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Please note that the Official Languages Act requires that government publications be available in both official languages.
In order to meet some of the requirements under this Act, the Commission's transcripts will therefore be bilingual as to their covers, the listing of CRTC members and staff attending the hearings, and the table of contents.
However, the aforementioned publication is the recorded verbatim transcript and, as such, is transcribed in either of the official languages, depending on the language spoken by the participant at the hearing.
TRANSCRIPT OF PROCEEDINGS BEFORE
THE CANADIAN RADIO‑TELEVISION AND
TRANSCRIPTION DES AUDIENCES AVANT
CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
VARIOUS BROADCAST APPLICATIONS /
PLUSIEURS DEMANDES EN RADIODIFFUSION
HELD AT: TENUE À:
Embassy Suites Hotel Embassy Suites Hotel
Rooms A/B/C Salons A/B/C
6700 Fallsview Boulevard 6700, boulevard Fallsview
Niagara Falls, Ontario Niagara Falls (Ontario)
June 6, 2005 Le 6 juin 2005
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès‑verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
Canadian Radio‑television and
Conseil de la radiodiffusion et des
Transcript / Transcription
VARIOUS BROADCAST APPLICATIONS /
PLUSIEURS DEMANDES EN RADIODIFFUSION
BEFORE / DEVANT:
Charles Dalfen Chairperson / Président
Barbara Cram Commissioner / Conseillère
Richard French Commissioner / Conseillier
Rita Cugini Commissioner / Conseillère
Stuart Langford Commissioner / Conseillier
ALSO PRESENT / AUSSI PRÉSENTS:
Chantal Boulet Secretary / Secrétaire
James Murdock Legal Counsel /
Steve Parker Hearing Manager /
Gérant de l'audience
HELD AT: TENUE À:
Embassy Suites Hotel Embassy Suites Hotel
Rooms A/B/C Salons A/B/C
6700 Fallsview Boulevard 6700, boulevard Fallsview
Niagara Falls, Ontario Niagara Falls (Ontario)
June 6, 2005 Le 6 juin 2005
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PRESENTATION BY / PRÉSENTATION PAR:
TVN Niagara Inc. 5 / 22
INTERVENTION BY / INTERVENTION PAR:
Robert Tanos 130 / 606
Welland/Pelham Chamber of Commerce 141 / 682
LOADD Studios 145 / 706
Jack Miller 156 / 766
BrockTV 162 / 794
Richard Sasse 169 / 827
Québecor Média Inc. 175 / 857
Seven Seeds Indigenous Productions & 199 / 993
Rogers Media 220 / 1112
City of St. Catherines 245 / 1273
Jaqueline Angi-Dobos 251 / 1303
Binational Tourism Alliance 255 / 1323
Niagara Economic and Tourism Corporation 259 / 1345
Brian E. Purdy 264 / 1374
CHUM Limited 273 / 1434
CTV Television Inc. 304 / 1618
Lionel M. Baum 329 / 1782
CanWest Mediaworks 337 / 1834
REPLY BY / RÉPLIQUE PAR:
TVN Niagara Inc. 355 / 1954
Niagara Falls, Ontario / Niagara Falls (Ontario)
‑‑‑ Upon commencing on Monday, June 6, 2005, at 0935 /
L'audience débute le lundi 6 juin 2005 à 0935
seq level0 \h \r0 seq level1 \h \r0 seq level2 \h \r0 seq level3 \h \r0 seq level4 \h \r0 seq level5 \h \r0 seq level6 \h \r0 seq level7 \h \r0 seq level0 \*arabic1 THE CHAIRPERSON: Order, please. À l'ordre, s'il vous plaît.
seq level0 \*arabic2 I trust there's seating for everyone around the room. If you can be seated that would be appreciated. Thank you.
seq level0 \*arabic3 Good morning, ladies and gentlemen. Bonjour, mesdames et messieurs.
seq level0 \*arabic4 Bienvenue à cette audience publique. Welcome to this public hearing.
seq level0 \*arabic5 My name is Charles Dalfen and I'm Chairman of the CRTC. I will be presiding over this hearing along with my colleagues. To my immediate right is Richard French, Vice Chair, Telecommunications, and to his right, Barbara Cram, Regional Commissioner for Manitoba and Saskatchewan. To my immediate left is Rita Cugini, Regional Commissioner for Ontario, and to her left, Stuart Langford, National Commissioner.
seq level0 \*arabic6 The Commission team assisting us includes Hearing Manager, Steve Parker, Senior Broadcasting Analyst and legal counsel, James Murdoch, as well as Chantal Boulet, hearings secretary. Please speak to Madam Boulet if you have any questions with regard to hearing procedures.
seq level0 \*arabic7 At this hearing we will first study an application from TVN Niagara Inc. to operate a conventional English language television station in St. Catharines, Ontario. The station would operate on channel 22C and the applicant proposes programming designed to serve St. Catharines and Niagara regions.
seq level0 \*arabic8 We will then review five applications for a new English language FM radio station for Woodstock and Tillsonburg market, including an application to convert CKOT Tillsonburg radio station from AM to FM.
seq level0 \*arabic9 We will also hear an application to change the frequency and authorize contours of the CJFH FM Woodstock radio station. All of these applications will be competing for the use of 104.7 frequency.
seq level0 \*arabic10 The panel will study the proposals to operate a new FM station in light of the cultural, social and economic objectives defined in the Broadcasting Act and the regulations flowing from it. The panel will base its decisions on several criteria, including the state of competition and the diversity of editorial voices in the market as well as the quality of the applications.
seq level0 \*arabic11 It will also look at the ability of the market to support new radio stations, the financial resources of each applicant, and proposed initiatives for the development of Canadian talent.
seq level0 \*arabic12 The Applicants will be heard in the following order. Burns Communications Inc., Standard Radio Inc. CHUM Limited, Newcap Inc., Sound and Faith Broadcasting and Tillsonburg Broadcasting Company Limited.
seq level0 \*arabic13 The hearing should take three to four days. We will begin each day at no later than nine‑thirty and finish up no earlier likely than six p.m. We will inform you of any changes in the schedule as they occur.
seq level0 \*arabic14 When you are in the hearing room we will ask you to please turn or your cell phones and pagers as they are an unwelcome distraction for participants and Commissioners. We would appreciate your cooperation in this regard throughout the hearing.
seq level0 \*arabic15 I will now invite the secretary, Madam Boulet, to explain the procedures we will be following.
seq level0 \*arabic16 SECRETARY: Thank you, Mr. Chairman. Before we begin, I would like to go over a few housekeeping matters. First, I would like to indicate that the Commission's examination room is located in Salon E, which is located down the hall from the hearing room. Public files of the applications being considered at this hearing can be examined there. The telephone number, as indicated on the agenda, is 905‑357‑4078.
seq level0 \*arabic17 Secondly, there is a verbatim transcript of this hearing being taken by the court reporter at the table to my left in the centre. If you have any questions on how to obtain all or part of this transcript please approach the court reporter during a break for information.
seq level0 \*arabic18 As you mentioned, Mr. Chairman, we will first hear the application from TVN Niagara Inc, and we will proceed as follows. First, the applicant will be granted twenty minutes to make his presentation. Questions from the Commission will follow the presentation.
seq level0 \*arabic19 In phase two other parties will appear in the order set out in the agenda to present their appearing intervention. Again, questions from the Commission may follow. Phase 3 provides an opportunity for the applicant to reply to all the interventions submitted on their application. Ten minutes are allowed for this reply, and, again, questions the Commission may follow.
seq level0 \*arabic20 And now, Mr. Chairman, we will proceed with Item 1 on the agenda, which is an application by TVN Niagara Inc. for a license to operate an English language television programming undertaking in St. Catharines. The new station would operate on channel 22C with an average effective radiated power of 401,000 watts.
seq level0 \*arabic21 Appearing for the Applicant is Mr. Wendell Wilks, who will introduce his colleagues. You will have twenty minutes to make your presentation. Mr. Wilks.
PRESENTATION / PRÉSENTATION
seq level0 \*arabic22 MR. WILKS: Thank you. Mr. Chairman, there are some people who are a part of our application who we'll take a brief moment to introduce them. There are people who should normally be in St. John's, Newfoundland at a national mayor's conference, but they've deemed that this hearing is of significant importance to them and they've graced us with their presence.
seq level0 \*arabic23 I'd like to meet them. First of all, I'd like you to meet His Worship, the mayor of St. Catharines, Tim Rigby. I would like to introduce you to the Mayor of the Town of Pelham, Ron Leavens and the Mayor of Welland, Damian Goulbourne.
seq level0 \*arabic24 If they would all stand and I do want to recognize that the City of Niagara Falls, which is our host, Mayor Salci, would be here, but he is recuperating from a quadruple bypass ‑‑ successfully we might add, but you are going to experience his presence vicariously in a moment or two.
seq level0 \*arabic25 I did want to introduce you though to the City of Niagara Falls representative, Jim Diodati, who is an alderman here. The Township of West Lincoln is represented by Bill Young, the Chief Administrative Officer. The City of Port Colborne by Dan Aquilina, Manager of Strategic Projects; the town of Wainfleet, councillor Barbara Henderson. If they would all stand please.
seq level0 \*arabic26 The Town of Fort Erie, councillor Tom Lewis. The town of Niagara‑on‑the‑Lake, councillor Art Viola; the City of Thorold, Councillor Michael Sharon, and Paul Grenier is also here as a alderman from the City of Welland. And we have Alan Teichroeb, who is here from Niagara Economic Development.
seq level0 \*arabic27 Just ‑‑ those people are the people that we spent many, many months and years, in fact, consulting with and they're important to us. They're an integral part of our application. Now we'd like you to meet our board of directors who are here and we'll ask them to stand and I'll quickly introduce them.
seq level0 \*arabic28 Charles Juravinski is our chair. If you had the unfortunate family incidence of cancer, the chances are that you would be treated at the Margaret and Charles Juravinski Cancer Centre in this community. Terry O'Malley, vice chair from St. Catharines. Paul Herriott from St. Catharines; Doug Fraser, who is from Port Colborne, and this is Doug's birthday. I know he didn't want me to say that but happy birthday, Doug.
seq level0 \*arabic29 Ann Mantini is part of a trio of sisters who are famous in this area. If they had a concert a thousand people would show up in a heartbeat. Ann Mantini. The Honourable Robert P. Caplan, QC. Anna Laurie Yeager of St. Catharines. Kimberly Thomas, who is a lawyer from Ohsweken, who represents the Six Nations of Grand River is on our board. Her colleague, Chief David General, the great artist, who is the chief of the Six Nations is on our bored and could not attend. Is he here? Is he not? Okay. I had heard earlier that he was unable to attend this morning. Michael Katz from Niagara Falls, and finally, George Thompson from St. Catharines.
seq level0 \*arabic30 Mr. Chair, at this point, if I can draw your attention to the applicant I'll just simply introduce to you the people who are here. We'll start down at the far end in front of you here.
seq level0 \*arabic31 William Dermody is our legal counsel, served for a time with the CBC in Ottawa. Then our second person is Mr. Douglas Newell, a distinguished person who is a veteran in the advertising business in Canada. Edgar Cowan, who started appearing in front of this Commission in the early 70's. Then ‑‑ and he's a program expert and our senior consultant and, in fact, he's agreed to work with us another three years, so that's really senior.
seq level0 \*arabic32 Dave Storey, our chief engineer, 25 years from CHCH Hamilton. Kevin Snook, who is a manager of the Niagara Growth Fund, who are shareholders of the company, but he is ‑‑ a long list of degrees, a long time president ‑‑ or check that, vice president of Deloitte and Touche.
seq level0 \*arabic33 Then I'd like you to meet Al Lutchin, he's a 15 year veteran of the broadcast business, radio and television. I'd like you to meet Mr. Dan Shakhhmundes, who is our computer scientist in our team. Tracey Wilks is behind me and Tracey is my son. We've worked together closely for the last twenty years, although he's been on the planet close by my side for 44 years.
seq level0 \*arabic34 Frank Thibault is on my immediate left. Frank is a 22 year broadcast veteran, having served at CH and CTS and in Red Deer, Alberta, where I first met him. Joan Mitzi Fry, on my right has the unenviable task of being the female representative. She is our production manager. She has worked with CFMT Television, with City Television, and she ‑‑ if you went to a Blue Jays baseball game and you saw the infield videos of the Blue Jays games, Joan was the officer in charge of Rogers Stadium, Sky Dome.
seq level0 \*arabic35 And then I come to my last panelist, who is David Buckhalter. David is vice president of Media Alternatives, that is our ‑‑ he is our Senior National Sales Representative.
seq level0 \*arabic36 That, then, is our introduction. Now, we'd like to commence our actual presentation and, Commissioners, this TVN application is about connectivity, human connectivity. It's about Niagarans connecting with each other and about Niagarans interconnecting with their neighbours in the Golden Horseshoe after 55 years of television isolation.
seq level0 \*arabic37 There are 144 English language TV stations operating in 44 different markets in Canada. We're market number 12 and it has never had a television voice of its own and that's why we're here today.
seq level0 \*arabic38 The people you will be seeing and hearing on what we're about to show you, many of whom are here today, are not interveners. They are and have been since the beginning an integral part of our written application. On their behalf we wish to thank you and your colleagues for coming to Niagara to hear our plans to provide these, our people, with their very first professional television station.
‑‑‑ Video presentation / Présentation vidéo
‑‑‑ Applause / Applaudissements
seq level0 \*arabic39 MR. WILKS: Mr. Chairman, this is a unique application. Commissioner Cram comes from my home province of Saskatchewan, where her home City of Regina, which is considerably smaller than Niagara, has three local TV stations. Here we are 55 years later, as was so eloquently stated by Jack Miller, a half century after the television stations like Peterborough and Kingston and Hamilton went on the air.
seq level0 \*arabic40 Now, this peninsula has 420,000 residents, but every day we get another 40,000 visitors and they're all asking for the first station. There are 29 markets in Canada that are smaller than the Niagara region that already have their own services, in some cases several.
seq level0 \*arabic41 The TVN written application is a plan submitted to you for your consideration to bring this, the 12th largest market in the country with exports larger that Newfoundland and/or New Brunswick. We'd like to now be added to the lexicon of broadcast and become the station that serves this underserved Niagara.
seq level0 \*arabic42 The Broadcast Act ‑‑ again, I almost hate to say it because Jack Miller said it so well, that the ‑‑ we know what the purpose of the system is. It says in the Act the purpose is to relate the diverse regions of Canada one to the other. And it's one to the other that gets to be the point that I'm sure we'll spend a lot of time discussing today. For TVN that's meant connecting, first, Niagarans to each other and ultimately connecting us to our neighbours throughout the Golden Horseshoe.
seq level0 \*arabic43 Of course, our Charter of Rights and Freedoms that expresses the right of all Canadians to a free press and free other media gives us the courage to enter the forbidden land of the TV giants that we're entering here. The framework of CRTC policies also encouraged us to seek this opportunity to serve our Niagara audiences. It's the inspiration we got from reading the speeches of CRTC Charles Dalfen over the past few years where you encouraged new voices to enter the system and specifically asked for new expressions from other places besides the dominant voices of Toronto and Montreal. Hence we developed this blueprint which we submitted to you.
seq level0 \*arabic44 So this is an application that's very different from most we've ever witnessed. Most public hearings are dominated at attendance by insiders, broadcasters, consultants, industry players, who have a special interest in the CRTC hearings. Now, this audience here today is local and obviously pretty vocal. They're here in person to demonstrate this difference that we're talking about.
seq level0 \*arabic45 So what's so different? We interviewed 1200 Niagarans and this is probably the most comprehensive independently gathered and monitored market survey ever submitted to the CRTC. We have also studied over 20 thousand businesses in Niagara. We wanted to know two things. One, would the people of Niagara watch us and, two, would the Niagara businesses support the station in advertising?
seq level0 \*arabic46 The results? Well, we've submitted them to you, 94 per cent of the people surveyed in Niagara said they would watch TVN regularly, and over 1800 businesses told us they'd definitely advertise on TVN. Even if that's only 40 per cent true, we would still exceed our budget predictions. But TVN is heartened by the local estimated ad spending currently in Niagara of over 16o million dollars a year.
seq level0 \*arabic47 Now, 124 out of a 125 ‑‑ you may want to know what happened to that one person ‑‑ the 124 locally elected officials in Niagara said they supported our plans. We went public over three years ago and released our blueprint to the community first and they reacted with enthusiasm that you've seen and support.
seq level0 \*arabic48 Long before filing with you for our final approval and in an effort to be open and transparent and accurate, we also released our plans to the industry and to our would be competitors. That's never done in Canada. We set a daunting task for ourselves. In Ontario in 2004, your records show that all Canadian commercial TV stations in Ontario spend 195 million dollars on Canadian programming in the year 2004, but regrettably, those same stations spent 325 million dollars on mainly USA programming. TVN set out to reverse that horrible reality TV saga and we present to you here today a model that's 70 per cent Canadian and 30 per cent foreign with regard to spending, a ratio not achieved by any other Ontario licensee.
seq level0 \*arabic49 That gives TVN, over a seven year license period, 37 million dollars to deliver 36 and a half hours per week of full Niagara local HDTV digital programming on two transmitters. TVN will spend only 15 million dollars on foreign programming.
seq level0 \*arabic50 Commissioners, we're not rookie broadcasters. We are a collection of veteran broadcasters and program producers. We've created thousands of hours of Canadian programs and we have very successfully started new TV stations elsewhere in Canada.
seq level0 \*arabic51 We at TVN wish to thank the hundreds of citizens who so enthusiastically supported the concept of bringing to Niagara its only TV connection to the TV universe. Mr. Chairman, thank you for the opportunity to tell our story and now our team is indeed very ready to respond to your questions.
‑‑‑ Applause / Applaudissements
seq level0 \*arabic52 THE CHAIRPERSON: Thank you very much, Mr. Wilks, ladies and gentlemen. I'm going to ask you a series of questions related to the question of the market and your service area, the absorbability of your station in the greater market and the regional market and then questions about your potential viability in light of some of the assumptions you've made with regard to the programming you're going to carry, the viewing and so forth.
seq level0 \*arabic53 I'll begin by asking you about your programming and your demographics. You say in a letter to the Commission in the January 21st, 2004, letter that your classic movie strategy is critical to your revenue generation and therefore to your ability to support local programming throughout the schedule.
seq level0 \*arabic54 And your demographic, I take it, is an older demographic, baby boomers between the age ages of 47 and 53, a segment that you label older Freedom 55 mid‑retirement shoulder group, people between the ages of 54 and 69. You state that this is an affluent audience, spends more than any previous generation and is the most educated senior generation. So I guess the initial question in your classic movie strategy is have you had discussions with owners of the broadcast rights to some of the movies that you intend to broadcast and did you discuss the costs of acquiring those rights? Mr. Chairman, we've had extensive dialogue with what are known in our industry as the program suppliers. The classic movies of all time, the ones that are called classics, there's approximately 25,000 in that category, and these are movies of distinction.
seq level0 \*arabic55 These are movies that have reached a status in our society of a history and have had acceptability at their time of their initial release and are still being redistributed in this era in the new DVD formats and they're all enhanced digitally.
seq level0 \*arabic56 Now, all great movie studios in America, of course, the 20th Century Foxes, the Disneys, the Columbia Pictures, Paramount Pictures, Warner Brothers, all have extensive libraries. In fact, when you ask them you literally get books of libraries, and not even close to the majority of those movies are under contract exclusively to any broadcaster in Canada.
seq level0 \*arabic57 We were encouraged particularly by several visits that we had to Atlanta, Georgia to deal with the people who controlled the Turner classic movies at ‑‑ owned by Time Warner. Our friend, Ted Turner, actually pioneered this classic movie format. In fact, in America, cable television was built on these classic movies.
seq level0 \*arabic58 So the answer to your question clearly and succinctly, every major distributor has indicated to us that the movies are available, and the prices that we have identified in our budgeting is in line with current pricing for this type of product.
seq level0 \*arabic59 A classic movie, in our definition, means that the movie is at least seven years of age. Someone saw a movie on there which is a Stephen Spielberg picture of a year or two ago, but we're applying for a seven year license, therefore, the ones ‑‑ the current classics will ‑‑ seven years from now would be eligible for play on our station. That's, in our definition, what a classic movie is.
seq level0 \*arabic60 The other difference with us in the presentation of the classic movies, Mr. Chairman, is that we're going to use hosts to introduce the classic movies and to set the context because there is a generation of viewers that we would argue that are under forty that will look at these movies and will appreciate them.
seq level0 \*arabic61 Classic movies, they're not ‑‑ some people, even in the Commission's language, call them oldies. We don't actually see movies as oldies. We always see movies only as good movies and bad movies. In fact, they are a reflector of a time and they're timeless, in fact.
seq level0 \*arabic62 The format has been successfully used in the United States on a number of television stations for many, many years and we would become the first classic movie television station in this country, where, by the way, we have a strong acceptance of movie by viewers. It's always listed as the number one choice of every viewer that's ever asked in a public opinion poll. Movies always come out number one.
seq level0 \*arabic63 THE CHAIRPERSON: Can I take that as a yes?
‑‑‑ Laughter / Rires
seq level0 \*arabic64 MR. WILKS: That is not a definite maybe.
seq level0 \*arabic65 THE CHAIRPERSON: Okay. Thank you, Mr. Wilks. I'm looking at your program schedule which you've filed with us and I see that you're offering 21 hours of movies a week in prime time plus another, what, 20 during the afternoon and another 20 hours in the afternoon, a another nine to five. Another eight hours on Sundays, plus late night movies.
seq level0 \*arabic66 Now, your budget, your entire foreign ‑‑ I take it these are foreign movies?
seq level0 \*arabic67 MR. WILKS: Yes.
seq level0 \*arabic68 THE CHAIRPERSON: Your foreign movie budget, foreign programming budget is two million dollars a year.
seq level0 \*arabic69 MR. WILKS: That's correct.
seq level0 \*arabic70 THE CHAIRPERSON: I haven't done the division, but that adds up to a lot of hours.
seq level0 \*arabic71 MR. WILKS: Yes.
seq level0 \*arabic72 THE CHAIRPERSON: Divided into two million, that's a rather low number per movie, isn't it?
seq level0 \*arabic73 MR. WILKS: Well, let me just explain what the average movie purchase consists of. An average movie rental on a non‑exclusive basis ‑‑ this doesn't preclude them running, for instance, a movie that we would contract on a specialty channel or pay T.V. channel. We're not, of course, a specialty channel. We're an over‑the‑air prebroadcast service.
seq level0 \*arabic74 The point there is, we're estimating, sir, that the amount of $5,000 per movie is actually a number that we've tried on specifically with the producers. We have some requirements for that and that is that it has to be digitally enhanced for us and wherever possible formatted in the HDTV format. So that number has been tested and we believe it's accurate.
seq level0 \*arabic75 We also buy movies for multiple runs, so basically each title is contracted between three and five runs, over usually a three to five year period. So that it's amortized. We take, of course, the largest amount of $5,000, approximately 2,000 in the first run and then it declines for each successive run.
seq level0 \*arabic76 That's low cost programming, sir, and the point really is is that the audience that it delivers makes it a very profitable part of our program schedule, which allows us to spend more money on Canadian programming.
seq level0 \*arabic77 THE CHAIRPERSON: What's your math on the per hour cost that you see?
seq level0 \*arabic78 MR. WILKS: It works out on an average with that ‑‑ it works out to $770 per hour. Now, a movie is a two hour minimum, sometimes a little longer.
seq level0 \*arabic79 THE CHAIRPERSON: Right So basically $1500 per movie?
seq level0 \*arabic80 MR. WILKS: Per play, yes.
seq level0 \*arabic81 THE CHAIRPERSON: Per play amortized. Now, when you look at the revenue side of the ledger, I don't know whether you've calculated to build up your revenue figures, and we'll get to that in a moment. I don't know whether you've based it on the prime time movies in your schedule or not or whether your classic movie strategy is across the full day. I do know that elsewhere you mentioned that you needed to achieve 0.5 of a prime time rating point in order to make your schedule work.
seq level0 \*arabic82 How do you relate your ‑‑ given it's your strategy, how do you relates the movies that you've scheduled to the revenues that you expect to generate from them?
seq level0 \*arabic83 MR. WILKS: I think I'm going to ask my colleague, my chief number cruncher who worked with us in developing this plan, Frank Thibault, to rationalize that question, sir.
seq level0 \*arabic84 MR. THIBAULT: Thank you, Mr. Wilks. In the prime time, the majority of the revenue is going to come from national sales for the movies and that would be, as far as overall revenue for the station, about 65 per cent.
seq level0 \*arabic85 THE CHAIRPERSON: So you expect ‑‑ is that just your national revenue number?
seq level0 \*arabic86 MR. THIBAULT: No, that would be all the revenue in prime time.
seq level0 \*arabic87 THE CHAIRPERSON: I understand that. The 65 per cent, are you just taking your projections and saying that you have, what, projected for the first year 6471 national and 5389 local? What does the 65 per cent represent?
seq level0 \*arabic88 MR. THIBAULT: If you take a look at the revenue that we're looking at generating, I'm assuming you're defining prime time between six and twelve or between seven and eleven?
seq level0 \*arabic89 THE CHAIRPERSON: I was defining it here as seven to eleven.
seq level0 \*arabic90 MR. THIBAULT: As seven to eleven.
seq level0 \*arabic91 THE CHAIRPERSON: And that's when your movies are being shown.
seq level0 \*arabic92 MR. THIBAULT: Right. Okay.
seq level0 \*arabic93 THE CHAIRPERSON: Or seven to ten most nights.
seq level0 \*arabic94 MR. THIBAULT: Yes. What I'm getting at there is the 65 per cent represents the revenue between 7 to 11 Monday to Sunday and about 65 per cent of our overall revenue is going to come from that period.
seq level0 \*arabic95 THE CHAIRPERSON: Right. And that will be basically all national?
seq level0 \*arabic96 MR. THIBAULT: Well, between seven and eleven we have movies and we've also got our local news from ten to eleven.
seq level0 \*arabic97 THE CHAIRPERSON: Right.
seq level0 \*arabic98 MR. THIBAULT: And that's going to increase the amount of local revenue because the local news is mostly local retail.
seq level0 \*arabic99 I guess what I was getting at with the 65 per cent was that 65 per cent of our revenue overall is going to come from seven to eleven.
seq level0 \*arabic100 THE CHAIRPERSON: Right. And what percentage of that would be the movies?
seq level0 \*arabic101 MR. BUCKHALTER: If I might add, I believe that's about 70 per cent, Frank.
seq level0 \*arabic102 MR. THIBAULT: That would sound right, yes. 70 per cent.
seq level0 \*arabic103 THE CHAIRPERSON: 70 per cent of the ‑‑
seq level0 \*arabic104 MR. THIBAULT: The 65 from the movies.
seq level0 \*arabic105 THE CHAIRPERSON: Okay. So that's approximately 45 per cent of your revenues.
seq level0 \*arabic106 MR. THIBAULT: Yes.
seq level0 \*arabic107 THE CHAIRPERSON: That, you expect, will drive your success?
seq level0 \*arabic108 MR. THIBAULT: Well, one could look at that's what will drive our success or it will be our local programming which will drive our success because the difference is not that great, but when you factor in the revenue we're going to get from our six to seven news, we're not really going any one particular way where any one thing has to be the thing that does it. As long as we do well in both areas of our local programming and in the movies, then we meet our revenue targets.
seq level0 \*arabic109 THE CHAIRPERSON: Okay. Well, that ‑‑ I don't mean to make you sound contradictory, but the way I read your strategy, and I can quote it in the January 21st letter. You say.
"Our classic, timeless masterpiece movie programming strategy must have enough income potential to support TVN Niagara's comprehensive commitment to local and regional programming, plus its stated responsibility to develop, produce or co‑produce Canadian priority programming."
seq level0 \*arabic110 I took that to mean that one was effectively going to subsidize the other.
seq level0 \*arabic111 MR. THIBAULT: I see what you're getting at. Yes, that's correct. The revenue from the movies is far greater than the cost of the movies, so the additional revenue will be used to subsidize the other time periods.
seq level0 \*arabic112 THE CHAIRPERSON: Right. And the revenue from the local and the Canadian will be the reverse and will require the subsidy.
seq level0 \*arabic113 MR. THIBAULT: That's correct.
seq level0 \*arabic114 THE CHAIRPERSON: That's how I understood that strategy, so I was trying to probe how you thought you could achieve those revenues and where in your schedule you thought they would be derived. What I'm hearing you say is that the movies, basically the 21 hours of movies in prime time during the course of the week is really going to generate 45 per cent of your revenues. Is that a correct statement?
seq level0 \*arabic115 MR. THIBAULT: That would be correct, yes.
seq level0 \*arabic116 THE CHAIRPERSON: Okay.
seq level0 \*arabic117 MR. WILKS: Mr. Chairman, just to clarify that to a small degree, the newscasts will have a far greater central area of our coverage area rating than the small number that we're projecting for the overall region with the classic movies.
seq level0 \*arabic118 We expect to take in a very large ‑‑ into the seven o'clock time period when the first movie starts in prime time from our major newscast, the evening newscast. So that ‑‑ our experience with that is that any television station that has a majority of audience in local news becomes always the most viewed television station in the market overall.
seq level0 \*arabic119 We'll have a much higher central area viewing than we will in our overall reach.
seq level0 \*arabic120 THE CHAIRPERSON: Okay. And ‑‑
seq level0 \*arabic121 MR. WILKS: We're really using news and public affairs to build our relationship with the viewer and the community. It's foundational. Everything else is built from that.
seq level0 \*arabic122 In fact, we do expect actually a small decline in some cases on the movies from our local news period. This is because the experience that we have had in similar markets where the spot in the local newscast on a CBC affiliated station frequently gets more cash per unit than a spot adjacent or inside an NHL hockey game. That has to do with the incredible importance of local news.
seq level0 \*arabic123 THE CHAIRPERSON: Right. And to generate that prime time revenue, peak time revenue of roughly 45 per cent of your entire revenue base, you, I think said elsewhere ‑‑ I can give you the quote if you need it ‑‑ you needed to attract .5, half of one prime time rating point to achieve these revenues, is that correct?
seq level0 \*arabic124 MR. THIBAULT: Yes, that's correct.
seq level0 \*arabic125 THE CHAIRPERSON: I know comparisons are not always apt, they can even be invidious at times, but when we look at the rating points of, say, CKXT, which offered movies in the prime time schedule and had a far higher programming budget than you're projecting, we got in the demographic that you're looking at and basically throughout its demographics, if you take adults 25 to 54, roughly a .5 or half a rating point. And I guess my question is is there enough resources allocated to the movies in order to do the job of achieving that half of a prime time rating point in order to drive the revenue?
seq level0 \*arabic126 MR. BUCKHALTER: The analysis that we first conducted showed that of the past three full periods that the range of movie performance amongst all conventional stations ranged from a low of .7 to a high of a 2.9 on adults 25‑54 over the past three or four periods.
seq level0 \*arabic127 The movie rating of a .5 is actually 37 per cent below the projected ratings delivery that we did in our initial analysis of a .8 and 30 per cent below that of the lowest movie performance over the past three or four periods.
seq level0 \*arabic128 THE CHAIRPERSON: I guess I'm ‑‑ what I'm reading is BBM 2003, 2004 metered data for the '04 broadcast year roughly, which shows the number for CKXT with a predominance of movies in the schedule at .5. I don't see the .8 to full rating point numbers.
seq level0 \*arabic129 MR. BUCKHALTER: Mr. Commissioner, as you're aware, there are two measurement systems currently being used for the Toronto market. There's Neilson people meter system in addition in addition to BBM people meter system.
seq level0 \*arabic130 As the market evolves and as, I believe, the current Neilson BBM merger is before the Competition Board and if, as anticipated, that, in fact, goes forth, Neilson will continue to do metered measurement in the major markets and BBM will do diary measurements in all the markets they measure currently. So the data for that. Initially the .8 that we suggested and the .5 was based on Neilson people meter.
seq level0 \*arabic131 MR. THIBAULT: There's something else I'd like to point out in regard to the cost of the movies as far as the audiences are going to generate. In television it's not really any different than it is in the theatrical world as far as movies that are released in the theatre.
seq level0 \*arabic132 Simply because a movie has a big budget doesn't mean that people are going to go and see it. In fact, it often happens that it's the opposite. Big budget movies quite often will fail and it will be a small budget movie that will generate a huge amount of revenue. It's not the cost of the movie that's the important thing, it's what the movie's about, it's the content.
seq level0 \*arabic133 That's what's different between what our program strategy is and what CKXTV was. What they were doing to a certain extent was almost, but not quite, directly competing for the same types of movies as City TV. And that gave them higher costs and they were almost basically splitting the audience.
seq level0 \*arabic134 We're going after an entirely different demographic and, therefore, because not ‑‑ the particular movies that we're looking at purchasing aren't in the high demand by over‑the‑air broadcasters, the prices are low. It's the old supply, demand situation. We're sort of hitting a niche in the marketplace that's allowing us to exploit lower cost material to gain ratings.
seq level0 \*arabic135 The ratings projections are realistic because we're not splitting the market again with that same younger 18 to 34 or 18 to 49 viewer. We're going after a slightly older demographic and there isn't that same direct competition for them.
seq level0 \*arabic136 MR. BUCKHALTER: In other words, the adult 25‑54 movie delivery for a station like CKXT was incidental to the actual intended audience, which was, as Mr. Thibault suggested, directed towards adults 18 to 34 and 18 to 49 primarily, as do most of the movies on all competitive stations in the marketplace, including Citytv, for example. Whereas TVN would be primarily appealing to that adult 25‑54 rating point.
seq level0 \*arabic137 THE CHAIRPERSON: First of all, on that point, how does that reconcile with your target audience as being 47 plus?
seq level0 \*arabic138 MR. BUCKHALTER: The 25‑54 would be the currency, if you will, that advertisers would purchase for a specific demographic. Whereas, the sub demographic group that Mr. Wilks has referred to within the application, in fact, is a byproduct of that older 25‑54 demographic. But it's a currency that media buyers would be talking of that we're identifying that .5 rating delivery.
seq level0 \*arabic139 MR. THIBAULT: When ‑‑ in the ratings there's some very simple standard categories that are always reported; 18 to 49, 25 to 54, 55 plus. However, in the last few years, especially with the metered system in Toronto, you can create your own special age group and define it using the software. And this is something that both broadcasters and advertisers have access to, but it's not something that's used commonly as statistics that's reported and it's not the kind of thing you'd read about in a newspaper or see in a magazine article because it doesn't fit the standard mold.
seq level0 \*arabic140 But what it allows our sales team to do is do a presentation based on, okay, this is where we're at with adults 45 to 65 or 35 to 52. We can create anything we want and we can compare that between how we're doing versus how the audiences for other shows on other channels are at the same time period.
seq level0 \*arabic141 So by using that software we can take advantage of the situation and create a package for advertisers that matches the demographic that we're selling to.
seq level0 \*arabic142 MR. BUCKHALTER: I'd like to add as well that ‑‑
seq level0 \*arabic143 MR. COWAN: Mr. Chairman, there's also some little miracle that's happened over the last ten years. And it is what's happened to the baby boom bubble as it's moved up through 50 and probably the leading edge is maybe 57 now; 56, 57. Some of the material that's been developed and researched is that people in that age group ‑‑ there's a number of us that are in it, actually don't see themselves as age ‑‑ in terms of age, they see themselves as a life stage.
seq level0 \*arabic144 The interesting thing in the life stage phenomenon is that in the early part of the 50's people see themselves act, buy, do things about ten years younger than their actual age. That's how they react to things. Now, as that bubble starts growing up into the 65, 67 years, that ten years starts to contract a little bit.
seq level0 \*arabic145 So what you are having ‑‑ if you're saying, oh, gosh, we have a 49 to whatever age group, hold on for a second. That's an age group, that's not a life stage. That's not the way people see themselves. They see themselves in that group quite a bit younger.
seq level0 \*arabic146 So in terms of attracting an audience, you're probably looking at the age group that we've talked about in there, but the shoulders on that age group are the way people actually act.
seq level0 \*arabic147 MR. BUCKHALTER: Mr. Commissioner, I'd like to add as well that you've referred to the .5 that CQXT produced. The key is TVN is starting the movies at seven p.m. one hour prior to all the other competitor's movies. So Citytv, Toronto, CKXT begin their movies at eight o'clock. TVN starting their movies one hour earlier, prior to everybody obviously using all the other conventional broadcasters airing their major US network programs that begin at eight p.m., so we're getting a headstart on that in addition to being able to stay away from the competitive movies.
seq level0 \*arabic148 MR. WILKS: We also are in a region where there is little driving time between work and home, so the commuters at this side of the lake do not have to face some of the misery on the north side of the lake where that luxury is seldom experienced by most families. Our people are home much earlier.
seq level0 \*arabic149 And we are, by the way, the largest consumers of television in Canada, according to A.C. Neilson. We're the most aged market in Canada. We have more seniors per capita in St. Catharines than Victoria does. So that's to put it in some kind of perspective.
seq level0 \*arabic150 And it's the growing demographic, meaning that 25 per cent of this ‑‑ our total population will be in a category that we're seeking and every other television station is aiming precisely at the 18 to 39, and that's a shrinking demographic.
seq level0 \*arabic151 You can't read a newspaper without having some kind of reference to something nostalgic that came out the seventies, sixties, eighties, the decades before. It's big business. And the wealthiest in the nation. Those people over 55 control 83 per cent of the nation's wealth. So not only do they have all the money, they haven't got long to spend it and they are spending it.
‑‑‑ Laughter / Rires
seq level0 \*arabic152 THE CHAIRPERSON: Don't be a pessimist, Mr. Wilks.
‑‑‑ Laughter / Rires
seq level0 \*arabic153 THE CHAIRPERSON: I guess I'm just trying to understand the orientation to the 47 plus demographic and the need in order to make the .5 rating point work and attract the national revenues of attracting the 25 to 54 demographic. So I'm trying to reconcile those two in terms of I understand the business proposition of the 25 to 54, but I'm still having a little trouble reconciling it to your orientation.
seq level0 \*arabic154 What I'm taking from our discussion, correct me if I'm wrong, is that in the prime time driving part of your schedule you really are going to try to show movies that attract the 25 to 54 demographic, not the 47 plus demographic, and you're going to try to sell it on that basis. In fact, your reports, Media Alternatives and so on, support that approach.
seq level0 \*arabic155 So it's just an effort of, I guess, asking whether that is a correct perception or not and if it isn't you'll tell me why. And then if it is a correct perception, how are you going to cater towards that demographic in the movie part of your schedule, the higher age demographic?
seq level0 \*arabic156 MR. WILKS: It's fair to say that we do not intend to market ourselves to the marketplace as a station for senior citizens. That is not our intention. We're a place that will run entertainment that has timeless quality.
seq level0 \*arabic157 Now, the jury is out as to whether the younger person under 39 is interested in those classic movies. In fact, I think we're households that do participate and watch and like classic movies. In facts, there are generations of young people now that know more about the history of motion pictures than some people in my age group. I do believe there's been a cross‑over.
seq level0 \*arabic158 Of course, in the 18 to 39 area, not only is it a declining population base, but they're watching television differently and a lot less of it. And I think eventually we'll learn how to get them back in the sense that they're really going to be watching television on their computers and the merger between our computers and our television sets is now taking place extremely rapidly and that is our future and I think we'll get them back at that time.
seq level0 \*arabic159 The real point is that there's no way for us to really know what we're going to do with the under 39, but we're just simply demonstrating to the Commission that we can hit our modest revenue targets really just with the generations that we've talked about, with the aging boomers and those persons over 55 now, and that ballooning age category which is demonstrably underserved in Canada by Canadian television.
seq level0 \*arabic160 THE CHAIRPERSON: Okay. I think I have your answer. You have a great deal of broadcasting experience in your team, and I guess I'm wondering whether you could point to another example of a commercial over‑the‑air station that has succeeded with its primary revenue driver being movies that are seven years old or more.
seq level0 \*arabic161 MR. WILKS: I did mention WTDS, which is the Turner broadcast system in Atlanta, Georgia. Remember in America when they introduced cable television, in Canada, we introduced cable really because that was the only way you could get NBC, ABC, CBS, the big American Stations. That's what drove the cable penetration in this country.
seq level0 \*arabic162 In the United States they already got NBC, ABC, CBS, so how do you sell a cable subscription? They never reached our levels of penetration in the United States, but what they did grow it on was really the super stations, WTBS, the Turner broadcast, which he parlayed his success, the money that he made off his movie station, into a thing called CNN, which is now 25 years old.
seq level0 \*arabic163 But WGR in Chicago ‑‑ WGN, check that, in Chicago is a classic movie television station. It's been running movies now for 58 years successfully. Classic movies, nothing else except classic movies.
seq level0 \*arabic164 WPIX in New York City, KHJ in Los Angeles, our American super stations that they call them that run and have lived forever on classic movies. And now there are actually two more in California recently that have been added to lexicon of over‑the‑air commercial television stations. They've become so popular in America, in fact, that they're extremely profitable corporations.
seq level0 \*arabic165 Canada, we've never had to do it before because the way that we were aligned there was enough foreign programming that we would simulcast from NBC, ABC, CBS and Fox. But we saw that as an entirely risky process, meaning in order to get the simulcast rights we'd be competing against these giant corporations, all billion dollar corporations, that inhabit 93 per cent of the ownership base of commercial television in Canada now.
seq level0 \*arabic166 We certainly can't compete against them in buying power. We also thought it was a faulty strategy in the sense that you were spending most of your money on Americans instead of Canadians It just didn't work out for us.
seq level0 \*arabic167 This was an area that had a proven history. Nobody was using it in this country, the classic movie format. We did research it extensively. I can tell you that the best research material that we got was from the Turner Broadcast Company and their classic movie channel. However, there are other pay TV systems that have been doing it successfully as well. Very successfully.
seq level0 \*arabic168 THE CHAIRPERSON: So you don't have a Canadian example. You're citing the Turner stations. Now, WTBS, as I understand it, is a super station and was, I suppose, driven as much by carrying the Atlanta Braves bring as it was by ‑‑ carrying Atlanta basketball and so forth as it was by movies, was it not?
seq level0 \*arabic169 MR. WILKS: Yes, it is now, but the empire was built, as Mr. Turner himself says so eloquently, I built my empire on old movies and ‑‑ but that's how he generated his income. Of course now he's become ‑‑ has 17 channels in the organization.
seq level0 \*arabic170 THE CHAIRPERSON: The classic movie channel, as I understand it, does not attract advertising so it's, in effect, a subscription‑based service.
seq level0 \*arabic171 MR. WILKS: That's correct. The others do. We do have a history, actually, in Canada with movies. Strangely enough, it's with a television station that's well‑known to us here. CHCH for years ‑‑ Movies 11 was the staple of programming on CHCH. I venture to say that those were the best years of CHCH's life.
seq level0 \*arabic172 They had a classic programmer by the name of Sam Hepshire, who was a genius at programming older movies at lesser cost that generated enormous ratings. In fact, CHCH, the little station down the highway from the big boys in Toronto really got attention. But they were seduced eventually into competing for the ‑‑ especially when Global Television started in 1975, they were seduced into going for prime time simulcast, and the reason that they did that is they wanted to keep it away from Global Television.
seq level0 \*arabic173 I happened to be around in that era and happened to be right in the centre of that. And the CH at that time abandoned the movie format, and from my point of view, history shows that they have not been stable ever since. They've opted for the model that says we're going to spend 50, $75,000 an hour for American programming.
seq level0 \*arabic174 To me, if I want to gambling I'll go to Casino Niagara or Fallsview Casino. I don't think that has strengthened the Canadian Broadcast System, the amount of money they've been spending on foreign programming.
seq level0 \*arabic175 We just ‑‑ for us it was unthinkable that we would enter that area. We had two kinds of programs we could look at. One was the off‑network syndicated classic television reruns. I like that genre. They include Carol Burnett and Lucille Ball and Jackie Gleason and Red Skelton and the list is endless of the classics that are available to us. Those have been successful as well, however those, we believe, have had much more exposure than the 25,000 classic movies libraries and, in fact, we have a belief now for a whole new generation that most people have not even seen those movies at all of the younger generation.
seq level0 \*arabic176 We think there's enormous value in them there hills and that goldmine, and that's the one we've chosen to mine.
seq level0 \*arabic177 MR. NEWELL: May I make a comment on that, Chairman Dalfen? I believe that our revenue model which you're questioning ‑‑ probing on wasn't specifically arrived at by ‑‑ on a program by program basis.
seq level0 \*arabic178 The numbers that we submitted to you were based upon a survey. That survey asked people whether they would watch, how much they would watch. When describing the station, the specific of movies was used. We took our results from the information that we collected and that information supports the ratings data that we supplied, the ratings data drove the ‑‑ based upon market information drove the revenue data.
seq level0 \*arabic179 So we've tried to give the Commission audience information based on fact, not on conjecture. We've asked people whether they would watch, they said they would. We've asked advertisers whether they would support us. We've described again how we were going to get our audience and what kinds of programs we were going to have. They said they would. And I believe that we have demonstrated that we can deliver an audience and can deliver the revenue numbers conservatively that we have filed.
seq level0 \*arabic180 THE CHAIRPERSON: Thank you. I was ‑‑ I take that point, Mr. Newell. I was trying really to understand the classic movie strategy as a driver, the half of a prime time rating point notion and how important that was to your schedule. How that was reached in the demographic that you were dealing with.
seq level0 \*arabic181 I'll now move to the other methodology, so to speak, or the methodology that you used. I appreciate you used two to arrive at your revenue figure. One, a survey of local businesses, and the other the audience projections based on your survey and then converting that into cost per thousand and so forth.
seq level0 \*arabic182 Maybe we can turn to that now. As I understand the Tri‑Media Marketing and Publicity ‑‑ do you have a representative here from that company, Mr. Wilks?
seq level0 \*arabic183 MR. WILKS: No, but we consider in this instance Mr. Newell is, in fact, a neutral expert and he actually set out all of the standards and I ‑‑ none of us at the TVN team participated at all in the process at all.
seq level0 \*arabic184 The framework was established by Mr. Newell and he set out the basic criteria and then I'll let him explain how the ‑‑ what methodology as you require it that was used to actually do this survey.
seq level0 \*arabic185 THE CHAIRPERSON: I'll certainly allow Mr. Newell to do that. I guess in looking at their study, and if there isn't anyone here I hesitate to delve too deeply into it. My understanding of it is it's based on net cost per rating point per thirty second spot averages across the province, and the ‑‑ it's almost arithmetical in terms of how you derive both the cost per rating point and the CPM based on Ontario averages and factoring Niagara, Hamilton's populations into those averages and just deriving a number that comes out to 5407 as a cost per rating point at a CPM of 946. Is that correct?
seq level0 \*arabic186 MR. NEWELL: That is correct. However, those data were not plucked out of the air. They are actual market data which a company that I used to be partner in provided to Tri‑Media for them to make those calculations.
seq level0 \*arabic187 THE CHAIRPERSON: Could you elaborate?
seq level0 \*arabic188 MR. NEWELL: Harrison, Young, Pesonen and Newell was a media buyer from 1979 to 2002. I headed up the television buying portion of that. And so when it came to the time to do the mathematical calculations that you're referring to, I supplied Tri‑Media because they were not ‑‑ they did not have the breadth of the television data that H.Y.P.N. did have. I supplied them with our cost per rating point data and our cost per thousand data, and then they took the data and did the calculations.
seq level0 \*arabic189 THE CHAIRPERSON: Right. And I see that and ‑‑ but they then just plugged those numbers in that you gave them and effectively came up with averages.
seq level0 \*arabic190 MR. NEWELL: That is correct.
seq level0 \*arabic191 THE CHAIRPERSON: So do you want to elaborate, and perhaps we can focus on ‑‑ again, again, let me preface this question by saying that in trying to understand, you know, you're a Niagara station, but you're clearly going to be drawing revenues in the Toronto extended market if you're successful.
seq level0 \*arabic192 You've given us in section 53 of the application the weekly hours of 2 plus that you expected to generate, weekly hours of tuning and then your share. The numbers are set out in the application at section 5.3, which, of course, is a focus on Niagara. And you don't provide in your application revenues that ‑‑ weekly hours and share in the Toronto EM.
seq level0 \*arabic193 Can you explain why you don't do that and how reliable the Niagara figures alone are for assessing your projections?
seq level0 \*arabic194 MR. NEWELL: Thank you. The first part of the question is we based the projection for audience on the Tri‑Media study, which was a study of the twelve towns and cities, the twelve counties or groups that constitute the region of Niagara.
seq level0 \*arabic195 We ‑‑ we're applying for a Niagara license. We're not applying for a Toronto license, and so we wanted to focus on what we consider to be our core market. We didn't study Hamilton, we didn't study Burlington, we didn't study Toronto. We only studied the twelve counties.
seq level0 \*arabic196 When we studied the 12 counties and asked them the questions we asked, we found that there was sufficient support to justify the audience and the revenue numbers that prior to our getting involved in this that management of TVN had come up with on their own.
seq level0 \*arabic197 We then studied businesses and they came up with another ‑‑
seq level0 \*arabic198 THE CHAIRPERSON: Excuse me. Mr. Newell. Sorry to interrupt you, but are you saying that your study was done to validate what management had done?
seq level0 \*arabic199 MR. NEWELL: No, it was not. The study was done to find out ‑‑ at the time that we did the study I was ‑‑ myself and my partners were considering becoming shareholders and basically the study was done to see if ‑‑
seq level0 \*arabic200 THE CHAIRPERSON: Focuses the mind, right?
seq level0 \*arabic201 MR. NEWELL: The focus was to find out whether this was a viable project. That's why I was interested in doing it. And so I don't want to give the impression that the study was done with any other purpose than finding out whether or not people in Niagara would ‑‑ first of all, whether they considered themselves to be a market because, frankly, we didn't consider them to be a market, we considered them to be part of Toronto.
seq level0 \*arabic202 For forty some odd years if someone had said to me, you know, would you buy a Niagara television station, I would have said, no, I've already got enough rating points in Niagara by buying Toronto and Hamilton. It's only when we did the study and we found out that there was, in fact, a separate definite market that was different than Toronto and different than Hamilton and that they would support the station that I started to get excited. Part of that time I was pretty sceptical.
seq level0 \*arabic203 THE CHAIRPERSON: The Niagara area shares that you put forward in your application, you then simply used as ‑‑ to drive your revenues by multiplying the cost per rating point that was driving the Tri‑Media study based on the averages?
seq level0 \*arabic204 MR. NEWELL: That is actually, Chairman Dalfen, one of four ways that we arrived at the revenue. One was driven by audience, one was driven by advertisers, one was numbers that were given to us by management and the fourth way was the Media Alternatives, we asked them to guess what the numbers would be.
seq level0 \*arabic205 And from four different sources basically you could throw a blanket over the revenue numbers that everybody came up with independently and from different ways.
seq level0 \*arabic206 THE CHAIRPERSON: So if you multiply those numbers out, you will get the cost per rating point times the share number, you'll get your revenue number as a global matter?
seq level0 \*arabic207 MR. NEWELL: That's correct. If you follow the study based upon the number of people who said they would watch and how often that they would watch it, we arrived at an average quarter hour audience and we multiplied that times the number of hour a day times number of commercials per hour times the cost per rating point, and came out with a number of, I believe ‑‑ depending upon which scenario ‑‑ because we did a 40 per cent, 60 per cent, 80 per cent, a hundred per cent capture, sell‑out, et cetera, we arrived at a number that would be between 8 and 17 million dollars.
seq level0 \*arabic208 THE CHAIRPERSON: Right.
seq level0 \*arabic209 MR. BUCKHALTER: From a national perspective, agencies who purchase media on behalf of their clients do not analyze the specific shares of individual stations in order to come up with an assessment as to where they would be placing their monies on behalf of their clients.
seq level0 \*arabic210 They're doing so based on programs, based on rating delivery, not on share of hours tuned.
seq level0 \*arabic211 THE CHAIRPERSON: That was going to be my next question. So you achieved the global revenue picture that way and then you subdivided that down between national and local based on the considerations related to your program in your local market, is that correct?
seq level0 \*arabic212 In other words, the number you gave me of between eight and 17,000,000 ‑‑ I thought it was 10 and 17,000,000 in your application ‑‑
seq level0 \*arabic213 MR. NEWELL: I think the ten is sixty per cent and the eight is 40 per cent, but, yes, sir, you're right.
seq level0 \*arabic214 THE CHAIRPERSON: Those gave you the global revenues for the station overall.
seq level0 \*arabic215 MR. NEWELL: Correct.
seq level0 \*arabic216 THE CHAIRPERSON: And then what would you have done, and Mr. Buckhalter anticipated, but what would you have then done to break them down? You, for example, have a ratio of national to local of what, roughly 55 to 45?
seq level0 \*arabic217 MR. NEWELL: Correct.
seq level0 \*arabic218 THE CHAIRPERSON: Which is, of course, far different from most broadcasters.
seq level0 \*arabic219 MR. NEWELL: Correct.
seq level0 \*arabic220 THE CHAIRPERSON: So how did you, in other words, validate that global figure of revenue that your four methods produced and suggested was within that range? How did you then divide it up between the national and the local?
seq level0 \*arabic221 MR. NEWELL: I'm sorry, Frank Thibault and myself on the 11th hour and 59th minute before our filing sat down and answered that question. And we obviously estimated it, but just after ‑‑ I'll let you go, but my thinking, our thinking, my personal thinking on it and then we had to collaborate obviously, but my personal thinking on it was that the Tri‑Media audience study said we'd do eleven and that was just based upon the twelve markets.
seq level0 \*arabic222 The businesses said we'd do ten to thirteen, I think the number was, and that was just based upon the Niagara business people who said they definitely would advertise on the station. So that was another kind of number that I had ‑‑ or we had in our head.
seq level0 \*arabic223 We asked the national people what they thought they would do and they said, well, you know, by and large nobody's going to watch ‑‑ nobody's going to want to buy the news from Toronto, nobody's going to want to buy the local programming from Toronto, they're just going to want to do the movies, and we think we can do, on your famous .5 rating, we think we can do this kind of advertising revenue.
seq level0 \*arabic224 So we said, well, we're going to do eleven million dollars. Most of it should be national because most of the money that's spent in Canada is national advertising money. It's four or five times as much as local, but we do have a hell of a lot of support here in St. Catharines, Niagara, in the Niagara region. We think we might be able to do it by ourselves alone, so why don't we say 55, 45.
seq level0 \*arabic225 THE CHAIRPERSON: Hence the science of it.
seq level0 \*arabic226 MR. NEWELL: Hence the science of it.
seq level0 \*arabic227 MR. THIBAULT: You mentioned that our ratio is off from what a lot of people do. Most of my background comes from working in Red Deer, which was a market that was really dependent on local retail. And our ratio was 70 per cent retail and 30 per cent national for a lot of years. It changed slightly when the station started to market itself more into Edmonton and Calgary, and so we increased on the national revenue, but the local revenue was the mainstay of the station. That's what kept the boat afloat, so to speak.
seq level0 \*arabic228 In this particular case, one of the things ‑‑ and Doug briefly alluded to it, but what the strategy here is from a sales standpoint and from an audience standpoint is that we have two distinct types of programming and two distinct revenue sources.
seq level0 \*arabic229 The movies are designed to generate an audience and revenue from the Toronto area and ‑‑ Toronto, Hamilton. The local programming is designed to generate audience and revenue from the Niagara region, and that is what makes it different when you us compare us to CKVR Barrie or you compare us to a Peterborough or any other station and we start looking at percentages. Because what is controlling our percentage is the number of hours of programming in each of the two different categories and where that programming is placed.
seq level0 \*arabic230 And that's why we've got a ten p.m. newscast as opposed to a eleven p.m. newscast, to generate the local revenue that's required you have to get be able to get the audience. You're going get a much larger audience at ten o'clock for a local newscast than you are at eleven o'clock just because there's far more people available watching television at that time period so you've got a much better chance of getting them to watch you.
seq level0 \*arabic231 When we went through the analysis, this was what really drove the percentage ending up where it is.
seq level0 \*arabic232 The other thing is, I worked on the management side of the equation that Doug was talking about when the numbers were first presented and I'm relatively conservative by nature. That's why our numbers are lower than what's in the Tri‑Media survey. I like to look at it from the standpoint of, well, okay, I've got some experience in certain market. I've looked at what people do, what they don't do, what they'll watch, what they won't watch.
seq level0 \*arabic233 There's a big difference between a survey that says people will do something and what they actually do. Classic example is everybody says they watch PBS. PBS can tell you, no, they're not. They wish they were, but they're not.
seq level0 \*arabic234 So I tried to get a little more realistic. Let's make sure that what we're saying is what is really achievable, not pie in the sky. We don't want to be launching a station with a bunch of local programming and then six months later have to turn around and start cancelling because we don't have the ratings that we projected and therefore we're not getting the revenue that we projected.
seq level0 \*arabic235 The numbers that are here are, from my standpoint, very achievable and that was why, I guess, they're a bit lower than what Tri‑Media has got because they were basing their numbers off of a consumer survey and a business survey which might be just a bit higher than reality.
seq level0 \*arabic236 MR. WILKS: Mr. Chairman, the actual numbers are really astonishing. The Tri‑Media survey said that we would do between eleven and 17 million dollars in retail advertising in our first year. Our projection is 5.6 million. We've obviously discounted the information because we really wanted to make sure that we could do it and not gamble and that was the best way to do it.
seq level0 \*arabic237 When we look at retail, retail advertising is not a factor in the Golden Horseshoe. Television retail advertising is not a factor. I can simply point out to you that the retail advertising on the prairies in Canada is equal to all of the retail advertising in the entire Province of Ontario. In fact, the only places in Ontario where there are significant retail are in the markets like Kingston, Ontario, where I manage the television station. Peterborough, Sudbury, North Bay, Timmins, Pembroke, Ottawa, London, Wingham, Sault Ste. Marie. Those are the stations that generate the retail, but in the Golden Horseshoe retail is just not a factor.
seq level0 \*arabic238 It is to a small degree with some specialty channels such as Omni, who does retail to their distinct ethnic audiences very effectively, but in the great Toronto area and our area there is no retail business and the reason is quite simple. They sell out to national advertisers.
seq level0 \*arabic239 We don't predict to have that luxury, so we intend to be local. When we looked at local, we discovered the most astonishing thing in Niagara, and that is that 76 cents of every dollar that's spent here in tourism, which is 25 per cent of our economy, is coming from foreigners. Only 24 per cent of the economy is coming from visitations from Canadians.
seq level0 \*arabic240 Even though we're Canada's number one known tourist destination, their participation has been noted. And in a time of international tension, this is a matter of grave concern for Niagara. And what we found when we did the survey is we found this pent up need to reach our neighbours so that they, the five million of them on the north side of the lake, could come down here and just simply bring their money, but not ‑‑ we don't want to urbanize this side of the lake like they did on the north side of the lake. We don't want to bring that influence from them, but they've been selling us as a people to their audiences for fifty years and they haven't been giving us a payback.
seq level0 \*arabic241 Now we're simply looking to fulfil the part of the Broadcast Act which says, "Relate the diverse regions one to the other." So that's what rationalized our thinking.
seq level0 \*arabic242 THE CHAIRPERSON: I guess when I read your material, the inference I drew, and you'll correct me if I'm wrong, was that you need to raise as much as you can locally and you're counting on the optimism that we saw on the video and in your support from advertisers locally to do that because you have a problem with national revenues.
seq level0 \*arabic243 We talked about the movie strategy and we ‑‑ your own report from Media Alternatives has statements in it like, you know, it will be a difficult task to change the thinking of most agencies about placing ads in Niagara stations because they can get it through Toronto, Hamilton. They don't like to buy TVN for Niagara alone.
seq level0 \*arabic244 Your consultant says that national advertisers will demand attractive rates and so on. So there is a problem and, in effect, you see yourselves making it up by beating the bushes in the local region and making as much revenue out there as you can. Is that an unfair characterization?
seq level0 \*arabic245 MR. WILKS: It is. And with great respect, it actually comes from really a fundamental practical experience.
seq level0 \*arabic246 I had the pleasure of leading the second independent television station in Canada on air, ITV Edmonton. We started with the great classic movie "Hello Dolly" and that television station quickly in a three station market became number one. We had the same problem as an independent station. National advertisers don't know anything about you. They're going to wait and see.
seq level0 \*arabic247 So what did we do as a result of that? Well, we made a kind of history which, in fact, I don't mind telling you that we're replicating here. Here's what we did. We sold out retail for the first four months. National advertisers could not buy the television station because we sold out to retail.
seq level0 \*arabic248 In fact, in that process we discovered ‑‑ we took, for instance, a little corporation locally which was a discount furniture operation called The Brick, convinced them to go on television, and now they're one of the largest retailers in the nation. And he credits it all, Bill Comrie credits his entire success to starting on local television.
seq level0 \*arabic249 In fact, retail is a big factor in many parts of the country. Where Commissioner Cram is from in Saskatchewan, Yorkton, Prince Albert, Saskatoon, Regina, retail is big business. In fact, as I said to you, it's a big in the prairies as it is in all of Ontario, which, of course dwarfs the prairies in population.
seq level0 \*arabic250 It's just a factor here. Here in Toronto when the new television station signed on, if they had actually groomed a retail face in the first instance they may not have had the struggles that they had. That's just ‑‑ it's easy to look at things in hindsight.
seq level0 \*arabic251 I'm simply saying we've been through this experience. We found that developing retail is the safest insurance that you can buy that you're going achieve your objectives, because we do think that national will lag.
seq level0 \*arabic252 MR. NEWELL: I'd also like to add that some of the money that is coming from national, even though it won't be bought for Niagara by itself, is actually Niagara money in the sense that all the franchisees like McDonald's and Harvey's, Swiss Chalet, Montana, et cetera, et cetera, they have to make a contribution based upon their sales two and a half per cent and two per cent, whatever it is, and those monies they would rather them be attracting people locally than people that are going to have to drive 50 or 60 miles.
seq level0 \*arabic253 So we will get some money from McDonald's and those kinds of ‑‑ because of franchisees. We'll also get probably GM, Ford, Honda dealer association monies and that will lessen the load on local. But I agree that we are going to take a very aggressive local advertising strategy.
seq level0 \*arabic254 THE CHAIRPERSON: In terms of national spot, Mr. Newell, just to comments, a number of the interveners have raised the issue that the national spots market is weak currently. Is that your perception? If so, how does that affect, again, your national revenue picture?
seq level0 \*arabic255 MR. NEWELL: I'm apparently not supposed to say this, but I'm retired and so as of 2002 I would totally disagree with ‑‑
seq level0 \*arabic256 THE CHAIRPERSON: As of 2002?
seq level0 \*arabic257 MR. NEWELL: 2002. I would totally disagree. David, however, has provided me with some information that certainly shows that the market is not that way and maybe he could answer that question as well.
seq level0 \*arabic258 MR. BUCKHALTER: I certainly think that it's important to keep it within the context. That is the Toronto, Hamilton national spot sales are nearing $600,000,000, which is a 60 per cent increase since the year 2000.
seq level0 \*arabic259 TVN is looking for 6.4 million dollars within that universe. In terms of the weakness, we came to it from a different perspective. Not one based on a short term economic blip that perhaps some of the interveners were experiencing, but a comprehensive, longer term picture as to the financial viability of the market over the past five years.
seq level0 \*arabic260 We looked some of the issues pertaining to ‑‑ we looked at, for example, the unemployment rate. Statistics Canada came out ‑‑ have come out with 352 monthly reports that suggest that out of those 352, over a 29 year period only three times has the national unemployment rate been lower than in current years. That was 6.7 per cent as opposed to 6.8 per cent.
seq level0 \*arabic261 The BMO's, Nesbitt, Burns chief economist has suggested that Canada will lead the G7 countries in economic growth in '06.
seq level0 \*arabic262 The Conference Board of Canada has suggested that the Metropolitan Toronto census area will lead the country in economic growth throughout '06. So we've used some of the interveners' suggestion that there is a weakness to the market certainly as a short term proposition.
seq level0 \*arabic263 THE CHAIRPERSON: Thank you.
seq level0 \*arabic264 MR. SNOOK: If I can just add to that, Chairman Dalfen, the recent study that was completed for the Ontario government called the Greater Golden Horseshoe forecast, the Ontario government is going through a major study on primarily how to deal with the growth here in the Greater Golden Horseshoe.
seq level0 \*arabic265 Just to read briefly from that. It says. "The new forecast called for a large quantum increase by 2031." Seems like a long way away, but it's only about 25 years, and, the Greater Golden Horseshoe population, which of course includes Toronto, Hamilton and Niagara, is actually going to grow by almost four million people. There's going to be over 1.6 million new housing units start and over 1.7 million new jobs.
seq level0 \*arabic266 They clearly point that the Golden Horseshoe is continuing to be the power engine for Canada. So to suggest that there's a slowness happening in the Golden Horseshoe is actually the complete opposite.
seq level0 \*arabic267 MR. BUCKHALTER: The Ontario television market over the past five years, according to the CRTC figures in terms of national spot sales have increased by 23 per cent. During the same period, the Canadian average is 12.5 per cent.
seq level0 \*arabic268 The Ontario profit before interest and tax over the past two years at close to 16.7 per cent is 31 per cent above the Canadian average during the same period. According to CanWest Global's own intervention, they point to pretax profit analysis and over the past year they point to the Toronto Hamilton market having an 18.5 per cent higher profit or pretax profit than the Canadian average of 6.4 to 5.4.
seq level0 \*arabic269 So I think that within the context of the market and in addition to looking at total Canadian television revenues, which over the past four years, from 2000 to 2004, have increased nationally by 1.1 billion dollars. This is a healthy market, one which is thriving, that is increasing its revenue base by 225 million dollars annually. This is a new Canadian kid on the block looking for a very, very, very small percentage of that.
seq level0 \*arabic270 THE CHAIRPERSON: Thank you. If I can turn to your Appendix 5B, which is the impact of your revenues on ‑‑ or the sources, if you like, of the revenues and the impact on existing media, where you would draw those revenues, and it's a year 2 analysis, as you probably know. You gave us shares when you simply use those numbers and divide them into the 13 million. In the second year you get a series of numbers.
seq level0 \*arabic271 There's three areas I'd like to explore with you there. The first is you project about 5 million of the 13, 38 per cent of your revenues for the second year to come from existing conventional television. Could you elaborate on how you came to that number?
seq level0 \*arabic272 MR. NEWELL: I'll take that, Chairman Dalfen. Again, it was 11:59 prior to the filing. Take you back there, but however, we relied very ‑‑ again, very heavily on the data that we had collected from Tri‑Media.
seq level0 \*arabic273 What we found was that about ‑‑ of the people who said that they would definitely advertise, almost half of them said they would increase their budgets. They were very few of them, I think only 16 per cent, that were using television already. The amount of share of advertising that they said that they would put on the station of the $44,000 that they spent in a year, about 26 per cent would be allocated on average to the new station.
seq level0 \*arabic274 So we took all of that data and said if we're going to do the 13 million dollars that you used ‑‑ actually, I thought it was eleven million.
seq level0 \*arabic275 THE CHAIRPERSON: This was just a second year analysis.
seq level0 \*arabic276 MR. NEWELL: Yes, I'm not going to argue with you on any issue at all. I'm just going on my memory.
seq level0 \*arabic277 THE CHAIRPERSON: Any time you think I'm wrong please let me know.
seq level0 \*arabic278 MR. NEWELL: Not at all, sir. Not at all. In response to the question, we thought that of the 13 million dollars or eleven million dollars, whatever it was, about half of it was going to come from existing television and so what percentage of that would be from conventional ‑‑ because there are no conventional stations in Niagara. What part of it would be coming from Buffalo what part of it would be coming from Toronto or from Hamilton or from network or whatever. We just divided ‑‑ we said there's 2.1 billion dollars being spent in conventional television, there's another 730 million dollars being spent on specialty, pay, digital, whatever. Of all of that, we're looking for a total of eleven million dollars. Five million of it is going to come from existing television. The split will probably be 35‑16, 38‑16, but it might be 48‑6. As I said, we put some numbers there.
seq level0 \*arabic279 THE CHAIRPERSON: Thank you for your candour. You mentioned Buffalo in there though, and I guess I was wondering about ‑‑ Buffalo isn't mentioned. I guess you include those as existing off‑air conventional stations in this particular analysis?
seq level0 \*arabic280 MR. NEWELL: We would include the ‑‑ I've been to quite a few hearings where the famous Buffalo repatriation story has risen its head and its 40 million dollars a year, it's 20 million dollars a year. The last time I checked somebody told me it was 16. It's rapidly being repatriated, I suppose.
seq level0 \*arabic281 At any rate, the Buffalo money would be in the 54 per cent that we've included as existing ‑‑ when I say existing, I mean A and B as 54 per cent.
seq level0 \*arabic282 THE CHAIRPERSON: When you say A and B you mean existing ‑‑
seq level0 \*arabic283 MR. NEWELL: Existing off‑air television and existing specialty. So I'm saying that's where we roughly ‑‑ we would get half of the monies that were we're projecting. What the split is we made up.
seq level0 \*arabic284 MR. BUCKHALTER: Referring to the Buffalo component, in that number ‑‑ I mean in 1998 the CAB suggested that that number was 18 million dollars. In Craig Media's application hearing in 2001 in December, they suggested 24 million dollars was going across the border.
seq level0 \*arabic285 Our notion is that the 14 to 16 million dollars is currently going across the border, a portion of which we would expect to repatriate in terms of bringing back to Ontario, in terms of people watching Ontario as well as being able to contribute some of that money back into Canadian production.
seq level0 \*arabic286 THE CHAIRPERSON: Okay. And radio, is that the same? You estimated about eleven per cent coming from existing radio. What's your thinking on why radio advertisers would shift to your station? Is this your heavy focus on retail?
seq level0 \*arabic287 MR. LUTCHIN: Chairman Dalfen, actually based on our ‑‑ not only our quantitative study through Tri‑Media, but our qualitative study, that both myself and Mr. Wilks spent talking to hundreds of business across Niagara. Being responsible for the sales team, I don't see us actually selling against radio at all. In fact ‑‑ so that number I would say that we filed with you is actually high.
seq level0 \*arabic288 Niagara has a disproportional number of newspaper and print operations here. There's ‑‑ for want of a better way to describe it, there's almost a newspaper on every corner here in Niagara.
seq level0 \*arabic289 I did a little bit of a study that I'd like to share with you and other members of the Commission. Putting the Niagara market in the context of Southwestern Ontario; for example, in London the population CMA base there is relatively close to Niagara. Their total advertising spending in London, Ontario is 181 million dollars.
seq level0 \*arabic290 In Kitchener, the Kitchener‑Waterloo market is about 186 million dollars. Again, population base just a little higher than Niagara.
seq level0 \*arabic291 If you come down to us here in Niagara, we're currently ‑‑ have a retail spend of over 5 billion dollars a year and growing, and our total advertising spend is 162 million.
seq level0 \*arabic292 I've talked to many of the radio station broadcasters and, in fact, have a very close friend in this audience right now ‑‑ at least I think he's here. He told me he's going to be here. Who is actually an owner. He's actually looking forward to having TVN on the air as a radio station colleague because he believes that we will raise the overall awareness and profile of Niagara, not only with local Niagara advertisers and consumers, but also across on the north side of the lake. So radio station are actually, we believe, hoping TVN gets on the air.
seq level0 \*arabic293 From a sales team perspective, without disclosing all of my strategy, we'd be pleased to do that, but certainly out of that 162 million dollars, at least 60 per cent of that here in Niagara is being spent on print. At least 80 to a hundred million dollars of that.
seq level0 \*arabic294 So for TVN to be successful, if you took a look at both our local and national time sales, out of that 162 million, if you took everything, we would only have to get seven per cent to be viable.
seq level0 \*arabic295 If you just took us on a local sales perspective, we would only need 3.5 per cent of that 162 million dollars. Spending here in Niagara and, in particular, on television is much lighter than in other parts of not only Southwestern Ontario, but throughout Canada.
seq level0 \*arabic296 Mr. Newell had referred to our Tri‑Media study that talked about the advertisers that we sampled said they would spent about 26 per cent of their budget reallocated would be spent on TVN. It just so happens, and I actually didn't realize this until last night when I was poring through my notes, but that 26 per cent spending they are telling us they would spend on TVN, correlates directly to the Television Bureau's total advertising spending of 26 per cent on television sales in Canada.
seq level0 \*arabic297 What it's telling me, and it's confirming again through at least another four or five different strategies, that what we're hearing in our studies is tracking exactly where it should be.
seq level0 \*arabic298 THE CHAIRPERSON: I guess you weren't at 11:59 meeting, were you.
‑‑‑ Laughter / Rires
seq level0 \*arabic299 MR. LUTCHIN: I think I missed that one.
seq level0 \*arabic300 MR. NEWELL: Chairman Dalfen, however in answer to your question, we did use the information from the Tri‑Media study which did say that they ‑‑ of the advertisers who would definitely advertise on the TVN station, almost half of them said that they would spend less on radio and that was ‑‑ even though it was minimal amount that was quoted, that's where that number came from.
seq level0 \*arabic301 THE CHAIRPERSON: Thank you very much, Mr. Newell. Mr. Wilks, gentleman, lady, thank you very much. That was very helpful.
seq level0 \*arabic302 We'll now break for fifteen minutes. Nous reprendrons dans 15 minutes.
‑‑‑ Upon recessing at 1115 / Suspension à 1115
‑‑‑ Upon resuming at 1137 / Reprise à 1137
seq level0 \*arabic303 THE CHAIRPERSON: Order, please. À l'ordre, s'il vous plaît.
seq level0 \*arabic304 THE CHAIRPERSON: We will now continue the questioning. Vice Chair French.
seq level0 \*arabic305 COMMISSIONER FRENCH: Thank you, Mr. Chairman. Mr. Wilks, I'm just going to pursue some technical aspects of your application, which I think we can deal with reasonably rapidly and concisely.
seq level0 \*arabic306 I'll try to ask my questions in as straightforward a way as possible and perhaps we can maximize the time available to talk about what's actually on the screen, as we've been able to do so far to a certain degree.
seq level0 \*arabic307 With respect to your plans for moving to digital, can you tell us what your current plans are and what the key considerations would be. In your ‑‑ in the material that's currently before us there are three or four different dates given and I'm sure that you'd like to clarify that in our minds please.
seq level0 \*arabic308 MR. WILKS: I would indeed. TVN. Niagara intends to be ‑‑ at the beginning of its existence to be a one hundred per cent digital HDTV service.
seq level0 \*arabic309 COMMISSIONER FRENCH: Sorry, Mr. Wilks. Is everybody all right here? Is somebody hurt? Once again we see that technology is much less perfect than the human beings who created it.
seq level0 \*arabic310 I'm going to let you start again please. The question was what are your plans to convert to digital and what were the considerations or factors going into your decision?
seq level0 \*arabic311 MR. WILKS: As I did say and I will repeat, TVN Niagara commences its life as a full digital, high definition television service and a hundred per cent of our programming that we run that's Canadian will be high definition television. Also with the ‑‑ with the movie, we're also high definition television with the movie format.
seq level0 \*arabic312 Let me explain what has changed with us. For a time some of my shareholders and colleagues were distressed with the process of going through an application. It's taking too long. Well, in fact, let us confess today that the delay has helped TVN enormously. And I'm going to ask my engineer, Dave Storey, to explain why the passage of time has changed our circumstance. Dave.
seq level0 \*arabic313 MR. STOREY: Monsieur Vice Chair, when we first did our budget in 2003, we were looking to be a hybrid analog digital station, but as time has progressed and technology has improved, it didn't make sense to design a plant that was anything other than high definition. And with the recent visit to NAB this year, showed that even the news reporter cameras could be cost effectively purchased for a reasonable amount.
seq level0 \*arabic314 So our plan is to have an ‑‑ internally a high definition station and down convert to our analog transmitter. In doing so, it allows us also to ‑‑ with the aspect of Channel 22 and high again antenna to reduce the power of our transmitter from 40 kilowatt to 20 kilowatt, allowing more or less of a half price cut in the price of the transmitter, allowing sufficient budget to purchase transmitter and ancillary gear to be able to transmit license pending to be simultaneously analog and digital high definition right out the gate.
seq level0 \*arabic315 MR. WILKS: To put it into perspective, cameras which were near a hundred thousand dollars to purchase, high definition cameras of that same quality are now being marketed because of the introduction of that technology mainly in the United States, they're selling in the range of $18,000 per camera. So that allowed us to do several things, which is to increase the number of cameras that we have.
seq level0 \*arabic316 But more importantly, with transmission, you today are considering our application for an analog service. We have been working with Industry Canada to ascertain the availability of our companion digital HDTV channel and Industry Canada has cleared channel 48 for our use, subject to your approval, of course.
seq level0 \*arabic317 We will be going through that process the moment the decision is made, and assuming it is positive, we would file the application for the digital transmitter and would simultaneously broadcast on both HD digital and on our analog transmitter, to be the first television that's all digital in the country. All digital, all HDTV.
seq level0 \*arabic318 COMMISSIONER FRENCH: Sorry, Mr. Wilks, when exactly ‑‑ I know you can't be absolutely precise, the future is uncertain, but what are your intentions with the timing of that filing?
seq level0 \*arabic319 MR. WILKS: Assuming the Commission would deal with the application for the secondary transmitter, which is the digital service, we would expect that by the spring of 2006 or the summer of 2006, latest, that both analog and digital would be signing on simultaneously.
seq level0 \*arabic320 COMMISSIONER FRENCH: Can I just be completely clear about the movies you want to acquire. Will they all be digitally formatted?
seq level0 \*arabic321 MR. WILKS: Yes, all of the moves ‑‑ it's a requirement. We've been dealing with the majors now, and in America where the transition has been much more quick into digital HD television, the transition of the great libraries has been the major industrial activity in America.
seq level0 \*arabic322 We're finding in the international marketplace that the films of Europe and the United Kingdom are going through the same transition. They're all being put into a standard 1,000 ADI digital high definition format. They're all formatted in letterbox size.
seq level0 \*arabic323 COMMISSIONER FRENCH: So when you say it's a requirement, it's your requirement?
seq level0 \*arabic324 MR. WILKS: It's our requirement. We're not going to buy any ‑‑ I shouldn't really say that. If there was a significant movie in an historical package that obviously you should not preclude some of the great works of art from history because they're not in the right technical format.
seq level0 \*arabic325 COMMISSIONER FRENCH: Understood. And in terms of even news gathering equipment and remote operations will all be digital because the price points are declining rapidly?
seq level0 \*arabic326 MR. WILKS: Yes, that is correct. I'm going to let Dave answer the question, but I want to mention one small thing.
seq level0 \*arabic327 We have been doing some experiments where we moved a signal from this ‑‑ just out in the street a block away to Brock University, a full wireless signal from here to Brock University of broadcast quality without any microwave, without any satellites, which is some exciting new technology that we intend on using, working with Canadian corporations, I might add, in developing that technology. David.
seq level0 \*arabic328 MR. STOREY: To answer your original question, vice chair, yes our news gathering gear, equipment will be high definition and we will be doing some file conversion factors to service our analog service as well. So the image will be originated in high definition and down converted.
seq level0 \*arabic329 COMMISSIONER FRENCH: Thank you. You've been working with your consulting engineer about a possible allotment for digital. Will it be possible to duplicate your analog coverage, and, if not, will there be ‑‑ will an issue arise with cable carriage?
seq level0 \*arabic330 MR. WILKS: No. In fact, it achieves the same objective. From the tower site that we've been working on, we understand from our engineer that the HD transmitter ‑‑ Gordon Elder, our consulting engineer, advises us that we will reach the same pattern.
seq level0 \*arabic331 COMMISSIONER FRENCH: So the extent that you have priority status, you'll retain your priority status?
seq level0 \*arabic332 MR. WILKS: That's correct.
seq level0 \*arabic333 MR. STOREY: The intent is the patent with using Channel 48, which is what Industry Canada has pointed to us, the preliminary investigation shows that we can achieve the same sort of pattern as we would from our analog.
seq level0 \*arabic334 COMMISSIONER FRENCH: Thank you very much. I don't have anything further.
seq level0 \*arabic335 THE CHAIRPERSON: Thank you. Commissioner Cugini.
seq level0 \*arabic336 COMMISSIONER CUGINI: Good morning, Mr. Wilks and colleagues. My questioning this morning will focus primarily on Canadian content and the commitments you have made in your application both to local programming and your priority programming.
seq level0 \*arabic337 So my first question for you today is could you confirm for us that the 34.5 hours to which you referred in a letter dated January 26th in response to staff questions are indeed original hours, as you say, produced by ‑‑ which are Niagara originated programming, produced either by the station or Canadian independent producer resources? I just want confirmation that they are, indeed, original.
seq level0 \*arabic338 MR. WILKS: Yes, ma'am, they are.
seq level0 \*arabic339 COMMISSIONER CUGINI: And you would commit to that as a condition of license?
seq level0 \*arabic340 THE WITNESS: Yes, we would.
seq level0 \*arabic341 COMMISSIONER CUGINI: I checked your description of Canadian programs in block schedule, and it appears that all but Six Nations Report are station produced. I do take note that you do say in your letter either/or, but are there any other programmes that would be made up of those 34.5 hours that would be produced by independent producers other than Six Nations Report.
seq level0 \*arabic342 MR. WILKS: Yes, they are now ‑‑ an order, for instance, for Six Nations to deliver the programming they had to go through a technological upgrade as well.
seq level0 \*arabic343 That is why we've appropriated $80,000 in an initial grant to them, not a loan, but a grant, in order that they can equip their operation to deliver us the HDTV programming.
seq level0 \*arabic344 But, remember, what we've said in the application is that, particularly with reflection of our aboriginal population, that they are also contributing on a daily basis to all of our programming. They're not precluded, but that particular half hour they are also delivering us shorter item ‑‑ regular items for news and public affairs programming on a regular basis.
seq level0 \*arabic345 But the only other issue that we're facing at the present time is the reality that the independent industry in Niagara has not yet made the transition to HDTV. They're still NTSC analog by and large in the production sector. So that actually sent us back to the drawing boards to ensure that they had the tools to deliver the program to us, programming to us.
seq level0 \*arabic346 So the way that we approached it was that we built a technical complement, increased the size of our production capacity with studios and equipment and mobile units, but we did it with the assumption that independent contracted Niagara producers will, in fact, deliver the programming; that they will act as the writer, producer, directors of the programming, but we're making, in effect, in the language of our business the below the line facilities contribution to them until they get the transition made themselves where they develop their own HDTV capacity, HDTV digital capacity.
seq level0 \*arabic347 So the answer is in the news and public affairs programming, the hard news, the newscasts, per se, are all developed by the 90 persons that we employ, the full‑time staff.
seq level0 \*arabic348 But beyond that when it comes to long form documentaries, when it comes to the delivery of some priority programming, which includes drama and light entertainment, pretty much all of that is delivered by independent Niagara producers. And we have not talked to any other producers outside of Niagara and we, of course, found an amazing community of professionals that live here and have never had this opportunity.
seq level0 \*arabic349 COMMISSIONER CUGINI: That leads so well into my next question. So you do confirm that, in fact, the 34.5 hours will be reflective of the Niagara region.
seq level0 \*arabic350 MR. WILKS: Entirely.
seq level0 \*arabic351 COMMISSIONER CUGINI: Could we further define locally reflective as programs that are station productions or programming that reflects the particulars needs and interests of Niagara region residents produced by Niagara region independent producers and would you accept that as a condition of license?
seq level0 \*arabic352 MR. WILKS: We would.
seq level0 \*arabic353 COMMISSIONER CUGINI: Thank you. Again continuing with the 34.5 hours, you're planning on airing some 24.5 hours of repeats in your schedule on top of the 34.5?
seq level0 \*arabic354 MR. WILKS: I wouldn't express it like that. I think what we're saying to you and what we've said steadfastly throughout the application is we accept as a condition of license to do a minimum of 34.5 hours of Canadian programming.
seq level0 \*arabic355 COMMISSIONER CUGINI: Original.
seq level0 \*arabic356 MR. WILKS: Original. But we intend to do more than that. The reason we intend to do more than that is that we find that the syndicated materials that are available in the acquired Canadian program category are ‑‑ in effect, we do not believe that it serves the interests of other Niagarans or the Canadian television industry to continue to take programs that have had significant airplay on a number of outlets in Canada, so we've ‑‑ we did say this in the application. We've determined that acquire ‑‑ we would be better off to repeat our best Canadian programming that we produce in Niagara than we would be to acquire the low priced syndicated material that's already been exhibited over and over and over again ad nauseam in order to get most Canadian stations that magic 60 per cent number.
seq level0 \*arabic357 So our real goal is to have all of our Canadian programming to be Niagara originated. That is our goal. We think that we can achieve it. We're already working on specific programs to achieve that, and I'll be glad to answer ‑‑ if you were interested.
seq level0 \*arabic358 I won't answer my own question, but the point is if you were interested we would be glad to enlarge on that idea.
seq level0 \*arabic359 COMMISSIONER CUGINI: You mentioned earlier the 19.5 ‑‑ your news and public affairs programming, but I want to focus a little on your news programming which, from your schedule, is about 19 and a half hours per week.
seq level0 \*arabic360 MR. WILKS: Correct.
seq level0 \*arabic361 COMMISSIONER CUGINI: Your application does detail ‑‑ I think it was in response to staff questions, detail what is currently available on CH or lack thereof, depending on your point of view.
seq level0 \*arabic362 MR. WILKS: Yes.
seq level0 \*arabic363 COMMISSIONER CUGINI: Could you tell me, in your news and sports programming, in particular, what will be different from what TVN will be offering when comparing it to what is currently offered in the market in term local reflection.
seq level0 \*arabic364 MR. WILKS: Well, the ‑‑ I hate to do it almost, except that I'm forced to say that CH's portrayal of Niagara is really handled by one reporter that lives in New York State. That's the ‑‑ that's what we have now. That's how we cover this vast region.
seq level0 \*arabic365 And we have suggested that our news contingent, with technical personnel added to the actual hard news staff, that 25 professionals will certainly deliver ‑‑ I think the better question would be what are they missing. And the answer is everything.
seq level0 \*arabic366 They're ‑‑ they are experts, and we give them the leadership and actually we'll give them the title of being the leaders of covering the Karla Homolka, Paul Bernardo saga and the bodies bag disaster stories of Niagara. We think that they're the king and we're going to let them keep that territory, because that's not what Niagara is about. And that's what, regrettably, is what has been portrayed.
seq level0 \*arabic367 The fact is, we've got some enormous issues in Niagara to deal with. We need to connect to each other. I want to simply point out that there is no practical way today for all Niagarans every day to connect. Meaning there's no medium of communication. Newspapers reached a small portion of under 40 per cent of our population.
seq level0 \*arabic368 So how do we get our information? Radio has abandoned largely the news and public affairs except one radio station, and I don't believe they would be insulted if I said that their coverage is not comprehensive about Niagara.
seq level0 \*arabic369 We've got some major issue that take place in Niagara that just do not get discussed in any media. At our election time we have attended at voting polls as low as ten per cent of the people participating because they just don't know who the candidates are.
seq level0 \*arabic370 We've got more elected officials in Niagara at the local and regional level than any other municipality in Ontario, in fact, double the number of any other municipality. We have a regional election, which we'll have in November 2006. We'll be running 600 candidates for 125 local positions.
seq level0 \*arabic371 CH in November 2003, the time of the last election, their total coverage for the entire month, including the results night when city collections were announced throughout the province, was 14 minutes for the entire month.
seq level0 \*arabic372 You can't get a perspective on these issues. We've got dilemmas. The dilemmas are good on the one hand. You have this per capita spending that's higher than Toronto or Hamilton. Our household income spending is higher, our retail spending is higher. In gross dollars we actually sell more retail than Hamilton does as a particular region.
seq level0 \*arabic373 So we've got the revenues, but our huge issues deal more with social issues, transportation issues, definitely cultural issues, and economic issues in the sense that with the changes that have taken place in our economy over the past fifteen years, basically we find that Niagarans haven't got any idea who we really are. They don't even know about themselves.
seq level0 \*arabic374 They think, for instance, that the agriculture business in Niagara ‑‑ that must be the wine business. Niagarans themselves are shocked to find out that grape growing is 13 per cent of our agricultural economy. 42 per cent of our economy and agriculture is with cut flowers. Hog producing and chicken growing, poultry raising are larger industries.
seq level0 \*arabic375 Most people in Niagara don't even know who is our biggest payroll. We have 80,000 people directly involved in education in Niagara, directly. It's by far our biggest payroll.
seq level0 \*arabic376 So all of these changing demographics ‑‑ and we've got big problems. We've got health issues that are really catastrophic potentially really. Not to exaggerate. Higher cancer rate than anywhere else. We don't know whether it's from hydrocarbons and the Queen Elizabeth Way that some engineer years ago decided to put right beside our most populated centres and our best fertile lands.
seq level0 \*arabic377 We've been trying desperately to get a highway built up on the top of our escarpment to avoid this kind of mess that we have that is spoiling this incredible pristine environment here. And we're not connect with the political ‑‑ 12 political regions of Niagara sometimes get tribal and parochial to an extent that they're not unified on anything. But that comes not because they're not interested in working together. They're not communicating.
seq level0 \*arabic378 I hate to say the cliche from the movie, but "What we have here is a failure to communicate." So that for us, what are we doing different than CHCH? Everything. Everything.
‑‑‑ Applause / Applaudissments
seq level0 \*arabic379 THE CHAIRPERSON: You're not running for one of those 125 offices, are you?
‑‑‑ Laughter / Applaudissements
seq level0 \*arabic380 COMMISSIONER CUGINI: Given your conviction in responding to that question, I'm sure you won't have a doubt with this one, but would you agree to a condition of license requiring 19.5 hours of news programs per week?
seq level0 \*arabic381 MR. WILKS: As a minimum we would accept that and intend to increase that minimum.
seq level0 \*arabic382 COMMISSIONER CUGINI: Thank you. You did mention the aboriginal presence on your station through Six Nations Report, and you also include in your application the program "Village Square."
seq level0 \*arabic383 MR. WILKS: Yes.
seq level0 \*arabic384 COMMISSIONER CUGINI: As reflecting the presence of cultural aboriginal minorities in the Niagara region and that these two programs would result in 52 original 30 episodes per year. Would you accept a condition of license requiring at least 26 original hours per year of programming primarily dedicated to reflecting the presence of cultural and racial minorities and aboriginal people in the Niagara region?
seq level0 \*arabic385 MR. WILKS: Yes.
seq level0 \*arabic386 COMMISSIONER CUGINI: Thank you. I also note that these two programs are scheduled in prime time.
seq level0 \*arabic387 MR. WILKS: Yes.
seq level0 \*arabic388 COMMISSIONER CUGINI: Would you further accept a condition of license requiring that they be aired between six and ten p.m.?
seq level0 \*arabic389 MR. WILKS: Yes, ma'am.
seq level0 \*arabic390 COMMISSIONER CUGINI: Thank you. In continuing with the block program schedule, in addition to the 26 hours in prime time comprised of "Six Nations Report" and "Village Square", you've included titles such as "Wines of Niagara", "Garden City" and "The Buck Stops Here."
seq level0 \*arabic391 To me, that totals a hundred hours of locally reflected ‑‑ as we've described earlier, programming again in prime time.
seq level0 \*arabic392 MR. WILKS: Yes.
seq level0 \*arabic393 COMMISSIONER CUGINI: Would you except a conditions of license requiring .
seq level0 \*arabic394 MR. WILKS: Yes, we would.
seq level0 \*arabic395 MR. GOODWIN: Okay. I'm going to turn to priority programming for just a moment. You list "Tiny Talent Time", "Talent Caravan", two "Minds' Eye" telethons per year, first film right one entertainment specials and four long form documentaries each year?
seq level0 \*arabic396 MR. WILKS: Yes.
seq level0 \*arabic397 MR. GOODWIN: Is that the total composition of your priority programs?
seq level0 \*arabic398 MR. WILKS: The answer is ‑‑ I like short answers, as you see.
seq level0 \*arabic399 COMMISSIONER CUGINI: And it's getting warm in here.
seq level0 \*arabic400 MR. WILKS: No, it is not comprehensive. When you asked us to file a block program schedule, it's a schedule for seven years which, of course, is ‑‑ every television station changes the program schedule every week. So we'd need to file 365 to reflect what we really intend to do.
seq level0 \*arabic401 We're dealing with a number of situations that are emerging very quickly. For instance, just next door to us is the new thing in Niagara. It's a 1400 seat theatre. Believe it or not, performing arts centre other than the wonderful Shaw have been in short supply, and thanks to Brock University we've been able to have some semblance in our larger city, St. Catharines, but with this 1400 seat theatre we found in dealing ‑‑ it can be made available to Television Niagara for five days per week. And we've been asked to develop programming should we be licensed to use that room to do programming, which we would like to export worldwide. That is all priority programming.
seq level0 \*arabic402 The genre happens to be variety television, a place where we've had considerable experience and we've had considerable success in moving variety television programming around the world, but that venue is absolutely perfect for showcasing our talent.
seq level0 \*arabic403 For instance, in July I'm working with a local group called The Mantini Sisters to tape a high definition video and concert in that particular room.
seq level0 \*arabic404 But the fact is that we intend to be, in essence, in the music sector and that genre, the television station that is the nostalgia music television station, nostalgic performers. These are the great acts from the sixties, seventies, eighties, nineties. >From our past, both international and domestic, but will be all Canadian content, meaning the strictest definition of how one measures Canadian content.
seq level0 \*arabic405 We've been ‑‑ even then have generated a position by sharing the box office with the people who want the traffic, that own that theatre, that will contribute approximately another two million dollars to our above the line ability to pay acts. Really, we're doing it in a partnership with acts.
seq level0 \*arabic406 We've been dealing with the major acts ‑‑ now, these are household names, people you would know about instantly. They would partner with us in the sense that once you're recorded on HDTV you have a record that is both a video record which now there's an international market for the HDTV video disk. There's a market for international CD's because most of these artists may have had hundreds of best sellers in their past, what happens now is the new world of the record business, they no longer have recording contracts. So we're partnering with them in the release of CD's as well. We think it will be an interesting industrial strategy.
seq level0 \*arabic407 Then just to finish off the idea, we're in constant motion and have been even now, and have acquired product even now specifically. We had ‑‑ Simon Bradbury is one of the permanent ensemble cast members of Shaw Festival who did a brilliant ‑‑ wrote and performed in and starred in a brilliant play on the trials of Charles Chaplin. That's Charles Chaplin, the film star of "The Little Tramp." It's a brilliant piece.
seq level0 \*arabic408 It's currently ‑‑ only just weeks ago moved into the United States, into Pittsburgh, and is getting rave reviews in the United States. But we've acquired the rights to videotape on HD television that work.
seq level0 \*arabic409 Similarly, another Canadian friend of ours, a man by the name of Eddie Carroll, has written and stars in and is getting international rave reviews on the life story of Jack Benny. We've acquired the rights for that particular program to be recorded.
seq level0 \*arabic410 Even as we're sitting here, we recorded a history series ‑‑ we've already completed the first part of the history series in HDTV, featuring a war of 1812 which, again, is all priority programming, shot on location with multiple cameras and it's already in the can. And we've undertaken to deliver that.
seq level0 \*arabic411 I guess what's really interesting with us is once we're made real ‑‑ what I mean by that is that once you've determined that we have a life, and we should not be stillborn, as someone suggested, then in fact once that take place we will be in position of being able to generate co‑productions.
seq level0 \*arabic412 We've had extensive meetings with PBS in the United States where I have a current series that I've produced running on PBS on a weekly basis. They're in discussion and ready to go, particularly on HDTV product. They actually met extensively with us to share the War of 1812. We almost had the War of 2004, though, in those meetings in the sense that each of us see that War of 1812 somewhat differently I discovered, which I don't know how that could be.
seq level0 \*arabic413 So some co‑productions will work and some will not, but we believe that eventually we will be working with specialty channels and pay TV channels in sharing a process. In some instances, we'll take second and third window.
seq level0 \*arabic414 To put it succinctly ‑‑ ha, is he kidding, he doesn't know what the words means ‑‑ succinct, but the point really is that you're looking at our minimum base and what we've reflected there because it was affordable with the monies we had available in priority programming, but our ambitions, what we actually believe, is we believe that the people in the Golden Horseshoe that we compete against are very vulnerable.
seq level0 \*arabic415 We believe, in fact, we can, in fact, take a very significant audience by producing high quality programming. If we do a Walter Ostanek, a local musician who has been nominated 17 times for a Grammy, if we do a barn dance at Hernder's Estate Winery with him, I'll make a prediction when we come up for a license renewal that that would be our most popular show.
seq level0 \*arabic416 We just think that there are a lot of people in Southern Ontario, the Golden Horseshoe, who are ready for this kind of programming. We intend to make our mark, just as we have done in the past, with producing programs that Canadians will watch, and not just Niagarans.
seq level0 \*arabic417 COMMISSIONER CUGINI: Do you anticipate that this programming would air in your first year of operation?
seq level0 \*arabic418 MR. WILKS: I'm going to be surrounded by people with suspenders and green eye shades who are going to ensure that we do it in a orderly basis. In essence, you develop them carefully and contractually in a very safe way, but then you seek out those relationships that you add other dollars to your dollars.
seq level0 \*arabic419 We qualify for acts as to the television funds, just like the other big broadcasters across the lake, who last week took out 28 million dollars of taxpayers' money for their productions. We are eligible for those kinds of allocations as well. Canada is constantly evolving in the world of tax‑motivated reasons to produce in our various provinces, and Ontario is no exception.
seq level0 \*arabic420 We've got all kinds of tax‑motivated benefits that we can add to our production process and, of course, there's always rumours going around which we always like. Things like tax shelters which have produced thousands of hours in the past. We're looking continually for new methods to generate the amount of money so that we can produce programs Canadians will watch.
seq level0 \*arabic421 For TVN our belief is that the future is in the Canadian programming. The future ‑‑ where the vulnerability is in the Canadian marketplace with ‑‑ with only two out of 25 of the top 25 shows being produced now by our Canadians producers on our big networks, that we just think they're missing the mark and we think little Niagara might surprise a few people.
seq level0 \*arabic422 COMMISSIONER CUGINI: In your applications you did commit to spending $500,000 per year on priority programming.
seq level0 \*arabic423 MR. WILKS: We did. In addition, Commissioner, we also allocated another 500,000 which was for syndicated ‑‑ Canadian syndication, which we're suggesting that will be applied to the priority programming budget as well.
seq level0 \*arabic424 COMMISSIONER CUGINI: I'm sorry, could you repeat that for me?
seq level0 \*arabic425 MR. WILKS: Yes. There's a category that we have which in letters exchanged with the Commission, you asked about half hours that were blocked on the strip, mainly on Saturday, you'll see it's a category called Canadian Acquired. That budget is a half million dollars a year.
seq level0 \*arabic426 What we're suggesting ‑‑ and you'll also see between nine and eleven each morning Canadian Acquired. We're suggesting to you, just as we've said earlier, that that programming, we believe, is better to repeat our Canadian programming that we produce in Niagara rather than spend that money or to invest it in priority programming which we ‑‑ we're saying that's in addition to the money that we've identified.
seq level0 \*arabic427 We will not be doing buying off‑network or old syndicated material. "Tales of the Riverbank" and "Tugboat Annie" TVN will never show.
seq level0 \*arabic428 COMMISSIONER CUGINI: So are you now going to spend a million dollars on priority programming?
seq level0 \*arabic429 MR. WILKS: That's correct.
seq level0 \*arabic430 COMMISSIONER CUGINI: And you would accept that as condition of licensing?
seq level0 \*arabic431 MR. WILKS: We would.
seq level0 \*arabic432 COMMISSIONER CUGINI: Thank you. Now, would you accept that as a conditions of license beginning in the first year? I do note that you ‑‑ in your list of priority programs, you said that some would begin in the second year of operation. "Tiny Talent Time," I think was one and "Talent Caravan" would begin in the second year.
seq level0 \*arabic433 MR. WILKS: Yes, that's correct. That is what we predicted. Am I right?
seq level0 \*arabic434 MR. THIBAULT: Yes.
seq level0 \*arabic435 COMMISSIONER CUGINI: So would the condition of license apply in your first year of operation? That is, the one million dollars on priority programming?
seq level0 \*arabic436 MR. WILKS: The answer is yes, it will, in the sense that we're not going to use the Canadian acquired budget in that fashion.
seq level0 \*arabic437 We'd prefer to repeat the programming that we own and control and we've created with our independent producers rather than take that money for another rerun of an old cooking show that's been around for 20 years and still being flogged on the circuit.
seq level0 \*arabic438 We're just saying we've determined internally that we're going to abandon that process. We believe that the money is more needed in the priority programming, and that, for us, is where the opportunity is.
seq level0 \*arabic439 COMMISSIONER CUGINI: In terms of the Canadian acquisitions, then, what will your schedule look like? You did go into some detail as describing what your Canadian acquired programming would be, but now given this commitment, I'm wondering if you've changed your plans with regard to Canadian acquired.
seq level0 \*arabic440 MR. WILKS: Yes. For instance, with the kind of programming that we're doing such as the Niagara Newspaper and the "Six Nations Report", we've got "Six Nations Report" running in a position that puts it a half hour before "Hockey Night in Canada." We didn't want to do them the disfavour of having them run against the juggernaut, if there is an NHL in our lives, but we're optimists, as you know.
seq level0 \*arabic441 The point really is that we have not scheduled many of those programs for repeats, including "Village Square," those kinds of programs. You may have heard our ambition after talking to the Welland francophone community. They've identified a particular need of a program that disappeared that had great value and it was a preschool French instruction program in the style of "Chez Helene."
seq level0 \*arabic442 Well, TV Niagara has ‑‑ has a capacity to produce programming in a very unique way in that we're using a number of robotic cameras which are relatively inexpensive, and that kind of a format is where there's not a lot of ‑‑ I don't need six cameras to do it.
seq level0 \*arabic443 You need a very good teacher. If you recall that particular program, there's some people who have never heard of "Chez Helene", but it's where French language was introduced to many Canadian children before they went to primary school.
seq level0 \*arabic444 So we see a need there and we've agreed to work with it. Really, it's all below the line in the sense that we've already got the below the line facility there, so what does it cost us to hire an instructor and work with an instructor and fill a studios full of kids.
seq level0 \*arabic445 The answer is it's not expensive production and there's a demand for it and a need for it. We've got a large ‑‑ it's one of ‑‑ Ontario's only three bilingual ‑‑ cities, rather, is Welland and it's important that they find expression. They've told us that's what they want. It's inexpensive to do. We can add the tonnage without any difficulty.
seq level0 \*arabic446 If I read through the whole list of things that are in development, it would take the balance of your day and I won't bore you with it, but I'd be glad to file with you the extensive research and dialogue that we've had with independent producers in that category.
seq level0 \*arabic447 It addresses a ‑‑ I'll just very simply deal with this. This addresses an issue that came up, in essence, at other hearings where low budget Canadian production was not adequately, in my opinion, defined by some applicants in the past. But low budget television has changed the face of Canada and us in our television experiences, we've lived through this. We've lived producing a local documentary that focuses on the ambulance services and sees that ‑‑ improvements in the instance that I'm talking about.
seq level0 \*arabic448 We exhibited it to Canadian Association of Broadcasters and it resulted ‑‑ these exhibits resulted in the industry in Canada actually creating a thing called CanPro, and actually were the foundations for a thing where I was at the genesis of it like the Banff International Television Festival.
seq level0 \*arabic449 Those events took place at a time ‑‑ it was a different time. CanPro died because consolidation took place. Where we used to have hundreds of owners and participants competing against each other, we now have a half dozen. We don't have any of the these national program competitions anymore. But when we did have them, it was enormously prestigious for us Canadian broadcasters to bring our programs in competition with broadcasters anymore. We don't do that any more.
seq level0 \*arabic450 All we have with the consolidation is local newscasts. It's whose local newscasts against ‑‑ you know, they're not doing the programming they once did.
seq level0 \*arabic451 I'm not saying it's wrong. I'm saying that has disappeared. It kind of makes us an old fashioned television station in that regard. I'm sorry for the long‑winded answer. I really will stop.
‑‑‑ Laughter / Applaudissements
seq level0 \*arabic452 COMMISSIONER CUGINI: Thank you. Those are all my questions.
seq level0 \*arabic453 THE CHAIRPERSON: Thank you. Commissioner Cram.
seq level0 \*arabic454 COMMISSIONER CRAM: Thank you. I'm a frustrated mathematician sometimes. I just need to find out the basis of what is going on.
seq level0 \*arabic455 Mr. Newell, you said that you provided Tri‑Media with the cost per rating point and ‑‑ in order to get to the average and figure out your numbers.
seq level0 \*arabic456 MR. NEWELL: When I said I did, I didn't really mean I. I meant the company that my parters and I were running.
seq level0 \*arabic457 COMMISSIONER CRAM: Okay. And what were they, just for the year that you retired or for five years before or an average of five years?
seq level0 \*arabic458 MR. NEWELL: They were the current data from the 2003, which I think is when the study was done.
seq level0 \*arabic459 COMMISSIONER CRAM: So they were data for fall 2003 or spring?
seq level0 \*arabic460 MR. NEWELL: I believe the study was done in the summer and early fall, so they would have been the spring of 2003 purchasing. We probably were doing some fall stuff as well at that point in time, so that might have included some fall, but the data was, let's say, the most current data we had.
seq level0 \*arabic461 COMMISSIONER CRAM: And that has been three per cented up to when? Because it says based on ‑‑
seq level0 \*arabic462 MR. NEWELL: Seven years.
seq level0 \*arabic463 COMMISSIONER CRAM: Okay.
seq level0 \*arabic464 MR. NEWELL: Is that correct, Frank?
seq level0 \*arabic465 COMMISSIONER CRAM: I may be taking advantage unfairly. This is at page 126 of the study. It talks about based on historical data the standard three per cent increase per year.
seq level0 \*arabic466 MR. NEWELL: I knew you were going to do this to me. I have to now find page 126.
seq level0 \*arabic467 COMMISSIONER CRAM: Mr. French says it's right after 125.
‑‑‑ Laughter / Rires
seq level0 \*arabic468 MR. NEWELL: Thank you. That was very helpful.
seq level0 \*arabic469 MR. WILKS: Mr. Chairman, if it's in order it may not be. But we answered incorrectly an earlier morning question in arithmetic. Mea culpa, Frank wants to set the record straight, if it's okay with you.
seq level0 \*arabic470 MR. THIBAULT: I made the mistake of doing a calculation in my head, which was a bad place for it to be done. You had asked earlier the total revenue from seven to eleven p.m. that we would get as a percentage of our overall revenue. The correct answer is 55 per cent.
seq level0 \*arabic471 Then you had asked from seven to eleven the movies, what portion of that would be generated from the movies, and the answer to that is 83 per cent. I apologize for the error.
seq level0 \*arabic472 THE CHAIRPERSON: Does combining those two figures still work out to about 45?
seq level0 \*arabic473 MR. THIBAULT: Sorry, 40 ‑‑
seq level0 \*arabic474 THE CHAIRPERSON: Multiplying those two figures together.
seq level0 \*arabic475 MR. THIBAULT: I see what you're saying. Yes, it does.
seq level0 \*arabic476 THE CHAIRPERSON: So we get the same. Thank you.
seq level0 \*arabic477 COMMISSIONER CRAM: So Mr. Newell, do you have that ‑‑
seq level0 \*arabic478 MR. NEWELL: Commissioner Cram, I'm trying to find the 1. Do you know where the 1 is? What you're asking about is the footnote, correct?
seq level0 \*arabic479 COMMISSIONER CRAM: Yes.
seq level0 \*arabic480 MR. NEWELL: And it's a source PHD, which is what HYPN became. God knows what reason. This is based on historical data with standard three per cent increases per year. That's source and it's footnoted 1. I'm trying to find ‑‑
seq level0 \*arabic481 THE CHAIRPERSON: It's at the top, Mr. Newell. You see in black that background? Net cost.
seq level0 \*arabic482 MR. NEWELL: Okay. The net cost per rating point.
seq level0 \*arabic483 COMMISSIONER CRAM: Maybe you can just let us know. I mean I realize ‑‑
seq level0 \*arabic484 MR. NEWELL: Certainly. That's a very good suggestion. I'm not sure why the footnote reads three per cent a year because this doesn't ‑‑ the net cost for rating point doesn't refer to any more years than the current year.
seq level0 \*arabic485 Perhaps we used it when we did the projections, the seven year projections, but I would like to confirm that.
seq level0 \*arabic486 MR. THIBAULT: I believe the three per cent refers to the rate of inflation, which is what we had used throughout the course of the application. That would ‑‑ I believe that would be what is going on there.
seq level0 \*arabic487 COMMISSIONER CRAM: Okay. I then wanted to talk about the response rate, because you said, Mr. Newell, that you relied heavily on the data from Tri‑Media. And one of the interveners talked about the data from businesses and I thought I may as well put it on the table so we can deal with it cleanly.
seq level0 \*arabic488 I believe it's Mr. Baum. And he referred to ‑‑ I believe at paragraphs 19 to 26, and I'll paraphrase, that the survey of local businesses apparently consists of lists ‑‑ sending out essentially surveys to about three ‑‑ well over 3,000 ‑‑ about 3,300 businesses. It's at paragraph 22, with a response rate of 5.21 per cent. That's at page 23, with about 40 out of those 120 giving you a ‑‑ giving disqualification or replied that they didn't advertise.
seq level0 \*arabic489 So it appears that the sample really ends up being about 120 out of 3,000 to whom the forms were sent. Would you agree with that?
seq level0 \*arabic490 MR. NEWELL: On page 227 of the Tri‑Media study we describe the methodology that was used and specifically on page 227 is the sampling. I would agree with what you have said. We do state in the study that it's not projectable because it's not a ‑‑ I can't think of the word, but it's not a random sample.
seq level0 \*arabic491 It is not ‑‑ when they talk about the sampling error in the study, they basically say there isn't a way to predict what the error would be. Because of the way that the study was done it is not a projectable sample. However, having said that, most of the data that we collected was based upon the 1100, whatever it was, consumers that we talked to. So our audience information and our revenue information was ‑‑ really relied on that part of the information.
seq level0 \*arabic492 The second part of the study, which is the business study, we couldn't randomly sample the businesses. We had to have a sample that, first of all, was only in the area that we wanted. We had to have a sample that had control of their advertising and then did advertise.
seq level0 \*arabic493 So to create a universe out of that restricted a definition was virtually impossible. What we did do was we sent out e‑mails to a specified list that was controlled. We sent out faxes. We re‑emailed them, re‑faxed them. We set a timetable upon which it was done, and we did get 120 responses that we were able to rely on.
seq level0 \*arabic494 And we did rely on these responses to answer some of your questions like where was the money going from ‑‑ coming from, how do you spend your money, how much money do you spend, would you advertise on the station and whatever. We're not presenting this as defacto scientific research. It is a ‑‑ more, I would put it, in the category of a focus group, a very large focus group of 120 advertisers who took the time to complete a 16 page questionnaire.
seq level0 \*arabic495 Does that ‑‑ it's a long ‑‑ but it was a complex question.
seq level0 \*arabic496 COMMISSIONER CRAM: I hear you. So 2003, let's say July or so, these people were ‑‑ these surveys were sent out, or sometime in 2003.
seq level0 \*arabic497 MR. NEWELL: Correct.
seq level0 \*arabic498 COMMISSIONER CRAM: You decided you'd invest in TVN. Do you think these numbers would change at all as a consequence of two things. One, the entry into the Toronto market of Toronto 1 and Omni, and I'll get to the second after you finish with the first part of the question. Would you still invest and do you think your number are still ‑‑ Tri‑Media's numbers...
seq level0 \*arabic499 MR. NEWELL: The answer is I would still invest and I am still investing. The second part of the question is are we, TVN, concerned about our audience in revenue numbers as a result of the additional licensing of conventional television stations in the Toronto market.
seq level0 \*arabic500 I believe ‑‑ we believe that Toronto was ‑‑ benefitted in spite of the sale of Toronto 1. We think that Toronto benefitted, Toronto conventional television benefitted from the licensing of Omni and of an additional conventional television station.
seq level0 \*arabic501 It could be have been Torstar, it could have been Craig; whatever, Toronto benefitted from putting that extra station on. The conventional revenues increased after they went on in spite of the fact that CHUM and Global and CTV all cried that it was a depression and the revenues were going to be horribly damaged ‑‑ their revenues would be horribly damaged by these licensing decisions.
seq level0 \*arabic502 In my 41 years of being in this business and dealing with the CRTC and their regulatory issues, I am a strong believer that competition is good for Canada, it's good for conventional broadcasting. I have appeared many times before the Commission asking for more licenses.
seq level0 \*arabic503 I think the fact that you licensed a couple of hundred digital channels did marvelous things for Canadians broadcasting. It was a huge success and I think conventional television can benefit from more licensing of conventional television stations. So, yes, I would be an investor, and I think it's good for TV Niagara, good for the Toronto stations, good for Hamilton, and it's good for Canada.
seq level0 \*arabic504 COMMISSIONER CRAM: And, secondly, after this study what happened, if I understand it, was that one of the major conventional television groups in Canada increased their rates. Meaning that if people wanted to advertise on their stations, the media buying, the amount available for the other stations was, if I understand it correctly, substantially less. That the pie, even though it got bigger, the reallocation was a major reallocation to one or two large stations and far less to the others.
seq level0 \*arabic505 Would that impact your numbers at all?
seq level0 \*arabic506 MR. NEWELL: It's our belief that television stations don't set the market; that the market sets the market. You can ask for high rates or low rates or ‑‑ but it will be the buyers and the availability and the audience that will dictate your revenue success and your sell‑out success.
seq level0 \*arabic507 Given a competent sales force locally and nationally, we strongly believe we can do our numbers in spite of the consolidation. I don't think ‑‑ I should stay we don't think it was necessarily a good thing that CanWest bought WIC and we ‑‑ you know, WIC was a great company and it became a play ‑‑ more of a financial nature than a broadcasting desire.
seq level0 \*arabic508 But more independent voices, more competition, we think, is good and we're glad to ‑‑ we're happy to compete in that environment.
seq level0 \*arabic509 MR. BUCKHALTER: I think it's important that add as well that TVN's financial impact is very much of a ripple, not a wave. That is to say that between today's date, the possible awarding of the license to TVN, and the station's sign‑on, the average growth in the national market revenues in Toronto and Hamilton on average in the past five years alone would have grown by two and a half times that of TVN's international budget in year one. In fact, more than 33 per cent more than the overall budget.
seq level0 \*arabic510 So from that perspective I think that we have to look at things from the perspective of if, in fact, those who would intervene would suggest that if a station coming into a marketplace taking a one per cent share of the market would negatively impact their business, I don't know of any other business that, if in fact, their share went up by one per cent or one per cent down, the entire market would be thrown into a state of flux.
seq level0 \*arabic511 COMMISSIONER CRAM: My only last question, Mr. Wilks, is it has been asserted that the second USA, the unanimous shareholders' agreement filed has not been completely executed and, of course, I can't say whether or not the document on the confidential file has been executed, I can only ask that if the fully executed copy of that second USA has not been filed, could you file it within a date certain?
seq level0 \*arabic512 MR. WILKS: Yes, we have some additional filing to do and it is ready to be submitted. We will submit it.
seq level0 \*arabic513 COMMISSIONER CRAM: Okay. That's all. Thank you.
seq level0 \*arabic514 THE CHAIRPERSON: Thank you. Commissioner Langford.
seq level0 \*arabic515 COMMISSIONER LANGFORD: Thank you, Mr. Chairman. My question, which may lead to one or two others depending on how you answer it, is very general. It arises out of some of the discussions you had with the Chairman earlier today and I know how warm it is in the room and I apologize to be going over this ground again, but we've come here to make sure we understand your application and at the risk of killing the audience from heat prostration, I'm going to ask a few more questions.
seq level0 \*arabic516 I think ‑‑ what I'm really trying to look at is the road ahead. Sort of the transition from year one, from launch to year seven, and particularly in terms of revenues. I think I heard you say, Mr. Wilks, today that one of your ‑‑ one of your major strategies and a strategy you would have commended to Toronto 1 had they asked you, would be to emphasize retail sales, as you called it, for the first while and then move gradually, I guess, to garnering more revenues from national advertising.
seq level0 \*arabic517 Is that a correct statement in light of what you said this morning?
seq level0 \*arabic518 MR. WILKS: It is, and it takes into consideration, Commissioner, that at the outset we're not predicting a full sell rate. We're using only a small portion of our inventory. It isn't a case of eventually lessening the access for retail, it really is, as the station matures, you're going to get to a point of carrying more volume of advertising.
seq level0 \*arabic519 So that's where the equality comes. But at the beginning, I do believe that at the beginning, the first four to six months, my own experience is that retail was the only one that was safe. So we intend to do the same thing.
seq level0 \*arabic520 In fact, we're using ‑‑ we have fifteen people involved in that department, including a department that doesn't exist anymore, the ability to produce high quality, low cost effective television commercials. The creative department is incredibly important to this process.
seq level0 \*arabic521 COMMISSIONER LANGFORD: I thank you for that. What I'm trying to, then, understand is the road ahead. How this beginning with retail, which sounds reasonable, moving to more national would work.
seq level0 \*arabic522 I guess what I'm trying to really ‑‑ I think what it comes down to is that I'm trying to understand the relationships between retail and national ad revenues and between Niagara and Toronto audiences and how one affects the other and what your plans are to draw on these two pools going forward over the first five or seven years. Is that too big a question?
seq level0 \*arabic523 MR. WILKS: No, it's not at all. I'm going to ask my colleagues to address this because we internally had to deal with definitions, what's retail and what's national. For instance, there are a number of advertisers in Niagara that currently advertise on television.
seq level0 \*arabic524 Well, in our calculations we do not call that ‑‑ they're not retail accounts, am I right? Perhaps my colleagues could pick up.
seq level0 \*arabic525 MR. NEWELL: That's correct, Wendell.
seq level0 \*arabic526 MR. WILKS: That means when we talk about retail, we're really talking about the advertisers in Niagara that are not currently advertising. Many of our advertisers in Niagara are using advertising agencies, even if the agency involved is a national account.
seq level0 \*arabic527 We also have the phenomena where in this country and throughout North America for that matter, of franchisers, franchisees; Canadian Tire, Kentucky Fried Chicken, McDonald's, the franchisees. And you've got them spread territorially. In some of those instances it's call co‑op advertising, meaning that headquarters will appropriate and pick up as much as half of the budget that they've allocated in the region, and the other half is contributed by the members, the people who operate franchises throughout this particular region.
seq level0 \*arabic528 That's an ever growing business and it's one where the relationship ‑‑ it's up to us to get the franchisees into a position to start dealing with us, and it's huge, huge money. I mean it's very big. So that ‑‑ it's definitions really that's part of the issue.
seq level0 \*arabic529 COMMISSIONER LANGFORD: Is that where the money that you're going to call national is going to come from? It's not going to be somebody looking at your numbers in Toronto and saying, hey, this is an national buy now. This is worth looking at.
seq level0 \*arabic530 I'm trying to figure out, the people that you're going to go and see to sell ads to ‑‑ well, I understand retail. Was it Mr. Al Slattery's Chev dealer or whatever it was, or Ford ‑‑ anyway, there was a man there selling automobiles and pretty clear where he sits on the spectrum.
seq level0 \*arabic531 MR. WILKS: Yes.
seq level0 \*arabic532 COMMISSIONER LANGFORD: Then when we move over to Ford itself or General Motors itself, or Molson's, will they always say, well, we've already got Niagara because they're getting it through the Toronto stations or will there be a time when they'll actually buy separately from you?
seq level0 \*arabic533 MR. BUCKHALTER: Well, national advertisers, they don't buy generally speaking Barrie for Barrie. They purchase Toronto and count the spill points in other minor markets. So that we would be approaching agencies who purchase on behalf of their clients to get a portion of their dollars and try to ‑‑ try to support the notion that there now will be a bias directed towards the Niagara region that has currently been underserved. So we're to reach buyers ‑‑ Toronto west buyers.
seq level0 \*arabic534 In terms of getting them, if I'm to understand your question, to purchase Niagara for Niagara, we don't see that as being a long term viable plan. There may be individual instances where that may occur, but by and large we'll be speaking to the advertiser who wants to reach the Toronto Hamilton extended market on a national basis and competing against the current conventional players in the market.
seq level0 \*arabic535 COMMISSIONER LANGFORD: Okay. Let me just reduce this to words of one syllable. Right now the advertisers who want to get Toronto could buy Toronto, Hamilton, Barrie, loosely speaking, and get Toronto. You're saying if you want to get Toronto, sometime in the future we want you to buy us, is that right, and we'll deliver Toronto to you.
seq level0 \*arabic536 MR. BUCKHALTER: Correct.
seq level0 \*arabic537 COMMISSIONER LANGFORD: Now ‑‑
seq level0 \*arabic538 MR. WILKS: That's two syllables.
seq level0 \*arabic539 COMMISSIONER LANGFORD: It's a great plan, but I just ‑‑ I'm having trouble, and I'm not in your business, understanding why it would be attractive to these people. Your programming is so Niagara, how many Toronto viewers are you going to be able to deliver?
seq level0 \*arabic540 If I'm living in Toronto and I turn on my television and I'm getting the voice of Niagara, it may have some charm and it may even have some interest to me, but if I want the news or something local, of course I'm going to have to find another channel because you're not going to be giving it to me.
seq level0 \*arabic541 So what have you got in your arsenal of programming, and I'm not in any way criticizing the programming you've talking about today, not in any way. It goes back to Ernie Bushnell and the birth of television, and I think it's wonderful stuff. But strictly on appealing to these green eye shades and suspender folks that Mr. Wilks was talking about, why would somebody trying to buy Toronto drive up the QEW and buy it from you when they can get it right there?
seq level0 \*arabic542 MR. BUCKHALTER: The majority of TVN's schedule will not be of appeal to a Toronto based advertiser. The majority of the monies we anticipate being directed to TVN on a national basis will go to specific areas on the schedule, the majority of which will be the movies and some of the Thursday evening programming as well.
seq level0 \*arabic543 COMMISSIONER LANGFORD: So it's the movie strategy.
seq level0 \*arabic544 MR. BUCKHALTER: Correct.
seq level0 \*arabic545 COMMISSIONER LANGFORD: I have a question about the movies as well. I'm sorry to sound negative, but I just have to understand this. Why will people watch your movies, which I assume will have ads in them because that's what you're trying to sell, when they can get the same movie on pay per view or at the local video store or perhaps even occasionally on TV Ontario or public TV with no ads in it? What will be the attraction there to watch those films when they're so readily available right now in so many ways?
seq level0 \*arabic546 MR. BUCKHALTER: One, I suppose, could make the same case for movies airing on Citytv, on CHUM or Toronto 1. In terms of going back to Mr. Wilks' point about Canadians in surveys suggesting that movies are the number one choice for viewing. So the classical movie format, in addition to starting at a time where there was less competition for the US simulcast programs at 8 p.m., more along the lines of looking at some Canadian syndicated programs, the E‑talk dailies, some of the game shows that traditionally appear at seven o'clock, we feel will be the reason the movies succeed in part.
seq level0 \*arabic547 MR. WILKS: If you ‑‑ I'm sorry, Mr. Langford.
seq level0 \*arabic548 COMMISSIONER LANGFORD: No, go ahead.
seq level0 \*arabic549 MR. WILKS: You really don't get it until you ‑‑
seq level0 \*arabic550 COMMISSIONER LANGFORD: People say that to me all the time.
‑‑‑ Laughter / Rires
seq level0 \*arabic551 MR. WILKS: I just mean if you take a classic film, a "Godfather," "Gone with the Wind," a "Bullitt". Even a spaghetti western from Clint Eastwood, we're just suggesting to you in the interstitials in all of these programs, the program inserts, are totally Niagaran in that scenes from Niagara are the interstitials that show up on every commercial break.
seq level0 \*arabic552 It is a matter of presentation, frankly. First of all, TV Ontario ‑‑ Elwy Yost never had the budget to show anything except scratchy old 16 millimeter prints. We're not in that. We're not going to run those kinds of property. We just ‑‑ it has served a purpose, but that's not what we do.
seq level0 \*arabic553 One thing I wanted to really emphasize with regard to the classical movies is the way that they're presented. We're a television station, and you can make this a condition of license, that will not slice out large sections of a motion picture. When we run a motion picture, you're going to see the way that it was produced and you're going to deliver it. Because ‑‑ that's extremely important because I'm not hemmed in by having to joint the network at the bottom of the hour or at the top of the hour.
seq level0 \*arabic554 There's been so much hacking and cutting of great classic films, even new releases, people who have seen them on television say, well, that wasn't the same as the one I saw in the movie theatre. Regrettably, that is the truth. They're hacked to death.
seq level0 \*arabic555 Now, the second part is that we've also affected the enjoyment index factor of movies for viewers. We have done things that are really abhorrent. One of the things we do is we squeeze the titles over into one small section of the screen and we blare a constant flow of promos for everything that's coming up.
seq level0 \*arabic556 You can't even for a second absorb, in effect, the climax of a motion picture, those last scenes that really leave you in a position where the credits were time for you to readjust your make‑up, not me, but I mean really it's the process of how you exhibit these films. When you think that they've been butchered on commercial television.
seq level0 \*arabic557 The other thing that we're experimenting with just as a final ‑‑ we will be experimenting with in consultation with the reps now is to have a limited commercial introduction and a limited number of interruptions, which is a factor that we've been looking at.
seq level0 \*arabic558 We think there is merit in that and we believe there is a market for that kind of advertiser that's looking for that less cluttered environment. We just think there's a premium possible to be paid for that kind of participation.
seq level0 \*arabic559 COMMISSIONER LANGFORD: Yes, there would have to be a premium, wouldn't there, because fewer interruptions mean fewer dollars.
seq level0 \*arabic560 MR. WILKS: Correct.
seq level0 \*arabic561 COMMISSIONER LANGFORD: I guess what I'm having a little trouble with is that your product, if I want to watch whatever the list of movies you just gave, if I want to watch "Harvey" or whatever, I can buy "Harvey", I can rent "Harvey", I can get "Harvey" on pay per view. That's a great film.
seq level0 \*arabic562 But if I want to watch a sports game, a tennis match, the latest scene of the crime episode, whatever, I got to watch it tonight because if I don't get it tonight I might miss it, it's on tonight. I suppose I could tape it, but there's more urgency to get the French ‑‑ the final of the French Opening when it's being played. That's when you want to watch it.
seq level0 \*arabic563 I don't feel the same sense of urgency about your product because if I miss "Harvey" on your station tonight, I can rent it tomorrow if I really feel like watching "Harvey" for old time's sake. I just wonder when you've got that kind of ‑‑ a sort of paradigm, I hate those words, but anyway, when you've got that sort of a model whether you won't be the loser, not because you're not putting out a great product, but because you're the one they can walk around and get to last. Whereas the people who are showing the sports, the people showing the sitcoms, the appointment viewing type of programming, are the ones the advertiser will go to and they're right there in Toronto.
seq level0 \*arabic564 MR. WILKS: It's always possible that you're entirely right. That's why program schedules, when it comes to the foreign programming, that strategy gets to be really key.
seq level0 \*arabic565 You did say a couple of things that are really not quite right in the sense that you talked about local news ‑‑
seq level0 \*arabic566 COMMISSIONER LANGFORD: It's a preoccupation.
seq level0 \*arabic567 MR. WILKS: When you talk about news, you said that we're all local news. The fact is we're subscribing to CNN's international service and NBC's international service just to supplement the news. We've had extensive meetings with CBC to buy the CBC syndicated news service. Now, that is available at their affiliated television stations.
seq level0 \*arabic568 What we have now is we've got the capacity to give something missing and that's the close‑up. On a regional basis it's easy for us to have a stringer relationship with Queen's Park and in Ottawa at the Parliament, to have our own stringer there dealing with Niagara's reflections.
seq level0 \*arabic569 But our hole that we have was the national footprint, and we felt that we taxpayers in Niagara are supporting the CBC as much as Prince Albert or Yorkton or Kingston, Ontario, and why can't we subscribe to your syndicated newscast?
seq level0 \*arabic570 In fact, I offered Mr. Stursberg at CBC to promote his service for CBC Newsworld as part of the trade‑off besides just simply giving them money, that, in essence, drive viewers to them.
seq level0 \*arabic571 I'm not pretending that we're the comprehensive, national voice of Canada, but it's important that we get all of those perspectives. That's how we do that. So we're a lot more than a local television station or newscast. We do offer a comprehensive world look.
seq level0 \*arabic572 The other thing is we made a headline newspaper in Buffalo, New York. Of course, nobody here subscribes to that newspaper. I mean front page banner headline, where the local NHL hockey club, the Buffalo Sabres, announced they were negotiating with TV Niagara to run a number of games on our television station. That raised other questions as to regard to territorial rights to teams like the Toronto Maple Leafs, but we find ourselves here in Niagara, we've got 6,000 people in Niagara that are regular attendees to Buffalo Sabres. That's our team.
seq level0 \*arabic573 Part of it has supportability and access so we can get a ticket for under a hundred bucks, so that's part of it. Even then they're suffering in the sense that only 60 per cent of their seats are filled and the demand and the appetite for hockey is definitely a Canadian thing.
seq level0 \*arabic574 We have avenue worked with Empire Sports, which is a division of Adelphia Cable in the United States, their pay vision, which is the only place you can see Buffalo Sabres on a regular time except if they're playing the Ottawa Senators or the Toronto Maple Leafs, to talk about sharing a feed with them, bringing in our own Canadian commentator.
seq level0 \*arabic575 95 per cent of the players on the team ‑‑ that was last year. It's a little more ‑‑ they've got more Europeans this year, but a large number of the players on the team are Canadian on the Buffalo Sabres.
seq level0 \*arabic576 So if that happens we have not projected any income or revenue from that, but would we do it, we would. And, strangely enough, although we would attract a lot of attention and a lot of viewers we will not ever make much money doing that, in the sense that the whole idea is to make slightly more than you spend on that kind of process. Would we do that? The answer is, we would, we surely would do that.
seq level0 \*arabic577 Mr. Bettman and other people get involved in that decision. It's not just a case of Mr. Golisano, who owns the club and us making the deal, there are other players who will have an interest in those kinds of things.
seq level0 \*arabic578 But TVN will be more than just a movie television station, but I think you truly underestimate the power of classics. I really think you do. And we're not ‑‑ we've got 15 a week in our daytime schedule. You're not going to go 15 times to pick up your movies. This is free to the viewers of Southern Ontario. You don't have to pay anything for it.
seq level0 \*arabic579 COMMISSIONER LANGFORD: Thank you, Mr. Wilks. I just want you to know that I'm not motivated by underestimating your energy or ability. I'm motivated by wanting any service we license to succeed.
seq level0 \*arabic580 MR. WILKS: Sure.
seq level0 \*arabic581 COMMISSIONER LANGFORD: And we ‑‑ the worst thing we can do for this enthusiastic crowd is to tantalize them and then license something that we're unclear of. In my mind, I was unclear on your strategy and I'm far clearer on it now and I appreciate your answers.
seq level0 \*arabic582 MR. NEWELL: If you're clear I won't add, but ‑‑
seq level0 \*arabic583 COMMISSIONER LANGFORD: It's your chance to snatch from the jaws of victory ‑‑ no, go ahead.
‑‑‑ Laughter / Rires
seq level0 \*arabic584 MR. NEWELL: I suspect that could be a strategy as well. I think much of what you've said, most of what you've said about the movie and your attitude towards it would be representative of just about everybody in this room. But we're only trying to get a half a rating point and so if 99.5 believe, like you do, which they probably do, we only want the other .5 to tune in.
seq level0 \*arabic585 I think that's an important thing to ‑‑ to ‑‑ I just ‑‑ I realize I just made a mathematical error because I'm talking share and you're talking ratings, but anyways, the number is a very, very small number that we are trying to get. One point.
seq level0 \*arabic586 The second point is that we didn't do any research into the Toronto market, but our national rep did take a look at movies and I believe the information that we got back from his study, which I note Chairman Dalfen took some exception to, but I believe the number that we're trying to get is the lowest number that any movie on a conventional television station currently gets in Toronto. Point number 2.
seq level0 \*arabic587 Then thirdly, whether ‑‑ I share your confusion with national dollars and retail dollars. As a purchaser of television, I didn't care what the definition was, I just cared what the price was and who my advertiser was. And I think the station likewise is not going to stop collecting national dollars because the national segment is all filled up or stop collecting retail dollars because the retail sector is all filled up.
seq level0 \*arabic588 What we have studied is the people in Niagara and based upon that, we think we can do the eleven million dollars. We've asked another party to look at the data for us and they think they can do six and a half million dollars. I don't care whether it's six and a half. If it's six and a half plus eleven, good for us, but if we can do the eleven we can make our business plan. I think that's the most important thing that we're concerned about. Thank you.
seq level0 \*arabic589 COMMISSIONER LANGFORD: Thank you very much. Those points are very, very helpful to me and I have no further questions. I do want to say, though, that when you say that I'm part of the people who wouldn't watch movies, I was simply asking my questions from an academic point of view. There's never been a program on television that I would watch in preference to "Harvey".
‑‑‑ Laughter / Rires
‑‑‑ Applause / Applaudissements
seq level0 \*arabic590 MR. WILKS: Commissioner, as you know then, Harvey's here.
seq level0 \*arabic591 COMMISSIONER LANGFORD: Harvey's with us all.
seq level0 \*arabic592 THE CHAIRPERSON: Thank you. Counsel?
seq level0 \*arabic593 MR. MURDOCH: Thank you. I have two brief follow‑up questions to clarify some of your statements regarding your priority programming commitments. The first is that I understand you've committed to spend one million dollars per year on priority programming commencing in your first year of operations.
seq level0 \*arabic594 Would you agree to a condition of license which requires you to report, along with your annual return, a list of priority programming projects you funded in each year?
seq level0 \*arabic595 MR. WILKS: Yes.
seq level0 \*arabic596 MR. MURDOCH: Then my second question is would you be willing to accept a condition of license requiring the airing of at least 55 original hours of priority programming per year beginning in the second year of the license term that would have their first window on TVN?
seq level0 \*arabic597 MR. WILKS: Yes.
seq level0 \*arabic598 MR. MURDOCH: Thank you. I have no further questions, Mr. Chairman.
seq level0 \*arabic599 THE CHAIRPERSON: Thank you, counsel. Mr. Wilks and your team, those are our questions at this phase. Thank you very much. It's been very helpful.
seq level0 \*arabic600 We'll break now for lunch and resume at 2:15. Nous reprendrons à 14 h 15
‑‑‑ Upon recessing at 1256 / Suspension à 1256
‑‑‑ Upon resuming at 1420 / Reprise à 1420
seq level0 \*arabic601 THE CHAIRPERSON: Order, please. À l'ordre, s'il vous plaît.
seq level0 \*arabic602 Madame le secrétaire, would you call the next item, please.
seq level0 \*arabic603 THE SECRETARY: Thank you, Mr. Chairman.
seq level0 \*arabic604 I would now invite the first five appearing intervenors to come up at the front, and they are V.I.P. Productions, Welland‑Pelham Chamber of Commerce, LOADD Studios, Carrie Aiello and Robert Tanos, and I would like to ask you if you could each introduce yourself before you speak and, also, you have 10 minutes for your presentation each.
seq level0 \*arabic605 Thank you.
seq level0 \*arabic606 MR. TANOS: Hello. Is there a starting light, or just start?
seq level0 \*arabic607 THE CHAIRPERSON: Go ahead.
seq level0 \*arabic608 MR. TANOS: Good afternoon, Commissioners, Mr. Chairman.
seq level0 \*arabic609 My name is Robert Tanos and it's my pleasure to be here today to speak to you in regards to TVN's application for their broadcasting licence to operate a television station in the Niagara Region.
seq level0 \*arabic610 First of all, I'm in total support one hundred per cent of this venture. There's not a shred of doubt in my mind that this area needs to have its own television station.
seq level0 \*arabic611 In fact, as a young man, very young man, I wondered why we didn't have one years ago.
seq level0 \*arabic612 You've heard the testimonials from the TVN supporters on their video presentation, we've heard many, many reasons today why this area needs a TV station.
seq level0 \*arabic613 I'd like to say to you that I think everybody in the room got a sense of what we call the big picture.
seq level0 \*arabic614 We heard numbers, 400,000 people plus, we heard from every mayor almost in every part of the region, we heard from ecumenic divisions, corporate divisions, big scope, we're talking about the entire Niagara Parks Commission, Netcorp, this is what I call a big picture.
seq level0 \*arabic615 But I'd like to take this moment to try to turn the page around ‑‑ turn the page over and ask the Commission to look at a much smaller picture.
seq level0 \*arabic616 The smaller picture is me, one person, one man speaking to you today from my heart, okay.
seq level0 \*arabic617 I was born in Niagara Falls in 1955 and this is where I was raised and this is where I went to school.
seq level0 \*arabic618 When I was young all my aunts and uncles and my parents and everybody around me asked me the same question I think every person was asked when they were young.
seq level0 \*arabic619 What do you want to be when you grow up?
seq level0 \*arabic620 Well, I went to school and they ran relay races one day on track and field. I came home, I said, Mom, Dad, I'm not going to be an athlete, I came in last.
seq level0 \*arabic621 They did geography tests. Ma, I guess I'm not going to be very good at drawing atlases or something like that because I didn't do very well in geography.
seq level0 \*arabic622 And then one day my art teacher said ‑‑ in grade 3, she had everybody draw a picture of a dog ‑‑ this is a grade 3 classroom ‑‑ and she asked everybody to draw a picture of a dog and when she took all the pictures and put them up around the room, I blurted out in my little youth ignorance, I thought you said we had to draw a picture of a dog?
seq level0 \*arabic623 And she said, I did. I said, well, they don't all look like dogs. She goes, well, Robert, not everybody's as good of an artist as you are.
seq level0 \*arabic624 Well, I ran home from school that day: Mom, Dad, I know what I'm going to be when I grow up, I'm an artist.
seq level0 \*arabic625 And that's how it all started, very young for me.
seq level0 \*arabic626 I quickly noticed that not only was I an artist, I was the best artist in the class, I was the best artist in the school.
seq level0 \*arabic627 So, as a young person trying to identify with yourself what you are and what you do, this was very much an eye opener experience for me.
seq level0 \*arabic628 And then I went to another school and the same thing applied, I ended up being the best artist in the school, posters for the committee council ‑‑ student council on the walls and whatnot.
seq level0 \*arabic629 Then I went to high school and in grade 9 everything changed for me because now I'm dealing with a much stricter competition level and when I went into the art room for the first day of school, I noticed these fabulous sketches up on the wall behind the art teacher's desk ad I said, wow, are you ever good. He said, oh, they're not mine. I looked at him. He said, they're a student's.
seq level0 \*arabic630 I knew right then and there I was in competition. These sketches were fabulous, one step up on me. And then I looked at the name in the corner of the sketches and it said, Jim Cameron, James Cameron we all know him, the writer/director, Titanic fame, the most expensive movie in history. That was his success. That was the same Jim Cameron, James Cameron.
seq level0 \*arabic631 I quickly met him in school and for two years while he was on the art committee doing set and designs for a school play, I was right there beside him.
seq level0 \*arabic632 And one day he had to leave and he had painted this big huge column of stones and he said, here's the paints, could you paint the other one on the other side to match it.
seq level0 \*arabic633 So, I did my best job. He came back, looked at it and we stood there in the gym looking at the stage and he said, looks good, didn't touch it and at that moment I stood beside James Cameron toe‑to‑toe and I felt like an artist.
seq level0 \*arabic634 Well, in the next year school started in September there was no James Cameron in our hallways and when I asked I found out his family moved the family to Hollywood, and in three seconds I knew that man was going to be successful, because you can't be that good, be plopped in Hollywood at the age of 17 and not do good for yourself.
seq level0 \*arabic635 Myself I continued to live in the Niagara Region. I went home from school that day and asked my Dad if he could get a transfer and move the family to California. That just wasn't going to happen.
seq level0 \*arabic636 I went to theatre college in Niagara College Theatre Centre in Welland. I went there again for economic reasons. I couldn't afford to go far. I came from a humble home and to drive back and forth to Welland was reasonable.
seq level0 \*arabic637 I studied theatre arts and I ended graduating the top 10 in my class with a diploma in set design and lighting design.
seq level0 \*arabic638 This allowed me after graduation to feel confident as a young individual to go out and look for work, but ladies and gentlemen of the CRTC Commission, there were no jobs for me in this area at that time.
seq level0 \*arabic639 So, I did what everybody in this area does when you're young and aspiring in the entertainment business, I moved, I had to move out, and when I ended up living in ‑‑ I'm going to try to speed it up now ‑‑ I went to Alberta and worked for Universal Film Productions, I went to Toronto and worked for CBC.
seq level0 \*arabic640 In Toronto I also had an opportunity for work for a company that made television productions where I ended up directing and editing and composing the music for my first television movie called "Fly With The Hawk" in the mid‑80s. It went on to be my executive producer's best seller at the MIP Festival in France that year.
seq level0 \*arabic641 The event I found in Toronto was great but it did not open doors for the next movie. In fact, because I made it under what we call a non‑union situation with a small, low‑budget company it was very difficult to move up into the ranks of the union people.
seq level0 \*arabic642 But I continued to look for work and I ended up living in Florida working for a production company.
seq level0 \*arabic643 I've been all through Canada in different cities and different places, but all along I keep coming back to Niagara because this is where my family is, this is where I was raised ‑‑ and I don't know if they are back in the room yet ‑‑ they're here. I'd like them to stand up for a minute, please.
seq level0 \*arabic644 This is my mother and my father. They're here today to support me.
‑‑‑ Applause / Applaudissements
seq level0 \*arabic645 MR. TANOS: Thank you. Thank you, Mom, Dad.
seq level0 \*arabic646 My father only said one thing to us. He's a very simple man, very simple father, he's got one thing in their heads: Son, I worked in a factory my whole life, he said, I'd like you to do one thing, just amount to be something better than I did, so that's why I tried.
seq level0 \*arabic647 I just kept trying, and I'm still trying.
seq level0 \*arabic648 Then something happened that changed my life for ever, my daughter was born and, of course, we wanted to raise her ‑‑ my wife and I wanted to raise her in Niagara where our family was and where my wife's parents were and her family.
seq level0 \*arabic649 So, I was here ‑‑ I had a choice, change the career or be Mr. Mom. I chose Dad to be Mr. Mom and I raised my daughter. She's 15 now and I can tell you, the last 15 years has not been easy, not been easy to find work here in my field at all.
seq level0 \*arabic650 I've driven taxis, I've installed carpentry work, I've done anything, worked in a paint store.
seq level0 \*arabic651 And I always had a dream of writing and directing my second movie for television. My problem was, I didn't have a nickel.
seq level0 \*arabic652 So, I bought a cheap camera and I did for the equivalent of what we all know as "The Blair Witch Project", I did a home‑made monster movie, I got lucky with it, it got me some notoriety and I went on and that became my second movie made for television.
seq level0 \*arabic653 But it was ‑‑ James Cameron made the most expensive move in history, I made the cheapest movie in history, but it was played professionally and that's what counted.
seq level0 \*arabic654 And in a way one could say, give me $300‑million and I could make the best movie in the world too, you just hire the best people to do it. But I give Jim a little bit more credit than that because I knew what a talented artist he was in the beginning.
seq level0 \*arabic655 It took me eight years part time to get that monster movie finished, between my responsibilities to my daughter and my family and part‑time work in trying to get this movie done.
seq level0 \*arabic656 That's a long time to chisel off a man's career for one movie.
seq level0 \*arabic657 And then I remember the night I started a new job laying drywall. If you have ever laid it, 12 foot long sheets, 5/8th inch thick holding it up over your head all day, it's very heavy, hard work and I just started this new career, and I went home after my first day's work and I want you to imagine how hard it was for me to watch James Cameron receive his Oscar.
seq level0 \*arabic658 And I wondered, why doesn't this station have ‑‑ or this area have opportunity? Why is there not production companies in Niagara? Niagara is the most beautiful area in Canada to live, or so I believe.
seq level0 \*arabic659 I was also told by my father, son you can move around anywhere you want to go, you'll find one of the most beautiful places to live in this country is in Niagara Falls.
seq level0 \*arabic660 And I guess his father knew that when he came over from Hungary in 1926.
seq level0 \*arabic661 When my father found opportunity in the factory he did well for himself. I'm still to this day looking for opportunity in Niagara.
seq level0 \*arabic662 'm not complaining about my past, I'd like to make that clear, I accept life deals its cards as it is, I'm the type that makes the best out of what I have. That's why I made a movie with no money and managed to get it professionally on television.
seq level0 \*arabic663 THE SECRETARY: Excuse me, Mr. Tanos.
seq level0 \*arabic664 MR. TANOS: Yes.
seq level0 \*arabic665 THE SECRETARY: Your 10 minutes has expired.
seq level0 \*arabic666 MR. TANOS: Oh, really, already.
seq level0 \*arabic667 Oh, my goodness. What do I do now then?
seq level0 \*arabic668 Well, okay. I had a trailer to play. Can I ask for an extension formally since there's only three of us here and two didn't show.
seq level0 \*arabic669 As a matter of fact, one of my associates, A.J. Heafy is on the docket and he had to leave early to go back to work.
seq level0 \*arabic670 THE CHAIRPERSON: Why don't you play the tape.
seq level0 \*arabic671 MR. TANOS: Okay, thank you.
seq level0 \*arabic672 I'm going to play the tape that was ‑‑ the reason why you are going to watch this tape is I met up with Wendell Wilks two years ago, he saw my work, TVN people liked what I did, they put an HD camera in my hand, the tape and what you're going to watch now is a trailer for an HD pilot movie that has been made with no budget outside of what I could put in out of my pocket.
seq level0 \*arabic673 Just hit play, please.
seq level0 \*arabic674 And this is a pilot movie, we hope to go into series for a one‑hour drama every week on TVN, which they have already promised me that one hour if they get their licence.
seq level0 \*arabic675 And the tape is rolling.
seq level0 \*arabic676 Lower the house lights maybe. Very good, and thank you.
‑‑‑ Video presentation / Présentation vidéo
‑‑‑ Applause / Applaudissements
seq level0 \*arabic677 MR. TANOS: Thank you very much everybody.
seq level0 \*arabic678 Thank you to the CRTC Commission.
seq level0 \*arabic679 Just one more quick second. I would like the people involved in Producer's Studio that are behind me to stand up now if you're still in the room, the people that were involved ‑‑ these two young actors are fabulous, they need an opportunity more than I do.
‑‑‑ Applause / Applaudissements
seq level0 \*arabic680 MR. TANOS: And in the name of opportunity, I ask that you give Producer's Studio a chance to do this and this all comes through the licence through CRTC to TVN Niagara.
seq level0 \*arabic681 Thank you very much.
seq level0 \*arabic682 MS FABIANO: Well, that's a tough act to follow.
seq level0 \*arabic683 Good afternoon, Members of the Commission. I am Dolores Fabiano.
seq level0 \*arabic684 I have been the Executive Director of the Welland/Pelham Chamber of Commerce and I'm currently the Chair of the regional Chambers of Commerce which is made up of the 10 Chambers of Commerce representing the 12 municipalities that make up our beautiful Niagara.
seq level0 \*arabic685 At this time I would like to introduce the other Chamber representatives who are with us this afternoon.
seq level0 \*arabic686 Dave Derry representing the St. Catharines Chamber of Commerce, Carolyn Benz from the Niagara Falls, Canada Chamber of Commerce and Amy Bald from the Thorold Chamber of Commerce.
seq level0 \*arabic687 Jointly the Chamber movement represents over 3,500 businesses locally. Clearly we are the voice of business, clearly we understand the needs of our members and I am here today to use our voice to express those needs.
seq level0 \*arabic688 Niagara is a distinct geographic area with a population of over 4100,000. We are read for our own broadcast station, we are ready for TVN Niagara.
seq level0 \*arabic689 Since the inception of TV over 50 years ago, the only local programming the residents of Niagara have had is from Toronto or from Buffalo, New York.
seq level0 \*arabic690 The story of the unique aspects of living in the Niagara Region with its excellent mix of agriculture, industry and tourism has never had a chance to be told until now.
seq level0 \*arabic691 TVN would be able to get that message to Toronto and Buffalo and other areas around the Golden Horseshoe. Our local culture issues and community could finally be reflected and projected to these markets.
seq level0 \*arabic692 Did you know, for example,that Thorold is the home of the only twin flight locks in the world?
seq level0 \*arabic693 Did you know that Pelham is home of the comfort maple tree, the oldest maple tree in Canada?
seq level0 \*arabic694 Did you know that West Lincoln is one of the largest producers of poultry in Canada?
seq level0 \*arabic695 Did you know that Niagara‑On‑The‑Lake is Canada's prettiest town?
seq level0 \*arabic696 Did you know that the Welland Canal is one of the world's greatest engineering marvels?
seq level0 \*arabic697 Did you know that because of our extensive fruit orchards, vineyards and vegetable gardens, our area has been given the title of garden of Canada?
seq level0 \*arabic698 I could go on and on. These are just a few of our stories, stories that we believe should be communicated beyond Niagara but told by Niagara.
seq level0 \*arabic699 TVN would be a welcome addition to the mix of media in this area. Particularly appealing from a Chamber of Commerce perspective would be the new way local businesses could advertise their products and services to potential customers throughout the peninsula and the rest of the local Golden Horseshoe.
seq level0 \*arabic700 Local programming would be a prerequisite to viewers watching advertisements, and I'm pleased to note that TVN's promise of performance includes producing 34.5 hours of Niagara programming every week.
seq level0 \*arabic701 I am pleased that the majority of shareholders are from Niagara and I commend their entrepreneurial spirit.
seq level0 \*arabic702 I personally have found their vision and philosophies to be particularly refreshing. Their genuine concern to serve the 12 municipalities that make up our wonderful Niagara is apparent.
seq level0 \*arabic703 At this time I urge the CRTC to grant a licence to TVN Niagara Inc. It is time for a TV station in Niagara.
seq level0 \*arabic704 TVN meets our needs. I anticipate the Commission will see the merit of their application and I look forward to a positive outcome from this hearing.
seq level0 \*arabic705 Thank you.
‑‑‑ Applause / Applaudissements
seq level0 \*arabic706 MR. LUPISH: Good afternoon everyone. I would like to thank everyone for coming and taking time out of their day, and thank you to the CRTC for having this meeting in Niagara Falls.
seq level0 \*arabic707 My name is Jason Lupish. I'm here to speak in support of TVN.
seq level0 \*arabic708 I know there are a lot people here with big names and big positions to speak on the subject. The reason I'm here is to make sure that the common man gets a voice in this subject.
seq level0 \*arabic709 In most people's eyes I am the everyday Joe that you are broadcasting to, that you are trying to entertain. Truth be told, it's people like me that this country was founded by and for, and as the everyday Joe with many people just like me in support, I'm here to tell you what I want. I want a television station in Niagara.
seq level0 \*arabic710 I was born and raised in St. Catharines, I have no intention to leave. This is a great place to live and I hope to raise a family here one day. However, I want to have a career as a filmmaker, and with circumstances as they are, I will not be able to do that. I will have to go to a market such as Toronto or Vancouver, or Los Angeles for that matter, like so many other people from Niagara have done.
seq level0 \*arabic711 Growing up like many other families, my family couldn't afford to go on vacations. The world that I was exposed to was through a television set. I was exposed to people of Toronto and Buffalo mostly, as well as Barrie, Hamilton and even Erie. I knew what was happening in Western New York more than I knew what was happening down my street.
seq level0 \*arabic712 The Niagara Region is a vast, sprawling, beautiful area that no one outside of this area knows about. The only outlet to let people know of events happening in our town, in our own backyards is by way of the newspaper, which is a day to a day and a half late, depending on where you live.
seq level0 \*arabic713 This medium of communication has been around since the 1800s, and probably sooner, and is very limited in the amount of content you can put in it on a day‑to‑day basis, and it's all we have. Take this in for a second. The only form of mass communication we have is a medium that has been used since the 1800s, possibly earlier.
seq level0 \*arabic714 I, along with many others, think it's time we caught up with the rest of the world. I couldn't tell you what was happening in Welland or Fort Erie, or even Thorold for that matter, but I could tell you what Toronto plans to do to beat the heat, or if their subway workers are on strike or what Western New York is going to do in case of a teachers' strike.
seq level0 \*arabic715 These are just some of the many reasons why the Niagara Region needs a television station.
seq level0 \*arabic716 The brain drain is something of an epidemic in the Niagara Region, but let me tell you, it's not just doctors that we need.
seq level0 \*arabic717 There are two post‑secondary institutions in the Niagara Region that offer film programs. Niagara College is even getting a new film wing, or so I've been told, to their school named after James Cameron.
seq level0 \*arabic718 Niagara College is a leader in training their students in the television medium, but once they get out, where do they go? If they wish to work in their field they just spent three years studying they can't stay here because there is nothing here for them, they must go to a market that can offer them employment. I urge you to stop running off our artists.
seq level0 \*arabic719 Give TVN a licence so that so many of us can stay here in the Niagara Region. Without TVN we are losing some of our most creative people every year.
seq level0 \*arabic720 I know there are some people out there who oppose TVN getting a licence and these people seem to be other television companies.
seq level0 \*arabic721 My apologies for only reading one of them, but I imagine that they are all pretty much the same and when it comes down to it, there's only one real reason why these other TV companies would oppose TVN, money.
seq level0 \*arabic722 It's sugar coated to sound like it's more than that, but the basic fact of the matter is money. I'll try my best to go over the arguments and debunk them as I go along.
seq level0 \*arabic723 They say that with TVN's business model, it will not succeed and fail. In all honesty, why would competition oppose something that they honestly think will fail.
seq level0 \*arabic724 I know that personally I would like to see myself come out on top and see my competition fail, that would just leave me and the entire market.
seq level0 \*arabic725 This argument is ridiculous. Obviously these people haven't met the people of Niagara; we're not quitters and we don't fail. And if it does fail, why would they care? It's no skin off their nose, they will still have their station in the morning. TVN will not fail and it is fear that is bringing on this opposition and fear that spurred this ridiculous argument.
seq level0 \*arabic726 They say that TVN will not generate enough money for state‑of‑the‑art equipment and great production values that people have come to expect from television.
seq level0 \*arabic727 No offence, but this attitude is the reason why Canadian television sucks.
‑‑‑ Applause / Applaudissements
seq level0 \*arabic728 COMMISSIONER LANGFORD: We want you to speak your mind here today. Don't hold back.
‑‑‑ Laughter / Rires
seq level0 \*arabic729 MR. LUPISH: First of all, TVN will have high‑quality equipment. Secondly, instead of worrying about glitz and glam, why don't you worry about the content. People watch television for the content and could care less what kind of camera or lighting set‑up you have.
seq level0 \*arabic730 I've seen many of the shows that these rival television networks are currently airing and instead of spending your money on state‑of‑the‑art equipment, you should hire writers and consultants so you can show things that people actually want to see.
seq level0 \*arabic731 I know about TVN's plan and they are going air things that people are actually going to watch and be interested about. They have not forgotten who they are broadcasting to. They are worried about the content and not the other superficial stuff.
seq level0 \*arabic732 NYPD Blue, Mash, Cheers and Seinfield didn't stay on the air for so many years because the shows looked good, it was the content that delivered those week in and week out, no other reason. That is why people stayed with these shows for so long and that is why people will stay with these shows is because of the content.
seq level0 \*arabic733 Another argument that has been brought up is that TVN will not be a No. 1 broadcaster right out of the gates. Why would it? Fox didn't just roll out one day and become a big player, they had nothing for years and finally got something with Married With Children. It wasn't until the Simpsons came along and then picking up some major sporting events that they became a force.
seq level0 \*arabic734 To use this argument that TVN shouldn't get a licence is absurd. TVN will is a station that will be the people of Niagara and the people surrounding Niagara. I think satisfying these people is an easily reachable, realistic goal. The goal is local is local television, not NBC, ABC or Global.
seq level0 \*arabic735 It's not a national broadcast company. This argument that they won't be a No. 1 broadcaster right away is ludicrous because it is saying that they won't be something that they're not trying to be. It's like saying that I can't buy a house because I won't be a basketball player.
seq level0 \*arabic736 The argument that Global CHCH is already covering the Niagara Region is preposterous. The bottom line is that they don't. If that was the case, how come they don't have someone in the morning show in the Niagara? They don't, they're all in Hamilton. I don't blame them, Hamilton is far away, it's a half hour from St. Catharines, 45 minutes from Niagara Falls and close to an hour from Fort Erie. I couldn't even tell you how far away from Port Colborne or Welland they are.
seq level0 \*arabic737 How can someone that far away cover our local events? They can't.
seq level0 \*arabic738 Also Hamilton is a pretty big city and, of course, preference is going to be given to their own city. There's talk of the CRTC Board mandating them to cover the Region more. Why? They obviously don't want to and they obviously can't. There's no sense in making people do something they don't want to do because if it's done, it will not be done right.
seq level0 \*arabic739 I'm from the background that if the job isn't getting done, do it yourself, and that's what TVN will do.
seq level0 \*arabic740 And now we start to get into the real reason ‑‑ do I still have enough time?
seq level0 \*arabic741 THE SECRETARY: Yes.
seq level0 \*arabic742 MR. LUPISH: Are we good?
seq level0 \*arabic743 Okay, thank you.
seq level0 \*arabic744 Now, we start to get into the real reason why this television station is being opposed. They say that the market can't handle another television station going to air.
seq level0 \*arabic745 What this means is that less advertising dollars will line their pockets and this is what it all comes down to, money, the market can't handle it. If for no other reason, then it has to.
seq level0 \*arabic746 It's not like TVN will get their licence and the market will just up and go away, this argument consists of other TV stations not getting enough money, once you have money you don't want to share it.
seq level0 \*arabic747 Anyone who comes up here and says that they will lose money if TVN gets a licence is a liar. They are afraid they will get less money. To lose money means you will go in debt; they will not go in debt, they will just not get as much money. What this opposition comes down to is competition; they are afraid that TVN will succeed and they will get less money, bottom line.
seq level0 \*arabic748 That is why these other television companies are opposing this, they are afraid of competition. A lack of competition breeds mediocrity.
seq level0 \*arabic749 I am tired of seeing my airwaves plagued with mediocre standards. Let TVN have its licence and let's raise the bar. Let there be competition and let the standards of Canadian television rise to the occasion.
seq level0 \*arabic750 I'm a firm believer that TVN should get a licence because only good can come from it. Jobs will be created, we will be able to keep our local artists, we will give our artists and the people of Niagara a much bigger forum to express their work and who they are. We will have a better sense of community.
seq level0 \*arabic751 Like I mentioned before, Niagara is a big, sprawling place to live, however, we really have no way of getting one place to another. TVN will help bridge that gap. Rather than just be aware of a few things going on in our city, we will know things that are going on in our neighbouring cities as well. I couldn't tell you how to get to Port Colborne, let alone what's going on in that city. TVN will bring all of our cities together through knowledge of one another.
seq level0 \*arabic752 And then I have got a lot more but I just wanted to say, before my time is up, I also own a small production company in St. Catharines, and I actually have a DVD here to show of a recent project that we're actually still working on, and we have produced two feature films in the last two years ‑‑ this is our second one ‑‑ and both, the first one the budget was under $8,000 and this one here, the budget is $5 literally.
seq level0 \*arabic753 And I just wanted to say, if you guys ‑‑ I'm assuming you all have the Internet. Go and check out our website. It's www.loaddstudios.com, that's two "D"s, just so you can check out the kind of stuff that we are producing here in Niagara. I think it's on par with everything else that's being produced in Canada, and I just ‑‑ I don't know. I think that's pretty much it.
seq level0 \*arabic754 We have a lot of local volunteers, like people who are volunteering their time, money, everything and I think there's just a huge market for it here, especially in terms of independent producers like Mr. Tanos over here as well.
seq level0 \*arabic755 And I know there's a lot more as well. J. J. Booth owns Electric Dreams Productions and I know they have a lot of stuff on go as well.
seq level0 \*arabic756 So, I think that's it.
‑‑‑ Applause / Applaudissements
seq level0 \*arabic757 THE CHAIRPERSON: Thank you very much.
seq level0 \*arabic758 Your positions and performances were very clear. Thanks.
seq level0 \*arabic759 Madam Secretary.
seq level0 \*arabic760 THE SECRETARY: Thank you, Mr. Chair.
seq level0 \*arabic761 THE CHAIRPERSON: We have no questions for you. Thank you.
seq level0 \*arabic762 THE SECRETARY: I would like to call the next five appearing interventions as a panel and they are, Gerry Augustine, Jack, Miller, Liv Uhrig, Brock TV and Richard Sasse.
seq level0 \*arabic763 If you'd like to come up to the front, please.
seq level0 \*arabic764 You each have 10 minutes to present your intervention and could you please introduce yourself before you speak.
seq level0 \*arabic765 Thank you.
seq level0 \*arabic766 MR. MILLER: Hello, Mr. Chairman. I'm Jack Miller and you know that. It's very nice to see you again. It has been a long time. The last time we spoke I think we both had hairs all over the tops of our heads, but then that far back so did Wendell.
seq level0 \*arabic767 Between myself up on the screen and all the other people at microphones, you have already heard today quite of bit what I had intended to talk to you about.
seq level0 \*arabic768 I will drop out some random thoughts of mine that have not come up yet. One of them just occurred to me this morning. We're talking here about a television station that would rely for its entertainment attractiveness on classic movies, and a lot of people wonder, will classic movies work?
seq level0 \*arabic769 What we mean by classic movies is old movies, and I have not mentioned or I have not heard anybody else mention one possible attraction in old movies, the language is clean.
seq level0 \*arabic770 Imagine a new television commercial station going on the air and never having to use that little placard: Viewer discretion is advised. Wouldn't that be something. I don't know if it would happen, but it would be nice.
seq level0 \*arabic771 Now, we have had a lot of talk this morning about people in this area not seeing themselves on television, so, if you finally licence ‑‑ or if you licence an application for a station that has finally come before you, we would have to start from ground zero in achieving the benefits that come from seeing yourself on television. I don't quite agree with that. I think we would have to start from ground minus zero.
seq level0 \*arabic772 Because when television started here in 1948, WBEN‑TV in Buffalo, the people here in Niagara especially could see it with crystal clarity right away, it was right next door, just across the river. The people in Hamilton, for the most part, could not see it, most of them lived below the Niagara Escarpment and that blocked the signal ‑‑ you know, the Niagara Escarpment, that's what Hamilton likes to call the Hamilton Mountain. It's 350 feet high, but it's good enough for a mountain for Hamilton.
seq level0 \*arabic773 The people in Toronto could not see it very well either because at the beginning the signal was pretty weak and Toronto was farther away and it didn't produce very good pictures to everybody here. We came under its spell immediately and we've been under it ever since.
seq level0 \*arabic774 You see, this was a brand new American communications medium and we quickly saw that it shared one characteristic with every other American communications media through history, and that was it had in all of its programming an underlying message, a subliminal message which was, the United States of America is the greatest country in the world to call home and if you call some other country home you're living an inferior lifestyle you poor sap.
seq level0 \*arabic775 Well, also realized pretty soon that television was probably the best brain washing machine ever invented and Ottawa spotted this and understood the threat to our self‑image here, so before long it saw to it that there was a station in Toronto and we could see that very clearly here in Niagara as well.
seq level0 \*arabic776 Between growing up here and then moving back here with my late wife after I retired, I've lived in Niagara about 30 years, I think I know the place pretty well, I live here now.
seq level0 \*arabic777 We had a station in Toronto. Well, it had least waved the Canadian flag, but before long it was taking up the local cheerleading and it also had the subliminal message ‑‑ maybe not quite as strong, but it was there ‑‑ and it was, Toronto is the greatest place in the world to live and if you're living anywhere else you're living an inferior lifestyle you poor sap.
seq level0 \*arabic778 And then Hamilton got a station and then stations started coming from all over the place.
seq level0 \*arabic779 And really since we had this message that life would be wonderful for you us if we lived in any of these other places and no balancing message that life is wonderful for us because we live here, that sort of seduced us.
seq level0 \*arabic780 I think the people here are not at ground zero ‑‑ as I was saying earlier ‑‑ in terms of what television can do for your self‑image, I think we have to start working up to ground zero once we get our own television, and I hope we get it pretty soon and it had been 57 years getting us to this point; if you say no, Lord knows if we'll ever see it again, because by the time another application would come along global warming might have wiped out the human race.
seq level0 \*arabic781 Mr. Chairman, as I said, these subliminal messages may boast the self‑image of people and their cities but they put down the self‑image of people elsewhere. I believe they mean to do that.
seq level0 \*arabic782 When I came back here after I retired I made a long study ‑‑ I was in the newspaper business, as you know and it was sort of habit forming ‑‑ I started studying the place and I got to know it very well, even better than I had known it when I grew up here and I came to the conclusion, first of all, that this is a marvellous place to live, it is just gorgeous, but you heard of that today. We have all these marvellous features.
seq level0 \*arabic783 Somebody mentioned the Welland Canal. They didn't mention that it has made it possible for 175 years for cargo ships from all over the globe to come right into middle of the continent to carry their cargoes from anywhere and to take our things back out again to sell over the world.
seq level0 \*arabic784 Before the Welland Canal came along, ships couldn't come up much beyond Niagara Falls. Would you want to if you were a sailor?
seq level0 \*arabic785 It's a change. Things here in Niagara have changed the way, not just Niagara lives, but the way the continent lives. This is a beautiful place, we have gorgeous scenery, we have a lovely climate ‑‑ please don't count that last winter ‑‑ and we have lovely people and lots of features, industries, tourist spots. But you know all about that, you've heard that many times.
seq level0 \*arabic786 But we have never seen this on TV and we go on seeing on TV these messages, subliminal messages boosting other places as the place to live.
seq level0 \*arabic787 And, Mr. Chairman, you don't have much basis for feeling good about yourself unless you can know yourself and you can't know yourself unless you can see yourself, and you can't see yourself unless you have a mirror, and we found out long ago that television is the greatest of all the mirrors.
seq level0 \*arabic788 It will let you see yourself head on like a regular mirror, or let you see the back of your head which a regular mirror cannot do. It will let you see all your other angles, it will let you see your surroundings.
seq level0 \*arabic789 If you can see all that and it looks good to you, then you have a chance at starting to feel better about yourself, but since I have been back here I have come to the conclusion that, while everybody here in the hall today is here obviously because they're an enthusiast of this place and think it's great, I feel an awful lot of people in the Niagara Region ‑‑ I'm afraid it's the majority in my view ‑‑ don't feel as good about this place as this place deserves to have them feel.
seq level0 \*arabic790 So, if we get a new television station, maybe we can start towards that.
seq level0 \*arabic791 I'm sure you will say yes to this, I can't think of any reason why you would say no.
seq level0 \*arabic792 All we need is that yes from you. After 57 years, please do it now, because it's time. It is time.
‑‑‑ Applause / Applaudissements
seq level0 \*arabic793 THE CHAIRPERSON: Thank you.
seq level0 \*arabic794 MR. FERRATO: Good afternoon, Commissioners, Mr. Chairman.
seq level0 \*arabic795 As a student of Brock University as well as a student trying to tap into the media industry, I would like to thank you for inviting me to come here and present my case.
seq level0 \*arabic796 Allow me to introduce myself. My name is Justin Ferrato. I go to Brock University, I'm studying business communications, so throughout my program I've learned a lot about the TV industry, how exactly media and culture entwine within each other and how a reflection of culture is based upon what we see on TV.
seq level0 \*arabic797 I've learned over the years actually, you guys have been talking about a lot of films and we have been talking about classic films and such. Throughout my courses I have learned to take an appreciation for a lot of the older classic films and one of these actually watches one of these things would actually get a little more background into ‑‑ a little bit more understanding about the older films, including Harvey, I think I have to see that one.
seq level0 \*arabic798 But the reason I'm here is obviously to support TVN. The support of TVN has created distinct opportunities for Brock University. As Brock University continues to grow and expand its subculture as a small component of the social fabric of Niagara, TVN will created an opportunity to accurately represent, reflect and assist our subculture in comprehensive and educational ways.
seq level0 \*arabic799 Before I mention exactly how I'm involved in this, I'll just go over exactly what Brock University, what Brock University means to the Region of Niagara.
seq level0 \*arabic800 Brock University is a growing community in the Niagara Region. It has a population of almost 16,000 students and is continuing expand. Our motto is that we are a comprehensive university, we are trying to expand in all possible ways and we are trying to look for new areas that we can tap into.
seq level0 \*arabic801 As Brock has continued to grow, even within the last five years, we have become part of this community. we have created our own subcommunity within the community. We have began to bridge that gap between the difference between the local St. Catharines and Niagara Region and the Brock University community. We have finally amalgamated into one community and that is the Niagara Region.
seq level0 \*arabic802 As Brock's community of students has grown over the years, we have become an important aspect of the Niagara community.
seq level0 \*arabic803 The students at Brock have a desire set of skills, interests and hobbies that creates such a unique community and once again, as I mentioned, we are only one part of the social fabric of Niagara.
seq level0 \*arabic804 &n