your blogs, how will the radio station, given all of this
potential input from across the country and beyond, how will it maintain its
localness and continue to be relevant to the local Kelowna market, because you
called the radio station the hub of your 360 approach.
LISTNUM
1 \l 11019 MR.
SKI: I will let Rob give you some
further information on this, but we know now that 60 per cent of the listening
to internet is outside of Kelowna. We
obviously want to repatriate that and bring it back to Kelowna. Our entire focus really is going to be on
young adults and teens in Kelowna.
LISTNUM
1 \l 11020 Rob.
LISTNUM
1 \l 11021 MR.
FARINA: In the planning of this, it
became very essential that this be a locally focused outlet. They could stream music from thousands of
other national sites, they could access blogs from thousands of other sites,
and they could go to lastfm.com, which houses the international community of
music fans and use similar to what we are doing.
LISTNUM
1 \l 11022 We
think that the unique selling proposition of the service we are offering is our
ability to, when we talk about going back to the roots of radio's localism and
focus, using technology to do that.
LISTNUM
1 \l 11023 In
terms of streaming, yes, audiences from around the world will be able to stream
the radio station. However, they are not
able to contribute to the sound of the radio station. We are going to use geoblocking for that, and
secondly, in terms of blogging, message posting, podcasts, all that stuff has
to be really relevant to this local audience.
LISTNUM
1 \l 11024 If
we were trying to make a play to build a website, we would be pretty late in
the game to do that. So, we think what
the real key to this is using what radio does best, and doing that in a fashion
and on the terms of this new audience.
LISTNUM
1 \l 11025 THE
CHAIRPERSON: One of the questions I was
going to ask you was why Kelowna? I
think you guys have done a pretty good job at explaining why Kelowna, but if
you have anything to add I would like to hear it, because the context is why
not a bigger market because it's irreverent, it's eclectic, some might even
call your format experimental. You call
it unprecedented.
LISTNUM
1 \l 11026 So,
why not try it out in a bigger market?
Why Kelowna? Why not do a format
flip of one of your existing radio stations in a bigger market where your
company has a track record with advertisers.
You have a track record in terms of reputation as a radio broadcaster in
this country, so in that context, I am going to ask you why Kelowna?
LISTNUM
1 \l 11027 MR.
SKI: Commissioner Cugini, a number of
reasons.
LISTNUM
1 \l 11028 I
think, as you may know, most of CHUM's radio stations are quite
profitable. We don't really have any
radio stations at the present time that are lagging or behind the market or are
unsuccessful. So, certainly from a
business standpoint it wouldn't be prudent for us to change one of those
stations at this particular point in time.
LISTNUM
1 \l 11029 I
think the other part of that is there are a couple of things that have come
together for this. We have been
obviously looking at new ways or other ways to repatriate listeners back to
radio, especially young listeners because that is where things started with
with CHUM over 50 years ago.
LISTNUM
1 \l 11030 We
have done a pretty successful job of that with some of our radio stations. An example of that are the Bob stations. The Bob stations came out of an opportunity
and a problem we had because we had a radio station in Winnipeg that wasn't
doing well, quite frankly, and so we had to find a solution. We used research, we used the skills that we
have and came up with a format. That
format now has swept across Canada with other names behind it, and across North
America, and we are pretty proud of that fact.
LISTNUM
1 \l 11031 Bounce,
as we mentioned, something else that is new that we brought to Edmonton based
on our research.
LISTNUM
1 \l 11032 When
we look at formats and look at ways to engage a market, we do the research that
we do and we look for opportunities. I
am not saying that we wouldn't try this format somewhere else. There is a very good chance we will and you
may see us in our next application, if in fact there is an opportunity for it.
LISTNUM
1 \l 11033 But
what came through to us were a couple of things.
LISTNUM
1 \l 11034 One,
the youth and adult market is very underserved here in Kelowna. There really isn't a radio station that is
targeting that particular audience, so there is an opportunity for that. Otherwise we might have been with some of the
other applicants here applying for a station that targets a different
demographic. But this one came through
loud and clear to us.
LISTNUM
1 \l 11035 It
is a growing market, as we have said the fifth fastest in Canada. It has a very large and growing youth and
young adult segment, some of which you don't see because it is not
measured. University students are pretty
hard to measure sometimes because they can be transient, so BBM doesn't grasp
those.
LISTNUM
1 \l 11036 The
technology. Technology has changed over
the last year that allows us to do this.
We might not ‑‑ I shouldn't say might, we wouldn't have
been able to do this, we don't think, a year ago. Technology has changed. So there is almost a confluence of things
that have happened to allow us to do it at this particular time in this
particular market.
LISTNUM
1 \l 11037 I
guess it is like a perfect storm that we think gives us this opportunity.
LISTNUM
1 \l 11038 The
other thing, as I mentioned, is that the study that we saw from the University
of California that says that radio has to embrace all technologies. There is more to the study, and I will not go
through all of the things that it says in the study, but it was very helpful to
us in terms of putting together this particular radio station.
LISTNUM
1 \l 11039 So,
for all of those reasons, plus our own research that showed that there was an
opportunity, in fact, 90 per cent would listen to the station somewhat, and we
think it may even go beyond the demos we have suggested. There are going to be people who are a little
older, maybe even younger listening to it, but at least 70 per cent of the
people in this age group said it could be their favourite station. That is a ringing endorsement for us.
LISTNUM
1 \l 11040 Obviously
when you go into these kind of things, you don't know where you are going to
end up. There may be an opportunity,
there may not be. If there isn't, then
you move on and you look at something else.
LISTNUM
1 \l 11041 We
have been sure excited about this particular opportunity, as excited as we were
about the Bob opportunity, as excited as we were about The Bounce opportunity
in Edmonton. We hope we will have the
opportunity to bring this particular format and opportunity to Kelowna.
LISTNUM
1 \l 11042 THE
CHAIRPERSON: I hope I didn't take away
your points for your two minutes at the end there.
LISTNUM
1 \l 11043 Legal
counsel.
LISTNUM
1 \l 11044 MS
LEHOUX: Merci, madam le prèsident.
LISTNUM
1 \l 11045 Before
your oral presentation you have filed with us a series of letters confirming
three out of four CCD initiatives that you had identified in your
application. However, you allege that
one of the initiatives, the Wakefest was cancelled, and you that you intend to
redirect the CCD money in a new initiative, the Rockanagan.
LISTNUM
1 \l 11046 Can
you describe that new initiative and how it is an eligible initiative for CCD
funding in accordance with our 2006 radio policy?
LISTNUM
1 \l 11047 MR.
ROMAN: Sure, I would be glad to do that.
LISTNUM
1 \l 11048 You
are aware of the circumstances that caused the cancellation of Wakefest. As you know, we have picked up with a really
exciting initiative. We are going to
provide the same amount of funding for Rockanagan.
LISTNUM
1 \l 11049 This
is an initiative that launched this past September 28th and 29th. They are really paving the way in this area
of Canada in the same way that Canadian Music Week operates in Toronto. Lots of acts, lots of opportunities to
showcase all kinds of managers and agents and business people in the music
business who will see these acts. We
will bring them forward. From our
standpoint we will make sure that we expose them on‑line, off‑line. We will make sure that we bring their talent
to the attention of the proper companies, to the proper managers.
LISTNUM
1 \l 11050 So,
for us, this is a perfect fit. It will
work, in our opinion, at the same level and at the same degree of success as
North by Northeast, the new Music West, and some of the other initiatives that
we have been involved with.
LISTNUM
1 \l 11051 Let
me just say that as one of the people that has been involved with organizations
like FACTOR for the past 25 years, I have seen a lot of initiatives and a lot
of well‑meaning and well‑intentioned proposals, and I think that
this really hits the mark.
LISTNUM
1 \l 11052 MS
LEHOUX: Thank you. And the redirection of the CCD funding to the
Rockanagan does not change your over and above commitment of $700,000 of CCD?
LISTNUM
1 \l 11053 MR.
ROMAN: It does not.
LISTNUM
1 \l 11054 MS
LEHOUX: And you still agree to have that
by condition of licence?
LISTNUM
1 \l 11055 MR.
ROMAN: Yes.
LISTNUM
1 \l 11056 MS
LEHOUX: You filed four letters. Could you just describe the four letters for
the record?
LISTNUM
1 \l 11057 MR.
ROMAN: Sure, yes, I can.
LISTNUM
1 \l 11058 We
have four letters.
LISTNUM
1 \l 11059 We
have a letter from FACTOR that indicates that they accept our $20,000 per year,
$140,000 overall to direct those funds to B.C. artists.
LISTNUM
1 \l 11060 We
have similar letters in the case of North by Northeast in the amount of
$175,000 that they will apply the funds to the production and presentation of
their event.
LISTNUM
1 \l 11061 We
have another letter confirming from New Music West, $210,000 over seven years
that they will also accept the funds and apply them to the production and
execution of their event.
LISTNUM
1 \l 11062 Then
finally, as has just been filed with you, we have a letter from the Rockanagan
organizers, Mr. Abougoush and his associates accepting the $175,000 over seven
years.
LISTNUM
1 \l 11063 MS
LEHOUX: Thank you very much. We will add this on to the public record and
copies are available at the exam room.
LISTNUM
1 \l 11064 Thank
you.
LISTNUM
1 \l 11065 THE
CHAIRPERSON: And now for your final
comments.
LISTNUM
1 \l 11066 MR.
SKI: Thank you very much, Madam Chair
and members of the Commission for your questions today.
LISTNUM
1 \l 11067 I
think we have already said, and I hope you can see that we are very excited
about this particular opportunity.
LISTNUM
1 \l 11068 As
I said, we were excited about Bob when we launched it, we were excited about
The Bounce, and we are equally excited about this opportunity.
LISTNUM
1 \l 11069 We
appreciate that this is a very competitive process with several
applicants. Respectfully, we believe
that we have the application that will best fulfil the objectives of the
Broadcasting Act, while providing the most diversity to the Kelowna market.
LISTNUM
1 \l 11070 AIR‑FM
is a direct response to the Commission's key challenge expressed in the
Commercial Radio Policy. AIR‑FM
will provide a truly underserved audience with a new source of music, news and
current affairs and will repatriate youth audience in this market.
LISTNUM
1 \l 11071 Our
plan provides for the most holistic support for Canadian artists, both on‑air
and on‑line, particularly to emerging Canadian artists with our four‑pronged
approach. That includes the 40/40 plan,
40 per cent CanCom, and within that CanCom 40 per cent emerging Canadian
artists; a deeper playlist to expose more Canadian emerging artists; targeted
CCD initiatives, which we have just talked about, to support B.C. artists and
the CHUM Indie Artist Initiative.
LISTNUM
1 \l 11072 Our
service is aimed at a targeted demographic for underserved advertisers that
will ensure the least impact on the two existing players, each with two FM
stations in the market. It will be a
local Kelowna radio station focused on teens and young adults.
LISTNUM
1 \l 11073 We
believe the market can withstand at least one new entrant, as we have said, and
for the reasons we have stated we believe that entrant should be AIR‑FM.
LISTNUM
1 \l 11074 Thank
you again for your time this afternoon.
LISTNUM
1 \l 11075 THE
CHAIRPERSON: Mr. Ski and your
colleagues, thank you very much.
LISTNUM
1 \l 11076 We
will now take a break. We will be back
at quarter to 4:00. Thank you.
‑‑‑ Upon recessing
at 1526 / Suspension à 1526
‑‑‑ Upon resuming
at 1545 / Reprise à 1545
LISTNUM
1 \l 11077 THE
SECRETARY: We will now proceed with item
5, which is an application by Clear Sky Radio Inc. for a licence to operate an
English‑language specialty FM commercial radio programming undertaking in
Kelowna, British Columbia.
LISTNUM
1 \l 11078 The
new station would operate on frequency 96.3, channel 242B, with an average
effective radiated power of 7,100 watts, maximum effective radiated power of
20,000 watts, antenna height of minus 89 metres.
LISTNUM
1 \l 11079 Appearing
for the applicant is Mr. Paul Larsen.
Please introduce your colleague and you will then have 20 minutes to
make your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM
1 \l 11080 MR.
LARSEN: Thank you, Madam Secretary.
LISTNUM
1 \l 11081 Madam
Chair, Commissioners, and CRTC staff, good afternoon. My name is Paul Larsen and I am President of
Clear Sky Radio. We are very excited to
present our application for a new specialty FM radio station to serve Kelowna.
LISTNUM
1 \l 11082 Before
we begin our presentation, I would like to introduce you to my colleague. To my right is Casey Wilson. Casey is the Sales Manager of our first radio
station, CJOC FM in Lethbridge, Alberta, which we launched this past July. Casey is a key member of the young and
dynamic founding management team that we have assembled for Clear Sky Radio.
LISTNUM
1 \l 11083 Mr.
Wilson joined us from Newcap Radio, Red Deer, where he was a Senior Account
Manager. Casey has extensive management
experience, including positions with Paramount Theatres and the Forzani Sports
Group, as well as owning and operating his own restaurant business.
LISTNUM
1 \l 11084 Casey
was born and raised in Lethbridge and has been a key part of the early success
of CJOC. In the near term, Casey will
take on an expanded general management role at CJOC as I move my focus to
Medicine Hat to launch our second radio station this winter.
LISTNUM
1 \l 11085 I
believe the Commission is getting to know me, but to quickly recap, this is my
21st year in radio. Having built up my
experience over that period, I took the opportunity to move into ownership,
forming Clear Sky Radio in mid 2005, responding to calls for applications in
Calgary, Lethbridge, Fort McMurray and Medicine Hat, Alberta.
LISTNUM
1 \l 11086 Clear
Sky Radio is now an operating broadcasting company with two licences and we are
ready to continue our growth, which brings us to this Kelowna application.
LISTNUM
1 \l 11087 Today
we will touch on the unique and vibrant economy of Kelowna and the Central
Okanagan Valley. The need for a radio
service targeting the region's large and fast growing adult population, and how
our exciting and distinct specialty radio station will complement rather than
compete with the existing stations in the market and benefit the Canadian
recording artists, the Canadian radio industry, and most importantly, benefit
the community of Kelowna.
LISTNUM
1 \l 11088 If
licensed, our radio station will be known as The Oasis. the Oasis brand was inspired by the beauty of
the Okanagan Valley. This region truly
is an oasis by any definition.
LISTNUM
1 \l 11089 Our
target audience is adults 35 to 64, the fastest growing population segment in
Kelowna.
LISTNUM
1 \l 11090 Our
application represents the best opportunity to bring a new radio service to the
Kelowna market, one that will offer true diversity to the airwaves without
significantly impacting the existing operators.
LISTNUM
1 \l 11091 The
industry label for our format is a Smooth Jazz.
Smooth Jazz is really more of a radio format than a music genre. It is a label that came out of a radio focus
group session in the late 80s when the format was developing in the U.S.
LISTNUM
1 \l 11092 The
Smooth Jazz radio format blends contemporary instrumental music, the songs that
you would consider Smooth Jazz, along with vocal selections from a variety of
music genres, including Soft AC, Rhythm and Blues, 60s and 70s Gold and
Contemporary Jazz. It is a soft and
relaxing format, perfectly suited to this region known for its laidback
lifestyle.
LISTNUM
1 \l 11093 There
is a substantial pool of Canadian Smooth Jazz artists. Proof of this depth can be found in the
Canadian Smooth Jazz Awards. Now in its
fourth year, this Canadian awards show has become one of the largest Smooth
Jazz shows in the world.
LISTNUM
1 \l 11094 Some
of the Canadian instrumental artists who would receive regular and substantial
airplay on the oasis include: Jamie
Bonk, Liona Boyd, Eddie Bullen, the Clayton Scott Group, Jesse Cook, Rick
Emmett, Ray Garand, Warren Hill, Brian Hughes, Gabriel Mark Hasselbach, Oscar
Lopez, Robert Michaels, Les Sabler, Pavlo, Four80East and others.
LISTNUM
1 \l 11095 Distinct
Canadian vocal artists who would be played on the Oasis include Lee Aaron, Dawn
Aitken, Tim Tamashiro, Angela Kelman, Matt Dusk, Denzal Sinclaire, Molly
Johnson, Carol Welsman, Alfie Zappacosta, Marc Jordan, Holly Cole, Diana Krall,
Sophie Milman and many others.
LISTNUM
1 \l 11096 The
vast majority of these Canadian artists would be considered emerging
artists. Virtually none of them receive
airplay on Kelowna radio today or Canadian radio, for that matter.
LISTNUM
1 \l 11097 We
are proud that many of these Canadian artists took time to write letters of
support on behalf of our application.
LISTNUM
1 \l 11098 Canadian
music will be prominently featured in our programming, scheduled evenly
throughout each hour. And to ensure
significant airplay of emerging Canadian artists, 50 per cent of our Canadian
songs will be released in 2000 or later.
LISTNUM
1 \l 11099 In
addition to the Canadian music diversity that our station will offer, The Oasis
will feature many international artists who also receive no airplay on Kelowna
radio. Some of the core instrumentalists
include: Dave Koz, Marc Antoine, Craig
Chaquico, Ottmar Liebert, Peter White, Jim Brickman, Richard Elliot, Norman
Brown, Kirk Whalum, Mindi Abair and others.
LISTNUM
1 \l 11100 A
good portion of our international vocal selections will also be distinct,
unduplicated artists in this market, names like Basia, Sade, Renee Olstead,
Carrine Bailey Rae, Queen Latifah and many others.
LISTNUM
1 \l 11101 To
give you a good indication of the sound of the station, here's a short sample
of 96.3 The Oasis.
‑‑‑ Video
presentation / présentation vidéo
LISTNUM
1 \l 11102 MR.
LARSEN: Because this music is not
available on Kelowna airwaves today, we believe that we will attract many
listeners not currently tuning into local radio, those listening to satellite
or cable music channels, internet radio, personal CDs and MP3s, as those have
been the only sources for the music format to date.
LISTNUM
1 \l 11103 There
is strong demand for The Oasis. Our
research shows that 84.7 per cent of 35 to 64‑year old adults in Kelowna
would definitely or probably listen to our new station, and of those, 36.8 per
cent said the oasis would become their favourite radio station.
LISTNUM
1 \l 11104 MR.
WILSON: Kelowna is currently served by
five commercial radio stations, four FMs and one AM. With the recent purchase of CILK‑FM,
all commercial stations are now owned by two companies: Astral and Pattison. And if two pending ownership transfers in
Penticton and Vernon are approved, every single commercial radio station in the
Okanagan Valley from Vernon to Osoyoos will be controlled by those two
companies.
LISTNUM
1 \l 11105 Ownership
diversity in this region should remain a priority. The market can sustain new radio service
without undue harm to the incumbents as we will outline. While these recent acquisitions make good
sense for those involved, maintaining diversity of voices remains a key
objective of the Commission and this hearing offers the opportunity to
accomplish both.
LISTNUM
1 \l 11106 While
the incumbent operators would have us believe that the Kelowna market is in an
economic down spin with limited future growth potential, virtually all economic
data refutes that, indicating a vibrant economy today, and solid and
sustainable growth going forward.
LISTNUM
1 \l 11107 Some
of the key indicators that Kelowna can sustain new radio service are:
LISTNUM
1 \l 11108 Radio
revenue has grown significantly in the past two years. The CRTC reported 2004 market revenue of
approximately $8.8 million. Standard
Radio's intervention, quoting TRAM numbers, indicate total radio revenue of
approximately $10.4 million in 2006, an 18.2 per cent increase in just two
years.
LISTNUM
1 \l 11109 These
radio revenue increases are consistent with retail sales growth over the same
period. Financial Post markets reported
2004 retail sales in Kelowna of over $1.9 billion, and estimates 2007 retail
sales at just over $2.7 billion, a 39 per cent increase.
LISTNUM
1 \l 11110 And
Financial Post markets forecasts retail sales to continue growing at a
significant rate, eclipsing $3 billion by 2009 and $3.6 billion by 1012.
LISTNUM
1 \l 11111 Given
this substantial increase in radio revenues and retail sales, we are challenged
to explain why PBIT has not improved more significantly. This is a strong indication that the
Commission must look beyond, or at least deeper, into the PBIT issue in
determining the ability of the Kelowna market to handle new competition.
LISTNUM
1 \l 11112 With
the recent ownership consolidation and the flip to CKOV‑AM to FM, we
expect Kelowna's PBIT to improve substantially in the near term and before any
newly licensed radio station signs on.
LISTNUM
1 \l 11113 It
is important that diversity of voices be preserved in this market, and we
believe The Oasis is the right station to accomplish that goal
LISTNUM
1 \l 11114 MR.
LARSEN: In addition to ownership
diversity, The Oasis will also bring a new independent news and information
voice to Kelowna. Prior to the purchase
of CILK‑FM by Standard, the editorial balance in this market was three
separate owners. Approval of our
application would restore that level of news and information diversity.
LISTNUM
1 \l 11115 And
our station would be an important and substantial contributor to providing
local news and information.
LISTNUM
1 \l 11116 If
licensed, The Oasis will provide hourly, locally produced newscasts between
6:00 a.m. and 6:00 p.m. Monday to Friday and 8:00 a.m. to 4:00 p.m. on
weekends. That is 98 newscasts weekly,
totalling six hours and 21 minutes of new, diverse, news content each and every
week on Kelowna's airwaves.
LISTNUM
1 \l 11117 In
the current market, that would be the most news on the FM dial. We will accomplish this with three full‑time
and one part‑time dedicated news staff.
LISTNUM
1 \l 11118 95.1
per cent of total respondents to our research said news and information
specific to Kelowna is important and we will provide it for them.
LISTNUM
1 \l 11119 Other
spoken word, including sports, weather, business news, arts and entertainment
will total another three hours and 29 minutes weekly.
LISTNUM
1 \l 11120 Kelowna's
adult audience enjoys an active lifestyle.
Topics important to them include health and wellness, finance, travel,
fine food and wine and more. To satisfy
the desire for lifestyle information, The Oasis will air a weekly one‑hour
program called The Okanagan Life featuring local experts discussing these
topics and more.
LISTNUM
1 \l 11121 Our
scheduled spoken word programming totals 12 hours and 56 minutes weekly,
approximately 10 per cent of the broadcast week. On top of that will be announcer show prep,
community ad‑libs, and live interviews which will add even more spoken
word dimension to The Oasis.
LISTNUM
1 \l 11122 We
have made this strong commitment to spoken word based on what Kelowna adults
told us in our research and because we believe it is the spoken word content
that truly differentiates great local radio from average radio. And with increasing competition for
listeners, from music services such as satellite radio, MP3 players and
internet streaming, the local spoken word component of our programming, what we
do between the music, is the most significant competitive advantage that we
will have over these generic music services.
LISTNUM
1 \l 11123 In
our research, 79.9 per cent of respondents said exposure and promotion of local
and Canadian artists is important. Our
Canadian content development starts first and foremost with airplay of new and
emerging Canadian artists, most of whom receive no airplay on Kelowna radio
today.
LISTNUM
1 \l 11124 A
cornerstone of our indirect CCD initiatives is a commitment to play new
Canadian music. We propose that at least
50 per cent of our Canadian content will be songs released in 2000 or later,
ensuring airplay of a high percentage of newer Canadian songs from emerging Canadian
artists. This initiative is unique and
exclusive to our application.
LISTNUM
1 \l 11125 Canadian
artists have told us consistently that what they need from radio is
simple: Airplay and exposure. The Oasis will ensure both with this
commitment.
LISTNUM
1 \l 11126 We
are firm believers in Canadian content development, both direct financial and
the equally important non‑monetary means.
LISTNUM
1 \l 11127 Our
direct CCD contribution will be $129,500 over the initial licence term, a
significant contribution for a new broadcast entity.
LISTNUM
1 \l 11128 100
per cent of our direct CCD will stay in the Kelowna region. Our annual proposals include:
LISTNUM
1 \l 11129 Post
secondary music and journalism bursaries for Kelowna students; funding of the
Okanagan Jazz and Blues Society; funding to FACTOR, which Canadian artists told
us is a critical source of funding for development of their music, and our
FACTOR contributions will come back to British Columbia artists; and our
original instrumental song competition which will be of direct benefit to local
and regional independent Canadian artists.
LISTNUM
1 \l 11130 Our
direct CCD commitments will be supported with significant on‑air
promotion, website exposure and other marketing.
LISTNUM
1 \l 11131 In
addition to our unique Canadian content airplay and our direct CCD plans, we
also propose to air a weekly one‑hour program focusing exclusively on
independent Canadian music called Canadian Oasis.
LISTNUM
1 \l 11132 While
we will be highly supportive of Canadian music throughout our programming,
Canadian Oasis will give us a platform to explore emerging and independent
Canadian artists more thoroughly.
LISTNUM
1 \l 11133 MR.
WILSON: Kelowna has a vibrant arts
community. There are many annual
festivals and events, and The Oasis will be front and centre, broadcasting live
from each of them. Some of these events
include:
LISTNUM
1 \l 11134 The
Okanagan wine festivals; Parks Alive; Kelowna International Dragon Boat
Festival; the Okanagan Film Festival; and many others.
LISTNUM
1 \l 11135 Kelowna
is a culturally diverse city, with a strong non‑for‑profit and
social community. There are many
individual organizations that promote and offer activities and services
relating to multi‑cultural interests, and we have already reached out to
many of these organizations, ensuring our support through no‑charge
public service announcements and interviews, should we be licensed. This will be invaluable in assisting them
with fundraising and general awareness.
LISTNUM
1 \l 11136 Further,
the on‑air exposure of these groups and events will ensure that our
programming is inclusive of Kelowna's entire population spectrum.
LISTNUM
1 \l 11137 Our
News Department will take into account Kelowna's diversity and establish
contact with cultural communities and the region's First Nations to ensure The
Oasis includes their news in our programming.
LISTNUM
1 \l 11138 We
are committed to reflecting diversity within out company as well and provided
information to this in our application.
LISTNUM
1 \l 11139 And
our music format lends itself perfectly to reflecting cultural diversity. The vast and varied music styles that
comprise the Smooth Jazz format include artists and musicians from virtually
every background and region of Canada and beyond, and we will encourage Canadian
artists from all backgrounds to submit new music for airplay consideration.
LISTNUM
1 \l 11140 The
Kelowna and Central Okanagan economy is vibrant and well diversified. Major industries include agriculture,
wineries, manufacturing, natural resources, high technology and real estate.
LISTNUM
1 \l 11141 The
Central Okanagan Economic Development Commission, in releasing its 2007
economic profile, says:
"Among several indicators of
the region's healthy economy is the Central Okanagan growth rate of 2.6 per
cent in 2006."
LISTNUM
1 \l 11142 The
Central Okanagan also saw a dramatic increase in retail sales of 22.3 per cent
compared to B.C.'s increase of only 5.7, as well as a 7 per cent increase in
business licences. Kelowna and area is
sharing in the economic prosperity that the rest of British Columbia and
western Canada is enjoying.
LISTNUM
1 \l 11143 Kelowna's
retail sales are very strong with 2007 sales of nearly $2 billion, 27 per cent
higher than the national average, according to Financial Post markets.
LISTNUM
1 \l 11144 Retail
sales in Kelowna are forecast to continue growing at a significant rate,
reaching over $3 billion by 2009 and over $3.6 billion by 2012.
LISTNUM
1 \l 11145 The
correlation between retail sales and radio advertising sales is well
documented, and we believe that Kelowna's stronger than average retail sales,
coupled with the fact that they are forecast to continue growing significantly,
indicate Kelowna can sustain new radio service at this time.
LISTNUM
1 \l 11146 Our
proposed radio station and format is the right one for Kelowna. The demographics certainly support this
position. Kelowna is experiencing rapid
population growth, particularly the upper demographics. According to the 2006 federal census, the
city population grew 10.9 per cent between 2001 and 2006 and now totals over 106,000
people. The regional district boasts a
population of over 160,000 and the region's Economic Development Commission
quotes a regional trading area of over 400,000.
LISTNUM
1 \l 11147 The
largest population increases have occurred within the 35 to 64 age groups, the
target audience for The Oasis.
LISTNUM
1 \l 11148 As
you can see on the graph on the screen, the Kelowna population of adults aged
35 to 64 increased 36.8 per cent in the decade between 1996 and 2006. By comparison, those aged 0 to 35 increased
only 6.9 per cent during the same period, and those aged 65 plus increased 29.2
per cent.
LISTNUM
1 \l 11149 According
to the 2006 federal census, 40.6 per cent of the city of Kelowna residents are
between 35 and 64 years of age, and they total over 43,000 people.
LISTNUM
1 \l 11150 This
audience deserves a new radio station custom tailored for them. Local businesses that market to this
impressive demographic deserve a targeted radio station to reach this audience. The Oasis will be both.
LISTNUM
1 \l 11151 The
Oasis will open up new advertising opportunities for retailers and
manufacturers who, until now, have had limited radio choice on which to
advertise their products and services to the mature adult population.
LISTNUM
1 \l 11152 Today's
mature consumer is still very much an active consumer. Every day in the news we hear stories about
the baby boomer shift and how today's mature adult is not the same as those of
previous generations.
LISTNUM
1 \l 11153 They
are far from retiring. Many are still
working, but on their own terms as consultants or by starting their own
businesses. And they are purchasing
second homes, luxury vacation condos, travel, new vehicles, recreation
activities and more.
LISTNUM
1 \l 11154 This
audience grew up listening to radio and radio is one of the most effective
advertising mediums to reach these active, mature consumers. But only if there are radio stations that
appeal to them. The Oasis will be that radio
station in Kelowna.
LISTNUM
1 \l 11155 MR.
LARSEN: We have given this Kelowna
application particular thought and extensive planning, with research confirming
our instincts.
LISTNUM
1 \l 11156 The
Oasis will bring a new format to Kelowna, one with virtually no overlap with
existing stations, and given its specialty component, one that won't infringe
on the incumbent station formats.
LISTNUM
1 \l 11157 The
Oasis will provide a fresh and focused choice for the fastest growing
demographic in Kelowna, one that already comprises over 40 per cent of the
population.
LISTNUM
1 \l 11158 The
Oasis will provide significant news and other spoken word elements that are
important to our target audience. Our
station will bring a new, independent news and information voice to the
community and increase the diversity of spoken word voices in the market.
LISTNUM
1 \l 11159 The
Oasis will be highly active in the community.
Community service will be the foundation upon which our company and our
radio station is built.
LISTNUM
1 \l 11160 We
are excited about the possibility of bringing our unique and innovative format
to Kelowna and the Central Okanagan Valley.
LISTNUM
1 \l 11161 We
are here to grow. We are already
licensed in southern Alberta, and Kelowna is an important and strategic market
in our goal to develop Clear Sky Radio into a strong, independent western
Canadian broadcasting company.
LISTNUM
1 \l 11162 To
create a viable and self‑sustaining business, it is essential for us to
gain critical mass in these early stages of our development.
LISTNUM
1 \l 11163 Given
the trading multiples of purchasing radio stations today, our only opportunity
for growth as a small independent company is through the application
process. We simply do not have the
financial capacity of the larger broadcasting companies to purchase existing
licences. The $9.25 million price tag paid
for CILK‑FM in this market clearly tells us that.
LISTNUM
1 \l 11164 We
are young, we are experienced career broadcasters with many working years ahead
of us to create compelling radio, and we thank you the opportunity to present
our application for 96.3 The Oasis and look forward to your questions.
LISTNUM
1 \l 11165 THE
CHAIRPERSON: Thank you, Mr. Larsen and
Mr. Wilson.
LISTNUM
1 \l 11166 Commissioner
Morin will start the questioning.
LISTNUM
1 \l 11167 COMMISSIONER
MORIN: First, I am noticing 33 per cent category
3 music commitment rather than a higher commitment of perhaps 50, 60 or even 70
per cent category 3 music.
LISTNUM
1 \l 11168 With
just 33 per cent of your broadcast being dedicated to blues and jazz, how can
you argue that you are truly offering the people of Kelowna diversity in your
programming?
LISTNUM
1 \l 11169 MR.
LARSEN: Thank you, Commissioner Morin,
good question.
LISTNUM
1 \l 11170 I
have had some experience as a Program Director in this format in the past. We launched a radio station in Calgary for
Newcap that had a 70 per cent commitment to sub‑category 34 music. The station, while we had early success
ratings‑wise, failed to gain long‑term traction and the station has
been struggling really since year two of its licence. A lot of that is to do with the fact that at
70 per cent you are playing a lot of unfamiliar music to the community. It is very hard to get them to buy in to
listening to that amount of unfamiliar music.
LISTNUM
1 \l 11171 The
Smooth Jazz format in the United States, the vocal selections or the mainstream
songs that are included in the music mix are what they would call the
glue. It is the familiarity that would
bring the audience to that radio station, and you can open through an instrumental
song every third song or a Diana Krall song which would likely have been in sub‑category
34.
LISTNUM
1 \l 11172 33
per cent, one in three songs, every third song essentially is going to be a sub‑category
34 specialty song. So, if we take an
average hour of 15 songs, five of those are going to be from the specialty
component. We can't vary all those into
one‑quarter hour. They will be
evenly dispersed throughout the hour, and we do think that the overall mix of
music at 33 per cent would be the ideal fit.
LISTNUM
1 \l 11173 Referring
back to some research that we had done in the Calgary market when we launched
the station, 33 to 35 per cent, roughly a third, was pegged by the audience
that we did music testing with as the ideal music mix. So that is why I decided to go with that
particular percentage in this case.
LISTNUM
1 \l 11174 COMMISSIONER
MORIN: What do you think as a condition
of your licence of committing to devote a minimum 20 per cent of all music
broadcasts in each broadcast week to instrumental music?
LISTNUM
1 \l 11175 MR.
LARSEN: We were asked that question in
our deficiencies and I indicated we would accept that as a condition of
licence, should the Commission feel it necessary to impose that.
LISTNUM
1 \l 11176 Instrumental
music is a core component of this format.
You can't do it effectively without that component, so we would accept a
20 per cent level.
LISTNUM
1 \l 11177 COMMISSIONER
MORIN: You will offer, if the licence is
granted, six hours of syndicated programming per week. By definition, syndicated programming does not
qualify as local programming unless it originates from the local station.
LISTNUM
1 \l 11178 So,
could you clarify the real level of weekly local programming, 126 hours, given
that syndicated programs don't count towards the total?
LISTNUM
1 \l 11179 MR.
LARSEN: Our local total hours would be
120 in that case.
LISTNUM
1 \l 11180 COMMISSIONER
MORIN: You have indicated that you will
offer six hours, 21 minutes of news per broadcast week, of which 90 per cent
will be devoted to local and regional news.
LISTNUM
1 \l 11181 Of
this 90 per cent, what will be the local‑to‑regional ratio?
LISTNUM
1 \l 11182 MR.
LARSEN: I would say of the 90 per cent,
75 per cent would be truly local, and 25 per cent would be regional in that it
would come from the Okanagan Valley, perhaps say from Vernon to Penticton, news
stories that are of regional relevance to this particular area of British
Columbia.
LISTNUM
1 \l 11183 COMMISSIONER
MORIN: Do you believe that the three
full‑time journalists you plan on having will be sufficient to provide
not only the amount of news anticipated, but also quality newscasts?
LISTNUM
1 \l 11184 MR.
LARSEN: We are actually extremely
confident of that in that it is the exact same staffing level that we have
launched within our Lethbridge station which we signed on in July.
LISTNUM
1 \l 11185 So,
we have three full‑time news staff, one of which is the News
Director. So, we have an overlap of
three shifts over the course of the regular week and the part‑time person
does reporting, as well as the weekend newscast. It has been an extremely successful mix in
terms of the right number of people to accomplish that number of newscasts.
LISTNUM
1 \l 11186 The
number of newscasts presented in this application is identical to what we are
delivering in Lethbridge today.
LISTNUM
1 \l 11187 COMMISSIONER
MORIN: If there is a revenue shortfall
over the first few years of operation, will your commitment be negatively
affected?
LISTNUM
1 \l 11188 MR.
LARSEN: No, sir. We are a well‑funded company. We do have the financial backing through our
partnership to sustain some early year losses, should that become the issue for
us. We are extremely positive about the
opportunity here in Kelowna for this format with the levels of specialty that
we have indicated in our application to gain traction here, and we will also
now that we have two other radio stations, have some operating synergies to
offset some expenses, for example, traffic and accounting, some bookkeeping
function, perhaps some creative and production that we can share among our
company as we get bigger.
LISTNUM
1 \l 11189 So,
we think that that risk lessens as we gain more stations.
LISTNUM
1 \l 11190 COMMISSIONER
MORIN: Unlike category 2 music, there is
no Canadian content distribution regulation for category 3 Canadian content
music. Would you commit to ensuring that
category 3 Canadian content music will be distributed evenly throughout the
broadcast day and week?
LISTNUM
1 \l 11191 MR.
LARSEN: Yes, we would.
LISTNUM
1 \l 11192 COMMISSIONER
MORIN: Thank you.
LISTNUM
1 \l 11193 THE
CHAIRPERSON: Mr. Larsen, your six hours
of syndicated programming, is that Canadian or non‑Canadian programming?
LISTNUM
1 \l 11194 MR.
LARSEN: At this point, the initial plan
would be non‑Canadian programming.
There is in new two‑hour Smooth Jazz weekly countdown show, Dave
Cozz does a two‑hour show and Ramsay Lewis does a two‑hour show.
LISTNUM
1 \l 11195 At
this point, I don't think the format has gained a substantial number of
stations to have true Canadian syndicated programming, but it is perhaps an initiative
we could work in with some of the other stations within the format. But at this point, those six hours would be
outside of Canadian programming.
LISTNUM
1 \l 11196 THE
CHAIRPERSON: Do you use this programming
on your Lethbridge station currently?
LISTNUM
1 \l 11197 MR.
LARSEN: Not currently. We used some of it when I was employed in
Calgary.
LISTNUM
1 \l 11198 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 11199 We
have asked every applicant here before us how many stations they believe the
Kelowna market could sustain and I am going to ask you the same question.
LISTNUM
1 \l 11200 MR.
LARSEN: In looking at the market, we
would be comfortable with two licences.
Assuming that the Commission looks at the format roles, we would be most
comfortable with say being partnered with CHUM as the other winner in that they
are targeting 12‑24, we are targeting 35‑64. So if there is a demographic separation
between the multiple licences that were granted, it would certainly make the
business plan a lot easier than, say, to go up against two new stations that
are targeting the exact same demograph.
LISTNUM
1 \l 11201 THE
CHAIRPERSON: A number of other
applicants have talked to us about the recent format changes that have occurred
in this market. Do you believe that those
format changes will have any impact on your business plan as proposed?
LISTNUM
1 \l 11202 MR.
LARSEN: We don't believe that. In fact, Pattison choosing Country versus a
softer AC vocal was probably more advantageous to our longer‑term success
with this format.
LISTNUM
1 \l 11203 THE
CHAIRPERSON: Even though arguably it is
the same target demographic group, as well with the news/talk switch on AM?
LISTNUM
1 \l 11204 MR.
LARSEN: Very different musical
preferences. Same general demographic,
but very different musical tastes.
LISTNUM
1 \l 11205 THE
CHAIRPERSON: Legal counsel.
LISTNUM
1 \l 11206 MS
LEHOUX: We do have some follow up
questions.
LISTNUM
1 \l 11207 THE
CHAIRPERSON: Please go ahead.
LISTNUM
1 \l 11208 MS
LEHOUX: We see that a competing
applicant, Deep Waters Media, is proposing what it calls a New Variety format
that would feature Smooth Jazz and World music amongst other genre. From your perspective, what are the
similarities and differences between your specialty FM Smooth Jazz format
proposal and Deep Waters format?
LISTNUM
1 \l 11209 MR.
LARSEN: Our application is built around
a radio format that is commercially viable and exists in the United States and
in some Canadian markets already.
LISTNUM
1 \l 11210 We
feel within the current Canadian CRTC rules of how the music categories are
organized, we really have no choice but to include the specialty component
because instrumental music by definition would fit into category 34. So, as a non‑specialty licence, they
would not have ‑‑ I guess they would have more flexibility to
play more mainstream music than us.
LISTNUM
1 \l 11211 I
think that would be the only major difference.
LISTNUM
1 \l 11212 MS
LEHOUX: Thank you.
LISTNUM
1 \l 11213 Would
you tell us why you feel your proposed Smooth Jazz format, if licensed, would
provide sufficient musical diversity to the market and have a minimal market
impact?
LISTNUM
1 \l 11214 MR.
LARSEN: Again, we have chosen a target
demographic that has not been traditionally well served in this
marketplace. So, we are going after the
upper end of the demographics. We have
done that same demographic pursuit in our other radio stations in Alberta, and
we found a good success in targeting that demographic.
LISTNUM
1 \l 11215 By
committing to the specialty component and the instrumental component of the
radio format that we are proposing, we do feel that that diversity would
definitely be there, particularly musically, and also with the amount of news
and information programming that we are proposing, that spoken word diversity
would also be a benefit.
LISTNUM
1 \l 11216 MS
LEHOUX: Thank you.
LISTNUM
1 \l 11217 To
follow up on Commissioner Morin's question with respect to the fact that you
would be prepared to accept an instrumental commitment as a condition of
licence of 20 per cent, a minimum of 20 per cent of all musical selections
broadcast weekly on both categories 2 and 3, music combined, to follow up on
that, if we were to impose this commitment as a condition of licence, what
impact would this have on your programming plans?
LISTNUM
1 \l 11218 MS
LEHOUX: To play instrumental music is
already a key component of what we plan to do, so we are going to play that
music regardless of if it is a condition of licence or not.
LISTNUM
1 \l 11219 MS
LEHOUX: But you agree to ‑‑
LISTNUM
1 \l 11220 MR.
LARSEN: I just want to clarify. When you say 20 per cent instrumental in
category 2 and 20 per cent in category 3, our feeling would be that all of our
instrumental music would fit into category 3 and we would be compelled to say
that the 20 per cent would be in that category.
LISTNUM
1 \l 11221 MS
LEHOUX: Thank you very much.
LISTNUM
1 \l 11222 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 11223 Mr.
Larsen, you now have your two minutes.
LISTNUM
1 \l 11224 MR.
LARSEN: We are again excited to present
another unique and innovative application here in Kelowna, qualities that we
believe are essential to the future of Canadian radio.
LISTNUM
1 \l 11225 The
Oasis will bring true diversity to Kelowna's airwaves, with minimal impact on
the incumbent stations. The Oasis will
be a fresh and focused product choice for the fastest growing demographic in
the region, one that already comprises over 40 per cent of the population.
LISTNUM
1 \l 11226 The
Oasis will bring increased diversity of spoken word voices to the Kelowna
market and provide significant news and other spoken word elements.
LISTNUM
1 \l 11227 This
is my fifth time before the Commission in the last 19 months in pursuit of FM
licences, and our story has been clear and consistent from the beginning. We are trying to build a focused,
independent, Canadian broadcasting company in western Canadian markets. To do that, we need to gain some growth at
this early stage, and Kelowna is an ideal fit in our business plan. We feel that the presentation and format that
we are proposing is a good fit for the market at this time.
LISTNUM
1 \l 11228 We
thank you again for your time and consideration.
LISTNUM
1 \l 11229 THE
CHAIRPERSON: Thank you, Mr. Larsen.
LISTNUM
1 \l 11230 One
of the advantages, perhaps disadvantages for you, of having laptops up here is
that we get messages from staff that tell us what we have omitted.
LISTNUM
1 \l 11231 So,
I am going to ask you a couple more questions, I apologize. If you need to change your closing statement,
please do.
LISTNUM
1 \l 11232 We
have already talked about the change in format on the AM dial from Oldies
format to a News/Talk format. You
maintain that that is not going to have any impact on your business plan.
LISTNUM
1 \l 11233 MR.
LARSEN: Right.
LISTNUM
1 \l 11234 THE
CHAIRPERSON: In terms of your financial
projections, you say in your application that you only estimate selling two
minutes of available hourly advertising minutes in year one, while only
modestly increasing sales to four minutes per hour by year seven of the term.
LISTNUM
1 \l 11235 Do
you recall that in your financial projections?
LISTNUM
1 \l 11236 MR.
LARSEN: I do, yes.
LISTNUM
1 \l 11237 THE
CHAIRPERSON: Can you tell us what
factors went into coming up with these numbers?
LISTNUM
1 \l 11238 MR.
LARSEN: What we typically do when we are
trying to estimate revenues for our seven‑year business plan, we will
build a rate card based on market research.
We will try and find out what existing stations in the market are
selling radio advertising for, and then where we feel where we are going to
come into the market, determine what we think is a fair and equitable price for
our 30‑second commercials.
LISTNUM
1 \l 11239 From
that point, using the calculation of the two minutes per hour over the 18‑hour
window, just apply the simple math to come up with the revenue projections that
we would generate in that market.
LISTNUM
1 \l 11240 THE
CHAIRPERSON: Some might say that this is
a conservative estimate, but others might contest that this is grossly
understating the impact that you will have on incumbents.
LISTNUM
1 \l 11241 MR.
LARSEN: Again, we have now gained a
little bit of real world experience in Lethbridge because we have been on the
air for a couple of months there, and we projected very similar numbers in
Lethbridge to what we are projecting here for Kelowna. There is more competition here, more
stations.
LISTNUM
1 \l 11242 We
do feel that we would be better off to project conservative numbers that we
know we can base a business plan on as opposed to coming up with overly
inflated numbers that might be hard to reach.
We don't think we are underestimating what our impact would be.
LISTNUM
1 \l 11243 Again,
even at 33 per cent specialty component, it is still going to be perceived as a
niche radio station of sorts. It will be
harder for us to gain that immediate sort of mainstream attraction that a broad
25‑54 mainstream format could really gain out of the gates.
LISTNUM
1 \l 11244 It
will take us a little bit longer to gather steam.
LISTNUM
1 \l 11245 I
am confident we can hit the numbers that we presented. I don't think they are overly conservative
based on the format that we are presenting.
LISTNUM
1 \l 11246 THE
CHAIRPERSON: Along those lines, you say
that you anticipate generating 50 per cent or $450,000 of your total year two
revenues from new advertisers, as well as 15 per cent from other forms of
media. Again, 50 per cent is quite high.
LISTNUM
1 \l 11247 What
research have you done of the advertising market here in Kelowna, and do you
have any commitments from advertisers that would generate that level?
LISTNUM
1 \l 11248 MR.
LARSEN: We don't have specific
advertising commitments in this particular market. Those figures were gathered again from
previous experience and now translating that into our real world experience in
Lethbridge, and Casey might be able to expand a little bit on it, we have made
great inroads in targeting an older demographic in Lethbridge and generating
new advertising dollars from people that weren't advertising on radio before.
LISTNUM
1 \l 11249 Casey
might have a few examples of those types of advertisers.
LISTNUM
1 \l 11250 MR.
WILSON: One of the challenges of going
after a little mature audience is traditional advertisers are not used to
targeting these people.
LISTNUM
1 \l 11251 They
are trained to go after the 25‑54 demo and this is all they know. We have noticed in Lethbridge that it has
taken a little while to start to educate the consumers that there is a mature,
affluent audience that is being neglected out there.
LISTNUM
1 \l 11252 We
found success with businesses such as podiatrists, franchises like Good Feet,
prosthetic surgery, very non‑traditional advertisers. So, we have really seen that grow through the
advertisers that come on board in Lethbridge going after a more mature
audience, as well as people have really expanded, once they have become
educated on who we are going after with this audience, they have expanded their
budgets, as well as a lot of new opportunities have opened up.
LISTNUM
1 \l 11253 THE
CHAIRPERSON: I believe we had this
conversation at another hearing that you are in fact going after the audience
that advertisers just seemingly don't want to touch, where the target audience
for advertisers are the 25 to 54, and what efforts are you going to make
specifically in this market ‑‑ I take your point that you have
the experience now in Lethbridge, but are there such businesses in this market
that would allow you to sell an older audience to advertisers?
LISTNUM
1 \l 11254 MR.
LARSEN: I think there is more here
honestly in this market. The percentage
of older population, including those over 65, is much higher here in Kelowna
than it is in Lethbridge.
LISTNUM
1 \l 11255 That
advertising shift is already taking place in a younger market like Lethbridge.
LISTNUM
1 \l 11256 In
a market like Kelowna where there is an abundance of 35 or 40‑plus
population and it is growing rapidly, there is a ton of businesses out in this
community that are specifically selling products that are targeted to that
particular audience, even higher end.
LISTNUM
1 \l 11257 One
thing that the Smooth Jazz format is able to is it generates non‑traditional
revenue from a lot of higher end type of products, for example, Jaguar or I saw
a Bentley driving around Kelowna here. I
don't know if there is a dealership here or not, but we would go after them for
potential advertising because we are targeting that affluent, well‑to‑do
person over the age of 40, who has got the wherewithal and the wealth to go out
and buy a $250,000 motor home or a vacation condo at Big White, those types of
advertisers that traditionally haven't used radio to market those high end
services. They are using magazines or
direct mail pieces. That has been where
we have been able to steer some of the budget away from other media into radio.
LISTNUM
1 \l 11258 In
Lethbridge, we have a great success in generating new budget from clients that
are increasing their total spend on radio, and I think historically when a new
radio station comes to market, you will traditionally see that. You will see the overall radio revenue increase
in markets where it is reported. I am
sure you guys see that in the data that is filed. When new stations come to the market, it
doesn't all come away from the existing players. The overall radio advertising pie tends to
increase.
LISTNUM
1 \l 11259 We
believe this market is underperforming relative to the retail sales. So, a station that specifically targeted the
upper end of the demo such as ours, should and will generate new revenue that
is not being spent in radio today.
LISTNUM
1 \l 11260 THE
CHAIRPERSON: It seems to be a harder
challenge to convince national advertisers to target this older demo. Is your ratio the typical 80/20 between local
and national?
LISTNUM
1 \l 11261 MR.
LARSEN: We were very conservative in our
national, both in our Alberta applications and this one. We started about 10 per cent and scale it up
as we go forward from there.
LISTNUM
1 \l 11262 CBS
is our national advertising representative in Lethbridge and a lot of their
buys are starting to shift away ‑‑ 25‑54, by and large
is still the number one demographic for them, but they are seeing a gradual
shift to 35‑64 as that population is entering that age demographic. Maybe a little bit ahead of the curve, but I
suspect that within the next three to five years that 35‑64 honestly will
become one of the primary buying demographics.
LISTNUM
1 \l 11263 We
have, on purpose, kept our national expectations low based on that fact, that
we are a little bit outside of the target.
LISTNUM
1 \l 11264 The
other thing that has been clear to us in Lethbridge is the national agencies
will wait for BBM numbers before they put a lot of revenue on your station,
especially first year in, national is going to be a little bit slow and we will
build it up over that initial seven‑year licence term.
LISTNUM
1 \l 11265 THE
CHAIRPERSON: You spoke with Commissioner
Morin about your 33 per cent musical component.
I would like to switch gears a bit and talk about the 67 per cent, which
comes from category 2.
LISTNUM
1 \l 11266 How
will you ensure that your station remains distinctive in the market because
that 67 per cent could be Adult Contemporary and still fit somehow within your
format, and we know there is an Adult Contemporary station in this market
already.
LISTNUM
1 \l 11267 So,
what will you do with that 67 per cent to ensure its distinctiveness?
LISTNUM
1 \l 11268 MR.
LARSEN: We will really truly try and
model this station after the successful Smooth Jazz stations in the U.S. The vocal component there are artists that
don't traditionally get played on mainstream AC radio.
LISTNUM
1 \l 11269 Where
mainstream AC radio has now shifted its focus really to a small percentage of
music from the 80s and focusing more on that 90s to 2000s decades, maybe a
little bit of 70s for Spice, Smooth Jazz uses a lot of those 70s vocal tracks,
bands like Earth, Wind and Fire, Bill Withers, those types of distinct vocals,
people like Queen Latifah. The
discussion we always had in Calgary was do we put Queen Latifah as a category
34 or do we put Queen Latifah as a category 2?
Where does she fall? Diana Krall;
Michael Buble.
LISTNUM
1 \l 11270 Michael
Buble, number one selling artist in the world right now, you could strongly
make the case on either side that he is a jazz artist or a mainstream artist.
LISTNUM
1 \l 11271 So,
we will find distinct vocal songs that fit the overall tempo and sound of the
radio station because, frankly, going from a brand new Christina Aguleira song
into a Dave Cozz instrumental is a train wreck and nobody would listen. So, we have to find those right vocals that
mesh well with the instrumental component and the contemporary jazz vocalists
from artists like Diana Krall and the Michael Bubles and Norah Jones of the
world.
LISTNUM
1 \l 11272 THE
CHAIRPERSON: A number of people bring up
the example of Rod Stewart and his Great American Songbook. One day someone is going to talk about Brian
Ferry's As Time Goes By.
LISTNUM
1 \l 11273 MR.
LARSEN: It is in your collection, isn't
it?
LISTNUM
1 \l 11274 THE
CHAIRPERSON: Would something like that
make it on to that 67 per cent?
LISTNUM
1 \l 11275 MR.
LARSEN: It possibly could. To be completely honest, I am not completely
familiar with that particular record.
LISTNUM
1 \l 11276 THE
CHAIRPERSON: Let's say Rod Stewart
because everybody seems to be more familiar with that one.
LISTNUM
1 \l 11277 MR.
LARSEN: What is really interesting is a
lot of these artists, as they matured or be more artistic with their music,
Sting, for example, Sting doesn't get a lot of airplay on mainstream radio any
more because his music has become too artistic, but it fits well with the
Smooth Jazz format. A lot of the Smooth
Jazz instrumentalists, Chris Bottie was his sax player.
LISTNUM
1 \l 11278 There
is very compelling music out there on the vocal side that mixes well with the
instrumental side that can create that really distinct diverse sound. It is important that you brand the format of
Smooth Jazz. You need to be known as the
Smooth Jazz station.
LISTNUM
1 \l 11279 What
happened to us in Calgary was we became known as the second great AC station
because we didn't embrace, particularly into that second and third year, the
Smooth Jazz label. So, when we ask
people how would you explain this radio station, they said, it is kind of like
Light 96 but not really as good as that station.
LISTNUM
1 \l 11280 So
you really have to own that brand and be that brand and call yourself Smooth
Jazz and mix the right music together or frankly the station will fail over the
long term.
LISTNUM
1 \l 11281 THE
CHAIRPERSON: Thank you very much, Mr.
Larsen. If you do have anything to add
to your closing ‑‑
LISTNUM
1 \l 11282 MR.
LARSEN: I do not, but I will go and find
the Brian Ferry album.
LISTNUM
1 \l 11283 THE
CHAIRPERSON: Thank you very much.
LISTNUM
1 \l 11284 Madam
Secretary, I believe we need a few minutes to allow the next applicant to set
up. We will take a short ten‑minute
break. Thank you.
‑‑‑ Upon recessing
at 1633 / Suspension à 1633
‑‑‑ Upon resuming
at 1640 / Reprise à 1640
LISTNUM
1 \l 11285 THE
CHAIRPERSON: Ladies and gentlemen, we
are about to begin.
LISTNUM
1 \l 11286 For
those of you making your dinner or rehearsal plans, whichever the case may be,
this will be the last applicant we will be hearing for today.
LISTNUM
1 \l 11287 Madam
Secretary.
LISTNUM
1 \l 11288 THE
SECRETARY: Thank you, Madam Chair.
LISTNUM
1 \l 11289 We
will now proceed with item 6, which is an application by Touch Canada
Broadcasting (2006) Inc. (the general partner) and 1188011 Alberta Limited and
Touch Canada Broadcasting Inc. (the limited partners), carrying on business as
Touch Canada Broadcasting Limited Partnership, for a licence to operate an
English‑language FM commercial specialty radio programming undertaking in
Kelowna, British Columbia.
LISTNUM
1 \l 11290 The
new station would operate on frequency 96.3, channel 242B, with an average
effective radiated power of 7,100 watts, maximum effective radiated power of
20,000 watts, antenna height of minus 89 metres.
LISTNUM
1 \l 11291 Appearing
for the applicant is Mr. Allan Hunsperger.
Please introduce your colleagues and you will then have 20 minutes for
your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM
1 \l 11292 MR.
HUNSPERGER: Thank you.
LISTNUM
1 \l 11293 Madam
Chair, Commissioners and CRTC staff, my name is Allan Hunsperger and I am the
founder and director of Future Developments for Touch Canada Broadcasting Inc.
(2006). We are very excited to be here
today to present our vision for a very different kind of radio station for
Kelowna.
LISTNUM
1 \l 11294 With
me today I have on my right Malcolm Hunt, Network Programming Director, and next
to him is Bev Karbonik, our Business Manager.
To Bev's right is Natalie Harder from the Gospel Music Association of
Canada. To my left is Jamie Moffat,
Retail Sales Manager for our Edmonton operations. Left of Jamie is Maureeta Percy, Vice‑President
of Ipsos‑Reid.
LISTNUM
1 \l 11295 A
contemporary gospel music radio station will bring diversity to the marketplace
in Kelowna. Currently, there are five
basic commercial formats broadcasting in Kelowna: Top 40, Soft AC, Rock, Country and
News/Talk. None of the existing stations
are broadcasting the genre of music we would offer, which not only provides an
alternative in programming, but also fills a need according to those polled in
our market research survey.
LISTNUM
1 \l 11296 In
addition to diversity in programming, our proposed station would bring
diversity in advertisers. By this we
mean that we would actually increase the amount of advertising dollars being
spent on radio in the Kelowna area. Our
experience at our existing stations in Calgary and Edmonton have shown that
this genre attracts businesses that don't typically advertise on mainstream
radio. Touch Canada's existing stations
have many advertisers that had never tried radio before they met us.
LISTNUM
1 \l 11297 We
have successfully established the Gospel format in Edmonton and Calgary and our
desire is to duplicate that success in additional markets across Canada. The reason we chose to apply in Kelowna is
simply due to the strength of the survey results we received. Thirty‑four per cent of the respondents
in Kelowna indicated that they would listen to the proposed station, which
means that we could potentially be one of the top two stations in Kelowna for
listener share.
LISTNUM
1 \l 11298 To
further explain our survey results, I would like to call upon Maureeta Percy
see, Vice‑President of Ipsos‑Reid.
LISTNUM
1 \l 11299 MS
PERCY: Thanks, Allan.
LISTNUM
1 \l 11300 Ipsos‑Reid
was commissioned by Touch Canada Broadcasting Inc. to conduct a telephone
survey with a random sample of 400 adults from the Kelowna area to determine
the market potential for a contemporary Christian music radio station. Interviews were conducted between April 20th
and May 6th of this year, 2007.
LISTNUM
1 \l 11301 Interest
in a contemporary Christian music station in Kelowna is encouraging. A total of 34 per cent of respondents
indicate that if such a radio station were available in Kelowna, they would
listen to it either regularly or occasionally.
LISTNUM
1 \l 11302 Furthermore,
43 per cent of Kelowna adults say they listen to Christian music, but nearly
half, or 42 per cent, are currently dissatisfied with the amount of this music
currently played on the radio, indicating a demand for this format.
LISTNUM
1 \l 11303 Currently,
28 per cent of Kelowna residents listen to or watch any Christian
programs. However, only 17 per cent say
they are very satisfied with this amount of programming available to them, and
22 per cent say they are dissatisfied, indicating a desire for additional
Christian programming.
LISTNUM
1 \l 11304 Those
interested in having a contemporary Christian music radio station broadcast in
Kelowna indicate they would listen for an average of 54 minutes per day. Additionally, 27 per cent who would listen to
the station also say their radio listening habits would increase once the
station began to broadcast.
LISTNUM
1 \l 11305 If
this station existed today, it would likely be among the popular radio stations
in Kelowna. Assuming that the 34 per
cent of Kelowna residents who indicate that they would be likely to listen to
the new station do so at least occasionally, it has the potential to become a
popular station that could rival the popularity of stations such as CILK‑FM,
36 per cent indicate they have listened to this station in the past month, and
SUN‑FM, 30 per cent have listened to this station in the past month.
LISTNUM
1 \l 11306 The
potential new contemporary Christian music radio station is likely to have
broad appeal. The demographic profiles
of those interested in this format closely reflect that of all survey
respondents.
LISTNUM
1 \l 11307 MR.
HUNSPERGER: Thank you, Maureeta.
LISTNUM
1 \l 11308 Jamie
Moffat, our Retail Sales Manager, will now share with you our view of the
market here in Kelowna.
LISTNUM
1 \l 11309 MR.
MOFFAT: Thanks, Allan.
LISTNUM
1 \l 11310 With
a population of approximately 107,000, Kelowna is the largest community in the
Central Okanagan and one of the fastest growing cities in B.C. The city's vibrant retail and commercial base
attracts a trading area of 450,000 residents, making it the largest centre for
urban development between Greater Vancouver and Alberta.
LISTNUM
1 \l 11311 The
Kelowna area economy is firing on all cylinders and will continue to expand in
2007. Employment is up overall, despite
job losses in the forest industry sectors.
Robust job growth will lead to higher levels of in‑migration.
LISTNUM
1 \l 11312 Strong
demand for homes will keep Kelowna's new home sales at near record high levels
in 2007 and 2008. Kelowna's resale
market will move towards more balanced market conditions in 2007.
LISTNUM
1 \l 11313 According
to the Financial Post retail sales survey, the total estimated retail sales for
2007 in the Central Okanagan are expected to be approximately $2.7
billion. Retail sales for the Central
Okanagan increased 10.1 per cent in 2006, compared to a 5.9 per cent increase
for the province of British Columbia overall.
These sales are forecast to increase dramatically for 2007 for the
Central Okanagan.
LISTNUM
1 \l 11314 Kelowna
is the major retail and business centre in the B.C. interior, with a total of
seven shopping centres. Orchard Park
Shopping Centre is the largest mall between Calgary and Vancouver.
LISTNUM
1 \l 11315 The
Kelowna area has developed into an international destination that attracts
tourists year round from all over the globe.
As a result, tourism is now a major employment and economic contributor
to the Central Okanagan. Meetings,
conventions and sporting events play a vital role in supporting the local
tourism industry. Kelowna has become a
desirable destination for these activities, which are expected to grow due to
the continued improvement in access to the region for air travellers.
LISTNUM
1 \l 11316 Competition
for media dollars in Kelowna is light for a market serving over 400,000
people. There are eight newspapers
daily, weekly and bi‑weekly, six radio stations and two television
stations.
LISTNUM
1 \l 11317 The
cornerstone of our start‑up marketing strategy for Kelowna consists of
pre‑selling packages made up of four spots a day, 365 days a day for a value
of $30,000. The signing of 20 partners
in the first year would meet our budget requirements. The average cost per spot for this package is
$21.
LISTNUM
1 \l 11318 Revenue
estimates are based on actual B.C. radio revenue figures prorated to Kelowna's
population and Shine FM's estimated share of 7.6 per cent.
LISTNUM
1 \l 11319 We
believe the Kelowna market will be able to handle an additional two new radio
stations, one conventional format and one niche format. We further believe that Touch Canada should
be granted one of the new licences for the following reasons.
LISTNUM
1 \l 11320 One,
the revenue requirements of our niche format are relatively low and much of our
advertising will come from new sources, so we will have a minimal impact on the
existing stations in Kelowna. Number
two, Touch Canada will bring much needed diversity to the Kelowna market.
LISTNUM
1 \l 11321 MR.
HUNSPERGER: Thank you, Jamie.
LISTNUM
1 \l 11322 There
is no one else in this country that has had more experience in programming
gospel music radio than our Network Program Director, Malcolm Hunt.
LISTNUM
1 \l 11323 Malcolm.
LISTNUM
1 \l 11324 MR.
HUNT: Thank you, Allan.
LISTNUM
1 \l 11325 For
more than ten years I have had the privilege of programming gospel radio
stations in Canada. I have seen the
steady growth of Canadian gospel artists and our industry as a whole. In fact, just last week I attended the Gospel
Music Association of Canada music conference in Calgary, where music talent and
radio personnel from all over the country gathered for showcases and
seminars. It was an incredible event
that rivals its American sibling. We are
very pleased that Touch Canada received the award for best Gospel Radio Stations
of the Year, the industry awards. One of
the main reasons that event was so successful is that the number of gospel
radio stations in Canada continues to increase.
Touch Canada Broadcasting has committed itself to doing its part to grow
this industry.
LISTNUM
1 \l 11326 96.3
Shine FM will provide Kelowna with much needed diversity. The Shine FM brand of Gospel radio will
ensure this happens. We can talk about
our brand and what our industry looks like and sounds like, but we would rather
show you so we have a short video to give you a better feel of what we are
about.
‑‑‑ Video
presentation / présentation vidéo
LISTNUM
1 \l 11327 MR.
HUNT: I apologize for the audio. There must be a problem between here and the
back.
LISTNUM
1 \l 11328 As
you saw in the video, the Shine FM brand looks and sounds very similar to
mainstream radio. The main difference,
of course, is our music. That music is
what 34 per cent of Kelowna residents said they would listen to if it were
available. Our stations never play songs
that demean young women or anyone else, promote drug use, or encourage violence
or anti‑social behaviour. Our
positioning statement is safe and fun for the whole family.
LISTNUM
1 \l 11329 Attached
to this presentation is a programming schedule that I have drawn up to give you
a representation of what a typical week of programming will look like on Shine
FM Kelowna. This programming has become
increasingly popular in the markets we currently operate in.
LISTNUM
1 \l 11330 When
Shine FM signs on in Kelowna, it will have four full‑time and three part‑time
staff. Our morning and drive home shows
will each have one full‑time host and one full‑time news
anchor. Weekend and mid day programming
will be voice tracked by Kelowna staff and we will also hire a part‑time
weekend news anchor. Evenings will
feature a program called Today's Family with Beth Warden, a Canadian syndicated
program that airs on all of our FM stations.
Touch Canada Broadcasting produces that program.
LISTNUM
1 \l 11331 An
extremely important aspect of our programming is Canadian content. We continue to exceed our licence requirement
of 10 per cent at our existing operations.
For example, last week, Shine FM in Edmonton aired 20 per cent, while in
Calgary we reached 18 per cent. We will
continue to exceed the required level in Kelowna should we obtain a licence.
LISTNUM
1 \l 11332 Shine
FM Kelowna will provide a weekly total of 26.69 hours of spoken word
programming. This will include 3.53
hours of news, weather, and sports, 6.93 hours of local reflection, and
announcer content, 1.23 hours of comedy and human interest features, and 15
hours of brokered programming.
LISTNUM
1 \l 11333 News
is an area that Touch Canada Broadcasting continues to improve upon. With our 2.5 news staff, we feel we can
adequately report the stories and information our Kelowna listeners need to know
about.
LISTNUM
1 \l 11334 We
are very proud of our Canadian Content Development initiatives. A total of $15,000 will be allocated to CCD
annually. These monies will be
contributed to FACTOR, the Gospel Music Association of Canada, and the Covenant
Awards. GMA week is an annual event,
including a conference, talent showcase, awards show and artist competition
designed to train, encourage and network artists and the Gospel Music Industry
from coast to coast. The GMA portion of
our CCD commitment will be devoted to three areas: The competitions, training sessions, and the
Covenant Awards show.
LISTNUM
1 \l 11335 The
GMA Canada Covenant Awards gives out 38 awards each year for albums, artists,
and the industry in a variety of genres of music. The number of awards and attendance has grown
over the years. This year saw over 1,200
in attendance, with artists from across Canada, as well as Canadian artists who
have centred their operations out of Nashville, such as Starfield and Downhere.
LISTNUM
1 \l 11336 We
have Natalie Harder here from the GMA and she can give you a little more
insight into who they are and how they help Canadian gospel artists.
LISTNUM
1 \l 11337 Natalie.
LISTNUM
1 \l 11338 MS
HARDER: Thank you, Malcolm.
LISTNUM
1 \l 11339 GMA
Canada exists to foster and promote Canadian gospel music. They do this through the annual GMA Canada
week, which consists of the training sessions in song writing and artist
development, the Shine FM cross‑Canada talent search, and the Covenant
Awards, now in its 30th year. This week
also provides opportunities for artists and industry to network to further both
those working on the industry side as well as in the careers of the artists.
LISTNUM
1 \l 11340 GMA
Canada has contracted Slyngshot Productions to produce and promote this annual
event, and through the CCD funding from Shine FM, GMA Canada has been able to
assist artists from across Canada in establishing their careers in the
following ways.
LISTNUM
1 \l 11341 Number
one, the Shine FM cross‑Canadian talent search. As a ‑‑ quote/unquote ‑‑
Canadian idol style competition with over 250 entries this past year, Slyngshot
Productions and GMA Canada was able to give out prizes valued at over
$20,000. These prizes immediately and in
the long term make an impact in artists' lives, including development deals
with Canadian labels, showcase opportunities in front of labels, managers and
agents, and other practical prizes such as photo and design, instruments and
recording equipment. Having Shine radio
stations in both Edmonton and Calgary as a key component in this competition
both attracted and informed the core demographic interested in the
competitions, resulting in submissions more than doubling for this year.
LISTNUM
1 \l 11342 Number
two, Canada Christian Music conference. The
CCD fund enabled the CCCMC to double its line up of speakers and clinicians
without creating unreasonable cost for the conference attendees. This allowed the conference to absorb
approximately $120 per attendee for registration, while at the same time,
registrations doubled this year.
LISTNUM
1 \l 11343 Number
three, the annual Covenant Awards. The
CCD fund enabled the production and presentation of the Covenant Awards to be
raised up to a higher standard, thus raising the bar for the entire industry. The industry, as well as the artist
community, is challenged to increase their skills and presentation, pushing all
towards excellence.
LISTNUM
1 \l 11344 MR.
HUNSPERGER: Thank you, Natalie.
LISTNUM
1 \l 11345 One
of the other areas that we are very proud of in our existing operations is our
work with local charities. Bev Karbonik,
our Business Manager, will share some details concerning how we have helped
charities in the cities that we are now broadcasting in.
LISTNUM
1 \l 11346 MS
KARBONIK: As Allan mentioned, Touch
Canada Broadcasting is very proud of its partnerships with very deserving
charities in the markets we currently serve.
In Edmonton and Calgary, we have raised over $5 million for these
charities. Many of these organizations
tell us our radiothons for them are their biggest events of the year.
LISTNUM
1 \l 11347 For
example, our initial radiothon for the Mustard Seed Street Ministries in
Calgary raised $175,000 in 2003 and that has grown to $425,000 in 2006. With the help of many volunteers, these
radiothons have helped meet the needs of these charities which, in turn, have
helped many who have no where else to live but the streets. These monies help them get off the streets
and change their lives. We now have many
success stories and these people, in turn, are now helping others find a better
life.
LISTNUM
1 \l 11348 If
licensed in Kelowna, we fully intend to search our worthy charities to assist
in a similar fashion.
LISTNUM
1 \l 11349 MR.
HUNSPERGER: Thank you, Bev.
LISTNUM
1 \l 11350 Madam
Chair, Commissioners, with your approval and our ability to provide the
infrastructure, including personnel, programming, marketing and the financial
backing to sustain such a station, we are confident that we can establish a
successful gospel voice in this market, thereby satisfying the needs of the 34
per cent of Kelowna and area residents whom desire our kind of format, which
will increase the diversity within this market.
LISTNUM
1 \l 11351 Touch
Canada Broadcasting has been committed to the gospel format since we started
broadcasting in April of 1994 on AM 930 CJCA in Edmonton, Alberta.
LISTNUM
1 \l 11352 We
have no plans of intentions of changing to other formats, as we believe that
this is a market for today's gospel music.
LISTNUM
1 \l 11353 May
I further just say, just to let you know that our transmitter problems in
Grande Prairie are close to being resolved, and we hope to be on the air within
the next 60 days.
LISTNUM
1 \l 11354 Thank
you for allowing us this opportunity. We
welcome our questions.
LISTNUM
1 \l 11355 THE
CHAIRPERSON: Mr. Hunsperger and your
colleagues, thank you very much. Good
afternoon. It is still afternoon. Six o'clock is evening.
LISTNUM
1 \l 11356 As
with everything else, the key to understanding your proposal is understanding
the programming. So, I am going to start
with asking questions about that, and I am going to refer you specifically to
your reply to deficiencies dated April 6th, questions 7 and 8 where you
detailed the local programming as well as the spoken word programming. So, that is what I will be referring to.
LISTNUM
1 \l 11357 In
your application you say that of the 126 hours, 100 hours will be local. Correct?
LISTNUM
1 \l 11358 MR.
HUNSPERGER: Yes.
LISTNUM
1 \l 11359 THE
CHAIRPERSON: You say live‑to‑air,
that is comprised of 40 hours. I wonder
if you could tell me what components make up those 40 hours.
LISTNUM
1 \l 11360 MR.
HUNT: Absolutely. If you look at our ‑‑ now I
have to find it.
LISTNUM
1 \l 11361 THE
CHAIRPERSON: Yes, take your time. Not too much, I don't want to start saying
good evening. Just kidding.
LISTNUM
1 \l 11362 It
is your rely to deficiencies dated July 6th.
LISTNUM
1 \l 11363 MR.
HUNT: If I could just direct your
attention to the programming schedule, you can see our morning show and drive
home portions would be that 40 hours of live.
LISTNUM
1 \l 11364 THE
CHAIRPERSON: And voice tracked, is that
all 54 hours are locally produced?
LISTNUM
1 \l 11365 MR.
HUNT: Correct.
LISTNUM
1 \l 11366 THE
CHAIRPERSON: Then you have an additional
four hours of locally produced.
LISTNUM
1 \l 11367 MR.
HUNT: Correct.
LISTNUM
1 \l 11368 THE
CHAIRPERSON: What is that?
LISTNUM
1 \l 11369 MR.
HUNT: If you look on Sunday it says
Power Praise. That is a program that we
produce internally, but it is a slightly different format to what our regular
format is, but we produce that program internally.
LISTNUM
1 \l 11370 THE
CHAIRPERSON: Is that primarily music
driven?
LISTNUM
1 \l 11371 MR.
HUNT: Yes, entirely in fact.
LISTNUM
1 \l 11372 THE
CHAIRPERSON: Automated syndicated
programs for 13 hours. What are those?
LISTNUM
1 \l 11373 MR.
HUNT: The Sound of Lights is a program
that generates from the U.S. as well as a program called Zjam on that schedule
which actually they changed their name to RevGen now, and also the Red Letter
Rock 20 Countdown and some Gospel Greats programming which is southern gospel
targeting a little bit older demographic.
We have some block programs on the weekend that is that syndicated.
LISTNUM
1 \l 11374 THE
CHAIRPERSON: Once again, is that
primarily, predominantly music driven?
LISTNUM
1 \l 11375 MR.
HUNT: Yes, totally music driven.
LISTNUM
1 \l 11376 THE
CHAIRPERSON: Automated brokered programs
for 15 hours.
LISTNUM
1 \l 11377 MR.
HUNT: Those are the talk programs that
we have like Focus on the Family, for example.
We will air those during the week in the evenings.
LISTNUM
1 \l 11378 THE
CHAIRPERSON: Those are exclusively talk
shows?
LISTNUM
1 \l 11379 MR.
HUNT: Yes.
LISTNUM
1 \l 11380 THE
CHAIRPERSON: Is there an open‑line
phone‑in component to those programs?
LISTNUM
1 \l 11381 MR.
HUNT: No, not at all.
LISTNUM
1 \l 11382 THE
CHAIRPERSON: Are they Canadian or
foreign?
LISTNUM
1 \l 11383 MR.
HUNT: We strive to try to put as much
Canadian on as we can. Unfortunately
with the brokered programs, the majority of them do come from the U.S.
LISTNUM
1 \l 11384 THE
CHAIRPERSON: You cited an example, Focus
on the Family. Do you have other
examples of what kind of programming makes up those 15 hours?
LISTNUM
1 \l 11385 MR.
HUNT: Sure. I will let Allan actually discuss those.
LISTNUM
1 \l 11386 MR.
HUNSPERGER: It will depend, of course,
who wants to be in this market.
LISTNUM
1 \l 11387 For
example, we had 15 hours in our Grande Prairie application in the licence, but
we now only have nine hours that we are using.
So it will depend on how many of those kind of spoken word programs want
to be here in the Kelowna market. So
that will determine, but they would be much the same as what we already have in
our existing operations like Love Worth Finding, Insight For Living, Turning
Point, programs like that.
LISTNUM
1 \l 11388 THE
CHAIRPERSON: What are the likely themes
of those programs, a little bit more expansion than just the title?
LISTNUM
1 \l 11389 MR.
HUNSPERGER: Some of them are teaching on
how to be a better person, how to have a better marriage, how to be a better
parent, those kind of things.
LISTNUM
1 \l 11390 THE
CHAIRPERSON: I think that both of us are
avoiding the word "religious" teaching.
LISTNUM
1 \l 11391 MR.
HUNSPERGER: Yes.
LISTNUM
1 \l 11392 THE
CHAIRPERSON: So you can anticipate what
my next question is going to be.
LISTNUM
1 \l 11393 MR.
HUNSPERGER: Yes.
LISTNUM
1 \l 11394 THE
CHAIRPERSON: Do any of these programs
have within them a religious component that would therefore move your proposal
into a religious broadcaster?
LISTNUM
1 \l 11395 MR.
HUNSPERGER: No, we don't believe
so. We believe that the programming that
we do is mainly music and that these are just programs that we have added in
the evening to first of all help supplement our budgets, and also to help meet
some of the requests of our listening audience that would like to have those
kind of programs.
LISTNUM
1 \l 11396 THE
CHAIRPERSON: So would it be fair to say
that none of this programming would be overtly religious, but, rather, they are
focused on humanism?
LISTNUM
1 \l 11397 MR.
HUNSPERGER: Yes.
LISTNUM
1 \l 11398 THE
CHAIRPERSON: I don't want to put words
in your mouth so if you feel that you should explain further ‑‑
LISTNUM
1 \l 11399 MR.
HUNT: I do want to add one more thing.
LISTNUM
1 \l 11400 THE
CHAIRPERSON: Please.
LISTNUM
1 \l 11401 MR.
HUNT: A lot of other radio stations
across this country carry this same programming. A lot of country radio stations carry this
programming, a lot of ethnic stations carry this programming and talk stations
as well. As Allan mentioned we don't
feel we fall into that category simply because we are playing the same programs
that many of the other mainstream formats are playing as well.
LISTNUM
1 \l 11402 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 11403 We
will move specifically to your spoken word commitments. Again, in that same reply to deficiencies,
you say an average weekly total of 26.69 hours of spoken word programming, of
which 3.53 hours of news, weather and sports.
Is that correct?
LISTNUM
1 \l 11404 MR.
HUNT: That is correct.
LISTNUM
1 \l 11405 THE
CHAIRPERSON: What is the ratio of local
news to international and national within those three hours?
LISTNUM
1 \l 11406 MR.
HUNT: At least 60 per cent local and the
remainder would be either regional or national and international.
LISTNUM
1 \l 11407 THE
CHAIRPERSON: 6.93 hours of local
reflection and announcer content, and that is over and above the news content
obviously, otherwise I couldn't get to 26.69.
LISTNUM
1 \l 11408 MR.
HUNT: Yes.
LISTNUM
1 \l 11409 THE
CHAIRPERSON: What are the factors that
make up those almost seven hours?
LISTNUM
1 \l 11410 MR.
HUNT: It is basically the announcer
banter that we have on the air and reflection about what is important to the
people in Kelowna with our announcers.
LISTNUM
1 \l 11411 THE
CHAIRPERSON: And the 1.23 hours of
comedy, community event and human interest features.
LISTNUM
1 \l 11412 MR.
HUNT: Human interest features would be
things like financial, you know, health, computer, those type of features. Community event obviously would be our community
calendar, community spotlight, however you want to describe that. And of course comedies.
LISTNUM
1 \l 11413 THE
CHAIRPERSON: Looking at your schedule, I
wouldn't see an hour of a comedy show?
LISTNUM
1 \l 11414 MR.
HUNT: No. We are talking at maximum 90 seconds per bit,
but likely more like 60.
LISTNUM
1 \l 11415 THE
CHAIRPERSON: Thank you very much for
that.
LISTNUM
1 \l 11416 Your
commitment to CCD contributions. You do
say that you will make the basic annual CCD contributions in line with the new
contribution system put in place by the Commission in its Commercial Radio
Policy of 2006. You plan on exceeding
that amount by $14,000 for each year of the seven‑year term of your
licence. Is that correct?
LISTNUM
1 \l 11417 MS
KARBONIK: Yes, correct.
LISTNUM
1 \l 11418 THE
CHAIRPERSON: In a reply to deficiencies
dated August 10th, you stated that based on the revenues projected in the
application and subject to change, if there are revenue fluctuations that
affect the calculations determining the over and above CCD contributions. I just want to confirm your understanding
that it is the base contribution that is subject to fluctuations and revenue
and not the over and above.
LISTNUM
1 \l 11419 MS
KARBONIK: Okay, correct.
LISTNUM
1 \l 11420 THE
CHAIRPERSON: So you will accept this as
a condition of licence as put forward in your application?
LISTNUM
1 \l 11421 MS
KARBONIK: Yes.
LISTNUM
1 \l 11422 MR.
HUNSPERGER: Yes.
LISTNUM
1 \l 11423 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 11424 I
would like to now move on to your business plan and the components that went
into coming up with your business plan.
LISTNUM
1 \l 11425 You
cast a rather wide net in identifying your target audience because you say in
your application that the target demographic group is adults 25 to 54 and that
you will offer programs targeting a younger demo, 12 to 23, as well as an older
demo, 55‑plus.
LISTNUM
1 \l 11426 In
watching your video and in listening to the music that you showcased in your
video, I find it hard to believe that a 55‑plus audience will listen to
that music. Correct me if I am wrong.
LISTNUM
1 \l 11427 MR.
HUNSPERGER: You are right, that is the
majority of our music that we will be playing throughout the day. That is why we have, for example, on our
weekends the Gospel Greats and things like that. The older demographic have a tendency to
listen to that. The older demographic
have a tendency to listen to the brokered programming in the evenings.
LISTNUM
1 \l 11428 Basically
we are finding trying to be a niche radio station and trying to satisfy the
needs of the community with the various ages is a challenge. For example, the music that we are playing is
more demographic to a 35‑year old female most of the time, and that is
why we even have the Zjam and music Saturday nights, so that that is more
rockier to the teenager than the Gospel Greats is more catered to the older
demographic.
LISTNUM
1 \l 11429 So,
we are trying to help people because there are so many different kinds of
programming formats in this niche, we are trying to satisfy the most people
and, yet, what we have learned over the years since 1994 is we do have to zero
in on what we would say would be the biggest demographic, and that basically is
about a 35‑year old female who is listening most of the time to our
station.
LISTNUM
1 \l 11430 THE
CHAIRPERSON: So that is the median age
for your listener?
LISTNUM
1 \l 11431 MR.
HUNSPERGER: Yes.
LISTNUM
1 \l 11432 THE
CHAIRPERSON: It sounds to me as though
what you have decided to do is day part your station but over a weekly basis as
opposed to a daily basis to target those various demographic groups. Have I got that right?
LISTNUM
1 \l 11433 MR.
HUNT: Yes, the day parting, if you will,
is primarily on the weekends. Saturday
nights will be youth nights. Sunday
evenings will be for Gospel Greats or Saturday mornings. But basically the rest of the week is
primarily the music that you heard on our video.
LISTNUM
1 \l 11434 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 11435 In
terms of audience share, in your oral presentation today you said 43 per cent
of Kelowna adults say they listen to Christian music. Where are they getting this Christian music
from, because there is no Christian music radio station in the market today. Correct?
So, where are they accessing this music?
LISTNUM
1 \l 11436 MS
PERCY: We didn't specifically ask them
where they are getting it from, but it could be any source of Christian
music. Perhaps some of them are buying
CDs and listening at home; some may be tuning in to other stations.
LISTNUM
1 \l 11437 THE
CHAIRPERSON: Is there a large Christian
music presence on the internet, for example?
LISTNUM
1 \l 11438 MR.
HUNSPERGER: Yes, there is.
LISTNUM
1 \l 11439 THE
CHAIRPERSON: So there is a lot of
internet radio that plays this kind of music?
So they could be listening to it there?
LISTNUM
1 \l 11440 MR.
HUNSPERGER: Yes, plus satellite.
LISTNUM
1 \l 11441 THE
CHAIRPERSON: Plus satellite radio, okay.
LISTNUM
1 \l 11442 You
are very optimistic in projecting your audience share at 18 hours in weekly
tuning. I know you went through this in
detail in reply to deficiencies, but I am going to take advantage of the fact
that the representative from Ipsos‑Reid is here.
LISTNUM
1 \l 11443 But
the Ipsos‑Reid research indicated a mean of 53.5 minutes per day or six
hours per week, and yet you came forward with an application that says 18 hours
of weekly tuning. How did you come up
with 18 hours?
LISTNUM
1 \l 11444 MR.
MOFFAT: What I did is I took the
percentage of the sample that would listen for an hour. I broke the sampling down to 68 per cent
would listen for an hour and 19 per cent would listen for an hour longer,
calculated that as a total person number, and then calculated the total hours
from there.
LISTNUM
1 \l 11445 Then
I added the weekly hours tuned and I averaged it out against an audience reach
of approximately 25,000, which is why I came up with 18 hours.
LISTNUM
1 \l 11446 THE
CHAIRPERSON: We looked at the other
Touch Canada stations in Calgary and Edmonton.
We also looked at other Christian stations in comparable markets, and you
are significantly higher at 18 than the share you are getting in your other
markets and the share that other Christian stations are getting in the other
markets.
LISTNUM
1 \l 11447 Why
are you so optimistic about the Kelowna market and what is so special about the
Kelowna market that allows you to be so confident in this share number?
LISTNUM
1 \l 11448 MR.
HUNSPERGER: I think just being here in
Kelowna over the past year has really encouraged us. There are a lot of businesses and a lot of
people that are eager for this. As you
know, for the Commission, there have been other people in front of the
Commission who have wanted this kind of format here in Kelowna.
LISTNUM
1 \l 11449 We
are as optimistic about Kelowna as we were about Grande Prairie. The interesting thing is now that Grande
Prairie is about ready to go on the air, our optimism has not been diminished
at all. In fact, it has been increased
in Grande Prairie. We kind of believe
that the same thing is going to happen here.
LISTNUM
1 \l 11450 In
Kelowna you can't sit at a coffee shop and be sipping on a latté without
somebody around you talking about God or maybe they have a bible or they are
discussing something religious or whatever.
We believe that this is kind of a bible belt scenario here in the
Okanagan Valley.
LISTNUM
1 \l 11451 THE
CHAIRPERSON: We are looking in some
detail at your share projections because, of course, they form the basis for
your advertising revenues projection. I
would like you to take us through the assumptions used to arrive at what you
projected for local advertising revenues in particular, because it goes from
$500,000 in year one to over $1 million by year seven.
LISTNUM
1 \l 11452 MR.
MOFFAT: Like any radio station that is
launching in a new market, it takes time to generate revenues.
LISTNUM
1 \l 11453 We
are very fortunate to have experience in launching contemporary Christian radio
in, this will be our third market in Grande Prairie, but in Edmonton and
Calgary.
LISTNUM
1 \l 11454 The
immediate response within the core demographic, which would be the Christian
book stores, charitable organizations, Christian business people, they are
immediately enthusiastic and willing to advertise. However, from an overall market share
standpoint, that is a very small percentage.
LISTNUM
1 \l 11455 So,
what happens is the initial revenues are sluggish. It is a hard sell. We are not rated in our markets, so we can't
walk into the agencies and talk to the media buyers for Sears or Ikea or Bank
of Montreal because they don't recognize us as a legitimate advertising media.
LISTNUM
1 \l 11456 However,
what happens is the word of mouth travels from the successes that we get for
advertisers because what we have found in both Edmonton and Calgary universally
is that advertisers who have used our radio stations have had success, and then
they are willing to write letters of reference which we then present to
prospective advertisers.
LISTNUM
1 \l 11457 So
it is a lot of face time and it is a lot of training of new reps to bring them
up to speed on how to sell Christian radio.
LISTNUM
1 \l 11458 THE
CHAIRPERSON: As with any niche service,
it is the environment you are selling and not the numbers?
LISTNUM
1 \l 11459 MR.
MOFFAT: Yes.
LISTNUM
1 \l 11460 THE
CHAIRPERSON: What has been your success
in tapping into the national advertising market in terms of selling this
environment to them?
LISTNUM
1 \l 11461 MR.
MOFFAT: Recently we have added Sleep
Country Canada and they have asked for submissions for next year and have
indicated they are willing to use our station again.
LISTNUM
1 \l 11462 It
really isn't much. So we project zero
dollars or practically zero dollars for national. We are included in Tim Hortons buys. We have a representative in Vancouver who is
a former employee of our station in Calgary who works on our behalf calling on
agencies and presenting the stations.
She understands how to sell it.
LISTNUM
1 \l 11463 So,
we are hoping as we achieve critical mass in western Canada that we can become
more of a presence with the national media buyers and we can present the
package of Shine FMs in western Canada.
LISTNUM
1 \l 11464 THE
CHAIRPERSON: In terms of the brokered
programming, I believe your application projects $1 million revenue from
brokered programming over seven years.
Do these projections reflect commitments from suppliers of such
programs?
LISTNUM
1 \l 11465 MR.
HUNSPERGER: No, they don't.
LISTNUM
1 \l 11466 THE
CHAIRPERSON: Then what is that
projection based on, that $1 million?
LISTNUM
1 \l 11467 MR.
HUNSPERGER: That projection is basically
based on our talk with the agencies that deal with the brokered programming and
their indication, but nobody has signed a contract or anything like that. We are going mainly by what they say.
LISTNUM
1 \l 11468 They
are excited about, you know, the Okanagan Valley and they say that they will
come on, but we don't really know that until we are actually up and
running. It is interesting to see how
that is even transpiring in Grande Prairie because even then we give a rate of
what our rate is and then we start negotiating with the brokered programming to
see if they will pay that rate and whether we can go from there or what we can
do.
LISTNUM
1 \l 11469 It
is interesting, in Edmonton, for example, when Rogers bought the ethnic
station, they then basically ended the contracts for most of the brokered
programming that we are talking about.
We actually had to try to ‑‑ we now had people knocking
on our door and saying, can you give us more time, can you give us time or
whatever.
LISTNUM
1 \l 11470 It
depends on the demand of those various brokered programming. We believe that Kelowna will be a good market
for that.
LISTNUM
1 \l 11471 THE
CHAIRPERSON: You project $460,000 of
contra revenues. Again, that is based on
your experience as opposed to commitments from potential suppliers?
LISTNUM
1 \l 11472 MR.
HUNSPERGER: Yes.
LISTNUM
1 \l 11473 THE
CHAIRPERSON: What is the nature of those
contra revenues?
LISTNUM
1 \l 11474 MR.
HUNSPERGER: Do you want to answer that,
Beverly?
LISTNUM
1 \l 11475 MS
KARBONIK: The majority of contra basically
involves selling and promotional items.
LISTNUM
1 \l 11476 THE
CHAIRPERSON: Selling promotional items?
LISTNUM
1 \l 11477 MS
KARBONIK: Items we use for sales and in
promotions.
LISTNUM
1 \l 11478 THE
CHAIRPERSON: Do you anticipate any
synergies with the current radio stations that you operate if you are licensed
in Kelowna?
LISTNUM
1 \l 11479 MR.
HUNSPERGER: Absolutely. Just like we are doing with Grande Prairie,
we have synergies with accounting, we have synergies with traffic. We have some synergies with production, with
commercials and that kind of thing.
LISTNUM
1 \l 11480 Although
we really want the stations to be the local sound where possible, but, yes,
there are some synergies.
LISTNUM
1 \l 11481 THE
CHAIRPERSON: Are there any synergies
with the provision of news?
LISTNUM
1 \l 11482 MR.
HUNT: There are some simply because a
couple of years ago we had very little news on our radio stations and we, over
time, listening to our audience, realized that we weren't giving them enough. So, we have poured significant resources over
the last couple of years in staffing in all of the stations that we either have
on the air now or are proposing in the future.
This is something that we definitely want to make sure that we are
staffing it adequately.
LISTNUM
1 \l 11483 The
synergies, for example, with Grande Prairie, we have a news person in Grande
Prairie but we are going to be using some stories ‑‑ Alberta
is a big province and there is all kinds of reporting type stories from Calgary
and Edmonton that we can use in that market, and vice versa.
LISTNUM
1 \l 11484 THE
CHAIRPERSON: How would that translate to
the Kelowna market?
LISTNUM
1 \l 11485 MR.
HUNT: Like I say, if there is a story
that is large enough that would affect the folks here in Kelowna, we would use
our resources in Alberta to report that story, but the synergies are minimal
because we do have the two and a half people here that we feel will be able to
adequately cover the stories that our listeners want to hear.
LISTNUM
1 \l 11486 THE
CHAIRPERSON: And those two and a half
people will be responsible for the three hours and 31 minutes of news per
broadcast week that you have committed to in our application?
LISTNUM
1 \l 11487 MR.
HUNT: Correct.
LISTNUM
1 \l 11488 THE
CHAIRPERSON: Is this the total hours of
pure news you will broadcast per week?
That is to say, excluding weather, traffic, promotion of community
events and other information?
LISTNUM
1 \l 11489 MR.
HUNT: No, it is the whole package.
LISTNUM
1 \l 11490 THE
CHAIRPERSON: It is the whole package?
LISTNUM
1 \l 11491 MR.
HUNT: Yes, that is news, sports and
surveillance.
LISTNUM
1 \l 11492 THE
CHAIRPERSON: What percentage of that
would be devoted to local news stories?
LISTNUM
1 \l 11493 MR.
HUNT: Again, like I mentioned before, 60
per cent of our news will cover local and the remainder will be ‑‑
that is what you are talking about again?
LISTNUM
1 \l 11494 THE
CHAIRPERSON: Yes.
LISTNUM
1 \l 11495 MR.
HUNT: A minimum of 60 per cent would be
local.
LISTNUM
1 \l 11496 THE
CHAIRPERSON: But that would include also
sports, for example, coverage of local sports teams?
LISTNUM
1 \l 11497 MR.
HUNT: Correct.
LISTNUM
1 \l 11498 THE
CHAIRPERSON: As you know, there is
another applicant who is proposing a similar format. I am going to ask you if you believe it is
similar to yours, how it is similar or how it is different from the format you
are proposing? Specifically I am
referring to the In‑House application.
LISTNUM
1 \l 11499 MR.
HUNSPERGER: That is a good question.
LISTNUM
1 \l 11500 First
of all, we shook their hand and wished them luck.
LISTNUM
1 \l 11501 I
would say that the difference obviously is we come with several radio stations
that we are already involved in in doing this whole gospel music format. So, I believe that we bring the expertise and
the experience that someone who maybe this is going to be their first station
won't be bringing to the market.
LISTNUM
1 \l 11502 THE
CHAIRPERSON: But, careful, Mr.
Hunsperger, you were a first‑time applicant yourself.
LISTNUM
1 \l 11503 MR.
HUNSPERGER: Yes, I was. But in saying that, they are much similar to
what the sound is going to be from what we have.
LISTNUM
1 \l 11504 They
have a little difference here, but for the most part, I believe if Kelowna gets
either them or us, I think Kelowna will be happy with a Christian music radio
station.
LISTNUM
1 \l 11505 THE
CHAIRPERSON: So there is no way we
should do both, you and them?
LISTNUM
1 \l 11506 MR.
HUNSPERGER: We could handle that if you
did.
LISTNUM
1 \l 11507 THE
CHAIRPERSON: In your oral presentation
you did say that you believe the Kelowna market could sustain one new
commercial FM and ‑‑
LISTNUM
1 \l 11508 MR.
HUNSPERGER: Yes.
LISTNUM
1 \l 11509 THE
CHAIRPERSON: Is that your upper limit,
one commercial FM plus you or plus In‑House?
LISTNUM
1 \l 11510 MR.
HUNSPERGER: I think that is our minimum.
LISTNUM
1 \l 11511 THE
CHAIRPERSON: That is your minimum?
LISTNUM
1 \l 11512 MR.
HUNSPERGER: Yes.
LISTNUM
1 \l 11513 THE
CHAIRPERSON: Do you think the Kelowna
market could sustain two commercial FM and you?
LISTNUM
1 \l 11514 MR.
HUNSPERGER: Yes.
LISTNUM
1 \l 11515 THE
CHAIRPERSON: Thank you very much. My colleagues? Legal counsel? We have done well.
LISTNUM
1 \l 11516 I
will give you your final two minutes.
LISTNUM
1 \l 11517 MR.
HUNSPERGER: Thank you very much for
allowing us this opportunity.
LISTNUM
1 \l 11518 Touch
Canada will bring much needed diversity to the Kelowna market. Virtually none of the music we play is
available currently in Kelowna.
LISTNUM
1 \l 11519 The
revenue requirements for our niche format are relatively low and much of our
advertising will come from new sources so we will have a minimal impact on the
existing stations in Kelowna.
LISTNUM
1 \l 11520 While
growing, the Canadian gospel music industry needs a critical mass of stations
playing gospel music in order to enhance the opportunities for Canadian gospel
music artists to take their place in the rich fibre that is the Canadian music
industry today.
LISTNUM
1 \l 11521 The
people in Kelowna who deserve this type of music have waited long enough for a
family‑oriented radio station and we hope that we are going to be one of
those who receive the licence for Kelowna.
LISTNUM
1 \l 11522 Thank
you very much.
LISTNUM
1 \l 11523 THE
CHAIRPERSON: Mr. Hunsperger and your
colleagues, thank you very much.
LISTNUM
1 \l 11524 Madam
Secretary.
LISTNUM
1 \l 11525 THE
SECRETARY: Thank you, Madam Chair.
LISTNUM
1 \l 11526 The
hearing will reconvene tomorrow at 8:30 a.m. with a presentation by Northern
Native Broadcasting.
LISTNUM
1 \l 11527 Thank
you, and good night.
‑‑‑ Whereupon the
hearing adjourned at 1731,
to resume on Wednesday, October 31, 2007
at 0830 / L'audience est adjournée à 1731,
pour reprendre le mercredi 31 octobre 2007 à 0380
REPORTERS
____________________ ____________________
Barbara Neuberger Monique Mahoney
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