Transcription, Audience du 28 novembre 2017
Volume : 1
Endroit : Toronto (Ontario)
Date : 28 novembre 2017
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Les participants et l'endroit
Tenue à :
Holiday Inn Toronto Yorkdale
North York Centre
3450 Dufferin Street
- Président de l'audience : Christopher MacDonald
- Vice-présidente, Radiodiffusion : Caroline J. Simard
- Conseillère : Linda Vennard
- Conseillère Juridique : Crystal Hulley-Craig
- Secrétaire : Jade Roy
- Gérante de l’audience : Rachel Marleau
--- L’audience débute mardi, le 28 novembre 2017 à 9h29
1 THE CHAIRPERSON: Good morning, ladies and gentlemen, and welcome to this public hearing.
2 Bonjour, mesdames et messieurs, et bienvenue à cette audience publique.
3 Before I begin, I would like to acknowledge that we meet today on the traditional territory of the First Nations Peoples. I thank them and pay respect to their Elders.
4 During this hearing we will consider six applications for licences to operate new radio stations in Ontario, three to serve the Grimsby/Beamsville area, as well as three for the Georgina area. Several of these applications are competing for the use of the same frequency in the same market.
5 In the coming days, we will examine the Applicants’ programming proposals. We will consider their commitments related to local programming and the benefits that such programming will bring to the communities, including contributions to Canadian content development.
6 The CRTC will also analyze the diversity of editorial voices and the impact these new licences will have on each respective market.
7 To begin, I would like to make a few introductions. The panel for this hearing will consist of Dr. Linda Vennard, Regional Commissioner for Alberta and the Northwest Territories, Dr. Caroline Simard, Vice-Chairperson, Broadcasting. I will preside over this hearing. My name is Chris MacDonald and I am the Commissioner for the Atlantic Region and Nunavut.
8 The Commission staff assisting us over the next two days consist of Rachel Marleau, Hearing Manager, Crystal Hulley-Craig, Legal Counsel, and Jade Roy, Hearing Secretary.
9 I would now invite Ms. Roy to explain the procedure we will be following.
10 Madam Secretary?
11 MS. ROY: Thank you and good morning.
12 I would like to go over a few housekeeping matters to ensure the proper conduct of the hearing. When you are in the hearing room, we would ask that you please turn off your smartphones...
14 THE CHAIRPERSON: If anyone in the room wondered why we proceed with housekeeping matters, you have just witnessed a real-life example.
15 MS. ROY: This was all a -- we did it on purpose.
16 Please turn off your smartphones as they are an unwelcome distraction and they cause interference on the internal communications system. We would appreciate your cooperation in this regard throughout the hearing.
17 You can examine all documents on the public record of this proceeding in the examination room, which is located in the room York.
18 Interpretation services will be available throughout the duration of the hearing. English interpretation is available on Channel 1 and French interpretation on Channel 2.
19 We would like to remind participants that during their oral presentation, they should provide for a reasonable delay for the interpretation while respecting their allocated presentation time.
20 Le service d’interprétation simultanée est disponible durant cette audience. Vous pouvez vous procurer un récepteur auprès du technicien à l’arrière de la salle. L’interprétation anglaise se trouve au Canal 1 et l’interprétation française au Canal 2.
21 There is a verbatim transcript of this hearing being taken by the court reporter. Please note that the transcript of each day will be posted on the Commission’s website the following business day.
22 Just a reminder that pursuant to section 41 of the Rules of Practice and Procedures, you must not submit evidence at the hearing unless it supports statements already on the public record. If you wish to introduce new evidence as an exception to this rule, you must ask permission of the panel of the hearing before you do so.
23 Please note that the Commission will also be tweeting the documents during the hearing at @crtchearings using the #crtc.
24 Veuillez noter que les documents seront disponibles sur Twitter sur le compte du Conseil à @crtcaudiences en utilisant le mot click #crtc.
25 Finally, please note that if parties undertake to file information with the Commission in response to questioning by the panel, these undertakings can be confirmed on the record through the transcript of the hearing. If necessary, parties may speak with legal Commission counsel at the break following their presentation to confirm the undertakings.
26 And now, Mr. Chairman, we will proceed with the Grimsby and Beamsville market portion of this hearing. We will begin Phase 1 with Item 1 on the agenda, which is an application by Byrnes Communications Inc. for a broadcasting licence to operate an English-language commercial FM radio station in Grimsby/Beamsville.
27 Please introduce yourself and your colleagues, and you will then have 20 minutes for your presentation.
28 MR. BYRNES: Thank you, Madam Secretary.
29 Thank you, Madam Secretary. Good morning, Commissioners and CRTC staff. My name is Chris Byrnes, owner and president of Byrnes Communications. With me
30 today is Hilary Montbourquette on my left. Hilary is a 30-year broadcast management veteran, and he will become the general manager/general sales manager of the proposed
31 new Grimsby/Beamsville FM radio station.
32 To my right, Sharon Taylor is a career broadcaster specializing in programming and operations. She will be the program director in Grimsby/Beamsville. Both Hilary and Sharon currently work in my organization in other capacities
33 To my far left is Kaan Yigit, president of
34 Solutions Research Group.
35 And to my far right is Michael Fockler, Byrnes’ longtime regulatory affairs consultant.
36 It’s our pleasure to come before you today to share our vision for a full-service local FM radio station servicing the communities of Grimsby and Beamsville, Ontario.
37 In our application, we address the concerns of the CRTC regarding impact on the
38 Grimsby/Beamsville market, its competitive state, the diversity of news voices and the quality of our application.
39 We also speak to the Commission's desire to ensure small, independent broadcasters can survive and thrive in a world of constant consolidation.
40 I believe we have interpreted these perspectives correctly, and I believe we have the wherewithal to meet and exceed your standards.
41 Now, as you can probably tell, I am originally from New Zealand, where I was an
42 owner/operator of a number of small and successful radio stations. My journey here started in 1997 when, as a shareholder in a national radio company, the majority
43 shareholders decided it was time to sell. That allowed me to fulfill a wedding day promise to my Canadian bride, who is here in the audience today, to move our young family to Canada.
44 We showed up on a snowy, cold January morning of 1998 and I became a Canadian citizen in 2000.
45 At that time, I started Byrnes Media, a broadcast consulting company, which has now grown to become one of the largest of its kind in the country. We offer programming and marketing advice to radio stations across Canada, in communities as large as Toronto and as small as Whitehorse in the Yukon.
46 Byrnes Communications was formed in 2002 with the express purpose of applying for FM radio licenses in Canada, and in 2004, after an extensive search, I decided that Woodstock Ontario would be my first application.
47 Following a highly competitive hearing in 2005, we were granted that licence, and the station was built from the ground up, launched in April of 2006, employing 18 staff. Today 104.7 “Heart FM” is the most listened to radio station in Woodstock and Oxford County.
48 The station takes pride in creating great local radio each and every day, with a staff who live in the area and are actively involved in their community.
49 I believe that Grimsby/Beamsville is very similar to Woodstock in terms of population, economy, and proximity to radio competition from other markets.
50 At its core, our proposal is built on a philosophy regarding the power of “local”. The New FM will be locally orientated, and one listen will undoubtedly prove that you are tuned into a radio station located in Grimsby/Beamsville.
51 We have endeavoured to present a well-researched business plan and programming plan that will provide audiences and advertisers in Grimsby/Beamsville with a truly local radio service.
52 MR. MONTBOURQUETTE: Good morning. Bonjour.
53 In order to determine whether the Grimsby/Beamsville market had the ability to support its own local radio station, Byrnes conducted extensive primary and third-party research over the course of the 14 months. Mr. Byrnes visited the area several times, speaking to businesses, community groups, town councils, all very supportive and enthusiastic about having a local radio station in the area.
54 However, those same community leaders recognized that regional stations rarely attend special events, or even provide on-air coverage of council meetings and unique happenings in Grimsby and Beamsville. This lack of interest by regional radio is perhaps the most common complaint we have heard from people in the community. Their plea is very clear; "Please allow our towns to have a local radio station."
55 We engaged Solutions Research to conduct a survey of potential local advertisers, and their findings reveal that very few businesses have considered radio advertising in the past, simply due to the expense of purchasing time on regional radio stations. But 75 percent of those surveyed said they would consider advertising on a lower-cost, locally-based radio station.
56 We also asked Communications Management Inc. to examine the economic environment. CMI found a robust and expanding market, bolstered by an 8 percent increase in population since 2011, and household income several points above both the national and the provincial averages.
57 I should point out that all financial and audience tuning estimates in our application assume a principal marketing area of approximately 45,000 people in 2016. Our principal marketing area is focused solely on Grimsby, Beamsville, and Lincoln County.
58 The proposed coverage contours are limited by interference zones over Hamilton and St. Catharines, preventing those audiences from receiving a clear signal on 88.5 FM. As a result, our business plan does not contemplate attracting advertising revenue from those cities. There will be no noticeable financial impact on any existing regional broadcaster. We will simply repatriate advertising dollars back to a local Grimsby/Beamsville radio station.
59 Members of the Commission, following positive results from Solutions Research and CMI earlier this year, we engaged ENS Media, an Ontario-based sales and advertising research company, to further investigate the interest of local advertisers about Byrnes Communications radio station. We would be pleased to place this new report on the public record for your consideration, upon request.
60 EMI conducted a study, early November 2017, asking 69 area businesses if they would be interested in advertising on a local Byrnes radio station. An impressive 86.9 percent agreed, leading to nearly $500,000 in pre-launch sales commitments pending CRTC approval. These pre-sales equate to 72.5 percent of Byrnes' total first year local revenue as presented in our application.
61 The overwhelming support from the business community in Grimsby and Beamsville has solidified confidence in our new FM, and we're certain it'll be successful.
62 MS. TAYLOR: Mr. Chairman, Commissioners, once we determined Grimsby/Beamsville could support a new radio station our next step was to build an on-air product that's intensely local.
63 Solutions Research investigated what listeners really wanted to hear by surveying 300 people within our principal marketing area. Over 70 percent of respondents were interested in a "classic hits" format. More than two‑thirds said that they wanted local news reports that were relevant to the area that they live. And nearly two-thirds, or 64 percent of respondents, commute outside the Grimsby/Beamsville area every day. Therefore, traffic, weather, road conditions are going to be key components of this station.
64 Ultimately, our research told us that a classic hits music format, combined with more than 12 hours of news and spoken word programming each week, would be important to build a solid listening base in the region.
65 Our classic hits music format will target a broad 25 to 64‑year-old demographic, with a core 35 to 54‑year-old focus, recognizing that the PMA has a slightly older population than the provincial average. Our station will feature signature artists such as Tom Petty, Barenaked Ladies, The Eagles, and Tom Cochrane, all within a family-friendly listening environment.
66 The new FM will strive to reflect the depth and popularity of Canadian music, both in musical selections and promotion of local, regional, and national artists. Our 35 percent Canadian content commitment is just a minimum, and we will exceed that on a regular basis.
67 We will also provide our listeners with all the benefits of HD broadcast technology, including a better audio experience, as well as playlist and traffic information delivered to audiences in their vehicle or on mobile phone.
68 But our stations will not simply be a music jukebox. It will broadcast six hours of news and surveillance information weekly, in addition to six hours of spoken word content, in the form of community calendars, local interviews, public service announcements, and announcer talk.
69 In total, Grimsby/Beamsville's new FM will provide over 12 hours per week of local news and spoken word programming. This focus on spoken word programming is reflective of our philosophy of local orientation. Our newsroom will have an internal goal of building our newscasts with at least 80 percent local information.
70 We have found that the Hamilton and St. Catharines stations seldom run any news about Grimsby or Beamsville unless it's bad news. These bad news stories are easy to find. For example, recently when a major fire broke out on Main street on July 6th in the early afternoon, it forced the evacuation of the downtown area. The story was reported by some out-of-market radio.
71 But then those stations moved on, as they do, and did not follow this important local story; how it impacted Brad Eggink who lived above the Dressing Room Salon with his two dogs, Gracie and Lana. He lost everything due to the fire, and all three were left homeless.
72 They didn't talk about the impact it had on the three Main Street businesses that were destroyed, or how the popular Grimsby/Beamsville local farmers’ market had to move to a new temporary location because of the closures. Our local radio station would have done that. In fact, all of our programming content will be produced in Byrnes Communications own studios.
73 The new FM will be live-to-air as much as 12 hours a day, and overall, provide 126 hours of local programming across the broadcast week. Additionally, we will make the radio station available to non‑profit organizations in the community so that they have access to live interviews, public service announcements, our community cruiser, and many other promotional opportunities that become available.
74 Complementing our on-air activities, the new FM will use our mobile app to push weather, traffic, and emergency information directly to listeners' smart phones and tablets. Further, this app allows listeners to communicate directly with the station to provide emergency conditions or developing situations.
75 Commissioners, we have committed $140,000 to Canadian content development over the seven-year term of licence. We are proposing a package of initiatives that includes $5,000 annually to local high school music programs, two $2,500 annual scholarships to the radio broadcast or journalism programs at Mohawk College, and $6,000 each year for live concert performances in the region.
76 As part of our application, we were pleased to include Letters of Agreement with each of the proposed CCD recipients: Mohawk College, the Grimsby Festival of the Arts, and the Niagara Catholic School Board.
77 Byrnes Communications clearly has the support of listeners, advertisers, and community groups, who are very eager to receive a truly localized FM radio service in Grimsby and Beamsville.
78 MR. BYRNES: Commissioners, Byrnes Communications is a small broadcaster with a strong desire to grow within the Canadian broadcast industry. In an era of consolidation where vertically integrated corporations are forcing out small operators, we want to expand our radio properties in Ontario.
79 Heart FM Woodstock has a proven track record of providing truly local service. In the most recent ratings, the fall of 2016, Heart FM was once again number one in the Woodstock market, well above another local radio station and at least 20 other spill signals that come in from Toronto, London, Kitchener, and beyond. We’re very proud of that achievement.
80 You know, the secret to our success in Woodstock is built on the premise of the power of local. Simply put, the more local your product is, the more listeners buy into it and the more listeners that listen.
81 We found that people buy people, and the sound of a familiar voice on the radio who knows your town like the back of their hand, is far more relevant and engaging than out-of-market stations with a regional focus.
82 In our experience, listeners tune to our locally focused radio station because they want that important, timely information they can’t get anywhere else. And advertisers want to support the local radio station because they know they can reach more of their potential customers without paying the high cost for out-of-market media.
83 I believe that local radio is the most trusted medium of all. And audiences identify with what is familiar to them. In this world where fake news is everywhere, listeners can trust their local radio station. And this is the kind of community-focused operation we’ll create in Grimsby and Beamsville.
84 In conclusion, our extensive research and due diligence confirms the strong probability of success in the Grimsby/Beamsville market. We have the management team with the in-depth knowledge and experience of small markets across Canada, markets such as Woodstock, a similar demographic, economic, and business environment as Grimsby and Beamsville.
85 We will offer a musical alternative and intensive local news that Grimsby/Beamsville listeners and advertisers have clearly said they want and need. Our proposed radio station will add to the diversity of news and programming voices available in this region.
86 And, finally, a new FM will be a radio station that Grimsby and Beamsville can truly call its own.
87 Commissioners, on behalf of everyone with me this morning, I would like to sincerely thank you for hearing our presentation today. We encourage you to consider our application favourably and grant the next FM licence to our company, Byrnes Communications. Help us bring local radio to Grimsby and Beamsville.
88 Thank you very much, and we look forward to your questions.
89 THE CHAIRPERSON: Good morning.
90 Thank you very much for your presentation and your application. I will start us off and then my colleagues may have a few questions as well.
91 To begin, let’s talk about your local programming, and you mentioned it in your opening remarks, your commitment to 126 hours of local programming each week, and your intent is to -- for six hours of that to be spoken word and six would be devoted to newscasts.
92 I’m just wondering; what internal -- that’s your intent but what internal processes do you plan on putting in place to ensure that those minimums are met each week and that you are able to, on a consistent basis, meet your commitment that 80 percent of that would be comprised of local and regional news?
93 MR. BYRNES: Thank you.
94 Well, firstly, we’ve been doing that for 11 years in Woodstock. Secondly, our consulting company gets employed by broadcasters right across the country to come and show them how to do local properly. And so the process we go through is, firstly, making sure that we actually have the local employees based at the radio station, and our proposal we’re going to have 14 staff on the radio station; three in the news department. Those people will actually be going to city council meetings, to school council meetings, to actually gather up the local content.
95 I can tell you from personal experience in Woodstock, you know, we have a problem with trying to get all the local news in on some days. So we have no concerns at all at being able to not only meet the six hours of spoken word programming and news commitments, but also our own internal goal of 80 percent local news.
96 And the reason we feel that’s so important is that, frankly, you can get news about anything in the world anywhere. We all have smart phones and we can find out exactly what the Kardashians had for dinner last night. But, you know, you really can’t find out, unless you’re listening to local radio, what’s actually happening in the community, and with the unfortunate closure of a number of newspapers here in the last 24 hours, I think local radio is only going to become more relevant, you know, to listeners.
97 Sharon, do you want to add to that?
98 MS. TAYLOR: No, I think you’ve covered it well. Thanks.
99 THE CHAIRPERSON: Perfect, thank you.
100 I mean, you mentioned that you intend to have 14 staff and, you know, duplicate the processes and mechanisms that you have in place at your other station to ensure that you’re meeting those minimums. Will it be those same individuals and processes that you use at, for example, our Woodstock station that you’ll use to monitor on a go-forward basis?
101 MR. BYRNES: Well, you know, Hilary will be the General Manager, and ultimately Hilary will be, you know, the person that will monitor the daily output. But, you know, our company also is fortunate in that we have the resources of our consulting company, Byrnes Media, and so we actually have, you know, that staff coming in and helping as well.
102 But just to be absolutely clear, we’re talking about the staff will be located in Grimsby. We won’t be shipping in newscasts from elsewhere. This is all about local news, and you can’t fake it. You know, you actually have to have somebody going to that town council and actually really finding out what the story means. And, again, we know from personal experience that it’s fine; you can listen to a town council meeting on line, they often stream them. But often that’s not the real story, and our reporters being able to catch the mayor before the council meeting, or after, and asking, “What does that really mean?”; that’s actually when you get the true story and the information that’s relevant to -- you know, to the listeners.
103 MR. FOCKLER: Mr. Chairman, if I may?
104 As well, one of the key monitors that the station both in -- the current one in Woodstock and the proposed one in Grimsby will have is, of course, the listeners themselves. They will let us know if we are providing enough, too much, or not enough local news and reflection in the community.
105 So while we do have internal mechanisms to determine, for example, an internal 80 percent local news content in each newscast, we will also have listener feedback lines and receive emails and phone calls from listeners and audience members in Grimsby to let us know if we’re doing a good job or we should be trying harder.
106 MR. MONTBOURQUETTE: And Mr. Chairman, if I could just add, as the General Manager of the radio station, it’ll be my responsibility to ensure our commitment that we’re making to the community, first and foremost, and to the CRTC in general, will be met. And that’s just having a good conversation with the staff that -- you know, we’re hiring all brand new staff, and those in the newsroom will understand what it is we’re saying here today and what our commitment is to the community. So the expectation is understood up front and the checks and balances we’ll put in place to make sure that we are realizing those objectives and commitments.
107 THE CHAIRPERSON: Thank you for that.
108 On the topic of community, your proposed service would operate in a larger geographic area than the other applicants that are applying today; would stretch into St. Catharines and Hamilton, towards Niagara-on-the-Lake, even up towards Burlington. So I’m wondering; what are your plans to serve communities that would exist within your secondary contour?
109 MR. BYRNES: None. We have built our entire application on serving Grimsby/Beamsville, and Beamsville falls into a little piece of Lincoln. So there’s a little piece there that we will serve.
110 Frankly, we just think this is the best use of the frequency. The other two applicants, I believe, hope to go off a small six-metre cell phone tower in the city. We actually commissioned a very detailed technical study and found a tower up on the escarpment that will actually give us a great 3 millivolt coverage over our primary area of Beamsville and Grimsby.
111 So, you know, the interference levels are such in Hamilton and St. Catharines that we won’t get listeners in that area, and our business case is not built on that. You know, I can tell you, for example, you know, my radio station in Woodstock has a great FM signal over London, but we don’t go chasing revenue in that market because there’s plenty to be had in our own home market.
112 And frankly, you know, what we’ve seen other broadcasters trip over and make that mistake is that when you go off and try and seek revenue from markets outside your primary area, all it does is upset the local retailers. You go and sell the Ford dealer for example, in -- I don’t know -- St. Catharines or Hamilton and all that does is alienate the Ford dealer in Grimsby.
113 And so, you know, we don’t believe our signal will be heard much outside of the area and we don’t intend to do anything but service Grimsby and Beamsville.
114 MR. FOCKLER: Mr. Chairman, just as a courtesy, in the back of the package that you were handed today, we provided a copy of a map that was given to the Commission during the questioning process of this application. And the map clearly shows interference zones well over Hamilton and St. Catharines. Therefore, we have eliminated those populations from our principal marketing area figures. We have no intention of marketing to areas that do not receive a decent radio signal.
115 THE CHAIRPERSON: Okay. Thank you for that. You did a very good job anticipating a few other questions that I was going to ask.
116 I’m just wondering; you mentioned your commitment to local and regional news and you don’t have really any concerns that you’ll be able to meet the minimums that you’ve -- that you’ve specified. I think you even said that, you know, sometimes there’s too much local news to be able to cover everything. So I’m wondering; what process do you actually use to gather that local news and information and how do you make decisions about what makes it onto the air and doesn’t?
117 MR. BYRNES: It’s really easy to find what we call the bad news stories. Sharon referenced that in her note. And I think in part that’s because in a way, you know, it’s -- the police department has a Twitter feed and they have, you know, a person -- a PR person. You can call up and find all the things that happened overnight; the car accidents, the break-ins, the thefts. And certainly while they do form part of our news, where appropriate, we try and dig a little deeper and actually find the stories that matter.
118 We, in our company, hold a number of what we call listener advisory panels, where we actually ask listeners to come into the radio station and sit down, and we ask them an array of questions. And here’s what, you know, we’ve learnt over the years; that what’s really important to them isn’t, oftentimes, the things that end up in lots of newscasts. It's not, you know, the break and enter but it’s what really matters to their family and their immediate loved ones. And that’s what we try and dig a little bit deeper and find those stories, and actually try and write our news stories in such a way as to describe what it means to them.
119 You know, I’m not sure if you’ve ever, you know, been listening to a newscast and you hear a story where they talk about, you know, the Bank of Canada interest rate being raised by three basis points. You know, I’ve yet to meet anybody who can tell me what a basis point is? But when we write that story that says you know, “If you’re paying down an average mortgage of $250,000, it’s going to cost you an extra $30 a month as the Bank of Canada has raised the interest rate,” that’s a lot more relevant and meaningful.
120 So we spend a lot of time with our news department and our news staff, not only making sure that they really are finding all those great stories, but then writing and presenting them in a way that’s a lot more meaningful to our audience. And I think that’s actually, in a way, how we grow time spent listening to radio. If you’ve got a great product people will listen to it.
121 THE CHAIRPERSON: You mentioned your listener advisory panels. I assume those are all made up of local individuals?
122 MR. BYRNES: Absolutely.
123 THE CHAIRPERSON: And how do -- just out of curiosity, how do you choose who sits on that advisory panel and how do you ensure that the makeup accurately represents the community in which -- that you’re trying to serve?
124 MR. BYRNES: Very simply. If I take Woodstock as an example -- clearly, we have not done any listener advisory panels in Grimsby as yet. We’ve done lots of formal research. But if I take, you know, the Woodstock example, we interact with a lot of listeners, both who come into the radio station, who call the radio station, and who interact with us on our -- you know, on our various platforms. And so we take a cross-section of those people and we invite them to come to a venue. We found if we supply pizza and pop it always works. And then we sit down and ask a series of questions.
125 Now, we don’t react to one panel itself. We do a series of them over the year and out of it we see a trend. And so it gives us a sense of, you know, what really matters to the community and it also gives us a sense of how they’re actually consuming our product.
126 So for example, you know, we are watching our online consumption just go through the roof. People now are spending way more time, you know, listening to our radio stations on these things than they are on a desktop radio. So what does that mean? Well, in our imaging, rather than say listen to your radio, we talk about find us on your smartphone; little things like that. So we get lots of really valuable information out of those informal research panels.
127 THE CHAIRPERSON: And did you say you hold one panel meeting a year, or do you do it more on an ad hoc basis?
128 MR. BYRNES: No, no. We try and do -- our goal is to do one a quarter.
129 THE CHAIRPERSON: Okay.
130 MR. BYRNES: So we do about four a year.
131 THE CHAIRPERSON: Okay. We’ve mentioned your other station in Woodstock, and in your application you note that none of the programing or announcing or news staff will be leveraged from the other station. So I’m just curious; what support do you expect to receive from your other station, or what synergies do you think will be created by having an additional licence?
132 MR. BYRNES: Back-office functions primarily; technical services, accounting. Nothing that involves the on-air. I’d referenced earlier that, you know, I was involved in owning a number of radio stations prior to 1997 in New Zealand. And so, you know, we have a reasonable amount of experience at looking at what those synergies are and how they can actually help the operation.
133 But where they don’t help is by trying to, you know, use frontline staff on air or anything like that. It’s all about the power of local and, you know, we want our local, you know, morning show to be in Grimsby, to be living there, to be involved in the community. So it’s back-office functions. It’s you know -- and I can go into more detail if you’re interested.
134 THE CHAIRPERSON: Well, yeah. I guess just -- I mean I understand, you know, customer-facing individuals; you’d want your salespeople to be local, you’d want your newscaster to be local. So when you say back office, I mean what do you actually include with technical support, HR, legal? I guess where’s the line between back office and customer facing?
135 MR. BYRNES: All the boring stuff, really is -- such as -- as you say, HR and accounting and accounts payable. The things like that that can be centralized and run more efficiently, you know, the payroll services, for example.
136 You know, we want our staff at the radio station level to be spending as much time with our listeners and advertisers as possible. Not dealing with, you know, the boring stuff, so in simple terms that’s really where we see those synergies.
137 COMMISSIONER MacDONALD: Okay, so different staff between the stations, at least for anything that, you know, the public will see or be interested in.
138 How do you envision -– do you think your news programming will be similar between the two stations? I mean obviously, you know, you’ll be covering the local counsel meetings so, you know, that adds a different flair, but do you see the overall format being relatively similar?
139 MR. BYRNES: The format in terms of duration absolutely and in style, yes, but in terms of content they’ll be in two entirely different operations.
140 You know, what’s important to the people of Grimsby right now, you know, is the shortage of housing. There’s a real problem in Grimsby. It’s built out and in fact, right now there are 1,200 homes -- or 1,200 sections have been created in nearby Smithville, which is just up the escarpment.
141 And so if you’re in Grimsby right now, you’re concerned about traffic congestion on the QEW, you’re concerned about house prices, you’re concerned about, you know, the intensification of building on the other side of the QEW, between the QEW and the lake.
142 You’re concerned about six ugly A.M. radio towers that pollute your view on a daily basis and you’re concerned about what’s going on at City Council and frankly not being reported that well in current media.
143 So what we do is we look at what’s really important in a particular community and try and reflect that on the air.
144 COMMISSIONER MacDONALD: So you don’t envision sharing any actual programming between operations?
145 MR. BYRNES: No.
146 COMMISSIONER MacDONALD: Okay. You mentioned that you would have 14 staff at the new station?
147 MR. BYRNES: M’hm.
148 COMMISSIONER MacDONALD: Can you unpack for me how –- are they full-time staff, part-time and what the breakdown would be by position?
149 MR. BYRNES: Happy to, Mr. Commissioner.
150 So three in sales, the morning show, midday, promo person, afternoon drive and evening. Two full-time in news, one part-time, Hilary here the General manager, General sales manager, reception and traffic. And then three part-time staff, so 11 full-time, 3 part-time.
151 To of the part-time would be involved in community cruiser and one of the part-time people would be a part-time news person.
152 We typically have, you know, three people in our news operations.
153 COMMISSIONER MacDONALD: Okay, thank you for that. Just to change topics for a moment, you mentioned earlier -– and then I have some of it right here, you know, the additional research that you had conducted. I’m looking at the SRG advertiser research and then the audience study that you conducted, so that level of due diligence is always appreciated.
154 In the advertiser research document, it said that 168 businesses were sampled, but only 19 interviews were conducted, and I’m just wondering was that only because 19 businesses were willing to be interviewed or whether they went through some selection process to weed out certain businesses?
155 MR. BYRNES: I’m going to ask Kaan Yigit from Solutions Research, who managed the project, to answer that question.
156 MR. YIGIT: Yes, sure, no problem. So that’s what we call the sample frame. One-hundred sixty-eight (168) business phone numbers were acquired.
157 We cross-checked against Google Maps now which you’re able to actually even see where the business is located and we did the survey on a blind basis, which is very difficult.
158 The reason for that was we wanted to have an objective view, so we didn’t want to say we’re calling on behalf of somebody they may have just spoken to recently, which would have created some kind of bias.
159 We didn’t dial necessarily all 168. I think it was... ended up being about 120. In the period that we surveyed, you’re looking at somewhere in the neighborhood of 20 to 25 percent response rate as quite decent for businesses, so we were a little bit -– we’re about 19 out of 120 dialed, so close to that.
160 We also in the report itself kind of put a note saying it’s directional. It’s as if you’re having two, three focus groups. We put in the verbatim comments, but it’s not atypical, especially as I said earlier, if you’re doing your survey on a blind basis among businesses, because there’s so much spam calling that happens now in Canada -– well everywhere actually, that getting to the actual person, keeping them on the phone is a real challenge.
161 But this said, I think it’s -- the number of completes would be comparable to similar kinds of situations when you’re not disclosing who your client is but rather saying something like we’re calling you on behalf of a potential applicant.
162 Sometimes people say well I don’t -– you know tell me who it is and if you don’t they hang up and that’s just part of the risk profile for this kind of work.
163 MEMBER MacDONALD: That’s helpful and rest assured we’re working on the nuisance call file as well.
165 MR. YIGIT: Yes, I know you are.
167 MEMBER MacDONALD: So it just -– to be clear and I think it is with respect to a blind survey, I just want to make sure that businesses weren’t selected because they had a pre-existing relationship with Byrnes or you weren’t targeting specific business verticals that may be more apt to advertise on radio, such as the Ford dealership that Mr. Byrnes referenced.
168 MR YIGIT: And that’s precisely why we’ve decided to conduct on a blind basis, even though we knew that that would mean a lower response rate.
169 COMMISSIONER MacDONALD: Okay.
170 Mr. BYRNES: And, Mr. Commissioner, the reason we actually commissioned, you know, a third-party piece of research was to remove all that bias.
171 And you’ll notice actually in that document they put all the verbatims. There was a couple of comments in there that, you know, weren’t necessarily that positive about the concept, but nevertheless they were included.
172 And I should further add, you know, what we were looking for was some in-depth information and so, you know, to conduct 19 telephone surveys that lasted quite some time and produced a tremendous amount of information -- and I think the, you know, the most encouraging thing out of that was 86 percent said that, you know what, they would like to advertise on the kind of radio station that we’re going to create.
173 So I think that, you know, it is very positive and we’re quite encouraged by this research.
174 COMMISSIONER MacDONALD: Was the same methodology employed when you did your audience study of the 300 individuals you spoke with? Blind survey.
175 MR. YIGIT: Yes, so that’s –- yes, that was blind as well as they typically tend to be. We interviewed 300 residents, 18 - 64, in the primary service area.
176 COMMISSIONER MacDONALD: Okay, thank you.
177 According to the research, Boom F.M. was identified as one of the top 10 ranked stations in the proposed principal serving area and they offer a selection from 70s, 80s, 90s and position themselves as classic hits as well, so I’m curious as to what similarities or differences you envision between your proposed service and the service provided by Boom FM?
178 MR. BYRNES: Well firstly, we’ll be local and that’s something that, you know, Boom can’t do. They’ve got to focus on the greater Toronto area. And so, you know, fundamentally yes some of the music will be the same, but everything else will be different.
179 Sharon, would you like to talk a little bit about those differences?
180 MS. TAYLOR: Yes, you’re right, Boom is a very successful and popular radio station and Boom has a very similar format to what we’re applying for, for this radio station. There was also a very high response to Q107 in Toronto, which is a classic rock station.
181 Typically when you look at classic hits as the format that you intend to build, there are a couple of directions you could go, because Q107 was also so popular our classic hit station will be a -– more of a rock based classic hits or guitar based classic hits, as opposed to a pop based classic hits or, you know, Madonna kind of classic hit station. So there will be -- you know, there will be song duplication, song overlap, but the biggest differences will come from what’s between the records. What’s between the records will be concentrating on our local region, talking about what’s going on there, and also the local artists in our community that we hope to support.
182 So yes there will be similarities but there will be plenty of differences, and I anticipate that our actual playlist will have some duplication but certainly not all.
183 THE CHAIRPERSON: If you had to hazard a guess, what percentage of song duplication would you ---
184 MS. TAYLOR: I would say 20 percent or less.
185 THE CHAIRPERSON: Okay. With respect to your proposed CCD contributions, which you spoke about this morning, you mentioned two annual scholarships to broadcast and journalism programming’s at Mohawk College, but in the CRTC’s commercial radio policy from 2006 we stated that contributions must specifically benefit students of music and journalism, and having reviewed what Mohawk is offering, it doesn’t appear that someone is able to pursue radio broadcast and they don’t offer courses in journalism. So do you have any -- is that an accurate representation of what Mohawk is offering?
186 MR. BYRNES: So Mohawk offers a couple of streams in their broadcast program. We think it’s important that broadcasters actually support the next generation of broadcasters and, you know, we encourage our staff to speak at broadcast events and talk to young broadcasters.
187 But, look, we’ll certainly investigate that further, and if the Commission has any concerns then we would -- you know, we’ve already said in our application that if anything doesn’t meet the standard we would simply redirect those funds to factor. You know, we have an 11-year track record in Woodstock of fulfilling our commitments, and we certainly are very careful to make sure that everything we do is in line.
188 We did respond to one of the notes that you had sent and laid out the information, but again if, for some reason, that, you know, as we investigate this further, if it doesn’t meet the requirements we’ll modify that for sure.
189 THE CHAIRPERSON: Okay. So you’re willing to redirect those funds. And I don’t want -- the panel are not prejudging what -- whether it may count or not, but if we make a decision that it doesn’t count for CCD you’re willing to redirect, would that be your preference as opposed to asking for an exemption to the policy?
190 MR. FOCKLER: Mr. Chairman, absolutely. We are dedicated to the $140,000 figure in our application. If, for whatever reason, the Mohawk initiative is not acceptable to the Commission we will redirect that to another source.
191 THE CHAIRPERSON: Okay. Now, let’s talk about money for a moment and your business plan. You know -- and I note that the markets that you’re hoping to enter enjoy relatively high employment levels and relatively affluent population from your research businesses and individuals are supportive of a new local station. That said the market in question is also relatively small when you look at it in the context of the GTA. So I’m just wondering how your experience in radio -- how you’re going to be able to leverage that experience to deliver a high quality financially viable product in these relatively small markets.
192 MR. BYRNES: We really don’t look too much at what Toronto is doing. That’s a completely different animal. We focus on small to medium markets, and our experience is there’s a very healthy living to be made there as long as you’re doing it right, as long as you actually have a great local product and, you know, you’ve got the business case right.
193 We believe we have the business case right. We used CMI out of Winnipeg, who are a very respected media economics company, who did a top-down analysis and they’d actually looked at small market Ontario and looked at retail sales, and they looked at advertising revenue, and then they did a deep-dive on the Niagara area as well.
194 At the same time, we actually went the other way and started, you know, at zero and built it up, and actually looked at retail sales and what the -- you know, typically the average retailer spends on marketing and what radios reasonable share of that is and came up with, you know, our numbers. Our first year projections, by the way, are half of what we anticipate that to be.
195 What I can tell you is that, you know, again, based on our experience in Woodstock, it’s all about going and having those conversations with retailers. They’re all about wanting to grow, you know, their client base, and they’re constantly looking for ways to reach their customers. And, you know, there’s more and more evidence that say that, you know, this exciting new shiny thing over here, whatever it might be, Facebook or what have you, is not necessarily the way to actually reach a large number of people.
196 And Hilary, you know, actually went and spent six days walking the streets of Grimsby. And you might have some additional information to add to that.
197 MR. MONTBOURQUETTE: Thanks, Mr. Byrnes.
198 Yeah, I mean, as mentioned, and as is included on page 15 of the supplementary brief, on the CMA analysis, you know, they identified the retail sales in Grimsby, you know, $606 million growing to $643 into 2018. So using that formula, you know, we determined that the radio market is a million four seventy-eight.
199 So our first year revenue model, as Mr. Byrnes mentioned, is seven forty-seven eighty-one. So, you know, that was the first step. So we knew, you know, that our business plan was sound in terms of revenue generation.
200 Then, as noted on page 17 of the supplementary brief, we contacted Solutions Research to go in and ask the question. So we know the number’s right but is there interest, will the business community support us, and we found out overwhelmingly through that research that it did. Did the bottom-up, top-down; did monitors of the existing radio stations to see what’s going on, and then I spent, you know, the first half of November going business-to-business in Grimsby and in Beamsville doing a survey prepared by ENS Media and just asking -- having the conversation, you know, would you listen to a radio station if it’s local, and feeling that out a little bit, and then would your business support a local radio station.
201 And then in that conversation, you know, testing, you know, what is the -- what’s the tolerance for your budget, and in that conversation, as mentioned in my opening comments, you know, we came up with over half a million dollars towards our first year operating budget.
202 So -- and the reason for that I think the overwhelming sense that I received from having the conversations with business owners and business managers is number one, the existing rates are really too expensive and number two, when they listen to the radio that’s getting in there it’s all promoting shop anywhere but here, you know, it encourages shoppers to go out of market. And they -- the business owners, business managers, really want a shop local opportunity to promote their businesses and to grow their businesses, and it was overwhelmingly supportive to listen to the radio station and to advertise with it.
203 MR. FOCKLER: I’d also like to return to what Mr. Byrnes was saying about how we calculated our revenue models. CMI and Mr. Byrnes did a top-down model looking at retail sales and population tax filer income information, et cetera. I also took it a different way, from the bottom-up, examining the estimating spot load per hour and the approximate sales per minute. And, as Mr. Brynes said, we came to about a $60,000 difference in total in year one.
204 THE CHAIRPERSON: Thank you for that.
205 We always try and move as quickly as we can at the Commission I'm not sure we'd ever be described as speedy. But -- so on your -- keeping an eye on the market on your six-day walk in November, you haven't observed anything that would lead you to be concerned that your financial projections won't come to fruition; there hasn't been a stall in population growth or a significant employer shut down an operation?
206 MR. BYRNES: Not at all. In fact, when we first started looking at this market 18 months ago to today, there's lots of positive indicators. Not only has the Stats Canada data come out to actually look very, very favourable, but little things, like, you know, shovels in the ground and the Go Station that's being built in Grimsby; it'll be open in 2021, and that's going to be a gamechanger.
207 People will be able to actually -- you know, we've already established in our research that some 60‑plus percent -- I think 64 percent of people travel outside of Grimsby/Beamsville each day to either work or whatever they're doing. And to be able to jump on the Go Train and go to Toronto or Mississauga, or wherever it is that they're going to work, it's going to make their quality of life a lot of better.
208 And, certainly, the conversations that we have had with city officials and with some of the, you know, key stakeholders in Grimsby and Beamsville indicate that it's going to become, you know, even more popular. So we actually think these numbers are, to be honest, quite conservative, but that tends to be the way I operate.
209 I appreciate the CRTC have a high standard, but trust me, I have a higher standard because it's my house that's on the line. You know, I want to make sure if I'm going into a business that we're going to be successful. So I assure you that we're going to be just fine.
210 THE CHAIRPERSON: Well, thank you for that.
211 And given that it is your house on the line, and I don't want to get a reputation as being a glass-half-empty kind of guy, but what if the projections aren't as rosy as you project? You know, what is your willingness to absorb financial losses incurred by this station that may occur over potentially the entire licence term?
212 MR. BYRNES: Well, you know, in fact, you know, our numbers when you look at them, I think we project, you know, a small profit in year five. So we in fact are projecting losses in years one, two, three, and four.
213 So your question is well what happens if we got it wrong, what happens if it's worse? We do live in uncertain times. There's this thing called NAFTA, and what's happening to the south of us. And, believe me, we have sat and thought about those kind of things.
214 Everything that we can see is that in fact things are going to be better than what we have predicted, but should they not be we have the financial resources to be able to weather the storm. And we included in this letter -- with our application a letter from our bank that actually indicates a reasonable amount of money that's available to us should we need it.
215 THE CHAIRPERSON: You also have an application before us to purchase the assets of Vista. And I don't want to discuss that application because we're going to deal with it in the non‑appearing phase of the hearing. But with respect to the application we're talking about today, if we were to also approve the Vista application, what impact positively -- positive or negative would have -- would that would have -- the Vista approval have on the application that we're discussing today?
216 MR. FOCKLER: Mr. Chairman, just before Mr. Byrnes answers, I’d like to point out that we're not purchasing Vista. We're purchasing portions of Vista.
217 THE CHAIRPERSON: Very fair point. Thank you for the clarification.
218 MR. BYRNES: Yeah, Mr. Chairman, it's just two stations from Vista.
219 You know, we think actually it makes a great deal of business sense. Again, there are some further synergies that will come about. You know, for example, we can hire a full-time Webmaster to actually then work across what will be four radio stations, should the Commission approve this application and the non‑appearing application.
220 We also think there are some common synergies in terms of listeners actually being able to carry our signal from one market to the next. To be able to, for example, you know, run advertising on the Grimsby station promoting, you know, Niagara Falls as a tourist destination.
221 So we actually think it's very positive and made perfect sense. Obviously, we were, you know, looking at both of these deals at about the same time, and we think, actually, it lines up nicely, three in a row, and we think it's going to work very well. We just would hope that the Commission will approve things reasonably quickly so that we can get on with life.
222 THE CHAIRPERSON: So thank you for that.
223 That answers my question about what potential benefits or synergies could be created if we approve this application and approve your acquisitions in Niagara Falls and Fort Erie.
224 Would the current application be negatively impacted in any way? I see the obvious upside for you, I'm just wondering; is there a downside if all three are not approved? On your operations, obviously.
225 MR. BYRNES: Well, the downside, obviously, would be, I think, to the Canadian Broadcast System as a whole. It would be, you know, potentially -- I'm presuming that if you weren't to approve our Grimsby application, you may approve one of the other applicants here before us today.
226 Frankly, we think we're actually offering more in CTD. We think we have better use of frequency, and we think we're going to create better local radio than the other two applicants. I think we are the only applicant that actually took the time and effort to do the level of research that we carried out. We actually carried out, you know, a -- an audience study, and we actually tested five music formats.
227 So we think there's lots of upside to the community and to the broadcast system in general. We -- back to your question, though. You said what's the down -- could you just repeat the question?
228 THE CHAIRPERSON: Yeah. I was just wondering -- you know, I understand the benefits for you as an operator if all three are approved. I was just wondering what's the downside for the Grimsby application if we only approve Grimsby but denied the acquisition of the two other stations? And maybe there is no downside.
229 MR. BYRNES: Well, the downside, to be honest, would be a great deal of time, money, and effort that's already been expended to get us to this point. The downside would be the staff that we hope to employ in Niagara Falls and Fort Erie would be out of a job. The downside would be that, you know, Fort Erie that just lost its only local newspaper would, in theory, now lose its only radio station. I think there's lots of downsides to that not being approved, to be honest.
230 THE CHAIRPERSON: Okay. Thank you.
231 MR. FOCKLER: However, I think Mr. Byrnes would accept whatever the Commission would approve, because he does want to -- this whole organization wants to grow in the Canadian broadcast industry. So we would not turn down an approval on either of the applications.
232 MR. MONTBOURQUETTE: And if I could just add one other comment?
233 I spent time in Niagara Falls meeting with business managers and owners as well, and that community would like to have another voice that serves it locally, effectively, and provides good local content. Because it's -- there's a void there, you know? They're not being served their needs, their news, their information. And I know this isn't about that hearing, but I think that's another downside for Canadian broadcasting and for the community at large in Niagara Falls and Fort Erie.
234 THE CHAIRPERSON: Okay. Thank you for that.
235 I just have, basically, one or two last questions before I turn to my colleagues.
236 I'm sure you're aware of the submission from Corus suggesting that we should have -- impose a condition of licence to prevent any successful applicant from seeking advertising revenue in Hamilton. And I'm wondering what your thoughts are on their recommendation and whether you would be willing to accept that as a condition of licence?
237 MR. BYRNES: We think that Corus actually misunderstood our application. Firstly, we’re not proposing to take money out of Hamilton. Again, our coverage map indicates that we’re not going to get a signal, a clear signal over Hamilton. Hamilton radio stations are already serving that market, and just as we don’t go chasing money in London, Ontario, which is close to Woodstock, we’re not interested in chasing revenue out of Hamilton. There’s enough of a living to be made by super serving Grimsby and Beamsville.
238 That said, all we would ask is an evenhanded approach. You know, if the Commission saw fit to impose a condition of licence preventing a new entrant from selling in nearby markets, we would hope that they would also impose the same condition of licence on those stations who frankly currently come into the Grimsby market and try and take money out of that market.
239 So we think they misunderstood our application. We tried to clearly describe it in our response to them, and we just don’t think that -- we don’t expect to get any money out of that market. There’s already enough radio stations in that market.
240 MR. FOCKLER: I would just like to point out quickly that Corus’ request was that any new entrant would be prevented from soliciting advertising in Hamilton rather than solicit or accept advertising from Hamilton.
241 So when Mr. Byrnes says that he’s prepared to accept such a condition, that is with the assumption that we would be allowed to accept advertising from Hamilton without sending salespeople in to actually solicit.
242 THE CHAIRPERSON: Okay.
243 MR. BYRNES: And to give just an example of that, you know, I’ve already said we don’t go to London, for example, with our Woodstock radio station. However, occasionally, a client or an advertiser in London would, perhaps by advertising in Woodstock, simply because that product or service is not available there. So, for example, the Mercedes dealership would occasionally buy advertising saying “We’ve got these shiny new machines 30 minutes down the road in London; come see them.” Well, there is no Mercedes dealership in Woodstock. So I think that’s an example that Mr. Fockler is perhaps inferring there.
244 THE CHAIRPERSON: Just one final, because I’m not actually sure I heard a yes or a no there.
245 Are you willing to accept a condition of licence preventing you from soliciting advertising in the City of Hamilton since it doesn’t factor into your business plans anyway?
246 MR. BYRNES: Yes.
247 THE CHAIRPERSON: Perfect. Thank you very much.
248 Those are all of my questions and nothing from legal either. So those are our questions. Thank you very much.
249 MS. TAYLOR: Thank you.
250 MR. BYRNES: Thank you so much.
251 THE CHAIRPERSON: We will take a short break and we will come back at 11 o’clock.
--- L’audience est suspendue à 10h41
--- L’audience est reprise à 11h01
252 THE CHAIRPERSON: Madam Secretary?
253 MS. ROY: Thank you.
254 We will now proceed with Item 2 on the agenda, which is an application by Durham Radio Inc. for a broadcasting licence to operate an English-language commercial FM radio station in Grimsby-Beamsville.
255 Please introduce yourself and your colleagues and you have 20 minutes for your presentation.
256 MR. KIRK: Thank you, Madam Secretary, and good morning. Good morning, Commissioner MacDonald and Chairman of the hearing, Vice-Chairman Simard and Commissioner Vennard.
257 Before we begin our presentation, I want to introduce the panel representing Durham Radio at this hearing. The seating plan is attached to our remarks, and you have a chart there.
258 My name is Doug Kirk, I’m President of Durham Radio, in the middle left position of the row. I started Durham Radio in 1994 with the acquisition of an AM station in Ajax, Ontario. We have grown the company over the past 23 years to where we now have 5 over-the-air stations and a separate on-line station, wave.fm. Our biggest stations are CHKX-FM in Hamilton/Burlington and CJKX-FM in Ajax, Oshawa and Toronto. Both operate in HD as well as on FM. We also own CKGE-FM and CKDO-AM/FM in Oshawa and recently we acquired CHTG-FM in Haldimand County, or Caledonia, Ontario. All our stations are growing. We employ 87 fulltime equivalent people and we’re actively trying to grow as an independent radio company.
259 I've been involved in radio ownership since 1987 and served eight years as President of the Ontario Association of Broadcasters. I also serve as an independent director on two Boards of BMO Financial Group's mutual fund issuers.
260 On my left, your right, is Steve Kassay, DRI's Vice-President, Programming and Operations. Steve has been in the radio business for 33 years, 27 of which have been with DRI and its predecessor station. Steve is responsible for all the air operations of DRI. In his spare time, he is a director and executive board member of the Country Music Association of Ontario.
261 On Steve's left, your right, is Andrew Forsyth, our broadcast consultant. I've known Andrew for 30 years and he has been our consultant since we started DRI in 1994. Andrew also serves as a director of the Ontario Association of Broadcasters.
262 On Andrew's left and your right is Holly Kassay. Holly was a part-time employee in Ajax when we purchased it in 1994. Holly is a key member now of DRI's news team. She is an active reporter and broadcaster on all the DRI stations. And yes, she is married to Steve.
263 Rounding out our panel, on my right and your left is Wally Sallows. Wally is based in Hamilton and manages the sales team at CHKX-FM in Hamilton and CHTG-FM in Caledonia. Wally has 40 years' experience in the Hamilton and St. Catharines-Niagara markets as a sales representative and manager of sales departments at Corus and Bell's predecessor Telemedia, as well as at DRI. Wally has been with us for almost 10 years.
264 And finally, to your far left is Peter Jaycock. Peter has many years of on-air experience in Hamilton with CKOC and CKLH-FM. A little over a year ago, he joined DRI to be Morning Host on our newly-acquired CHTG-FM, Haldimand County, Caledonia.
265 We are all excited to be here with you today to review our application for Grimsby/ Beamsville.
266 We will now begin our presentation for Grimsby/Beamsville's new station, The Lake@88.5 FM.
267 Over the next few minutes, our DRI team will address three points:
268 (1) The concern with the markets as described in the Call;
269 (2) Our unique solution for those markets; and
270 (3) Why Durham Radio is your best choice to execute and establish new radio service in the communities of Grimsby/Beamsville.
271 First of all, what is Grimsby/Beamsville? Well, Grimsby/Beamsville is not a radio market. Other applicants have referred to it and may continue to refer to it as a market, but we emphatically insist that Grimsby/Beamsville is not a market at all but an aggregation of two communities already encompassed in established Statistics Canada Census Metropolitan areas and Numeris Central areas. These maps, which are in the presentation and will be on the screen, show this.
272 First, the Hamilton CMA on the west and Grimsby is in the eastern part of the Hamilton CMA, along the lake. And four, the St. Catharines-Niagara CMA adjacent to the east, where the community of Beamsville and the Town of Lincoln is located. This is part of the St-Catharines-Niagara CMA and the St-Catharines-Niagara Numeris Central cell.
273 The next map shows where the communities are in their respective markets.
274 Numeris has confirmed with us that they will not split or alter Numeris market definitions which would disrupt CMA boundaries. The conclusion is that Grimsby/Beamsville will not exist as a separate radio market for radio market measurement purposes. A Grimsby/Beamsville station will have the following options for Numeris measurement.
275 They could participate in the Hamilton CMA. They could participate in the St. Catharines-Niagara CMA, or they could opt out of measurement altogether, an option that Numeris offers when a station technically reaches less than 1/3 of the population in the market concerned.
276 The technical proposals submitted by the three applicants show the 3 mV/m coverage in the 38 to 59,000 population range. This is small in comparison to the incumbent market stations' coverage.
277 For example, Durham Radio's Hamilton station, CHKX-FM, has over 1.3 million population in its 3‑millivolt signal and over 5.4 million in its half millivolt contour. The other Hamilton commercial FM stations would have similar populations in their coverage areas.
278 The 2016 population of Hamilton and St. Catharines' CMAs are, respectively, 778,000 and 411,000. The 88.5 signal has 3‑millivolt and interference-free coverage in both CMAs, split about approximately 60 percent in Hamilton and 40 percent St. Catharines-Niagara. Simple math would suggest that the station will cover approximately 3.1 percent of the Hamilton CMA and 3.8 percent of the St. Catharines-Niagara CMA, or 3.3 percent of the combined CMAs. We make the point to illustrate how small the 88.5 signal is in comparison to its market competitors.
279 DRI's conclusion is that 88.5's coverage for us, and for the other applicants, will not -- and I emphasize not -- be large enough to cover either CMA in an effective way. And, as we said before, it won't have its own market definition.
280 Since the communities concerned are effectively covered by seven Hamilton and seven St. Catharines-Niagara stations, buying Numeris’ audience measurement would not serve any new 88.5 megahertz station very well. This small audience coverage would not provide any useful ratings in the full CMAs for -- in which 88.5 operates, and the audience numbers would be too small to generate any national sales to speak of for the station.
281 Without Numeris' measurements, 40 to 45 percent of the radio advertising dollars in Hamilton -- this is national and agency-placed commercial buys -- would be off the table for the Grimsby/Beamsville station. National advertisers will reach Grimsby/Beamsville in a much more efficient way by using the existing market stations; they already do today.
282 How could a new station break into the national/agency portion of the pie without verifiable audience and without coverage over a predominant portion of the market? It simply cannot.
283 Let's speak about retail revenue. Retail and agency revenue will make up about 65 percent of the Hamilton CMA money. This was 11.2 million, or $14.38 per capita last year. Apply this to the Grimsby's community population of 27,000 and you get revenue expectation for Grimsby radio of $393,000.
284 A similar analysis in the Beamsville community, based on St. Catherine's CMA radio revenue achievement, over 11,800 population in the market, shows a radio revenue expectation of 202,000. The combined community radio revenue expectation is therefore $595,000.
285 And we make a point; this is derived not from a formula but hard numbers that are being achieved in the two markets where these communities exist.
286 This revenue is currently spread around existing stations in the market. A new entrant would have to gain market share and then expect to garner retail revenue as it becomes effective for local advertisers.
287 The Grimsby/Beamsville community spreads its radio tuning over dozens of radio stations. In our research and that of others, DRI's CHKX-FM is shown to be among the top-rated stations, with approximately a 10 percent share. If, over a couple of years, a new station were to reach these levels, let's say 10 percent and then maybe a bit more because it is a local station, and local advertisers will patronize that local station, a little more than 10 percent of retail revenue would logically come its way.
288 Based on the analysis -- this analysis, DRI predicts the local retail revenue in the first year of operation will be $90,000. Other applicants have predicted revenues and commercial advertising rates for Grimsby/Beamsville -- a Grimsby/Beamsville station that are multiples higher than ours. We include this information in order to clarify the way DRI's assessment of the radio revenue is determined, and since we operate in this market, we know how revenues are derived.
289 Mr. Sollows will talk more about that more in a moment.
290 The most crucial element when establishing a new commercial radio station is the assessment of the market's revenue potential. If this assessment is wrong, then the whole proposal goes down the drain. Programming commitments have to be cut; CCB initiatives are not met, and so on and so on.
291 The revenue expectations for Grimsby/Beamsville must be modest, given its location within existing large markets served by dozens of radio stations. However, we have an existing market operation which can be used to enhance; The Lake at 88.5.
292 When the Commission called for licence applications for Grimsby/Beamsville, the team at Durham Radio thought long and hard about this opportunity. During the market capacity consideration of this process, we concluded, on the record with the Commission, that the community aggregation could not support a new and viable standalone radio service. Revenue potential was simply too small to support a new station with as many as 24 locally based staff. Expenses would overwhelm revenues. Our plan would avoid any of this -- of these outcomes that might happen.
293 For example, severe cutting of expenses, such as staff; reliance on a permanent subsidy from the parent company and the station never achieving profitability; or the need down the road for a technical upgrade to enlarge the audience at the station in a way to get viable at the expense of incumbent stations in Hamilton and St. Catharines.
294 DRI is proposing nothing of this sort. DRI is the only applicant with a radio station in either Hamilton or St. Catharines' markets. Our CHKX-FM is number two of all stations in the Hamilton Numeris market, and the number two billing station of the seven Hamilton commercial radio stations in TRAM. We operate in the same market as the proposed -- as proposed for The Lake 88.5.
295 We already have a sales team of 10 in the market which call on a long list of businesses in Grimsby and Beamsville. We have a good list of commercial advertisers from there who are already on the air with us. We cover news and community events; as well, sponsor music events in these communities.
296 In sum, CHKX is already in the Grimsby/Beamsville communities. Because DRI has a strong station already in the area, our proposal to serve Grimsby and Beamsville will work. This clearly differentiates us from the other proposals you're seeing.
297 DRI can produce distinctive local radio service; news, weather, traffic reports, community events coverage, and so on, with a local staff of six, compared to the upwards of twenty staff proposed by the other applicants.
298 The conclusion is that Durham Radio is best positioned of the three applicants to build and operate a viable commercial radio service for Grimsby/Beamsville. DRI has the on-the-ground operational synergies in the market in market functions of a radio station.
299 Like the other applicants, we can also offer synergies in administration, technical, programming, and so on, but we're the only applicant which is already in these communities and can provide on-the-ground assistance for the new radio station.
300 Now here is Wally to explain how the revenue reality will work in more detail.
302 MR. SOLLOWS: As Doug mentioned, Grimsby and Beamsville are served by 14 other radio stations. A new station would need to compete for share of audience with the incumbent local stations, plus 74 other signals from Buffalo, Toronto, and elsewhere. We know, from being in the market, and from our research, that the Grimsby and Beamsville committee -- communities migrate daily taking them away from what would be local radio.
303 This new station will have an incredible uphill battle to get significant revenue and audience. Where Grimsby/Beamsville is not recognized as a Numeris market, no national advertising dollars will flow. At $4 to $6 per commercial, a station might be able to find around $100,000 of local revenue the first year.
304 In the last year, CHKX has generated just over $60,000 in business coming out of Grimsby/Beamsville. These are the larger clients who wish to drive traffic into the immediate area but clearly also want to reach the rest of the CMA. They want the full coverage we offer.
305 To be clear, these existing clients we and the other CMA stations have are the larger retailers in the area who benefit from having messages heard in their entire trading area. This new station, with a small coverage area, will need to target small, independent retailers on a micro scale. They do not have large budgets; it will be a struggle.
306 We recognize that any station in our CMA will fragment the income of the existing stations in the Hamilton CMA. Advertisers do not increase their budget because there are new opportunities to spread the dollars around.
307 We believe that with CHKX's history and relationships in the area, we would be in a much better position to leverage business than a standalone station would be. Even then, to do more than $100,000 in the first year will be a challenge.
308 Just over a year ago, DRI purchased CHTG-FM in Haldimand County. After years of financial loss and low listener engagement, we have improved the revenue situation and the relationship with the community.
309 The Haldimand experience has worked well as we super serve that community but also get part of our income from existing Hamilton based accounts. This is the model we intend to apply in Grimsby/Beamsville.
310 MR. KASSAY: Some notes on our plan.
311 Based on the Hendershot Research that we commissioned, our Hamilton station CHKX-FM ranks as the favourite commercial station in the two communities of Grimsby and Beamsville. Clearly, KX offers the overall radio service that resonates with residents. This same engagement philosophy will be applied to the new Lake at 88.5.
312 Our plan is to provide local programming that addresses the greatest demands; actionable information that helps listeners make day-to-day decisions: news, weather and community information. To meet that demand, the service will provide over 14 hours of information programming in category one, spoken word.
313 We’ll target an audience in the 25 to 64 plus age group that comprises over 70 percent of the area population. Our experience with CHTG-FM, The Grand, in Haldimand, and CKDO in Oshawa, tells us the classic hits/oldies format has the best appeal to this audience. Both stations draw more than 90 percent of their hours tuned from this demographic group.
314 Now, with respect to CCD, a hands-on approach has long been a DRI philosophy. Working directly with artists and events and helping them get the exposure they need is a hallmark of our company. In the spirit of assisting local talent development by promoting local artists and performers to their neighbours, the station would commit to an annual CCD contribution for eligible initiatives of $7,000 over six years, rising to $8,000 in year seven, for a grand total of $50,000.
315 Now, this sum is over-and-above the required CCD formula, speaking to our determination to give the Grimsby/Beamsville area a station that truly serves the whole community. This is one of the positive strategies that’s worked for us in Haldimand County after only one year of operation.
316 Now, Peter Jaycock can explain how we apply this to our daily programming.
317 MR. JAYCOCK: I’m glad to be working for a company whose philosophy of community access to the airwaves and regional inclusion is the same as mine. Our station is a grassroots return to the airwaves belonging partially to the people who listen. We are not cookie-cutter radio.
318 We believe that no event, church bazaar, exercise class for seniors, or fund-raising Turkey Roll at the Legion is too small for our support.
319 At 1,251 square kilometres, Haldimand County is roughly twice the geographic size of Toronto, with five main population centers. Many smaller villages and hamlets exist, each with their unique personality, events, and neighbourly hospitality. They learn about each other, and themselves, through our radio station.
320 Every morning, I spend time phoning organizations having charitable and non-profit events, to have them record an invitation message to the community, anywhere 25 to 70 seconds long. Five or six of these are interwoven into my morning show each day. Other listeners hear the enthusiasm of those running events, organizers listen to hear themselves, and their friends listen for them on the air.
321 These people feel engaged with our station and are grateful for the free promotion. More than 270 of these have been recorded this last year. Occasionally I phone these people just to stay in touch. I’ll often drive our community cruiser to destinations across the region to visit and join community events.
322 Additionally, we contact countless people from Haldimand, the Six Nations community, and surrounding areas for audio and information used daily in newscasts every half hour.
323 We've had heartwarming response from listeners, business, charities, and local government. This model of interaction is the model DRI would bring to Grimsby/Beamsville.
324 MS. KASSAY: DRI operates newsrooms in Hamilton, Caledonia and Oshawa. In total, we have 10 dedicated staff members working in news, providing service both on-air and on-line at durhamradionews.com.
325 One day last August the phone lines started ringing at CHTG in Haldimand, newsroom, front desk, in-studio. People told us of an odd traffic detour but no one really seemed to know what was going on, so right away reporter Yvonne van de Wiele set out. She discovered a blockade; it was on the main street in Caledonia, set up by members of Six Nations. OPP were on scene, tempers were high. Poor darling Yvonne told me she’d never been as nervous as she was approaching that group of protesters. And they weren’t talking, to her, to anyone, but she pressed on, she stayed, she earned their trust, she got the story.
326 And that’s what we do at Durham Radio in our newsrooms. We’re storytellers. We tell the important local stories that are often overlooked by the major media networks.
327 Advancements in equipment and technology such as Burli news software, which connects our reporters, newsrooms and anchors from across the region, and mobile applications that act as mini-studios, make electronic transfers of audio, information and reports to the newsrooms simple and quick.
328 The Lake at 88.5 will offer seven, five-minute news packages in breakfast Monday to Friday, a report at noon and hourly newscasts in the drive home period. News content would be 50 percent local at minimum, 30 percent from around the immediate area, and 20 percent national and international.
329 Because we have established contacts with area police, politicians and other news makers, and already cover Grimsby/Beamsville local news on CHKX, we’re well positioned to deliver the news of the day.
330 In July, our reporter Kathy Hyde was on scene when a massive fire ripped through downtown Grimsby causing millions of dollars in damage. It was a big story and we were there to bring our audience there.
331 The fulltime journalist to be hired for Grimsby/Beamsville will be well supported by the KX Hamilton newsroom and the whole DRI news team.
332 Do the names John Aker, Adrian Foster, Matthew Green, Ken Hewitt, do they mean anything to you? Perhaps not, but they mean something to our local listeners. They are major news makers in our markets.
333 Durham Radio is experienced at finding, producing and writing engaging local content for the markets that we serve. We pride ourselves in delivering the local stories other outlets miss or ignore.
334 MR. KASSAY: Now, despite the many formats that are available in Grimsby and Beamsville, there is a void. Classic hits/oldies has been absent in the two CMAs since Ontario’s longest serving radio station, CKOC-AM Hamilton, dropped the format in favour of all-sports. The reintroduction of the hit music that the audience grew up with from the 60’s and 7O’s will ensure the station is offering musical diversity and a sound that will attract a key audience.
335 The Lake at 88.5 FM will broadcast from a store-front in Grimsby, providing a site for the studio, the administration, the sales office and an access point for residents. On-air staff will consist of the morning show team, and a newsperson, swing announcer, ensuring live coverage on the weekends during key listening hours.
336 Now, successful strategy at all Durham radio stations is our community initiative. In addition to daily multiple on-air segments, every weekend Durham radio stations have cruisers and staff promoting, visiting and reporting on community events throughout the coverage areas.
337 This also happens on a variety of social platforms, providing further access to messages of local importance. We’re already engaged in the Grimsby/Beamsville communities and all these platforms. We will continue to weave the local area and its community members into the programming of the radio station on-air, on-line and on mobile.
338 This is a plan that results in meaningful service and value. In addition to over-the-air, our on- line presence is enhanced by all the technology at our disposal; allowing the sending of messages through streaming audio, websites, local news websites, and mobile applications like RadioPlayer Canada and, of course, our own.
339 MR. KIRK: Thanks Holly, Steve, Peter and Wally.
340 I hope the DRI team has articulated the key points of our application and conveyed the sense of enthusiasm about the way we operate our radio businesses.
341 I would now like to conclude our presentation now.
342 You have heard our assessment of, and our concerns about, the communities of Grimsby and Beamsville being able to support a new standalone station. DRI is the only applicant with a station in the Hamilton and St. Catharines CMAs. We can leverage its existing on-the-ground assets to create a viable local radio service for these communities and also in consideration of the revenue potential -- very important.
343 DRI has substantial cash on hand to fund the construction and long-term development costs to get The Lake at 88.5 productive and successful. We are not leveraging our assets with debt or having to incur more debt if overly optimistic projections fail to be met.
344 We have an experienced management team already in place in the market. All these factors combined with a very realistic view of what the radio station should be should give the Commission comfort with our plan.
345 We hope that you agree that DRI’s proposal for Grimsby/Beamsville is the best one available when all these factors are assessed.
346 Thank you very much for listening. We’re ready to answer any questions you may have for us.
347 THE CHAIRPERSON: Thank you very much for your presentation. I will leave you in the hands of Vice-Chair Simard.
348 COMMISSIONER SIMARD: First of all, we would like to thank you for your presentation and your application. Thank you for being with us this morning. We have questions which refer to local programming, Canadian content, CCD contributions, synergies, and we will close the discussion with your business plan.
349 So the first series of questions refer to local programming, and the objective is to understand how Durham’s proposed programming would best meet the specific needs and interests of listeners in Grimsby and Beamsville.
350 So the first question; Durham proposed a classic hits, oldie, pre-1981 music format targeting adults aged 25 to 64. So could you explain why Durham chose such a broad segment of the population as its target audience, and whether such a broad age group provides a sufficient basis to guide advertising and programming strategies?
351 MR. KIRK: Thank you for your question. I’m sure I’ll be asking many of the people here to fill in parts of the answer.
352 We chose the format, as Steve mentioned in his remarks, because of a void in the market. This sixties, seventies, early eighties music wasn’t available. It had been available for a long, long time on CKOC, and Peter and Wally both worked there over the years. But Bell moved that station to its TSN all-sports format, and left a big opening in the market. And that’s one of the reasons.
353 I mean, you just have to look at the market, what was there, and it had actually fairly good numbers in Hamilton, even as an AM music station, for years. So that was the first pointer to look at to find where, you know, the format void might be. So that’s what we’ve focused on, we’ve done research.
354 These are communities, they’re not the -- they’re not the CMA; they are communities within the two CMAs. So what we looked at was the age of -- balance in the communities, and what might be a format that would work that’s not available, that you won’t be competing with Toronto or other Hamilton stations in that same format.
355 So that was the broad outline. I’ll ask Steve to comment on how we derived down to that age. Are you comfortable?
356 MR. KASSAY: Absolutely. We’ve had great success this -- we execute two stations on this format of the five that we have. All five are set up strategically, three are east of Toronto and Durham Region, where Doug mentioned CJKX was our next grandest to CHKX in Hamilton. And we have good success with it south of Hamilton in the Haldimand market.
357 And we found after one year, a successful combination of being able to program to peoples’ needs -- I know that’s separate at the moment, but the music format is wide-ranging, it’s fun, it associates and draws quick associations with people over the age of 40, quickly, because the music is not available on any other service over the air.
358 So we’ve made the connection with the audience and the retail market and are confident enough that we can take it to this corner of our market as well.
360 MR. FORSYTH: If I could just add to that? The results certainly in Oshawa and most recently in the Caledonia-based radio station in Haldimand County, using the classic hits oldies format, has been able to attract the target audience we’re looking at. And, yes, it’s very broad; it’s 25 to 64-plus.
361 One of the reasons for that is, is that this format reflects music from a whole series of generations, true, but a lot of it is very iconic music. So 70 percent of the tuning that goes to both the Oshawa station and the Caledonia station come from that group. So that’s why we’re very positive that it’s -- it has that broad appeal.
362 And the second point on this, too, is that there’s diversity. There aren’t very many radio stations doing anything pre-1975. You know, so having the sixties and the seventies, and having a full complement of that music allows us to provide a broad approach, and makes us very distinct from the adult hits radio stations, which tend to be seventies, eighties; mostly eighties and nineties based.
363 COMMISSIONER SIMARD: And when it comes to advertising -- so the second part of the question was whether such a broad age group provides a sufficient basis to guide advertising and programming strategies?
364 MR. KIRK: Yes, in looking at the station, you have to differentiate it from large market and small market. We are talking about two communities now within larger markets, and you really have to look at it to say what segment of that community can we serve? You want it a bit older; you want it as broad as it can be, because that will have to tie into where advertisers -- you know, you have to have a useful audience for the advertisers.
365 And as we said, most of those advertisers will be small community advertisers. They won’t be the national advertisers. So they’re looking to get impact in the market for their local business and it has to be, you know, a well-accepted, broad format to get people into their stores on Main Street.
366 Does that answer your question?
367 COMMISSIONER SIMARD: Yes, thank you.
368 The second one is that we are interested in getting more information on the 14-plus hours of spoken word programming broadcast each week, including the four-plus hours of newscast and the other programming segments proposed in the application. And in particular -- I have, like, five questions, so ---
369 MR. KIRK: Well, we’ll take them one by one. One at a time is pretty good.
370 COMMISSIONER SIMARD: Yes. So the first one; could you explain how you would ensure this programming is of direct and particular relevance to the local communities in Grimsby and Beamsville?
371 MR. KIRK: Thank you for your question. And the strategy for the station, obviously, is to be a community-focused station. That’s all we have to work with. So it will be pointed and fully connected with the community first. And I’ll ask Steve and Andrew to go through the math of how we layer in all the hours of spoken word with news and other elements in the programming.
373 MR. KASSAY: Yes, sure. Thank you.
374 To help answer your question from the -- back at the beginning you mentioned four hours of news; correct. The rest are -- is all community. It’s all community. Everyone on air during the day is involved in community; we have a dedicated person doing all the community events. And this is not just hopping in a van and going somewhere. Contact is made, information is shared; it gets published online. We promote the fact that we’ve got this information online, because there is no paper; there is nowhere else to get this. It’s part of the fabric of the programming of the station, and the news -- Holly can tell you the long list of contacts we already use for news in Grimsby and Beamsville -- help supplement this. We know some of the individuals personally, having grown up there.
375 It’s really not too difficult to go out, get the information, bring it back and disseminate it within the station and get it on air. And not just during the community reports, but as just part of the ongoing -- sorry; I heard my alarm clock go and I got distracted. It’s part of the -- it’s part of the ongoing personality of the station to do this. We’ve had great success with this at CHTG in just a year.
376 This is what adds up to the hours. With other public service announcements we may sell, but it really is about just talking to people and getting the information on the air. As Peter told you, 270 of these went on the air in the last year.
377 MR. JAYCOCK: As of last Friday it was 278.
378 MR. KASSAY: That’s more than one a day.
379 MR. JAYCOCK: Yes.
380 MR. KASSAY: Wow. That’s my math for the day. But truly -- so when the whole team is involved, it’s a baseline requirement. It’s easy to make it work from there.
381 So we would fold all this information into our day, and that’s what we do at CHTG and the other stations, and it works very well.
382 The buy-in from the staff is very important. I will tell you that I don’t -- Pete tells me where he’s been, what’s going on. He tells the other departments what he’s found out, the people he talks to. He makes sure Nicolina knows so the information is already online. It’s a very tightknit group because it’s a tight staff, and it’s easy to share information and get this done, but they all understand it’s the baseline. So when everyone buys in, it gets done well.
383 MR. FORSYTH: I have the opportunity of being their consultant, so I’m kind of outside the walls and I sort of look inside and see what’s going on.
384 For them, one of the things that’s -- and this isn’t, you know, to flatter Doug and the organization he’s put together, but I have done consulting to other groups beside Durham Radio and the thing that stands out with Durham Radio is their belief that the people in the studios, that people in the markets, the people who are actually there in the newsrooms and out in the community are the people that make the decisions. They’re the decision makers. They’re the ones that were hired because they have the know-how to do these things. They were hired on the basis of not being the 9:00 to 5:00, somebody that comes in and reads a newscast and goes home. They’re there doing things all the time.
385 One of the lines that, in fact, Mr. Byrnes might have used as a consultant, because we’ve all used it, is that there’s no such thing as 9:00 to 5:00 show prep. Your life is your show prep, so everything you see.
386 So this is one of the things that they encourage with their staff which allows that information to come back to the radio station, and it’s managed that way.
387 Now, I hope that helps you with that.
388 MR. JAYCOCK: If I can just jump in as well and say there are times where here again there is almost too much information for us to handle because we do have five communities in Haldimand County: Dunnville, Cayuga, Jarvis, Hagersville and Caledonia. So many different events go on in those communities. Not only are we there and come back and talk about it on the radio show, we have the information to impart about the one that we can’t attend, and Yvonne and I talk about that. We have people on the air, as I indicated, with recorded messages, talking about their own events, and so the enthusiasm is there for that, on top of the newscasts, on top of our community calendar which lists all kinds of different events. That runs multiple times every day. I listen to Ted Yates in the midday. He’s talking about events that are going on and Rockin’ Ray in the afternoon. It’s just on and on and on.
389 So 14 hours, I would say, is a minimum of what goes on at our Haldimand operation.
390 MR. KIRK: I hope that gives you some flavour of how the four hours of hard or direct news and the other elements add up to the overall requirement, which is 12 hours.
391 COMMISSIONER SIMARD: What will be the extent of programming targeted to the regions of Hamilton and St. Catharines which are located within your secondary control service areas?
392 MR. KIRK: I think, first of all, this will be a station that’s focused on the communities of Grimsby and Beamsville but, you know, they are in Hamilton and St. Catharines’ CMAs, so you could say all of it.
393 But specifically, the station will be targeting very, very tightly the communities of Grimsby and Beamsville. They have to be. That’s where the signal really operates, and it would be virtually fully targeted at Grimsby and Beamsville in the manner that we have developed for the station in Caledonia. It will have a very similar model, because we’ve found in the same sort of market, it’s a similar kind of size. It has competition from everywhere, all sorts of signals from Hamilton, Toronto, Niagara, London, Kitchener get in there and you have to differentiate yourself. And to make it work on Main Street, you have to talk to Main Street, and that’s what we do.
394 COMMISSIONER SIMARD: Is the intent to use -- to have access to these markets for the advertising?
395 MR. KIRK: The primary market for advertising will be the communities. As we said, there isn’t a very big reach. It won’t have a very large impact in either Hamilton or St. Catharines. In fact, the usable signal falls short of the major population centres, meaning where the people live in Hamilton and the people live in Niagara, primarily in that St. Catharines/Niagara Falls area.
396 So, you know, I think it’s it in our best interest, to make the business work, that we talk to those communities, and the model that you see working in Caledonia is what we’re going to apply in Grimsby/Beamsville, although, you know, it is part of Hamilton and part of St. Catharines. We will be looking at the communities first and we won’t have much of an impact at all in the greater Hamilton or the Greater Niagara scene.
397 Do you want to add anything to that?
398 COMMISSIONER SIMARD: So in your presentation you explained or you referred to a studio that would be located -- actually, the broadcast will be done from a storefront location in Grimsby. Is it right to say how the programming will be located in this place?
399 MR. KIRK: The programming of the radio station will all originate from the studio in Grimsby. You have to understand part of it will be live, generated from that studio location. Part of our key point here is that we cannot -- with the revenue potential of this market, we cannot have a staff of 12 or 14 or 24 as others have talked about. It is our firm view that that will not work. It’s just not big enough to support that.
400 So what we’ll have is what counts, live-originated programming, and then rely on other Durham Radio resources that can do voice track shows in other parts of the day, but it will all be through the studio in Grimsby.
401 COMMISSIONER SIMARD: And what will be the proportion of the programming done in this -- at this place? So you said that you will be relying on, you know, the programming done elsewhere, I mean, in your other, I guess, studios?
402 MR. KIRK: Yes. Well, the programming staff count is three for this station.
403 COMMISSIONER SIMARD: Yes.
404 MR. KIRK: And the news and morning anchor will do about a four-hour morning run on weekdays, and then on the weekends we have an anchor that does a live show on the weekend, key points morning into afternoon of the weekends. Those people will also do what we call voice tracking in other periods, and that swing announcer may do live shifts during the week in other time periods.
405 So overall you could think about it as 20 hours for the morning team live, about another 25 hours by the swing person live, and then the rest would rely on either voice tracks by the in-market staff or voice tracking from other staff in the Durham Radio -- the other Durham Radio stations, which would supplement the in-market staff of this station.
406 COMMISSIONER SIMARD: But all the news will be produced from this location, right?
407 MR. KIRK: All the news would originate -- well, would be originated out of that. Some of that would be supplied by Durham Radio News from other markets. The morning news, of course, would be ---
408 COMMISSIONER SIMARD: Yes.
409 MR. KIRK: --- generated in the market.
410 COMMISSIONER SIMARD: Okay. Thank you.
411 MR. KIRK: Is that good?
412 COMMISSIONER SIMARD: Yes. So maybe for more clarification, could you elaborate on the process of gathering news and local information? That was my question. I was not precise enough, but that’s what I had on my mind. For example, could you explain whether the full-time journalists referred to in your supplementary brief would work exclusively for the news station?
413 MR. KIRK: Yes. Steve and Holly would love to answer that question, so I’ll turn it over to them.
414 COMMISSIONER SIMARD: Good.
415 MR. KIRK: These are models we use at all our radio stations. We obviously started in one place and grew from there. With today's technology, with today's staff, the right staff who understand what has to be done, we do this in all our markets. Local news generation is done in the market.
416 Now, based on the revenue projections we have and the obvious realities of how much you can buy with so much money, in terms of staff, we find ways to make it work in secondary high-listing times where we know we need to be on the air. And we have a team that talks, communicates electronically, gadgets and gizmos and audio and things going back and forth, where we can take the news of the day and still deliver it and still work on them and build on them throughout the day because we already do, we already have the contacts.
417 So, yes, it's generated in-market. It's done in Haldimand in-market, Hamilton in-market, Oshawa, Toronto in-market, and the same thing would happen here. It would be done in-market and then shared with the team.
419 MS. KASSAY: If I could just describe my day a little bit for you.
420 I come in in the morning and my news director has already been there; she starts earlier than me. And -- I'm sorry. Yes, I'm in Oshawa.
421 So she's already talked to the Caledonia morning newsperson and to the Hamilton morning newsperson. They've already talked about what the big stories are that day. They've been through the council agenda. What's coming up this week; what are the stories today?
422 Kate, my news director, turns around and tells the room of us. We all have a meeting. We all get assignments. Yvonne may be following up a story in Caledonia, but she's got another one on the go as well. That gets put on to my plate. There are 10 of us there, and we cover all the markets. Because we -- we're organized. We already do this.
423 And so by the afternoon, when the afternoon run comes around, I've got all my local stories for each market and I can go on and I can record Caledonia, and in four minutes it's over there before the top of the hour. I do the same for Hamilton, and I'm live in Oshawa.
424 So to do it again for -- I could do a report from Grimsby/Beamsville today. Like, it's -- we've already got the contacts. We are already on the Niagara Police release, we're on the Hamilton Police release, and that pretty much covers the Grimsby/Beamsville area. So we're already talking about that.
425 We talked about the drowning that happened last week, you know, the Grimsby man, and they couldn't find him for two days. But we covered that; for two days we followed that.
426 Am I missing anything? I'm sorry.
427 COMMISSIONER SIMARD: I'm curious to know, is it -- would it be one fulltime journalist, or -- like, for this market or communities?
428 MS. KASSAY: Right. We would get an Yvonne ---
429 MR. KASSAY: Yes.
430 MS. KASSAY: We would get an Yvonne or a Kathy in Grimsby/Beamsville.
431 COMMISSIONER SIMARD: Right. Fulltime?
432 MS. KASSAY: She -- fulltime, absolutely. She would do the morning run, but the morning run is four hours. The rest of the time, she’s out generating leads, generating stories, calling the Health Department to find out that the flu shot is two weeks late for that community, because that did happen. So that's what they're finding out.
433 And they're sharing that information, again, with Burli. It's a newsroom. We're all connected electronically. We have Report It, which is just an app on our phone. If Kathy's at a council meeting, she just interviews the councillor, it comes to me. I cut up the story; I'm with it for the afternoon.
434 We've got a lot of people in the newsroom, and when we have such an organization that there is clear direction and we all know what we're supposed to do, but we all know what's going on. That's the way we cover the market. And, yes, that fulltime person would be working eight hours and probably a little bit more because we all do in news because you're there because you love it. Yeah.
435 MR. KIRK: I think to answer your question; it's one fulltime newsperson in the community and 10 news people covering the community.
436 MS. KASSAY: Oh, that's much better.
437 COMMISSIONER SIMARD: I mentioned earlier that there were five questions. There are actually nine for this topic of local programming.
438 MR. KIRK: You miscounted or lied, I'm not sure. It's okay.
439 COMMISSIONER SIMARD: Just for the record, because I think you have already answered this question, but could you explain how the news programming for the news station would be different from the news programming broadcast on CHKX-FM?
440 MR. KIRK: A local focus. The live in-market originating relevant stories to the market. It may be originated there but finished in the DRI news function, but it would be relevant to that market.
441 So it would have local relevance versus we're not going to take the CHKX run and just run it on this station because it wouldn't -- they could already hear that on the other station. It would be tailored specifically to those communities.
442 MR. KASSAY: Indeed, we do the same thing now. They are not the same. These people work hard all afternoon because there are distinct casts for each market based on the market. Why? If we don't do that, we're not going to win long term. We've been doing this a long time. We know.
443 And we have a bottom-line core, it's called value, and if we don't provide value, if any business doesn't provide value, your sales are at risk. Your relevance is at risk.
444 MR. FORSYTH: It's interesting that you should ask about CHKX relative to Beamsville and Grimsby because in the research that we carried out, and we've seen this in Numeris data as well, CHKX does immensely well in those two areas right now.
445 And we like to think that -- and to that point, CHKX, of course, is a country music radio station, and while country music is very, very popular, certainly south of the border, it has some difficulties in Canada as a radio format. There are areas, pockets, where it's successful. It's been successful in Hamilton; it's been successful in Oshawa, but the point would be it's not what one might call a very broad format.
446 Yet despite all that, the radio station ends up being number -- it was the number one favourite radio station in the research we did. And the reason for that, I think, is, as everybody keeps saying in the radio business, it's not necessarily the records, it's what goes on between the records.
447 So I think, you know, it just shows the capability that the DRI has to understand that local is the most important thing you can do, and tailoring it to that market is important.
448 COMMISSIONER SIMARD: Well, we'll get a bit more specific with the two next questions.
449 So how will you ensure that programming broadcasts on your station will include, on a regular basis each broadcast day, coverage of local news -- we have already talked about that but more specifically also sports and events that is of direct and particular relevance to Grimsby and Beamsville?
450 MR. KIRK: I think you've heard the broad picture and how we do it. I will let Steve and Andrew, who have the matrix of how all these casts are done, so over to Andrew.
451 MR. FORSYTH: I'm sitting with the matrix, and Steve's trying to figure out what it is. It's my matrix, and he doesn't have his glasses on.
452 But, quite literally, there is a matrix where each hour is plotted out. These are allocated in the program wheel, if you like. And like everything else, these are minimums. These are minimums. There's going to be a minimum of X-number of newscasts at X-amount of time. Where's there's a necessity to go longer, it's going to go longer.
453 As Peter spoke about on the community events, you know, I'm -- if I just gave you a set of numbers, it wouldn't really say very much. But you know, if we look at, you know, the news is 27 percent in spoken word, surveillance -- general surveillance is 35 percent, sports is about 6 percent, 6 to 7 percent, and the features, which would be the community events, et cetera, are about 30 percent. But they're all plotted out and they're all there. So there's an allocation that these have to happen.
454 And I think, as Doug and Steve have already noted, you know, these are things that will have to be focused on the community anyway because it's the only area that the signal is going to cover. So there's a matrix there, there's a plan, and then it's up to people like Peter, et cetera, et cetera, to fill that.
455 But as I was going to say, Peter will tell you that sometimes the bits are 25 seconds, sometimes they're 70 seconds. It's all going to depend on just how important and how animated the information is.
456 MR. KIRK: And all these elements are in the program log as you're running it, real time. So they're all dropped in. And if it's a live show or it may be a voice track show, those elements still appear. That’s how they’re worked out here. We get a bit mathematical and detailed sometimes in the programming area. But you want all these commitments to be made and made on a consistent, reliable, and recurring basis. So that’s how it’s all worked out.
457 MR. KASSAY: Yes.
458 MR. KIRK: So when you see the ongoing program log it’s got all those all mitts in and they’re addressed.
459 MR. KASSAY: And when it’s time for news it’s time for news, not time for half the news at the bottom of the hour. I mean, people wake up at any time. We commit to the things that we program, yes.
460 MR. KIRK: And, ultimately, if there is a big event, for example, in Grimsby, if the fire happens, you know, you’d be on that story and as needed any large event like that -- and I can think of in the history of DRI some big events like, you know, the Ontario power failure. Now, that’s a story of 13 years ago. But it’s something where you drop everything and you go live. It just runs because you are the conduit to your community and that’s the only way they can get it. Radio still has that power.
461 So despite all the scheduled news, if there is an overwhelming event of local importance you drop the music and just go direct.
462 COMMISSIONER SIMARD: While you have the numbers in front of you, I had the same question for weather and traffic. So I don’t know if you have the numbers for that.
463 MR. FORSYTH: Actually, the weather and traffic is under the surveillance number that I gave you, which was 35 percent.
464 COMMISSIONER SIMARD: And the last question, for local programming, what are you plans related to serving the communities within your secondary contour, such as St. Catharines and Hamilton regions?
465 MR. KIRK: In the specific plans for this station, not much. We don’t have effective coverage of the major population of much of Hamilton or St. Catharines. It will be ineffective.
466 If there is something obviously going on in Hamilton that had relevance to Grimsby, news, whatever, you know, we talk about that, other major events, but we’re not -- there will be no targeting of this station to Hamilton, it’ll be Grimsby and Beamsville first.
467 MR. KASSAY: But, of course, we operate in the Hamilton CMA, which includes Grimsby, as Holly’s described, and Peter’s described. We like to think we’re well aware of what’s going on. We have that ability because we’re already in Hamilton. But, as Doug says, the signal coverage is so small, can’t go much further than the two communities.
468 COMMISSIONER SIMARD: Thank you.
469 The next series of questions refer to the Canadian content, and the objective is to clarify the details of Durham’s proposed condition of licence pertaining to the broadcasts of music selections from content category two, so the popular music.
470 In broadcasting decision 2016-400 the Commission approved an application by Durham to amend the broadcasting licence for its CKJN-FM radio by adding a condition of licence similar to the one Durham is proposing in its current application.
471 However, contrary to Durham’s current proposal, the conditions of licence approved for CKJN-FM included that the licensee shall specify on the music list it provides to the Commission the year of release for all musical selections broadcast.
472 So the only question I have in this category is could you comment on the possibility that the Commission, if it grants the proposed condition of licence, would include that provision in the condition of licence? So, in other words, it would clarify the year of release for all musical selections broadcast?
473 MR. KIRK: The decision 400 it had the old call letters on it. That was CKJN. That’s now CHTG.
474 COMMISSIONER SIMARD: Oh, yeah.
475 MR. KIRK: That’s The Grand that we’ve -- we changed the call letters when we acquired the station and relaunched it. So, just to clarify, that is The Grand.
476 COMMISSIONER SIMARD: Thank you.
477 MR. KIRK: And it is supporting the 60’s, 70’s and 80’s -- some 80’s, adhering to the pre-’81 condition. And as part of that we have to manage that so you know we’re only playing less than 10 percent of music that’s older than ’81.
478 COMMISSIONER SIMARD: Yes.
479 MR. KIRK: And we do that already for that station. And I know Steve’s just raring to add to this answer. But we would do that -- we have it, we know how to do it, and that would be applied to this station as well.
480 So would we take that as a requirement to identify music by year; absolutely right.
481 COMMISSIONER SIMARD: Good. Thank you.
482 The next questions refer to the CCD contributions. There are two questions. The first one, could you confirm that at least 20 percent would be allocated to factor all music actions?
483 MR. KIRK: The answer is yes. The station, as forecast here, is below threshold, so there’s no base CCD required. So the commitments that we’ve made, the 50,000 over seven years term of the licence, is all over and above, and of course 20 percent of it would go to factor. So the answer is -- quick answer is yes.
484 COMMISSIONER SIMARD: Yes. And to factor, not music exempt?
485 MR. KIRK: Yes.
486 COMMISSIONER SIMARD: And could you confirm that Durham proposes that these commitments be imposed by way of condition of licence?
487 MR. KIRK: Yes, we’d accept that.
488 COMMISSIONER SIMARD: Next questions refer to synergies. So they are very similar to what we discussed earlier this morning ---
489 MR. KIRK: Yes.
490 COMMISSIONER SIMARD: --- with the other applicant. And the objective of the questions is to better understand the synergies Durham will be reliant upon with its existing station CHKX-FM Hamilton, and the extent to which they would allow Durham to best serve the local communities in Grimsby and Beamsville.
491 Would you like -- we would like to get more information on the synergies that you have projected for the new station. So, in particular, to what extent would the station’s programming rely on synergies? And after that we will, I guess, get into the details.
492 MR. KIRK: Very -- a good question, and key to this proposal, because we -- this is designed. People have said “Oh, is it another Hamilton station” well, yes, it’s in the Hamilton and St. Catharines market so it’s another Hamilton station. It will rely for its viability on having a big hand from CHKX in the market.
493 The programming, we’ve talked about the programming budget and the staff doing the live programming and news obviously will be dedicated to the station, but a lot of the other things -- I’ll let Steve talk in a minute about the synergies among adding those other hours of programming. The news, you understand how it works, there’s local plus news supplementation from the DRI news service or operation.
494 We were thinking about this as we were designing the financial forecast, and keeping in mind that its modest revenue, we have some specified in-market synergies. We identified $137,000 a year initially as the only way the proposal would work, and that would be approximately $12,000 a year for engineering services, because it’s technical engineering, keep the station on the air, which would be supplied by CHKX; $15,000 in allocation for commercial traffic management, where the traffic manager in Hamilton could run the traffic logs for The Lake, and that would be a portion of her salary; approximately 35,000 for creative and production services. This is producing the commercials and other programming elements, which would be done substantially at CHKX. And, in fact, this model is in place now with Caledonia, where we share the production suite -- there’s a small production suite at CHTG, the Grand, in Caledonia, but the bulk of the production work is done at CHKX, because it’s a bigger operation and we’ve staffed it appropriately to help that.
495 Fifty-thousand dollar ($50,000), rough valuation, for sales management. We don’t have to have a sales manager in the market. Wally is right here; he’s a short drive to the station. And this is the same model that works -- Wally oversees what is going on in Caledonia from the Hamilton station. He can also oversee what’s going on in Grimsby the same way.
496 And another $25,000 for programming, direction, consulting, management, so the kind of work that Steve and Andrew do that is supported by the station. So just in those elements there are $137,000 annually at the get go that would be supplied by the in-market.
497 The other elements in -- and a very important element, when you look at other applicants’ projections, are the cost of sales. We already have 10 salespeople in the market.
498 Wally, you might want to comment on that in a minute.
499 But we already have a sales team in the market. We’re not starting from scratch, having to get people to walk the block. We already have people that are in there. We already have, as we mentioned in the presentation, I believe we have about $80,000 of revenue now generated out of the communities of Grimsby and Beamsville on CHKX. These are people like Grimsby Ford, Grimsby Kia; there are some wineries in Beamsville that we work with, other music venues that we work with.
500 MR. SOLLOWS: Yeah, different events, yeah.
501 MR. KIRK: Yeah.
502 MR. SOLLOWS: Yeah, some of the events down there, Prudhomme’s Landing and whatnot, we do with them and with the -- their wine -- or apple festival, I guess it is.
503 MR. KIRK: Yeah.
504 MR. SOLLOWS: Apple wine festival. Yeah, so we have reps that are down there anyway and one rep that lives in Beamsville, in fact. We will add one more rep at least to work out of Grimsby/Beamsville. But I think at the first year -- at the first year, things are going to, you know, we’re going to lose a lot of money. There’s no question, the first year.
505 But down the road, you know, because we have to start slowly and build it up and get some -- we have to get some audience first and foremost, because it doesn’t just magically happen, as I found out when we turned KX over from the Wave.
506 In fact, a quick story on that, I went back to some clients that I knew from Corus, when they were a country station, and I immediately went after them and sold one a $55,000 long-term plan -- which would have been the biggest client that year, had he not realized after the first 13 weeks that nothing was happening because we had no critical mass in audience yet. It takes time to get that audience because you have to take it from somewhere else.
507 And in Hamilton, for example, there’s 17.1 percent of the tuning is from out-of-market tuning. So you’ve got to look at all this, too. So yeah, we work the market now and we’ll -- we’ll add one more body down here, too.
508 MR. KIRK: And the key thing here is that you already have that sales coverage; it’s already in place, people are working the market. And to bring the other station in, it’s a method we used in Caledonia as well, where you’ve got two -- you’ve got two objectives, really; it’s to work the local market and super-serve the smaller community clients that won’t be big spenders, but, also, spread some of the other major clients that you have on CHKX, for example, and get them to use the Caledonia station and then the Grimsby station as well, to bring them in the door.
509 That’s the way you will actually get more revenue, because you’re bringing -- you’re adding something on to something they’re already using, not saying, “Use this little station to do the job for the market.” It won’t happen.
510 Andrew would like to supplement that.
511 MR. FORSYTH: I was just going to use the example of an even that the Grand did over the summer. Again, going back to the music, it’s an interesting comparison of the music and how the music works relative to how you can sell the radio station based on the music. And what the radio station did was it celebrated 1967; here we are, it’s 50 years later, Summer of Love. So, they did Summer of Love music all summer long.
512 But they built that as a package, there was a contest, people had an opportunity to go to San Francisco and all sorts of wonderful things like that. But the package was built specifically for the local advertisers. This wasn’t necessarily for the big car dealer in Hamilton or that. But you could hear throughout the summer all of these small, local advertisers who probably wouldn’t necessarily be involved with something that big, but it was affordable, it was neat, and it gave them a lot of presence.
513 So that’s how that aspect of it works. But, you know, as Wally says, it takes time to develop those products and those ideas.
514 MR. KIRK: So just to sum up on the question, you heard about those specific synergies that we talked about. The broader synergies would be having the sales team in place and doing that coverage, and by spreading out our 10 -- the 10 salespeople in Hamilton now, you’re getting, effectively, the equivalent of a couple of fulltime salespeople working the market.
515 Within that, they’re covering the market already, so it probably is saving you an additional, roughly, $100,000, you know, if you have two in-market salespeople that you’ve got to pay and make a living, and they’re getting nothing; they’re getting nothing in terms of revenue when you start. It’s pretty hard to start. You’re already getting that effort in and it’s already paid for by having it attached to the other station.
516 So when you add all that together we’re, you know, somewhat over 225, $250,000 of value by having CHKX in the market attached to 88.5 The Lake. And as you’ve heard from us -- if I say it too many times tell me to stop, but that’s the reason this is going to work. It’s not going to work if it’s a standalone.
517 COMMISSIONER SIMARD: Last question in this section. I think you have already answered it or like -- yeah, I would say. But, again, just for the record, how many dedicated staff -- or it’s more specific. So how many dedicated staff would be working exclusively for the new station? But if it’s possible to have the details about the, you know, how many fulltime staff, on-air staff, news reporters, sales position, management positions. I don’t know if you have all these numbers.
518 MR. KIRK: Yeah, yeah. We worked it out and we put it in the presentation. Six; six people full time to The Lake; the three on-air staff that we talked about, morning host, news, and weekend -- weekends and evenings. Two salespeople working for Wally, and an administrative function to be the front at the office, an admin sales assistant, do a bit of everything; sweep the floor maybe, receptionist. But, you know, an overall face of the station; someone who is in the building and in the storefront during business hours.
519 MR. KASSAY: For instance, what we did at CHTG, formerly CJKL -- CKJN, when we needed -- we had the same needs in Caledonia and Haldimand County. And one of the needs, after hiring -- and by the way, our staff count keeps going up. Pretty proud about that. But then we need certain people to do the job properly and you need the right person at that, who’s engaged and understands the job.
520 When we opened CHTG last year, Jen’s spot needed someone in the building to handle some admin. You’ve got -- the door was locked before we bought it. The door needs to be open all day. People need to come in. People want to come in. Fans want to come in, especially for one of our eclectic on-air people; we get a lot of people coming by to see Rockin’ Ray. But, seriously, you need someone in the office. Phones need to be answered, clients are coming in; we want them to have a relationship with us.
521 So what we did was we moved one of our creative writers, actually, upon agreement -- actually she turned me down and then changed her mind. Moved a creative writer from Hamilton to CHTG. It was half an hour down the road, another market, she even moved. It was great. But that’s an example of her job was -- you know, didn’t need to be geographically located under one roof -- because we have more than one writer, for starters, more than one producer at all locations.
522 So she actually does a creative job where she doesn’t have to see anyone out of CHTG, and yet still handles all the administrative and reception duties and facilitates clients coming in to record commercials that will get sent down the line to get produced.
523 So there are lots of creative solutions if you take a moment and actually analyze your assets and see how they can be properly deployed.
524 MR. KIRK: So to answer -- completely answer, full-time, six at the station, but as you can see, probably another three or four equivalents by functions supplied by other stations, meaning part effort -- another equivalent sales staff of two to supplement the two that are there, given their coverage in the market and, of course, engineering and other production and so on.
525 COMMISSIONER SIMARD: So the six people, I have three on-air staff ---
526 MR. KIRK: Yes.
527 COMMISSIONER SIMARD: --- two sales positions?
528 MR. KIRK: Yes.
529 COMMISSIONER SIMARD: Which is the other one?
530 MR. KIRK: Administration.
531 COMMISSIONER SIMARD: Yes. Good.
532 Now, the last series of questions is about your business plan, and the objective is to clarify your business plan for the proposed service and the potential impact that licensing a new station would have on the surrounding markets.
533 There are eight questions. The first one, could you discuss the extent of your radio experience and how it would help you establish the proposed service? I know that you have already talked about it during your presentation, so maybe just a quick summary?
534 MR. KIRK: M’hm. By the way, we’re enjoying this, so we don’t mind that there are eight questions more.
535 How would we set the station up? Well, it would follow the kind of procedure we went through with setting up CHTG, which is down the road in a separate market called Haldimand County, but it does have similarities operationally. First of all, you know, you’ve got to make sure that your technical and everything else is up to our standard. We had a lot of work to do to rehabilitate the station that we acquired a year ago, but we got that done and simultaneously, a new programming crew came in. You’ve got to get started.
536 First of all, this business, if you don’t have good programming, if you don’t have something that’s appealing, you don’t have anything. So our philosophy has always been, “Steve, go out there and get the listeners.” “Then, Wally, we can sell it.” So that’s how it works. So that’s how it would start. We’d have to have a very well developed programming system put in place, on-air talent, you know, the key people that you need, plus how the other hours are going to be filled. And you start that and market it like crazy. That’s how you start.
537 And we did that with CHTG, you know, billboards in the market. We used some TV advertising in the market and really went at it locally, put a lot of effort into it. So that’s how you get the station started.
538 Now, what other detail did you want?
539 COMMISSIONER SIMARD: It was more a question about your radio experience.
540 MR. KIRK: Oh yeah. Okay. Well, I mean, that’s the way we did the last one.
541 COMMISSIONER SIMARD: Yes.
542 MR. KIRK: Durham Radio has been in operation for 23 years. We started at -- if you don’t mind the boring history, we started it by buying an AM station in Ajax, Ontario in 1994 from Golden West Broadcasting, who you probably know. And we relaunched that as an FM. We were fortunate enough to get the purchase of an AM and a conversation back to back wrapped together. At the time, it was what was needed. So we relaunched the station, which is now CJKX FM. So that started on November 1st, 1994. Steve was there. Holly was there. Andrew was there. And we’ve just built it like that, each one added on.
543 You have to go in there and find out what the market needs, build it well technically and continue to add on. We were fortunate enough to get the two stations in Oshawa in 2003, so we put all those stations in the east end of the GTA together under one roof, and it worked. It’s worked very well for us.
544 We’re 17 years in Hamilton. That started from a new licence, and we’re just over a year in Caledonia. So we’ve had various startups from converting AM stations, rebuilding them, to just taking over and improving stations, to starting off from new licences, and the last one was an acquisition and rebuilding station. So over 23 years, I think we’ve looked at a few different files and managed to get them all to work together pretty well.
545 MR. KASSAY: Experience has taught us a few things. It’s nothing bad here. Experience has taught us a few things, and we’re sort of built this way anyway. Experience has taught us that you need the technical support. You need the proper gear and equipment and proper experienced people to take care of it for you so it runs at a high efficient level.
546 You cannot do that and spend a lot of money and time trying to be consistent or you can invest in your assets, your hardware and the gear and the people that understand it can help you make it grow. So this is what we’ve done on the technical level with equipment and buildings, and that’s -- when Doug said we had to rehabilitate, that was a great way of describing it, frankly.
547 Same with our IT services. You know, 20 years ago, radio was not involved in publishing anything in text. It’s vital now that we do this type of thing, and they teach us along the way, believe me.
548 So you asked about our experience. Yes, 17 years in the Hamilton market I think says a lot right there.
549 MR. KIRK: And it is among the top-ranked stations in Hamilton consistently over the past three years and as I said, it’s the number two billing station in the market.
550 I just want to conclude with two things. You have to have perseverance in this business, and I would define that as time and money. When we -- if I can go back in history, when we started CJKX off converting an AM to FM, we had the experience of -- it was a great lesson for me. You went in and thought revenues were going to be X because you knew your costs were Y. And you’d say, “Well, okay, how did the first year go?” Well, the revenue was about lower than X and about 40 percent of what Y was. So it was a huge loss the first year. We were talking in the day about a million. So we had 400,000 in revenue and a million of expenses that first year.
551 And the good thing is, the second year, we actually had 600,000-some of revenue and a million of expenses, and then it was 900,00 of revenue and a million of expenses, and then it floated. By the fourth year, it was making some, as you call it, operating income, or as we call it EBITDA, earnings before interest, taxes and depreciation.
552 So it took that length of time. You have to have the money and continue to say, “Well, are we doing the right things? Is this thing actually going to work?” We were encouraged because the audience was coming on. We were starting to build, rebuild a market that had been basically diminished over years from bad radio. So you get in there, and as long as you’re building, getting more audience and having success, having success with clients, saying “You use the radio...” -- and I remember the first year we said, “Do you want to do remote on this radio station? We’ll guaranty it. If it doesn’t work for you, we won’t charge you for it.” Well, we didn’t have any no-charges because they all started to work for us. And then you build it.
553 Now, for 23 years, that radio station, CJKX, has never stopped growing every year. We just finished our numbers. We sent them in to you a couple of weeks ago for the fiscal ’17, and it was its best year and most profitable year ever. But that first year, you had some doubters in the room when our expenses were 60 percent larger than our sales. So that’s what you have to do in terms of experience. So I think we’ve got that track record and we’ve demonstrated that to you.
554 MR. KASSAY: The experience again, we love to do this; we love it more when it’s going well. I think that’s safe to say.
555 But we’ve learned a lot along the way. This business is changing. Radio means different things to different people. It’s -- I’d like to talk about the fact that we’ve expanded on digital terms. We offer digital products. We’re at the edge of what’s new tomorrow with digital products. We are now selling digital space. This has been a big shift for a lot of people over the last 10 years. It was not in radio before.
556 We have an alternate stream available on HD. It’s not a repeater of a terrestrial over-the-air signal.
557 We have developed durhamradionews.com, which was, like I said, why don’t we put this on the web. Next thing you know we have a sales vehicle; we have a touchpoint with listeners. They can now comment, and they comment back. I hop on just to look at stories and I read the comments. People don’t generally phone you to tell you you’re doing a terrific job but, you know -- and yourselves included, what’s the feedback from your audience, but if you set up a conduit all of a sudden you notice a traffic going back and forth and it changes who you are, it changes your perception of things, points it towards reality, and you can build off that and grow further.
558 So -- and a lot of people we have, have been with us for a while. I don’t know what it is. But they’re not going anywhere. And that works in our favour because ---
559 MR. KIRK: I pay them too much.
560 MR. KASSAY: They grow with the company. They learn about the company. They understand the initiatives and they buy in and -- I mean, we love to be surrounded by those people because that can be half the battle, and it’s not, it’s half the solution. And we are growing, and our experiences deepening, and it works to our advantage.
561 MR. KIRK: In terms of our -- Steve referred to durhamradionews, and several years ago when we started this site it was a bit of an afterthought, well, we’ve got all these stories we’re doing on the air and there is this thing called the web and so why don’t we just post them all so people in the local market can see the stories and maybe have a little more depth then you get in the five minute or three minute newscasts. So this kind of afterthought has now become a big focus of the whole Durham news operation.
562 What was our number of uniques?
563 MR. KASSAY: Well, almost half a million impressions last month, over 340,000 visitors. This is in a population area of ---
564 MR. KIRK: Seven hundred ---
565 MR. KASSAY: Six to seven hundred, and unique visitors 185,000. This more than -- this is our highest ranking online property. Why? Because there’s general interest. What are the stories that make people tune in? What were the ones you were following a couple months ago or a few months ago that had incredible traffic? It wasn’t Justin, and it wasn’t -- Justin Bieber or Trudeau.
566 MS. KASSAY: No, it was a rash of carjacking’s in Ajax/Pickering, like the amount of hits that we got on that. We take a lot of pride in our web and we’re just amazed every month, our numbers get higher and higher.
567 MR. KASSAY: And some break-ins.
568 MS. KASSAY: But it’s local, and of course breaking news, but ---
569 MR. KASSAY: It’s local.
570 MS. KASSAY: Our local stories.
571 And then also I know there’s no difference between good news and bad news, but we do some great feel-good stories and we’re able, through our website, to have them link up to the GoFundMe page for the family that down the street lost their house in a fire. And, you know, we’re able to really complete the community connection through our website. So it feels really good.
572 MR. KIRK: It stuns me every month I look at the numbers that Steve said. You know, we started this and thought well we might get a few hundred or a few thousand people supplementary to the news operation and, you know, 185,000 unique visitors from a little radio station website a few years ago, it’s huge, and half a million interactions with the site.
573 And Steve and Holly will tell you, if there is a hot story -- I mean, there’s no daily newspaper out in Durham Region, and they’re closing the weeklies, as you saw yesterday, another 40 fell by the wayside, so the print element is pretty ineffective for a news communication. And I think maybe just by luck or, you know, backing into the right spot, this thing has become the local go-to place for breaking news in Durham Region, and we support it by having three radio stations point people towards it, and that’s why it continues to grow.
574 And if you get a hot story, like Holly was saying, the traffic on the site just goes crazy. It goes right over the top.
575 MR. KASSAY: So these successes are what we use and apply to the places where we don’t have them at this substantive level. We learn from them, and it’s the model we, you know, intend to apply here. They’re currently in process at CHTG and at CHKX to do even better than number two in the market. It’s about growth and it’s about radios changing face and how much value you supply to your customers, which are the residents. If they don’t react -- if they don’t buy you’re not doing business, as I said before.
576 COMMISSIONER SIMARD: Thank you.
577 Since you filed your application, have you observed any changes in the short to medium term economic outlook for the market that would impact your financial projections or other aspects of your application?
578 MR. KIRK: No. I think the economy generally in Southern Ontario is growing modestly, which is good, better than it’s been maybe from three or four years ago, and I think conditions are still pretty good in that whole Hamilton/St. Catharines/Niagara Region.
579 COMMISSIONER SIMARD: Good.
580 MR. KIRK: So no major changes. I know you probably appreciate a short answer.
581 COMMISSIONER SIMARD: Thank you.
582 You projected spending significantly less on programming than the other applicants. Could you explain whether this would result in an inferior quality of programming prepared to the other proposals?
583 MR. KIRK: I think we’ve visited that in multiple ways in the last few minutes.
584 COMMISSIONER SIMARD: Yeah.
585 MR. KIRK: I think you understand why, because it’s three specific but supplemented by lots of other programming, and quite frankly we believe our programming for this proposed station will be at the mark or higher than the competitive.
586 COMMISSIONER SIMARD: Thank you.
587 At this point I’m not sure that we have covered this question, so again for greater certainty, to be sure that it’s on the record, could you discuss how your proposal would be effected should the Commission impose a condition of licence prohibiting the solicitation of advertising in the City of Hamilton as identified by Statistics Canada as proposed by Corus?
588 MR. KIRK: I read the Corus and we responded -- so our response is on the record -- to that intervention. It was kind of confusing because they were saying the Hamilton market, which includes Grimsby, and then it sort of evolved to the City of Hamilton, which is smaller than the CMA. So effectively they’re saying you’d only be able to accept advertising in the Town of Grimsby, that portion of the Grimsby/Beamsville aggregation.
589 Quite frankly, in terms of advertising risk, I don’t know why a major broadcaster like that would be the slightest bit worried about this. As we said, it’s only covering three percent of the CMA, this signal. Grimsby is about three percent of the Greater Hamilton CMA, and it will have, in our view, none or just inconsequential effects on the Hamilton commercial radio stations.
590 So we think the whole debate about having conditions of licence, for one, being restricted, you know, to just Grimsby is ludicrous. So we’ve said on record that we would not accept a condition of licence that limits the station.
591 I think the other applicant was saying, you know, maybe there’s a reciprocal arrangement. Well, that’s silly too because Corus hasn’t applied for anything and you can’t put a condition of licence on something out of the blue. They would have to be in a process. So I don’t think that strategy works.
592 I think in this case the radio industry works best when clients can pick the radio stations that work for their business best, and if there’s a client in Hamilton that wants to reach the Grimsby/Beamsville community and they feel that they should be advertising on the Grimsby/Beamsville radio station because it’s focused more on the community than any of the other radio stations, they should sure well be able to use whatever they want.
593 And the point as well on the backside is the risk. I can’t even conceive why Corus would be worried about such a small element. They’ve got three stations in Hamilton. They’ve got the biggest FM station in Southern Ontario with 95.3 in Hamilton. They’ve got a Heritage AM news talk station and a rock station. Why would you even think about being worried about this small add-on in the Hamilton market?
594 So to sum it up, we don’t think there should be any COL with respect to solicitation. The market is going to work best without them. It will give the station the ability to take advertising out from outside of Grimsby that could use the station well and, you know, let the market decide what the best situation is. But putting artificial fences around these things is just terrible.
595 And you know that this station is going to have a tough time to start with. It’s got a very, very small market. So restricting it to a tiny little square, that it could only operate in that, to me, it doesn’t make any sense.
596 MR. SOLLOWS: If I might just add? I’m sorry.
597 COMMISSIONER SIMARD: Yes.
598 MR. SOLLOWS: It would be kind of similar, I guess, that we have clients in Grimsby now that buy our stations and other Hamilton stations because they want to draw people from there. So the same thing could work in reverse, and it seems wrong to restrict that. That’s all.
599 COMMISSIONER SIMARD: Thank you.
600 I don’t have any further questions, so I will ask my colleagues.
601 THE CHAIRPERSON: Okay. I’ve checked with my colleagues and legal and we don’t have any additional questions, but don’t run away just yet because the hearing secretary has a few comments to make.
602 MS. ROY: Thank you, Mr. Chairman.
603 One small announcement before we go for lunch. So after lunch and after the next presentation, we will be starting Phase 2, whereby applicants appear in the same order as Phase 1 to intervene on competing applications, if they wish.
604 If you know that you are not intending to appear in this phase, please advise me at lunch. If you are unsure at this time, I will call upon you during Phase 2 and you can state your intention at that time.
605 Thank you very much.
606 THE CHAIRPERSON: Thank you, Madam Secretary.
607 It is 12:41 now, so let’s adjourn for slightly over an hour and come back at 1:45.
608 MR. KIRK: Thank you very much, Chairman and Commissioners. We enjoyed it. Thank you. We’ll see you later.
--- L’audience est suspendue à 12h42
--- L’audience est reprise à 13h46
609 MS. ROY: We will now proceed with Item 3 on the agenda, which is an application by Dufferin Communications Inc. for a broadcasting licence to operate an English-language commercial FM radio station in Grimsby/Beamsville.
610 Please introduce yourself and your colleagues, and you have 20 minutes for your presentation.
611 MS. LAURIGNANO: Thank you, Madam Secretary.
612 Good afternoon, Chair MacDonald, Commissioners Simard and Vennard.
613 My name is Carmela Laurignano. I am Vice-President and Radio Group Manager for Evanov Communications Inc. Dufferin Communications Inc, the applicant, is a wholly-owned subsidiary of ECI. I have been with the company for the last 25 years.
614 Joining me here today, to my right, is Judy Joo, in-house General Counsel. Before joining the company four years ago, Judy was an Associate at a boutique litigation firm in the heart of downtown Toronto. Judy is an active member of the legal community. She is a past executive of the Ontario Bar Association’s Entertainment, Media and Communications Law section. In her spare time, she does pro bono work for the music talent community to help those who do not readily have access to legal services.
615 To Judy’s right is Gary Gamble. Gary is Director of Operations for ECI, and the Morning Show Host for Jewel 88.5 Newmarket. Gary has been with ECI for over 18 years and in the broadcasting industry for 29 years. Gary has had stops at radio stations in Guelph and Cambridge, and in his current position, he oversees the operations for 18 ECI stations.
616 To my left is Ky Joseph. Ky is the Executive Vice-President of Sales for Evanov Communications Inc. Like me, she shares in the ownership of 4 of the company's 19 stations. She celebrated her 23rd year with the company this year.
617 To Ky’s left is Mike Rose, Music Director. Mike has logged 39 years as a broadcast professional with placements at Rawlco, Chum Group and CORUS Entertainment. He has been part of ECI for the past eight years and is currently working with us. During his career, he has been a successful announcer, and as a Music Director, has received multiple nominations for MD of the Year.
618 In the back row from your right and my left is Tracey McLeod, proposed Sales Manager for the new service. Tracey has been in Media Advertising Sales for over 20 years working with Shaw, Corus, Rogers, Toronto Star and is currently the General Manager of two radio stations for ECI. Tracey has received recognition for sales excellence, placing 1st in Innovation across Canada for all Dailies. She has been highly successful in working with all categories of clients in markets from small town to large city. Tracey understands the challenges that many independent businesses face when it comes to competing with larger box stores and larger cities nearby.
619 And beside Tracey is Debra McLaughlin of Strategic Inc.
620 Also joining us today in the audience today is Bill Evanov, our Founder and President of the ECI. Bill is an Ontario Broadcasters’ Hall of Fame inductee. 2017 marks the 50th anniversary of his broadcasting career. Among the many accolades received, he was honoured this year with a Lifetime Achievement Award at the 2017 Small Business Summit.
621 Seated with Bill is Paul Evanov, our VP of Programming.
622 Also in the audience is our Corporate Development Manager, founding father of FACTOR, Duff Roman.
623 Together, we are very proud to present our application for an English language FM radio service for Grimsby and Beamsville, GB 88.5.
624 MR. ROSE: The Adult Contemporary format we have developed for this market is one that we take a great deal of pride in. It is based on our knowledge of sound programming strategies and draws on our research within this market. It provides a market-specific listening option for residents who do not hear their needs addressed by the existing selection of stations.
625 Dufferin Communications has a reputation for creating innovative programming that serves markets both niche and large. The challenge of being a first service means you are tasked with finding a format that is sufficiently broad to provide content for the greatest number of people.
626 The AC we have designed for GB 88.5 is a modern, easy listening adult contemporary format. It combines classic sounds and new releases giving listeners a selection of familiar tracks and a window into new music. Music lovers, the people who generally spend the most time listening to radio, will tell you that there are many genres of music represented in their libraries. Young listeners will tell you that they enjoy hearing good music regardless of the year of release. Older listeners will tell you that they really enjoy the memory-evoking music of their youth, but they also want to hear new sounds. These facts suggest a format that crosses genres and pulls songs across decades.
627 On GB 88.5, it will be possible to hear a timeless song by Cold Play beside a more contemporary hit by Kelly Clarkson which is followed by a recent release of Bruno Mars and a track from Jake Robertson, a new and emerging artist from Mississauga. Music selection is based on the sound of the recording and not on a specific genre or era of music. In this way, selections from the pop category, both current and classic, folk, jazz and world music categories make it to the active playlist.
628 The format should not be confused with a classics format. In a classics format, the gold component is almost the entire playlist. New music is not a factor given the requirement to focus on the familiar. It makes for higher repetition in the playlist and more frequent switching between stations by listeners. Our version of an AC format will have an active playlist of between 900 and 1100 tracks and will be refreshed regularly with infusions of recently released songs, new and emerging artists, as well currently trending selections.
629 While we do include a broad representation of classic music, at least 20 percent of our selections are no older than five years. Critical to the enjoyment of this station by the largest number of residents is the inclusion of new music. Our core audience looks forward as well as back when it comes to their musical tastes. In addition to including these selections in our playlist, we have proposed a music feature called Spotlight. It introduces new music and new artists. Part sampling, part biography, this two-minute segment jump starts a listener’s engagement with a track or performer. Our proposed format will provide exposure to contemporary and emerging artists through both an inclusion on the playlist and the opportunity of being featured in Spotlight.
630 It is for this reason we are committing that 10 percent of our Canadian spins will be allocated to new and emerging artists and 35 percent of our spins overall will be Canadian music as defined by MAPL.
631 The overall sound of the station will be slightly softer than mainstream ACs which often draw selections from the Rock genre. It will be highly engaging, making it the ideal accompaniment in either the office or a retail environment or the perfect companion for a drive to or from home. This is the format we are proposing.
632 We believe it is perfectly suited to this market because the profile of the audience matches the distribution of the demographics of the two areas. In 2016, the enumerated population of Grimsby was 27,314, which represents a change of 7.9 percent from 2011. This compares to the provincial average of 4.6 percent and the national average of 5.0 percent.
633 Beamsville, on the other hand, is a smaller market with a population of 11,834 but with a growth rate that is even higher than Grimsby, 11.1 percent relative to 2011.
634 While both markets are growing, Grimsby is aging at a greater rate than Canada as a whole while Beamsville is aging less. Grimsby has a larger percentage of its population in retirement years than markets in the surrounding area. 19.3 percent of the population is 65 years of age or older compared to just 16.9 percent for Canada. The median age for the town is 43.6 while for Canada it is 41.2. Beamsville, on the other hand, has a much higher percentage of young families with 20 percent of the population under the age of 14 years compared to 16.6 for Canada. The median age in Beamsville is just 39.3 years.
635 Grimsby and Beamsville receive many radio signals from Hamilton and St. Catharines and even from Toronto. The format we propose is unduplicated because although some of the music we will provide is currently available off air, it cannot be found on a single station. We will blend the best of contemporary with classic music to provide a listening option that encourages longer periods of time spent tuning. New artists, more tracks and more genres make GB 88.5 a truly unique addition to the market, meeting the requirement of increasing the diversity.
636 MR. GAMBLE: An important part of the value proposition for the market is our news and information programming. We know from our consultations that Grimsby/Beamsville residents feel underrepresented in the spoken word they hear on radio. We heard repeatedly of local events and news stories which residents could neither hear in the broadcast news nor find details of online. This is the gap we are proposing to fill with the largest commitment of news of any of the applications before you. We will provide 6.25 hours of news. Over half of this will be dedicated to local news, again the highest amongst the proposals. We will provide updates from across the country and around the world in addition to this local coverage to ensure that listeners have all the information they need. Regular surveillance such as weather and traffic will be provided. Sports highlights, business reports and a community event calendar complete our formal news package.
637 To accomplish this, we will have four people in our news room gathering local stories. To provide the type of in-depth coverage we feel this market requires, we will also tap into the resources from our other stations when it makes sense to do so. If, for example, we are covering a provincial announcement in Toronto through our Toronto services we would share any original actualities with all of our stations so that listeners will hear directly from the people making the headlines. We know from our extensive research that in this day and age, where fears of fake news have become the news, that listeners value hearing from the people making the news directly. With stations in both the provincial and federal capitals, we are uniquely positioned to offer this type of synergy.
638 Much of what interests a community is not strictly found in headlines. We will also provide extensive spoken word programming covering information and events, giving residents their first experience of community reflection in the broadcast system. Our on-air announcers will be locally based and involved in community outreach meaning they will have firsthand knowledge of what is happening in the market and can share their experiences with listeners. We will invite people from the community in for interviews presenting not only the stories from the market but the voices as well. We will go out and be onsite as well as participating in what is happening in the area.
639 For example, St. Catharines is known for its Grape and Wine Festival celebrations, but there is also a growing wine industry in Grimsby/Beamsville and while all attention at the end of September is focused on the wineries to the south of Grimsby, we will focus on what is happening with the vintners in this area. We would invite them to come to speak to us live and discuss their perspective on the year’s crop and what wine they were especially excited to take to market.
640 Black Friday is another example of something that can be localized. It is common for people in this area “to go across the river”, another way locals describe going to the US. We would augment our traffic reports during this four-day period with information on wait times at border crossings. These examples are not headline-making updates, but they are reflective of what is important to residents of these areas.
641 Finally, we will create features that are of specific interest to listeners such as our Seasonal Activities reports which will cover the conditions for golfers/skiers/boaters/fishing enthusiasts as appropriate and highlight the many outdoor activities available to people living in the Niagara Peninsula. This region is a gardener’s paradise with some of the best growing conditions in Canada. It might not make a lot of sense to discuss things like expected rainfall in terms of specific amounts as part of a weather forecast in many markets, but it would in this area. In the fall, you cannot drive down many streets without seeing fruit for sale from someone’s personal orchard.
642 Understandably, matters of health are important to all age groups but the interest often increases with age or heightens when we have young children. Our Health Moment will provide insights into advances in health care and wellness while at the same time assist parents with information on pediatric advances and advice.
643 Over time, we hope to develop local experts who will contribute and put a local spin on this information piece.
644 MS. McLEOD: Our revenue model is predicated on years of experience working in small and developing markets like Grimsby/Beamsville. We are not strangers to operating in areas besieged by spill from neighbouring centres and we have developed strategies for working with advertisers to create efficient and effective advertising campaigns. Our research into Grimsby confirmed what we suspected. Stations from neighbouring St. Catharines and Hamilton have sold airtime in the market but due to the higher prices charged and the fact that the majority of the listeners to these stations were not in the trading zone for these advertisers, these businesses have not found the medium to be effective. In other words, anyone hoping to sell radio advertising in this market is going to meet resistance based on a poor return on investment from past radio buys.
645 This is not unfamiliar territory for us. We can give advertisers a package that will be effective and at a price they can afford. We can also provide them with online inventory as well as social media that fills their need for targeted digital advertising. The combination of these two streams of promotion has proven very effective in other markets and when tested with businesses in Grimsby/Beamsville was well received. In addition to placement, we have many resources to draw on when it comes to designing the creative. In smaller markets like Grimsby/Beamsville, radio stations act not only as the distribution platform for commercial content but also as the design agency for the creative. We have years of experience in creating commercials for smaller Ontario markets and a breadth of successful campaigns on which to draw. The combination of these strengths will entice advertisers to sample the station. The success they will realize will have them renew with us.
646 MS. JOSEPH: Our business plan anticipates revenues that reflect what a market the size of Grimsby/Beamsville should generate based on the number of businesses, size and growth of the population, and composition of the market. We’re not presuming revenues from other markets, but would expect that given the higher disposable income in the area, that there are advertisers from outside this area who will want to reach this group if a new radio service makes it efficient for them to do so. Tourist operations from Ontario and regions to the north and east of Grimsby/Beamsville will be interested in reaching residents. We have made preliminary inquiries on some of the national accounts we service in other smaller markets and have been assured that if this market is licensed, that we can have this new station added to the national buy. Local accounts such as Tim Hortons, McDonalds and Dairy Queen are just a few examples. But the vast majority of the revenues will be built by doing grassroots work in the market and inviting clients to benefit from having their message heard on radio. This is where our sales teams excel and why we have been able to thrive in markets much smaller than Grimsby and Beamsville.
647 Our expenses reflect the cost of creating truly local programming that meets the needs of the community, while at the same time delivering high-quality content. We expect the profitability over the seven years will not be large but we can provide something of value to this market without running at a loss or turning our attention to developing revenues from nearby radio markets.
648 MS. JOO: Our CCD contribution is appropriate for a market this size and revenues at this level. It is a sustainable level of investment that can be maintained even in the event of us falling short of revenue projections. We are proposing $35,000 over and above the required amounts. We will assign a portion of this to FACTOR but have left monies unassigned so that we can address the needs of the community as they arise. As we mentioned in our brief, there are music festivals that currently take place that would benefit from our support.
649 Our experience has shown us that there are always more asks and more opportunities for investments that arise over time. We fully understand what is required by the CRTC to be eligible as a CCD initiative and can guarantee that if licensed we will assign the investments appropriately.
650 MS. LAURIGNANO: When we triggered this call in 2014, we did so because we believed we had found the right format for two markets that were underserved and underrepresented. We believed then, and still do, that these markets will require the type of expertise that we uniquely can offer. We currently go head to head with some of the biggest broadcasters in Canada in markets that operate in the shadow of major urban areas. We create compelling local programming, make meaningful investments in CCD, and give communities a voice in the broadcast system.
651 We are able to develop revenues and create operating efficiencies that support local service. We can sustain a station while it grows toward profitability without compromising what listeners hear or the breadth of our local coverage.
652 Several of our formats are ground breaking and innovative and took time to develop. None of them have been designed to amortize costs of current operations but are market-specific services that address different needs for a range of demographics; GB 88.5 is no exception.
653 If licensed, Grimsby/Beamsville, the benefits to the system and these markets are as follows:
654 The towns will have a dedicated service that will develop programming unique and specific to these markets;
655 Residents will enjoy a format that offers a broad selection of music, less repetition, and artists not heard on any station in the market giving them a new listening choice;
656 The format we propose will provide real support to new and emerging artists with a commitment of 10 percent of Canadian spins allocated to their exposure;
657 We will introduce a fresh news perspective increasing the range of views and the voices heard;
658 We can offer synergies in news that will increase the content and quality of our programming by tapping into our news teams in both Ottawa and Toronto;
659 The station will be managed by a group that has decades of broadcast experience including in small markets, and has developed revenues in markets where there are heavy spill and smaller populations;
660 Revenue development will focus in Grimsby and Beamsville causing the least amount of impact on stations in neighbouring markets;
661 The CCD commitment is both realistic and sustainable for a market of this size, and provides a greater flexibility in terms of supporting content development at the local level.
662 We are very proud of the work we have done in developing new markets and new programming streams. We would very much like to bring this level of commitment, enthusiasm, and dedication to the Grimsby and Beamsville markets.
663 I leave you now with a sample of what GB 88 would sound like.
664 (PRÉSENTATION AUDIO)
665 MS. LAURIGNANO: Thank you for your time and consideration. We would be very pleased to answer any questions you might have, and we expect to have some.
666 THE CHAIRPERSON: Thank you very much for your presentation. I’ll leave you in the hands of Commissioner Vennard.
667 MS. LAURIGNANO: Thank you.
668 COMMISSIONER VENNARD: Good afternoon, and thank you for that trip down memory lane. Some pretty good music there.
669 I just want to remind you that the Commission actually deals with things that are on record, and you gave us quite a lot of information that sounded a lot like research and so presumably you must have done research. However, we don’t have that on our records. So as I go down the list of questions, then I am going to probably ask you things that you’ve said already but -- and we may have to circle back to some of that as well. But, again, I would just remind you that we don’t have a study and we don’t have your actual market research, audience research on our record.
670 So the first thing I want to do is talk a little bit or ask you to comment on the local community consideration. And, again, I would ask you to also keep in mind that our questions and our thinking on your application, and as well as the other applications, are based on what we have on our record. Okay. So that’s important to keep in mind.
671 So in your application, you state that:
672 “Musical selections will appeal to the interests of the area’s slightly older population and to the year-round visitor and vacationer.” (As read)
673 You also state that you:
674 “...have carefully considered the unique population and culture of Grimsby/Beamsville and have developed a dedicated radio service to reflect it.” (As read)
675 In the absence of a market research study, how were you able to determine the interest of the communities you wish to serve?
676 MS. LAURIGNANO: Okay, thank you for that question.
677 This process began in 2013 when we began to look at this area. As we often do, we look at many areas for the company.
678 We’re looking for opportunities, whether it’s through acquisitions or start-ups.
679 As you know, some of the big areas are very congested, you know, with frequencies, and they’re not easy to find. So when we looked at this area here we thought ah-ha there’s a very good possibility that a service would work there.
680 So not only that, but it would work as a first service, because by the definition of market, which is the three millivolt, or the area whichever is smaller, this qualified as its own market for its own service.
681 So as a first service we are not really required to provide a market study per se, so -- however, what we do -- what we did in that case, and what we would normally do is look at all sorts of indicators in the market. So the indicators are, you know, what competitive forces are around. So we looked at that. It was, you know, very besieged by a number of spill stations coming in from Hamilton, from St. Catharines, from Toronto, or from the United States, really like on all four sides.
682 We looked at the demographics again and we found that for best use of frequency to maximize that frequency that was there it would be best to serve the two towns rather than concentrate it just on one, because then you have more of a critical mass, a bigger marketing area, and the close proximity between the two towns is almost negligible. There’s only like nine kilometres I believe between one and the other.
683 So then we looked at the demographics of one and the demographic of the other and we said well what type of format would fit in there. But before we came to even the music and the type of format, the most critical part of that whole thing was the provision of a local service in terms of news and spoken word, because that was absolutely absent.
684 So we went in the community. We do not have a study -- a third person study. But we deployed a team of salespeople, we deployed a team of programmers, we spoke with people in the area, and we monitored the stations surrounding, and there’s obviously a lack of news and information about that.
685 We figured that based on those indicators, the economic indicators, the retail sales volumes, how they can be parlayed into the potential for what radio market could be in terms of generating revenues.
686 In fact, the Commission itself, when it declared that this area could sustain a station, at least one, it stated that -- in the notice that according to its records markets of that size or similar generate revenues between $450,000 and $1.3 million. So that was based on 2011. So fast forward that potential is even more.
687 So really the arrival at the format was to make it as broad as possible to serve the areas -- the two areas and to serve the middle of that demographic in an AC kind of format, but really to make sure that we also did not exclude the younger or the older population, which is why it’s an AC format rather than a more niche or narrow kind of format that would skew the demographics one way or the other.
688 And based on that, we can build our business plan. We are providing a unique service again because of the local news and spoken word commitment, but we can also differentiate ourselves from the music, you know, that we play, that it’s not duplicated as much just from the analysis of what’s in the market. That’s how we came to that format.
689 COMMISSIONER VENNARD: Okay. Thank you for that explanation.
690 Now, I have a series of questions for you on local programming and spoken word, as you’ve proposed. So please confirm that the station would provide a minimum of 18 hours of spoken word content.
691 MS. LAURIGNANO: That is correct. We confirm that.
692 COMMISSIONER VENNARD: Okay. And can you explain how your spoken word programming would reflect the interest of the local community?
693 And here you might want to refer to -- I’m going to ask you to at least include the different categories of spoken word that you’re talking about.
694 MS. LAURIGNANO: Sure. I will ask Gary Gamble to just address that for now and we can supplement later.
695 MR. GAMBLE: I’ll give you a breakdown as to how that -- what our percentage is in hours per week breakdown to.
696 First of all, as we mentioned, we’ve got the highest amount of news available, that’s true news, 6.25 hours per week. Our surveillance on top of that, weather, sports, traffic reports, covers 4.25 hours per week. Features, including community calendar, our seasonal reports, golf, sports, fishing, new music reports, business and agriculture reports, those features total 3.17 hours per week. That gives a subtotal of 13.67 hours per week. With announcer talk thrown in there covering all of the different things that are happening in the community, keeping people things up to date, that’s another 4.43 hours per week, with a total of 18.1 hours per week.
697 Now, of the total news package alone, the 6.25 hours per week, 50 percent of that will be local news specific. The other -- another 30 percent will be national news, and 20 percent will be provincial news.
698 COMMISSIONER VENNARD: Okay.
699 MR. GAMBLE: I can give you a breakdown as to how we ---
700 COMMISSIONER VENNARD: We’ll be covering the news in a question or two.
701 MR. GAMBLE: All right.
702 COMMISSIONER VENNARD: Could you expand on the topics and issues that would be covered in the local spoken word programming? Kind of leave the news out of it, but with the other ones.
703 MR. GAMBLE: With the spoken word alone?
704 COMMISSIONER VENNARD: Yeah.
705 MR. GAMBLE: Yeah. Spoken word, besides our news, covers of course our announcer talk, and they’re talking about weather, they’re talking about traffic. We’re heavily involved in community calendar reports, 31.5 minutes per week specifically of what’s happening in the area. New music reports, which is also big for us, which of course our commitment is 10 percent for new and emerging artists. Those reports are running 50 minutes per week in two minute segments spotlighting emerging artists from around the area. Business reports twice daily, and agriculture reports we also find are specific to this area, and those would also run twice daily. Our health watch reports, 21 minutes per week, which are 90-second reports on medical research and tips on healthy living and wellness and that sort of thing, two days -- 90 seconds twice a day, seven days a week, once again 21 minutes per week.
706 COMMISSIONER VENNARD: Okay. And how did you arrive at that in terms of how that would reflect the interest of the communities that you’re going to serve?
707 MR. GAMBLE: Yeah, we try to give as much -- by breaking it down first of all, finding out what was important when it comes to these reports, health, business, whatever, we try to balance it so that we cover totally throughout the day so that we’re not just shoving everything in the morning newscast, or just in midday, or in the evening.
708 So we took each one of those reports, plotted them out so that we’d give the best coverage for each topic throughout the day. And so we -- when it came to health watch, for example, one of the -- that’s of concern to everybody, not just people listening in the morning, or listening midday or in the evening. So we spread those out, mapped them out, and put them on a program schedule as to give the best coverage, and we also take those reports and highlight them on our website also so they’re also available.
709 MS. LAURIGNANO: If I could just add to that, Commissioner.
710 COMMISSIONER VENNARD: Sure.
711 MS. LAURIGNANO: The -- like when you have to go back to the starting point, which is the first service into the market, and the broad service that it should provide, we kept in mind that we have a small geographical area to cover which is defined by the contour, you know, so that we are limited us to, you know, how far we can reach or how people can reach us.
712 So really it had to be a station like an old fashioned radio station, you know, like one a town radio station. So we had to go as broad as we could to offer something for as many people as possible, but there had to be things that are in common, you know, that you don’t want to alienate like one or the other.
713 So there’s going to be, for example, some day parting. You know, we know, that, you know, young children or young kids, you know, sleep in weekend mornings or like after a party night, you know, so obviously we would cater to them like later in the evening, you know, with more information.
714 We would put the new music, you know, not in the midday, you know, to reach the older one because we know it’s the younger people who are more interested in the new music and they’re the ones, you know, who drive it.
715 So that’s how we really came to that, just keeping in mind how can we best serve a whole market. And then the spoken word has to be related and be appropriate to the area and its place within the larger area, which is why, for example, we opted for 50 percent local news, because this market does not live in isolation, so I mean, yeah, you know, you could provide 100 percent local news but they also need international and local and, you know, national news as well, and how they fit -- you know, how it fits into that perspective. So that’s the premise that we went with.
716 COMMISSIONER VENNARD: Okay. So we can move more into, you know, how you plan on doing these different things. And so my question to you at this time is how will you ensure that programming broadcasts on your station will include on a regular basis each broadcast day coverage of local news, sports and events that is of direct and particular relevance to Grimsby/Beamsville?
717 MS. LAURIGNANO: Well, we have accounted for that in our business plan.
718 I believe that between the -- I believe that we have more staff than the two other applicants combined. We are looking at a staff of 24 between fulltime and part time. Because in order for us to truly develop a local service, we really have to be local and that means that we have to have the people on the ground.
719 Our news is comprised of, like, four dedicated persons just for the purpose of gathering and delivering the news. The -- you know, the area is small, so, for, example our promotions department and access, you know, back and forth to the station will be such that we can also receive as well as to go out and get the information.
720 So it'll be easy for -- you know, for us to go to the local events. You know, if there's like a charity something, if there's a festival, if there's like a big sporting event, if there's like a -- you know, some fundraising activity, the onset of the wine season and all that, we will physically be present there.
721 And that's going to be integrated into like everything from the Web site to the social media to the on air to the news.
722 COMMISSIONER VENNARD: So you're going to have a total of 24 people?
723 MS. LAURIGNANO: M’hm.
724 COMMISSIONER VENNARD: Can you break that down?
725 MS. LAURIGNANO: Sure can. So -- yeah. So what I -- yeah. So what I have is in term -- so it's 15 fulltime and nine part time.
726 The fulltime are a music director, a news reader, another news reader -- two fulltime news, morning show host, midday host, an afternoon host, evening host, a weekend replacement shift, a sales manager, four sales reps, a marketing and promotions person, a receptionist, traffic and accounts receivable, a production person, an operator/assistant production, a copywriter.
727 No; I do beg your pardon. I've lumped all of them together but I can actually provide you with a list if you wish, or we can submit it, but -- I'm sorry, I -- I read all of them down, all the number of positions, but I did not give them the part time or fulltime.
728 COMMISSIONER VENNARD: Okay.
729 MS. LAURIGNANO: So the fulltime program director ---
730 COMMISSIONER VENNARD: Okay.
731 MS. LAURIGNANO: Okay. I'll ---
732 THE CHAIRPERSON: If you want to submit that as an undertaking...
733 MS. LAURIGNANO: Yeah, we would do that.
734 THE CHAIRPERSON: Okay. Can you do that by 8 p.m. Ottawa time Thursday?
735 MS. LAURIGNANO: Oh, sure.
736 THE CHAIRPERSON: Okay, thanks.
738 MS. LAURIGNANO: We'll probably do it before.
739 THE CHAIRPERSON: Okay. Thank you.
740 COMISSIONER VENNARD: Okay, but just run some of them past me again.
741 MS. LAURIGNANO: Yeah.
742 COMISSIONER VENNARD: You've got a fulltime program director?
743 MS. LAURIGNANO: I have a fulltime program director. I have a fulltime news director, a fulltime news reader. I have a fulltime morning shows host, fulltime afternoon host.
744 COMISSIONER VENNARD: Okay.
745 MS. LAURIGNANO: Fulltime sales manager.
746 COMISSIONER VENNARD: Okay, we can probably circle back to that ---
747 MS. LAURIGNANO: Right.
748 COMISSIONER VENNARD: --- when we start talking a bit about synergies.
749 What I'm looking at is, are you planning on having two studios for this, or how -- for ---
750 MS. LAURIGNANO: No, there's ---
751 COMISSIONER VENNARD: --- from a structural point of view?
752 MS. LAURIGNANO: There will be one studio.
753 COMISSIONER VENNARD: One studio. Because on ---
754 MS. LAURIGNANO: One -- one ---
755 COMISSIONER VENNARD: On some of your financials you mentioned -- you referred to two studios.
756 MS. LAURIGNANO: Oh, we did? Okay. I'm -- does it ring a bell?
757 MR. GAMBLE: I believe what she's referring to is ---
758 MS. LAURIGNANO: Oh, within the building. Yeah, two studios within the building, right. So we would have -- we'd have like a news -- a news -- not two separate locations, but the actual ---
759 COMMISSIONER VENNARD: Okay.
760 MS. LAURIGNANO: --- like, inside the building structure we'll have two studios.
761 COMMISSIONER VENNARD: Oh, okay.
762 MS. LAURIGNANO: Yeah.
763 COMMISSIONER VENNARD: So you're going to have one studio with two ---
764 MS. LAURIGNANO: Right. We'll have ---
765 COMMISSIONER VENNARD: --- two different functions going on in there.
766 MS. LAURIGNANO: --- one location with two studios to operate from.
767 COMMISSIONER VENNARD: Okay.
768 MS. LAURIGNANO: So they could both be on air.
769 COMMISSIONER VENNARD: Okay.
770 MS. LAURIGNANO: Right.
771 COMMISSIONER VENNARD: Because you refer to that as two studios, so I was wondering ---
772 MS. LAURIGNANO: Yeah.
773 COMMISSIONER VENNARD: --- if you had two ---
774 MS. LAURIGNANO: Correct. Yeah. No.
775 COMMISSIONER VENNARD: --- two separate studios.
776 MS. LAURIGNANO: Right.
777 MR. GAMBLE: Yeah. I think what we mean is there'll be one master control room, then there would be a production studio ---
778 COMMISSIONER VENNARD: Okay.
779 MR. GAMBLE: --- within the one plant.
780 COMMISSIONER VENNARD: Okay. Thank you for clarifying that. Because when I read two studios I thought you were actually doing two studios.
781 MS. LAURIGNANO: No.
782 COMMISSIONER VENNARD: Okay. I'll ask you a question that, again, is a -- you know, we -- you've -- you've probably answered most of it already but for the record I'm going to ask it again.
783 How will you ensure that programming broadcast on your station will include, on a regular basis each broadcast day, traffic and weather reports specific to Grimsby/Beamsville?
784 MS. LAURIGNANO: Okay.
785 Gary, could you just recap that?
786 MR. GAMBLE: Yeah. Our surveillance, specifically traffic and weather, as we mentioned, is 4.25 hours per week. That is quite a bit.
787 We have to do that because it doesn't matter how -- what the population of a certain area is, that specific area with tourists and everything else is very -- means that we've got to be covering traffic, for example, especially between the border crossings, very heavily.
788 So as we would in one of our other stations in a bigger market, four times per hour we would be running traffic reports to keep people updated.
789 Same thing with weather; weather changes so much and it affects not only tourists in the area but families. People always got to be constantly updated with weather forecasts, so that is a -- besides our news, that is very target specific for us, is keeping people updated on weather and traffic conditions.
790 COMMISSIONER VENNARD: Okay, and that will be done by some of the 24 people that you have in this news station?
791 MR. GAMBLE: That's right. And our announcers are covering weather forecasts or checking on it, but our traffic reports, and also what's big for us is listeners calling in with traffic reports so we can get that on the air.
792 COMMISSIONER VENNARD: Okay.
793 MS. LAURIGNANO: It's also especially important we do these a lot and very often because the distance for people who are in their car is not that great, so it's not that you can listen, you know, to a forecast 45 minutes ago and then drive down 45 minutes and it be relevant. That's not going to happen because the coverage is small.
794 So we have to make sure that, you know, as people are coming in or getting out of that area that they're really up to date on especially the traffic.
795 COMMISSIONER VENNARD: Okay. What are your plans related to serving the communities within your secondary contour, such as St. Catharines and Hamilton regions?
796 MS. LAURIGNANO: There are no plans. It's -- there is some overlap. There is some reach of the point 5. But it does not encompass any significant portion of St. Catharines or Hamilton at all. On the point 5, the 3 millivolt, I mean, is very contained as well.
797 So there is -- there is no -- no plan. We could not monetize it. We can't be heard there, so ---
798 COMMISSIONER VENNARD: Okay.
799 MS. LAURIGNANO: --- why -- we couldn't -- it wouldn't -- be foolish of us to market in a place where we can't be heard.
800 COMMISSIONER VENNARD: Okay, thank you for that.
801 I want to switch over and talk a bit about synergies. Okay? And again, we'll probably go back a bit to the structure that you're proposing on the employees and the -- everything ends up being sort of interrelated at some point.
802 MS. LAURIGNANO: Yeah.
803 COMMISSIONER VENNARD: So the next few questions that I will be asking you will be with a specific objective; and that is to establish the synergies that you have projected for the new station.
804 MS. LAURIGNANO: Right.
805 COMMISSIONER VENNARD: Okay? So my first question to you is; what specific areas of operation would rely on synergies? So, for example, technical, advertising, sales, administrative. Can you describe that to us?
806 MS. LAURIGNANO: Yes. Yes, I can. The synergy -- there are some synergies to be realized. They are mostly in the administration and general management, that we have a very good executive team that can do some of that so that we're not, like, heavy on the expenditures or in our projections about that.
807 And in terms of the revenues and how they're going to be used and the -- how we plan to spend, which is also why we can afford to hire all those people in terms of the news and the sales and all that. So there are specific synergies in administration and management.
808 There are great synergies in, for example, the music. We have music libraries, you know, that the company, with all its other holding, has that is centralized so that there's access there.
809 There are synergies, for example, in the IT and engineering sectors. There are synergies in buying power. You know, for example if we are looking at sourcing promotional materials or equipment, that kind of stuff; those can be leveraged quite nicely.
810 The biggest synergy that we see is actually in contribution to the news and information. Because we have operations in both capitals, in the provincial capital and the national capital, we can, you know, tap those for input. If something is breaking right there, we can be right on it. Somebody can report it in or it could be called in.
811 The same goes, for example, with some of the features and emerging artists. So let's say there is an artist who's, you know, in Ottawa performing and he's from that area or she's from that area we could, you know, have a link between the two studios, and that would make it easier and more effective and more -- give us more opportunity to do more of that.
812 So really the big, big, synergies are there, because everything else really has to be local. I mean, we can’t pretend to be a local radio station and not have any boots on the ground, you know, calling on clients and developing business, or delivering that service.
813 You call yourself local, but if you’re not, you know, you’re not. You have to have those newscasts and you have to have those people selling and, you know, developing those business relationships.
814 COMMISSIONER VENNARD: Okay. What about in terms of sales and so on; do you see synergies there with your other stations?
815 MS. LAURIGNANO: In terms of -- I’m sorry?
816 COMMISSIONER VENNARD: Sales.
817 MS. LAURIGNANO: Sales?
818 COMMISSIONER VENNARD: Sales, marketing and so on.
819 MS. LAURIGNANO: Okay. I’m going to ask Ky to respond to that.
820 MS. JOSEPH: Yeah, there are some synergies. They’re really at the -- I guess, at the top levels. So our sales software is wide orbit, our CRM database, certainly training.
821 So we do a biannual sales management conference where all of the sales managers come to a central location and we go through the challenges that we’re having, solutions, new ideas, new sales opportunities, things like that. So that’s really where, you know, I mean, I have a touchpoint with every single sales manager in every market every week. So in terms of -- that would be the synergies that sales would be involved with this radio station.
822 COMMISSIONER VENNARD: But you’ll have local people doing sales, like, in -- right in the ---
823 MS. JOSEPH: Local. Local; hopefully living in the market, in the direct market, yeah.
824 COMMISSIONER VENNARD: So the synergies that you’re -- that you just described, how would you characterize that? That would be more of expertise, or ---
825 MS. JOSEPH: It’s more of an expertise. Like I said, it’s at top level, so we would -- the synergies really are involving the sales manager, which there would be a local sales manager in the market as well. However, that sales manager, you know -- for example, I’ll give you a great example.
826 You know, in the summertime we go through strategic business planning to look at -- that gets sales managers, sales rep involved. But there’s a strategy, there’s a process behind it. It’s getting the last three years’ sales, it’s looking at every single account. It’s -- so that it’s more of a -- for lack of a better word, directive, just to make sure that we’re doing it properly at every radio station. But it happens at the local level, so it really is just more, I guess, instruction.
827 COMMISSIONER VENNARD: Okay.
828 MS. LAURIGNANO: I believe Gary wants to add something about the news synergy.
829 MR. GAMBLE: Yeah. I just want to add something about these news synergies.
830 COMMISSIONER VENNARD: Sure.
831 MR. GAMBLE: When you’re proposing as much news as we are, 6.25 hours per week, we’ve got to make sure that we’ve got proper resources to be able to handle that. First of all, we’ve got the most amount of news staff proposed in front of you, four people. One of those -- this is strictly now for local; one of those is a news director, and one of those is an afternoon person, and two reporters.
832 So those are people locally on the ground, whereas a news director -- we would like to, as Carmella mentioned before, old fashioned news, we’re getting back to a news director sending some reporters out to actually go and get news, not wait until it comes in.
833 Also, when it comes to synergies, as we mentioned, we’ve got people in the provincial capital and the federal capital. So if breaking news happens, whether it has to do with Canada alone, provincially, or specifically with Grimsby/Beamsville, we’ll be able to get that information as fast as possible and put together a complete news package. So if it’s local or whether it’s provincial or whether it’s federal, when we provide news, especially at this amount, we’ve got to be prepared, so synergies are important to us.
834 COMMISSIONER VENNARD: Okay. That brings me down to a specific question about that. Given that reporters from your existing stations will be involved in the news production in the initial launch phase, like when you start out, can you explain how they would go about gathering news and local information in Grimsby/Beamsville, or do you plan on having local people right from the get go?
835 MR. GAMBLE: We plan on having our local news staff on the ground and ready to go.
836 COMMISSIONER VENNARD: Okay.
837 MR. GAMBLE: We gather news like this from our -- first of all, we have an APBN wire service in all of our stations that we use for those bigger stories. But you can’t get that from a wire service, the local stories I’m talking about.
838 COMMMISSIONER VENNARD: Yeah.
839 MR. GAMBLE: So that’s why we feel it’s necessary to staff it with four different -- with four people.
840 Of course, we’ll be in constant contact with OPP, 9-1-1 Emergency Services, on their press release lists, through their Twitter feeds, have these reporters that we have attend city council meetings. You can only do so much from a limited area, but you’ve -- we feel you’ve really got to be on the ground and it will take four people to do that, to go out and actually gather that news.
841 Not only that, any news department can give you headlines, but unless you go and follow up on those headlines, whether it’s councils, or council meetings, or that sort of thing, or something huge has happened like the tax levy that is going on in that area right now, we’ve got to have people following up on that so that our listeners just don’t get one little piece of information in three minutes and then it’s forgotten about. People in these areas are relying on their city councils and especially us to give -- to update them on what is going on, on an ongoing basis. So that’s why we have reporters and a news director on site gathering that information.
842 COMMISSIONER VENNARD: So you’re going to have your own there on the ground, right from the beginning?
843 MR. GAMBLE: Specifically, yes.
844 COMMISSIONER VENNARD: Okay.
845 MR. GAMBLE: Yeah.
846 COMMISSIONER VENNARD: Okay. Thank you for clarifying that.
847 So reporters from your existing stations are actually not going to be involved in news production in the initial launch phase, ---
848 MR. GAMBLE: No.
849 COMMISSIONER VENNARD: --- at least not local?
850 MR. GAMBLE: No, not locally.
851 COMMISSIONER VENNARD: Not local. Okay.
852 MS. LAURIGNANO: Unless it’s a breaking news story, as we’ve said, or something is happening in a place where we do have a newsroom; it could be Halifax, it could be Winnipeg, it could be Ottawa. Then we have the luxury, you know, really of being able to do that directly, which is good.
853 COMMISSIONER VENNARD: Okay. So to what extent would the station’s programming rely on synergies, as you’ve described them, as you conceptualize them?
854 MS. LAURIGNANO: It’d rely on -- in terms of monetary require ---
855 COMMISSIONER VENNARD: Yeah, the programming, the content; in a general way, like ---
856 MS. LAURIGNANO: Yeah.
857 COMMISSIONER VENNARD: --- would you say 80 percent; 50?
858 MS. LAURINGNANO: The synergies really are mostly administrative, and what flows into the newsroom, and that, but this is an independent operation, it’s a format that’s quite distinct from any others that we are operating. So again, yes, we do have an extensive music library, you know, that houses all the music. But that music director of the station would have -- you know, would have to, like, put the playlist together for that station and put the proper rotation and that.
859 So there is -- there are a lot of synergies in the expertise and, you know, putting things together, like even designing a rate card, you know? As Ky said before from the sales, you know, we have a number of rate cards so it’s easier for our -- for the head office to, you know, get them printed or help them design. But the actual personnel is going to be located there and is going to execute all those functions from the news, right through the copywriting, to the production of a commercial, to the airing. Yeah.
860 COMMISSIONER VENNARD: Okay. Thank you for that.
861 I’m going to ask you some questions now on the -- your -- the economic part of your business plan as well. I’ve got about six questions for you here and some of them we may have touched on already and you can feel free to expand and answer them more clearly if you want.
862 So basically, again, the objective that I have for these questions, to clarify your business plan for the proposed service and the potential impact that licensing a new station would have on the surrounding markets as well. Okay?
863 This is -- the first question is a very general kind of a question. Discuss the extent of your radio experience and how it would help you establish the proposed service.
864 MS. LAURIGNANO: The -- I’ll answer the first part and I’m going to ask Ky ---
865 COMMISSIONER VENNARD: Sure.
866 MS. LAURIGNANO: --- to elaborate on how we came to the actual figure of revenue projections.
867 To the extent of the impact on existing stations, we -- as our projections stated, we’re relying on new revenues and we are relying on retail revenues for the most part. We don’t expect, we can’t expect, and it would be unreasonable for us to expect that we’re going to get -- be included in buys for those central areas with only 5 percent of the population.
868 Even if we were measured and you project, you know, 5 percent of what -- 5 percent of the population could garner and then project that against the market, there’s no way we’re going to be included in any national buys or any big buys where people are just buying numbers.
869 So, again, because the contours are so defined and they stop at the city limits, you know, we have to rely on the local market. And so to the extent of, you know, what impact it’s going to have on existing stations, we say none, because it’s impossible for the most part, you know.
870 Now, granted, there are some, you know, possibly that, for example, there are some -- what we call what’s been cherry-picked, you know, some of in incumbents in St. Catharines or Hamilton or surrounding areas are getting revenues, even on of the applicants mentioned this morning, from the area. So we see that, you know, perhaps there could be an increase in budget, you know, not that there’s a local player there, but we don’t see those advertisers who have been with them and have a heritage and presumably have had results delivered abandoning them either because it’s a different thing altogether.
871 So at most, we would be like a second option for some of the advertisers who are right now advertising out of market, but really our business plan is premised and founded just on the fact that we are going to find new revenues and we have to rely on it being a truly local service.
872 So Ky may want to add something to that.
873 MS. JOSEPH: Yes, I’m just going to add something to that. So your question is that how does your experience come into play?
874 COMMISSIONER VENNARD: M’hm.
875 MS. JOSEPH: You know, if I look back to almost 25 years ago and having one radio station, it took so much longer to become successful because we didn’t have any structure in place.
876 And so now -- and this is kind of combined with your question about synergies -- there are structures in place. So the structures are there. They’re systems. You know, we have an intranet site where all of our sales packages for all of our radio stations across the country sit, and they’re renewed and they’re shared. And so there’s no kind of reinventing the wheel. If somebody is looking for some kind of a really cool, unique local promotional opportunity, as an example.
877 You know, if we didn’t have the experience, we may look at this market and say, you know, there’s no opportunity for national dollars whatsoever because, of course, it’s such a small market with small population, and the two markets that are sandwiching this market, you know, are on national buys. But the truth is, there will be some discretionary national dollars, albeit modest, but I’ll give you a perfect example. Just last week, we got a remote for our Rockland station, which is in the Ottawa CMA, but they wanted to do a special promotion, so they bought a remote. So we’ve factored that into our business plan, so we know that there will be, like I said, modest, but there will be some discretionary dollars. Sampling is another opportunity. So, you know, there are national brands that want to get into smaller markets with sampling. So that’s kind of a very grassroots local activity that has to happen at a local level. It’s national dollars. We would never be placed on a national buy or a national list, but when you’re aggressive and you go after those dollars, you know, and especially in a market like this, you have to go after all the dollars in order to make your business plan.
878 COMMISSIONER VENNARD: Okay. Thank you for that.
879 My next question is have you observed any changes in the short to medium term economic outlook for the market since you filed your application that would impact your financial projections or other aspects of your application?
880 MS. LAURIGNANO: We have. We’ve been monitoring the market since 2013. I’ve said that before, that that’s when we first looked at it, and the data that we used was based on the 2011 Census when we first applied. We’ve had a chance to update with the Census of 2016 being published, and we’re very, very encouraged by the fact that there’s a population growth that is above average. Even for Beamsville, for example, there’s like a younger demographic, you know, than Grimsby, which really means it’s more sustainable and younger families are moving in, and it’s going to get more and more populated.
881 Economic factors, you know, they look fine to us. We don’t have any concern about any, you know, downward turn in the foreseeable future right now.
882 However, we are confident that should anything like that happen, we would be able to weather it and sustain it. You know, we know that the economy sometimes goes in cycles and you have things that happen. Our company is very solid. We don’t have any debt whatsoever. So we have, you know, projected some... even losses in the first few years. We could sustain any impact without any undue influence on the business plan. So we’re in it for the long term. In fact, we know that we have to invest that time to get to where we want to go because we’re starting from zero.
883 You know, so we’re not going into a market where we’re covering the whole CMA. We’re covering, you know, just a portion of it, and we know that we have to invest. We have to put the people in there, have a solid staff, a lot of boots on the ground, people knocking on doors, developing relationships with advertisers. And should we fall short in any way whatsoever, we can make it up. We’re very solid that way.
884 COMMISSIONER VENNARD: Okay. Thank you for that because you’ve answered my next question then.
885 Now, I’d like you to provide more detail regarding your projections that 30 percent of your second year’s revenues would come from other media and what this source would be comprised of.
886 MS. LAURIGNANO: Okay. Ky will answer that.
887 MS. JOSEPH: Well, if you’ve read the newspapers lately you’ll know that a large part of our revenue -- the 30 percent will come from a combination of direct mail, mostly print. I mean, in small markets, this is not unusual. We operate in four other small markets, actually smaller than this market and, you know, print has been alive and well in the form of visitor’s guides and all kinds of magazines and that kind of thing. There are a lot of newspapers closing. Right now there are two newspapers in this market. One has a circulation two days a week and the other has a circulation one day a week. One is Metroland and the other is Independent.
888 I’ll just take a recent Metroland newspaper. There were 45 advertisers in there, not including the wheels section or the classifieds. It’s a perfect opportunity for a local radio station to go in and say, “Hey, I can give you a great return on your investment.”
889 So we did a calculation based on what businesses are currently advertising in newsprint based on our discussions with them, based on what we saw in these publications. I mean, it’s like this thick. We’ve got all the publications and I’m sure there are more that we don’t have. So our 30 percent will primarily come from print, some from direct mail, and very little from billboard.
890 MS. LAURIGNANO: Also, what I would like to add is that I was actually listening to some analysis yesterday on some of the swap and acquisition that happened between some print conglomerates. So one of them bought the other, but they intend to shut, you know, some of those small publications down that serve the small areas.
891 And the truth of the matter was that it’s not the editorial part of the print that they’re interested in; it’s the flyers. So what’s happened is that in the little markets, you know, in the absence of radio or in the absence of an affordable rate for that, print may have disappeared in terms of editorial, you know, in news, but if you look in your junk mail, I think you will see that it has not disappeared. So the advertisers who relied on broadcast media in the past or who can’t afford it now or don’t have it, you know, will go the flyer route. That’s still a very, very active and profitable business. So we intend to target that very much.
892 COMMISSIONER VENNARD: Okay. Thank you.
893 I have just -- I just have two more questions for you. Could you further discuss how your proposal would be affected should the Commission impose a condition of licence prohibiting the solicitation of advertising in the City of Hamilton and would you be willing to accept such a condition of licence?
894 MS. LAURIGNANO: Well, off the top, I would say that we don’t believe it’s warranted, especially in some of the ways it’s been described by Corus who intervened about it being both a non-solicitation and a non-acceptance.
895 We would not accept both. We would prefer that there would not be any for a number of reasons, including the fact that they and all the incumbents are currently already marketing in that area. So it becomes a one-way street one way but a two-way street the other way. So I don’t want to call it unfair or anything like that, but it’s hard to reconcile. That would be our view.
896 However, you know, should the Commission come to that decision, we would accept the non-solicitation but not the non-acceptance to form part of it.
897 COMMISSIONER VENNARD: Okay. Thank you.
898 MS. JOSEPH: Can I just add to that?
899 COMMISSIONER VENNARD: Sure.
900 MS. JOSEPH: Five (5) percent of our revenues are based on increases in advertiser revenue, and some of that comes from outer market but not from solicitation. It comes from, you know, events and venues, you know, like the Brock University Centre for the Arts, or FirstOntario Place in St. Catharines, or Copps Coliseum, for example, in Hamilton. These are places that need to draw on the masses, so they would want to talk to this -- these two communities, you know, to attract them to these events.
901 So while it’s modest, first year 28,000, second year 32,000, this is where our increases in budget comes from.
902 But, you know, after speaking with some of these event venues, they would increase their budgets. They wouldn’t take away from the existing marketing efforts of their local radio stations.
903 COMMISSIONER VENNARD: Okay. Thank you for that.
904 And this is my final question for you. Given that your proposed secondary contouring encompasses a large population, please estimate the percentage of your revenues that will come from sources located outside of your primary contour.
905 MS. JOSEPH: I guess I kind of just answered that, but 28,000 year one, so five percent.
906 COMMISSIONER VENNARD: Five percent?
907 MS. JOSEPH: Five percent.
908 COMMISSIONER VENNARD: Thank you.
909 I have no further questions.
910 THE CHAIRPERSON: Thank you very much.
911 I’ve checked with my colleagues in legal and we have no further questions for you today. So thank you very much.
912 MS. LAURIGNANO: Okay. Thank you.
913 THE CHAIRPERSON: We’re going to take a short break now before we proceed with Phase 2. So let’s return at 10 after 3:00.
--- L’audience est suspendue à 14h53
--- L’audience est reprise à 15h13
914 THE SECRETARY: Please take your seats.
915 THE CHAIRPERSON: I believe that the hearing Secretary has a quick announcement to make.
916 THE SECRETARY: Yes. I would just like to announce that tomorrow morning we will start the hearing at 9:00 o’clock. So we will contact the applicants to let them know. But tomorrow morning we will start the hearing at 9:00 o’clock.
917 We have now reached Phase 2 in which applicants appear in the same order to intervene on competing applications if they wish. Byrnes Communications Inc. and Dufferin Communications Inc. have indicated that they will not be appearing in Phase 2.
918 Therefore, I would ask Durham Radio Inc. to intervene on the competing applications. Please reintroduce yourself and your colleagues and you have 10 minutes to make your presentation.
919 MR. KIRK: Thank you, Madam Secretary.
920 Hearing Chair, Vice-Chair, and Commissioner, my name is Doug Kirk, President of Durham Radio. And I have with me at the hearing on my left, your right, Steve Kassay, Vice-President Programming and Operations at Durham Radio, and Mr. Andrew Forsyth on Steve’s left, your right, who is our Broadcast Consultant.
921 In this phase of the hearing we wish to intervene on the applications from the competing applicants. This should be considered as an opposing intervention against these applicants.
922 The first section involves an intervention against Byrnes and the Dufferin/Evanov applications. So it’s against both. And I’ll begin.
923 As we mentioned in our presentation earlier today, doing the math to ensure a business model is viable should be the keystone in any successful enterprise. We’ve spoken earlier about the comparatively small population that the 88.5 station would serve, under 40,000 people in its primary coverage area. Comparing the first-year revenue projections from the other applicants raises serious questions to us as to whether there was a process to apply a realistic and mathematically rigorous view of the enterprises they propose, or are the proposals just based on optimistic formula.
924 The Commission is undoubtedly aware of numerous cases of revenue exuberance by new licence applicants in recent history.
925 Looking at Grimsby/Beamsville and estimating the portion of radio spending based on the current rates -- this is the current rates of radio spend in the Hamilton and St. Catharines CMAs -- these are the CMAs in which these communities are based, so this is not based on a formula it’s what’s actually happening -- there would be approximately $595,000 available, which is $15.26 per capita. It will be split among the 14 incumbent stations. And, in our case, if the new Grimsby/Beamsville station could generate a 15 percent share of that revenue, it would earn approximately $90,000 or $2.56 per capita.
926 Byrnes suggests first year revenue in excess of $740,000. This is $18.97 per capita in the primary coverage of the station. Dufferin’s projection in a similar range of $560,000 translates into $14.36 per capita. The applicants are not basing their calculations on the reality of what’s being generated in the Hamilton CMA and the St. Catharines CMA.
927 If Byrnes was able to capture 100 percent of the revenue he projects there would be -- 100 percent of the revenue available in the market, that’s our $595,000 estimate, they’d be $150,000 short of their first-year projection. Dufferin similarly at $560,000 would capture virtually all of the available revenue dollars in the market. This makes absolutely no sense to us if a station has a 10 percent share of the market, which is the projected share starting from the other applicants that they be in the 10 percent range. In other words, how do you capture 100 percent or more of the revenue potential of the market with a 10 percent share?
928 Both Byrnes’ and Dufferin’s proposals show unrealistic revenue projections that would be multiple times the true capacity of Grimsby/Beamsville for a standalone operation. These plans do not stand the test of time. Programming tactics, staffing levels and CCD commitments would be compromised on the basis of these projections.
929 Using a more realistic revenue expectation and the other applicants expense programming strategies would produce losses of hundreds of thousands of dollars per year; in other words, if you staffed it up and only generated the revenue that we see in the market. We believe the losses, particularly for Byrnes, would be unsustainable and the rosy high staffed programming plans would quickly evaporate because of lack of money to fund them.
930 The station would be faced, in this scenario, with options. It could launch big but in the face of higher than expected losses the owner would have to severely cut expenses, pull it way back, and that’s mostly people, and the station would be reduced to a non-essential jukebox with minimal local content and value to the communities.
931 On the other hand, a station could continue on its original plan -- optimistic plan and rely on a permanent subsidy from its owner. It would never be profitable if it carried on this way, and commercially viable, and that’s likely not what the Commission intends by issuing a new broadcasting licence.
932 The third option, and in order to survive, is that the station must look outside Grimsby/Beamsville to be a bigger station. Likely a power increase would be needed to cover more population in Hamilton and St. Catharines markets. The additional audience would be needed in order to increase revenues and achieve viability, by the way, at the expense of the existing stations in the Hamilton and St. Catharines CMA. This modus operandi is not new to the Commission.
933 That concludes our comments on the Byrnes and Evanov applications together.
934 We have a couple of more points regarding the Byrnes application only.
935 Byrnes has an application on this hearing agenda -- it was mentioned this morning -- for the acquisition of two stations in the St. Catharines/Niagara CMA. It is proposing to purchase CJED-FM/Niagara Falls and CFLZ-FM/Fort Erie from Vista Radio. Because of the commonality of the market concerned, consideration of this is relevant to this process regarding Grimsby/Beamsville.
936 Our view is that it would give Byrnes three stations with three millivolt local signals in one market, the St. Catharines/Niagara CMA. We asked our consulting engineer, Jim Meitner, to show the signals of 88.5 CJED-FM and CFLZ-FM together, which are indicated in the chart below and on the screen over here, and it shows the borders of the St. Catharines/Niagara CMA are shown by the dashed line. You can see it’s a dashed purple coloured line on a coloured chart there. And it shows that clearly the three millivolt contours of the three stations fall in the same market. We believe this contradicts the Commission’s multiple licence ownership policy. And we are not aware that Byrnes has asked the Commission for an exception to that policy.
937 There's one more additional technical point regarding Byrnes' application. In Technical Map 4D, filed with their application, there is an interference predicted in the realistic contour over a large portion of Beamsville.
938 If you refer to the following map, you can see the yellow and red crosshatched areas are covered interference zones right in one of the primary communities of licence.
939 Beamsville is noted in the yellow box so it's maybe not too easy to see, but that's sort of the centre of Beamsville. So a large portion of the Beamsville community is subject to interference in this analysis.
940 We wonder why an applicant would file an application when one of the two communities it proposes to serve is not fully covered by a 3 millivolt per metre local signal, and worse, where there -- what -- where that level of low signal experiences interference from at least two other stations.
941 Our final point regarding the Byrnes’ application concerns financing. Byrnes filed a financing letter from TD Commercial Banking dated March 20, 2017 regarding the Grimsby/Beamsville application. The letter cites financing -- and I quote:
942 “Under the terms and conditions specified in our letter agreement dated March 20, 2017 provided to Chris Byrnes." (As read)
943 We cannot find the terms and conditions in any material filed by Byrnes regarding this application.
944 Byrnes also cited $250,000 to be provided by Byrnes Communications. We can't find financial statements in the application or materials filed with the Commission regarding this process to verify this commitment. And finally:
945 “The Byrnes family is to provide $150,000 to fund the new licence." (As read)
946 There was no information or third-party documentation to prove the availability of this commitment.
947 These three points, in our view, show the applicant's deficiency in adhering to the Commission's policy regarding provision of documentary evidence to confirm the availability of financing for this application.
948 Thank you for listening to our concerns regarding the competing applications. We're happy to answer questions you have of us.
949 THE CHAIRPERSON: Thank you for that. We have no questions.
950 MR. KIRK: Okay. Thank you.
951 THE SECRETARY: This completes Phase 2. We'll now proceed with Phase 3 in which the intervenor will appear to present his intervention.
952 I would ask Mr. Brian Purdy to come to presentation table.
953 (COURTE PAUSE)
954 THE SECRETARY: When you are ready you may begin. You have five minutes for your intervention.
955 MR. PURDY: I don't have a delegation. I'm just solo today.
956 Good afternoon, Mr. Chairman and Commissioners. My name is Brian Purdy and I am currently General Manager for the Niagara Gateway Information Centre, hosting thousands of tourists heading out to every corner of Niagara. It's located at the Grimsby Welcome Centre right on the QEW.
957 I've been a Canadian broadcaster, producer, director for 61 years and I'm fortunate to have been awarded 105 national and international awards for production and creative work, including a Gemini for the time-lapse video of the building of SkyDome, now the Rogers Centre in Toronto.
958 I was inducted into the Half Century Club of the Canadian Association of Broadcasters in 2007, and I received the Gold Broadcast Award of Achievement from the Ontario Association of Broadcasters for 60 years in broadcasting in 2016.
959 I am also on the Board of Directors of radio station CHOP-FM 102.7 located at Pickering College in Newmarket, Ontario, the only independent school in Canada with an FM radio station licensed by the CRTC, now celebrating its tenth anniversary. We have created strong relationships with the Newmarket and surrounding communities, building a large and faithful audience.
960 When my wife and I moved to Grimsby 20 years ago, friends asked me, "Where is Grimsby?" Now the remarks are, "Oh, you're in Grimsby? Great."
961 Grimsby has been on the map for many years, bursting at the seams. Businesses are flourishing. My passion and involvement in this town over the past 20 years has resulted in a great deal of recognition, including Grimsby's Citizen of the Year in 2010; the Grimsby Civic Achievement Award in 2010; a Certificate of Congratulations from the House of Commons, Government of Canada, in 2010; the Grimsby Civic Recognition Award in 2014.
962 I received a Certificate of Recognition from the Niagara Region in 2014; and I was awarded the Queen Elizabeth II Diamond Jubilee Medal for Community Service in 2014.
963 I understand the Grimsby area and I worked hard to help it grow and develop. Grimsby is the gateway to Niagara and certainly deserves a local radio station to promote its life and times on a daily basis.
964 I am here today to tell you why I feel the Byrnes Communications application is the best of the three applicants and why you should award them this licence.
965 Byrnes Communications will make a real difference in this area. The station will be located in Grimsby, create local jobs, and provide us with critical information, as been discussed, such as local news, traffic information and local weather. The weather we get in Grimsby at certain times of the year is very different than the weather in Hamilton and St. Catharines, I can assure you.
966 The financial contributions that Byres is proposing will also make a real difference. The Music in Schools program Byrnes has detailed will help our local students create great music, and the financial contribution to the Grimsby Festival of the Arts will allow this group to bring in better quality local emerging artists to perform at this Grimsby must-attend event in July, and it's been running for the past 50 years.
967 I checked out his station in Woodstock and was impressed with how local and involved it is. They support so many local events, and their staff talk about activities, events, and what's happening with pride and passion. They have been doing this for the past 11 years and is a fine example of their commitment to community service, along with quality local programming.
968 Chris Byrnes has promised to do the same in Grimsby and Beamsville, and I for one cannot wait for this to happen. The one company that has turned up for every major function in Grimsby over the past several months is Byrnes Communications.
969 They have spoken to service organizations; the Grimsby Downtown Business Association; Chamber of Commerce; and attended important events such as the Mayor's annual Business Appreciation Breakfast. They have shown me their high degree of interest in being a part of Grimsby and Beamsville, and I laud them for that.
970 Mr. Byrnes has created a real buzz in the community, and I can tell you there are a lot of people who are excited about Grimsby and Beamsville finally getting a locally focused FM station. This new FM station would be a most welcome asset for both Grimsby and Beamsville.
971 I hope I have conveyed my utmost passion for the Grimsby area, and how strongly I believe approving the Byrnes’ application will benefit everyone in the region. I'd like to thank the CRTC for allowing me to speak to you today, and be happy to answer any questions.
972 THE CHAIRPERSON: Welcome, and thank you. I'll leave you in the hands of Commissioner Vennard.
973 MR. PURDY: Thank you.
974 COMMISSIONER VENNARD: Well, thank you for coming to speak to us today. I don't have any questions for you. I'd like to congratulate you on your many achievements in your long career, and just thank you again for coming to speak with us.
975 MR. PURDY: Thank you. Just a note of trivia to lighten the afternoon. One of the other alumnus of Pickering College was John Meisel, who was Chairman of the CRTC from 1980 to '83.
976 COMMISSIONER VENNARD: Oh. Okay. Thank you for that, too.
977 MR. PURDY: Good company. Thank you.
978 THE SECRETARY: This completes Phase 3.
979 THE CHAIRPERSON: We will take a short break and will come back at 3:50.
--- L'audience est suspendue à 3:31 p.m.
--- L’audience est reprise à 15h50
980 THE CHAIRPERSON: Madam Secretary?
981 THE SECRETARY: Thank you.
982 We'll now proceed with Phase 4 in which applicants can reply to all interventions submitted on their applications. Applicants appear in reverse order.
983 We will begin with Dufferin Communications, Inc. Please reintroduce yourself for the record and you then have 10 minutes for your presentation.
984 MS. LAURIGNANO: Thank you, Madam Secretary.
985 MS. LAURIGNANO: Good afternoon again, Commission Chair, Commissioners, and staff.
986 For the record, I am Carmel Laurignano, Vice President of ECI, and I am here on behalf of Dufferin Communications. Joining me is Ky Joseph, on my left, Executive Vice-President; and Judy Joo, general counsel, both of ECI.
987 We are here to reply to the intervention by Corus and Durham Broadcasting, who offer the perspective that Grimsby/Beamsville could not support a licence dedicated to serving these markets' residents.
988 As a test of the applicant's conviction that the retail market in these towns can support a new station, Corus suggests the Commission apply conditions of licence that precludes either soliciting or accepting advertising from Hamilton. Durham says no licence or licence his service. I will offer a response on these two points.
989 First, what seems to be ignored here is that the Commission has already made a determination that the market can support a new licence. In Broadcasting Decision 2016-450, and I quote, paragraph 15, it says that:
990 “Given that Grimsby and Beamsville comprise only a small part of the combined populations of the Hamilton and St. Catharines CMAs, and that a station in Grimsby and Beamsville would be limited in its coverage, such a station would have minimal impact on the listenership of Hamilton and St. Catharines and Niagara stations.” (As read)
991 MS. JOSEPH: Nothing we have heard from either residents or businesses in either of Grimsby or Beamsville during these hearings has given us so much as a second's pause about the financial strength of these markets. Before we triggered this call in 2014, we looked at the usual economic indicators and determined that there was sufficient retail sales to support a small market service.
992 The fact that the markets are, for a second census in a row, growing at retail -- sorry -- at rates that surpass all of the markets around it suggests that the base for advertising is only going to get better. We recognize that both Hamilton and St. Catharines have not posted growth in their radio sales, but we would suggest that is more to do with declining listenership; therefore, declining efficiencies and not lack of available advertising dollars as they suggest.
993 It is worth noting that no St. Catharines stations intervened, and Corus and Durham stand alone in voicing opposition to local service.
994 MS. LAURIGNANO: As the Commission knows the world has very much become an on-demand consumer market. Radio listeners have music available at their fingertips, either through streaming services, radio apps or their own personal music library. The bigger consumer value position for radio today is local news and information.
995 While Grimsby and Beamsville may be designated to either of two markets for purposes of measurement, nowhere in life, outside of the exercise of producing ratings, does this definition exist. The boundaries used by Numeris rely on Stats Canada census divisions as building blocks, but many of the market definitions are constructed by committees and have no alignment with how markets operate or connect with residents. These are purely a creation of the members who serve on either the technical or executive committees of Numeris. It is not how residents view their local area.
996 A case in point is both the St. Catharines and Hamilton central market areas.
997 MS. JOSEPH: When both Hamilton and St. Catharines stations were licensed, the markets to which they are assigned did not include either Grimsby or Beamsville. Over time, however, for a variety of reasons that have to do with economics of both the measurement service and member stations positioning with the agencies in the absence of an originating station, these markets were expanded to subsume neighbouring small towns.
998 It is critical that the CRTC understands that Stats Can, an apolitical organization with no vested interest, does not connect the two markets, Grimsby or Beamsville, to either Hamilton or St. Catharines. To suggest that because stations have laid claim to dissociate geographies using policies at the measurement service that their revenue should be protected at the cost of truly local and reflective service to one of the fastest growing areas in the Niagara Peninsula, is to ignore the letter and spirit of the Broadcasting Act.
999 MS. JOO: According to the 2016 Census, Grimsby has population of just over 27,000; Hamilton has population of over 530,000. Grimsby represents just 5 percent of the City of Hamilton's population, and even less of the Numeris-defined market of the Hamilton CMA. If every person in every home in Grimsby were to tune 24/7 to our station, we would still not have reportable ratings in the Hamilton published report.
1000 Our 3-millivolt contour does not reach the City of Hamilton, and combined with the fact that our news and information programming will not be providing anything of interest to the majority of residents in Hamilton, it is an argument of convenience to suggest we would impact their revenues.
1001 MS. LAURIGNANO: From our perspective, the advantages that the larger broadcasters once held -- legacy signals and coverage of huge markets -- has become, in this day and age, a limitation. If you are serving the Numeris-defined Hamilton CMA, you are trying to provide local information to Hamilton, Burlington, Stoney Creek, Caledonia, Grimsby, and all other smaller markets encompassed in this trumped-up definition. These are very different areas with different weather, unique traffic patterns, cultural makeup, and economic drivers.
1002 Frankly, it is not possible to serve all, and so you wisely opt for serving the largest population centre -- in this case, Hamilton -- and make your service as broad-based as possible in hopes of not offending any groups. But what falls by the wayside is truly local service for that population that provides meaningful weather, traffic reports on community roads, updates on local town councils, events taking place in the community, and spoken word that is relevant to most of these markets.
1003 That is what is being proposed for Grimsby and Beamsville, and given the relevancy of the content, we believe it offers the potential for growing ours, too.
1004 MS. JOSEPH: The hours lost to radio can only be regained by focusing on what people need, and radio alone is positioned to provide up‑to‑the‑minute, portable, free and available, in-the-car local news and information. So with all due respect, the stations in Hamilton have never served this market, and because Numeris committees made up of broadcasters who have, unchecked, created new definitions of markets that serve their economic needs, the Commission should not consider that the act of them taking revenues from these markets is the same thing as providing local coverage.
1005 I would also note that contrary to Durham Radio's claim, Numeris does at this time use the Stats Can definition that isolates and reports on Grimsby, as well as one that isolates and reports on Beamsville. The combined sample of these markets in spring 2017 was 892, and we have been tracking the performance of radio in these two cells. These are available for any member to buy, and while they are not currency now, Numeris can be petitioned to report on this area.
1006 MS. LAURIGNANO: We do not think conditions of licence as requested by Corus is warranted, but if the Commission is of that view we would accept a non‑solicitation as a condition of licence. In doing so, however, we would point out that they can come in and poach for markets we alone are prepared to develop. That our investment will be turned against us seems not in the best interests of the service to this market.
1007 In closing, we would like to thank the many, many businesses and residents who took the time to provide input and letters of support. We would like to thank the Commission, the wonderful Commission staff, as usual. And we've had a fair and thorough hearing, we thank you for that, and we wish you well in your deliberations.
1008 THE CHAIRPERSON: Thank you very much.
1009 THE SECRETARY: I will now ask Durham Radio, Inc. to come to the presentation table.
1010 Please reintroduce yourself, and you have 10 minutes.
1011 MR. KIRK: Thank you, Madam Secretary.
1012 MR. KIRK: I am Doug Kirk. Just me this time.
1013 I'd like to thank the Commission staff and the Panel. We've had a, I think, a very good discussion. We've had pretty well everything we wanted to say said, other than to rebut the Evanov Dufferin contention that we oppose local service in Grimsby/Beamsville.
1014 Obviously, we made an application for it. We don't oppose it; in fact, we promote it. We just think it has to be done the right way to be viable and contribute to the community.
1015 We've presented, I think, the most viable option for new radio service to serve these communities unrealistic, rigorously determined revenues, expense plans for the small signal that are realistic and result in a viable service. And we have the assets in the market already to make this a success for the new licence.
1016 So on behalf of all our Durham Radio team, I want to thank you for the conversation and the attention, and we wish you well in deliberations to sort it out.
1017 Thank you.
1018 THE CHAIRPERSON: Thank you very much.
1019 MS. ROY: I would now ask Byrnes Communications Inc. to come to the presentation table.
1020 Please reintroduce yourself and you have 10 minutes.
1021 MR. BYRNES: Thank you.
1022 I guess we are between you and a beverage, so we’ll be brief.
1023 Good afternoon, Mr. Chairman and Commissioners. Again, my name is Chris Byrnes and with me is Michael Fockler.
1024 Byrnes Communications strongly objects to the Durham Communications’ comments made in Phase 2 regarding our company’s pending Niagara Falls and Fort Erie purchases and feel that these are not relevant to these proceedings which are, after all, is an application for a licence in Grimsby and Beamsville.
1025 Durham had the opportunity to intervene on our purchase applications during the public consultation process which ended on the 2nd of October 2017. They chose not to do so, and therefore we feel they are out of order.
1026 The Commission has and will consider each of the applications independently and, as such, the Durham comments regarding Byrnes’ Niagara Falls and Fort Erie purchases should be removed from the public record.
1027 In the event the Commission has any further questions or concerns about our application, I’m happy to discuss those at any time.
1028 On behalf of myself and all the people who appeared with me at today’s presentation, we’d like to thank the Commission and CRTC staff for taking the trouble and time to hear our plans to bring a true local FM radio service to Grimsby and Beamsville.
1029 I would also like to thank Mr. Bryan Purdy for appearing in support of our application, as well as the 35 other business and community leaders and individuals, including Grimsby Mayor Bob Bentley who took the time to write to the Commission requesting that the Byrnes Communication application be awarded this licence.
1030 We firmly believe that ours is the best proposal to bring true local radio to Grimsby and Beamsville.
1031 Thank you again, and we hope you enjoy the remainder of your time in Toronto.
1032 THE CHAIRPERSON: Thank you very much.
1033 Just before we adjourn, a remind that we’re going to start tomorrow morning at 9 o’clock instead of 9:30.
1034 And for any applicant that agreed to an undertaking -- I think there’s only one -- you have until 8:00 p.m. Ottawa time this Thursday to file that undertaking. Thank you.
1035 Madam Secretary?
1036 MS. ROY: We are done for the day. Thank you.
--- L’audience est levée à 16h05
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