TRANSCRIPT OF PROCEEDINGS
FOR THE CANADIAN RADIO-TELEVISION AND
TRANSCRIPTION DES AUDIENCES DU
CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
BROADCASTING APPLICATIONS AND LICENCES/
DEMANDES ET LICENCES EN RADIODIFFUSION
HELD AT: TENUE À:
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
Hull, Quebec Hull (Québec)
December 9, 1999 Le 9 décembre 1999
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès-verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
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participant à l'audience publique.
Canadian Radio-television and
Conseil de la radiodiffusion et des
Transcript / Transcription
Public Hearing / Audience publique
Broadcasting Applications and Licences/
Demandes et licences en radiodiffusion
BEFORE / DEVANT:
A. Wylie Chairperson/Présidente
D. McKendry Commissioner/Conseiller
A. Noël Commissioner/Conseillère
B. Cram Commissioner/Conseillère
J.-M. Demers Commissioner/Conseillère
ALSO PRESENT / AUSSI PRÉSENTS:
P. Cussons Hearing Manager /
Gérant de l'audience
G. Batstone Legal Counsel /
D. Santerre Secretary / Secrétaire
HELD AT: TENUE À:
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
Hull, Quebec Hull (Québec)
December 9, 1999 Le 9 décembre 1999
TABLE OF CONTENTS / TABLE DES MATIÈRES
Dufferin Communications Inc. 1087
Questions by the Commission 1096
N.O.T.A.'99, North of Toronto Area Music Conference 1110
Questions by the Commission 1119
Seasons Center for Grieving/Traumatized Children 1125
Questions by the Commission 1131
Mnjikaning First Nation 1134
Questions by the Commission 1141
Gary Farmer 1142
Questions by the Commission 1143
Isadore Peltier 1146
Questions by the Commission 1153
John Van Veld 1157
Questions by the Commission 1163
Reply on behalf of
CHUM Limited 1166
Larche Communications (Barrie) Inc. 1176
Rock 95 Broadcasting (Barrie-Orillia) Ltd. 1186
Douglas Kirk and Rae Roe 1190
Questions by the Commission 1207
Questions by Commission Counsel 1245
Affinity Radio Group Inc. 1248
Questions by the Commission 1265
NewCap Inc. 1298
Questions by the Commission 1314
Questions by Commission Counsel 1343
Questions by the Commission 1349
TABLE OF CONTENTS / TABLE DES MATIÈRES
Douglas Kirk and Rae Roe 1359
Affinity Radio Group Inc. 1368
Questions by Commission Counsel 1370
NewCap Inc. 1372
Aboriginal Voices 1376
NewCap Inc. 1382
Questions by the Commission 1384
Affinity Radio Group Inc. 1387
Douglas Kirk and Rae Roe 1396
Hull, Quebec / Hull (Québec)
--- Upon resuming on Thursday, December 9, 1999
at 0830 / L'audience reprend le jeudi
9 décembre, à 0830
5921 THE CHAIRPERSON: Order, please.
5922 Madam Secretary.
5923 MS SANTERRE: Thank you, Madam Chair.
5924 Before I announce the first intervenor this morning, I have been asked to change the order for intervention for Item No. 4. Isadore Peltier and John Van Veld will be appearing now after Gary Farmer. Also that Sherman Butler is nonappearing today on behalf of Item No. 4.
5925 So we are beginning this morning phase three, the interventions from the general public. Every intervenor has 10 minutes to present their intervention and we will start with Dufferin Communications Inc., Mr. Evanov.
5926 THE CHAIRPERSON: Bonjour, Mr. Evanov.
INTERVENTION / INTERVENTION
5927 MR. B. EVANOV: Good morning.
5928 Madam Chair, members of the Commission, my name is Bill Evanov, President of CIDC-FM, Orangeville, one of the last remaining independent FMs in the Toronto CMA. Seated to my left is Carmela Laurignano, our Station Manager and Vice-President of Marketing, and to my right, Paul Evanov, Assistant Program Director.
5929 For the benefit of some of the Commissioners and the staff who may not be aware of the geographic location of many towns and cities contained in the Barrie and Toronto CMA we brought a map for your examination. I will explain this to you very quickly, if I may.
5930 Starting with the bottom of the map, the black outline outlines the Toronto CMA. On this particular map it is shaded. On your particular map it is not shaded, but that is the extent of the Toronto CMA which also is the Census Canada measurement area as well.
5931 To the very bottom of the Toronto CMA, along Lake Ontario, is the City of Toronto. Heading north from the City of Toronto we arrive at the Town of Orangeville within the Toronto CMA. Adjacent to the Toronto CMA is the Barrie CMA which runs north along Lake Simcoe, up to Georgian Bay and down. We will refer to that map and that's why we wanted to bring it to your attention.
5932 We are very concerned about the survival of CIDC-FM. For this reason we have intervened against the three Barrie applicants, two of which are proposing an identical format to what we offer and the third proposing a format that will target much of our audience demographic.
5933 Barrie-Huronia is important and vital to CIDC's survival. The spring 1999 BBM for Barrie confirms CIDC as the number one station in the 12 to 17 demo and the 18 to 24 demo. In addition, out of 20 signals heard in the market, we are No. 4 overall. We have a five-year history of actively marketing and selling the Barrie-Wasaga Beach-Collingwood area. We, in fact, are an incumbent radio station in that market and we do wish to abandon our listeners or our clients.
5934 All the applicants and many Toronto broadcasters would have you believe that we should build a Berlin broadcasting wall around the little town of Orangeville. They don't do it to themselves. In fact, they could not survive if they did. They have totally confused service area with marketing area. Even the wealthy Toronto stations would never dream of building a wall around the City of Toronto. They need the entire City of Toronto in order to exist and to survive and to do well.
5935 CIDC has a licence for and provides a vital service to the Orangeville area. However, in order to survive we have had to market listenership in our coverage area. Every other radio station does the same. They are all licensed to provide a specific service to a city but, in fact, they will and must market where their signal goes and where BBM measures.
5936 To illustrate the point, I will give you a few examples on the map. The City of Toronto stations are licensed for the City of Toronto but, in fact, they market that entire CMA area. There are no national or regional advertising budgets allocated for the City of Toronto and there are definitely no national budgets allocated for the small Town of Orangeville. All advertising budgets are allocated for the overall Toronto CMA as measured by BBM, cell 5199.
5937 Therefore, each radio station in the CMA must attain the highest possible listenership throughout the entire CMA, not just their city of licence if they hope to secure advertising budgets.
5938 The Midland station, although licensed to serve Midland, markets extensively in the Barrie CMA and far beyond. Rock 95, licensed to serve the City of Barrie in fact markets his station in both the Barrie CMA and the Toronto CMA, down to Aurora, Newmarket, et cetera.
5939 All the Barrie stations market well beyond the City of Barrie, in addition to Collingwood, Wasaga Beach, Orillia, Muskoka, they also market and extract revenue from the Orangeville area.
5940 A new FM Barrie service will also market the Orangeville area. With open country and no obstacles, the 50 UVM of the three applicants will put a reliable signal into Orangeville.
5941 We already have a history of Barrie stations taking revenue and audience from Orangeville. Therefore, we have no reason to believe that a new service would not do the same, especially one that duplicates our format and/or our target demo.
5943 MS LAURIGNANO: Thank you.
5944 I would quickly address the three applicants individually. The CHUM application states that we are serving Orangeville and we are proud to serve Orangeville and we believe we are doing a good job.
5945 However, CHUM's claim is false when they say that CIDC's audience is in an upswing and has not been impacted. To be fair to CHUM, their statement was made prior to the release of the BBM fall interim report which was issued just two weeks ago. That report clearly shows that from the fall of 1998 to the fall of 1999 CIDC has lost 51 per cent of its teen share and 38.6 per cent of its teen cume, that is 12 to 17 demo in the Toronto CMA. Since the spring book 1999 we have lost 42 per cent of the 18 to 24 share.
5946 We are taking a major hit in the Toronto CMA from a Toronto city broadcaster with a much stronger signal. In the Barrie area we have invested five years building audience and clients. It has now become more critical that we retain that audience and revenue. A new Barrie service would erode this base which we rely on.
5947 The CHR format of the CHUM application is a duplication of what we do and what we broadcast on CIDC-FM.
5948 On the other hand, the Larche proposal calls for a classic rock format. Although the format is not identical, there will be considerable demographic duplication. The Larche application states that their concentration of listenership will be in the 18 to 34 demo. Their spring BBM for 1999, Barrie central area, clearly shows that out of 20 signals CIDC is ranked No. 1 in the 18 to 24 demo and No. 4 in the 25 to 34 demo. These are the same demographics that Larche proposes to serve.
5949 Also, Larche proposes a marketing and selling combo with its Midland station with the new service should it be approved. And the combination of the two stations will be very extensive we believe, or as he stated himself.
5950 Therefore, a combo of demographics and sales efforts by Larche or Rock 95, for that matter, will also have or compound the impact on CIDC which stands alone and must sell singularly.
5951 Rock 95 is correct in stating that for 1987 until 1994 CIDC derived almost 100 per cent of its revenue from the Orangeville area. Those seven years of continual losses almost destroyed the radio station. In a competitive radio market, an Orangeville community of 19,000 residents could not provide sufficient listeners and revenue. The financial statements on file with the Commission from 1987 to 1994 clearly show why CIDC-FM had no option but to obtain a much larger listenership in its coverage area and to market that area. The station learned to diversify, not to put all its eggs in one basket. Orangeville could only be served if CIDC remained viable.
5952 Rock 95 is incorrect in saying that CIDC is redirecting its marketing efforts. It is not. In fact, it has a history of marketing in the Barrie area. A full 10 per cent of our revenues come from selling in the Barrie-Huronia area, and that is substantial.
5953 Rock 95 also indicates a lack of CHR service to the population north of Barrie, and that again is not true. CIDC's contour does in fact extend north of Barrie, and the 50 UVM over open country goes beyond Orillia. Therefore, the communities to the north of Barrie currently have a CHR format provided by CIDC-FM.
5954 Rock 95's expressed desire to reach residents north of Barrie with a CHR format is an admission that they too will market outside and beyond their licensed area.
5955 The Barrie stations including Rock 95 also market well into the Toronto CMA.
5956 MR. B. EVANOV: CIDC-FM respects all three applicants as experienced broadcasters who have successfully operated radio assets. They are asking to add an additional service to this market, and based on their previous history it will be a service that will split audience, divert revenue and seriously damage CIDC.
5957 The existing broadcasters in Barrie, including CIDC, are providing excellent service to Barrie. There is no obvious need for more stations.
5958 If the Commission sees the need to protect independent broadcasters, we say it should protect the incumbent who has served the area over the years before new players are let in to further divide the market.
5959 CIDC is in a precarious position. After seven years of substantial losses, CIDC was turned around in 1995 allowing it to serve Orangeville better than ever. Now to the south of us CISS-FM, observing our growth and success in the CHR format and having at its disposal a much superior signal, chose to abandon its country format and duplicate the CHR dance format of CIDC.
5960 The results have been catastrophic on this independent broadcaster. In only eight months, since the CISS-FM change in format, CIDC has lost 25 per cent of its revenue and 23 per cent of its cume and share -- and that only in eight months.
5961 While we do everything in our power and have plans to limit or alleviate some of our losses, we will never be able to recover and attain our former position, which is where we were at the end of 1998.
5962 If, however, we are faced with a similar situation from the north as we are from the south, we will not be able to get out of that box.
5963 As we said before, this process today affects a full 10 per cent of our revenues, a very bitter blow on top of the other losses. We submit that the broadcasters who are currently licensed for Barrie, and the rest of us who already serve that area, are already meeting the needs of the market.
5964 Thank you.
5965 THE CHAIRPERSON: Thank you, Mr. Evanov.
5966 Mr. Evanov, when you look at this map, what do you think can be done? Twice the Commission has given you, despite some opposing interventions, the ability to perhaps position yourself a little better to compete with Toronto.
5967 Now you say that you will have to rely more and more on areas near Orangeville, going north to the Barrie area, for a sizable portion of your audience and revenue. And you want your ability to help your situation in the Barrie area to have an impact on whether or not we license another station in the Barrie area.
5968 When you look at this puzzle, what is the Commission supposed to do, protecting any particular broadcaster from competition?
5969 MR. B. EVANOV: I can't tell the Commission what it must do but --
5970 THE CHAIRPERSON: Well, that is what you are here to do. You say do not license any of these applications because they will harm us. We have difficulty competing with Toronto despite the alleviation and amendments to your licence that have been granted as recently as September 1999.
5971 I know you will tell us that it is not a big difference; that you are still an Orangeville station. But that is not what other parties say.
5972 Now it is Barrie north because somebody has maybe found that you were very clever with your format in this duplicating it.
5973 What are we supposed to do, as a regulator in this area, to thwart competition for the benefit of one party or the other?
5974 MR. B. EVANOV: I am going to let Carmela answer that. But I would like to say that it would be wonderful if it were an equal playing field.
5975 We are great broadcasters. We have been doing this format now, not just at CIDC but prior to that we made it very successful. We have a great staff who developed this format and probably produced one of the best CHR dance formats. And they also did it at a time before the hits factor changed. We did it when it was still 50 per cent hits, and did it very successfully.
5977 MS LAURIGNANO: I just want to add to that that the two favourable decisions that we got from the Commission were really helpful to us in terms of economic considerations: and that was that the studio was allowed to be moved, once when we first acquired the assets of CIDC-FM, because at that time we were also operating an AM station and we thought to put the two things together; and also given what we said that CIDC was in a very bad financial situation, we did that.
5978 There was one studio move, and then there was a relocation of the studio when we were able to secure a better broadcast facility that was approved.
5979 So in terms of advantage in the marketplace, although it has helped us -- to not have to maintain studios, one at one end of our coverage area and the other one in the other one, has helped us a lot. However, there have been no improvements in our technical parameters.
5980 Basically, all we did was operate out of a different place. But we didn't have a better coverage area or our signal was not much better.
5981 It is a tough question -- that is why I wouldn't want your job -- as to what to do. All we can do is really state our case, and that is that we didn't foresee -- we foresaw that another player could come in and take over that format.
5982 As you know, with two signals, with all things being equal, the better signal will win. You may have the best product in the world, but if nobody can hear it, then it is no good.
5983 All we can do is state our position. And we are frustrated.
5984 THE CHAIRPERSON: One of the applications for Barrie has in it a study that shows that a winning proposition in Barrie is to have a local station that will be attractive from a music perspective and also whether or not it is pitching to the right demographic. But the crucial thing is that it be local.
5985 Is that not supposedly your goal as well in Orangeville: to serve your local audience as best you can? If the signal is stronger coming from Toronto or a better signal, at least there is more relevance to the content.
5986 Some of the changes you have made in the last years have been to reduce local content. Am I correct in saying that?
5987 At least that is what the amendment requested from the Commission at one point focused on. It is true that it was bringing yourself into the policy and was legitimate to ask for that.
5988 Is that what you have done actually: reduce your Orangeville sound because it is difficult to compete with Toronto? Are we supposed to shut down the Toronto stations or prevent them from competing with your format if it is the more clever one?
5989 MS LAURIGNANO: We have not -- on paper we have the minimum local commitment, I believe. However, the --
5990 THE CHAIRPERSON: -- but I think at one point you were doing as much as a hundred.
5991 MS LAURIGNANO: That is before there was a format change.
5992 As you know, a CHR format serves a specific demographic, which is 12 to 24.
5993 Therefore, it would not be smart. A CHR station would not have major success if it provided a whole lot of news, because there are a lot of news choices in the area. There is a news station and everything else.
5994 So, basically, it is not a news type of driven station. The format is young and therefore you have to target to a specific demographic. So within that there are -- but there are, of course, local and news concerns that have to be addressed and they may just be slightly different. You know, you may not have a financial report at eight o'clock in the morning, but you could have entertainment news, school information, university issues, that kind of thing.
5995 So it has to be, you know, obviously relevant to the audience.
5996 But what we do, because of where we are and because of the format that we have, we are really a station for the whole area. So it is not uncommon for us, in fact, it is part of our programming, that, you know, Barrie, Orangeville, Toronto, Wasaga and all the other places are mentioned in our programming, and that could be through traffic and weather surveillance, we do ski reports, marine reports which take into account the whole area. As I said, school closings. There are features that we put on air.
5997 One of the things in the summer is we have what is called A Hundred and Three Days of Summer Calendar which lists all the entertainment and available venues throughout the coverage area. Being summer, you know, of course there is the Wasaga Beach or that kind of thing. We have showcases of Canadian talent in Orangeville and beyond, including Barrie and Wasaga, where we have record release parties or we feature Canadian DJs who will do a live broadcast and spin music live on the air.
5998 So, as I said, because of the demo and because of the format, we are really a bit more wide ranging than a limited station; also because the audience is very mobile, okay. When you are an 18 to 24 year old and it is summertime, you are going to go to the beach, you are going to go to the cottage, you are going to hang out with your friends. So they have to have the ability to bring the radio with them and find an event where they are going. That is what we do as well.
5999 THE CHAIRPERSON: So to you a change in format is not an answer. And I gather there is no answer to the technical limitation either.
6000 MR. B. EVANOV: For us?
6001 We have an answer, but I don't want to talk about it today.
6002 THE CHAIRPERSON: You have had answers you have put before us before. I remember now.
6003 MR. B. EVANOV: Yes. But then it was -- one of the answers from the Commissioner was a perceived threat that didn't exist. Well, now we are bleeding profusely and we need help. As you know, we are coming back to the Commission in January, but it's not an issue we want to discuss today.
6004 THE CHAIRPERSON: How much of your revenue now is derived from that area, the Barrie area, that would lead you to try to persuade us that we should not licence a station in Barrie for the reason that it will be competition for you? How much revenue do you derive currently from that area?
6005 MR. B. EVANOV: Do you want a percentage or a dollar figure?
6006 THE CHAIRPERSON: Whatever you feel comfortable with.
6007 MR. B. EVANOV: Okay. Ten per cent of our revenue comes from that area, which is a substantial amount.
6008 THE CHAIRPERSON: And how much from Toronto?
6009 MR. B. EVANOV: Okay. Are you saying the City of Toronto? Are you saying the CMA?
6010 THE CHAIRPERSON: However you want to put it --
6011 MR. B. EVANOV: Yes, I'm not sure --
6012 THE CHAIRPERSON: -- that is not around Orangeville.
6013 MR. B. EVANOV: That is not around Orangeville?
6014 THE CHAIRPERSON: Well, within -- I know it is --
6015 MR. B. EVANOV: Okay. It is very hard to break out.
6016 THE CHAIRPERSON: Torontonians usually includes Ottawa and Toronto.
6017 MR. B. EVANOV: Sometimes. I watched Citytv this morning. CHUM has a great program, and they were doing Toronto traffic reports, and I watched them here in Ottawa.
6018 It is really hard to say. I would say that 60 per cent of our revenue comes from the Toronto CMA area and maybe 40 per cent from the northern part of Toronto.
6019 THE CHAIRPERSON: Isn't that doing fairly well for an Orangeville station, considering it's an Orangeville station, which we repeat in all the decisions, and yet some people would say you have been clever, yes, with your format, but you have been lucky to be able to derive that much revenue from Toronto.
6020 MR. B. EVANOV: I had good teachers. I looked at what every Toronto radio station did and I did the same, except my service was to Orangeville. They did the same thing. There are two million people in Toronto. They can't exist if they only serve that two million. They have to reach the other million and a half that are in the CMA. Yet everybody is saying, "Go back to Orangeville and build your Berlin broadcast wall." That doesn't make sense.
6021 We provide two essential services to Orangeville. One is we are very involved in the community. We do what every radio station does for a local community, whether it be local news, traffic, you know, the service clubs, the whole thing. That is one issue.
6022 The other thing we do for Orangeville, and this is why the entire town supports us right now, for the first time in their life this small community of 19,000 people had a voice in the CMA, okay, a radio station that could reach 600,000 people.
6023 That was vital for the town of Orangeville because they knew that voice -- and we do infomercials, we do other information on Orangeville daily -- they knew that that radio station could attract tourists because when you go to Collingwood up Highway 10, okay, you have past Orangeville, you stop into a restaurant, you stop into the McDonald's, you stop in and you buy things in that area or you may ski in that area, or you may go north to Collingwood and ski in that area. So it was important for tourists; it was important for home buyers. There are builders in the Orangeville area that utilize our station because they want to draw people from the other parts of the CMA, not necessarily downtown Toronto, but other parts of the CMA, into the Orangeville area.
6024 Also, they are using us to attract commerce into the area, new businesses into the area, and for the first time Orangeville had a voice in the Toronto CMA and it was not just isolated with its own wall built around it.
6025 So we provided the internal service that every radio station provides, but we also provided something very important to that community. That is why the mayor, the city council, every service club is totally supportive of what we are doing and they want us to exist, because if we die, if we really get killed in this battle right now, they know that CISS-FM in Toronto is not going to provide any services for Orangeville. They are not going to be the voice of Orangeville in the CMA, and this town of 20,000 deserves this.
6026 So all I can say to you is we learned from every other broadcaster in the Toronto area except we have never asked to go to the CN Tower. We are content to stay out there.
6027 You know, I think our last application was for a move seven miles the other way of Orangeville City Hall. Well, that is not a major, dramatic move. We thought it would just help us and, in this case, would help stop the rupture.
6028 But the problem with Barrie is, we do a great business in Barrie, and what is happening now is we are taking a bath in the Toronto area or the CMA area and it is only going to become more compounded by losing more. You will say, "Well, if you have lost 30 per cent of your business, what is another 10 or 15 per cent?" Well, really, it is adding up and it is adding up daily, and we are an independent broadcaster.
6029 THE CHAIRPERSON: Mr. Evanov, you say the mayor in Orangeville is very supportive of your position, but have you spoken to the mayor in Barrie?
6030 MR. B. EVANOV: I have not spoken to the mayor in Barrie.
6031 THE CHAIRPERSON: I know it is difficult and I'm sure we will see you again. But you have won some battles.
6032 MS LAURIGNANO: May I just add one thing, please, to what he said, and that is, for some, well, I'm sure perfectly good reason, it has come to pass that if you are a Toronto broadcaster -- actually, I'm going to stand up and show you.
6033 Perhaps we are getting confused with the Toronto broadcaster, CMA and the whole thing, but, as you know, they are licensed. Everybody is licensed for their own thing. You have a City of Toronto licensee, you have a Orangeville licensee, you have a Newmarket licensee. But for some reason there is this perception that if you hold the licence for here, you have a God-given right to just go and go all over here. So you market from here, all the way to this on the map. But if you are in this part of the CMA, which is part of the same map, then you should really stay in your little corner, or retreat over here, which is where the bushes are.
6034 THE CHAIRPERSON: That is your Toronto intervention.
6035 MS LAURIGNANO: What's wrong is that the map is upside down. That's what wrong.
6036 If Orangeville were here, then we would have the same latitude as the rest.
--- Laughter / Rires
6037 THE CHAIRPERSON: Not even the Toronto mayor can turn that around.
--- Laughter / Rires
6038 THE CHAIRPERSON: But today we are focussing on the Barrie problem. The Toronto problem is yet to come. This is probably a rehearsal, but be careful that you are not served with your very own words later on as to who should stay where.
6039 We are focussing today on the Barrie problem and I understand your position to be, don't licence anyone but if you licence anyone please let it not be the one who has the format closest to mine. Is that fair?
6040 MR. B. EVANOV: That would be fair.
6041 THE CHAIRPERSON: Thank you.
6042 Thank you for your presentation.
6044 Thank you, Mr. Evanov. Thank you.
6045 Madam Secretary.
6046 MS SANTERRE: Thank you, Madam Chair.
6047 Now I would like to invite North of Toronto Area Music Conference to present their intervention.
--- Pause / Pause
6048 THE CHAIRMAN: Good morning. Proceed when you are ready.
6049 MR. MIFSUD: Good morning.
6050 I do have some literature to pass out. I would like to know where I would do that.
6051 THE CHAIRPERSON: Give them to Madam Secretary.
--- Pause / Pause
6052 THE CHAIRPERSON: Mr. Mifsud.
INTERVENTION / INTERVENTION
6053 MR. MIFSUD: Good morning, Madam Chair and Commissioners. I would like to thank you for allowing me to appear at this public hearing.
6054 My name is Stephen Mifsud. I am Vice-President of North of Toronto Area Music Conference and I am here to support the application of Rock 95 broadcasting for an additional radio station Z107.5.
6055 As a proprietor of a local music store in Barrie which educates and retails equipment also to musicians in Barrie and surrounding Barrie, I have an idea of what goes on as far as what musicians and players want.
6056 A key role that we do in the city is to develop talent, to promote talent and to educate.
6057 Being in the industry for the better part of 18 years as a performer, an educator, a retailer, I have gone through many of the processes of being a musician and where it is I want to be.
6058 A few years ago we decided -- an associate and myself -- to do something about creating and developing. So what we did was follow in the footsteps of Canadian Music Week we brought to Barrie. Basically what we did there was link the music industry to the musician, allowing them access to what information they required to further their careers.
6059 So what we did is, we had a proposal, an idea, and that's all it was. We shopped it around to various stations and individuals throughout Barrie. We approached Doug Bingley from Rock 95 with an idea. He looked at it and basically said "We want to be part of this. We are interested in being part of this".
6060 We hit many walls to develop this. Being the first year and not having any past track record doors were closed or somewhat open.
6061 So we looked at this and said, well, we knew we had an idea. We found somebody who believed in the same idea with that, which was the developing and promoting, educating of Canadian artists.
6062 So what we did is we set forth to put together -- laid the plans, secured venues. Because of the support of Rock 95 to deal with the conference we found it much easier to bring on other sponsors and interest gained and it was a lot easier to put forth.
6063 Basically what we did, in a nutshell, was we rented a venue, which was the Comfort Inn, and held a series of seminars with top industry professionals, is what we did, ranging on all aspects of the industry, management, producing, recording.
6064 We had some pretty important people come out to this conference. We had representation from Attic Records, Warner, Kim Cook, Candy Higgins. These are names that people know in the industry who came out to support it, saying we should be doing things about developing Canadian talent.
6065 As a musician growing up looking for that record deal, et cetera, I ran into a lot of walls. To see people come forth and say "Hey, we are into supporting this" was a big thing.
6066 Without the support of Rock 95 and their coverage area it would not have been a success. It far exceeded what we anticipated for the first year. The numbers were very good.
6067 Another big part of it, with the developing of Canadian talent, we secured -- which I heard throughout the hearing about not having any venues to play in Barrie. We secured nine venues for a whole weekend, a Thanksgiving weekend, that showcased local and area original music for three nights. It wasn't one band or one performer playing the bar or the venue for three nights. At some times we had two and three bands each night at nine different venues for that.
6068 So why I'm here is the development -- the Canadian development with our artists. Currently we sit at the top of the world with acts like Celine Dion, Shania Twain, Tragically Hip, Sarah McLaughlan, all of this, and they have opened a lot of doors. I believe one of the biggest things we could do right now is sustain that, keep the doors open. The only way of doing that is developing, promoting and educating Canadians.
6069 We had support from many other businesses outside of the music industry through car dealers that just saw that it was something that was beneficial for the City of Barrie and was an overwhelming success with that.
6070 Another part I would like to mention regarding that is the accessibility we had to Rock 95 being an independent.
6071 We approached various other stations and companies which were much larger. We approached CKVR. It seemed like we had some sort of arrangement. All we asked for from them was coverage of the event and in return we would give them advertising on our posters, which you have seen. It seemed everything was fine from the first, initial contact.
6072 I made initial contacts over and over and over again and had no reply, couldn't talk to different people. I understand it's a big company, people are busy, but in my point I needed to get something off the ground, I needed answers. I didn't get any. If I had known it would have been that easy, I would have applied for a transmitter and I would have had everybody at my hand. I had nobody to talk to with their --
6073 Doug Bingley, the night before our seminars, Friday night -- I remember this clearly -- there was a message saying "Steve, you can call me. I will be home after 11:00 p.m." I made a call to secure the schedule.
6074 Mr. Bingley himself came to the seminars during the afternoon, personally. It was the Thanksgiving weekend -- I remember this -- there were a lot of people who had family functions and things like that. Mr. Bingley himself attended the seminars and then attended our gala dinner personally with his wife, which we couldn't ask for more from that.
6075 Other stations were asked to be involved. We did have -- in all fairness to Mr. Larche, we did have involvement, but there was -- basically how it was put forward, if we invested so much money per time, bought some space, ad space, we were given additional ones.
6076 Rock 95 came on straight, didn't ask anything from us, actually opened up to us and said "We are here to help. What is it that we can do for that?"
6077 I guess my only part, I sit back and I listen to the three applicants and it is a real eye-opener to see where myself and fellow aspiring artists, musicians, songwriters are -- a big point of the success is to have our songs played on the radio. I'm listening and going "Wow", you know, "we are talking about numbers and we are talking about what area we are covering and economic impact."
6078 We are sitting back here and I'm going "Okay, the Canadian development" -- and I have been hearing it over and over from yourself, Madam Chair and the Commissioners -- "What is it that you are doing?" That is a very important part and it seems a lot of them are missing that.
6079 Doug and I have since been discussing various ideas and promotions throughout the year 2000 to do exactly what we did with the North of Toronto Area Music Conference and the promotion and the development I believe is a huge part to sustain where we are in this industry for that.
6080 Other than that, just to give you an idea of some of the support for a first year venture, we were given $6,500 in cash from Rock 95, with an additional $7,500 worth of air time, which was beyond what we had anticipated or expected for our first year.
6081 Because of the success of the first year, not a 1999, not a 2000 is already steps above where we were last year. Canadian Music Week, North by Northeast in Toronto are very successful events in promoting talent.
6082 Barrie is a city now. It's no longer a town. It is a city. We can sustain our own conferences. We have the Barrie Music Jazz Festival which draws people from all over Ontario and outside of Ontario. We have the February Blues Festival. We have the Canadiana Music Festival. Barrie is becoming a very music central city.
6083 There is nobody at the demographic right now between 12 and 24 that's servicing and promoting it. Twelve and 24 is a very important age group. As an educator, we have a school. Most of our students are between the ages of 12 and 17. These are the individuals that are getting into music for the first time.
6084 We have heavy competition that we compete against, things like Nintendo 64, the Internet, snowboarding. What we need to do is make sure that we maintain the growth as far as individuals learning to play a musical instrument and then go on, make records, hence put songs out so everybody in this room has a job basically. It's because of what is being done there unless, of course, you are going to be in talk radio. That's understandable.
6085 What I'm trying to get at is we need the development. I know from my experience being up in Barrie I have had more than my fair share of time given, of effort given and contributions from Rock 95 with that.
6086 The Internet brings up another thing. Doug and myself have been sitting down and working on a Web site between NOTA, North of Toronto Area Music Conference and Trade Show, and Rock 95. I have a team that worked with me on this conference that are putting together a very interesting site.
6087 Basically what it is, we run a conference once a year for a weekend, but it maintains 12 months of the year. We act as a support centre and information centre for musicians to gain information to record companies, to management companies, to everything else.
6088 Doug has sat down with us and we are currently working that we do have an interactive site that can be utilized from people all over the world basically and let them know what we are doing here as Canadians and as developing our artists which maybe 20 years ago we didn't garner the respect, but now when you say "We're a Canadian artist", it actually means something big time. We are sought after now.
6089 I'm here again to support the application of Rock 95 for that.
6090 I thank you for your time. If there's any questions, I would be glad to answer.
6091 THE CHAIRPERSON: Thank you, Mr. Mifsud.
6092 Commissioner Cram, please.
6093 COMMISSIONER CRAM: Thank you, Mr. Mifsud.
6094 Do I understand now that you are getting some support from CJVR?
6095 MR. MIFSUD: CJVR?
6096 COMMISSIONER CRAM: Didn't you say -- CKVR. I'm sorry.
6097 MR. MIFSUD: No. We receive no support.
6098 COMMISSIONER CRAM: Okay. Thank you for this, the lining better bird cages everywhere.
6099 MR. MIFSUD: Let me explain that. The Reverb magazine is not our magazine.
6100 COMMISSIONER CRAM: Okay.
6101 MR. MIFSUD: Reverb magazine is a Barrie version of "Now or I" which a lot of people understand. It's an entertainment magazine. They came on as one of our sponsors. They agreed. We wanted a pull-out section. We wanted a guide which the people at Reverb were glad enough to put together an entire pull-out for us, for the conference itself. We based the entire paper for our scheduling and everything else.
6102 No, we are not Reverb. They have an arrangement with the VR. We don't personally.
6103 COMMISSIONER CRAM: Okay. I was on a -- I shouldn't tell stories, but I was on a call-in show in Winnipeg. There was a young man who phoned me. He was a musician. He said "You know, I got the CD and I have been trying to get it going somewhere. What do I do next?"
6104 Is that what -- if I can call it NOTA -- is that what NOTA does?
6105 MR. MIFSUD: That's exactly what it is. A lot of musicians, they are musicians -- the music industry or music business has two words in it. One's "music", one's "business". The majority of the musicians understand completely the music side of it.
6106 The business side is the area where a lot of them do not spend a lot of time researching and developing and finding out. What we do is we come in and from our years of experience, all pretty much 18 years of performing, is sat down. Being in business for the past eight years myself, I have made certain connections in the industry through my associates in what I have done.
6107 What I have sat back and decided to do at this stage of the game is why not help the players, the musicians, that want to get their dream? The music industry is a dream factory. That's what it is. They want the success of air play. That's what they want to do.
6108 If you ever get to meet musicians, they are very passionate. It's a passion oriented business, myself included. I have been in other businesses where it has been more lucrative, but it's not where my heart lies.
6109 What we do is we have taken this and we have a skeleton staff the first year that worked 16 hours a day on this event to bring people from Toronto. We even went as far as when we brought our speakers up from the city of Toronto to Barrie, we sent a bus down. Rock 95 sent us a bus.
6110 We contacted these people and said "Our bus is going to be down at the King and Dufferin area at a particular restaurant. It's going to be leaving at seven o'clock in the morning. You don't have to drive. We will pick you up. When you are up here, we have hospitality suites for you. You can relax when you are not in a seminar."
6111 We also had through one of the car services a shuttle. We had a driver. We took the speakers in around the city of Barrie to show them what Barrie was all about. We took them to the venues where bands were playing. We made sure they were treated very well.
6112 The response after the entire conference was overwhelming. On the Sunday, Thanksgiving, it was loaded with calls from the venue saying we had astronomical weekends. The clubs were packed. We even had a Christian outreach centre. We wanted Christian music that participated. It was a whole load that fell off our shoulders with that.
6113 One story I would like to say, and this means everything. We are setting up at the conference which started at 10 a.m. The first conference started with record producing and then at 10 o'clock the musicians showed up at a quarter to 11. I was in the conference. Ken goes "I hope I didn't miss to much". I said "No, not really".
6114 This gentleman bought his ticket through Ticketmaster in Toronto, didn't have the bus fare to get up. He hitchhiked from Toronto to Barrie to be there. He sat through the whole day, through all the seminars, went to a gala dinner, had a ticket just for the awards ceremony, showed up during dinner. We had the key note address with Daniel Richler.
6115 What am I going to say to this guy? "You can't come in". He came in. He wrote us a letter. I wish I had it with me. I apologize. He attended Canadian Music Week and North by Northeast a number of times. He said "I don't care where I have to go as long as there's information that I can get to further my career". That basically said the whole thing.
6116 Next year we are looking forward. The sponsorships have grown. People who committed the first year have committed again and have committed more. We are just in a phase now of structuring out the year 2000 for what we are doing with that.
6117 That's where my place in Barrie is going to be over the number of years. There are places in Barrie to play. If people would come up and spend time in Barrie, attend our festivals, and they are all music oriented, it's going to be a hot spot. We know that.
6118 I am willing to put my time and effort in, but I am going to surround myself with people that feel the same way. That's why I'm here.
6119 COMMISSIONER CRAM: When you say it's north of Toronto, do you really mean the rest of Ontario or is there a specific geographic group?
6120 MR. MIFSUD: I'm glad you brought that up. Our plans are to keep not a short form version, if you don't mind me referring to it, in Barrie consistently, but we do have plans of dropping this in London and in Ottawa and in Thunder Bay.
6121 What we want to do first is basically just get our feet. Everything is a process and I understand that. That's how I built my business.
6122 What we are doing is we want to get everything put in place, have all the elements put in place so we have a template basically. What we want to do is take it -- we are going to keep it in Barrie only for the year 2000, but we already have feelers out in Ottawa, in London and in Thunder Bay to do a very similar conference.
6123 It's just a matter of setting up the logistics. It was a ton of work the first year, and to sit there and to make sure that it works just as successfully it takes some time, but that is our plan.
6124 COMMISSIONER CRAM: Thank you very much.
6125 MR. MIFSUD: Thank you.
6126 THE CHAIRPERSON: Thank you, Commissioner Cram.
6127 Thank you, Mr. Mifsud.
6128 Madam Secretary.
6129 MS SANTERRE: Thank you, Madam Chair.
6130 The next intervention will be by Seasons Center for Grieving/Traumatized Children.
6131 THE CHAIRPERSON: Good morning. It's Ms McAlpine?
6132 MS McALPINE: Yes.
INTERVENTION / INTERVENTION
6133 MS McALPINE: Good morning, Madam Chair and panel members.
6134 I would like to thank you for this opportunity -- you will have to excuse my cold -- to come here and tell you what Rock 95 means to me. I know very little about radio or music, but I do know the impact that Rock 95 has had on the agency I work for, so I hope you don't mind that I bring some warm fuzzies to the room today.
6135 Seasons Center for Grieving/Traumatized Children provides support services to families with children and caregivers who have someone die due to a murder, suicide, accident or illness. We also provide support to families living with a life-threatening illness, or who have a family member living with someone who has a life-threatening illness.
6136 The Centre is a grassroots organization. We receiving no government funding, no United Way funding, yet there is no fee for our services. The cost to maintain our programs is $1,230 per year per child. At this present time we have 200 children and caregivers combined.
6137 Due to the nature of our work and the fact that we are a national organization, it becomes very difficult to get partners on board. There is not a lot we can offer back to them and this is where Rock 95 has really touched the soul of our program. It was actually three years ago a DJ at Rock 95 named Al Brown, he does the morning show, a big, masculine guy came to the Centre and picked up a brochure and was very interested in what we did.
6138 The Centre is the only one of its kind in Canada, so he was very excited that it was actually in Barrie. So he came through and spent about an hour and a half with me and did a tour of the Centre. As he was going through, you could see the tears welling up in his eyes and he was trying to hold that back. He left his handprint on the wall and talked about his own childhood. I was like running back to my co-workers, there is only four of us, and I said, "That was Al Brown from Rock 95. You know, we didn't even have to call him. He came to us." So that was really exciting for us.
6139 Then, over the next six months different people from Rock 95 would come in, "We had heard Al had been here and we wanted to come in and see exactly what you did." So by the end of the six months we had had about seven people from Rock 95 come through, and what they had decided to do for the Centre was hold a golf tournament.
6140 The media for us is very important because they promote our events. They create awareness. They help us raise funds, but this group of people was going out and organizing the event, running the event, creating the awareness, so they were really getting quite involved in the event.
6141 So, my co-workers and I proudly went to the event that Rock 95 was holding. When we got there we realized that it was very prominent people in the community who were there, and the people who had been through on a tour of the Centre got up and spoke about the Centre. This had the most amazing effect on Seasons Center.
6142 After the tournament, different businesses who were there, clients of Rock 95 also came through the Centre. I think it is Rock 95's sterling reputation that enabled them to encourage these small businesses and corporations and individuals to get behind the Centre.
6143 So, ever since then, and that was three years ago, they have been part of our family, the whole team at Rock 95. They have been very, very involved with the Seasons Center and have made an incredible difference. I really don't know that the Centre would be what it is today without them.
6144 So, as far as being a financial contributor with the golf tournament, they also run a big Halloween event each October in partnership with Molson's. It's a family Halloween haunt and this year we had 2,500 people attend, which is amazing for a small organization. Those proceeds were also shared with the United Way. Sue Leighton, who was the mastermind of that event, spent a lot of her own time decorating, getting the event, doing the brainstorming.
6145 What else happened through that event was that we had a lot of teenagers come to us. They knew it was a Rock 95 event and that Rock 95 personalities would be there. We had over a hundred teens volunteer for that event.
6146 So going back to teenagers, there is one small story I want to tell you about. Seasons Center runs programs for teens and young adults. Now, our teen group right now has 25 teenagers and about 95 per cent of them have been affected by a suicide where a parent has committed suicide. Their self-esteem is not the greatest. They aren't feeling good about themselves. They feel that if their parent had truly loved them they wouldn't have chosen to die. So we work outside of programs with those teens even on the weekends because they really don't have anyone or anything. Right now a few of them are being passed from home to home.
6147 So again, Rock 95 had called. They were doing an event to raise money to open a baseball diamond and they thought that perhaps our teens would want to come out and do face painting. We have really talented face painters, to raise money for the Centre or whatever we wanted to do with that.
6148 So I got together seven teens and we got there and Sue had come up and asked three of the teenagers if they would dress up in those Barney outfits and she picked the tall guys because they fit the outfits. This one little guy -- well, he's not really little, but he's 13 and really adores Al Brown. He said, "Shauna, I don't want to be Barney. Al Brown's here." I said, "Jordan, just try it for 15 minutes." So he goes out and he saunters out onto the grounds. Well, Al Brown came up and shook his hand and thanked him for helping and, "Oh, this is great that you are doing this." Then Sue came up and it looked like she was trying to do the tango with Barney, but anyways after that I couldn't get him out of the outfit. He was just feeling so good about himself, these people talked to me. He went back to school, told all his friends he spent Saturday with the Rock 95 people.
6149 The sad thing is they think the DJs are cool. They don't like the Rock 95 music. They listen to 103.5, but they love the DJs and I really feel that that's where they can influence our teens and be a part of that group because the DJs in the Rock 95 team in general they are very active in the community. The people there are well known by the teens because they are out at the malls, they are out at Audio 2000. They are everywhere.
6150 So, if we could this happy little marriage of -- and here's the one fuzzy talk, of having a top 40s hit station I know that their audience is there and it would be great for the teens to have a local station with their local personalities.
6151 I think I have covered everything I wanted to cover, but I just want to thank them. Their moral support has been absolutely phenomenal and I know that it's a difficult cause to get behind. I don't know that there is ever anything we can give back to them, just to tell them that they have made an incredible difference.
6152 I come from a home where my brother was killed in a car accident when I was 14 and there was no Seasons Center and there was no Rock 95. So it just really touches my heart to see them take these kids under their wings and take the program under their wing.
6153 So, thank you, everybody.
6154 THE CHAIRPERSON: Thank you, Ms McAlpine.
6155 This Centre is a day centre providing counselling and so on? It's not an overnight shelter?
6156 MS McALPINE: No.
6157 THE CHAIRPERSON: It's more activities and counselling during the day?
6158 MS McALPINE: Yes. Peer support.
6159 THE CHAIRPERSON: For the adults who deal with the children, as well as the children?
6160 MS McALPINE: Yes. What happens during the day is we provide individual support, therapy, play therapy for the kids who maybe need more than just peer support.
6161 In the evening time we run peer support programs and that's both for the kids and the caregivers, but it is all according to their age, the circumstances surrounding the death and the relationship of the person who has died, so they can all relate to each other.
6162 THE CHAIRPERSON: How did this come about? I don't think it's a particular field that I have ever heard about by itself for that very purpose, as opposed to peripheral -- to other more generic shelters.
6163 MS McALPINE: How did Seasons Center start?
6164 THE CHAIRPERSON: Yes.
6165 MS McALPINE: Chris Parker, who is the founder of Seasons Center, has worked as a group counsellor for many, many years in a private practice. What she found in our community was that there was very little support for children. So to give back to the community, she started a small bereavement group in her home. But the need was very overwhelming, so she went to Portland, Oregon, and we are modelled after the Dougy Center.
6166 There are over 62 of these centres in the United States.
6167 She came back to Barrie and started Seasons Center. Seasons Center officially opened on December 17, 1995, and we started out with a unit in an industrial building. When I started there three years ago, four years ago, there were 60 children, and now it has grown. In the last three years, altogether we have supported over 350 children and caregivers.
6168 The need was really overwhelming, and we expanded. It was a hard go. It was not an easy program to start.
6169 The need was there but with the community we really had to push what we were doing and get the message out there, because unless they had been touched by a death it is not a service that everyone knows about. Now it is. A lot of people know about Seasons Center in our community.
6170 THE CHAIRPERSON: We thank you very much for your participation. There is really nothing we can add to your very engaging intervention.
6171 MS McALPINE: Thank you so much.
6172 THE CHAIRPERSON: Madam Secretary.
6173 MS SANTERRE: Thank you, Madam Chair.
6174 I would like now to invite the Mnjikaning First Nation to present their intervention.
6175 THE CHAIRPERSON: Are you Mr. Martel or Monsieur Martel, or are you a gentleman in both languages?
6176 MR. MARTEL: Unfortunately, I am not. I was adopted as a child. My stepfather was French Canadian, and my mother and family were as anglo as you can get. Unfortunately, I grew up in an Anglo community, so I don't speak French.
6177 It is a source of embarrassment to me.
6178 THE CHAIRPERSON: You have become a "Mister", which is fine with us.
6179 MR. MARTEL: I have become a "Mister", yes.
6180 THE CHAIRPERSON: Go ahead.
INTERVENTION / INTERVENTION
6181 MR. MARTEL: Thank you very much for allowing me to come here today. My name is Dennis Martel. I work with the Mnjikaning First Nation.
6182 I notice some funny looks on faces. It is a difficult name to say. Mnjikaning refers to the fish fence weirs that are located just outside of Orillia at the town of Atherley. The fishing weirs have been there for 4,500 years. They have been carbon 14 dated.
6183 So the community has referred to itself as Mnjikaning, which means people of the fish fence. However, the name Rama lives on in one of the little joint ventures that we entered into a while back, which is called Casino Rama.
6184 So that is our community.
6185 The Chief and Council wanted to be here today to make this presentation, but unfortunately the Chief has been involved in a Supreme Court appeal up until just recently. There is a Council of Chiefs going on right now in Ottawa, and other councillors are there.
6186 Because I have worked in the communications field for a number of years and I do work for the Chief and Council, they asked if I would come here.
6187 A little bit about why I am here. Obviously, I am not a First Nations member, although I have spent 27 years of my life, almost my entire adult working life, working with First Nations people.
6188 In the area of communications I started out as a university professor, tenured professor, and in 1978 I gave that position up in order to go and work fulltime with the First Nations because it was such an exciting challenge.
6189 My life since then has been quite scary, because I worked on contract and I gave up that wonderful soft position as a university professor.
6190 My experience working with First Nations in the area of communications has been tremendously successful, I think, at leat in some areas, and it has been very rewarding.
6191 It has taken me to Orillia, where I am now working with the Chief and Council up there and helping them deal with the media, with governments, and with other First Nations organizations. It was while I was working at Mnjikaning First Nation that Mr. Bingley approached me to talk about the possibility of establishing a small radio station within our community.
6192 I can't explain how excited I was at that.
6193 Over the years there have been a number of initiatives established in Ontario. Attempts have been made to put small radio stations in First Nations communities throughout northern Ontario. Not one of them has succeeded, because one vital element was missing from each one of those proposals.
6194 What I found exciting about Mr. Bingley's proposal was that he addressed that one particular issue.
6195 Mr. Bingley, Rock 95, has committed to a seven-year program, and that is what has been missing in the past.
6196 The programs in the past have been a little bit of money, hire one or two people, give them some second-hand equipment, let them broadcast, and then let them fail. And that is precisely what happened.
6197 I stood back in mute horror when I worked at Queen's Park for a short period of time as I watched these stations go in all across the province and as I watched them fail all across the province.
6198 One of my previous jobs at the University of Western Ontario was to establish a program in journalism for native people because I saw the need for First Nations people to be involved in the media as reporters, as writers, as newscasters, as technicians, that sort of thing.
6199 We graduated over the course of about nine years about 45 to 50 people. Some of them have gone out to work in the area; others have gone back to their communities and are working with the Chiefs and the Councils in the areas of communications and media relations. And sometimes they are working as flaks. But most of them are working in that area.
6200 One of them has gone on to become News Director for the Aboriginal Peoples Television Network, which I think is really quite exciting.
6201 Mr. Bingley did approach this whole issue from that perspective of a long-term commitment, and I found that really exciting. As a result of that, I was able to take the message back to the Chief and Council and say: "Here's what is being planned: long-term commitment, equipment, some financial involvement and training".
6202 From our perspective, what we are trying to do at Mnjikaning right now is provide training for as many people as we can, in as many positions and non-traditional occupations as we can.
6203 For example, we have a joint venture with Carnival and the province of Ontario to establish a casino: 2800 employees, 580 First Nations employees. It is the largest employer of First Nations people in Canada.
6204 But it is not just because it is a casino that is going to make lots of money for the First Nations; it is providing training. We send people off to Carnival hotels in the United States and in Mexico, and young people get their training in these places.
6205 We formed a joint venture with Van Botts Construction. This company is now building retail malls. It is going to be building the hotel and the entertainment complex for the casino. It is a joint venture. Right now it has one-half of its workforce of First Nations people.
6206 What we see with Rock 95 is another one of these kinds of joint ventures that will allow us train people, that can then take those skills elsewhere, if they so wish.
6207 Mnjikaning is a very small community. The demographics are not there to provide a commercially viable radio station. But we can train people, and they can move on and go elsewhere. It is amovable feast that they can take with them for as long as they live.
6208 Our major concern in this whole project right now is in training and capacity building, and the idea of a joint venture. We are committed to this project as much as Rock 95 is. We have already set aside some money in our budget to provide assistance to whoever it is that is going to be hired for this.
6209 We already have space set aside, but I want to get the space right next to my office because I want to play with this project too. I think it would be a really wonderful experience for me, at my age, to get involved with something like this in the training aspect of it. So I am looking forward to it as well.
6210 Essentially, that is really all I wanted to say, was that we see this as a training venture, as a joint venture, as something that will train our First Nations young people to go off and work in other areas.
6211 By the way, we already have, within our community, four graduates of various communications programs who are working in other areas right now, but they are all itching to get at this radio station. Two of the graduates are from the University of Western Ontario, one of the graduates is from the Carleton School of Journalism, and another graduate is from the First Nations Technical Institute in the Tyendinaga First Nation. So we have some people in place already prepared to go and who will also start working with young people and to train them.
6212 So the commitment is there from our side. We see that the commitment is there from Mr. Bingley's side. We think it is a practical project and we think that, given the long-term commitment, it is a project that will succeed where so many other ones have not had that good luck.
6213 Essentially, that is all I wanted to say. Thank you very much.
6214 THE CHAIRPERSON: Thank you, Mr. Martel.
6215 Commissioner Demers.
6216 COMMISSIONER DEMERS: Mr. Martel, just one question.
6217 It is very interesting to see your side of this undertaking. Maybe there is none, but is there anything that you are giving back to Rock 95 for that undertaking, from their part?
6218 MR. MARTEL: No, not that I know of. We will be providing space. We will be bringing in the volunteers and other people. We will be putting some money aside to see if we can perhaps top-up salaries for people, because $12,000 is not enough to keep somebody going. So we are prepared to do as much as we can that way to keep the station going.
6219 MR. MARTEL: Thank you. I have no other questions. Thank you, Mr. Martel.
6220 THE CHAIRPERSON: Thank you, Mr. Martel.
6221 MR. MARTEL: Thank you.
6222 THE CHAIRPERSON: Madam Secretary.
6223 MS SANTERRE: Thank you, Madam Chair.
6224 I would like now to invite Gary Farmer to present his intervention.
6225 THE CHAIRPERSON: That is cutting it close, Mr. Farmer.
--- Laughter / Rires
6226 THE CHAIRPERSON: Good morning.
INTERVENTION / INTERVENTION
6227 MR. FARMER: Good morning, Madam Chair, Members of the Commission.
6228 It is an exciting time for us here on this side for native broadcasting. I wanted to come and lend my support for Mr. Bingley and his application, for the application before you.
6229 You know, for years we have been struggling to get empowerment to native communities for radio, and the options that he offers in terms of funding and the opportunities that he offers those communities and the region around Barrie is encouraging for us and our strategy over the next few years, to empower native communities across the country, much similar to what Mr. Bingley is participating in right now. So I simply wanted to come and offer my support for this application and to whole-heartedly stand behind it.
6230 Mr. Bingley's operations as a businessman have been very fruitful for the native people generally in the region. He has employed people over several years. He has been a real encouragement to me as an individual who is, you know, struggling to get radio and licenses throughout the province and throughout the country.
6231 That is simply my statement.
6232 THE CHAIRPERSON: Thank you, Mr. Farmer.
6233 Mr. Farmer, you have been before us a number of times now, so we consider you an expert. Therefore, we find it is quite legitimate to ask you expert-type questions, so I would like your comments on -- I'm going to tell you what the issue is because you weren't here yesterday, but Mr. Bingley's proposition would want to characterize, as Canadian talent development, some expenditures which are -- I think it would be fair to say, in some part, at least capital expenditures for hardware, et cetera.
6234 We would like you to comment on how you make the link between the development of Canadian content, which is usually more closely associated with helping artists, providing money to FACTOR or Musique Action, or projects that are distinctly related. So questions have been asked about linking capital expenditures for transmitters, et cetera, to this policy of the Commission.
6235 Do you feel like an expert now?
6236 MR. FARMER: Yes. This is a question that we are being faced with as well in our application that is coming before you in January.
6237 THE CHAIRPERSON: So you are going to rehearse now.
6238 MR. FARMER: Yes.
6239 THE CHAIRPERSON: But you can't mention Toronto. We are talking about Barrie.
6240 MR. FARMER: Of course. But I know it is an issue, I guess, is what I'm saying, with the Commission and the staff.
6241 I want to thank the staff for their consideration on this matter.
6242 In our community, we don't have any expertise that I can turn to for station management, technical management, in any areas in radio development. We are understaffed and undertrained in all the areas above.
6243 Any monies that you offer for capital operations legitimizes the radio station, empowers the radio station to actually go on the air. All of the individuals that we employ from our communities and begin to train them to undertake the roles from station management, in general, as well as on-air talent, is all developing our talents as Canadians. So I see a direct link for benefits packages such as Mr. Bingley is offering to the community as, you know, a strength.
6244 Our only alternative, really, in terms of developing that talent is by actually going on air, because we learn by doing. The native people, it is very critical for them to do in order to learn. In order to learn we have to get up; in order to get up, we need Mr. Bingley's dollars, his support, to buy us those transmitters so we can go on air. I think it is a direct relationship to all the other talent development that you have done in the past.
6245 I know it is a little unique in our particular situation, but there is a special place for aboriginal people in this country, I know, and I believe that these dollars are directly related to talent development.
6246 THE CHAIRPERSON: So your position, I would suspect, is that to build a transmitter for Canadians who are already on the air in other areas and so on would not necessarily fit this policy, but it does because it is to empower aboriginal people. In other words, capital expenditures towards building radio stations in mainstream circumstances may not fit within the policy, but your position would be that it does for aboriginal stations?
6247 MR. FARMER: Yes, exactly, because we are all just getting those up now. Like I say, we don't have those individuals to turn to readily in our community who have the experience.
6248 Time and time again in my own community they are asking me, "Do you have anyone to operate this radio station?" Time and time again I can look and see, yes, I do. There are people I would trust to do it. But when it comes right down to it, we don't have those individuals in our community, and the only way that we are going to get them is by signing up and doing the work.
6249 THE CHAIRPERSON: Thank you, Mr. Farmer, for appearing this morning.
6250 MR. FARMER: Thank you very much.
6251 THE CHAIRPERSON: Madam Secretary.
6252 MS SANTERRE: Thank you, Madam Chair.
6253 I would like now to invite Isadore Peltier to present his intervention.
INTERVENTION / INTERVENTION
6254 MR. PELTIER: Good morning, Madam Chair, Commissioners.
6255 My name is Isadore Peltier and I'm from Beausoleil First Nation in Ontario.
6256 THE CHAIRPERSON: Good morning.
6257 MR. PELTIER: Thank you.
6258 I live on an island. It is on the south shores of Georgian Bay. Christian Island, as is before you, is a populated -- there are residential reserves there that are populated, and the two islands you have before you are more of a unique area. It is just for a tourist basis and we have a park in there involved.
6259 I come before you this morning to support Rock 95, Doug Bingley, in the areas of communications and radio.
6260 I'm a councillor in my community, and I put four years in communications. I work in the areas of self-government process right now with the groups that we are with with the eight First Nations. What we face is getting communications out there.
6261 Living on an island it is pretty hard to have open communications to the people because, in terms of -- when we went to having community meetings, there is not much turn out. Having information out there to the community members about what is going on has been effective. Our route in the past six years is to get information out via radio, and the people in the community were startled. It was new to them.
6262 We are going into the 21st Century. Living on an island, we find that there is more need for communications for our members. We have experienced that by the time information gets from one end of the island to another it is stretched. The information is stretched. It is not logical. It is beyond proportions.
6263 So when we got into radio -- by the way, we are running on a low-powered radio right now as a pilot project. We have been at it for the past six years. The equipment we had was so prehistoric, you could call it today, and when we met with Doug Bingley, I showed him what we were running by, on a low-powered area. He heard us, because he came to town, over the airwaves, and he says, "Let me look at your equipment." I said, "You really want to see what we have? Okay, come on up."
6264 Then I showed Doug what we have there, and he goes "Where did you get this?" I said "Well, we just picked it up from here, from there. We are testing it out. People need to know what is going on in the community besides newsletters and all that. People want to speak over the airwaves, and there are old people that can't make it out and we are reaching to them."
6265 It was so ironic. He says, "What can we do to help you?" I said, "Well, first of all, Doug", I said, "can we upgrade what we have now?" "Okay, let's work on something."
6266 This is like six years ago. To this day we are slowly building up in the capacity. They donated to us a vast size of equipment that we could work with. The youth that we have there were startled. "I want to get on. I would like to be one of the announcers. Can I work with the youth?" Great. That's all we need.
6267 In our community there is a strong population of youth and we want the youth to have something there.
6268 But, Madam Chair and Commissioners, here we have an option right now as to what we are getting and so it was a Godsend for us.
6269 Doug Bingley came up and met with us. He said "I have a proposal here for you." I said, "You know, I got something for you, sir, that we could work with." I said, "Okay, I will take it back to Council. I will take it back to the people." I said, "This person here", I said, "he is going to work with us for the next -- not only now but for the next seven years on this, to work with."
6270 By the way, we have already journalists in our community, we have voice programmers in our community, but there are no financial resources for them and we lose them. They go elsewhere because our population is about 80 per cent unemployed and it's pretty hard for them. So all the skills they have, they are using elsewhere. But now we could bring them back, with the financial resources that Doug Bingley is talking about, and they are glad about that. I said, "Well, come back home. We will use it." That's great.
6271 I solely support in this part because for the past six years not only had Doug Bingley worked with us and all that, but when this proposal came to our table, to the Council, I said, "Hey, this guy has knowledge". You know the old saying "talks the talk". Well, he actually walks the walk.
6272 We highly support this. It's going to happen.
6273 I was quite surprised at this Lachine -- CISS-FM, I guess yesterday, overviewing Beausoleil First Nations. To me that was the first time I really -- as a communications person in my area -- heard this particular group wanted the assistance. I'm glad. I said, "Well, you know" -- I was thinking to myself the doors are open. Anybody who wants to assist the First Nations community it's open. I said, "I will never turn anybody down."
6274 But we have been working with Rock 95 for the past six years, equipment, you name it. Festivals that were happening, they were there, you know, just for exposure.
6275 But the great thing about it is the people that cannot make it out, especially old people listening over the airwaves what is happening, what is going on out there, how it's going to -- you know, what is happening in terms of in an everyday life. Bringing on native contemporary music that they didn't know exists. They say, "Who are these people?" They write back to us. Well, they are actually native people using their music, teaching their songs and all that.
6276 Then during the lunch hour one of our language teachers has a one-hour show in the language, strictly language, and the young ones pick up on that.
6277 I am 39 years old and I am the only youngest person to still retain the language. That is kind of sad. No, terrible.
6278 But using media as a vehicle, you know, to us is a Godsend. We enjoy it and we really, really highly recommend that we will support this particular applicant to move forward with us and all that.
6279 Fishermen are out there on a daily basis, sometimes gets careless, doesn't know what is going on in terms of weatherwise, we have it on the air. Our boat sometimes breaks down, people are lining up. No one knows what happened. Now we have it on the air. I'm sorry, there are going to be delays. Okay, we will stay home instead of lining up.
6280 It's a very, very -- it's a rut really. Psychologically it's a major impact -- living on an island.
6281 In the wintertime when ice freezes over we don't know what's going to be out there tomorrow, what it's going to be like. But now we can put it over the airwaves. Do not cross today due to the fact that there is a storm coming. But this is the south. We are not in the north. It happens here.
6282 So to say this -- I guess emotionally, due to the fact that I have a large population of young, youth and they listen to radio, they listen to anything that comes on. Ever since we launched ourselves into radio they never stop listening to it. You know, "I have CDs coming. Could you play this? Could you play this for my friend?" That's good. It keeps them occupied.
6283 And they want to learn about media. They want to learn how to get into the mainframe of media, announcing. I said "Great. This is going to capture and build a strong composure for the community."
6284 That's what I really have to say this morning, Madam and Commissioners. I wholly, strongly support in my community what we have proposed in our proposal. We work with them well and we will continue to work with them.
6285 If that doesn't happen, we are still going to go ahead with it. We will still work with whoever comes to our door, because living on an island we sure do need that communication for us and all that and keep our young ones occupied.
6286 Meegwetch. Thank you.
6287 THE CHAIRPERSON: Thank you, Mr. Peltier.
6288 Commissioner Demers.
6289 I apologize. Commissioner Cram.
6290 COMMISSIONER CRAM: Thank you.
6291 Mr. Peltier, you gave us this map. So the United Anishnaabeg Councils, is that a group of First Nations?
6292 MR. PELTIER: Yes, it is. That is part of my package of -- what do you call it? Like I said, we are in the process of a self-government process in Ontario. You have seen the Nisga'a. Well, here in Ontario there are eight groups of us that are in the process there.
6293 That part I took because I submit that to form part of our brochures and all that, but I just wanted to let you know where we are located at and how the other First Nations happen to be there, the First Nations we are talking about happen to fit in.
6294 COMMISSIONER CRAM: So Beausoleil is part of the Joint Council. Is that --
6295 MR. PELTIER: Yes. They must have a Council because it is made up of Pottawatomi, Mississaugas and Ojibwes.
6296 COMMISSIONER CRAM: When you talk about your nation and the people -- you are talking about older people and younger, youth -- how many are there? What is the population of Beausoleil?
6297 MR. PELTIER: Six hundred and forty-two all year round. In the summertime, with the cottage industry, it quadruples and it is like a city really, because we have cottages surrounding an island. So that's what brings in some of the revenue coming in.
6298 COMMISSIONER CRAM: In terms of youth, what is the percentage of youth of the population?
6299 MR. PELTIER: I would say there is close to 40 per cent. A strong per cent.
6300 COMMISSIONER CRAM: Under 18?
6301 MR. PELTIER: Yes. We need, you know, to keep the young ones occupied here.
6302 We are in a stage where we did a study, we are building a new complex to house these young ones for recreational purposes and all that, because right now everything is outside.
6303 COMMISSIONER CRAM: Then you talked about elderly and if I said age 60 and over, how many or what percentage?
6304 MR. PELTIER: I would say that would probably kick in at least 4 per cent.
6305 COMMISSIONER CRAM: Four per cent?
6306 MR. PELTIER: Yes, of the elderly.
6307 COMMISSIONER CRAM: I take it when you were talking about the language, you mean Ojibwe?
6308 MR. PELTIER: Yes.
6309 COMMISSIONER CRAM: Right now you have the one hour at noon.
6310 MR. PELTIER: Yes.
6311 COMMISSIONER CRAM: Is there any other programming on the radio in Ojibwe?
6312 MR. PELTIER: In Ojibwe? No, but the music that comes on in Ojibwe that we use, or if it's pow-wow music or the teachings and all that, that would come on at the same time with that one hour span.
6313 Just to bring the youth or older people that are out there and the people don't know the language in our community, and we are using it as best we can so that the young will pick up. Because, like say, we lost it, you know, and we are trying to retain it.
6314 COMMISSIONER CRAM: Thank you very much.
6315 MR. PELTIER: Thank you very much, Madam and Commissioners. Have a nice day.
6316 THE CHAIRPERSON: Thank you.
6317 Thank you, Commissioner Cram.
6318 Thank you, Mr. Peltier.
6319 Madam Secretary.
6320 MS SANTERRE: Thank you, Madam Chair.
6321 The next intervention is by John Van Veld.
INTERVENTION / INTERVENTION
6322 THE CHAIRPERSON: Good morning, Mr. Van Veld.
6323 MR. VAN VELD: Good morning. Madam Chair, Commissioners, I am here to throw my support behind Rock 95's broadcasting application for a new FM radio station in Barrie.
6324 A little bit about myself. I am an independent songwriter, singer, recording artist, producer. I work very closely with different artists as well as my own projects. I live rock and roll.
6325 Over the past day or so, I have heard all the applicants put forth their proposals for supporting and developing Canadian talent. I would just like to clarify a few things.
6326 This is where Canadian talent needs to be developed, not in bandshells, not through token live performances. We need tangible things. Rock 95 as a broadcaster has in its 11 year history been completely supportive of any of the regional talents and their development.
6327 Rock 95 is the only rock station north of Toronto that is committed to the development of new Canadian talent. I know this because I am one of the beneficiaries of these projects.
6328 I spend probably --
6329 THE CHAIRPERSON: Mr. Van Veld, if you speak a little further from the microphone. Our equipment is not as sophisticated as what you are used to.
6330 MR. VAN VELD: Okay.
6331 THE CHAIRPERSON: We wont' get this boom effect.
6332 MR. VAN VELD: All right. I spend probably 16 hours a week on the road in my vehicle listening to radio to keep up to my industry. In other words, when I am out touring from town to town and I do tour 51 out of 52 weeks in 1999, I monitor the radio to hear what's new, what's happening, what people want to hear. This is my guide to what's going to make me popular to my clients.
6333 I hear radio stations from Chatham to Kapuskasing. That's the territory that I have covered this year, along the 401, along the 400 series highways. Rock 95's play list is almost identical to my own as an artist and as a cover artist. They play Sloan, Tragically Hip, Foo Fighters Creed. I do the same thing. This is what makes me popular and makes me viable within my industry.
6334 They have a new music commitment within Rock 95 broadcasting, but what they are proposing at this point, to develop a CHR station and to continue their commitment to new Canadian talent development, is what myself and anyone as an artist needs to continue within the industry.
6335 I can cite examples of several different artists that have benefited from Rock 95's commitment to new talent development. The Carpet Frogs for one wouldn't have a career if it wasn't for the fact that Rock 95 got behind them early in their career.
6336 I wouldn't have a career. I have been at it for 20 years. In the last six years through Rock 95 broadcasting's development system I have had viable hit potential singles played on air. If I get a record on Rock 95, it makes it a lot easier to get a record on the rest of the radio stations within the region. That creates a trickle down effect that spreads throughout radio.
6337 A classic example, Rock 95 commissioned myself and other artists to create a 100 per cent Cancon CD three years ago. The first cut on the CD happened to be my own. Rock 95 played it. CHAY-FM played it. B101 played it. Then it went from there down the 401 to CKNX in Wingham -- sorry -- yes, CKNX in Wingham, CHEX-FM in Owen Sound.
6338 The real thrill is not getting on stage and performing. The real thrill comes nine months after you release something and you get a royalty cheque. These are the things that allow us to continue.
6339 Creating a CHR station in partnership with Rock 95 with their commitment, CHR is where we need to be. It's great to have classic rock, it's great to have new rock, but CHR is current hit radio. If we get exposed in that genre, then we have convinced all the rest of the radio stations that we are viable.
6340 Rock 95 broadcasting has committed to continuing their development of new Canadian talent. I get a record on a CHR station in Barrie, it makes me a lot more credible when I go to Toronto or Windsor or any of the other major markets.
6341 There's a chain reaction that happens because of a launch pad. All new writers need a launch pad. Rock 95 broadcasting is offering to create that launch pad. Z107.5 by raising the bar of Canadian content again makes it easier for new Canadian artists to be presented to the world simply by launching them from that station.
6342 They raise the bar of Canadian content, that means they are eliminating -- not eliminating, but they are narrowing the field for outside foreign markets -- outside foreign content.
6343 American radio stations which I am exposed to quite frequently wave a flag in their programming. If you listen to an American radio station, you may hear 10 per cent foreign content. That means American radio stations are committing 90 per cent to their own.
6344 American markets are huge. There's millions of people in towns like New Jersey, right, areas like New Jersey where Bruce Springsteen or John Bonjovi came from. These artists wouldn't have made it in this country. The reason they make it there is because there is a push behind the American artist. We need that same thing in Canada and this is the way to do it, by creating new launch pads for our artists.
6345 There's also the topic of Internet site development. That is now a crucial part of the Canadian music industry, everybody's music industry world-wide. The Internet now is what the radio was a hundred years ago or 50 years ago what television was to us. It's the new communications central.
6346 It is also costly. Rock 95 broadcasting is proposing in line with their new radio station to create a Web site that's going to support 75 regional acts. Myself, as an artist, I have to eat. Therefore, I have to get in my car, I have to drive to my gig, I have to perform. It's a lot of man hours. I don't have time to sit and monitor a Web site. If they are going to do this for me, I am a real happy guy.
6347 I just wanted to say about classic rock radio stations, 100 per cent classic rock radio stations do nothing for the development of new Canadian talent. They squeeze out new Canadian talent. In order to be programmed into a 100 per cent classic rock radio station you have to have a track record of 10 years and five hits, unless you've had one million-selling single. These things don't develop new Canadian talent; they quash it.
6348 Business plans and experience are necessary to succeed, but new products and creativity are what drive the economy. Let us grow.
6349 If you give people the opportunity to hear something new and fresh, they may like it. Every so often you have to burn the forests down in order for new growth to occur.
6350 Rock 95 broadcasting has repeatedly shown its commitment to the growth and development of new Canadian talent. Rock 95 broadcasting and Z107.5 should be the example to all other broadcasters. Their commitment is shown historically through the creation of new product, by handing the money to the artists to create it. They get behind live events, absolutely. They get behind live events that create an opportunity for us to showcase ourselves in front of large audiences.
6351 However, those large audiences wouldn't be there for us if we didn't have the product before us so they could familiarize themselves with us.
6352 Thank you.
6353 THE CHAIRPERSON: Thank you, Mr. Van Veld.
6354 Commissioner Demers.
6355 COMMISSIONER DEMERS: Just a couple of questions. You seem to describe Rock 95 as a very successful station and you describe what it does to be successful. Do they do something more than the others so that they are more successful, in your view?
6356 MR. VAN VELD: Absolutely. They are more accessible to the artists. They are more committed to the creation of new product. They open their wallets. They open their doors and they say, "Here. Here's some dough, create a product. We'll get behind it."
6357 I mean, they are not throwing money into the wind saying, "Here, press a thousand CDs and good luck." They say, "Here, press a thousand CDs, give me 500. Let me distribute them. Let me get behind you. Let me put them to other radio stations. Let me put them in other markets. Where are you playing? We'll send some there." You know, "What's your schedule look like? We'll get behind you and we'll send a record to Chatham if you are there three weeks from now and we'll talk to those radio programmers." That for the artist is what is important.
6358 Myself, as an artist, sure I can go a day in advance and maybe, if I am lucky, get to talk to a program director or a music director at a radio station that I am not familiar with. But if I have someone like Rock 95 broadcasting behind me, and not just Doug Bingley, but he has got an entire staff of people that work for him that are behind the artist, it's really beneficial for me as an artist to have a Ross McLeod talk to a radio programming director in Chatham to say, "You know what? It's a really good record, man. Just give it a listen." Right.
6359 I can say that. I can say that to the radio programmer, but he doesn't know me from Adam. If he has got somebody, one of his peers within the industry saying, "Honest, trust me, give this a listen," as an independent artist that's a break that you can pay for.
6360 COMMISSIONER DEMERS: Are you a favourite son of Rock 95, in the sense of do you know of other artists in Barrie or in the area that get the same treatment?
6361 MR. VAN VELD: Absolutely. Absolutely. I'm a favourite son, no. My concern is with the music industry. Okay?
6362 But I have several different compilation CDs, ones that I have been involved with, ones that I haven't been involved with that they have done the same thing with.
6363 COMMISSIONER DEMERS: Thank you, sir.
6364 MR. VAN VELD: Thank you.
6365 THE CHAIRPERSON: Thank you, Mr. Van Veld.
6366 I believe, Madam Secretary, that completes Phase III?
6367 MS SANTERRE: Yes.
6368 THE CHAIRPERSON: So we will take a 15-minute break, I think we deserve it, and we will do Phase IV, hear the applicants in reply. Thank you.
--- Recess at 1027 / Suspension à 1027
--- Upon resuming at 1049 / Reprise à 1049
6369 THE CHAIRPERSON: Madam Secretary.
6370 MS SANTERRE: Now we will proceed with Phase IV and we will here the rebuttal to all the interventions by CHUM Limited.
REPLY / RÉPLIQUE
6371 MR. WATERS: Thank you.
6372 Madam Chair, members of the Commission, we just have a few comments about a couple of the interventions that have come before you today.
6373 First of all, I would just like to comment briefly on comments made by Stephen Mifsud. For the record, when he approached CKVR he was not looking for sponsorship. He already had that. He was looking for promotion. He got it, a full schedule of promos for the event, several times a time on "Passport to VR Land" from September 7th to October 3rd.
6374 What Mr. Mifsud also did not mention was the fact that CHUM's MuchMusic did lend him support for his event as well.
6376 MR. ROMAN: I would like to take just a moment to respond to some of the issues raised by Mr. John Van Veld. I am going to do it from the perspective of CHUM's association with the music industry. It has been long, it has been proactive and we believe it has been effective. Every one of our stations in every one of our markets is in close touch with the music community.
6377 What has been made apparent to us in the building of a successful industry, the music industry or any industry, is a long, complete and unbroken chain of vital components. Songwriting, talent development, appearances and honing of skills. It is also promotion. It is marketing. It is showcasing and it is touring. It is about finding the money to produce a demo. It is about shopping the demo to the record labels and, if successful, recording that first CD and then it starts all over again, airplay on Canadian radio stations, bookings in clubs, venues and promoting to the next level.
6378 CHUM, and if approved, 97.7 The Bay, will be part of the demonstrated commitments that we have made to the music industry at every single step of that process, the one I have just outlined.
6379 But what we know from the music industry is that there are needed and almost -- I think almost taken for granted issues here that are nevertheless still very important. I am stunned that memories are so short that perhaps familiarity does indeed start to breed contempt.
6380 As the founding President of FACTOR, for the first six years (sic) of that organization's life I was given leave by my company, CHUM, to move onto the premises of FACTOR. I spent that six months working with my colleague, the Chairman of the Canadian Independent Record Production Association, Earl Rosen, in personally crafting and designing the guidelines of the programs that today are used in support and development of Canadian talent. They include new talent demos, finding the funding for them, songwriting demos, record production loans and direct project approval for Canadian independent record labels.
6381 We got involved in 1982. There hasn't been a year gone by that we haven't contributed significant financial resources and manpower resources to both FACTOR and then in 1984 to the founding and to this day continual involvement with francophone recording at Music Action.
6382 We have furthered that relationship with the music industry. Ross Davies and myself have been involved in the Music Industry Task Force to create today what is called CARMAC, the Canadian Association for Record Marketing Across Canada. We are now drafting and completing those guidelines which will be submitted before the Commission. We have complete buy in of the music industry, that what we are doing at the next level in the development of Canadian talent is what they want and what they consider important.
6383 They have made it very clear to us that personal performances that are appearing at venues and being on stage, concert halls, arenas and, yes, even bandshells, is still very important and very vital. It all begins at the local community level. When the community says that we don't have that kind of venue, that we would like to complete a project that we have been working on for 30 years to get that venue, we listen and that's essentially what we did in preparing our application for 97.7 The Bay.
6384 In fact, Ross Davies, who has been with me side by side, working directly with the music industry, on the CARMAC project and at other levels, including the annual production of the Juno event and as a past director of CARAS, the Canadian Academy of Recording Arts and Sciences, to offer his insights.
6385 MR. DAVIES: Thanks, Duff.
6386 Madam Chair, fellow Commissioners, you would have heard me yesterday refer to my involvement with CARAS and I am also on the Music Education Committee at CARAS and, as I said yesterday, they have really outlined the incredible importance of music education in this country. In order to get musicians coming into our industry we need to start teaching them.
6387 Mr. Van Veld's comments about not needing places like Bandshell concerns me. Yes, it is all about getting that CD, that is the goal, but I would suggest that you will never get that CD unless you know how to play.
6388 We know this because, as Duff has said, our involvement with the music industry we are talking to people from the Canadian Record Industry Association, the Canadian Independent Record Producers Association, CARAS, as I said. These are the people who represent Mr. Van Veld, who tell us. These are the people who are telling us we need to get our people out there playing. They need to improve their craft. The only way they can do that is by playing.
6389 You need venues to play and I would suggest that a place like The Bandshell for Barrie may be one of the most perfect places to expose their talent. And I think it is important we don't forget that. The goal is the CD, but you have got to be taught and learn how to play properly in order to get to that CD and that's what our initiatives are dealing with.
6391 MR. ROMAN: Could I just add, we are going to build The Bandshell one way or the other.
6392 MR. WATERS: Thanks, Duff. Thanks, Ross.
6393 I would now like to speak to the Dufferin Communications Intervention. In response to CIDC-FM, CHUM filed a written rebuttal with the Commission on November 23rd. We have a few additional comments in respect of their appearance today.
6394 One, the objection to multiple ownership and combo selling in the Toronto market has nothing to do with CHUM's application for an FM licence in Barrie. The manner in which CIDC-FM is sold at the national level is a concern best addressed to its national representatives and not to the CHUM application.
6395 Two, CIDC-FM is licensed to serve the Orangeville community, but it has listed itself in the BBM survey as a Toronto station.
6396 As the Commission is aware, Dufferin Communications attempted several times over the past few years to reposition itself as a Toronto station and only in September was finally granted the authority to move its studios and business offices to Toronto, at 5302 Dundas Street West. That is more than 100 kilometres from Barrie, a market they now purport to serve as a local radio station.
6397 Now, with Toronto competitive stations eroding its audience, CIDC-FM is directing more attention to Barrie.
6398 Three, Orangeville is outside our proposed FM 97.7 The Bay's .5 millivolt contour and certainly our 3 millivolt contour because second adjacent frequency protection to the south and southwest to Toronto is pulled back. And because of protection CHTZ-FM St. Catherines, which operates on the same frequency, 97.7, The Bay signal, even in open country will not reach Orangeville.
6399 Four, CIDC-FM suggests that a new licence would have a devastating effect on an incumbent broadcaster. With respect, CIDC-FM is not an incumbent in the Barrie market.
6400 And finally, CIDC-FM had every opportunity to address the call for FM licence applications in Barrie. Three applicants came forward. CIDC-FM chose not to apply.
6401 Finally, I would like to speak to the Larche intervention of yesterday.
6402 First, he stated that all the research substantiated the need for a classic rock station. This is factually incorrect. As Mr. Bingley stated, and knows intimately, Barrie already has a station that plays classic rock: his Rock 95.
6403 Mr. Larche suggested CHUM had not done any research. He stated, and I quote:
"We assume there was no research done by CHUM."
6404 Madam Chair, because of our intimate knowledge of the market, we knew the hole that existed and we did do the research to confirm it. I have it right here, and I would be happy to file it with the Commission, if you would like.
6405 Our audience research was done by Audience Research International of Seattle, who do all the regular research for our radio stations across Canada.
6406 As to his use of BBM data, back when his research was done in September of 1998, CISS-FM was a country station. Further, they never even tested CHR in their study. The study stated they tested classic rock, classic hits and hot AC. None of these are youth oriented formats.
6407 We reiterate: Our research, and indeed Mr. Bingley's research, confirms the hole in the market is not classic rock. Frankly, we were stunned when we saw Larche's application which is a proposal to basically duplicate an existing service in Barrie, not a contribution to diversity.
6408 Mr. Larche made reference to our proposed operating costs. Madam Chair, Members of the Commission, the entire thrust of this hearing, and indeed any hearing for a new licence, is the ultimate service to the public.
6409 CHUM has been in the radio business for nearly 50 years, and we are committed to be around for the long haul. We know what it takes to provide first-class radio service, and you can't do it on the cheap.
6410 We are part of the Barrie community, and we are prepared to make the necessary operating investment, over $9 million over five years, to do it right: more than twice as much on operating and more than twice as much on programming than either of the competing applicants.
6411 Mr. Larche was correct when he said CHUM was prepared to wait and was prepared to invest in the future. Indeed, we are.
6412 Thank you.
6413 THE CHAIRPERSON: Thank you, gentlemen.
6414 We have no questions.
6415 Madam Secretary.
6416 MS SANTERRE: Thank you, Madam Chair.
6417 Now I would like to invite Rock 95 Broadcasting (Barrie-Orillia) Ltd. to present its rebuttal.
6418 THE CHAIRPERSON: Welcome back, Mr. Bingley.
6419 MR. BINGLEY: Thank you, Madam Chair.
6420 I know this morning we have taken up quite a bit of your time with some interventions with respect to our application, and I would be happy to make whatever contribution I can to get you back on schedule.
6421 So we have no comments at this time. Thank you very much.
6422 THE CHAIRPERSON: If you have no comments, we have no questions.
6423 Thank you.
6424 Madam Secretary.
6425 MS SANTERRE: The next rebuttal will be done by Larche Communications (Barrie) Inc.
REPLY / REPLIQUE
6426 MR. LARCHE: Good morning. I think I am going to take my ten minutes, if that is all right. I know we are all anxious to bring this part of the application to a close.
6427 I would like to spend a few moments to draw attention to just a few of the very positive letters of intervention that were filed on our behalf in our application.
6428 The Mayor of Midland, George McDonald, and the Mayor of Penetanguishene, Bob Clue, commented on how LCI will bring the same level of community service and professionalism and community dedication to Barrie as we have to those communities.
6429 I would also like to comment on a point Mr. Peltier said this morning with regard to not knowing about our initiative with CHIM-FM, which kind of took us aback.
6430 We have dealt for the last year with the Chairperson at CHIM-FM, Edna King, who wrote in her positive letter of intervention that LCI has been very helpful to the Beausoleil Band First Nations FM radio station.
"They have provided us with equipment and CDs. We have been to their Midland station to learn more about the business of radio, and we believe that the apprenticeship program that they are proposing would be very positive." (As read)
6431 Georgian College, the primary college in central Ontario, intervened regarding News Voices. They said that:
"We believe that the proposed new station will bring with it a fresh and unique perspective to the news dissemination process in Barrie. It will allow the public to formulate a more accurate and intelligent opinion concerning events of the day in the community in which they live." (As read)
6432 Mr. John McCulloch, who is a retired local broadcaster, said:
"As large consortiums are gobbling up radio and television stations, it is refreshing to see that an entrepreneur is prepared to take an independent stand and move forward with enthusiasm to serve the community in which he lives." (As read)
6433 I would like to make a few points with regard to Mr. Bingley's intervention against us yesterday with regard to CTD.
6434 Mr. Bingley said that we were introducing new initiatives. I just want to point out that each and every initiative that we have put a value on is in our application, with the exception of the CTD director.
6435 I only included that more as a statement that if Rock 95 can count a person's salary to co-ordinate their CTD, then I think every station in Canada should be allowed to do the same thing. We are all very committed to promoting Canadian Talent Development.
6436 The second point has to do with saying that we are trying to augment our application by introducing new costs.
6437 Again, that is just not the case. We know that we are not proposing the most money. We are just trying to show that there is a cost associated with the CTD initiatives that we put forward.
6438 I still don't believe that it counts. I just want to make sure that the Commission understood that the initiatives we proposed do cost money, especially in the context of what else is being proposed to you by the other two applicants.
6439 Accepting their value or not does not diminish the value of our initiatives. I believe that in terms of the plans being innovative, being meaningful, and most likely contributing to the long-term success of Barrie artists, I don't think I have to take a back seat to anyone.
6440 Finally, the implication that our proposed mobile studio is more self-serving than a true benefit to Canadian talent development, again, this is not the case. We are proposing a mobile recording studio which will include multi-input, multi-track recording equipment, digital processing equipment and CD mastering equipment. None of this equipment is required for broadcasting.
6441 The mobile studio is the cornerstone of many of our initiatives. How could we deliver on the promises regarding recording time offered to artists without a professional recording system.
6442 We are committed to our mobile. It is going to be a state-of-the-art recording facility that will produce CD quality recordings.
6443 I would just like to turn for a moment to a few other of Mr. Bingley's comments saying that our proposed classic rock format will directly come after his audience and his advertisers.
6444 CFJB-FM, contrary to what you just heard earlier even by CHUM, who are again making this assessment without research that we have been able to see, is not a classic rock station. They bill themselves as hot new music and classic hits, and their day-to-day music list reflects that of a hot AC station more than any type of rock station.
6445 Mr. Bingley quoted some core rock artists that are in his library like Pink Floyd and Jimmy Hendrix, but what he failed to mention is that Rock 95 showcases classic rock Saturday nights with a four-hour program hosted by their morning team called Classic Rock Saturday Nights. That is where many of these artists are aired.
6446 What we are proposing is to be a classic rock station seven days a week, 24-hours per day. We will be different.
6447 Also, Mr. Bingley complained about what he felt was an unclear point of reference with regard to some of the Angus-Reid research findings. On one level, I do agree with Mr. Bingley because there has been so many numbers going back and forth over the last few days that a lot of them seem contradictory.
6448 With that in mind, I thought it would be helpful to just clarify some of the research findings that have been discussed over the past couple of days.
6449 Mr. Bingley referred to the finding from the Angus-Reid group research filed with our application that only 28 per cent of the listeners attracted to a classic rock format identified CFJB-FM as a station that specializes in this type of music. He felt that result was somehow tainted because the question only asked listeners whether they were aware of a Barrie station that specialized in playing this style of music.
6450 We submit that the relevant point of reference for this hearing is indeed what Barrie station is specializing in that format. I don't think the Commission is particularly interested in protecting the format position of an out-of-market licence.
6451 The findings remain. Only 37 per cent of potential classic rock listeners felt that the Barrie station specialized in this style of music, and only 28 per cent named CFJB-FM as that station.
6452 It is interesting, Mr. Bingley fails to mention the full context of the findings of his own Oakes research, and I would like to refer the Commission to examine this evidence for themselves on Tables 18.1, 19.1 and 20.1 from -- one of the statistical tables submitted by Oakes research. When CFJB core listeners, those most familiar with the station, were asked which station is best known for playing classic rock, a total of 55 per cent mentioned CFJB-FM. When these same core listeners were asked which station was best known for playing the latest Top 40 hits, 52 per cent said CFJB-FM. When asked which station was best known for playing new rock, 64 per cent of these listeners said CFJB-FM.
6453 With CFJB, Mr. Bingley is clearly casting as wide a net as possible to get as large an audience as possible. To his credit, he has been successful dominating 18 to 54 in the Barrie extended market. What Mr. Bingley doesn't acknowledge is that he has left a large hole in this net and left a large group of classic rock fans who are dissatisfied with the local listening options.
6454 Indeed, the Oakes research study backs this up. Fifteen to 44 year olds in the Barrie extended markets say rock'n roll and classic rock in particular is not being played enough on local radio.
6455 I refer again the Commission to Table 14.1 of the statistical tables. When asked, on an open-ended basis, what type of music is not played enough on radio, more 14 to 44 years old mentioned classic rock than any other style of music. The second most commonly mentioned style of music that they thought they weren't getting enough of was rock'n roll. The third, seventies' music. In other words, what the Barrie market is missing is a classic rock radio station.
6456 Mr. Bingley also made reference to Q.107's numbers in Barrie being based on Howard Stern. Again, this is misleading. A quick look at the fall but prior to Stern going on air only reveals one share point less than what they currently have.
6457 I would just like to turn to BBM's for a second. Mr. Bingley also said that if we took a 3.5 share of his audience he would drop from second place to fourth place in Barrie. Again, this simply doesn't equate.
6458 Mr. Bingley is currently second place with an 18.2 share of listeners 18 to 54 and he would still be in second place after losing a 3.5 share by a 9 share margin over CHAY-FM. What Mr. Bingley didn't reference was the BBM cell that CFJB-FM and other radio stations in central Ontario really sell on, and that is the Barrie extended market. Here, CFJB-FM has a 20.4 share, which is double the nearest competitor. Losing a 3.5 share would still leave him with a 75 per cent increase over the next station.
6459 Our application is not targeted to CFJB-FM. I'm a small broadcaster with limited financial resources. When I decided to apply for this new station I looked at the market data, then I decided to hire the most respected research company in our business. They are also one of the most expensive, but it didn't matter. I wanted to make absolutely sure that the format we chose would fill a market hole. That research said it was classic rock. The research said that the market didn't believe it was currently available. The research said most of our listeners would come from out-of-town tuning, not local stations, and that is why we are here today.
6460 If I believe that the research -- and if the BBMs told me that it should have been CHR, I can assure you I would be in front of you today proposing a CHR format.
6461 Again, you have met us over the last few days. We are a young group of broadcasters. We really want to become part of something special. We want to make a difference.
6462 I'm very aware of the awesome responsibility that we have as custodians of the radio frequency that belongs to the public. We want to contribute to enriching the public. We are at a point in our company where we are just starting to make money. Our 1999 return showed us $1,600 profit. Not much, but at least it is on the positive side.
6463 We want to grow. Names like Waters and Rogers and Shaw, they started out with one station or one cable company, and then they were given the opportunity for another, and that allowed them to build. What I am asking is for you to give me that opportunity.
6464 I think I have presented you with more than compelling evidence that the format that we are providing will fill the hole. I think we have provided you with, again, more than compelling evidence that we meet the criteria that we have set out and I honestly believe that the outcome of this decision will dictate our future.
6465 Thank you.
6466 THE CHAIRPERSON: Thank you, Mr. Larche.
6467 We have no further questions. Thank you.
6468 This completes Phase IV.
6469 Before adjourning this part of the hearing, Mr. Bingley, could you come back to the microphone please. Over there is fine. Any microphone, just so that you can get on the record.
6470 I want to ask you whether you are satisfied that you have had the opportunity to say anything you have to say about Mr. Larche's additional letter related to Canadian talent development.
REPLY / RÉPLIQUE
6471 MR. BINGLEY: Yes. I guess for the record, Madam Chair, the biggest problem we had with his additional information was that in his application he made what we felt could best be characterized as relatively vague references to Canadian talent initiatives. There were no concrete definitions as to how much money was going to be spent in any area. So, for example, the application as filed said "Well, we will probably have a recording studio" or "We will have a recording studio", but how much is that? Is that $5,000? You can build a recording studio for $5,000 with today's computer technology or half a million dollars. That is just one example.
6472 We feel the key point is that if an applicant can put in, as I say, relatively loose definitions of Canadian talent initiatives, and then later on, after viewing the exact dollar amounts that other people are putting up, if they are able to go back and change that, well, we believe it somewhat undermines the process.
6473 That is our comment.
6474 THE CHAIRPERSON: Thank you, Mr. Bingley.
6475 We will take a five-minute break. I will consult with my colleagues and we will come back and let you know what we are going to do about this.
6476 Thank you.
6477 I see that we have had a possible major retraction to Canadian talent development.
6478 I understood Mr. Roman saying that the bandshell is going to be built one way or the other, so give our best to Mr. Salter and his project.
6479 We will be back in five minutes.
--- Recess at 1118 / Suspension à 1118
--- Upon resuming at 1124 / Reprise à 1124
6480 THE CHAIRPERSON: Order, please.
6481 In all the circumstances and having considered the representations of both parties the Panel has decided to add to the public record the additional information provided by Larche in its November 12 letter.
6482 This decision is no indication of whether the Panel has yet concluded that the commitments to Canadian talent development contained in that additional information are acceptable as CTD commitments under the Commission's CTD policy.
6483 So that completes the record or the proceeding for the Barrie radio stations.
6484 My colleagues and I wish to thank the Applicants for their patience, especially since we had such a long day yesterday, and we also thank all the intervenors for their participation in the process.
6485 We wish you all a Merry Christmas.
6486 Madam Secretary.
--- Pause / Pause
6487 THE CHAIRPERSON: Did I create some confusion with the CHUM group by my comment? If so, you are welcome to correct the record.
6488 I thought I had heard you, Mr. Roman, say the bandshell will be built one way or the other. Was that incorrect?
6489 MR. ROMAN: Madam Chair, what should have been said is we will build it whether it qualifies as a Canadian talent development initiative or not. That was what I meant.
6490 Thank you, Madam Chair.
6491 THE CHAIRPERSON: Thank you very much.
6492 I apologize if I misheard what you said.
6493 MR. ROMAN: Well, you probably didn't, but that was what I meant.
6494 THE CHAIRPERSON: Thank you very much.
6495 So that will be part of the record as well.
6496 Madam Secretary.
6497 MS SANTERRE: Thank you, Madam Chair.
6498 We will now proceed with the competing application for Hamilton/Burlington Ontario.
6499 The first application we will be hearing is by Douglas Kirk and Rae Roe on behalf of a company to be incorporated for a broadcasting licence to carry on an English-language FM radio programming undertaking at Hamilton/Burlington.
6500 The new station would operate on frequency 94.7 MHz with an effective radiated power of 1,880 watts.
6501 The Applicant is proposing a new adult contemporary/smooth jazz music format with a minimum weekly level of 35 per cent instrumental musical selection.
6503 THE CHAIRPERSON: Good morning and welcome.
6504 Proceed when you are ready.
PRESENTATION / PRÉSENTATION
6505 MR. KIRK: Thank you, Madam Chair.
--- Audio clip / Clip audio
6506 MR. KIRK: Madam Chairperson, Commissioners Demers, Cram, McKendry and Noël, these opening shots are just a little panorama of the Hamilton/Burlington area and to introduce our application for a new adult contemporary/smooth jazz formatted station.
6507 We are here to present a first in Canada application. This is a first in Canada radio format. We think the Commission has a real opportunity here to licence an exciting new format in a growing southern Ontario market.
6508 With me and in the introductory music you heard Brian Hughes. Brian is on my extreme left. Brian is SOCAN's Jazz and Instrumental Composer of the Year for three years running.
6509 Next to Brian is Carol Welsman. Carol is a two-time Juno nominee, a contemporary jazz Canadian artist. Carol has numerous CDs, has had a major concert series last year -- earlier this year with the Toronto Symphony Orchestra playing her music and is certainly well-known to us.
6510 I will be chairing the panel. On my right is Jim Craig, a broadcast educator and consultant.
6511 Behind me on the panel are Rae Roe and Ed Sajecki.
6512 Rae has helped -- Rae is a local resident, a former broadcaster and has provided tremendous local help in preparing this application.
6513 Ed is the Chief Executive Officer of the Burlington Community Development Corporation. They will be available for comments later.
6514 The major shareholder of this application is me. I am a shareholder and officer of Beaver Communications (Chatham). A small shareholder. Beaver Communications operates three stations in the Chatham, Ontario market.
6515 I am also controlling shareholder of CJKX-FM or KX 96 in Ajax, Ontario. It is a new country formatted radio station in the Toronto region and has started to become a very successful operation.
6516 The other shareholder who is not with us today is Tom Pippy. He has 18 years experience in investment banking, primarily in the Canadian broadcasting area. He is currently Senior Vice-President, Mergers & Acquisitions at GEAC Canada and, unfortunately, business precluded him coming today.
6517 Now on to the good stuff, the background here.
6518 Hamilton/Burlington is a market which we believe has underallocated FM frequencies. It sits between Buffalo and Toronto and the Niagara region. The last licences in the market were granted in Burlington in 1976 when CING-FM was licensed. CING is now a Toronto/London corridor radio station and has decreased, in our view, its commitment to the market.
6519 Also, in Hamilton the last licence was in 1986 when CKLH-FM was licensed. This was recently purchased by Telemedia.
6520 The group before you initiated this call for applications though a combination, I think, of diligent and creative engineering where we opened up and found the 94.7 frequency would work in the Burlington/Hamilton market.
6521 The proposal. The proposed station would serve the major markets of Burlington/Hamilton. These are located in two regional areas of southern Ontario, Hamilton-Wentworth and Halton. The signal would cover 931,000 people.
6522 The market is currently served by three FM stations, local FM stations, and three local AM stations.
6523 In our view, the ratio to a population and the radio revenue to the number of radio stations in the market is quite low, and you can see that clearly on the chart we have before you.
6524 Burlington/Hamilton radio revenue in 1998 was $24.9 million, about $4.15 million per station, the existing local stations, and the population per station of over 126,000 was quite high relative to other markets in that tier.
6525 As you can see -- I won't belabour the point -- but certainly markets like London and Winnipeg have many more licenses. Victoria, which is a much smaller market, less than half the size in terms of radio revenue, has as many licences with the new licence that was recently granted in Victoria, although it is not on the air yet.
6526 We think this is a very viable market for the Commission to consider. As I mentioned, radio revenue is $24.9 million in the year ended August 31, 1998, 7 per cent -- approximately 7 per cent growth over the previous year. The market has grown at an average rate of 6.7 per cent over the past five years.
6527 More important, I think, for the Commission to consider in looking at this is the profitability of the market. The best measure of profitability that I know is what we call EBITDA, that is earnings before interest and taxes, depreciation and amortization or, I think, operating income, as the Commission calls it in their market studies.
6528 The Hamilton/Burlington market produced EBITDA of $3.6 million for the year ended August 31, 1998. It was up 24 per cent from the previous year and caps off a five year high growth recovery of this market.
6529 The market is based, again, on the Hamilton-Wentworth and Halton regions. These are very fast-growing regions in the regional economy.
6530 The outlook is very strong and Mr. Sajecki can answer any questions that you have in the question period. We believe this is a very good prospect to continue to grow radio revenue.
6531 Trying to tune in the market, the data from the fall 98 BBM shows that the six Hamilton/Burlington stations generate approximately half of the adult 25 to 54 local tuning and about half of the tuning is to out-of-market stations. These are primarily Toronto and Buffalo stations.
6532 Often the out-of-market tuning goes to stations duplicating musical styles available in this market. We believe, with only six local stations in this market, there is a real opportunity to increase listenership with a new station and a distinct format.
6533 On the following chart, we have placed the format in a quadrant system which has a few discriminators old to new in terms of age and age appeal and had to soft in terms of musical style and feel for the radio station, and WAVE 94.7-FM format, as you can see in the top right quadrant, is distinct in the market. Being primarily new music with a softer edge to it and no one in the market is currently doing that.
6534 Just to elaborate on those points, the chart demonstrates the contemporary current stations cover the spectrum from hard rock to adult contemporary. Only 75 per cent of the chart, basically, is covered. In addition, no out-of-market station addresses this new soft quadrat that we are proposing in WAVE 94.7.
6535 In our view, our format clearly fills a large gap that exists in this type of music available on the market.
6536 I'll turn the presentation now over to Jim Craig who will describe what we describe as NAC and smooth jazz.
6538 MR. CRAIG: Well, the question may be in your minds what exactly is NAC/smooth jazz and the proposed format is new adult contemporary smooth jazz format which has a contemporary instrumental jazz flavour to it. It is spiced with the finest current adult contemporary vocalists and, typically, the format carries about a 50 to 60 per cent instrumental ratio to vocal in the format. That is typical across North America.
6539 Of course, there is no such thing as an NAC/smooth jazz radio station anywhere in Canada at this point. There are a couple of radio stations within the region which do carry some jazz, one being a CBC station. Of course, everyone is familiar with Ross Porter and his work and also CJRT-FM in Toronto carries a mix of classics and jazz, but generally more traditional jazz, not in that adult contemporary, new adult contemporary or smooth jazz field.
6540 Canadian artists such as Carol Welsman, who is here before you and Brian Hughes, also here, Diana Krall, you are all familiar with her probably, although the general Canadian public doesn't get a chance to hear her on the radio, Warren Hill -- Warren Hill is an individual who topped the NAC/smooth jazz charts for most of the summertime and most Canadians have never heard of Warren Hill. John Chiasson and Shirley Eickhardt who is well-known in Canada for her pop and country work. Her very first recording was a jazz recording, and she has just recently returned to jazz and smooth jazz in her offerings on CD.
6541 Some of the other artists who would be appearing on this radio station would be Anita Baker, Boney James, Luther Vandross, Bob James, Kenny G, Foreplay, Incognito, some of the others smooth jazz artists and NAC artists that are available to this format. There is a lot of music available to this format right across North America. It is an extremely successful format. In the U.S., where you will find it, it is showing very, very nicely. It emerged back in the early 90s. It has only been charted -- the airplay and the music itself -- for the last three years and radio stations that run within this gendre rank very well in markets with a mix of traditional formats such as AC and rock and CHR and country. Burlington and Hamilton have these formats on the air now.
6542 Just to give you a quick overview of some of the U.S. market comparisons -- and, again, we have no point of reference in Canada, so we can't show you any Canadian figures for Canadian smooth jazz NAC stations. But in the States, in Detroit, there are 31 Detroit stations that are in the City of Detroit along with another 35 or so that emerge in the market. Out of those 31 stations, the NAC/smooth jazz station ranks number 7. In Chicago, as you can see, 43 stations, it ranks number 5, right down to Philadelphia where there are 33 stations and ranking number 6. In Los Angeles, 49 stations, the number 3 stations overall in the Los Angeles market is an NAC/smooth jazz station.
6543 So in a very short period of time this format has become extremely popular and successful. NAC/smooth jazz can be described as easy listening. We have a gentleman that I had the pleasure of speaking to in Farmhington Hills, Detroit, last weekend on tape. His name is Tom Sleeker. He is the program director of one of my favourite radio stations in the U.S., WVMV-FM Detroit, V 98.7, and I am going to ask Nick to roll the tape here. He has some great comments about the format, first of all.
--- Audio Clip / Clip audio
6544 MR. CRAIG: The proposed licence would be the first NAC/smooth jazz station in Canada. The format, we feel, will have the least negative impact on the local and regional Canadian licensees. This format certainly does not compete directly with any other stations in the market, nor any other Canadian station anywhere.
6545 It draws listeners from a very broad base of musical taste and the addition of an NCA smooth jazz station would not unduly impact on the existing local services in the Burlington/Hamilton area.
6546 Benefits to the market. Of course, the programming will be high quality, distinct, locally produced using Canadian resources. There are a number of great Canadian broadcasters in that area who will be able to tap, who are no longer in the broadcasting business or in a hiatus from the broadcasting business.
6547 The target is adults 25 to 54, secondarily 35 to 64 and typically it is evenly split between male and female listening audience. The repatriation of out-of-market tuning through localization should occur because, of course, we will have local presence, we will have a high visibility.
6548 We plan to be very, very active in the marketplace -- $139,000 + will be spent on direct support of Canadian artists. The focus will be on contemporary jazz festivals and year-round events, concerts, et cetera, featuring Canadian artists. And the biggest benefit is radio exposure for a broad group of Canadian contemporary jazz artists who do not receive any commercial play or very, very little airplay of any kind in Canada.
6549 And to speak to that very briefly we would like to, first of all, welcome Carol Welsman, who is a two time Juno Award nominee and contemporary jazz pianist and vocalist. Carol.
6550 MS WELSMAN: Thank you very much.
6551 Madam Chair, it is a pleasure to be here today and to support such a fantastic idea. I have three albums out in Canada now and the first two are contemporary jazz format.
6552 In order to place myself more in the Canadian market I decided to produce a symphony CD because my grandfather is the founder of the Toronto Symphony Orchestra in order to get into the eyes of the media. I certainly accomplished that this year. However, I would have liked to have accomplished it through performing and producing more CDs in the contemporary jazz vein.
6553 After that fact, I am now signed with a U.S. company and I am in the midst of production on a new smooth jazz CD, which will be NAC format as well. I am thrilled to know that these gentlemen have applied for this licence because I feel that at this point in Canada we need this kind of representation.
6554 I actually discovered who Warren Hill was this summer at the Beaches Jazz Festival when I took my French friends down to listen to a day of music and I had never heard of Warren Hill. I think it's a pity that being in such a beautiful and huge country as Canada to not be aware of such great local talent it's just a disappointment.
6555 So this is the perfect opportunity to showcase people and without CBC -- the CBC has been a great supporter, I wouldn't have any airplay. My material is much more contemporary than what Ross Porter would choose on a regular basis to play. He has been extremely supportive and so is Katie Malleck and many of the shows, but they have a lot of material to cover through their format. So this is an ideal opportunity to actually obtain the exposure that I as an artist would need in a country like Canada.
6556 MR. CRAIG: Thank you, Carol. That's terrific.
6557 Brian Hughes is a contemporary jazz guitarist. He is SOCAN's jazz and instrumental composer of the year for the past three years, and he is recognized by U.S. NAC/smooth jazz programmers as the core artist or one of the core artists for this format in the U.S. I ask have you ever heard of Brian Hughes before today? Brian.
6558 MR. HUGHES: Well, I have heard of me.
6559 Madam Chairperson and Commissioners, it's a great pleasure to be here. It was probably about a month ago I was attending a jazz summit in Toronto and I happened across the proposal for the application for this station. I immediately gave Ray Roe a call to offer my support.
6560 Unfortunately, I found out about it on the deadline of the closing date for letters of intervention. I sent one anyway, but you sent it back, so I am here in person to state my case. I think it is a great idea and it is certainly long overdue.
6561 I recorded my first album almost 10 years ago for a Montreal-based label, Just in Time Records, which is a great Canadian jazz label. At that time I had no idea that the NAC or smooth jazz format existed in the U.S. I mean it certainly did in Canada.
6562 About a year after my first album came out it was licensed to a California-based label and I got a call from the label about a month later and they said, "Oh, your album is in the top ten on the NAC chart." I said "What is that?" I soon found out a few weeks later.
6563 We went down to perform a concert in Boston and I couldn't believe it. Usually, in Toronto I was playing jazz clubs for a hundred people and I went to this concert and there were 3,000 people there and they all started clapping after the first three notes of the song. They actually knew the song and I had never played before in that city, so I could see right away the benefit to one's career for that kind of support.
6564 Certainly, this station, as we have heard, would be unique not only for the area, but certainly for the whole country and I think it might go a long ways for other stations of the same format to come up in this country.
6565 Just yesterday I was being interviewed by Radio and Records, which is the largest chart-making publication in the U.S. and the interviewer asked me if I often tuned into my local smooth jazz station to check out the competition and I told him "There isn't one in Toronto. In fact, there isn't one in Canada," and he couldn't believe it.
6566 So I think there is definitely room for it. I think it would be great for the market. Thank you.
6567 MR. CRAIG: Thank you, Brian.
6568 We would be very pleased to answer any questions about the format and certainly we could comment all day about the artists and the format, but I think we have to move along. So, Doug, we will pass it back to you.
6569 MR. KIRK: Thank you, Jim.
6570 Just quickly to recap on the market. Our proposal will not impact revenues of the market stations in our view. The new station will increase market radio revenue by being active in the market and promoting more revenue with a distinct format.
6571 We have put our proposal together and projected our revenue and costs based on successful U.S. models. This is a very high-end format. It attracts a very high level of advertiser that wants to reach a high income urban type of audience.
6572 I think we have demonstrated within our group here there is an experienced management team that can put this proposal into action and make it work in the Hamilton market.
6573 Our financial forecasts, which the Commission has and I won't dwell on them, project the station taking in its initial year 3.5 per cent of market revenue and in its fifth year 7.4 per cent of market revenue and, as indicated early in the presentation, the market has been growing much faster than that and we don't see this station going in and crippling the market.
6574 In summary, Hamilton/Burlington can sustain a new FM station. We have developed the technical proposal to create that new service and we have proposed an exciting, unique format, the first in Canada to go on WAVE 94.7 FM.
6575 We have a strong commitment to develop and provide air time to new Canadian contemporary jazz artists who have no commercial exposure for their music in this country.
6576 The format will have the least negative impact on local market stations of any of the three applications that you will hear today. We think the applicant has the solid experience and industry knowledge to operate this radio station and it brings a fresh entrepreneurial approach to the industry and the market. Our proposal is financially viable and well financed.
6577 And with that we will show our logo, WAVE 94.7 FM. We sit before you in eager anticipation of winning this licence to put this delightful new station on the air.
6578 We will finish with a little tour of some of the artists in the format.
--- Audio clip / Clip audio
6579 MR. KIRK: And, of course, you recognized our esteemed colleague here down the table, Carol Welsman.
--- Audio clip / Clip audio
6580 MR. KIRK: This gives you a little bit of a flavour of the type of music that we will be showcasing. But at the risk of going too far over, we will say thank you and open ourselves to your questions.
6581 THE CHAIRPERSON: Thank you, Mr. Kirk.
6582 It is a good thing we followed our rules of procedure, because we would not have had the pleasure of meeting you, Mr. Hughes.
6583 Commissioner Noël.
6584 COMMISSIONER NOËL: The first question I will ask you is this: You are probably aware of the preamble to the recently released decisions in Victoria, Kelowna and London.
6585 Could you discuss with us how your application fits into that preamble.
6586 MR. KIRK: In this case, I think the key thing in the application is diversity; adding something that has not been done in Canada before. That is really the key to it.
6587 As you have heard from Carol and Brian, there is a very vibrant community here of producers and artists and writers that just are not getting exposure. They have to go to the U.S.
6588 They make it in the U.S. They are huge artists in the U.S. and we have never heard of them. And we think that is kind of bizarre, to be quite honest, that we don't have a station in Canada that is highlighting this music.
6589 Overall, that is really the main --
6590 COMMISSIONER NOËL: It is the main criteria that you use.
6591 MR. KIRK: Yes.
6592 COMMISSIONER NOËL: The quality of the application is on your list too. What do you think about that?
6593 MR. KIRK: Well, I wrote it, with the help of some others. I think it is pretty good.
6594 COMMISSIONER NOËL: I will just repeat those criteria. There is quality of the application.
6595 MR. KIRK: Yes.
6596 COMMISSIONER NOËL: Diversity of new voices in the market.
6597 MR. KIRK: We are new.
6598 COMMISSIONER NOËL: Market impact.
6599 MR. KIRK: Yes, we have talked to that in our comments, the market impact here. Hamilton is a unique market -- and I should reel back a little bit.
6600 As I mentioned earlier, I have an interest in the station in Ajax. Ajax I think is even more extreme in terms of its Toronto spill; it is right adjacent to Toronto, on the east side of Toronto.
6601 COMMISSIONER NOËL: I know. It is next to Pickering.
6602 MR. KIRK: Yes, that's right.
6603 The station operates with all the Toronto stations as direct competitors. You may have heard from others, or you will hear from others here today, about spill. This is the influence of stations out of the core market spilling into another market and of course dividing the tuning.
6604 You can see from the Hamilton/Burlington statistics that it is about half and half, without putting too fine a point on it.
6605 The way you can get tuning back into those markets is by having diverse formats and actually increasing the consumption of radio. You will also hear this from others today. But that is the way to do it.
6606 I think ours is interesting and unique in that we are proposing to do this with a format that is brand new. So we are not going toe to toe with another broadcaster and trying to take audience away from that broadcaster or repatriate audience in that sense. This will be tuning to a new format in the market.
6607 Who knows? We may even get some tuning from people that have large antennas and can pick it up in Toronto. But that is certainly not part of our proposal at this stage.
6608 I think the diversity and quality -- I agree with all the comments we have made there. This is a very unique format that will actually increase consumption of radio in the Hamilton market.
6609 COMMISSIONER NOËL: If we go to your format, I have a number of questions on that.
6610 I know you conducted a research in 1998.
6611 MR. KIRK: Yes. That was filed with the application.
6612 COMMISSIONER NOËL: That was filed with the application, the Forsythe Research.
6613 Did you conduct also research in the Hamilton area?
6614 MR. KIRK: No, we did not, and you might have concerns about that.
6615 We found, as you have heard here this morning from others, when people say "what is Smooth Jazz? What is NAC/Smooth Jazz?", people just sort of -- there are no reference points. There is no base on which to rank rock or hits or AC or anything like that. The knowledge is just not there in the market.
6616 We did not a market survey in that sense because with the level of knowledge of this format in Canada it is almost impossible.
6617 COMMISSIONER NOËL: It's Radio II in Lachine Culturel after 11 o'clock at night.
6618 MR. KIRK: Yes. If you ask people out there, in some of the other research that has been done by the applications that you will see later today that ranks formats, it is not even on those research lists.
6619 It is hard to go and ask people if they like something that they have never heard about, they have no reference points; they have never heard the music.
6620 MR. CRAIG: And yet, interestingly enough, when they hear the music they really like the music. So there is a process of education that goes along with it too.
6621 COMMISSIONER NOËL: In your decision to introduce the new adult contemporary -- I have a problem with all those acronyms here -- smooth jazz music format, it is based on the apparent success of this format in the U.S.
6622 According to the Arbitron Format Share of winter 1999, jazz represented only 2.9 per cent share of all U.S. radio formats. This share places the format ahead of niche types services as classical, at 2.2; religious also at 2.2; and slightly behind modern rock at 2.8.
6623 Based on this finding, could you explain your confidence in the success of this format in Burlington/Hamilton?
6624 MR. CRAIG: This is an emerging format, and it is an emerging format in the U.S.
6625 When you don't have all markets with an NAC/smooth jazz format, obviously overall the listenership will be down. But when you take a look at the markets -- and I have a list of I believe about 75 markets that go as small as a Columbus and as large as a New York City or Los Angeles -- those markets that have radio stations that are on an NAC/smooth jazz format, those stations are doing very well in that market.
6626 That was part of our presentation.
6627 Because it is an emerging format, it does not show overall, across the broad base of the U.S. But when you take a look at the individual markets where it is introduced, where it is worked with, it does very, very well.
6628 MR. KIRK: Perhaps I could add to that point.
6629 As you are looking at that, you are looking at the numbers and tuning of that format. There are a lot more stations, for example, in the U.S. playing country or rock, which add to those totals.
6630 This format started out less than a decade ago with a couple of markets. It is now in virtually the top 100 markets in the United States, doing from okay to extremely well.
6631 Don't forget, as well, that in Canada we have fewer stations per market generally than in the U.S. There are some figures out there where you can say: Well, these stations, for example, in New York or Detroit, they are only getting a four share but the average radio station in that market is only getting a two.
6632 So they do well, and they achieve better than average.
6633 In Canada, in a market like Burlington/Hamilton, there are only six stations. So our expectations for audience here we think are grounded very, very well.
6634 MR. CRAIG: A 5.5 share in Detroit represents almost half a million people listening.
6635 COMMISSIONER NOËL: You mentioned in your presentation that there are no such formats in Canada at the present time.
6636 Do you know if the Hamilton/Burlington area is covered by out-of-market U.S. stations that have the same format, like the Buffalo stations?
6637 MR. KIRK: No.
6638 COMMISSIONER NOËL: No?
6639 MR. KIRK: No. I think the nearest one is Cleveland and Rochester.
6640 MR. CRAIG: Cleveland and Rochester, and neither of them put what I would call any kind of a signal at all into that market.
6641 COMMISSIONER NOËL: No. It is a bit far.
6642 Do you expect to attract listeners from the Toronto area with your new format; and if so, how would this out-of-market tuning from Hamilton to Toronto impact on your revenues?
6643 MR. KIRK: I think only format lovers who had an antenna on a 100-foot pole could probably get the station in Toronto. So we are not looking at that at all as a source of tuning.
6644 The technical brief filed shows that the primary coverage, the reliable coverage, is just east of Burlington into the Oakville area, over through the full Burlington-Halton region, Hamilton-Wentworth. It doesn't get down into the Niagara area because of an adjacent channel problem.
6645 There is a station in Buffalo at 94.5 megahertz that is right next to it. So as you get closer to Buffalo, the two of them will cancel -- the adjacent channel will cancel the 94.7 channel.
6646 So it is really the core reliable tuning is in Hamilton-Wentworth and Halton region.
6647 COMMISSIONER NOËL: Okay. Let's turn to audience projections.
6648 In response to a request for supplemental information regarding your projected audience share, you indicated that you anticipate attracting 4.5 per cent of listening in the Hamilton market in your first year, and by year seven you hope to capture 8 per cent of the regular listening.
6649 Do these projections apply to the 12-plus demographic in the market or specifically to your target group, which is the males and females 25 to 54?
6650 MR. KIRK: I believe we projected those on a 12 plus.
6651 COMMISSIONER NOËL: On the 12 plus.
6652 MR. KIRK: I will have to check. We can check that.
6653 The format will achieve better in key demos, for example, 25-54, 35-64. We expect that will happen. That is the way the format works in the U.S. There is very little interest in the format in the youth market, for example.
6654 COMMISSIONER NOËL: It is an educated taste.
6655 MR. KIRK: Pardon me?
6656 COMMISSIONER NOËL: I said it is an educated taste. It is an acquired taste.
6657 MR. KIRK: Yes, it's acquired, but people like it when they acquire it.
--- Laughter / Rires
6658 COMMISSIONER NOËL: Now let's go to out-of-market tuning.
6659 On page 13 of the market study it is projected that half of your projected listening share will be repatriated from out-of-market stations. Can you tell us what portion of this repatriated audience will come from Canadian out-of-market stations as opposed to U.S. border stations?
6660 MR. KIRK: We would expect most of it would come from Canadian stations, but in some it is probably coming from 30 different stations. It is not designed to take audience specifically away from a Toronto station. There isn't one. It will come from a great number of stations where people in that age bracket may not find what they want on the radio. When this comes on they will say, "This is my radio station", and of course they will naturally reduce their tuning to other stations.
6661 MR. CRAIG: Part of that repatriation could also be people who have gone to CDs and may all of a sudden find that they have a radio station to listen to now.
6662 COMMISSIONER NOËL: You note in your applications that nearly half of all regular listening in the Hamilton radio market is to out-of-market Canadian and U.S. stations. The majority of this out-of-market tuning is done to Canadian, mostly Toronto-based, radio stations that have a significant spill into the Hamilton market.
6663 Do you expect to repatriate any national advertising that may currently be lost to these out-of-market Canadian stations?
6664 MR. KIRK: That is an interesting point that you raise. We think that the station will assist Hamilton by generating the high-end audience in Hamilton in a Hamilton-originated station, that it could actually reverse that spill trend by having an originating station in the market gathering good audience, high-end audience, which would be of interest to national advertisers, that it could actually improve the generation of national dollars in Hamilton.
6665 COMMISSIONER NOËL: Given that half of your audience is projected to be repatriated, would that new market audience elevate the current amount of dollars spent by local advertisers?
6666 MR. KIRK: Yes, it would, in the sense that the station is new in the market. We go from six to seven. It is targeting an audience, a new audience. You have more people on the street selling. I think it is an audience that could be very valuable to a bunch of advertisers that find it hard to reach that demographic in the market. So it should act to improve the total --
6667 COMMISSIONER NOËL: Local advertising.
6668 MR. KIRK: -- local advertising in the market, yes.
6669 COMMISSIONER NOËL: Some of the out-of-market tuning is to U.S. border stations. Do you think that your station will have an effect on repatriating some of those advertising revenues? Do you think there are advertising revenues going to U.S. stations, first of all, and then would that be repatriated?
6670 MR. KIRK: Not operating in the market as some of the other -- as maybe Mr. O'Brien can comment on. I don't know how much. My sense is that there is not a lot of money going to U.S. stations out of the market. You don't hear much Canadian advertising in the U.S. --
6671 COMMISSIONER NOËL: In the U.S. stations.
6672 MR. KIRK: -- but I will leave it to others who are probably more attune to that.
6673 We don't expect that the station will, number one, repatriate a lot of U.S. tuning, because the format isn't on the air. I mean, there may be some tuning, but it is not core to what we are expecting.
6674 In terms of revenues, I just don't know the answer as to how much is going out of Hamilton/Burlington to U.S. radio stations, but I think it is probably quite small.
6675 COMMISSIONER NOËL: Now, if we go to your position -- if we grant this application, your position in the market with a stand-alone FM station as opposed to -- there are a couple of combos in that market, if my memory serves me well.
6676 MR. KIRK: Correct.
6677 COMMISSIONER NOËL: There is also a stand-alone AM with a country format and there is -- if we grant the applications in the spring to a WIC/Shaw transaction, there will be a --
6678 MR. KIRK: I'm glad that question is still open.
--- Laughter / Rires
6679 COMMISSIONER NOËL: -- here could be three radio stations: two FMs, one AM combination. How do you feel about that situation?
6680 MR. KIRK: We feel we can compete. To be quite honest, this is a good format. As talked about, it attracts a very high-end audience in the demos that advertisers want.
6681 The station can be run. Having experience with AJAX and the size of operation, we can see that this station will be in terms of overall size about the same. You can operate it with 18 to 20 people.
6682 COMMISSIONER NOËL: Having a stand-alone, do you think in the near future you would look for getting a combo of some sort or buying another station?
6683 MR. KIRK: That is a little bit --
6684 COMMISSIONER NOËL: Premature.
6685 MR. KIRK: -- questioning.
6686 I mean, we would be interested in building -- you have heard others this morning, I guess, say they would like to grow. We would like to grow this company as well. I just don't know if anything would be available.
6687 However, I would make one point to you, and I think it is an important one. If this station were licensed for Hamilton/Burlington, and we believe it could work well, it has enough of an audience base, a core market that this could serve.
6688 Maybe Brian and Carol want to hear this. It could serve as a base to originate programming to other stations. In other words, you could regionalize it. This format could start here, but there are opportunities in other markets, markets that may not be quite large enough, that could support a station as long as it wasn't, you know, fully originating in that market, enough to be a local station but could take the core programming service.
6689 So that would be our first initiative, to try and grow it from Hamilton/Burlington, is to take it out and use that format, extend it to a regional station.
6690 COMMISSIONER NOËL: And take it out in other markets, not trying to buy another station in that particular market?
6691 MR. KIRK: Yes. You know, buying stations, they come up and -- they come and they go. You know, these days it seems like large broadcasters put big cheques on the table, is sort of what I see out there.
6692 We would try and grow this organically first, taking what we have started here and being able to take it out to other markets that could affiliate with WAVE 94.7. That would be my first objective, rather than going out there and trying to throw money at people to buy a station to use the format.
6693 COMMISSIONER NOËL: Let's go to the programming.
6694 In the area of spoken words programming, you offered general details on your plans in that field. The focus of your station will be the new adult contemporary/smooth jazz -- I'm getting it --
6695 MR. KIRK: NAC.
6696 COMMISSIONER NOËL: NAC --
6697 MR. KIRK: NAC.
6698 COMMISSIONER NOËL: -- format.
6699 What kind of place do you keep for news and information on your station?
6700 MR. KIRK: We made the point, and I would ask Jim to pop in whenever he feels like it on this, and I will step back from this. You can tell I wasn't an on-air broadcaster.
6701 COMMISSIONER NOËL: Me neither.
6702 MR. KIRK: Sometimes you can just do things behind the scenes and have as much fun, you know.
6703 In looking at this, this station is going to work because it has what we call a high degree of localization. CJKX and AJAX works because it has a high degree of localization. In other words, you focus the station on the market. You are not trying to be something you are not licensed to do. You are working within the market.
6704 This is going to be very, very tightly focused on Hamilton/Burlington, or Burlington or Hamilton or -- that is the market.
6705 What that does is focus news. We don't have to do a big deal on international news. This is a focus we have seen work at KX 96. If there is some large international news event, sure, it's mentioned, but the bulk of our news resources are devoted to local events, picking up local events, going to find out what is going on in local governments, and so on. That is the thing that separates you from the rest. That is your unique localization of the radio station.
6706 This station is not going to be looking at Toronto. It doesn't have the signal to look at Toronto. It is serving the community of Burlington and Hamilton, the regions of Hamilton-Wentworth and Halton. That will be its very, very tight focus.
6707 So as you construct news, you would be very, very tight on that. We often will not have an international story, or even a national story on CJKX, if there are enough news items that morning that are very --
6708 COMMISSIONER NOËL: Will you rely on others newsrooms or will you have your own newsroom?
6709 MR. CRAIG: There will be a local newsroom established within this radio station.
6710 I think what has to be understood here is that the NAC/smooth jazz format is very music-intensive. However, there is also a requirement in the mind of the listener that they get information.
6711 I think the best way that we can put it is that we will provide localized news and information you can use. That is the way we will present ourselves where we will provide the music that people want to hear within this particular format and certainly augment that with meaningful spoken word content as part of some formal newscasts, especially in the drive time periods, with that information that you can use regarding traffic flow in and out of Burlington, Hamilton-Wentworth and Halton area, to our listeners that is meaningful to our listeners but certainly would not be meaningful to somebody who is living in downtown Toronto.
6712 COMMISSIONER NOËL: We will not discuss Mr. Harris' position on the bilingual status of the Ottawa --
6713 MR. KIRK: No, but I want to take a little bit of issue with that.
6714 You have to keep it in perspective and a radio station has to inform its listeners. If we are committed to our listeners, and at CJKX we are, and you have to give them the top information. If there is a big international story, yes, it can be mentioned.
6715 But local radio news these days is really embedded in that local community. That is why people listen to you, because you are showing them -- you are giving them something that they are not hearing on other stations out of the market.
6716 MR. CRAIG: They can get those national stories by tuning into television. They can get them by tuning -- and they do elsewhere if they want that kind of information. But when it comes --
6717 COMMISSIONER NOËL: Will you have the weather and traffic information?
6718 MR. CRAIG: Oh, yes. Absolutely.
6719 COMMISSIONER NOËL: Just still on those spoken words, do you have a breakdown of the percentage of spoken words as opposed to the music that will be aired most of the day?
6720 MR. CRAIG: Percentage-wise?
6721 COMMISSIONER NOËL: Yes.
6722 MR. KIRK: No.
6723 MR. CRAIG: We can certainly get it to you. We don't have a percentage breakdown, but --
6724 COMMISSIONER NOËL: You don't have one as of yet?
6725 MR. CRAIG: No.
6726 MR. KIRK: No. I mean, it's a formatted radio station. It will have what you would call long sweeps of music with spoken word at the ends of those sweeps. There will be local news in prime time periods, traffic, weather information constantly through the day on those. That is just part of what you do to earn the local alliance.
6727 COMMISSIONER NOËL: We would appreciate having a breakdown on a percentage basis --
6728 MR. KIRK: Sure. Okay.
6729 COMMISSIONER NOËL: -- of the spoken words as opposed to the music.
6730 MR. KIRK: Sure.
6731 COMMISSIONER NOËL: Now if we go back to the format, you indicated your commitment to a minimum weekly instrumental level of 35 per cent. So instrumental jazz music will be an important music offering of your station.
6732 We note, however, that this level of instrumental selections is a minimum weekly commitment. What will be the typical weekly percentage of instrumental music selections broadcast at the station -- as the station?
6733 MR. KIRK: Well, Jim mentioned it. In our listening to this format in the U.S. the instrumental run or instrumental component of it runs 50 to 75 per cent, yes.
6734 MR. CRAIG: In talking to Mr. Sleeker last Sunday, we certainly talked a great deal about the make up of the music. One of the things that he said -- and I would have loved to have left it on the tape but for timing we pulled it off -- he said that they run -- within that format they are running two instrumentals to every vocal.
6735 He said that the vocal side of it is key to the success and the vocals that are aired are vocals which need to be meaningful to your audience within your particular market. Different markets treat those vocals in different ways, depending on the market. It could be more urban AC, in other markets it can be a softer AC vocal. But generally it runs about two to one.
6736 Now, I have listened to NAC/smooth jazz stations all over North America and personally listened to them directly off-air in a number of markets and they are generally running roughly 60 to 75 per cent.
6737 I cannot see us going against the grain of success in that format by trying to move back to a 35 per cent.
6738 So when the notice says 35, a minimum of 35 per cent, that is an absolute minimum. Certainly we would go much beyond that.
6739 I can also suggest to you that I cannot think of a radio station in Canada, with perhaps the exception of classical stations and some of the CBC programming, I can't think of a radio station in Canada that is running 50 per cent instrumentals. I can't think of one that runs 25 per cent instrumental.
6740 I have been around the business for a long time. I can remember the days of Andre Kostolanitz and Percy Faith, et cetera, et cetera, when we always used to run a fairly heavy instrumental content. So in a way it goes back to that easy listening.
6741 MR. KIRK: This is not easy listening.
6742 MR. CRAIG: No, it's not easy listening, but --
6743 MR. KIRK: The format works because of the high component of new contemporary jazz instrumentalists. This is not background or wallpaper music. It is very active. It is rhythmic. It is done at a very high intensity. These are terrific recordings, terrific artists that are putting their heart into the music, and it shows. That is why these stations are successful.
6744 It is just not in the background old easy listening. This is a brand new genre of music and it isn't here. I think the market in Canada doesn't understand what this is.
6745 COMMISSIONER NOËL: You will have to come to Montreal during the jazz festival.
6746 MR. KIRK: That's right. That's right.
6747 COMMISSIONER NOËL: Do you intend to make blocks of instrumental music and then more vocal or will it be evenly distributed through?
6748 MR. CRAIG: It will be melded, melded upon a music flow formula. We won't run five vocals in a row and then 10 instrumentals. It will be totally melded. That is modern programming practice.
6749 COMMISSIONER NOËL: If we go to the vocal part of your musical selections, how will you select -- what are the criteria that you will choose to select the music you will air, or the vocals you will air?
6750 MR. CRAIG: This format, as in any kind of format, it is a mix. What fits? What fits the format? What mixes?
6751 Again going back to Mr. Sleeker, he named a number of -- Celine Dion, for instance, they air as part of their mix because it fits the format. There are a number of Celine Dion songs which fit the format. There are a number of Canadian artists who are out there who are generally not regarded certainly as jazz artists.
6752 I have a list here of some of them who come to mind. We have -- oh, isn't that -- I have to find the names here, but a couple of them that run into -- Dominic Troiano.
6753 Dominic Troiano is a great jazz guitarist, and yet he is regarded more as a rock artist.
6754 Dan Hill will fit very nicely in the format. So it's a fit. It is, how does it mix within the format. That means that the format musically really has to be managed.
6755 MR. KIRK: Just to add to Jim's point.
6756 In the U.S., the NAC/smooth jazz stations can sound very different, market-to-market and there is a customization and that is just really to enforce that point. When you put these together, what will work in that market? What is the best mix? You know the overall format is very strong, but they are customized. So if you listen to San Francisco, KKSF in San Francisco, it will be different than Los Angeles. It will be different than New York or Chicago. It is a different mix in the market of some of these musical styles.
6757 So it isn't a cookie-cutter, just say, you know, classic rock is just this. It has to be looked and constructed and fine-tuned market-by-market.
6758 COMMISSIONER NOËL: Now, you have talked to us about the fact that this format has a lot of success in the U.S. and that it hasn't been programme yet in Canada on commercial radio.
6759 Do you know what the availability of Canadian selections will be for that format?
6760 MR. CRAIG: Well, we have been ruminating over that and certainly there is a lot of Canadian contents available to this format sitting out there.
6761 There are over 400 independent labels in Canada which a good many of them, a large percentage of them, have NAC/smooth jazz styles of artists who are recording for them. There are a lot of NAC/smooth jazz artists who record their own CDs and make them available. There are the mainstream artists such as Warren Hill and Brian and Carol, et cetera, et cetera, et cetera, that we can bring into the fray here.
6762 In talking to one program direction Stateside along the way and suggesting that we were looking at this format, he immediately seized -- as did Tom Sleeker -- seized on the fact that, "Well, that's terrific because do you people realize how many Canadian artists we play within our play list?".
6763 So I don't think there will be any difficulty with the artists to fit into the format.
6764 MR. KIRK: We have about half a dozen CDs right here.
--- Laughter / Rires
6765 MS WELSMAN: Also I'd like to add there are artists like Holly Cole who, when she started out, was primarily jazz and she's in more of a smooth jazz format now. Katie Lang has done albums with Tony Bennett. We have heard recordings of her in the States and my father says, "Who is that? I had no idea it was Katie Lang". So there is all kinds of music that has yet to be discovered. And there is a Best Jazz Contemporary Album category at the Juno Awards, so that is a good indication that there is a lot of material to choose from.
6766 COMMISSIONER NOËL: Does Reena Lee fall in that category?
6767 MS WELSMAN: Yes, depending on the songs, having listened to a lot of the smooth jazz stations in the States, I agree with you that there is such a variety. But, yes, most artists have a song or two on their records that could fall into the format.
6768 MR. CRAIG: I have a list here that took me about 40 minutes to enter onto my computer a couple of weeks ago of NAC/smooth jazz artists who are here in Ontario, in the Toronto/Hamilton/London corridor that off the top of my head and with a little bit of the material that I had come to me in the intervention stage of artists that fill a full page. That's just in that area, and that was really off the top of my head in a very casual exercise.
6769 COMMISSIONER NOËL: And with an instrumental --
6770 MR. CRAIG: With an instrumental base it makes it even easier.
6771 COMMISSIONER NOËL: -- format you can come to Quebec and see our guys.
6772 MR. CRAIG: Exactly.
6773 COMMISSIONER NOËL: Now, let's go to Canadian talent. In your deficiency letter response to the Commission dated the 12th of February, you indicated that at time you were not in a position to provide a budget breakdown related to your proposed summer concerts series and the accompanying $25,000 talent development budget.
6774 Could you now provide us with a budget breakdown for the details of the costs associated with your $25,000 minimum annual budget?
6775 MR. KIRK: Well, that's a minimum annual budget and it starts at that level and it increases over the period. I don't have a breakdown of that because we have not gone into the market and costed the staging of those events and the commitment we did make within that was that at least half of the expenditure would be the talent fees directly and whatever else. It all depends what venues you have, what kind of a deal you can make to state those sorts of things.
6776 What is clear in the commitment is that the current base level of Canadian talent development in the market is $8,000 a year, so this is more than three times that of the Hamilton-based stations and we had committed not to send the cheque off to somewhere else. This is money that we spent developing the format right in the market and it's hard at this stage to give you the specifics. You have to find out, then use what it's going to cost to do this, how you are going to promote it, what stuff you might be able to trade to stage that event.
6777 COMMISSIONER NOËL: So my next question will not be answered either because I wanted to ask you how many summer concerts will you have. You haven't planned that yet.
6778 MR. KIRK: We were thinking of having two, three, four, however many we can put in place with feature artists. And I wouldn't say it's just going to be summer because I think there will be other events through the year, as you can work through. The thrust of it will be that because you can get a lot of exposure. You saw the video with Carol at the Beaches Festival. There were thousands of people there. That gives you a very efficiency when you stage something like that.
6779 COMMISSIONER NOËL: Open air stage.
6780 MR. KIRK: Yes.
6781 MR. CRAIG: There is also the Burlington Music Festival, there is also the Ash Village Jazz Festival which happens every year. There is all kinds of other events such as that around the Burlington/Hamilton area that we certainly would be looking toward tying into.
6782 I might also make mention that every Sunday there is a sold out jazz brunch in Hamilton and a fellow by the name of Phil Barrette is the gentleman who pulls that together and we have already had discussions with him regarding tying in with those jazz brunches and assisting with those. We have had discussions with Blue Train Films who have tied in with Rhapsody Films from the States and have an agreement already in place with them whereby we will utilize some of their prerecorded material as jazz specials on the air and they are in the process right now of putting 30 films in the can for airing on Bravo and other television venues that we will be able to utilize. We have the agreement in place that we will be to utilize that programming on the air.
6783 So that in itself is an assist to Canadian talent development.
6784 COMMISSIONER NOËL: Now, you described in your application and Schedule 5 -- part of your application -- your initiative as "highlighting less widely known Canadian new contemporary artists". Should we understand then that the concert series will only feature Canadian performers and, if so, will it include established Canadian performers or only new Canadian performers?
6785 MR. KIRK: I wouldn't want to be categorical here, but clearly the thrust of this will be to raise exposure of the format. It might work that you have an established and an up and coming performer on that sort of venue. I don't want to nail it down and say it is just going to be established. We think the role might be of bringing up and coming talent and that has been something we have done, for example, at KX 96, even though this doesn't appear in your hard commitments of Canadian talent expenditures.
6786 We run a program there where we have a talent search every year with one of the major clubs in Oshawa and it is probably, in terms of promotion, worth somewhere in the range of $25,000 because of the airtime exposure, and it is meant to encourage people who have not had a demo tape done to come in, enter, they do performances and then there are finalists and the winners of that get a major demo session that they can then use to try and launch that. And that is something that we do in Ajax and Oshawa to raise Canadian talent.
6787 This wouldn't be any different. You could see that kind of program coming in. So you have to get into the market and work with it. The one thing that there is a commitment to is spending the money, spending it directly in the market to stimulate the talent.
6788 We are going to have some -- we have contemplated having some feature programming eventually on Saturdays and Sunday nights when it is a little more relaxed and you can highlight talent and do interview-type shows. That's a feature of the format in the U.S.
6789 Carol pointed out Dave Podds, who is based in San Francisco, that does an interview-type show and will do a review of a new CD with an artist or something on the air.
6790 MS WELSMAN: I would like to mention something as well. I have had the fortune to be on the Faculty of Music at the University of Toronto for eight years now and I am on a leave of absence presently because I am recording in the States.
6791 I can tell you that one of the most disappointing things without a radio station like this is that I have students who have graduated after four years of school and who have been exposed to a lot of this kind of format, not just the traditional jazz format because at their age they are listening and they are influenced by rhythm and blues and by so many different kinds of artists that their styles are contemporary. They are not back in the forties, just the mainstream jazz, and they don't know where to turn when they graduate from school because they don't have an outlet in which to perform. It's a real concern because there are only two jazz clubs downtown in Toronto, for example, and many of them travel around.
6792 There are jazz festivals in Niagara, beautiful vineyard festivals and they are performing down there. It would be lovely to have the support.
6793 COMMISSIONER NOËL: Thank you very much. I have no more questions.
6794 THE CHAIRPERSON: Commissioner Cram.
6795 COMMISSIONER CRAM: It seems to me that when I look at the numbers you have in terms of the American stations and consider the fact that this would be the first time this format would be in Canada, that the place you would target to launch something like this you would be looking for high per capita income and you would be looking for a skewing of the population to -- you would be looking for a place where the demographics are such that the 25 to 54 population, that's your target, would be high. Have I got that right?
6796 I guess my reaction to that is does Hamilton fit those two criteria, or is it just serendipity that you applied in Hamilton?
6797 MR. KIRK: No. I would argue with that. I think the market does have -- Hamilton gets underrated and it's really a bigger market than just the City of Hamilton. It's Hamilton-Wentworth and Halton.
6798 Ed Sajecki is here today who, as I mentioned earlier is involved in the development of Burlington and I think he should make a point of how fast -- well, I am going too quickly here. He can give you a view of how the market is growing, what the demographics are.
6799 In looking at this market we are talking about coverage here of 900,000 to 1 million people. That's a good start.
6800 It covers communities like Burlington, which are very high end and Ancaster, Dundas and other parts, Stoney Creek, other parts of that, and so it's not looking to downtown Hamilton exclusively to make a living.
6801 I think you have got to start somewhere. It is impossible to find a frequency in Toronto, as you well know. That might be -- this format might work very well in Toronto, but, you know, there just aren't frequencies at this point that can give you full market coverage, and some of the other players may in fact, you know, adapt the format in the Toronto market in due course.
6802 I think what we are talking about here is a very high growth market, a very high end market in totality. It's more than just the City of Hamilton.
6803 Maybe I would ask Ed Sajecki to give some comments -- he is working with this every day in the development of Burlington and the Halton region -- and to address that question.
6804 MR. SAJECKI: Thank you very much.
6805 Madam Chairman, I did bring an exhibit that does -- Burlington is shown in the purple, in the context of the Golden Horseshoe area, if you will, with Toronto being located to the east and the Oshawa, Ajax, Pickering area to the east of Toronto, running all the way through Hamilton-Wentworth and over to Niagara Falls and the U.S. border at Buffalo.
6806 Essentially, that area now, within what we turn the Golden Horseshoe, has a population of about 5 million people and is expected to grow by another 2 million to 2.5 million people over the next couple of decades.
6807 Burlington is located, as you can see from the map, right in the centre of that, and what is happening in terms of our growth patterns is we are getting very strong overspill from the Toronto, Mississauga area westerly into Burlington and we are also seeing growth from Hamilton-Wentworth moving in an easterly direction into Burlington.
6808 The Halton region area, and I am going to show another exhibit, if I might, has a current population of 362,000 and over the next 15, 16 years it is going to grow to about 538,000. If you add to that the current population of Hamilton-Wentworth, which is about another 450,000, you are up to that 1 million number that was being spoken about earlier.
6809 In our case, we are going through -- in Halton region there is a very major servicing scheme on which was basically going to provide water services to the more rural area or portions of Halton, which is going to result in dramatic growth in Milton, dramatic growth in Oakville and we are going to continue on. We have had two record years of building permits now within Burlington over the past two years, where in fact when you put Burlington and Oakville together, for example, this year we will do about a billion dollars of building permits.
6810 So I am giving you that just to give you a sense as to what is happening. The challenge to us within Burlington, and I would say the same comments for Milton and certainly Oakville, is to try to maintain our identity within this very large megalopolis which is happening in the Toronto area. What we find so exciting about having the possibility of a new radio station serving the Burlington area is the opportunity to get out the local message, have the programming that could be focused on events that are happening within the city, so that we are not lost within that huge metropolitan or megalopolitan area, as I have described it.
6811 So, for us getting a new radio station to serve a growing and burgeoning population, but also that is locally based would be absolutely a wonderful thing to achieve.
6812 COMMISSIONER CRAM: Thank you.
6813 Any idea of the per capita income on an average basis in relation to the rest of Canada?
6814 MR. SAJECKI: About the highest. Burlington and Oakville, for example, are always running about one, two or three within Canada. I think Markham is maybe a little higher than us at the current time, but it is a very high income community. There are many CEOs in Burlington, operating companies locally or commuting into downtown Toronto or Hamilton.
6815 COMMISSIONER CRAM: What about the demographics, skewing younger or older?
6816 MR. SAJECKI: I can give you some statistics which are based on 1996 census. The population of Burlington at that time was 137,000. It is now about 146,000, but in the 25 to 49 age group the population then was 53,000 out of the 136,000 and if you go a little beyond that the next figure I have is 50 to 65, that's another 22,000. So, in other words, in the 25 to 65 range it would be 75,000 out of 137,000.
6817 COMMISSIONER CRAM: So over 50 per cent of the population is over 25?
6818 MR. SAJECKI: Oh, yes.
6819 COMMISSIONER CRAM: Thank you very much.
6820 MR. CRAIG: I just want to add that translates well to the other markets within the area that we are serving, Dundas, Ancaster, Hamilton, yes, and Stoney Creek. It really mirrors what is happening in Burlington in terms of demographic.
6821 THE CHAIRPERSON: Counsel.
6822 MR. BATSTONE: Thank you, Madam Chair.
6823 My first question is just a very practical one. Commissioner Noël asked for a break down between spoken word and music. I was just wondering when you could provide that by?
6824 MR. KIRK: We will provide that to you at the latest by Monday.
6825 MR. BATSTONE: By Monday, okay.
6826 The second thing I would like to raise is Canadian content. I apologize, I don't have your application in front of me, so I haven't gone back to it. My understanding is that you committed to the 35 per cent of content category 2. Is that correct?
6827 MR. KIRK: No. We have committed on an instrumental 35 per cent.
6828 MR. BATSTONE: Thirty-five percent, so in fact that would be higher than the amount required in the regulation.
6829 MR. CRAIG: Exactly. The application -- I am trying to remember what the application, but it came back asking if we would commit to 20 per cent Canadian content, rather than the 15 as required based on the instrumental content, and we have committed to 20 per cent.
6830 MR. KIRK: Thirty-five per cent instrumental, 20 per cent Canadian within that.
6831 MR. BATSTONE: Right. I see what you are saying. Thirty-five per cent of the selections will be instrumental.
6832 MR. KIRK: Correct.
6833 MR. BATSTONE: And then you are taking the 20 per cent of those instrumental selections being Canadian content.
6834 MR. KIRK: Twenty per cent of overall selections Canadian.
6835 MR. BATSTONE: Right.
6836 MR. KIRK: And certainly that would be a minimum in our view. You know, with the industry just taking off and more and more product coming available we would consider those minima.
6837 MR. BATSTONE: Thanks very much.
6838 THE CHAIRPERSON: Thank you very much.
6839 Thank you, Mr. Kirk, and your colleagues. We will see you in intervention possibly.
6840 MR. KIRK: Yes.
6841 THE CHAIRPERSON: We will adjourn now for lunch. We will be back at 2:30 to hear the Affinity application.
6842 It is our optimistic hope to complete the Hamilton part of this process before the end of today, so that would include the other two applications, the interventions and then there is one intervention I understand from the public as well and the replies. We hope to complete that before the end of this day. Thank you.
6843 MR. KIRK: We would support that. Thank you.
6844 THE CHAIRPERSON: You want to go back Christmas shopping in Hamilton with all that money.
6845 Thank you.
--- Recess at 1251 / Reprise à 1251
--- Upon resuming at 1432/ Reprise à 1432
6846 THE CHAIRPERSON: Order, please.
6847 Madam Secretary.
6848 MS SANTERRE: Thank you, Madam Chair.
6849 I would like now to introduce the next applicant for Hamilton/Burlington. It is the Affinity Radio Group Inc., for a broadcasting licence to carry on an English-language FM radio programming undertaking. The new station would operate on frequency 94.7 Mhz, with an effective radiated power of 1,410 watts.
6850 The applicant is proposing a Country music format.
6851 You may proceed.
6852 THE CHAIRPERSON: Good afternoon.
6853 Mr. O'Brien, proceed when you are ready.
6854 MR. J. O'BRIEN: Thank you.
PRESENTATION / PRÉSENTATION
6855 MR. J. O'BRIEN: Madam Chairperson and Members of the Commission, my name is Jim O'Brien and I am the President of Affinity Radio Group. Affinity is pleased and excited to appear today to present our application for 94.7 -- The Sizzle -- a hot new country radio station for Hamilton.
6856 Before we begin, I would like to introduce the panel.
6857 To my immediate left is Bob O'Brien. Bob was responsible for developing the sales and marketing plans for The Sizzle.
6858 To my immediate right is Chris Byrnes, the Affinity Corporate Program Director. Chris has been directly involved in our programming plans for The Sizzle.
6859 Beside Chris is our legal counsel from Goodman Phillips, Tracey Pearce.
6860 Behind me, to my left, is Jamie Warren. Jamie is a talented new country artist and writer, who was recently voted independent Male Artist of the Year and won Song of the Year at the Canadian Country Music Awards. We are particularly pleased that he has agreed to appear with us.
6861 Jamie conveys the importance and appeal of today's country with real passion. I hope you will have a opportunity to speak with him.
6862 In the centre is Dennis Nishizaki. Dennis is Affinity's Chief Financial Officer.
6863 To the right of Dennis is Larry Rosin, co-founder and President of Edison Media Research. Edison conducts research and provides strategic information exclusively to media outlets and works with many of the largest radio groups in the world. In addition, Edison recently conducted a national survey in the U.S. on the "State of the Country Music" for the Country Music Association.
6864 In 1997 Affinity acquired CHAM, a stand-alone AM station in Hamilton. We believed that with a focus on traditional country music, and an emphasis on regional news and information, CHAM-AM could re-establish its place in the community and build a loyal listenership. We are proud to report that our plans have met with real success.
6865 While CHAM-AM has yet to show an operating profit, we are hopeful that it will break even in the current broadcasting year.
6866 Most importantly, through the operation of CHAM-AM we have learned a tremendous amount about Hamilton, including the economics and needs of the marketplace.
6867 We understand the challenges of operating in a market with significant out-of-market tuning to neighbouring stations in Toronto and the United States.
6868 We have learned about the changing nature of the Hamilton economy. No longer simply "Steeltown", Hamilton is now a diversified and growing business community with high tech, "knowledge" industries, a world-class medical centre, and a dynamic university working along side more traditional industry. Hamilton has one of the lowest unemployment rates in Canada and strong growth in retail sales.
6869 We have come to appreciate the diversity of our neighbours. Out of this understanding we have established broadcasting scholarships at a number of colleges, including Mohawk College in Hamilton.
6870 These scholarships provide financial assistance to young aboriginal, minority, and disabled broadcasters.
6871 And finally, we have come to intimately understand the needs and interests of Hamilton listeners.
6872 In short, Affinity has a demonstrated commitment to Hamilton, and through this commitment we have come to understand and appreciate this unique community. We are pleased that our strong track record has merited the support of Hamilton Mayor Robert Morrow, Member of Parliament Stan Keyes, Member of Provincial Parliament David Christopherson and Regional Chairman Terry Cook of Hamilton-Wentworth.
6873 We believe our application for Sizzle-FM reflects this intimate understanding of the realities of the marketplace and our desire to further serve it.
6874 MR. B. O'BRIEN: Sizzle-FM will provide synergies and support to CHAM-AM with no adverse impact on the ability of the existing stations to continue providing high quality service to the community. Licensing The Sizzle will also improve the competitive balance by providing each existing competitor with at least one FM station in the market.
6875 CHAM is currently the only stand-alone AM in Hamilton. It competes with an AM and FM licensed to Telemedia; an AM and FM licensed to WIC Radio and an FM owned by Corus.
6876 Corus has indicated that it will seek to acquire the radio holdings of WIC, subject to CRTC approval. Needless to say, CHAM-AM faces considerable competition, which is expected to increase in intensity whether or not another station is licensed for the market.
6877 The challenges of stand-alone AM undertakings are well documented. At Affinity, we have accepted this challenge in a number of markets and have sought ways to improve the performance of these stations.
6878 In Hamilton, it is clear to us that the best way to preserve CHAM's high level of local service is with the addition of a sister FM station. Sizzle-FM would provide the economic benefits of shared resources and synergies and establish a competitive balance in the market.
6879 It is equally clear that the introduction of a new station owned by an additional competitor would have a negative impact on CHAM-AM.
6880 However, this application is ultimately not about the benefits it would supply to CHAM-AM, but rather the benefits it would provide to the community, to Canadian music, and to the broadcasting system. We firmly believe this proposal represents the best choice for Hamilton.
6881 MR. BYRNES: We have reviewed the recent licensing decision sin Victoria, Kelowna and London and believe our application addresses each of the factors considered by the Commission.
6882 Affinity believes it has presented a high quality, realistic business plan which reflects our "on the ground" understanding of the market. Our hot country format reflects this research, which revealed a real and unmet demand for this music.
6883 In particular:
6884 Nearly one-third of all 18-39 year olds listen to contemporary country music.
6885 Approximately 44 per cent of 18 to 39 year olds said they will listen to a station that plays new country hits from the 90s and today.
6886 Currently, new country music fans are more likely to listen to this music on CDs and tapes than on the radio.
6887 Less than 50 per cent are satisfied with their choices of radio stations in the community.
6888 And when today's hot country music was available via CISS-FM Toronto, 30 per cent of 18 to 39 year old Hamilton listeners tuned in.
6889 Indeed, CISS-FM new country reached anywhere from 6.3 to 8.5 per cent of Hamilton listeners each week.
6890 New country is a proven format in this market and unquestionably there is a demand for hot new country music which is not satisfied by the current offerings available in Hamilton.
6891 MR. B. O'BRIEN: At Affinity we are passionate about country music, and we have devoted considerable resources to gaining an intimate knowledge of the industry, both in Canada and in the United States.
6892 Canadians love country music and we boast some of the most successful artists in the world, along with up and coming talent looking for exposure and their first big break. From established superstars like Shania Twain, Terri Clark and George Gox to new talent such as Jamie Warren, Tara-Lynn Hart and The Wilkinsons, country music is hot.
6893 The growth of hot new country music in the last ten years has been tremendous. In the U.S. there are more country-based radio stations than any other format. In Canada it is one of the top three format, and retail sales for country music exceeded $89 million in 1998. In fact, the marketing power and appeal of country is undeniable.
6894 For example, when Canadian artist Michelle Wright travelled nationwide with the Chevy Thunder Tour, GM truck sales in Canada soared by 30 per cent.
6895 This incredible growth and popularity is also reflected in the diversity of the music -- from rockability to country blues; from hot new country to country and western. The label "country" covers a wide range of sounds. In this sense, talking about country music is no different from rock or adult contemporary. Each category covers a range of formats that can appeal to very different listeners.
6896 That is where 94.7 -- The Sizzle -- comes in. We propose to introduce a fresh, new country format to satisfy this unmet demand which was so clearly demonstrated by the response of Hamiltonians to CISS-FM.
6897 Now, you may be asking yourselves: CHAM-AM is a country station. Doesn't it meet the needs of these listeners?
6898 The answer is simply "no".
6899 CHAM's roots are in traditional country music, serving its own unique audience with its own unique brand of country.
6900 CHAM features music from the 60s, 70s and 80s and artists such as Carol Baker, Merle Haggard and Ian Tyson. The station appeals to an older demographic -- empty-nesters, mostly employed in blue collar positions. In fact, the majority of CHAM's listeners are over 45.
6901 The Sizzle will be a hot country station featuring the hits of the 90s and today, along with the fresh new sounds introduced to radio for the first time.
6902 Tune into The Sizzle and you will hear Paul Brandt, Shirley Meyers, Steve Fox and The Dixie Chicks. Even more exciting is the opportunity The Sizzle will provide to new Canadian country artists just making the charts and desperate for more airplay, or those yet to be heard.
6903 With this music, The Sizzle will appeal to a younger, well-educated, urban audience of 18 to 39 year olds -- quite distinct from that of CHAM-AM.
6904 MR. WARREN: The universe of country music is vast. Today it is impossible to satisfy the thirst of the older audience for the legends of country music and to meet the demands new country fans have for the artists that represent their generation.
6905 You can think of the difference between traditional and new country by comparing an episode of "The Honeymooners" to the latest instalment of "Friends". The older audience still enjoys the content, humour and take on life that "The Honeymooners" provides, and of course we can all appreciate this series as a comedy classic.
6906 But people my age want humour that reflects our lives, so we turn to a new, hipper show we can relate to.
6907 In the last ten years hot new country has exploded, primarily because it has given voice to the concerns of our generation -- something all major music trends have done. Today, new country artists, influenced by the British Invasion, the rise of the counter-culture, and the vocal groups of the 70s, speak to the current generation.
6908 On this continent, Garth Brooks is about to outsell The Beatles as the best selling recording act in musical history -- and he was influenced as much by the band Kiss as he was by George Strait.
6909 In my own case, I grew up listening to some wonderful artists like George Jones, Patsy Cline and Merle Haggard. They still influence the music I write and record, but of course so do The Beatles and The Eagles.
6910 New country artists are singing and writing about the concerns of today -- and tackling contemporary issues. From the story of a young adopted woman finding her birth parents in Jim Witter's "All My Life" to fighting and dealing with substance abuse or surviving an abusive relationship. Songs like Terri Clark's "Every Time I Cry" and Garth Brooks' "The Thunder Rolls" give voice to real people, real problems, real life.
6911 One of my own songs, "The Secret", led to the formation of a foundation to help victims of domestic violence.
6912 I am excited that The Sizzle will feature this incredibly popular music and provide significant new opportunities for new Canadian artists. From my own experience, I can tell you that Affinity's significant contribution to FACTOR and its commitment to breaking new talent and giving it the exposure it needs to grow are exactly the kind of support Canadian new country music needs most.
6913 MR. J. O'BRIEN: Our application for Sizzle-FM also reflects increased diversity in the area of local news and information. The programming on CHAM reflects the needs and interests of listeners over 45 years of age. It features extensive news coverage, focussing on regional, often agricultural, issues. Indeed four out of five CHAM listeners are outside the Hamilton Central Market Area.
6914 On 94.7 -- The Sizzle, our dedication to the music will be supplemented by news and information tailored to the needs of our urban audience of 18 to 39 year olds. We will include newscasts in the morning, at noontime and during the afternoon drive period, along with regular updates, traffic and weather reports.
6915 Each segment will focus on the matters of concern to our listeners -- Hamilton city issues with an emphasis on career, health, lifestyle and entertainment news. The Sizzle will be the place to find out what's happening, what's new, what to see and where to go. Our reporters will be on the street exploring and reflecting the diversity of Hamilton.
6916 Sizzle-FM will also feature profiles and interviews with Canadian new country musicians and will devote considerable attention to entertainment updates, including concert listings for the musicians we play.
6917 As Chris will explain, The Sizzle will broadcast the Canadian Six Pack, a daily half-hour program in the weekday afternoon drive time, devoted to new Canadian country music.
6918 We have no doubt that Sizzle-FM will provide a distinct and diverse local news voice, as well as dynamic local programming.
6919 MR. BYRNES: An integral part of Affinity's philosophy is our commitment to the development of Canadian music. This application builds on that commitment. With your approval of this application, Affinity will provide $1.2 million over seven years to FACTOR, over and above the payments outlined under the CAB plan.
6920 FACTOR has a proven track record in assisting Canadian artists. Just as important, musicians are familiar with the programs offered by it and how to access this funding to support their dreams. I hope you will have the opportunity to explore Jamie Warren's experience in accessing this important source of funding. As a result, we believe our unequivocal commitment to FACTOR will provide immediate, tangible and proven assistance to the development of Canadian music, including artists in our home town of Hamilton.
6921 However, our commitment doesn't end there. Affinity will also ensure The Sizzle reflects its commitment to Canadian music on-air and in its role in the community. As a result, we have put together additional Canadian talent development initiatives.
6922 First, Sizzle-FM will introduce the Canadian Six Pack, a 30-minute feature in prime drive time each weekday which will highlight: a Canadian group, a Canadian male artist, a Canadian female artist, a Canadian CD, a Canadian song, and a new Canadian single.
6923 In addition to featuring Canadian music, the program will provide listener impressions and feedback; interviews with the artists and recording company executives; updates and information from the Canadian Country Music Association; and, interaction with program directors from across the country and their predictions for the next big act. In support of the Canadian Six Pack, we will hire a full-time producer/director dedicated to this show.
6924 Secondly, The Sizzle will mount an annual Canadian New Country Music Concert to be held at Hamilton Place and featuring established and new Canadian artists.
6925 Thirdly, Sizzle-FM will feature on-air interviews and performances by new country musicians right in our own control room. We expect these live and unplugged sessions will have tremendous appeal for our listeners and will give us another opportunity to showcase new Canadian music on FM.
6926 Fourthly, The Sizzle will further support these musicians with comprehensive concert listings detailing their performance schedules and recording release dates.
6927 And, lastly, Sizzle-FM will actively support local music festivals and new country music concerts both with funding and promotional support. We believe this commitment will have direct and meaningful benefits for events that showcase Canadian talent, such as The Festival of Friends and the Rockton World's Fair.
6928 In total, these benefits represent a commitment of more than $1.4 million over seven years to the development of Canadian music.
6929 MR. J. O'BRIEN: In closing, we believe that approval of this application for a new hot country FM would be in the best interests of Hamilton and the Canadian broadcasting system for the four following reasons.
6930 First, The Sizzle will add real and sustainable diversity with a hot new country sound. Research has confirmed this void in the Hamilton market for a radio station featuring this format for 18 to 39 year olds.
6931 Secondly, filling this gap will have no material impact on existing stations and will support the stand-alone AM -- CHAM. The positive effects on CHAM are undeniable and licensing The Sizzle will also enhance the competitive balance in this community.
6932 Thirdly, this format has proven viability in the market. When CISS-FM Toronto operated in the new country format it reached 6.3 to 8.5 per cent of Hamilton listeners each week. At the same time, CHAM-AM reached between 5.5 and 6.6 per cent of the audience. As will be the case with CHAM and The Sizzle, each station served a distinct and separate audience. The Sizzle business plan is based on a viable format which means our ability to deliver on our commitments to the community are solid.
6933 Thank you.
--- Pause / Pause
6934 MR. J. O'BRIEN: I have it.
6935 Finally, approval of our application will result in a contribution to FACTOR of $1.2 million over seven years as well as other significant tangible and intangible benefits. In total, this commitment represents over $1.4 million over seven years dedicated to the development of new and emerging Canadian artists.
6936 Affinity has a proven commitment to radio and to this market. We have sustained significant losses and have invested in our AM because we believe in radio and believe in the power and resonance of country music. We are here today because we seek the opportunity to build on this commitment and to meet the need for a fresh, hot country station we see demonstrated every day.
6937 For all these reasons, Affinity believes that this application is in the public interest and should be approved. We look forward to any questions you may have.
6938 Thank you, this time.
6939 THE CHAIRPERSON: Thank you, Mr. O'Brien.
6940 Commissioner Cram.
6941 COMMISSIONER CRAM: Mr. O'Brien, gentlemen, Ms Pearce.
6942 I wanted to start where you ended -- I think those are pages 16 and 17 of your oral presentation -- because I think what you were addressing is the issues that we addressed in the Kelowna, Victoria and London decisions. I wanted to ask you what you thought was the most important consideration of those factors in our decisions -- what do you believe for the Hamilton market? What would be the order, the priority we should give to each of the considerations? Which is the most important?
6943 MR. J. O'BRIEN: In Hamilton we believe the quality of the business plan and the impact on the market and the competitive balance of the key factors in licensing a new station for Hamilton. In reviewing the quality of the business plan, we agree with the Commission that several considerations are important. First of all, is sustainable diversity. Does the proposed format add real diversity, meaning is there a proven demand for it, and, equally important, is it a viable, sustainable format in that market?
6944 In addition, contribution to Canadian talent development. Does the application propose significant and unequivocal commitments to Canadian talent development that will make a real difference to artists?
6945 In addition, in considering the market impact, and the competitive balance, we believe that the impact of licensing the proposal on existing stations in the market, especially not those showing a profit.
6946 So we believe that our business plan incorporates these considerations and well reflects them in terms of our proposal and our ability to do what we say we will do.
6947 COMMISSIONER CRAM: So we should be considering first the issue of the business plan, and if it is sustainable; then, secondly, the issue of the competitive -- competitive issues within the market?
6948 MR. J. O'BRIEN: That is correct.
6949 COMMISSIONER CRAM: You talked in both your application and today about CISS-FM from Toronto. I believe you said in your application that there was a 6.3 share from Hamilton that CISS had, and I believe you said today 6.3 to 8.5. Where did you obtain those numbers?
6950 I will tell you why. Our statistics from BBM show the 12-plus tuning to CISS was 1 per cent both before and after the switch of format. Our statistics from BBM also show that in 1998 and 1999 the 18 to 34 tuning to CISS from Hamilton was 1 and 2 per cent. So where do you find the 6.3 and the 8.5 per cent?
6951 MR. BYRNES: Commissioner Cram, I would like to answer that question, if I may.
6952 The figures we were using are reach figures --
6953 COMMISSIONER CRAM: Oh, the reach, okay.
6954 MR. BYRNES: So they are the number of people who tuned into that station in any given week the spring of 1997. In the 18 to 49 demos that were reaching 8.5.
6955 So it was a reach rather than a sheer figure, which we considered to be more accurate because the reach effectively measures how many people are tuning into that radio station as opposed to the sheer of the market. We use that figure because clearly the radio station CISS-FM wasn't trying to serve the Hamilton market.
6956 So it didn't have the level of local information that a Hamilton-based radio station would. So while a lot of people may have tuned into the radio station clearly they didn't spend very long listening to that radio station. That's why it has a higher reach and a lower sheer.
6957 COMMISSIONER CRAM: So the fact that the BBM, if I understand it then, says that the listening audience was 1 per cent, does that show you that there is a demand? Or are you saying that there would be a demand if there was the local element in it? Is that your point?
6958 MR. BYRNES: Absolutely. There is a big difference. The amount of hours tuned is really the critical issue. With a station that was providing a viable format musically, which without doubt CISS was doing -- and Edison Research established that fact, supported also by the BBM data -- but because it really wasn't providing the amount of local information, local news, local traffic, useable information for the community, the hours tuned to CISS-FM were very small.
6959 COMMISSIONER CRAM: So you used the BBM and you used the reach figures, but I take it that you also then used Mr. Rosin's research. Is that correct?
6960 MR. BYRNES: That is correct.
6961 COMMISSIONER CRAM: If I recall correctly, that was a telephone survey, was it, Mr. Rosin, of 400 people?
6962 MR. ROSIN: Yes, 18 to 39 year olds.
6963 COMMISSIONER CRAM: Was that extended Hamilton or was that just the Hamilton BBM?
6964 MR. ROSIN: The word "BBM" defines the Hamilton market.
6965 COMMISSIONER CRAM: Just the Hamilton BBM?
6966 MR. ROSIN: Yes.
6967 COMMISSIONER CRAM: Tell me, Mr. Rosin, you also did this study in the States, if I understand it correctly, where we were told that since the 1990s as a genre country music has declined in popularity.
6968 MR. ROSIN: It's off from its peak, but the valley that it is in right now is so considerably higher than it ever was before that.
6969 Essentially, usually to 1989 there is a -- the use of the term "The Class of '89" came out. A lot of incredibly popular artists, Clint Black, Alan Jackson, Garth Brooks and a number of others. Country just soared in popularity from 1989 through 1994-1995.
6970 It has dropped a bit from the peak that it hit in the middle 1990s but, again, the point that it dropped to is so -- it's like four times what it was in terms of record sales and it is higher in terms of Arbitron radio ratings as well by a considerable margin than it was before that huge increase in popularity starting in 1989.
6971 So I don't know the Canadian statistics that would parallel that, but that is probably what they were referencing.
6972 MR. BYRNES: If I could add to that, Commissioner, the good news from the most recent Arbitrons is, firstly, that country music is on its way back up in the large markets in the U.S. It showed considerable improvement.
6973 I think the second and relevant point is also that country music, particularly in the U.S. in the early 1990s, became the darling format and everybody climbed onto it, so to speak. So the format itself, the operators of the country music formats, got very much into niche formats and they started a whole variety of country formats within country.
6974 COMMISSIONER CRAM: As Mr. Warren was talking about.
6975 MR. BYRNES: Yes.
6976 Here in Canada, to use the statistics here, quite clearly country music is in the top three in terms of radio stations operating that format. The three big ones, adult contemporary, news talk and country.
6977 There were certainly a number of markets where country is doing very nicely. We looked at, obviously, all the Canadian markets as we were going through the process, and there are I guess three markets that we could give you some examples of where the country was doing very well. Those markets -- if I can just find the little piece of paper here so I can talk from fact.
6978 The markets that come to mind are Calgary where there are both a traditional and a hot country format operating. CKRY is the number 12-plus radio station in the Calgary market.
6979 In Edmonton CISM is the station on FM doing very well, attracting audience under 45. In fact, 62 per cent of the audience is under the age of 45.
6980 There is a traditional country station on AM, CFCW, and it is surviving nicely in that market and the audience profile is as you would expect: 86 per cent of their audience is over the age of 45.
6981 Lastly, Saskatoon, a market smaller than Hamilton, once again two country formats operating in that market: CFQC playing hot country and the AM station, CJWW on AM, and once again the audience profile is as you would expect. The FM playing hot country, 74 per cent of its audience is under the age of 44. The AM station, 70 per cent is over the age of 45.
6982 COMMISSIONER CRAM: Those are the people who said that the country format was declining in Saskatoon. CJWW, the people who own the AM station. That is why I was asking that very question, because of their assertion that the issue was one of a declining popularity.
6983 In terms of the popularity in Hamilton, should we take anything from your standing in the shares, CHAM-AMs standing in popularity in the Hamilton market?
6984 MR. BYRNES: CHAM-AM in the Hamilton market is, once again, performing acceptably. Seventy per cent of its audience is over the age of 45. It's a station, as we have mentioned in our presentation, it's roots are in traditional music.
6985 I think that the research that was conducted in the Hamilton market where, as you pointed out, we talked to over 400 people aged 18 to 39, clearly demonstrates that there is a real demand for this style of music.
6986 We used the zip codes to ensure we talked to a representative sample in both Hamilton and Burlington, and it quite clearly demonstrated a number of things. I will ask Larry Rosin to briefly touch on those.
6988 MR. ROSIN: Yes. There is clearly a considerable audience that is possible there. As was mentioned in the oral presentation, 30 per cent of the 18 to 39 year olds we talked to listened to CISS at some point. At some point while it was a country station they tuned in the station. About 18 per cent of the people in the sample or more said that they would listen to the station a lot, to a new '90s and today's country-based station a lot, and about 6 per cent said that it would be their favourite station among these 18 to 39 year olds.
6989 So there is a relatively clear level of general interest, "cume" level interest, people who wouldn't listen to it at all, and certainly a sustainable and relatively healthy and large number of people who would probably make it their favourite radio station.
6990 COMMISSIONER CRAM: How do you reconcile that with what is happening in the market today in Hamilton and the popularity -- the relative popularity of the --
6991 MR. ROSIN: Of CHAM-AM?
6992 COMMISSIONER CRAM: Yes.
6993 MR. ROSIN: Well, one of the questions we asked of the 18 to 39 year olds was: Do you ever listen to AM for music at all? A considerable minority said they ever listen to music on AM. Again, this was 18 to 39 year olds.
6994 So I think part of it is that there are just many people who essentially don't go shopping for music on the AM band, especially within the 18 to 39 age demographics. I would think that is definitely part of the issue with regard to why very few people 18 to 39 are listening to CHAM-AM right now, as well as the fact that it is not the kind of station we are proposing here. It is not a hot new-based country station, it is a much broader and more traditionally based country station.
6995 MR. BYRNES: I think the other point we would like to make is that traditional country music stations play music from the 1960s, 1970s and 1980s and sonically that music sounds fine on AM.
6996 The Sizzle is proposing a format that would be primarily music from the nineties and today and quite clearly, that musical sonically sounds different. It's more rock based, it's got more energy and simply the production values sound entirely different. That's why that format works so well on FM.
6997 What we I think are proposing here is real diversity in the music. On the AM radio station, as mentioned, the music is going to be from the sixties to the eighties. We will be playing the traditional artists like the Anne Murray, the Kenny Rogers, the Mercy Brothers and Gary Buck.
6998 On the new station, we will be featuring some great Canadian artists like Tara-Lynn Hart, Colin Amy, Steve Fox, Jim Cuddy and, of course, Jamie Warren.
6999 The international acts that we will be able to bring to the air is Chad Austin, Shannon Brown, Jennifer Day and Shedaisy, so we are going to have real musical diversity on this radio station.
7000 Clearly when CISS were operating, until the station was sold and the new owners chose to change format, the radio station had a real following. It was a successful radio station and the kind of music that it was playing is similar to what the Sizzle is proposing.
7001 What the research confirmed is that a lot of people once CISS went away didn't have a home. They stopped listening to radio and in fact were having to get their country music from CD and tape. We plan to bring those people back to radio.
7002 COMMISSIONER CRAM: In your application you talked about -- I'm very bad on my American geography -- you talked about an American station, WYRK-FM. I understand it tunes in to the Hamilton market.
7003 MR. BYRNES: That's a radio station out of Buffalo. It plays a similar format.
7004 COMMISSIONER CRAM: The hot --
7005 MR. BYRNES: It plays hot country, not particularly strong signal in that market and it virtually doesn't show up in the ratings radar. I believe they have around 4,200 people each week that they reach.
7006 The reason that it's not doing well is once again the lack of critical local information, the lack of weather, the lack of traffic, the lack of useable information. So while they are there, number one, they are hard to hear and, number two, they simply are lacking in the diversity of information. Clearly, their news presence has nothing whatsoever to do with Canada.
7007 COMMISSIONER CRAM: And you do agree with me, and you talked about negligible. If I have got the BBMs right from the spring, it was .1 per cent they had by way of share.
7008 You don't think either of the Buffalo stations' lack of popularity or CISS' lack of popularity has anything to do with the actual format or the genre of music. You think both of their lack of popularity in Hamilton has to do with the lack of local news.
7009 MR. BYRNE: Well, firstly, CISS was relatively popular in Hamilton in terms of the numbers of people it reached. For an out of market radio station, it did very nicely. Frankly, we are not really interested in dragging listeners from the U.S., so what WYRK does is of little interest to us.
7010 Certainly the importance of local information, of having area staff or announcers talking about things that are going on in the Hamilton-Burlington market and having a news staff that actually deal with the issues that are important to the 18 to 39 year olds, we believe that to be critical. Once again, that was absolutely confirmed by the local research that we conducted in the market.
7011 MR. ROGIN: Perhaps I could amplify just a bit on that. The WIRK, the Buffalo station, I think has quite a bit to do with the lack of signal reaching. It just barely reaches I think the edges of the metro. I think that has a lot to do with the lack of ratings, on top of what Chris is talking about with lack of local relevance.
7012 CISS did have, you know, a decent number of listeners but again, as Chris was also talking about, it wasn't focused on Hamilton-Burlington at all and wasn't really speaking to the market in any way. That's why they fielded the study with my company to see if "Well, hey, is there any country interest here or not and what is the level of that interest?"
7013 I will tell you straight out, I was surprised. It was higher than I would have -- if you would have asked me to guess before we did this study, it was higher than I would have guessed. If you asked me to put my money down on it, the level of people who have some level of interest in country among the younger side, the people of Hamilton, it was actually surprisingly high to me.
7014 More than a sustainable number of people said "That would be my favourite radio station if it came on the air". I think you would be taking the wrong inference from -- you would be taking it way too importantly the performance of CISS and serving this Buffalo station if that were part of your analysis of the opportunity here.
7015 COMMISSIONER CRAM: In terms of the analysis or the opportunity, do you give opinions based habitually on surveys or do you also give opinions based on share, sort of out of tuning share, out of market tuning share or is it normally that your opinions are based on these phone surveys or surveys of some kind?
7016 MR. ROGIN: I'm not sure I fully understand your question. Everything I'm going to tell you is based upon the survey data that my company produced. We only surveyed within Hamilton.
7017 Inasmuch as there is very little country available from out of the Hamilton market right now that could only be a limited part of analysis that these people could do in putting together their application because there is just that little sliver, I believe, of the metropolitan area that can hear WYRK as now and I don't think there's any other country stations coming with any kind of signal strength of note into the market right now.
7018 COMMISSIONER CRAM: So then, and I never know who to address this to, so I will say Mr. O'Brien. Mr. O'Brien or Mr. O'Brien or anybody can jump in.
7019 In terms of your year one goal of a 3 per cent share and a million dollars of revenue, how did you come up with those projections?
7020 MR. BYRNES: I will answer the audience aspect of the question and then hand it on to Mr. Bob O'Brien who will deal with the revenue side.
7021 We looked at the BBM research data, all people aged 18 to 49 -- we couldn't quite get BBM to give us the 19 to 39, but in the September 1999 book in terms of where the listeners are currently and where we thought we could gain them from.
7022 If you analyze the market and looked at the existing operators, there's Y95, a classic rock station, it currently has 29 per cent of 18 to 49s. Energy Radio has 23, the dance station. The soft AC has a 28 share. CHML 14. The oldies station has 10. CHAM has 6.
7023 We looked at those radio stations and we are also very aware of the percentage of out of market tuning which is somewhere around the 30 per cent mark.
7024 We feel it's not unrealistic to attract some listeners from Y95, marginally from Energy Radio simply because the numbers of 18 to 39s they have. Realistically, we won't take any audience from K-light, the soft AC, or from the Music of Your Life station, CHML.
7025 Given that country shares with oldies we think we will get perhaps half of a cent from them, and although CHAM doesn't have very many 18 to 39 year olds listening to it currently because of the fact that it's, firstly, on AM and, secondly, it's more of a traditional country station, clearly, the few that are listening we think will gravitate to the FM and the hot country format. So that's how we established that side of it.
7026 Ultimately, we think that out of market stations and bringing people back to radio is really where the growth will be.
7027 COMMISSIONER CRAM: I will just finish with the audience then. So, at the end of, I believe it's year five, you are at 7.5 per cent share and that additional 4.5 was based on primarily repatriation and repatriation from CDs. Is that correct?
7028 MR. BYRNES: If you look at where the audience will come from, 60 per cent will be out of market stations and repatriation. Thirteen per cent will come from CHAM-AM. Thirteen per cent will come from Y-95. Seven per cent will come from Energy Radio and 7 per cent of our audience makeup will come from the oldies station and, obviously, that add sup to 100 per cent.
7029 COMMISSIONER CRAM: So over the years you just think it will grow evenly in terms of where you are getting your audience from?
7030 MR. BYRNES: We think that initially with the marketing we are planning on doing the first people that will come to us will be the people who are not currently listening to FM to get their hot country music, the people who are currently listening to CDs and tapes.
7031 We think that that's where the bulk of the early listeners will come from and then, ultimately, the figure that we actually suggested to you was actually I think over seven years.
7032 COMMISSIONER CRAM: Yes, you are right. I'm sorry.
7033 MR. BYRNES: That's right. We will actually grow that slowly and, frankly, have very little impact on the existing operators in the market.
7034 COMMISSIONER CRAM: So then, how did you come up with a million, Mr. O'Brien?
7035 MR. B. O'BRIEN: What we did is we took a look at the balance of where we would get money, local, new and other media, such as newspaper, television, outdoor and direct mail, and then we took a look at what we thought was a realistic use of the inventory and the rating base. So, we took share points that we thought we could transfer into a rate card and we believed that that share of that particular demo would provide us, one, now we would be able to make national lists with 18, 40, 418, 49, 25, 54. We just barely qualified the top end for those now. So we think we have run a lot of nationalists.
7036 We have actually projected 25 per cent of our revenue would come in nationally.
7037 The 75 per cent local, we think in the first year we would use up 35 per cent of our inventory. In year two, 40 per cent; in year three, 45.
7038 We believe that if you take a look at, you know, "x" units per hour times a -- not including the all night show, how many units there are available to us, we think that 1.1 at a get started rate card, delivering a 3/3 share will deliver the 35 per cent use of -- we think that's very doable, very realistic.
7039 COMMISSIONER CRAM: So, it's based on the 3 share and then on the use of inventory, of --
7040 MR. B. O'BRIEN: Yes.
7041 COMMISSIONER CRAM: -- at, you said 35 per cent, did you?
7042 MR. B. O'BRIEN: Yes.
7043 COMMISSIONER CRAM: Now, the national -- what percentage of your revenue is now national on CHAM-AM?
7044 MR. J. O'BRIEN: It's under 25 per cent. It is under 25 per cent, Commissioner. It is under 25 per cent. Three strikes and you're out.
7045 COMMISSIONER CRAM: I heard you the first time, but I don't think the court reporter did.
7046 MR. BYRNES: We don't let him near the microphone much these days.
7047 COMMISSIONER CRAM: And your point is because the demographic is lower, Mr. O'Brien, that you will be able to get --
7048 MR. B. O'BRIEN: Yes. We would get a list every week of all the national buys that are coming into Hamilton, and when the agencies tell you what demos they are looking for, it is very, very -- they are very slim, the amount that say 35-plus. Ninety per cent say 18/44. The rest of it says 25/54.
7049 As CHAM's -- its CAM sort of comes on 45/54, we don't make a lot of national buy lists.
7050 MR. J. O'BRIEN: One of the things our competitors would not want to agree with is the difficulty in a stand alone AM is that when advertisers come into market and looking to accomplish a certain reach and frequency within the marketplace, very often radio stations are used as a bonus vehicle in order to accomplish the buy.
7051 As you can appreciate, that if you look at the complexion of the Hamilton market now, for example, Telemedia who have an AM/FM also have an AM/FM in Toronto and if the CORUS purchase goes through that would give CORUS three in Toronto, Burlington plus two in Hamilton, which would give them six.
7052 Now, as someone had mentioned in one of the presentations earlier about the Toronto/Hamilton/Niagara being a total continuous market, it's basically a television market. ADI is influenced from television.
7053 So, when people get through their television buys and look at radio, when you have spill from Toronto and you have an operator who has both Hamilton and Toronto radio stations, they in fact have a very powerful position in which to achieve national or large regional advertising dollars. So, the benefit of the FM is more than just on a superficial basis. It affects our ability to use the AM inventory more effectively and create an overall revenue growth for both stations.
7054 COMMISSIONER CRAM: I think this is you, Mr. Bob O'Brien. Your financial projections also refer to 28 per cent from year one from other media. What are you referring to there?
7055 MR. B. O'BRIEN: We actually work with our sales department training them on efficiencies and levels of effectiveness. So, dealing with buyers, we can tell them, for example, in direct mail we spend a lot of time dealing with people who spend a lot of money on direct mail. So we have targeted 4 per cent of that four share of that, Commissioner, and we took newspaper, for example, and expected a very strong newspaper, but also very, very expensive. They are not at all efficient.
7056 We look at the efficiencies that we can achieve in the market, especially demographically because, as you know, newspapers skew 35 plus.
7057 In doing TV -- right now we don't pitch against any TV buys. We would imagine that we could also be able to do that. We think we have a position because there again that station is not terribly efficient.
7058 And outdoor, we take a look at the radio being a great outdoor media. We think that in outdoor that doing a portion of that in outdoor, so we take the combination of newspaper, TV, outdoor and direct mail and come up with the 28. It would be sort of in keeping with what we think, when you are talking to enough buyers at malls, et cetera, et cetera, where we could find available dollars.
7059 COMMISSIONER CRAM: And then you say 40 per cent from local stations. Which ones and how much?
7060 MR. J. O'BRIEN: What we are talking about when we say for the other ones, we are talking in the local revenue, not the national revenue. What we do believe now is that the powerful combinations, when they are out selling a large local advertiser, the word tonnage sounds like it's weight, but what it really is is the ability to deliver large or mass audiences at an attractive cost per thousand.
7061 So, we believe that by having an FM which is generally easier to sell than AM, and most markets that we know of we believe that is what we can do in terms of getting on the local buys from the local marketing people.
7062 COMMISSIONER CRAM: Are there then other media? So, we believe that by having an FM which is generally easier to sell than AM in most markets that we know of, we believe that that's what we can do in terms of getting on the local buys from the local marketing people.
7063 COMMISSIONER CRAM: Are there then other media?
7064 MR. J. O'BRIEN: Yes. We are speaking of getting out share of the local dollar, but keep in mind that Hamilton is growing in terms of its retail sales. It is a very low unemployment rate and the amount that we are talking about is 2.4 per cent of the local market. So we are not talking about a lot of money. We are not expecting to steal a lot of money from the other stations; 2.4 is not a large percentage. But we do to increase our share of the buys.
7065 To be able to pinpoint which station and which stations, we wouldn't know how to do that, to be honest with you. It will depend on who has got the weakest rep on that account, frankly.
7066 COMMISSIONER CRAM: Now, the repercussions, if God were in her heaven and everything remained the same as it were now in terms of licensing in the Hamilton market, and if your application were refused and someone else were licensed, what would be the repercussions on Affinity?
7067 MR. J. O'BRIEN: The question you are asking is if someone else was licensed? Serious?
7068 In terms of most serious for CHAM, simply because we don't have an offset and the unfortunate reality is that a new FM would in fact be the new kid on the block. There is a natural excitement and enthusiasm. You generate your new sales organizations and your presentations. Generally speaking, when they first come on the market there is an excitement, a marketing effort and people will give them trial.
7069 So, the station that would probably get banged the most and most quickly will be CHAM-AM, of that we have little doubt.
7070 COMMISSIONER CRAM: You heard Mr. Kirk say that his NAC/smooth jazz would not impact anybody in the market and sort of create a new audience and create new advertisers. Are you saying there would still be an impact on you?
7071 MR. J. O'BRIEN: It's quite possible Mr. Kirk knows something about hiring sales people that we don't know and can find people who wouldn't go to listen to the existing radio stations here, who is using radio, and go and try to get the dollars, but I have yet to see that there is a selective process in determining advertising. People go where the budgets are and they lay claim to why they, that particular station, has either a greater service or a greater value for that particular advertiser.
7072 So, with all respect to Mr. Kirk and his sales organization, it's free form when it's on the street and trying to create revenues. Most salesmen are not particularly concerned about where the dollars are coming from. They have budgets to make and that's what their task is to do.
7073 COMMISSIONER CRAM: In terms of again a scenario that a third party, not Affinity, would be licensed. What would you say about Affinity's survival rate?
7074 MR. J. O'BRIEN: The easiest word is difficult, very difficult. One of the complexities, of course, in coming before the Commission is how to approach you in a manner that does not appear to be negative or nasty, in view of the new licensing situation that people can change format without approval.
7075 One of the difficulties is the viability of any format. We have chosen not to become involved in that kind of a street fight, but if you were to just check, for example, since your research people are so thorough, to see for example, just picking the NAC as an example, what has happened to the format recently is in fact you talk about country declining, but this format has failed in many markets.
7076 It was in Buffalo. It couldn't make it in Buffalo. It failed in Boston. It failed in Denver. It failed in Philadelphia. Two of the markets shown as examples there, they are out of the format.
7077 So, there is a very high likelihood that this is an esoteric format and would not be economically successful in the Hamilton market.
7078 But from our point of view we would rather leave that alone for another day. We have given you our presentation. We believe that there is a real need, that the competitive balance in the market is going to become extraordinarily difficult and we think that our application warrants consideration. We would like to leave it at that.
7079 COMMISSIONER CRAM: A final question -- oh no, more, I'm sorry. On your CTD I noticed that it's graduated over time. Why did you do that, the payments to FACTOR? They start off at one-fifty and then two hundred and two-fifty. They have gradually increased.
7080 MR. BYRNES: It's a simple matter of economics.
7081 COMMISSIONER CRAM: Okay.
7082 MR. BYRNES: Generating revenue. We are pretty excited, to be honest, about the contribution that we hope to be able to make to FACTOR. We think it's a significant amount of money and we have set it up so as that amount does increase over the years, with the Commission's approval of a seven year, if you should so wish. We are prepared to commit $1.2 million, which we think is a sizeable amount of money.
7083 Over and above that, $28,000 per year to set up an annual country concert. One of our advantages is because we have been working in this market for some time and we know the market well, we know where all the good venues are and we are pretty excited about the opportunity of bringing new acts and existing country acts to Hamilton. We have set aside $28,000 annually to run what we think will become an annual event in the city.
7084 We have also set aside an additional $8,000 in cash grants to actually help local music festivals and local events. That's some of the tangible things that we have done.
7085 I guess over and above that and outside of it are the intangibles. Things like the Canadian six-pack, the hiring of a producer and the additional publicity, the on-air publicity that we have taken out of our inventory to make available. I appreciate their intangibles are not counted, but we think that the total cash amount of $1.4 million over seven years is significant and will go a long way to helping get new Canadian acts launched.
7086 One of the great things, without wanting to hog the microphone, about the format is the number of Canadian country acts that have been created and FACTOR has done an amazing job towards that. It costs about $50,000 to produce a CD. If you simply do the maths, it gives you some idea of some of the potential we think is there.
7087 If you just look at the Hamilton/Burlington market and some of the individuals that are doing very nicely as new country acts, acts like George Fox from Ancaster, Robin Paul from Hamilton, Jamie Warren behind us here from Kitchener, have all been assisted by FACTOR, money coming from radio stations to help launch their career. As was said, we hope you have an opportunity to talk to Jamie at some point about his experiences with FACTOR.
7088 COMMISSIONER CRAM: Thank you very much.
7089 THE CHAIRPERSON: Commissioner McKendry.
7090 COMMISSIONER McKENDRY: In fact, my question is for Mr. Warren. I wonder if he could just give us some insight into how FACTOR has worked in relation to his career.
7091 MR. WARREN: Absolutely. This might sound odd coming from an artist, I guess I have to talk about me for a moment. I try not to do that too much.
7092 I was granted the $30,000 loan for my last current album courtesy of factor. Once again, I apologize talking about my achievements. However, from that record, called "Just Not the Same" we have released four singles. We have had three top ten and the fourth one peaked at 14, videos with every single, all reaching the top 10 in the CMT top 20 countdown.
7093 The reason I list those -- and the achievements earlier in the awards at the CCMAs and I am an independent country act. The cool thing as well, I was nominated for song of the year, competing with four other major label songs, nominated for male artist of the year, competing with four other major label artists. I didn't win that award, but I was nominated, as well as vocal collaboration. But I have managed to compete with major labels.
7094 The profile, if you actually analyze the top 10 artists, if you look at BDS Spins over the last 12 months, you would find my name in that top 10, including Terri Clark, Shania Twain, Paul Brandt. And if you extended that -- now, my figures once again I am not a broadcaster, if you extended that to probably 15 names you would probably find three or four independent acts. This is the one thing that definitely attracted me, obviously, this FACTOR commitment. It was interesting, I watched -- I don't know if this is proper protocol, but this is new to me, watching these proceedings, and I believe the format earlier in the day and I won't mention any names, it was a rock format and they were going back and forth and that was interesting for me to watch.
7095 But they were talking about this new catch phrase, CTD or whatever there, Canadian talent -- that's a new acronym for me. But, ultimately, he finished by listing their FACTOR arrangements and he either mocked holding a CD or was talking about the commitment with the CD thing.
7096 The ironic thing -- and I thought about it -- is the one thing that is very specifically different in country music as a genre, pretending to radio, is you can get a jazz record made from a factor commitment from that genre of music, or a rock record, or whatever. The financial commitment to those radio stations in that genre is there. You can make one of those records in any genre.
7097 That is not a confusing thing for me to say?
7098 The interesting thing is that country is pretty much the only one who will actually play it when it is done. We have an unbelievable high percentage of independent acts in country music.
7099 You were asking about the affectation of things. I would be curious to see how not having the $1.47 million will actually affect our industry.
7100 If I can briefly, as I said, I deal in ideals and not necessarily facts, but I picked up RPM just to make that point -- and the date doesn't matter. I was looking at the country chart, The Top 100.
7101 In what they call The Hit Rock -- actually, I will do the country first.
7102 There were 38 Cancon slots on The Top 100 chart; 28 of them were independents, meaning they all would have been available to help themselves with FACTOR.
7103 On the rock chart there were 33 slots for Cancon, with two independents on that chart. I don't even know if that two was a zero, because I am not familiar with rock. I didn't recognize two of the names.
7104 So it really is an industry that thrives on help from -- for instance, they sent a program from CMT and particularly for FACTOR grants and have obviously created a career or profile in an industry just through these benefits.
7105 COMMISSIONER McKENDRY: Thank you very much.
7106 MR. WARREN: You are welcome.
7107 THE CHAIRPERSON: Thank you, Mr. O'Brien. We will see you again.
7108 We will now take a ten-minute break and then hear the application by NewCap.
--- Recess at 1540 / Suspension à 1540
--- Upon resuming at 1558 / Reprise à 1558
7109 THE CHAIRPERSON: Order, please.
7110 Madam Secretary.
7111 MS SANTERRE: Thank you, Madam Chair.
7112 The next application will be by NewCap Inc. for a broadcasting licence to carry on an English-language FM radio programming undertaking at Hamilton/Burlington. The new station would operate on frequency 94.7 MHz, with an effective radiated power of 6,200 watts.
7113 The applicant is proposing a modern adult contemporary/modern rock music format.
7114 THE CHAIRPERSON: Good afternoon. Go ahead, Mr. Templeton.
PRESENTATION / PRÉSENTATION
7115 MR. TEMPLETON: Madam Chair, Members of the Commission, CRTC staff, ladies and gentlemen, my name is Bob Templeton. I am the President of NewCap Broadcasting.
7116 With me today are Anna Zanetti, Music Director of Q104, our station in Halifax; David Murray, Vice-President, Finance and Administration, NewCap Broadcasting; Jackie Boutilier, Manager, Human Resources, NewCap Broadcasting; Bob Kennedy, our News and Information Programming Advisor and Aboriginal Relations Consultant; Peter Doering, President of Peter Doering Consultants, the firm which conducted our market research; John Steele, Vice-President, NewCap Broadcasting; and Harry Steele, Chairman, Newfoundland Capital Corporation.
7117 Madam Chair, we are now prepared to start our presentation.
7118 We intend to show you how our proposed station, NewCap-FM, will best meet the needs and interests of the people of Hamilton/Burlington, promote the growth and development of new Canadian musical talent from the local area, and contribute to the achievement of the cultural goals contained in the Canadian Broadcasting Act.
7119 First, allow me to tell you a little bit about our company.
7120 Newfoundland Capital Corporation, our parent company, is a publicly traded Canadian corporation based in Halifax with interests in radio, printing and publishing. The company was founded in 1948 as a transportation business, and expanded into communications in 1985. Over the past two years, the company has refocused primarily on building its radio business.
7121 We have a strong commitment to radio. We purchased our first stations nearly 15 years ago and have poured millions of dollars into nursing them back to health.
7122 Currently, we operate 11 licences in Atlantic Canada, one in Ontario and three in Alberta. While we are the largest radio operator from Atlantic Canada, we are a small-to-medium size broadcaster with aspirations to expand beyond our base in Atlantic Canada.
7123 This application before you today reflects our desire to expand into central Canada.
7124 MR. MURRAY: The Hamilton Region is a thriving economic and culturally vibrant area with one of the lowest unemployment rates in Canada. Its economy is strong and growing and the economic prospects for the future, coupled with the financial data for the market provided by the Commission, clearly demonstrates that the region has the capacity to support another radio station.
7125 Despite a June 1, 1999 estimated CMA population of 655,000 and the proliferation of radio services in the area, only six stations reported by BBM are based in Hamilton/Burlington making it one of the most under-served areas in Canada in terms of local radio service.
7126 Research carried out for this licence application by Peter Doering Consultants reveals that more than half of Hamilton CMA residents listen to out-of-market non-Hamilton stations, particularly persons 18-34, primarily because of the limited number of format options available to them locally.
7127 Our research also identifies Modern AC/Modern Rock as the preferred format among these listeners.
7128 Our proposed station, NewCap-FM, with its modern AC/modern rock format, will have particular appeal to persons tuning in to non-local stations. Such a format would achieve an 8 to 10 per cent share of the audience aged twelve and over.
7129 Sixty per cent of the audience for NewCap-FM will consist of listeners who have been repatriated from out-of-market stations, particularly CKFM and CFNY in Toronto. The impact on the existing Hamilton market will thus be minimal.
7130 MS ZANETTI: Musically, our unique blend of modern AC/modern rock represents a fresh new sound featuring the next generation of contemporary pop and rock music. This music is not available on existing Hamilton stations on a fulltime dedicated basis.
7131 In order to help repatriate out-of-market tuning, NewCap-FM will feature a strong commitment to local news and information programming.
7132 MR. KENNEDY: News will be featured on the hour and half hour in morning drive, and at noon, 4:00, 5:00 and 6:00 p.m. News updates will be featured as required in other dayparts.
7133 News content will emphasize coverage of stories in Hamilton and area, and will provide angles wherever possible on regional, national and international stories. Local news will constitute not less than 50 per cent of each newscast.
7134 Newscasts will also include traffic, sports and weather, with sports coverage reflecting Hamilton's long tradition as an avid sports town and its interest in the city's two professional sports teams, the Grey Cup Champion Tiger Cats and the Bulldogs.
7135 A one-hour public affairs program entitled "Hamilton This Week" will be aired each Sunday morning.
7136 Particular care will be exercised to ensure coverage of local art and cultural events and to provide information on developments on the economic and business life of the community and to highlight important events and issues at institutions such as McMaster University and Mohawk College.
7137 MS ZANETTI: As is the case with other NewCap stations, we will be actively involved with the community. We will work with charitable organizations, service clubs, aboriginal, ethnic and immigrant groups, as well as academic and professional organizations, to cover important developments affecting these groups and reflect their perspectives in our spoken word and news programs.
7138 A 60-90 second feature entitled "Hamilton Today" will be included in news packages five times daily at 9:00 a.m., noon, 4:00 p.m., 5:00 p.m. and 6:00 p.m. The feature will focus on issues and events in Hamilton through interviews, on-scene reports and conversations with decision-makers and ordinary people.
7139 A calendar of community events and announcements promoting activities in Hamilton-Wentworth will be included in the "Hamilton Calendar", aired five times daily as part of regular programming.
7140 Our news and information programming, community service and spoken word content from our announcer-hosts will strongly emphasize local awareness, in order to repatriate Hamiltonians who listen very little to local radio.
7141 MR. STEELE: NewCap Broadcasting is very proud of its strong track record in providing developmental support for Canadian talent. We will continue this policy in Hamilton.
7142 Our Canadian Talent Development program provides a comprehensive array of initiatives designed to support and nurture Hamilton and area Canadian artists and musicians in the modern pop and rock genres.
7143 These initiatives include:
7144 1. We will establish a Canadian music section on our website to promote modern AC/modern rock by Canadian artists and groups, particularly those from the Hamilton area. Our website will also be designed to enable participating artists and groups to sell their music directly to consumers.
7145 2. We will schedule not less than 21 announcements per week to promote the sale of Canadian modern AC/modern rock music, and concert appearances by artist and groups from the Hamilton area.
7146 3. We will provide administrative support to help artists and groups from the Hamilton area secure grants under FACTOR's Professional Demo Program, and the Artists Recording Loan Program.
7147 4. We will write, produce and air a Canadian talent "Access and Awareness" campaign three to four times per year to inform up and coming musical talent about our Canadian talent development program, and how to take advantage of it.
7148 5. We will emphasize play of new Canadian music on air. We will ensure that one-third to one-half of the Canadian music we play each week will be new music released within the past 12 months.
7149 6. We will build the profile of new and emerging Canadian talent by using our best efforts to ensure that our announcers identify each and every Canadian selection played.
7150 7. We will devote one hour each week to highlight new modern AC/modern rock music, particularly by Canadian artists and groups from the Hamilton area.
7151 8. We will contribute $8,000 per year to FACTOR.
7152 MR. KENNEDY: As part of our presentation to you today, NewCap is proud to announce an historic, national initiative. Working in partnership with internationally renowned actor Gary Farmer, the publisher of Aboriginal Voices Magazine, we will provide $1 million to support the development of an aboriginal radio network.
7153 Here's the vision.
7154 Phase One: Aboriginal Voices Radio, a non-profit corporation led by Gary Farmer, has submitted an application for a new aboriginal peoples radio station in Toronto. If approved, the station will serve as the flagship for Canada's national Aboriginal Peoples Radio Network.
7155 Phase Two: Mr. Farmer and his team will submit an application for a network licence to distribute the programming of the flagship station to aboriginal stations across Canada by satellite, cable and other forms of delivery.
7156 Phase Three: As funds become available, applications will be submitted to establish repeater transmitters in urban markets across Canada with large aboriginal populations. These markets include Victoria, Vancouver, Calgary, Edmonton, Regina, Saskatoon, Winnipeg, London, Ottawa, Montreal, Quebec City and Halifax.
7157 What a vision! A national aboriginal radio network.
7158 This initiative is an innovative approach to Canadian talent development. However, we are proposing it as a public benefit that speaks directly to section 3(1)(o) of the Broadcasting Act. This often overlooked section of the Act states, and I quote here:
"...programming that reflects the aboriginal cultures of Canada should be provided within the Canadian broadcasting system as resources become available for the purpose."
7159 With this historic aboriginal proposal, that day has finally arrived. While this is a new and unique approach to public benefits funding, there may never be a national aboriginal radio service in Canada unless we seize the opportunity today.
7160 NewCap Broadcasting is proud to make that commitment to you now. If licensed, we will provide our aboriginal partners with the financial support required to launch the aboriginal radio network and work with them to ensure its success.
7161 MS BOUTILIER: NewCap-FM, in keeping with our commitment to ensure that our station will reflect the diversity of the community we are licensed to serve, will pursue an enlightened employment equity policy and program.
7162 Beginning on day one, we will ensure that our staff is fully representative and reflective of the population at large. In this regard, we will ensure representation among the four designated groups equal to their representation in the greater Hamilton census area.
7163 Based on the 1996 census, representation will be not less than 52 per cent women, 11 per cent visible minorities, 2 to 5 per cent aboriginal peoples, and 2 to 5 per cent persons with disabilities.
7164 MR. TEMPLETON: NewCap Broadcasting commissioned Peter Doering Consultants to carry out a market study to determine the level of interest in, and preferred format for, a new FM station in Hamilton.
7165 Mr. Doering, who resigned his position as President of Goldfarb Consultants to establish his own company in 1997, provides market research and consulting services on a worldwide basis for such clients as the Ford Motor Company and Four Seasons Hotels and Resorts.
7166 He has also conducted research for a number of Canadian broadcasters and has developed a method of accurately predicting share and cume for new formats that has worked successfully over many years.
7167 MR. DOERING: Research that was commissioned by NewCap in Hamilton is based on 400 telephone interviews among CMA residents 18 to 54 years of age. The study was conducted from May 31st to June 2nd of this year.
7168 Key results of our study are as follows:
7169 We began by asking people what station they listened to the most often.
7170 Currently, over one half of Hamilton CMA residents listen to an out-of-market station, as shown on the graph on the television screen. However, the key important point to note on this graph for the Commissioners is the colour that I have chosen for the pie in honour of the Hamilton Tiger Cats. I have chosen yellow and black. I'm a Hamilton resident living in Burlington now. We are quite proud of the Tiger Cats, so we have chosen those colours for our presentation.
7171 Since we knew from our study, and also confirmed by BBM, that over half of Hamilton CMA residents tune to out-of-market stations we wanted to find out why so we asked people: What is the key reason that you turn to an out-of-market station for your listening? You can see by far music is the reason people are tuning to an out-of-market station. They are looking for music which is not available in the Hamilton market.
7172 Because of this, we wanted to find out what type of music format will be most likely to bring back listeners who are listening to out-of-market stations, so we asked people their interest in 18 different music formats and the two that stand out as most appealing to those who are currently tuning to out-of-market stations are the modern AC and modern rock format. Of particular significance is the fact that the modern AC/modern rock formats are much more appealing than the two other formats that are being applied for in this current process, modern country and new age contemporary/jazz.
7173 The conclusions of our study:
7174 Hamiltonians who currently listen to out-of-market stations find the modern AC/modern rock format, far and away, the most appealing.
7175 A modern AC/modern rock format is three times as likely as modern country to repatriate out-of-market listeners, and it is four times as likely to do so as new age contemporary/jazz.
7176 MR. TEMPLETON: We have reviewed the Commission's recent statements regarding the factors it will take into account when assessing competitive radio applications to serve a particular market. We believe our application effectively addresses these factors.
7177 In terms of Canadian talent development, we will undertake a comprehensive program of effective, wide-ranging and innovative measures to promote the development of local, Hamilton and area Canadian musical talent.
7178 In terms of reflecting our local community, we will adopt a comprehensive schedule of news and information programming which will increase our capacity to repatriate listeners who devote most of their listening time to out-of-market stations.
7179 In terms of reflecting the diversity and distinctiveness of Hamilton, we will ensure a staff representation among the four designated groups approximately equal to their representation in the community at large. Instead of merely talking about what we will do to promote employment equity, we are going to follow the motto: Just do it.
7180 In terms of diversity of news voices, approval of our application will introduce a new independent voice in the Hamilton market and expand the diversity of news voices available to Hamilton listeners. Our proposal will also add to the diversity of programming choices and audiences served in Hamilton/Burlington.
7181 In terms of market impact, over 60 per cent of our tuning will be derived from Hamiltonians who presently listen to out-of-market stations, particularly CKFM and CFNY in Toronto. Reclaiming these listeners will strengthen the Hamilton broadcasting system overall and minimize the impact our station will have on local Hamilton stations.
7182 In terms of benefits to the broadcasting system as a whole, our $1 million commitment to help facilitate the introduction of a national Aboriginal Peoples radio network will expand the diversity of programming choices across Canada, contribute to a better and more balanced Canadian broadcasting system overall, and address the special place of aboriginal peoples within Canadian society, as outlined in the Broadcasting Act.
7183 In terms of the quality of our application, we are the only applicant in this process to have commissioned research asking the people of Hamilton what format they would prefer if a new station is licensed in their community. As such, we believe we are the only applicant before you with a sound business plan.
7184 In terms of our proposed format, our research indicates that the people of Hamilton who tune to out-of-market stations prefer a modern adult contemporary/modern rock format by a wide margin over any other format tested, including: by a three-to-one margin, the country format proposed by Affinity; and, by a four-to-one margin, the new age contemporary/jazz format proposed by Kirk/Roe.
7185 In summary, we believe that our sound business plan, combined with our financial stability, local broadcasting experience and overall business expertise ensure that we have what it takes to operate the proposed station in a manner which will bring considerable benefits to the people of Hamilton and the Canadian broadcasting system at large.
7186 Madam Chair, that concludes our presentation. We would welcome your questions at this time.
7187 THE CHAIRPERSON: Thank you, Mr. Templeton.
7188 This application is a little unusual in that this is a competitive process and there will be another competitive process in Toronto at the end of January, so I would like you to be sensitive to the fact that this process can't be used as a rehearsal for the Toronto process.
7189 It is impossible not to discuss, as Commissioner Demers will, your proposal, but I hope you understand what I mean, in fairness to the other applicants who will appear. You will have a chance to make the -- the applicant involved will have a chance to make his pitch in Toronto along with the others. I would ask you to take that into consideration for this particular process.
7190 Commissioner Demers.
7191 COMMISSIONER DEMERS: Thank you, Madam Chair.
7192 Good afternoon. I will have a few questions and they will be certainly on some matters that you have already discussed in your oral presentation. I may not follow the same order, but still I will probably touch on most of them.
7193 My first question goes to format, and that is: How would this format compare with -- and I believe you didn't talk about those two stations -- CKLH-FM and CJXY-FM?
7194 MR. TEMPLETON: CKLH, which is affectionately known as K-Light in the marketplace, is, for lack of a better term, a softer adult contemporary format, a very popular format across the country, and it does exceptionally well in Hamilton.
7195 CJXY you referred to, Y.95, although from our assessment and our monitors is not a pure classic rock radio station, it is certainly primarily, in our opinion, a classic rock station with some element of more contemporary rock, but primarily a classic rock station. This station is aimed primarily at 18 to 34 year olds. It may skew even a little younger than that, but that is the majority -- or the bulk of the audience should come from the 18 to 34 demographic with a slightly larger male skew than female skew -- slightly.
7196 It is very contemporary. It is primarily current or recurrent music. The older-based music is referring to early nineties for the most part. It is very contemporary, very -- I don't know if "leading edge" is the right word, but it seems to be the new emerging format in Canada. It is doing exceptionally well in a number of other markets in Canada with a proven track record.
7197 We are starting to see this quite often in research studies, this format we are referring to as modern AC/modern rock.
7198 COMMISSIONER DEMERS: So if I can put the question in a different way: Would there be and how much would there be duplication between your station and these two stations?
7199 MR. TEMPLETON: I think there would be almost no duplication with CKLH, maybe even none. I can't imagine there being any significant amount. They are at opposite ends of the spectrum, so to speak.
7200 With CJXY, there might be a slight duplication on the more current modern rock, but it is like listening to your favourite -- you have a station you listen to and if another station plays your favourite music 5 per cent of the time, it's not your favourite station. You won't wait through the other 95 per cent to get to the 5 per cent. But it is very minimal, in our opinion.
7201 COMMISSIONER DEMERS: So if we then go out of the market, which out-of-market stations currently capture listening from your target audience?
7202 MR. TEMPLETON: Primarily, it's The Mix 99 in Toronto, CKFM; and CFNY, which is a fairly leading-edge young skewing -- again, skewing a little more on the male side -- out of Toronto, the Shaw station; and the other being the standard stations.
7203 COMMISSIONER DEMERS: So you have referred to that in your presentation. You estimate that over half of your audience will be repatriated from out-of-market stations.
7204 Would this repatriation of audience encourage local advertisers to spend incremental dollars on your station?
7205 MR. TEMPLETON: I kind of heard that as a two-part question, if I heard it right.
7206 COMMISSIONER DEMERS: Yes.
7207 MR. TEMPLETON: Yes, we do believe it will increase advertising spending locally.
7208 That is a very attractive demographic for advertisers. I had the experience a number of years ago running a national radio representation company, Telemedia Radio Sales, and 18-34 is a difficult demographic and very attractive. So it would repatriate and it would attract new radio dollars in the market.
7209 As far as the majority of the tuning coming from out-of-market, we are convinced that it will be upwards of two-thirds, around 60 per cent. But I would really like to defer to my research expert, Peter Doering.
7210 MR. DOERING: Our research shows that among the target group about 62 per cent of the audience are currently listening to a non-Hamilton station. The two leading ones are CFNY and CKFM out of Toronto, however there are a number that are also appealing out of Toronto. QFM is appealing. HITS out of Ste. Catharines is appealing.
7211 CISS-FM, since it switched formats, gets quite a bit of listening in the Hamilton area, as well as several Buffalo stations get listening. Not a lot of listening, about 10 per cent of our audience will probably come from a Buffalo station such as WLFC and WBLK.
7212 COMMISSIONER DEMERS: So having that audience could we come back to local advertising.
7213 What is your reason to feel that they will come to your station, that they will spend an incremental amount of dollars on your station?
7214 MR. TEMPLETON: Well, when you analyze the current BBM results and shares in the Hamilton CMA, and that is primarily where most of the advertising buying is focused, certainly from a national or an agency standpoint, but even from a local standpoint. The leading edge retailers take a pretty good look at those numbers.
7215 There really isn't a real attractive medium in that market right now. Although I don't pretend to be totally intimate with the buying habits of Hamilton, but my experience is when there isn't an attractive radio buy to hit that demographic you tend to invest a little heavier in radio -- I'm sorry, television, newspaper, and there are probably some Hamilton advertisers that actually advertise outside of Hamilton/Burlington too in the Toronto market. I wouldn't be surprised if there were. So they have found other vehicles.
7216 If I could just add to a point Mr. Doering was making earlier.
7217 You had the slide up earlier and I'm not sure if everyone noticed it, Peter, but the percentage of out-of-town tuning and the age demographic. It is one of the highest I have ever seen in Canada.
7218 Could you refer to that number?
7219 MR. DOERING: Yes. It's 55 per cent overall of Hamilton CMA residents are tuning most often to an out-of-market station, but among the target for NewCap-FM, the 18 to 34 it's more like two-thirds of those people are listening most often to a non-Hamilton CMA station. So two out of every three individuals 18 to 34 that are not currently listening to a Hamilton radio station as their favourite.
7220 MR. TEMPLETON: That would rank amongst the highest in the country of out-of-town tuning.
7221 COMMISSIONER DEMERS: Okay. Thank you.
7222 Back to advertising again. Do you expect to repatriate national advertising?
7223 MR. TEMPLETON: The simple answer is, yes.
7224 Again, Hamilton gets overlooked a lot. It lives in the shadow of this beam of Toronto. We used to place a lot -- sell a lot of national advertising for customers, stations that our company had owned at the time and also non-owned stations. Quite often, especially in that demographic, you let the spill out of Toronto cover you off in Hamilton when it comes to radio because there isn't a real, good, effective way to reach that demographic. So you count on spill.
7225 Most major advertisers have another form of advertising with radio, it could be a TV campaign, a newspaper campaign, et cetera, and so it would allow some of that to offset that hole, if I can call it that, that 18-34 hole.
7226 So, yes, we do expect quite a bit of repatriation of national dollars.
7227 COMMISSIONER DEMERS: You spoke about -- but I didn't write it down.
7228 From which local Hamilton station would NewCap expect to derive some audience?
7229 MR. TEMPLETON: Well, it would be insignificant from the country -- from CHAM. It would be insignificant, in my opinion, from CKLH. There would be some from the younger end of Y95, CJXY. There would be -- again, I think a small percentage would come from CING in Burlington, and there would be --
7230 Do you just want the Hamilton/Burlington area?
7231 COMMISSIONER DEMERS: Yes.
7232 MR. TEMPLETON: From that area, that is where it would come from. But it would be in very small percentages.
7233 The younger audience is kind of fickle, so it's hard to lock an audience, a very young audience in long term because they will sample around.
7234 So any audience we are attracting, if we are not super serving them with exactly what they want they will continue to push around the dial, but there will be a lot of sharing.
7235 COMMISSIONER DEMERS: Now I will get to a question on TRAM. You have indicated that TRAM data, TransCanada radio advertising by market for the first seven months of 1998-1999 indicates a downturn in Hamilton radio advertising by more or less 3 per cent, due mainly to 18 per cent drop in national advertising dollars. You suggest that this downturn is evidence of an under-served Hamilton radio market where tuning and ad revenues are lost to outside markets.
7236 So my question is: Could you explain why the TRAM data could show a downturn in advertising revenue at this time?
7237 MR. TEMPLETON: Again, I think more and more part of it is that the 18-34 demographic is very difficult to reach in Hamilton and that will continue to erode over time. Number one.
7238 But I think it's important to remember that the Hamilton market is very, very healthy. It is one of the healthiest markets I am even aware of in the country.
7239 If you include Burlington -- which we should, we are talking Hamilton/Burlington -- it is approximately $23 million radio market with six radio stations. You can take other markets similar sized in Canada that have appreciably more stations and I can recite some across the country.
7240 I spend most of my time in the Halifax area, it is a market of $12 million. There are seven stations sharing $12 million. Here we have six sharing $23 million.
7241 In Edmonton, a market of about -- depending on how you want to count it but it's in the 700,000 to 800,000 range, not much larger than Hamilton -- perceptually it is, but it's not -- there are 11 radio stations licensed in the market and they are all doing reasonably well.
7242 Hamilton, in our opinion, is crying for a new radio station and I think that is why you are seeing over half of the audience in that demographic has to go out of town, and that's not right. That's not right.
7243 COMMISSIONER DEMERS: I think you have explained my next question but you may have something to add in the sense that TRAM says it goes down, then the stations are healthy. At least the Hamilton radio broadcasters seem to enjoy a healthy annual growth. So one goes down, the others are healthy. And there is out-of-town tuning.
7244 MR. TEMPLETON: If I may, Mr. Demers, can I just add a comment to that because it clarifies where you were heading with that?
7245 COMMISSIONER DEMERS: Yes.
7246 MR. TEMPLETON: That is, the TRAM report, we all contribute to it. All of the markets we do, in most of our markets we contribute so we can all see how we are doing versus what the market is.
7247 As an example, I will use Edmonton as an example.
7248 I believe it was last year the Edmonton national, local numbers got completely all distorted because one broadcaster wasn't reporting using the same criteria. These things happen all the time.
7249 Every year, my experience running a national rep shop and running a major market radio station is every year you are allocating: Well, this account is now national, now it is local. You can call it whatever you want. Your local can go up and your national can go down and nothing really happened.
7250 So when I see 3 per cent changes in a market I don't get too excited because just the margin or error alone on accounting allocation could cover that.
7251 Hamilton is a very healthy market. At a matter of fact, I will ask Mr. Doering, who lives in that market in the Burlington area, it is one of the strongest in Ontario and in Canada for that matter.
7252 MR. DOERING: Yes. As the Commissioners will recall, this morning we had the person in charge of Burlington development here and Burling is growing at a terrific pace.
7253 I live south of the Queen Elizabeth and the growth, which is the developed area, the growth north of the Queen Elizabeth is unbelievable as is the Ancaster area just outside of Hamilton. I am including the Hamilton CMA. So many people are finding the area attractive to not only live in, but also develop industry, so it's quite a healthy, vibrant area.
7254 I used to commute to Toronto daily and the traffic used to be the worst at the 401 and 400. The traffic is now the worst in Oakville-Burlington. That's where the traffic is the worst.
7255 COMMISSIONER DEMERS: We have heard of Barrie which is not exactly next door, but still. It was also a very interesting market there recently.
7256 You have referred on another matter to the possibility of deriving -- in your oral presentation you refer to that -- deriving advertising revenue from media other than radio. In your written information, you indicate 30 per cent or $345,000 would come from other media. Which media are these?
7257 MR. TEMPLETON: Well, it tends to be, and we have had this experience elsewhere in our development in our company, usually they come from the big ones which is television and newspaper primarily. That's usually where most of it comes from and we expect it would here.
7258 Again, we would be effectively targeting a demographic that a lot of advertisers, local regional and national, want. It's a very desirable demographic.
7259 COMMISSIONER DEMERS: On another point. You pointed to the London market as an example which you state is only two thirds as large as Hamilton, yet achieved revenues of $17 million in 1997-1998 compared to the $17 million in Hamilton.
7260 If the London radio market is capable of generating nearly the same amount of advertising revenue as Hamilton with one third less population, does this suggest that Hamilton may be able to support more than one new station?
7261 MR. TEMPLETON: I have analyzed a lot of markets over the years. Hamilton is probably the hungriest market I have seen in a long time that's crying for new radio service.
7262 To answer your question, the answer is probably yes. I don't know if it's today, but it probably isn't too far down the road. In other words, it might be appropriate to look at licensing one new service and see how the market does over the next few years.
7263 My 30-some years of experience in all facets of this business from programming and sales and, believe it or not with my voice, on air at one point and management says that this station should be able to create a completely new revenue source in the Hamilton market.
7264 I would expect the Hamilton revenue market would grow significantly with the addition of one service. Whether it's enough to include two, I think that's something that should be looked at some point down the road, but I don't know if it's today. I don't know.
7265 COMMISSIONER DEMERS: Thank you. Assuming that your application is approved, would you be looking to acquire an additional station in the Hamilton market at some future date?
7266 MR. TEMPLETON: Nothing is anticipated. Telemedia recently made a purchase, as you know, from Jack Shields' company. It would appear that -- well, there's the possibility of Shaw/WIC happening at some point.
7267 We would always be interested. We built our entire business plan on a stand alone FM. If that opportunity presented itself at some point, of course we would have to take a serious look at it.
7268 We are trying to grow our company. We are very proud of our successful track record over the last number of years in virtually every market we operate in. Hamilton we think is a wonderful market. It's right next door to where I grew up in Mr. Doering's back yard. We think it's a wonderful place to operate a radio business.
7269 COMMISSIONER DEMERS: Would you add to your comments in light of the possibility of having to compete with stations where there would be a potential, as you have indicated, for Shaw and WIC and so on where the competition would be stronger or would be in lesser hands.
7270 MR. TEMPLETON: It's more fun when you fight with the big guys. Absolutely. We wouldn't hesitate. We have obviously factored that in. Edmonton is an example. I like to refer to it as full contact radio. All the big boys or most of them are there, big boys and girls. No, that doesn't concern me at all.
7271 We are going after a very select audience there. There would be very little, if any, overlap of some significance. We think we can have a very prosperous popular station that should prosper, will prosper within our own niche that we are going after.
7272 I hope that answered your question.
7273 COMMISSIONER DEMERS: Thank you. Now to Canadian talent development. I think I will ask you to confirm a few things. I will read here.
7274 You would adhere to the CAB plan for an amount of $8,000.
7275 MR. TEMPLETON: CAB plan or the FACTOR contribution you are referring to.
7276 COMMISSIONER DEMERS: Yes.
7277 MR. TEMPLETON: Well, I am referring to CAB. Yes.
7278 COMMISSIONER DEMERS: $8,000.
7279 MR. TEMPLETON: Yes. We have pledged that.
7280 COMMISSIONER DEMERS: I think I will refer to your original package so that we can see the development so that you can make it very clear where you are at in that matter.
7281 Plus in your original package you were proposing direct contributions of $1 million over seven years to third party recipient, or FACTOR, but that you were negotiating. I would like that you intervene if you think that is not part of the historical development of your project.
7282 MR. TEMPLETON: Well, I'm glad you asked because we are very proud of what has been transpiring. We have entered into an agreement with the aboriginal community of Canada. Gary Farmer is the chief spokesman for this, the publisher of Aboriginal Voices.
7283 As recently as in the last couple of days, and I will call on Bob Kennedy, who is an expert in this area, it has now been endorsed by literally all of the Chiefs of Canada, our cooperative plan with the aboriginal peoples of Canada and it is the establishment of an aboriginal radio network, hopefully right across the country.
7284 COMMISSIONER DEMERS: If I can interrupt you.
7285 MR. TEMPLETON: Yes.
7286 COMMISSIONER DEMERS: I would like to follow the historical sequence of your project.
7287 MR. TEMPLETON: Okay.
7288 COMMISSIONER DEMERS: So there is nothing that is not clear to you and to us where it's at at the moment. On November 5 you advised the Commission that a third party recipient would be aboriginal people's radio network.
7289 An application scheduled for a hearing, as the Chair indicated, will be heard in Toronto at the end of January 2000. Should Mr. Farmer's application not be successful, the contribution would be redirected to rent studio time to facilitate the production of new Canadian aboriginal music and provide scholarships and grants for aboriginal youth.
7290 That was the situation on the 5th of November.
7291 MR. TEMPLETON: Yes.
7292 COMMISSIONER DEMERS: In a further letter of November 24, you amended this last commitment. Instead of a million dollars in direct contributions originally proposed as additional commitment, you were proposing $750,000 in loans to help launch the Toronto FM proposed by Mr. Farmer, not the network.
7293 Would that represent your letter of November 24, as far as you know?
7294 MR. TEMPLETON: Yes, but I think we are confusing two different things. That's a separate and that has taken place.
7295 COMMISSIONER DEMERS: It has taken place?
7296 MR. TEMPLETON: Yes. The $750,000 loan.
7297 COMMISSIONER DEMERS: Yes.
7298 MR. TEMPLETON: Yes. A loan?
7299 COMMISSIONER DEMERS: A loan.
7300 MR. TEMPLETON: Yes, that has taken place, as far as the agreement is in place. It's not really related to this. This is a separate initiative all together.
7301 COMMISSIONER DEMERS: Okay. I wanted your comment on that.
7302 MR. TEMPLETON: That's for -- Madam Chair asked me to stay away from that, but that's for a separate matter to be coming before the Commission soon.
7303 COMMISSIONER DEMERS: Okay.
7304 MR. TEMPLETON: The $750,000.
7305 COMMISSIONER DEMERS: Then you will have to make it very clear what your commitment is now. So we take away the $750,000 from commitment that you are making today. Is that it? It's a loan?
7306 MR. TEMPLETON: Well, we have done that. We already have. We think it's a benefit, but they are unrelated. The million dollars is a separate issue.
7307 We have committed to FACTOR over the term of the licence and it was $8,000 per year, which totals -- I will do the math on it, it's $56,000 and $1 million towards this Aboriginal Radio Network initiative. The $750,000 is an entirely separate thing that has already transpired as far as an agreement, and it's related but unrelated to this benefit. I hope that answers your question.
7308 COMMISSIONER DEMERS: All right. So there are oranges and tomatoes here. Okay.
7309 Then I will just go back to the commercial radio policy and you've already discussed that in your oral presentation. Now, anything else you would like to add on that? That will be my last question.
7310 The decisions that the Commission rendered in Kelowna, London and Victoria to which you referred in your oral presentation outlined four or five main points that the Commission was looking after in a competitive licence application and you have referred to it.
7311 Now, would you like to add anything? Would there be one point in that which you think the Commission should take more into account than another when thinking of the Hamilton/Burlington area?
7312 MR. TEMPLETON: I read that decision with much interest and support it and understand it.
7313 The only thing I would add and I don't want to repeat too much here, but we are convinced of the quality of our business plan. We think it is absolutely sound, well researched. We think that our initiative is a very significant contribution to Canadian talent development, both from a journalistic standpoint and from a musical talent standpoint.
7314 The FACTOR is a wonderful program that we have been contributing to for a lot of years and I have had a lot of input in and am a big supporter of it. It has got very healthy coffers and seems to be self-supporting and they have got a pretty thick wallet and that's great, that's wonderful. We have a nice vault there to foster Canadian talent.
7315 But where there is a big void we believe is in developing aboriginal talent, both journalistically and from a musical standpoint. We are delighted to be part of this national program.
7316 I recently mentioned to Gary Farmer, I said, "You know, Gary, it's obvious what a huge benefit this is for the aboriginal people of Canada. We know that. It's obvious. It's obvious what a benefit it is to our company as well." I said, "But, you know, when we are 80 years old, 80 years of age if we last that long and we are not going to look back and how much money did you make in the year 2000. We are going to look back at the contributions that we made, the difference we made," and I know this will be one of the most important contributions I personally will ever be involved in.
7317 I am very proud to be associated and our entire company is. We are 100 per cent behind this initiative and I couldn't be more proud to support this.
7318 If I may, could I ask Bob Kennedy just to add a comment to this? Bob.
7319 MR. KENNEDY: Good afternoon. Shekoli.
--- Oneida language spoken / Parle dans le langage
7320 MR. KENNEDY: That is who I am. I am here wearing a couple of hats, as we heard in the introduction. I will address the issue of the aboriginal participation.
7321 I am Tehaliwaskenhas. I am a member of the Oneida Nation Turtle Clan. I need to offer for all, to witness my respect to you, the Members of this Commission and all those gathered here, and all those who may hear my words today. I offer my respect to my Elders, our women, our young people and to sister Luwititalan, all Oneida, all those who have gone before us.
7322 I thank them for all they did to ensure we are here today and to the Master Creator and --
--- Oneida language spoken / Parle dans le langage
7323 I want to recognize and show my respect to the Algonquin Nation upon whose traditional territory we are gathered here today.
7324 I am indeed humbled by this opportunity to speak here as part of what I believe is a most important historic occasion for the aboriginal peoples of Turtle Island in this wonderful place called Canada.
7325 The introduction of partnership proposal involving aboriginal and non-aboriginal businesses with a purpose including an initiative to help bring back the life of the people in the communities through healing and wellness -- I know we are talking about radio and broadcasting.
7326 In this particular part of the initiative we are talking about healing and wellness, with the restoration of cultures and the traditions by way of broadcasting, a radio network that will provide us with the opportunity to have timely information, to share our success stories, our solutions, our music, our traditions with each other and with all Canadians.
7327 This truly is a momentous occasion and opportunity to bring to life a dream. The dream that we all have as aboriginal people, the vision, is that pride returns to us.
7328 This is about saving lives.
7329 There is a gentlemen named Dr. Michael Chandler at the University of British Columbia who I have had the pleasure of meeting and reading his research. He has researched adolescent suicide, particularly with First Nations in Canada.
7330 What he found is that communities where culture has been restored or there is a process in place of restoring that aboriginal culture, the rate of suicide of adolescents plummets. It drops dramatically. In his study he indicates where there is, for all intents and purposes, a full restoration in modern-day context of traditions, teachings and culture, suicide does not exist in some of those communities that he studied.
7331 So I believe that this is about saving lives. Save culture, save lives is the message from this gentleman's research.
7332 When I spoke with him -- he is a very respectful man to aboriginal people; he works with them. And he told me that he found it somewhat perverse, for a non-aboriginal academic, to be telling people what the solution is to the problems that we all hear about in Canada bout the aboriginal people.
7333 I respect him for saying that. The context of that was that we know that our Elders have been saying that all the time.
7334 Recently, just a few nights ago, the leaders of the aboriginal community in this country, because they are at a point where they look around and they see the devastation and the plague of poor conditions in the community, leaders, bright intelligent and experienced professional human beings came to the conclusion: What are we going to do?
7335 They went to the Elders, as they have to, and the Elders said: "We have to get back to our traditions and we have to start relying on our teachings."
7336 The wise sage of the Elders to the Assembly of First Nations leaders.
7337 So that means restore our culture.
7338 At the same gathering this week I had the pleasure of briefly describing the NewCap proposal to the more than 160 chiefs and leaders from across Canada who had gathered in Ottawa this week.
7339 My chief, Harry Doxtator of Oneida, introduced a motion of support, along with Chief Lydia Wheetsum of the Cowichan Nation of British Columbia, an historic motion. He put it forward and she seconded the motion, and they both spoke to it. I briefly addressed it and outlined what Commissioners have heard today.
7340 I am pleased to say that the motion of support for what we are doing was approved by the Chief through a traditional consensus process. There was no opposition. We need this.
7341 I was there today before coming here, and the theme in the air was communications.
7342 THE CHAIRPERSON: Excuse me, Mr. Kennedy.
7343 Are you speaking now about -- if you don't mind, I will interrupt and find out exactly what it is we are speaking about in this particular process. I have a responsibility to ensure that the process is fair.
7344 So we will get back to you, if we may, after we clarify what it is we are speaking of.
7345 Do I understand, Mr. Templeton, that there is really $56,000, $1 million and $750,000 spoken about?
7346 MR. TEMPLETON: Madam Chair, yes.
7347 THE CHAIRPERSON: $56,000 to FACTOR?
7348 MR. TEMPLETON: Yes. And $1 million towards the aboriginal --
7349 THE CHAIRPERSON: And $750,000 which is related -- I have before me your letter of November 24th -- to a loan to facilitate the project which will be heard at the end of January in Toronto.
7350 Over and above that, there is $1 million. And that $1 million, would it be fair to say, will now be --
7351 In your November 5th letter -- I don't have that letter before me. I have a summary of it.
7352 I understand it to have said that it would go to a third party and possibly related to the Gary Farmer application. If that was not successful, it would go to rent studio time to facilitate the production of new Canadian aboriginal music and provide scholarships and grants for aboriginal youth.
7353 Is that correct?
7354 So now we have $1 million directed to that effort as Canadian talent development commitments in this application, over and above the $56,000?
7355 MR. TEMPLETON: Yes.
7356 THE CHAIRPERSON: Mr. Kennedy, I don't want to be unkind, but I would like to ask you: When you speak about the project you are speaking about, are you speaking about what this million dollars would go to or the application that will be heard in Toronto?
7357 Which one?
7358 MR. KENNEDY: Yes, we are speaking about this $1 million proposal related to the establishment of the Aboriginal Radio Network.
7359 THE CHAIRPERSON: That is what we should not be speaking about.
7360 Perhaps what we will do is we will take a five-minute break. I think Mr. Templeton understands my problem.
7361 I think I now understand what money is on the table and for what, but everybody has to understand that we cannot allow this particular process to be a rehearsal or a head-start on Toronto.
7362 We will be back in five minutes.
--- Recess at 1655 / Suspension à 1655
--- Upon resuming at 1715 / Reprise à 1715
7363 THE CHAIRPERSON: Proceed, Mr. Templeton, to clarify whatever you feel you may want to clarify.
7364 MR. TEMPLETON: Okay.
7365 First, Madam Chair, I hope I haven't caused you any undue problem with this. I think I can clarify this. I just wanted to consult to make sure I was speaking the exact facts.
7366 Going back to our benefits commitment, we have pledged the $8,000 a year to FACTOR. That is a given. We have pledged the million dollars for the establishment of an aboriginal radio network, a national network, Aboriginal Peoples radio network. That is totally unrelated or there is no conflict with what is before you in February. It is not dependent on any outcome of any hearings regarding Toronto. It is a separate issue whatsoever.
7367 An aboriginal radio network can be headquartered in a number of locations across the country. It is not necessarily a prerequisite that it must be Toronto.
7368 Does that relieve the conflict? I hope it does.
7369 THE CHAIRPERSON: So then it would be dependent on another application. So we are back to the problem of the linkage.
7370 I will pass you to counsel, who will have some questions.
7371 MR. BATSTONE: Just so I understand, then, I would like to just -- I'm sorry. Let me start again.
7372 There is $1 million here. That commitment has been on the table in respect of this Hamilton application from the beginning. In your initial letters you said that you hadn't determined -- you were in negotiations and hadn't determined who it would go to.
7373 MR. TEMPLETON: Correct.
7374 MR. BATSTONE: Subsequent to that, on November 5th, you wrote in saying it would go to the Aboriginal Peoples radio network, okay, and in that letter stated that -- and this is one thing I would like you to clarify:
"In the event that APRN does not materialize, we will contribute the funds to rent studio time to facilitate the production of new Canadian aboriginal music, and provide scholarships and grants for aboriginal youths." (As read)
7375 Is that still the case?
7376 MR. TEMPLETON: Yes, it is.
7377 MR. BATSTONE: So what we are looking at is a $1 million commitment in the event that this station is licensed.
7378 MR. TEMPLETON: Yes.
7379 MR. BATSTONE: That money would go to the Aboriginal Peoples radio network.
7380 MR. TEMPLETON: That's our hope.
7381 MR. BATSTONE: Except that if it is not licensed, then it would go to rent studio time, scholarships and grants for aboriginal youths.
7382 MR. TEMPLETON: Correct. Either way we believe that we will be contributing in a great way to the development of Canadian talent, specifically in the aboriginal community.
7383 MR. BATSTONE: Then I guess my next question, in the event, say, that the APRN -- which I'm not even sure we have an application yet.
7384 MR. TEMPLETON: Not yet.
7385 MR. BATSTONE: That's right -- were to be licensed, can you explain to me why this would be CTV in the sense that is supporting a commercial operation? Do you see a problem with that?
7386 MR. TEMPLETON: It is not supporting a commercial operation. It is a non-profit operation. Self-sufficient operation is what the end result -- is what we are hoping for and we are -- on top of our million dollar contribution with this application alone, we will be offering our experience in broadcasting as well to try and assist wherever possible with any management expertise, sales expertise, set programming, et cetera, to assist, shared studio facilities, what have you.
7387 As far as answering your question, the establishment, whether it is the Aboriginal Peoples radio network or whether it is studio time, it is contributing, we think, in a dramatic way, in a very important way, to Canadian talent development. The only difference from the norm is this is being specifically designated to the aboriginal peoples of Canada.
7388 Whether it is a network developing journalism professionals or on-air talent and a vehicle to expose aboriginal music across the country, or in the development of aboriginal musical selections through studio time, I can't think of, myself, anything that could contribute where there is a greater need in this country than in that area. So we are firmly convinced that this is totally -- should be considered a contribution to Canadian talent development.
7389 MR. BATSTONE: My next question, then, is a timing question, I guess. You had mentioned that the network wouldn't have to be in Toronto. Assuming that it wasn't, would you hold the million dollars pending another application or would it automatically go to the other aspect of it, which you put forward, which is the studio time and the scholarships and grants?
7390 MR. TEMPLETON: This million dollars is totally unrelated to the Toronto application that has been gazetted and that you will be looking at I think in February. Correct?
7391 MR. BATSTONE: Okay. I think I understand what you are saying, except that when you talk about an Aboriginal Peoples radio network, that brings the Toronto application into it in a sense because that would be the logical starting point for that, I assume. That's the plan right now.
7392 MR. TEMPLETON: I think it would be preferred, but I'm really trying to make sure there is not a conflict here. That is probably preferred, but there are a number of locations in Canada that could be considered as a hub, if I can use that term, for the first phase of the Aboriginal Peoples radio network.
7393 Regardless of what happens in Toronto, this million dollars is pledged there subject to the will of the Commission to help us make this dream come true. Again, wherever, whether it is Toronto or elsewhere, this will happen with the blessing of the Commission.
7394 MR. BATSTONE: Let me phrase the question a different way, then.
7395 It could take some time for that network to materialize, if in fact it ever does -- and I don't say that with any sort of preconception or notion or anything like that. I'm just saying I'm looking at a hypothetical situation here where there is a million dollars on the table which is to go to this particular undertaking, or whatever, endeavour.
7396 In the event there is a time frame there, for this to be Canadian talent development, I think that arguably there should be -- sorry. Let me go back.
7397 If there is a large time frame involved there, is the million dollars just going to sit, is what I'm getting at? Because I think where you are making a commitment towards this Hamilton station or in the process of this Hamilton licensing process, I don't think that the Commission would want that million dollars just to be held sort of in escrow, or something like that, for an extended period of time. They would want it to go towards Canadian talent development.
7398 MR. TEMPLETON: Yes.
7399 Maybe this will help. First, you will be receiving in the next few weeks an application for an Aboriginal Peoples radio network. That is forthcoming, number one.
7400 Number two, any reasonable conditions that the Commission would want to put on the disbursement of those funds during the term with -- I just hope that the Commission, if they have the same will that we have and the aboriginal peoples have to do this, if you share that vision with us, I just hope that you would give us a reasonable time frame.
7401 But we are not talking five years from now. Subject to approval, this is something that would happen fairly clearly. If you wanted to put some time conditions on that, I think we could live with that. I just ask you to be reasonable.
7402 MR. BATSTONE: Okay.
7403 Just to nail that down, you would, then, I take it, be prepared to accept some sort of condition that would say, you know, a million dollars in Canadian talent development to be directed towards an aboriginal radio network, however, in the event that such a network is not operating within two years, the money is to go to scholarships, grants, production, studio time.
7404 MR. TEMPLETON: Yes.
7405 MR. BATSTONE: Okay. Those are all my questions.
7406 THE CHAIRPERSON: Commissioner Cram.
7407 COMMISSIONER CRAM: I'm sorry, I need some details.
7408 So it is the network that has to be licensed, not a radio station? A radio network --
7409 MR. TEMPLETON: For this million dollars?
7410 COMMISSIONER CRAM: Yes, for the million dollars.
7411 MR. TEMPLETON: Yes.
7412 COMMISSIONER CRAM: Okay.
7413 Is there a minimum number of stations that, in your mind, would consist of a network or just a network licence? Is that all you would be talking about?
7414 MR. TEMPLETON: A network licence is what we are seeking, and that would start with a hub, whether it is Toronto or some other location, and, depending on the funds and their -- quite frankly, this is an ongoing initiative, that we intend to be bringing more of these before you in the not-too-distant future -- as funds became available through the Canadian Talent Development Initiative we would expand or assist in trying to work with Gary Farmer and his team to expand it to as many possible locations as are required across the country.
7415 COMMISSIONER CRAM: Okay. That is my next question.
7416 It is not just an aboriginal regional network licence. It is an aboriginal radio network licence in the name or under the direction of Mr. Farmer?
7417 MR. TEMPLETON: Yes.
7418 COMMISSIONER CRAM: So it can't be George Smith from Carry the Kettle Band in Wolseley, Saskatchewan; it has to be under the direction of or titleage of Mr. Gary Farmer?
7419 MR. TEMPLETON: Yes.
7420 COMMISSIONER CRAM: So we would add that clause to your conditions --
7421 MR. TEMPLETON: Well, Mr. Farmer right now is the publisher "Aboriginal Voices" and we have been working very closely to bring this to this point where we have an agreement.
7422 As Bob Kennedy just mentioned, the Chiefs of Canada now have fully endorsed this plan.
7423 So I hope Mr. Farmer is involved for a very long time, but I think whoever is in that position of authority would be more reflective of --
7424 COMMISSIONER CRAM: Okay. So you are talking about an aboriginal radio network licence under the direction of the management of the magazine named "Aboriginal Voices". Is that correct?
7425 MR. TEMPLETON: Yes.
7426 COMMISSIONER CRAM: My problem is, I just want precision so that we know exactly what we are doing here.
7427 MR. TEMPLETON: You will be receiving this application in two weeks, as I mentioned earlier, but --
7428 COMMISSIONER CRAM: All I want is the precision on your CTD --
7429 MR. TEMPLETON: Yes. That is the --
7430 COMMISSIONER CRAM: -- and that is what it is?
7431 MR. TEMPLETON: Yes.
7432 COMMISSIONER CRAM: So you would have no problem, then, with putting the money in some sort of trust account should you be given this licence --
7433 MR. TEMPLETON: Absolutely.
7434 COMMISSIONER CRAM: -- to be payable to an aboriginal radio network licensee when the licence is granted, should it be under the direction of the management of "Aboriginal Voices", within a period of 24 months, failing which it would then go into the fall. Is that correct?
7435 MR. TEMPLETON: Yes.
7436 COMMISSIONER CRAM: Okay. Thank you. I feel better. I'm sorry, I was just getting confused.
7437 MR. TEMPLETON: The only qualifier I would like to add is that this is going to be a very significant project: Historic, as Bob Kennedy mentioned earlier.
7438 The only this is, if we felt -- I think two years is lots of time, but if we felt we were getting close to that, for the sake we might come back and ask, you know, can we have a six month extension to make the -- for whatever reason, technical difficulties, getting licences approved from the Commission in other markets, et cetera.
7439 But yes, I think within two years. That seems like a very reasonable timeframe to me.
7440 THE CHAIRPERSON: Mr. Templeton, this is a competitive process where three applicants have come forward with a business plan, including commitments for Canadian talent development and presumably the Commission looks at what in all the circumstances is the best application to license. So within limits those commitments cannot be based on hypotheses that may never develop. We have to take into consideration the possibility that such licences may never be issued.
7441 Would you be prepared to accept a condition that within a certain timeframe some of this money starts being disbursed for the alternative project which is not related to getting licences for radio stations?
7442 In other words, a condition that would say: Of that $1 million staring in year one, year two, a quarter of it or a fifth of it has to be disbursed for the alternative project? Otherwise, we can be sitting here with that $1 million on the table for a project that may not develop.
7443 If you were in the shoes of the competing Applicants who are sitting there, wouldn't you want to know whether this $1 million will materialize if it is going to have any effect on which application the Commission finds more acceptable and more in the public interest?
7444 Do you see what I'm speaking of?
7445 MR. TEMPLETON: Yes, I think I understand, Madam Chair.
7446 THE CHAIRPERSON: Would you be prepared, then, to remove this hypothesis by having a reasonable alternative of disbursements fairly early in the Hamilton license term. It only answers the question to a certain extent when you say it is not related to the Toronto application because it may be related to the Calgary application or an Edmonton application which makes the hypothesis even longer term.
7447 MR. TEMPLETON: Yes.
7448 THE CHAIRPERSON: So I think you understand what we are speaking of. We are going to have a third phase of hearing -- a second phase of hearing you in intervention against each other, the three applicants, and then we will hear Mr. Farmer in intervention and then reply, and perhaps at that stage you can tell us what may happen with this $1 million without hypotheses attached to it, an alternative instead.
7449 Do you follow me?
7450 MR. TEMPLETON: Yes, I believe I do, Madam Chair.
7451 The only latitude I would ask, though, is that this is probably going to take one to two years to get going --
7452 THE CHAIRPERSON: You are quite free to --
7453 MR. TEMPLETON: -- and may not happen. But we certainly are --
7454 THE CHAIRPERSON: Discuss that with your colleagues --
7455 MR. TEMPLETON: Yes.
7456 THE CHAIRPERSON: -- and at reply stage tell us what you think is reasonable, putting into the mix how you would feel if you were sitting there as a competing applicant for Hamilton.
7457 MR. TEMPLETON: You would like me to wait to respond on that? Is that what I heard you say?
7458 THE CHAIRPERSON: Well, you may want to consult with your colleagues as to what proposal you would put on the table. Because if you are granted the Hamilton licence that is what you would have as a condition.
7459 So you may want to -- if you are willing to make that commitment now as to what it is that would be acceptable as a disbursement of that $1 million over the seven year licence as Canadian talent development, unrelated to whether or not there ever comes about a licensed aboriginal station, network or otherwise.
7460 MR. TEMPLETON: I think we will wait and confer with our colleagues.
7461 THE CHAIRPERSON: Yes. Do you have any questions as to what it is we are driving at or do you understand?
7462 MR. TEMPLETON: No, I think I understand. You want to make sure that these funds are disbursed over a reasonable timeframe to either this --
7463 THE CHAIRPERSON: Yes.
7464 MR. TEMPLETON: -- initiative or another worthy initiative.
7465 THE CHAIRPERSON: We want these funds to be disbursed, if we find them to be in the public interest, in a reasonable timeframe, and we want to be fair to the other applicants as to what it is that will be before the Commission between the three of you when we are comparing your applications.
7466 MR. TEMPLETON: I understand.
7467 THE CHAIRPERSON: Any other questions?
7468 Did you have anything else to add about your project, because we have no more questions.
7469 MR. TEMPLETON: Okay, thank you.
7470 No, just one final comment.
7471 We were in the middle of our question from Commissioner Demers and I just wanted to finish very briefly, if I could.
7472 You had asked me about the approval process and we were kind of halfway through that.
7473 I just wanted to add a couple of comments, and that is that whether it is this initiative or another we believe it will significantly contribute overall to the broadcast system.
7474 We are eastern-based broadcasters and we think the time has come that eastern -- we are very proud of our success and we are very proud of our reputation as broadcasters, with our audiences, with the CRTC, and we are on an ambitious plan to expand. We have had many broadcasters from western Canada come into central Canada and lord knows since central Canada has expanded east and west.
7475 But this is a very proud eastern-based company. Our chairman is here, Mr. Harry Steele, one of the most respected business people of eastern Canada. We would like an opportunity to expand and this is the first application that we have come before you to expand into central Canada and we hope you will grant us that opportunity.
7476 Thank you.
7477 THE CHAIRPERSON: Thank you, ladies and gentlemen.
7478 Thank you, Mr. Kennedy. I hope it has been explained to you satisfactorily that we certainly didn't want to not be welcoming to you, but these things are kind of difficult procedurally sometimes.
7479 We will take a five-minute break to change to the second phase, which is the intervention of the Applicants against each other.
7480 Thank you.
--- Upon recessing at 1732 / Suspension à 1732
--- Upon resuming at 1740 / Reprise à 1740
7481 THE CHAIRPERSON: Madam Secretary.
7482 MS SANTERRE: Thank you, Madam Chair.
7483 We will begin phase two. Each intervenor will be given ten minutes for their presentation. We will start with Douglas Kirk and Rae Roe on behalf of a company to be incorporated.
7484 Mr. Kirk.
INTERVENTION / INTERVENTION
7485 THE CHAIRPERSON: Welcome back, Mr. Kirk. Go ahead.
7486 MR. KIRK: Thank you, Madam Chairperson.
7487 We have interventions in three parts. We will intervene on Affinity Radio Group, NewCap Inc. and we have some general comments about both of the applications. We have three key points and some supplementary comments against Affinity's application.
7488 Our first point is that Affinity radio is not a stand alone operator in Hamilton. In 1998 and 1999, Affinity acquired CHTZ-FM and CHRE-FM respectively in the adjoining market of St. Catharines, Ontario. As demonstrated on our chart here, we had our consulting engineer describe the coverage maps of both CHTZ-FM and CHRE-FM.
7489 As you can see, the three millivolt contour just touches the region, the Hamilton-Wentworth region. Both stations provide very, very strong and listenable signals in the market. We can assure you that from personal observation in the markets and these contours speak to very, very good quality and listenable signals in the market.
7490 On top of that, we have evidence that the stations already compete, this is CHTZ in particular, in the Hamilton-Burlington market. As you can see on this chart, these were billboards taken around the Hamilton-Burlington area where CHTZ is advertising, you can see, very clearly on those posters 997 CHTZ, right in the Hamilton market.
7491 Our conclusion is that Affinity already has a strong presence in the Hamilton-Burlington market as they own three stations which have strong signals in the market. They have listeners in these markets and advertise to gain listeners in the markets.
7492 There are three existing stations, in our view, that are in the market that are permitted under CRTC regulations currently.
7493 Our second point goes to the choice of format for Affinity's proposed service. They intend to put on a country FM station. Affinity indicates that under their management, CHAM-AM located in Hamilton, has improved its operations so that it is expected to show a modest operating profit this year.
7494 We believe that CHAM is serving the country audience well in the market. In fact, little change in their audience was noticed when CISS-FM changed formats earlier this year. I quote from the summer BBM survey in Hamilton, the Hamilton 12 plus numbers.
7495 Over the five successive surveys here, CHAM has had audience shares in the market. These are shares, not reach, of 4.4, 3.8, 5.2, 3.6 and 4.4. There has been some variability, but essentially steady in that four and a half share roughly.
7496 To us, with the change of the formats that have gone on, we believe the company and CHAM is serving the country audience well. We further don't understand how Affinity can successfully split the country audience in Hamilton with an FM station in Hamilton, incur the increased costs, and, I believe, they are adding numerous new employees and obviously will have operating costs of running the station and so on and as well provide the rather huge benefits indicated in their application and have a viable business model.
7497 Our conclusion is that Affinity's application duplicates its existing presence in the market, does not offer diversity of musical formats. Given the limited demand apparent in the market for country, once questions what incremental audience they would attract.
7498 Our third point is that NAC/smooth jazz and country don't mix. Affinity goes to great lengths to try and undermine the potential, if any, of smooth jazz in the market. We think their contention is wrong. The format does extremely well in diverse radio markets in the United States, as we have talked about, and NAC/smooth jazz often outranks the country station in those markets.
7499 There is very little overlap in our view and Affinity's assertions about a loss of income because of a NAC/smooth jazz station going into the Hamilton market were not proven and, we believe, were groundless.
7500 In conclusion, licensing a smooth jazz NAC station will cause minimal impact to the country station in the market.
7501 Some supplementary comments here relate to a couple of things. First of all, on the question of frequency, we developed this FM frequency and we wondered if Affinity was so committed to an FM country station why they didn't go about finding this frequency earlier and making an application. In effect, Affinity reacted to our proposal and call in the market and now wants a third FM in the market.
7502 Furthermore, we see the Burlington-Hamilton market well served by country stations. Very little mention has been made here today of a station which does provide a country FM service in the Hamilton-Burlington area and that's well in the CHOW-FM which was just granted a conversion from AM to FM in the past year.
7503 RB Communications, the owner and operator of CHOW-FM, is on record with the Commission and made their views known about their signal availability in the market.
7504 Finally, with regard to Affinity, much was made about their level of local support. We would indicate that we have letters -- we are just counting here -- from eight local MPs and they cited three and our level of support from the community in terms of numbered interventions were numerous times Affinity's.
7505 I would like to now turn to NewCap. In our view, the applicant offers no diversity to the market. NewCap's application proposes a format which replicates formats already available in the market and as seen by the correspondence record by the incumbent broadcasters, it's indicated that the NewCap proposal will directly harm, in market stations particularly, CJXY-FM and CING-FM. We think for a number of reasons that full repatriation of audiences is unlikely.
7506 In conclusion, NewCap's application adds little new to radio offerings in Hamilton-Burlington. At the risk of getting into a swamp here, our contention as well was that there is a questionable benefits package proposed by NewCap. It was specified only after the closing date for interventions, thus limiting public comment on it.
7507 The proposal, though sizeable, as destined to a private individual or operator or non-profit corporation, it keeps evolving, to develop a new radio network service. In our view, there is no local support coming from NewCap's application.
7508 Our application proposes expenditures 100 per cent in the market. Although I hear numbers approximating $1.8 million or a little higher through this NewCap proposal, I can't find where that is going to be spent locally within the market. So it's a great big number, but we see it adding very little specific to the Hamilton-Burlington market in support of the local licence.
7509 Just a couple of factual items here. We take great exception to Mr. Doering's conclusion regarding the attractiveness of the format we proposed. Table 7 of Mr. Doering's research presents a table which says Barrie likely to tune. I think a number of his conclusions have been based on that.
7510 In that he surveyed for what is listed in that table as new age contemporary, which is not new adult contemporary, and easy listening. Those are both anachronistic descriptions of formats and music styles, neither of which are new adult contemporary smooth jazz.
7511 We contend that the conclusions -- number one, the descriptor of new AC/smooth jazz was not polled in the research and in the survey and any conclusions drawn by Mr. Doering, in our view, are inaccurate and unsupportable and are incorrect.
7512 Finally, regarding the aboriginal initiatives and the question of fairness comes out, and I don't want to go there, but we have one question with respect to this and, with all due respect to the size of the commitment and as laudable as it is to developing the radio business and the communications business particularly for the groups involved, we have a question and it is: What does this have to do with operating a commercial radio licence in Hamilton/Burlington?
7513 We have great difficulty to see how this fits into the context of this competitive licensing procedure in Hamilton/Burlington. The commitments all seem to be outside of the market.
7514 Finally, we have a couple of general points against both Affinity and NewCap. It may be the small guy versus the big guys, if we can characterize it as that.
7515 Affinity is a sizeable group owner with five stations currently and an agreement to buy Blackburn Radio, which we know has not come before the Commission yet, but it will add interest in another nine radio stations.
7516 NewCap is a subsidiary of a public company, Newfoundland Capital Corporation. It owns, I believe Mr. Templeton said, 14 -- I counted 13, but say 14 stations across Canada and it has the next item on this hearing to acquire an additional eight stations in Newfoundland.
7517 Both Affinity and NewCap have proposed sizeable benefits packages in this hearing to win a licence. These benefits are disproportionate to the size of the market and the economics of their proposals.
7518 Unless they are backed by large group owners, the additional benefits cost would be uneconomic and unsustainable and unrealistic for this market. Our group is a small entrepreneurial group seeking to bring a fresh approach to the market and the radio industry in Canada. By granting this licence we believe we will send an important signal to others that want to have new participants in the industry, that the CRTC wants to have that and the industry will not continue to be consolidated by a very small group of ever larger industry players.
7519 Our conclusion here is that Affinity and NewCap are proposing to buy a licence. The proposed benefits are only available because of their ability to cross-subsidize from other operations and we believe our approach, bringing a new group and a new approach, a new licence and a new format to the Canadian industry are appropriate. We believe this will foster ongoing innovation in the industry.
7520 THE CHAIRPERSON: Thank you, Mr. Kirk.
7521 We have no questions. We thank you. We will see you again in reply.
7522 Madam Secretary.
7523 MS SANTERRE: The next intervention will be by Affinity Radio Group Inc.
7524 THE CHAIRPERSON: Welcome back, Mr. O'Brien.
7525 MR. J. O'BRIEN: Thank you.
INTERVENTION / INTERVENTION
7526 MR. J. O'BRIEN: Contrary to the assertions of NewCap, Hamilton is not the market in Canada with the most out-of-market tuning, if that's what I understood was stated. For example, Hamilton is local share. This is from BBM '99, by the way. The local share is 51.4.
7527 Compare that to Kingston, the local share is 42.3. If we go to Barrie, which we heard so much about the last while, 42, the local tuning. If we go to Oakville it's an 8.1 which we can understand, or Oshawa/Whitby, 5.8; St. Catharines/Niagara, 30.7; Kitchener, 44.5. So, in reality the local share of market or we should say the amount of out-of-market tuning in Hamilton has changed very little over the years.
7528 We believe this is quite relevant because while we all hope and strive to repatriate out-of-market tuning and out-of-market listeners. This tuning in our mind cannot form the foundation of a viable business plan.
7529 Moreover, NewCap points to MIX 99.9 and CFNY as primary sources of out-of-market repatriation. We respectfully believe that this is highly unlikely.
7530 These two stations provide very different musical formats. CFNY, the Edge, is alternative and the Edge is because it is harder, whereas MIX 99.9 is a hot AC format.
7531 So we don't think that listeners would come from both and we see nothing in the research to support that these people would switch from these stations to the NewCap offering.
7532 Finally, we share the Commission's concern about the clarity and fairness to the other applicants surrounding NewCap's Canadian talent development proposal. Thank you.
7533 We would be pleased to answer any questions if you have them.
7534 THE CHAIRPERSON: Counsel.
7535 MR. BATSTONE: I wonder if I could just get you to elaborate on that very last point about the fairness.
7536 MR. J. O'BRIEN: We don't think there is anything untoward here, by the way. We are not saying that. But I think that in checking the correspondence and reviewing how it was handled, the manner in which the letter in November and in subsequent situations, as Mr. Kirk pointed out it really didn't provide us an opportunity for examination, discussion or comment.
7537 It's an issue that we, quite frankly, don't wish to become embroiled in as a debate because it's a no-win situation; the purpose, the intent, the direction of it is admirable. We are talking about the process, not what was proposed, and so we have some concerns which we don't wish to pursue any further.
7538 THE CHAIRPERSON: But you are satisfied that you have an opportunity now to talk about it?
7539 MR. J. O'BRIEN: Yes, we are.
7540 THE CHAIRPERSON: And you don't feel it is necessary to follow -- to do it because I don't want you to leave saying that the process didn't allow you to speak about it when you are before us with an open microphone.
7541 MR. J. O'BRIEN: Thank you.
7542 MS PEARCE: Madam Chair, I don't think we are suggesting that you are clearly providing us with an opportunity to speak to it now. I think what we wanted to say at this point in the process was simply that we feel you have raised some excellent points and NewCap will presumably address those in their rebuttal.
7543 I was glad to see that the $750,000 was clarified because we had never see anything with respect to that and that had given us some real concerns. All we are trying to say at this point is simply echo that while NewCap clearly put the amount of the benefit on the table as part of their application, there is no question about that, it was later in the process that they introduced the nature of the benefit. We heard more about it today. We do have an opportunity to comment on it now, unquestionably, but simply to just echo the concerns that I think the Commission had raised.
7544 THE CHAIRPERSON: Thank you, counsel.
7545 We will see you again in reply.
7546 Madam Secretary.
7547 MS SANTERRE: Thank you, Madam Chair.
7548 Now I will be inviting NewCap Inc. to present their intervention.
7549 THE CHAIRPERSON: Welcome back, Mr. Templeton.
7550 MR. TEMPLETON: Thank you.
7551 I will just be one second while Mr. Doering --
7552 THE CHAIRPERSON: Take the time you need.
7553 MR. TEMPLETON: Thank you.
--- Pause / PauseINTERVENTION / INTERVENTION
7554 MR. TEMPLETON: I think we are prepared, Madam Chair.
7555 THE CHAIRPERSON: Go ahead.
7556 MR. TEMPLETON: NewCap Broadcasting wishes to intervene against the Affinity application. We question the validity of their business plan.
7557 Mr. Doering will address these issues.
7558 MR. DOERING: Thank you.
7559 We feel that Affinity's business plan is critically flawed for a number of reasons. We have taken a serious look at their application and their supporting material and have several questions and perceived deficiencies in that material.
7560 To begin with, Affinity only asked about the appeal of one format, and that was new country. Affinity has no idea if another format would better meet the needs and interests of Hamilton residents because it didn't ask about any other formats.
7561 Affinity only asked people 18 to 39 years of age about their interest in the new country format. Affinity has no idea how those 40 years of age and older will respond to its proposed new FM country offering.
7562 In addition, Affinity failed to ask current CHAM-AM listeners about their interest in the proposed new country format on the FM dial. Affinity has no idea how many of these people -- that is, its current audience to its AM offering -- will switch to its proposed new country FM station.
7563 Affinity believes the audiences for new and traditional country music are different. It believes that CHAM-FM will not hurt the viability and profitability of CHAM-AM.
7564 However, 1998 BBM data clearly show that the audience for new and traditional country music in Hamilton is one and the same: primarily those 35 years of age and older.
7565 In fall 1998 when the Toronto station CISS-FM featured new country music, 77 per cent of the hours tuned to the station were logged by those people in Hamilton 35 years of age and older. For CHAM-AM the proportion was very similar: 88 per cent of the hours logged to that station were logged by those 35 and older; in other words, both formats appealing to the same age group.
7566 Further, we feel Affinity has grossly over-estimated the size of the audience that is available to be repatriated from out-of-market new country stations.
7567 Several times in its application, although they corrected it today, Affinity incorrectly states that CISS-FM, when still featuring new country, had a fall 1998 BBM share of 6.3 per cent in Hamilton. That is actually the cume figure, not the share.
7568 The actual fall 1998 BBM share for CISS-FM in Hamilton was 1.4 per cent.
7569 Affinity is confident that many of the listeners seeking a new format and presently finding it only on American radio, WYRK-FM, the Buffalo new country station, will be repatriated by CHAM-FM. This is stated several times in their application.
7570 Its own research refutes this. When its research participants were asked to name all the radio stations they listened to in the past week, no one mentions WYRK-FM, Buffalo's new country station.
7571 Affinity states that many of its listeners will be those who do not currently listen to any radio station for music. Again, its own research refutes this. When asked to name the station they currently listen to most often for music, 98 per cent who say they would listen to CHAM-FM are able to name a station. Only 2 per cent do not have a current station they are listening to for music.
7572 Our conclusions: Affinity's business plan is based on perceptions, not reality, incorrect information and faulty analysis. As a result, Affinity does not have a sound business case for a second country station in Hamilton and has failed to prove that the licensing of such a station will not seriously jeopardize its own AM station, CHAM-AM.
7573 MR. TEMPLETON: That concludes our intervention. Thank you, Madam Chair and Commissioners.
7574 THE CHAIRPERSON: We don't have any questions. Thank you, Mr. Templeton.
7575 MR. TEMPLETON: Thank you.
7576 THE CHAIRPERSON: I believe we are Phase III now.
7577 Madam Secretary.
7578 MS SANTERRE: Thank you, Madam Chair.
7579 We will now proceed with Phase III and invite Mr. Gary Farmer, for Aboriginal Voices, to present his intervention.
7580 THE CHAIRPERSON: I will come back to Mr. Farmer and your colleagues.
7581 Have you been in the hall most of the afternoon -- so we don't have to read you the riot act.
7582 MR. FARMER: No. I am very wise to the word Toronto.
7583 THE CHAIRPERSON: Thank you.
INTERVENTION / INTERVENTION
7584 MR. FARMER: Thank you very much for having me here today.
7585 To my right is Mark McLeod, who has been my assistant through the writing of our licensing process and my assistant in Aboriginal Voices Radio. To my left is my Head of Communications for Aboriginal Voices Radio, Nicole Robertson.
7586 First off, there is one thing that I want to clear up. I have worked for seven years publishing Aboriginal Voices magazine for no income. I give my services freely. It is a non-profit corporation, federally incorporated, and all of our efforts in the broadcasting arena are all non-profit corporations to be incorporated.
7587 The Aboriginal Voices radio project is a brand new operation and has a separate board, different from anything else that we have done in the past. I just want to clarify that in response to what I heard earlier.
7588 It is a happy day for me to be here, Madam Chair. I am ecstatic about the possibility of receiving these kinds of dollars and benefits to assist us in developing a radio broadcasting, whether to the tune of a flagship station that we are applying for or whether to the tune of the network that we are applying for in the very near future, or whether to the tune of what we already do now, and have been doing for a number of years, which is wherever we can find a few dollars to initiate training and development of programming, we have been doing that all along.
7589 I established the magazine purely and in effect to set up radio stations throughout the Canadian market to develop aboriginal broadcasting, and that is effectively what I have been doing all along. That work will continue with the benefits package offered by NewCap in many areas.
7590 Some of the areas that we hope to develop would be training and turning over people, 75 to 150 people per year in some of our training initiatives, and allow us to develop a training studio. We currently don't have enough facilities to establish a studio.
7591 Also, we have been experimenting and have a technical director onside who has been doing a lot of experimenting with Internet broadcasting, which we have taken.
7592 We have applied for several licences in the Toronto market over the past, and that is where we are established. And we have been doing temporary broadcasts on 106.3 over the past. We did a six-day broadcast in June, and we have temporarily broadcast out of the Skydome and fed other radio stations throughout North America by using the satellite services that have been offered to us by the Aboriginal Peoples Television Network, and so forth.
7593 We have also distributed programming over the years and produced them on cassette and distributed them as runners out to aboriginal networks across the continent. So we certainly want to carry on with that work at any level, whether we get any licences in this arena or not.
7594 We have been very active in the development of aboriginal radio, and we will continue to do so with the money as it comes to us. Actually, only amounts -- not that I want to set aside the value of the $1 million, but it would only come out to us at $140,000 per year. So it is a wonderful benefit over the seven-year term of licence for NewCap.
7595 They have been extremely wonderful. It is fulfilling many of the dreams that I had always hoped for for Aboriginal Voices. I know we have gotten this far without any funds coming from the government. It is all work that we have been developing all along and using corporate Canada, which I think is a wonderful example for all Canadians to help us establish this network.
7596 I, as well, participated with the Assembly of First Nations this week and spoke today directly to the Indian Affairs Minister, and he has promised a meeting with Sheila Copps and himself to look at this idea and to take it even further, as there is a desperate need for aboriginal people in urban regions.
7597 That has been our primary concern; that 70 per cent of the population is moving to the urban regions of Canada and there really is no service for them at all.
7598 We think that service will befit, whether get a licence or not. There is a lot of work to do, and the quicker we can get to it, the better off we will be. These funds will desperately help us in the situation that we are in.
7599 I want to, as well, let you know that the developing Canadian aboriginal talent, as I mentioned this morning, fits in many areas in terms of -- we want to let you know that we are seeking in the process -- it is in three phases, in the perfect world.
7600 And I guess I can outline that to you, just to let you know where our plans are -- a scary point.
7601 First is to seek the Toronto licence, of course; second is to then seek the network licence to existing stations; and third is to begin to seek licences in other markets as repeater stations and other urban aboriginal markets.
7602 So it is a very comprehensive plan that you will be seeing very soon.
7603 We realize that it is somewhat unorthodox, but we think it is very innovative Canadian talent development. I urge the CRTC to look at it with their hearts open.
7604 Thank you.
7605 THE CHAIRPERSON: Thank you, Mr. Farmer.
7606 You obviously understood very well how this works. I told you this morning you were an expert. So we have no questions.
7607 Thank you very much for appearing again.
7608 MR. FARMER: Thank you.
7609 THE CHAIRPERSON: Madam Secretary.
7610 MS SANTERRE: Thank you, Madam Chair.
7611 We will now proceed with Phase IV, and we will hear all applicants, in reverse order, for their rebuttal, starting with NewCap Inc.
7612 Mr. Templeton.
--- Pause / Pause
7613 THE CHAIRPERSON: Would you like a few more minutes, Mr. Templeton? Would you like another few minutes?
--- Off microphone / Sans microphone
7614 THE CHAIRPERSON: Yes. We will take a break for 10 minutes.
--- Recess at 1818 / Suspension à 1818
--- Upon resuming at 1828 / Reprise à 1828
7615 THE CHAIRPERSON: Order please.
7616 MS SANTERRE: We will now ask NewCap Inc. to come forward and present their rebuttal.
REPLY / RÉPLIQUE
7617 MR. TEMPLETON: Madam Chair, our reply will begin with comments from our research expert, Mr. Doering.
7618 MR. DOERING: Thank you.
7619 Replying to the comments made today, both of the other applicants contend that the music proposed by NewCap is essentially already available in the Hamilton CMA area.
7620 If this is so, why do over half of the people in the market tune to out-of-market stations, and when those people are asked to explain why they do so, their key reason is better music. Obviously, when asked to explain why they are doing what they do, they identify music as the reason for their tuning outside of Hamilton.
7621 Both applicants contend that full repatriation is impossible, so NewCap's business plan is flawed.
7622 The reality is that to obtain a share of 8 to 10 per cent of the Hamilton CMA market, of which over 60 per cent will be from out-of-market, NewCap only has to repatriate one in seven to one in ten of those people who are tuning to the out-of-market stations now. Not an overwhelming task at hand.
7623 The Kirk applicants state that the NewCap research did not ask about the type of format for which it is applying.
7624 In our questionnaire for all music formats, we didn't ask the name of the format, we listed example artists to gauge interest in the particular format. For new age contemporary/jazz we listed such artists as Warren Hill, George Benson, Jon Tesh, Kenny G and Grover Washington Jr. So we feel we did adequately explore the appeal of that particular format which, in our estimation, will achieve approximately a 3 per cent share to 4 per cent share of the Hamilton CMA market which will not make the business plan viable.
7625 MR. TEMPLETON: Regarding our condition of licence, NewCap broadcasting has committed $1 million over seven years to help facilitate the development of a national aboriginal radio network. If our application is approved, as stated in our application, we will contribute the $1 million over the seven-year term of licence. In other words, our commitment would be paid in seven equal instalments of $142,857.14 per year.
7626 If the national network does not materialize, we will contribute the funds to rent studio time for the development of Canadian aboriginal music and provide scholarships and grants for aboriginal youth. If the network does materialize but has not materialized by the time we are ready to make our contribution for the first year, then the money for the first year will go to the alternative commitment. This will continue in each year of the seven-year term of our licence.
7627 Regarding the Kirk/Roe comments that this does not provide benefits for the local community, the large aboriginal community in Hamilton will indeed benefit from this initiative, as well as the community at large.
7628 That concludes our comments.
7629 THE CHAIRPERSON: Thank you, Mr. Templeton.
7630 Commissioner Cram.
7631 COMMISSIONER CRAM: You said "the large aboriginal population of Hamilton"?
7632 MR. TEMPLETON: Yes.
7633 COMMISSIONER CRAM: Can you tell me what the size of that is?
7634 MR. TEMPLETON: I can, I believe, in a few minutes. We have a documentation of all of the markets in Canada, and Hamilton is designated as one of the more significant medium to major-sized markets with a large aboriginal contingent. I don't have it with me, the exact number, but it is a very significant number.
7635 COMMISSIONER CRAM: Would they be speaking English, then?
7636 MR. TEMPLETON: Pardon me?
7637 COMMISSIONER CRAM: Because I have The Financial Post 1999 estimates and I have no native-speaking language population at all.
7638 MR. TEMPLETON: I'm certainly not an expert, I would defer to my partner, Gary Farmer, but I'm under the impression that most aboriginals in major urban centres do speak English and some also have a native tongue as well.
7639 COMMISSIONER CRAM: And they call English their home language, then?
7640 MR. TEMPLETON: That would be the language that they would be using most of the time. But I'm really getting into an area, Commissioner, that I'm not an expert on.
7641 Gary Farmer is joining me at the moment. I'm sure he can articulate.
7642 MR. FARMER: Yes. In the Hamilton market in which my community exists, the Six Nations communities in the same listening zone, they are 18 miles west of Hamilton, is the largest native community in Canada. There is 17,000 people live in the community and there is approximately about fourteen to 15,000 people living actually in Hamilton from my community alone, so it is a fairly significant aboriginal population.
7643 And the language is -- there is native-way schools in my community and there is also friendship centre programs in the downtown core of Hamilton.
7644 The Native Indian/Inuit Photographers Association is based in Hamilton, there is a number of art galleries, and the community is very vibrant in the whole core of Southern Ontario, based from primarily the Six Nations community. It really is a Ongohoway(ph) territory.
7645 THE CHAIRPERSON: Thank you, Mr. Farmer. Thank you, Mr. Templeton.
7646 MR. TEMPLETON: Thank you, Madam Chair.
7647 THE CHAIRPERSON: Madam Secretary.
7648 MS SANTERRE: Thank you, Madam Chair.
7649 I would like now to invite Affinity Radio Group Inc. to present their rebuttal.
7650 THE CHAIRPERSON: Welcome back, Mr. O'Brien.
REPLY / RÉPLIQUE
7651 MS PEARCE: Good afternoon again.
7652 Let me deal first with a number of the points made by Mr. Kirk and his colleagues in their intervention.
7653 First, with respect to the assertion that CHAM-AM is not a stand-alone station in Hamilton.
7654 Contrary, Affinity's Hamilton station is a stand-alone AM. CHTZ-FM and CHRE-FM are licensed for St. Catharines, not Hamilton. They provide strong local service focused on St. Catharines. Affinity has no other stations licensed in Hamilton.
7655 If we look at audience share in 1999, CHRE-FM achieved no share in Hamilton. CHTZ-FM achieved a two share. In total, including CHAM-AM, Affinity garnered 6 per cent of the 12-plus audience.
7656 In contrast, Affinity's present competitors achieved total audience shares. And here I'm using the same comparison that Mr. Kirk used, meaning they are Hamilton and, in this case, their Toronto stations, considerably larger shares.
7657 Just by way of example, the Telemedia Hamilton and Toronto stations in Hamilton achieved a 22 share. The WIC Hamilton and Toronto stations achieved in Hamilton a 22 share, and the core stations achieved a 9 share.
7658 Finally, Affinity St. Catharines stations achieved no material revenue from Hamilton.
7659 Secondly, Mr. Kirk stated:
"We don't understand how they can successfully split the country audience." (As read)
7660 They may be confused because Affinity has no intention to split the audience. As we have stated, these are distinct formats and, as Larry Rosin will expand on in a moment, the research shows a clear and unmet demand for hot country in this market.
7661 These two formats, traditional and hot country, serve different tastes and different demographics. In this regard, it is no different from AC and hot AC or classic rock and modern rock.
7662 As Affinity indicated earlier, the traditional and hot country formats successfully co-exist in a number of markets in Canada.
7663 Thirdly, Mr. Kirk made the point that smooth jazz/NAC won't impact CHAM or that smooth jazz is more popular than hot country.
7664 First, Mr. Kirk cites U.S. statistics to support their application. We understand why. However, those U.S. statistics also showed that country is the most popular format and is featured on more stations than any other.
7665 Finally, the introduction of a new competitive FM will negatively impact CHAM-AM. Obviously, in that scenario the station would not get the synergies or sales opportunities offered by The Sizzle. However, it would also feel the impact of another competitor, and as the sole standalone AM would be disproportionately impacted.
7666 Let me reiterate that Affinity is fully committed to CHAM, but the fact that a new competitive FM will have this disproportionate impact on CHAM is not hysteria or hyperbole, it is just the way radio advertising works.
7668 MR. BYRNES: Thank you.
7669 I would now like to turn to the comment made by NewCap.
7670 Their researcher raised the question as to why in our research we didn't ask some vital questions, in their opinion, one of them being other radio formats.
7671 Our comments are, we have already stated on a number of occasions that country as a format is one of the three largest in North America.
7672 Affinity has the benefit of working in the Hamilton market and we have a good understanding of the market. Not only do we have a good understanding of the market and all the signals coming in, but we also, as mentioned earlier, looked at other Canadian markets where both a traditional country radio station playing music from the '60s, '70s and '80s coexisted with an FM competitor playing music from the '90s and today.
7673 In simple terms, the FM, their audience is traditionally under the age of 45. The AM, their audience is traditionally over the age of 45.
7674 It has been stated quite clearly from the BBM data that 70 per cent of CHAM's audience is currently -- that is CHAM-AM, is currently over the age of 45. No great surprise there.
7675 So armed with a knowledge of the market and knowledge of a number of stations in North America in country and a knowledge of Canadian markets where both traditional country and hot country exist, such as Calgary, Edmonton and Saskatoon -- I could go on and name another 10 -- we asked Edison Research to conduct a research study.
7676 In simple terms, had that study not come back with such a powerful positive response, we would have conducted additional research. The fact that it came back and showed such a strong, positive indicator that a hot country format would be very viable in Hamilton was no great surprise.
7677 Our business plan is conservative, our audience estimates are conservative.
7678 I would now like Larry Rosin to add some additional comments.
7679 Thank you for your time today.
7680 MR. ROSIN: I would just like to clarify some of the things that have been said in the interventions.
7681 One of the things that was said was, it was pointed out that when CISS-FM went off -- changed out of the country format in Toronto the ratings of CHAM-AM did not go up. I thought that was a powerful argument for us, proving that these were distinct formats. If a station that was in a hot new country format left the market and no benefits accrued to the existing AM traditional country station, I can't think of a better argument whey they are two different formats. No one drifted from the CISS audience to CHAM-AM.
7682 So I like that argument except for he said it was against us. I personally wanted to point out I thought that was a good one for us.
7683 I wanted to point out a couple of things as well, one primary point about the intervention by NewCap about our research.
7684 They did quite a lot of analysis on the base of CHAM-AM listeners in our study. What I wanted to point out was there were very, very CHAM-AM listeners in our study, because our study was 18 to 39 year olds and, as Chris just pointed out, they have exceedingly small audience under the age of 40.
7685 So while they said, "Gee, a lot of the 18 to 39 year old CHAM listeners would do this or that", and they made various arguments out of it, they were dealing with an exceedingly small base.
7686 So I think it is very important that you put such comments in the appropriate context.
7687 Yes, CHAM has a tiny number of 18 to 39 year old listeners who may or may not go to the FM if an FM country station is available, but I don't see it as being terribly relevant because it is just such a small number in the first place.
7688 There are a couple of more comments that I wanted to make in terms of this issue of projecting shares.
7689 The task -- I'm asked to do it all them. What I do for a living is I research media, and while it is exceedingly difficult I am always asked to project the outcome.
7690 As I'm sure you know, there are so many variables involved from the signal strength of the station to the execution of the format that is chosen, the air staff, the general hustle and effort that is put into it, so many variables that you can't ever nail it down completely.
7691 But, nonetheless, we were asked to do that and we applied various mechanisms to try to do that.
7692 One of the things that I think is very important that you keep in mind is that to make these projections you can't just look at the demand side for a certain kind of music, you also have to look at two other factors.
7693 One is you have to look at the supply side. Yes, there are certain kinds of music that are very popular, but to say it is popular therefore if we play this music we will be very -- we, our station, will be very popular, is incomplete at the very least.
7694 In the survey conducted by Doering, it said that modern rock and modern pop, or whatever they referred to, were very popular, therefore that is the best way to go. They didn't ask any questions, though, about: Would you switch to that station or how much would you listen? It was just: I would be very likely to listen.
7695 So while I think it does establish a demand side, and not surprising, it is very popular kinds of music.
7696 I think you also have to think about the supply and think about the level of satisfaction that people have with the stations out of Toronto for instance. Because you can't just assume that people will just run over -- I mean, some of them will, of course, to any new option, but you can't just leap to that conclusion.
7697 The other thing that needs to be looked at is not just the breadth of the audience but the depth of the audience. By that I mean that while a lot of people may like a certain kind of music there is a big, huge factor of how much do they like that kind of music. Are they passionate about that kind music?
7698 Because ratings are essentially a matrix. It's not just how many people listen but how much do they listen and how often do they listen.
7699 So whether a station gets a broad "cume" doesn't tell the whole ratings story. You also have to try to analyze whether people would listen a lot.
7700 I will just point out that while they are correct in saying we only looked at two formats actually, the traditional country and a hot country-type option, at least in this case we did attempt to look at little bit at the supply side. We asked: Where are you going to get that?
7701 I will just point out that people didn't say CHAM-AM, because 18 to 39, as I pointed out earlier, AM just kind of isn't even a factor in many people's eyes. They don't think about it.
7702 We also asked, you know, "How much would you listen? Would this be your favourite station?" And we got the answer to that.
7703 So I just wanted to try to fill out the picture a little bit of doing this kind of research analysis. It is probably tedious, but I thought it was important to add that to the picture.
7704 MR. O'BRIEN: We would like to thank the positive intervenors on our behalf who supported this application and ask if there are any further questions from Affinity.
7705 THE CHAIRPERSON: No, Mr. O'Brien, we have no further questions.
7706 We thank you for your participation.
7707 Madam Secretary.
7708 MS SANTERRE: Thank you, Madam Chair.
7709 The next rebuttal will be done by Douglas Kirk and Rae Roe.
7710 MR. CRAIG: I really don't want to be mistaken for Rae Roe. He is one of the applicants. I am Jim Craig.
INTERVENTION / INTERVENTION
7711 MR. KIRK: Madam Chair, Members of the Commission, we are the only two people standing between you, dinner and your families, so we will make this brief.
7712 I think Jim just wants to clarify one point on the smooth jazz NAC format.
7713 MR. CRAIG: Actually there are a couple of points that need to be clarified. It was stated a little earlier that I believe the markets that were suggested were Boston, Denver, Philadelphia and Buffalo NAC/smooth jazz stations failed. Well, they did not. In accuracy, we must make sure that you understand.
7714 Boston was sold late in the summertime. I listened to that station back in the spring, a wonderful sound. It was doing fairly well in the marketplace. It was sold to a new owner who has a history of taking acquisitions and switching formats that that owner is in. That's exactly what they did.
7715 The Buffalo station was on the air for a short time as an NAC/smooth jazz. Early in the format's life, about four years ago, they also were sold. They switched to what was called the Alice format and since then have switched to dancin' oldies, so they are still around. They did not fail. It was a sale.
7716 Denver and Philadelphia, the two stations in question there, are on the air. They are extremely successful. They are operating as NAC/smooth jazz. I have looked at their numbers over the past -- just three days ago, the latest arbitrons. They are showing very, very well in those two markets. I listened to those stations on the Web earlier this week. They are still on the air, unless they have gone off the air in the past couple of days. They haven't failed.
7717 I want to get back to the new age contemporary jazz in the survey that was presented by Mr. Doering. I think it's very important to understand that in suggesting that name to a format in a survey immediately flaws the results because we all look at the wind and hill new age jazz, the esoteric wind chimes and animal sounds and the beautiful music that goes along with it as something which is totally different than what this format calls for in a new adult contemporary smooth jazz sound. That is not new age.
7718 In naming artists, it's all fine and dandy to name artists against the survey of the format that was suggested in the survey, but nobody here can equate those artists to the sound because they are not heard on radio in Canada. It's as simple as that. So that is still flawed. In our minds, it's a very, very flawed argument that comes out of that particular survey.
7719 It's your turn.
7720 MR. KIRK: Just going back to Newcap's assertions. Despite all the flaws in that material, they said they could predict a three to four share. In fact, if you go back to our application, that's what we are saying, that the format will generate a three and a half share in its first year. This is with a brand new format with unknown music and artists in the country. We can grow that format over the period. I think in a round about way, even though it is flawed, we think that's a minimum level that can work on this format.
7721 In conclusion, I think our application presented to the Commission today presents a clear alternative. It's a first in Canada type of opportunity that the Commission has. I think we have articulated what we propose to do clearly to you. We think it's the most sensible one. We want the licence.
7722 Thank you very much.
7723 THE CHAIRPERSON: Mr. Kirk, in your intervention you express concern that Newcap's benefits package was specified only after the closing date for interventions, thus omitting public comment on it. Do you feel satisfied now that you have had the opportunity to say whatever you may wish to say about the benefits of Newcap?
7724 MR. KIRK: I would make two points, Chairman Wylie. Through all the discussion today, I think it's finally defining itself what this benefits package is destined to be. I think we have said what we think it represents in our intervention to you.
7725 THE CHAIRPERSON: The answer then is you are satisfied.
7726 MR. KIRK: We are satisfied. We have commented on that benefits package.
7727 Thank you.
7728 THE CHAIRPERSON: Thank you very much.
7729 Madam Secretary, I believe that ends the process for the Hamilton radio stations.
7730 MS SANTERRE: Yes, it does.
7731 THE CHAIRPERSON: My colleagues and I certainly want to thank everybody for their patience. We have sat longer perhaps than you would have expected. Our business days tend to be long.
7732 We thank you for your cooperation and patience and we thank the intervenor for his appearance as well and wish you all a Merry Christmas.
--- Whereupon the hearing adjourned at 1855, to resume
on Friday, December 10, 1999 at 0830 / L'audience
est adjournée à 1855, pour reprendre le vendredi,
décembre 10, 1999 à 0830