ARCHIVED - Transcript
This page has been archived on the Web
Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.
Providing Content in Canada's Official Languages
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 DEVANT
LE CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
Various broadcasting applications further to calls for
applications for broadcasting licences to carry on radio programming undertakings to serve Owen Sound, Windsor and Peterborough, Ontario /
Plusieurs demandes en radiodiffusion suite aux appels de demandes de licence de radiodiffusion visant l'exploitation d'entreprises de programmation de radio pour desservir Owen Sound, Windsor et Peterborough (Ontario)
HELD AT: TENUE À:
Rooms B, C & D Salons B, C et D
Delta Hotel London Armouries Hôtel Delta London Armouries
325 Dundas Street 325, rue Dundas
London, Ontario London (Ontario)
December 11, 2007 Le 11 décembre 2007
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 broadcasting applications further to calls for
applications for broadcasting licences to carry on radio programming undertakings to serve Owen Sound, Windsor and Peterborough, Ontario /
Plusieurs demandes en radiodiffusion suite aux appels de demandes de licence de radiodiffusion visant l'exploitation d'entreprises de programmation de radio pour desservir Owen Sound, Windsor et Peterborough (Ontario)
BEFORE / DEVANT:
Rita Cugini Chairperson / Présidente
Peter Menzies Commissioner / Conseiller
Helen del Val Commissioner / Conseillère
ALSO PRESENT / AUSSI PRÉSENTS:
Cindy Ventura Secretary / Secrétaire
Joe Aguiar Hearing Manager /
Gérant de l'audience
Kelly-Anne Smith Legal Counsel /
HELD AT: TENUE À:
Rooms B C D Salons B C D
Delta Hotel London Armouries Hôtel Delta London Armouries
325 Dundas Street 325, rue Dundas
London, Ontario London (Ontario)
December 11, 2007 Le 11 décembre 2007
- iv -
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PRÉSENTATION PAR / PRESENTATION BY:
Neeti P. Ray (OBCI) 288 / 1743
Blackburn Radio Inc. 364 / 2173
INTERVENTION PAR / INTERVENTION BY:
Neeti P. Ray (OBCI) 430 / 2562
INTERVENTION PAR / INTERVENTION BY:
CTV 435 / 2595
REPLY BY / RÉPLIQUE PAR:
Blackburn Radio Inc. 455 / 2692
Neeti P. Ray (OBCI) 480 / 2842
- v -
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PRÉSENTATION PAR / PRESENTATION BY:
Acadia Broadcasting Limited 485 / 2870
591989 B.C. Ltd. 527 / 3143
London, Ontario / London (Ontario)
‑‑‑ Upon commencing on Tuesday, December 11, 2007
at 0900 / L'audience débute le mardi
11 décembre 2007 à 0900
LISTNUM 1 \l 1 \s 17301730 THE CHAIRPERSON: Ladies and gentlemen, good morning.
LISTNUM 1 \l 11731 I just have an announcement before we begin the proceeding today.
LISTNUM 1 \l 11732 According to the agenda of the Public Hearing, the presentations of the Peterborough and Kawartha Lakes applications will follow after the completion of the Windsor phase of this proceeding.
LISTNUM 1 \l 11733 Late yesterday afternoon we were advised by Acadia Broadcasting Limited, item 13 on the hearing agenda, of a tragic fatality back home involving a member of the Acadia Radio family. As a consequence, Acadia Broadcasting has requested and has been given permission to present its application first as part of the Phase I presentations involving the Peterborough and Kawartha Lakes applications. For Phase II and Phase IV we will revert back to the original agenda.
LISTNUM 1 \l 11734 On behalf of the CRTC, and I'm sure all of you join me in extending our condolences to Acadia Broadcasting.
LISTNUM 1 \l 11735 I would also like to thank the remaining Peterborough and Kawartha Lakes applicants for their understanding and cooperation.
LISTNUM 1 \l 11736 Thank you all very much.
LISTNUM 1 \l 11737 Madam Secretary.
LISTNUM 1 \l 11738 THE SECRETARY: Thank you, Madam Chair.
LISTNUM 1 \l 11739 We will now proceed with item 5 which is an application by Neeti P. Ray, on behalf of a corporation to be incorporated, for a licence to operate an FM commercial ethnic radio programming undertaking in Windsor, Ontario.
LISTNUM 1 \l 11740 The new station would operate on frequency 95.9 MHz (channel 240B1) with an average effective radiated power of 2,900 watts (maximum effective radiated power of 11,800 watts/antenna height of 145 metres).
LISTNUM 1 \l 11741 Appearing for the applicant is Mr. Neeti Ray.
LISTNUM 1 \l 11742 Please introduce your colleagues and you will have 20 minutes for your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 11743 MR. NEETI RAY: Thank you very much.
LISTNUM 1 \l 11744 Madam Chair and Commissioners, my name is Neeti Ray. I am president of the company to be incorporated. I am also president of 1650 AM Mississauga CINA Radio.
LISTNUM 1 \l 11745 On my left is Radhika Ray. She is a consultant with MacKenzie and Company, and also London is a very familiar place for her because she spent four years doing her HBA at the Ivy School of Business before joining MacKenzie.
LISTNUM 1 \l 11746 On my right is Anthony Gossman. He is a broadcast and wireless engineer. He is also partner in the proposed Windsor radio station. He has also done broadcasting when he was very young. He told me that he is very old now.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11747 MR. NEETI RAY: Next to Anthony is Rochelle Porter who is with the Multicultural Council of Windsor Essex County. She has also worked for the CBC as a communications manager for 22 years until recently.
LISTNUM 1 \l 11748 Behind me on my left is Mr. John Corrent. He is a lawyer and he is also partner in our proposed radio station in Windsor.
LISTNUM 1 \l 11749 Next to John is Dr. Walter Temelini. He is Professor Emeritus, University of Windsor. He is also chairman of the board of directors of the proposed radio station in Windsor.
LISTNUM 1 \l 11750 And next to Dr. Temelini is Dr. Conrad Winn. He is the president of COMPAS Research and Public Opinion Inc. and he is the one who has done the survey on our behalf of the Windsor audience.
LISTNUM 1 \l 11751 And next to Dr. Winn is Jim Moltner. He is our engineering consultant.
LISTNUM 1 \l 11752 Madam Chair, if I have your permission I would like to put on record that on September 28 we provided the Commission with a revised ownership structure and the main asset of that was that we joined hands with three new partners.
LISTNUM 1 \l 11753 And in addition to that, the members of the family of Neeti Ray, myself, would hold 94 percent shares in the new station which we have called "Newco" through a holding company which will be called Rayco in which, as we wrote to the Commission on the 28th of September, we would be the sole shareholders holding shares; as follows, Neeti Ray 67 percent, Rayno Ray 23 percent and Radhika Ray 10 percent.
LISTNUM 1 \l 11754 I would like to advise the Commission that because of the sudden and unexpected demise of Mrs. Rayno Ray on November 18th, 2007 it has become necessary to revise the ownership structure of Rayco as follows: Neeti Ray 67 percent and Radhika Ray 33 percent.
LISTNUM 1 \l 11755 I would also point out that the above revision has no impact on the ultimate control of the licensee, as outlined in our application, which will continue to be exercised by Neeti Ray. I have also given a copy of this letter to the Commission.
LISTNUM 1 \l 11756 And I would start the formal part of the presentation now.
LISTNUM 1 \l 11757 Madam Chair and members of the Commission, our appearance before you today seeking approval to establish Windsor's first ever ethnic radio station on 95.9 FM represents the culmination of a broadcasting mission we embarked upon a few years ago.
LISTNUM 1 \l 11758 Our goal is to create a radio station that meaningful reflects the reality of Windsor's ethnicity, addresses the needs of its diverse, multicultural communities and builds important bridges. A readily identifiable gap exists in the Windsor market.
LISTNUM 1 \l 11759 According to the 2001 Census more than 50 percent of Windsor's total population have indicated an ethnic origin other than English, French or aboriginal. In fact, Windsor has Canada's fourth largest proportion of foreign‑born population after Toronto, Vancouver, Hamilton, according to the same census results and, yet, there is no dedicated full service ethnic radio station in Windsor to serve the unique needs of its vast multicultural population.
LISTNUM 1 \l 11760 The current local market clearly does not reflect the dominant reality of Windsor's cultural and linguistic diversity. What it does graphically illustrate, however, is the need for a fulltime ethnic radio station dedicated to third language programming, third language broadcasting services for the multicultural communities of the Windsor region.
LISTNUM 1 \l 11761 If licensed, the proposed ethnic radio station will optimize the utilization of the 95.9 FM frequency and reaching out to serve 21 un‑served multicultural communities in 12 different languages within the Windsor region. These languages are Cantonese, Italian, German, Polish, Ukrainian, Hindustani, Tagalog, Spanish, Arabic, Hungarian, Romanian and Serbian.
LISTNUM 1 \l 11762 It is our intention to provide high‑quality locally relevant programming services in the above languages to the following 21 multicultural communities who currently have no service available to them in their mother tongues, Chinese, Italian, German, Polish, Ukrainian, Indian, Pakistani, Filipino, Spaniard, Mexican, Salvadorian, Guatemalan, Nicaraguan, Lebanese, Iraqi, Egyptian, Palestinian, Syrian, Hungarian, Romanian and Serbian.
LISTNUM 1 \l 11763 We have also extended an opportunity to First Nations peoples to participate fully with the proposed ethnic radio station's 21‑member broadcast family through six hours of programming each week.
LISTNUM 1 \l 11764 The inclusion of high‑quality locally relevant programming into these 21 targeted multicultural communities will add significant new elements of diversity and listener choice to the radio spectrum of the Windsor Essex County.
LISTNUM 1 \l 11765 Ethnic groups will now have access to local programs to promote events and activities in their communities. Multilingual programming is important to listening audiences who unlike their mainstream English‑language counterparts do not have access to any Canadian radio broadcasting in their preferred languages.
LISTNUM 1 \l 11766 MS RAY: An imbalance currently exists in the Windsor market between mainstream English language programming and the non‑existent local programming to third language audiences.
LISTNUM 1 \l 11767 The total number of weekly programming hours broadcast by local English radio stations within the Windsor region is approximately 1,200 hours, not counting CHYR FM Leamington which has a good reach within the Windsor Essex County. By comparison the programming hours available to the multicultural communities from a local Canadian station is zero.
LISTNUM 1 \l 11768 The implementation of the proposed radio station's ethnic broadcast plan represents an important step forward in addressing this gap. The only source of over‑the‑air multilingual programming for Windsor's ethnic communities is WNZK 680 AM Radio in Detroit. It is an American station with no Canadian orientation or commitment to fulfil the needs of local Windsor communities or to provide local Windsor news, traffic or community information.
LISTNUM 1 \l 11769 The U.S. station cannot serve the needs in Canada or build bridges the way a Canadian station could.
LISTNUM 1 \l 11770 The proposed ethnic radio station's broadcast plan for 95.9 FM fully meets the spirit and intent of the Broadcasting Act and the Commission's ethnic broadcasting policy and represents the most comprehensive and productive utilization of the 95.9 FM frequency.
LISTNUM 1 \l 11771 Turning specifically to the third language segment of the market, Windsor's population by immigrant status in 2006 was 75,000 or 23.2 percent of Windsor's total population. Now, this itself represents a population comparable to the total population of either Sault Ste. Marie or Kawartha Lakes, Ontario or Red Deer or Grand Prairie, Alberta and larger than that of Owen Sound, Woodstock, Leamington, North Bay and Cornwall, Ontario to name a few.
LISTNUM 1 \l 11772 According to the recently released 2006 Census results, Windsor's immigrant population has grown by 14,000 between 2001 and 2006 representing the largest ever increase in Windsor's immigrant population.
LISTNUM 1 \l 11773 Foreign‑born population accounted for 22 percent of Windsor's total population in 2001, up from 20 percent in 1996. These numbers will only increase as new immigrants continue to make Windsor their home.
LISTNUM 1 \l 11774 The 2001 Census also shows that almost 70,000 respondents or 22 percent of Windsor's population indicated a mother tongue other than English, French or one of the aboriginal languages. There are further tens of thousands of Canadians born to third language parents who would relate to and want to listen to the proposed ethnic radio station.
LISTNUM 1 \l 11775 These demographic facts compellingly indicate that it is time for an ethnic radio station to be established in Windsor.
LISTNUM 1 \l 11776 The 2001 Census found that there are a sizeable number of immigrants living in the Windsor region who could speak neither English nor French. These persons are at risk of social isolation and they face great barriers to accessing information and services.
LISTNUM 1 \l 11777 Multilingual radio programming in their respective heritage languages can reduce these risks by helping immigrants connect within their ethnic communities and access information about services, programs, local Canadian laws and current happenings. This in turn will also help make them active participants in the larger community.
LISTNUM 1 \l 11778 MR. NEETI RAY: As a further means of ensuring that our broadcast plan will address the specific needs and interests of the large and diverse ethnic communities we commissioned the non‑partisan and respected public opinion and research firm, COMPAS Inc., to conduct a comprehensive study of the Windsor Radio audience.
LISTNUM 1 \l 11779 The Windsor radio survey of 350 respondents from the general population conducted by COMPAS confirms our contention that, given the multicultural composition of the Windsor CMA and the absence of a fulltime Canadian multilingual radio station to fulfil their needs, a readily but yet untapped market undoubtedly exists. It needs to be served.
LISTNUM 1 \l 11780 Surveys of this size, according to COMPAS are deemed accurate to within 5.5 percentage points, 19 times out of 20. A key finding in the COMPAS survey, which did not target a particular segment but the general population, is that the proportion of respondents who indicated that they listen to multicultural radio from Detroit corresponds closely with the proportion of foreign‑born residents in Windsor and those who have a mother tongue other than one of the official languages.
LISTNUM 1 \l 11781 In the COMPAS study 20 per cent of all respondents said they listen to multicultural programming coming from a Detroit ethnic radio station. As discussed earlier, 22 per cent of respondents in the 2001 census were foreign‑born and a similar proportion also indicated a mother tongue other than English or French.
LISTNUM 1 \l 11782 It would therefore be reasonable to say that the vast majority of all foreign‑born and all third‑language speaking population of the Windsor region have a substantial appetite for radio programming in their respective heritage languages.
LISTNUM 1 \l 11783 The COMPAS study shows that the vast majority of Windsor's third‑language population are indeed resorting to a Detroit ethnic radio station to fulfil their needs. This existing Windsor radio station is immediately available to switch from an American station to a Canadian ethnic radio station offering locally relevant programming to Windsor residents.
LISTNUM 1 \l 11784 MS RADHIKA RAY: Windsor residents are enthusiastic about another issue that makes the approval of this radio application even more desirable. This was revealed by answers to the following questions. Question, and I quote, "Canadians who want to listen to a multicultural station should have a Canadian option and shouldn't have to listen to American content."
LISTNUM 1 \l 11785 Fifty‑nine per cent of all respondents from the general public indicated that they strongly or moderately agree with the above statement. But what is particularly remarkable is that among those respondents who listen to ethnic radio from Detroit 57 per cent say they strongly agree and a further 19 per cent say they agree, for a total of 76 per cent who believe there should be a Canadian ethnic radio option as opposed to an American one.
LISTNUM 1 \l 11786 These results clearly demonstrate that, first, a need exists for ethnic programming. Second, that there is a ready audience demand in Windsor for ethnic radio programming. And third, that there is demand for a Canadian station to serve needs and build bridges.
LISTNUM 1 \l 11787 Respondents also estimated the impact of a new Canadian‑owned multicultural station on Windsor and the reactions were overwhelmingly positive irrespective of their background. A strong majority also believe that the proposed new ethnic radio station would enhance Canada's image as a democratic country respectful of its multicultural communities.
LISTNUM 1 \l 11788 The full version and details of the audience demand survey by COMPAS can be found on record as part of our application.
LISTNUM 1 \l 11789 MS PORTER: Madam Chair and commissioners, turning now to our Canadian content development initiatives, CCD. In keeping with the Commission's policy regarding CCD, as set out in public notice 2006‑158, the new ethnic radio station will, if licensed, implement a number of creative initiatives that will directly and beneficially impact the development, promotion and ongoing exposure of ethnic‑Canadian talent within the Windsor CMA.
LISTNUM 1 \l 11790 All CCD contributions will go toward the Annual Ethnic Journalism Scholarship Fund to be administered independently by the Multicultural Council of Windsor and Essex County.
LISTNUM 1 \l 11791 The direct expenditures proposed under the CCD plan, which we would take as a condition of licence, are as follows. A basic financial contribution will be based on the revenue generated each year during the first licensing period of the new FM radio station in keeping with the new radio policy, which we estimate to be approximately $6,000 over seven years.
LISTNUM 1 \l 11792 Additionally, an over and above contribution each year will go toward the Ethnic Journalism Scholarship Fund. These contributions would remain stagnant during the first seven years of licensing for a total of $24,000, over and above contributions over the seven years. The combined total of both the basic and over and above CCD contributions will go toward the Ethnic Journalism Scholarship Fund to be paid to and administered by the Multicultural Council of Windsor and Essex County.
LISTNUM 1 \l 11793 MR. NEETI RAY: We propose to award four mutually exclusive scholarships each year in years one through four. Each scholarship will be of an amount equal to the total combined basic and over and above CCD amount in a given year divided by four.
LISTNUM 1 \l 11794 Further, in years five, six and seven we propose to award eight mutually exclusive scholarships. And again, each scholarship will be of an amount equal to the total combined CCD amount for a given year divided by eight. Thus, a total of 40 such scholarships will be awarded over seven consecutive years, administered by the Multicultural Council.
LISTNUM 1 \l 11795 To further clarify, while the proposed Windsor ethnic radio station will provide these funds and assist in everyway possible with the proposed scholarship awards, the management and ownership of the station will remain autonomous of the selection and decision making process of the jury appointed by the Multicultural Council of Windsor and Essex County.
LISTNUM 1 \l 11796 In addition to the direct expenditures over a seven‑year period, we are committing to at least $36,000 annually or $252,000 over seven years in indirect costs for the on‑air promotion of ethnic concerts, performs and artistic programs in the various ethnic communities.
LISTNUM 1 \l 11797 We believe that indirect on‑air initiatives can have a profoundly beneficial impact on a radio station's efforts to further enhance, stimulate, promote and develop Canadian talent.
LISTNUM 1 \l 11798 MS RADHIKA RAY: Turning to our business plan, the projections we have made in our application are conservative and attainable without difficulty.
LISTNUM 1 \l 11799 We project revenues of $550,000 in year one with a sell‑out factor of about 25 per cent, going up to about 40 per cent in year seven with revenues of $845,000. We have no doubt that Windsor's strong ethnic business sector would be able to support the new ethnic radio station.
LISTNUM 1 \l 11800 The vast majority of the over 750 ethnic businesses in Windsor remain untapped by existing radio stations. Only 5 per cent of our revenue or $27,500 in year one is projected to come from existing Windsor radio stations.
LISTNUM 1 \l 11801 It would be worthwhile to keep in mind that with the 95.5 FM frequency we would gain, as a naturally‑flowing bonus, advertising dollars and listening audiences from the Detroit market. Though we have projected only 20 per cent or $110,000 in year one to come from the Detroit market, this projection is conservative.
LISTNUM 1 \l 11802 We know that the proportion revenues the existing radio stations garner from Detroit is significantly lower.
LISTNUM 1 \l 11803 MR. GOSSMANN: The only ethnic radio service available to Windsor listeners and advertisers is Detroit's WNZK‑AM 680 radio.
LISTNUM 1 \l 11804 In order to effectively compete with this Detroit ethnic radio station, it is vitally important that we have a signal coverage that local Windsor businesses need in order to reach their target markets on both sides of the border. 95.9 FM is the only frequency capable of doing that.
LISTNUM 1 \l 11805 In order to gain further insight into the needs of Windsor's ethnic radio advertisers I would quote from two of the number of intervention letters that the Commission has received from such local businesses. Mr. J. Andrew Porter of Windsor's well‑known immigration law firm wrote:
"If a proposed radio station is licensed on frequency 95.9 FM, which I understand has good coverage of both Windsor and Detroit, it could be the foremost outlet for us to get our messages across to our perspective clients. Without doubt, we would prefer this local Canadian outlet over the Detroit ethnic radio station if it delivers the audiences we are looking for near the Detroit River." (As Read)
LISTNUM 1 \l 11806 Mike Vonella, President of the famous Erie Street Business Improvement Association, also known as Via Italia, writes that:
"There is need to attract U.S. ethnic customers as well as local ethnic clients through a radio program that can be heard equally well in the entire region on a regular basis. In this way, we shall not have to depend on U.S. radio stations like WNZK." (As Read)
LISTNUM 1 \l 11807 These letters echo the feelings within Windsor's ethnic business communities, as seen in interventions similar to these.
LISTNUM 1 \l 11808 MR. NEETI RAY: Turning to the Windsor economy and whether it can sustain a new radio station. First, we would like to underline the fact that in a market where no ethnic radio station exists and where there is a large ethnic population and a sizeable business community, an ethnic format is in the best position to be viable and would have the least impact on existing mainstream English radio stations.
LISTNUM 1 \l 11809 The Windsor economy is in a state of adjustment, which is a part of a natural business cycle. Windsor's economy is based on foreign ground. Windsor has seen downturns in the past and has a strong history of economic growth. Such downturns have been short lived and the economy has always rebounded with great strength as the mayor of the City of Windsor, Eddy Francis, is on record as having said two weeks ago, "By the time a new station will be established the Windsor economy is expected to be well on its way to recovery."
LISTNUM 1 \l 11810 With Windsor's recent winning of the North American Cities of the Future award from Foreign Direct Investment magazine and the city's designation as North America's best small city for investment is a testament to the confidence that reputable economic organizations and publications have in Windsor's firm footing.
LISTNUM 1 \l 11811 Without a doubt, an ethnic radio station will be sustainable by Windsor's ethnic market. The benefits of such a station would greatly outweigh any risks.
LISTNUM 1 \l 11812 To conclude, we would emphasize that Commission approval of our proposed ethnic radio station will bring true diversity to Windsor's broadcasting market. Its unique format will reflect the city's multicultural needs, attract new listeners, increase tuning hours and generate new advertising dollars, overall a positive impact on Windsor's radio market and Canada's broadcasting system.
LISTNUM 1 \l 11813 Thank you very much, that concludes the formal part of our presentation. And we would be very pleased to answer any questions and I am sure you have some.
LISTNUM 1 \l 11814 THE CHAIRPERSON: Thank you, Mr. Ray. You have attended CRTC hearings before, I see, to be sure that we have questions.
LISTNUM 1 \l 11815 First of all, I would like to thank you for reading into the record your letter of December 10th and to you as well, on behalf of the Commission, we would like to express our condolences for the loss of Mrs. Ray.
LISTNUM 1 \l 11816 MR. NEETI RAY: Thank you.
LISTNUM 1 \l 11817 THE CHAIRPERSON: Attached to your oral presentation this morning you have filed some information that relates to the immigrant population of Windsor.
LISTNUM 1 \l 11818 So I just wanted to know whether or not this is new information or if this is information that was already included in your application.
LISTNUM 1 \l 11819 MR. NEETI RAY: This is new information because we didn't have on record at the time that we initially submitted the application the survey that was done by COMPAS, and also it reflects the new 2006 census results, which have been released recently, some of them as recently as the 4th of December this year.
LISTNUM 1 \l 11820 THE CHAIRPERSON: Right. So the charts here or the graphs, this is information that was compiled from the release of the Stats Canada data?
LISTNUM 1 \l 11821 MR. NEETI RAY: Yes.
LISTNUM 1 \l 11822 THE CHAIRPERSON: Okay. Thank you very much.
LISTNUM 1 \l 11823 I will ask Commissioner del Val to begin the questioning.
LISTNUM 1 \l 11824 MR. NEETI RAY: Thank you.
LISTNUM 1 \l 11825 COMMISSIONER DEL VAL: Thank you, Mr. Ray and panel.
LISTNUM 1 \l 11826 I just want to begin with looking at some of your programming first. I think a key element of your application is the prospect of repatriation of the listeners who currently have no alternative but to tune to the Detroit stations, and namely the strongest one seems to be CNZK, and that you plan to do so by providing a distinctly Canadian option.
LISTNUM 1 \l 11827 I would like to ask you exactly what your repatriation strategy is, how you plan to draw the listeners to your station and with what. So this is what these questions will be about.
LISTNUM 1 \l 11828 Now I am looking at your supplementary brief and you do talk about the Detroit market and the Windsor market. But aside from the size of those two markets, what distinction do you see between the Canadian Windsor audience and the U.S. Detroit audience?
LISTNUM 1 \l 11829 MR. NEETI RAY: As far as the demographics are concerned, there is hardly any difference. Every ethnic community in Windsor has a sister community in Detroit and as a result there is also a lot of interaction between the two sister communities.
LISTNUM 1 \l 11830 As an example, the Italian community in Windsor, I think, totals, if I remember correctly, between 30,000 and 35,000, and their Detroit counterparts over 350,000 of them. So the difference is not in demographics but there is a huge difference in the number of each ethnic community, the population within each ethnic community.
LISTNUM 1 \l 11831 Otherwise, the habits, the cultural activities, the food and the customs are the same as far as the audience is concerned and I think that is what your question was, about the audiences.
LISTNUM 1 \l 11832 COMMISSIONER DEL VAL: Okay. So then I am looking at the Windsor radio study by COMPAS and particularly the analysis that was provided as a response to deficiency, I believe. Then you also alluded in your opening paragraph about the question that you posed for the potential audience.
LISTNUM 1 \l 11833 Maybe I should go to the question as you have summarized in ‑‑ yes, I believe it is page 7.
LISTNUM 1 \l 11834 MR. NEETI RAY: Of the supplementary brief?
LISTNUM 1 \l 11835 COMMISSIONER DEL VAL: I am sorry, of your opening statement.
LISTNUM 1 \l 11836 MR. NEETI RAY: Today.
LISTNUM 1 \l 11837 COMMISSIONER DEL VAL: And you said ‑‑ are you there?
LISTNUM 1 \l 11838 MR. NEETI RAY: Of the presentation today, right?
LISTNUM 1 \l 11839 COMMISSIONER DEL VAL: Yes.
LISTNUM 1 \l 11840 MR. NEETI RAY: Okay.
LISTNUM 1 \l 11841 COMMISSIONER DEL VAL: Yes, the second to the last paragraph where you say, and I quote:
"Canadians who want to listen to a multicultural station could have a Canadian option and shouldn't have to listen to American content." (As read)
LISTNUM 1 \l 11842 What did you distinguish as American content? What was it that the audience didn't like about American content?
LISTNUM 1 \l 11843 MR. NEETI RAY: Before I ask Conrad Winn to shed further light on that, I guess the fundamental question that the respondents would ask themselves is the aspect of programming that relates to local content.
LISTNUM 1 \l 11844 WNZK is the only radio station heard by these respondents. WNZK does not have a Canadian orientation. It doesn't have Windsor news, local news, local traffic, information about local events, and that is what they are missing and therefore they would prefer to have a Canadian option.
LISTNUM 1 \l 11845 I am sure that Dr. Winn would have a few words to say on that.
LISTNUM 1 \l 11846 Dr. Winn.
LISTNUM 1 \l 11847 COMMISSIONER DEL VAL: Perhaps I could just follow up on your answer because it might be sufficient.
LISTNUM 1 \l 11848 So what you are talking about in terms of Canadian perspective is what you just said about local news, local traffic of Windsor, so what is happening about town in Windsor, and aside from that, is there anything that would make your proposed station's programming different from Detroit's?
LISTNUM 1 \l 11849 MR. NEETI RAY: Well, it would be different also in that the Detroit station is not committed to fulfilling any of the regulatory requirements of CRTC, which are good towards serving the Canadian audience as well, and to fulfil their needs.
LISTNUM 1 \l 11850 One of them is the exposure of Canadian talent and Canadian musical talents and exposure of Canadian events in the musical world and also the quality of programming, I guess. What we have proposed is very high‑quality programming from the perspective not only of the local content but the overall quality of the programming, which would include the kind of music they want to listen to.
LISTNUM 1 \l 11851 Local announcers, local content, response to the demands of the local listeners is something that would not be possible except through a local Canadian radio station.
LISTNUM 1 \l 11852 COMMISSIONER DEL VAL: Those are good examples. I am just trying to flesh out the application. I would like very much to hear about specifically what are the programs that you consider Canadian and that are customized for the Canadian audience.
LISTNUM 1 \l 11853 Do you have any other examples of those?
LISTNUM 1 \l 11854 MR. NEETI RAY: Well, each program would consist of news, and I know as a matter of fact that WNZK is not providing news except the international news coming from back home. Our news content will be equally divided between local news, national/regional news and international news. WNZK is not providing anything of that kind.
LISTNUM 1 \l 11855 I hope I am able to address exactly what you are trying to get at.
LISTNUM 1 \l 11856 COMMISSIONER DEL VAL: Yes, I think you are on the way there. Those are good examples.
LISTNUM 1 \l 11857 MR. NEETI RAY: Yes and, for example, the open line shows which WNZK has, but then of course that is mainly American context.
LISTNUM 1 \l 11858 There are no open line shows to give opportunities, for example, to the ethnic communities who are not very well versed in the official languages to be able to discuss issues, whether it is issues relating to social problems, issues in relation to, say, family problems, and be able to discuss issues relating to laws, local laws, politics and so on and so forth, which can only be done ‑‑ and that will distinguish our station from WNZK.
LISTNUM 1 \l 11859 COMMISSIONER DEL VAL: Would you have any, say, programs to feature Canadian artists?
LISTNUM 1 \l 11860 I know that this is sort of ‑‑
LISTNUM 1 \l 11861 MR. NEETI RAY: Yes, in fact, as we have specified in our CCD commitments, that we would encourage local artists, Canadian talents to come forward and provide us with their musical recordings so that we can expose them on the radio and this is an opportunity to them which for them would give them the chance to be heard by thousands of people, which they otherwise would not have had.
LISTNUM 1 \l 11862 COMMISSIONER DEL VAL: Okay. Then going to the spoken‑word programming, and you did mention the equal proportions of regional, local and international news, and I had noticed in your application you had set 33 percent local.
LISTNUM 1 \l 11863 So then the remainder would be 33 percent regional and then 33 percent national/international?
LISTNUM 1 \l 11864 MR. NEETI RAY: Well, 33 percent local, 33 percent, say, international and 33 percent will be national and regional, like Ontario and the rest of Canada.
LISTNUM 1 \l 11865 COMMISSIONER DEL VAL: So then on your spoken‑word programming, would you be willing to commit to a condition of licence that would stipulate 36 hours per broadcast week of spoken word?
LISTNUM 1 \l 11866 MR. NEETI RAY: Yes, we would commit to that as we have said in the supplementary brief.
LISTNUM 1 \l 11867 COMMISSIONER del VAL: And would you be prepared to commit to 11.5 hours of content subcategory 11, which is news?
LISTNUM 1 \l 11868 MR. NEETI RAY: Yes, we would.
LISTNUM 1 \l 11869 COMMISSIONER del VAL: Now, you have also noted in your application what you ‑‑ you had a section called the bonus market, the Detroit bonus market. Now, there is nothing wrong with availing yourself of any available resources and sources of revenue, but we note that the Canadian ‑‑ the Windsor population is a fraction, is a small fraction of the Detroit audience, and I know that you also plan to attract the Detroit audience.
LISTNUM 1 \l 11870 Now, what would be your incentive to not abandon or to neglect the much, much smaller market in favour of the larger, more lucrative Detroit market?
LISTNUM 1 \l 11871 MR. NEETI RAY: I would like to clarify that there is neither the intention or remotely any plan of abandoning to any extent the local Windsor market. That is our primary market and we are committed to serving the needs of that market. We are not here to fulfil any of the FCC requirements. We are strictly gearing our proposal to fulfilling the needs of the Canadian audiences.
LISTNUM 1 \l 11872 And having said that, I'm not sure if your question was also what we planned to do with the Windsor or with the Detroit audiences and businesses ‑‑
LISTNUM 1 \l 11873 COMMISSIONER del VAL: I'm ‑‑
LISTNUM 1 \l 11874 MR. NEETI RAY: ‑‑ and why it is important to us or is it important to us.
LISTNUM 1 \l 11875 My answer to that would be that I must once again reiterate that our business plan and our programming plans are predicated on the Windsor market. However, when we called the Windsor market a bonus market, it is something that would flow into the proposed radio station as a natural whether we target them or not, whether we specifically do things that the Detroit residents' listeners want us to or not. These are the benefits that would naturally flow into the proposed radio station.
LISTNUM 1 \l 11876 Why it is important for us? There is only one reason why it is very important for us to ensure that we reach the Detroit audiences. And by being forthcoming about it I don't want to give the impression that the Detroit audience has an importance for us except because the Windsor businesses who advertise on WNZK do so because they are not only able to attract the local ethnic population audiences of Windsor but also the Detroit audiences.
LISTNUM 1 \l 11877 It is vitally important for the ethnic businesses within Windsor to be able to attract them and they depend on the American businesses to make their businesses viable and profitable. An Indian clothing, fashion clothing store would advertise, and they do advertise on WNZK. Or an Indian jewellery shop or a Korean restaurant or a Vietnamese restaurant would advertise on WNZK not only because they want to attract the Windsor audiences but also the Detroit audiences and they depend on that business in order to make their businesses profitable.
LISTNUM 1 \l 11878 If we fail to provide the Windsor businesses the exposure that WNZK does they would not have the incentive to advertise with us, as they would to continue advertising with WNZK.
LISTNUM 1 \l 11879 So the big challenge that we face in making this radio station successful is that we must be able to give the Windsor advertisers what they are looking for. As we have seen in the two examples that we read, two of the many letters that we have received from Windsor businesses who have said clearly ‑‑ and we have spoken to a number of them, to many of them in fact, especially in the Fort Erie street business improvement area ‑‑ they said, "We would love to advertise with you as long as you deliver us the clients that we are looking for."
LISTNUM 1 \l 11880 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 11881 And don't get me wrong. I'm not saying that there is something wrong about attracting the resources from Detroit. It's not that. But I think it is also clear from the application that you would and actually tried to attract the American Detroit audience as well.
LISTNUM 1 \l 11882 So I mean in the balance our concern is that the fact that this is a Canadian station and that you would not abandon the Canadian market ‑‑ would not ‑‑ that that would not happen. So then, now, would you have some programming that is catered specifically to the Detroit market?
LISTNUM 1 \l 11883 And I'm just trying to understand what the station is going to sound like, what the programming is. I'm not trying to trap you into saying is there something for the Americans. Of course you have to have something for the Americans if you want their dollars.
LISTNUM 1 \l 11884 MR. NEETI RAY: No. We do not have to have that. That is; you know, things in the programming that specifically caters to the Detroit audiences, we do not have to have that in order to attract those audiences. They would be attracted naturally by simply the quality of the programming that we intend to broadcast.
LISTNUM 1 \l 11885 It may be worthwhile to mention that the WNZK programs are all 100 percent what they call leased‑out programs or brokered programs and there is no mechanism in place that we know of that would ensure that they are meeting the needs of their own people. And it's none of our business but I am mentioning that because in our radio station, our proposed radio station, even the brokered programming would operate in more or less the same way as the station‑produced programming. We will be monitoring them. We will be helping our programmers. We train them. We ensure that they are capable of producing high quality programming. So that is one difference.
LISTNUM 1 \l 11886 Therefore, we as a result have that natural flow of audiences from Detroit. And once again, we do not have to do anything else in order to attract them.
LISTNUM 1 \l 11887 So the orientation will remain completely ‑‑ almost completely Canadian. It doesn't mean that we may not talk about events going on in Windsor because they are also of interest to ethnic communities within Windsor as well. I give the example of the Italian or the Indian or the Hungarian communities or the other communities, the Arab communities. They have their sister communities and they go ‑‑ they commute not only to work in the U.S. and shop in the U.S., but also to attend these functions and, you know, go to relatives or friends.
LISTNUM 1 \l 11888 COMMISSIONER del VAL: I will ask you some questions about brokered programming and well, that's a good opening.
LISTNUM 1 \l 11889 So one of the questions that I was going to ask, that you brought up is your projection that 20 percent of your revenues will come mainly from the Detroit station. So how did you come up with the 20 percent? Is it what you have just said, that it will just naturally flow or do you have some plan to target the advertisers there and maybe some of the advertisers there are Canadian and you are trying to repatriate?
LISTNUM 1 \l 11890 So could you talk ‑‑ tell me about your plans to get that 20 percent?
LISTNUM 1 \l 11891 MR. NEETI RAY: The 20 percent in our projection consists in fact more of Canadian advertisers advertising on WNZK than American advertisers. Therefore, when we say that our projection of 20 percent is conservative it is because we have not, except to a minimal degree, taken into account the prospect of advertisers from Windsor ‑‑ sorry, from the U.S. side, from Detroit.
LISTNUM 1 \l 11892 Would we target them? Well, I guess it would be wise to do so because there is nothing that ‑‑ they don't stop us from doing that and we would be making the radio station benefit from that bonus market that exists and there would also ‑‑ we expect some natural flow of businesses as well because once everybody finds out that there is a great radio station going on and a lot of people are listening to it, well, obviously you like to advertise on that.
LISTNUM 1 \l 11893 So yes, we do expect businesses to come from there. Exactly what percentage I couldn't tell you at this time. We didn't go into details of how much, but we are confident looking at the existing radio stations in Windsor and what they garner from the U.S. market is that our projection of that part of the revenue is conservative.
LISTNUM 1 \l 11894 COMMISSIONER del VAL: So can I gather ‑‑ conclude from your response that at this point there is ‑‑ there hadn't yet been any advertiser survey done that would form the basis of the 20 percent?
LISTNUM 1 \l 11895 For example, did you do any survey to see how many of the Windsor merchants are actually advertising on the Detroit station and then how many have you approached to say, "Would you move your advertising to us, so add us to your advertising budget?" Have you done anything like that?
LISTNUM 1 \l 11896 MR. NEETI RAY: Yes, absolutely. We have made personal contacts with a number of businesses within the Windsor market, ethnic businesses, many of whom are currently advertising on WNZK. And our three partners from Windsor are well aware ‑‑ are very familiar with that market.
LISTNUM 1 \l 11897 And having spoken to a number of the businesses like the ones we have quoted and like the ones who have written to the Commission, like the ones we have contacted, dozens of them have expressed abundantly their interest to advertise on our radio station, simply because most of them sometime or the other have advertised on WNZK. And having a local radio station with local context, and having learned from us that this would you know cater to the local needs of the ethnic population of Windsor, there was a lot of interest in advertising on our radio station.
LISTNUM 1 \l 11898 As far as Detroit is concerned I'm not sure if you are asking that question ‑‑ probably you did ‑‑ that if any business in Detroit may have spoken to you, yes, we have spoken to some businesses in Detroit and they said, "Absolutely. Whoever gives us the product we will certainly advertise on them. Deliver us the product and you will have our business."
LISTNUM 1 \l 11899 COMMISSIONER del VAL: So at this point would it be fair to say you have good promising leads and no commitments yet, but you don't have a station yet either?
LISTNUM 1 \l 11900 MR. NEETI RAY: Right, it would be premature to have commitments. But yes, absolutely, we have clear indications from businesses, ethnic businesses, to advertise on the proposed radio station.
LISTNUM 1 \l 11901 COMMISSIONER del VAL: And what about the ‑‑ any synergies you see from your recently licensed Mississauga station?
LISTNUM 1 \l 11902 MR. NEETI RAY: Yes, we do. And because that radio station has not been implemented yet and it would be premature for us to project some of the synergies that we know will take place ‑‑ therefore we have been very cautious when we wrote to the Commission subsequent to being licensed in Mississauga that the synergy that we can see for sure at this time are some of the aspects in the administration of the radio station.
LISTNUM 1 \l 11903 But we know that there will be many more synergies that could take place including in programming that we ‑‑ Toronto is a much larger centre of ethnic programming and we plan to produce programming not only for Windsor but some programming specifically made for Windsor. So that would reduce some of the programming costs in Windsor. That we have not put on record earlier because I thought and I still think that it would be premature to give any specific numbers in there.
LISTNUM 1 \l 11904 But we ‑‑ to answer your question, yes, there will be synergies that would help us in our undertaking, our proposed undertaking in Windsor.
LISTNUM 1 \l 11905 COMMISSIONER del VAL: So I will go back to the program costs later but just going back to the financial, your business case and the projections. Now, I think you are projecting in year one the 12‑plus tuning would be about 1 percent and then going up by year seven to about 1.6 percent.
LISTNUM 1 \l 11906 Now, according to our stats, I think the BBM Spring 2007 ‑‑ but tuning to the Detroit station is only 0.1 percent. So compared to your projections it makes me think that your projections for tuning are a bit optimistic. Could you please comment on that?
LISTNUM 1 \l 11907 MR. NEETI RAY: I haven't ‑‑ did you say that the BBM has indicated that WNZK has ‑‑
LISTNUM 1 \l 11908 COMMISSIONER del VAL: WZNK.
LISTNUM 1 \l 11909 MR. NEETI RAY: Has a tuning of 0.1 percent.
LISTNUM 1 \l 11910 COMMISSIONER del VAL: 0.1 percent. And if my numbers are wrong please correct me.
LISTNUM 1 \l 11911 MR. NEETI RAY: I am not sure. I have not seen ‑‑ I have not seen that survey or the results of the BBM.
LISTNUM 1 \l 11912 COMMISSIONER del VAL: Well, perhaps then we can just focus on the basis of your 1 percent projection, why you feel that that is realistic.
LISTNUM 1 \l 11913 MR. NEETI RAY: It is ‑‑ our estimation was based on our experience in other markets.
LISTNUM 1 \l 11914 DR. WINN: Neeti, it's Conrad. Could I just say something technical?
LISTNUM 1 \l 11915 MR. NEETI RAY: Yes, sure, please. Yes, go ahead.
LISTNUM 1 \l 11916 DR. WINN: Unless you are using multilingual interviewers you are going to ‑‑ on your sample the people who don't speak English.
LISTNUM 1 \l 11917 MR. NEETI RAY: Thank you.
LISTNUM 1 \l 11918 What I was in fact ‑‑ what I was going to say is also that BBM ‑‑ in conversation with BBM at one point I was told that it is not possible for us; that is, for BBM, to gauge ethnic audiences accurately as they would be able to the mainstream.
LISTNUM 1 \l 11919 COMMISSIONER del VAL: I'm aware of that problem.
LISTNUM 1 \l 11920 MR. NEETI RAY: Yes, for ‑‑
LISTNUM 1 \l 11921 COMMISSIONER del VAL: Yes, and so ‑‑
LISTNUM 1 \l 11922 MR. NEETI RAY: So the 1 percent is based on our experience of ‑‑ I worked for CKER Edmonton for nine years for the radio station and of course our ‑‑ my programming in the past in Toronto and the other radio stations in Toronto that are ethnic. It would be reasonable to say that a 1 percent compared to the percentage points in Edmonton and Toronto is reasonable if not conservative.
LISTNUM 1 \l 11923 The other point that I would like to make in response to the results of the BBM that you just quoted is that in the COMPAS survey which was not specifically targeting any segments of the population but the general population, 20 percent indicated that they listen to the Detroit ethnic radio station. That, I guess, is more in my view ‑‑ in our view that is more authentic than the BBM.
LISTNUM 1 \l 11924 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 11925 Then I'm looking at your revenue and PBIT projections and in year three you had projected ‑‑ so rounding off it's 27 percent for your PBIT margin.
LISTNUM 1 \l 11926 Now, I'm not ‑‑ I don't know whether you are aware that when I look at the overall figures for Canada and for the rest of Ontario, for the rest of Ontario it's about 13.7 percent and for Canada it's about 8.4 percent.
LISTNUM 1 \l 11927 MR. NEETI RAY: I'm sorry. If you don't mind could you repeat that to me? I guess I lost you on the ‑‑
LISTNUM 1 \l 11928 COMMISSIONER del VAL: Sorry, your ad revenue and PBIT projections for year three.
LISTNUM 1 \l 11929 MR. NEETI RAY: Which is $715,000.
LISTNUM 1 \l 11930 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 11931 MR. NEETI RAY: Okay.
LISTNUM 1 \l 11932 COMMISSIONER del VAL: And the PBIT margin is 27 percent. Is that ‑‑ or do I have that wrong?
LISTNUM 1 \l 11933 MR. NEETI RAY: That's 11.7 percent increase from the previous year.
LISTNUM 1 \l 11934 COMMISSIONER del VAL: Yes, and if ‑‑ but the PBIT margin itself is 27 percent, isn't it?
LISTNUM 1 \l 11935 MR. NEETI RAY: From year one.
LISTNUM 1 \l 11936 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 11937 MR. NEETI RAY: What we have projected is ‑‑
LISTNUM 1 \l 11938 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 11939 MR. NEETI RAY: ‑‑ the second year the increase will be the greatest which is 16.4 percent.
LISTNUM 1 \l 11940 COMMISSIONER del VAL: M'hm.
LISTNUM 1 \l 11941 MR. NEETI RAY: And third year it will go to 11.9 percent increase in revenue and then of course it will taper down to 7 percent in the next year, and then will go further down.
LISTNUM 1 \l 11942 COMMISSIONER del VAL: But is the PBIT margin in year three in absolute numbers, not as a comparison, is it not 27 percent? Do I have the calculation wrong then?
LISTNUM 1 \l 11943 MR. NEETI RAY: Are you saying 20 percent ‑‑ 27 percent over the first year revenue?
LISTNUM 1 \l 11944 COMMISSIONER del VAL: No, not as ‑‑
LISTNUM 1 \l 11945 MR. NEETI RAY: I think you are summing the year two increase and year three increase together to bring it to 27 percent.
LISTNUM 1 \l 11946 COMMISSIONER del VAL: I have your PBIT margin for year one is 11 percent. Do you ‑‑ do I have my numbers wrong?
LISTNUM 1 \l 11947 MR. NEETI RAY: Oh, 11 percent of what?
LISTNUM 1 \l 11948 COMMISSIONER del VAL: That would be your ‑‑ that would be your margin.
LISTNUM 1 \l 11949 MR. NEETI RAY: I apologize. I am not sure I am ‑‑
LISTNUM 1 \l 11950 COMMISSIONER del VAL: That's okay.
LISTNUM 1 \l 11951 MR. NEETI RAY: ‑‑ understanding the question well what the 27 percent relates to. Radhika has something to say.
LISTNUM 1 \l 11952 MS RAY: Sorry, could you just say what numbers you are using to get to the PBIT?
LISTNUM 1 \l 11953 COMMISSIONER del VAL: Say for year one what do you have for your PBIT margin?
LISTNUM 1 \l 11954 MR. NEETI RAY: And what are you looking at, which part of our application?
LISTNUM 1 \l 11955 COMMISSIONER del VAL: Maybe without looking at the numbers, I would say that say by your year three ‑‑ if I said by year three your revenue projections are high, particularly compared to what ethnic stations are doing in the rest of the country and in Ontario, would you agree with that?
LISTNUM 1 \l 11956 MR. NEETI RAY: I am not sure if I would agree with that. One thing to keep in mind when looking at these numbers is, unlike Toronto or Vancouver or Montreal where you have a number of stations to take small pieces of the pie, Windsor does not have any station to cater to the market and, therefore, we would be the only one there. Therefore this is, if I can put it this way, is that the entire pie would, we would be the only one to garner that. And I am not sure if that makes sense.
LISTNUM 1 \l 11957 COMMISSIONER del VAL: Yes, m'hmm.
LISTNUM 1 \l 11958 MR. NEETI RAY: But what I am saying is that these projections are based on our estimation of the total number of businesses in Windsor, the businesses who are advertising on ‑‑ it is based on the size of the ethnic businesses in Windsor and whatever we will get conservatively estimated from the U.S.
LISTNUM 1 \l 11959 But are you asking me that the profit level, as well, is high? Is that what you are getting at?
LISTNUM 1 \l 11960 COMMISSIONER del VAL: Yes, yes.
LISTNUM 1 \l 11961 MR. NEETI RAY: In the assumption, if we go to the details of the cost of the programs, which only increased 3 to 5 per cent each year.
LISTNUM 1 \l 11962 Okay, let us start with year two. It is the largest increase, because we are hoping that by the time the first full year of operation completes that we would have promoted ourselves enough to garner more audiences. And by the end of the second year we would have reached a much larger number of audiences because of better awareness created during the first 24 months. And therefore, the second year has the largest increase.
LISTNUM 1 \l 11963 One thing that does not change to the extent that the revenues change are the expenses. So because the expenses remain more or less at the same level, increasing 3 to 5 per cent, is that the profit is higher as the revenues increase. So there is more leverage that we are taking advantage of.
LISTNUM 1 \l 11964 I hope that makes sense.
LISTNUM 1 \l 11965 COMMISSIONER del VAL: Yes. And I apologize for not switching fast enough to say PBIT, you know, profit, but that was exactly what I was looking for.
LISTNUM 1 \l 11966 But now, what would you say if I told you that your programming costs, compared to other ethnic stations across Canada and in Ontario, are very low?
LISTNUM 1 \l 11967 MR. NEETI RAY: I am going to point out something which is important to keep in mind, it is we only have 70 hours per week of programming that our station produced. Fifty‑six hours of programming are brokered out and no programming costs incur as a result of that. So there is a substantial saving in the programming as a result of the 56 hours of brokered programming that, as I said, will cost us nothing.
LISTNUM 1 \l 11968 COMMISSIONER del VAL: Okay, great. Thank you, that is a perfect segway into my question on brokered programming.
LISTNUM 1 \l 11969 So on the 56 hours of brokered programming, what are the sources that you know of now, where are you going to get the brokered programming from?
LISTNUM 1 \l 11970 MR. NEETI RAY: Oh, we have had contacts already in order to gauge the demand for brokered programming. We have seven signed letters of intent to broker programs out. We have them in writing and, if necessary, we can provide copies of that to the Commission, from seven programmers, various languages like Serbian and Hungarian, Polish and so on who have already committed to..
LISTNUM 1 \l 11971 And we wanted to gauge if there is interest or not, so we called a number of, you know, those who would be interested through their organizations. And to answer your question, yes, there is great interest and we see, as a result, that there will be no problem finding brokers who would work within our guidelines.
LISTNUM 1 \l 11972 COMMISSIONER del VAL: Okay. Then you have in your deficiency response given quite a comprehensive answer about your guidelines. But I would just like to find out a bit more about how you will select your independent producers for your programs.
LISTNUM 1 \l 11973 MR. NEETI RAY: It would be done with the help of the various organizations that we are ‑‑ if I can use the word, partnering up with, who would be on our advisory council. And we have provided a list of those organizations in the addendum to the supplementary brief. And we have been working closely with them. In fact, that is what resulted in these seven brokers how provided us their letters of intent.
LISTNUM 1 \l 11974 We would do this in conjunction with the organizations within each ethnic community whose programming would be brokered out to them.
LISTNUM 1 \l 11975 COMMISSIONER del VAL: Can I just ask, on the seven, are they all local or..?
LISTNUM 1 \l 11976 MR. NEETI RAY: I am sorry?
LISTNUM 1 \l 11977 COMMISSIONER del VAL: Oh sorry, of the seven that have signed letters of intent, are they local?
LISTNUM 1 \l 11978 MR. NEETI RAY: Yes, absolutely. All Windsor, local Canadian individuals and organizations.
LISTNUM 1 \l 11979 COMMISSIONER del VAL: And what kind of professional backgrounds are you looking for in your independent producers?
LISTNUM 1 \l 11980 MR. NEETI RAY: We do not expect that there would be many who have ‑‑ well, some would have and some do have very good background. In fact, one of the, the President of the Hungarian Concert Club, he's been doing a program on WNZK for many years. And he's one of the persons, of course, who has signed the letter of intent. We don't expect many of them who would be really experienced.
LISTNUM 1 \l 11981 COMMISSIONER del VAL: Yeah, perhaps ‑‑
LISTNUM 1 \l 11982 MR. NEETI RAY: But we are also aware that there are talents whose talents have not been exploited. And I am a broadcast trainer myself, and that was one of my jobs at Radio CKER, is to train various language groups, even though I did not speak say Chinese or Korean. But the principles of broadcasting are the same. You know, effective broadcasting is the same in all languages, whether it is voice modulation or writing the right scripts.
LISTNUM 1 \l 11983 So we would find, with the help of the organizations who are participating with us, the talents who are capable of broadcasting and we will chisel them and, you know, shape them into good broadcasters.
LISTNUM 1 \l 11984 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 11985 Then we can move onto CCD. I believe you were here yesterday when we were talking about the commercial radio policy in 2006. And the guidelines there, in paragraph 116 ‑‑
LISTNUM 1 \l 11986 MR. NEETI RAY: Yes.
LISTNUM 1 \l 11987 COMMISSIONER del VAL: ‑‑ for a basic annual contribution.
LISTNUM 1 \l 11988 MR. NEETI RAY: Yes.
LISTNUM 1 \l 11989 COMMISSIONER del VAL: Can you confirm that you understand those and that would commit to..?
LISTNUM 1 \l 11990 MR. NEETI RAY: Yes, absolutely. I do understand that if it is less than $625,000 then we pay $500; and between $625,000 and $1.25 million is $1,000. Anything over that is 0.5 per cent plus the $1,000.
LISTNUM 1 \l 11991 COMMISSIONER del VAL: Great, thank you.
LISTNUM 1 \l 11992 Those are my questions. Thank you very much for your time.
LISTNUM 1 \l 11993 MR. NEETI RAY: Thank you.
LISTNUM 1 \l 11994 COMMISSIONER del VAL: Thank you, Madam Chairman.
LISTNUM 1 \l 11995 THE CHAIRPERSON: Commissioner Menzies.
LISTNUM 1 \l 11996 COMMISSIONER MENZIES: Good morning, Mr. Ray.
LISTNUM 1 \l 11997 MR. NEETI RAY: Good morning, sir.
LISTNUM 1 \l 11998 COMMISSIONER MENZIES: I will try to be fairly quick. First of all, I would like to add my condolences to those already expressed by the Commission.
LISTNUM 1 \l 11999 I have a couple of questions, quickly, on your business plan. And I am assuming you have a background in this. I am struck by the salary levels and I wanted to know that you are confident that you can recruit and retain the quality that you need at those levels for the number of people that you are covering, particularly in programming, salaries, wages and fringe benefits $105,000.
LISTNUM 1 \l 12000 MR. NEETI RAY: Yes, we have worked in the $35,000 per annum for all the employees, that is the average including the benefits. And if we look at the detailed profit and loss statement, we would have no problem meeting our obligations, given the $35,000 per year, which, in my opinion, is no different from some of the other centres that I am aware of, except Toronto where it is certainly higher, slightly higher than that, not significantly higher.
LISTNUM 1 \l 12001 But the average, $35,000, I guess would be reasonable for programmers who are skilled programmers or say the other employees of the radio station. I couldn't think of anything drastically less than that. If I remember correctly, Edmonton and Calgary have the same, they are paying their employees and average of about $35,000 as well.
LISTNUM 1 \l 12002 So to answer your question in short, we have considered that and it should be no problem for us.
LISTNUM 1 \l 12003 COMMISSIONER MENZIES: Thank you. Also, your bad debt expenses at $8,000 first year and progressing roughly on a percentage basis from there. Given the nature of a lot of your advertising being relatively independent small shops, restaurants, retail, that sort of stuff, that strikes me as low. Can you help me understand that a bit more?
LISTNUM 1 \l 12004 MR. NEETI RAY: Yes. It may look low because of what the average maybe is in the market or markets. From our personal experience, I have had brokered programming that we have had in Toronto and the advertisers were all the small businesses. But the way that we conducted our business, we had I will say between 90 and 95 per cent recovery simply because our programming were of very high quality, they had to advertise with us, but we always took the payments in advance. We would not advertise them in Toronto without getting all the payments in advance. So that is one of the strategies that we have used.
LISTNUM 1 \l 12005 Now, in Windsor we may not, at the beginning, be able to do that, but I have used our previous experience to come up with the bad debt. Now, even if the bad debt is more than that, if we go to the profit levels in the subsequent years, we should be able to absorb a higher level of bad debt in the Windsor proposed station.
LISTNUM 1 \l 12006 COMMISSIONER MENZIES: Okay. It is very wise of you, good for you.
LISTNUM 1 \l 12007 I was struck by Ms Ray's comment about the ability of a project such as this to help alleviate social isolation among people living without the ability to speak either official language. I suppose some could argue that this sort of a project could also confirm that social isolation, unless there was a strong dedication to fostering shared Canadian identity.
LISTNUM 1 \l 12008 And I would like you to expand on that a little bit for me, the extent to which the station, apart from news, because you can get news elsewhere, what your station would do to help foster shared Canadian identity.
LISTNUM 1 \l 12009 DR. TEMELINI: Can I say something about that?
LISTNUM 1 \l 12010 MR. NEETI RAY: Yes, Dr. Temelini.
LISTNUM 1 \l 12011 COMMISSIONER MENZIES: Sure.
LISTNUM 1 \l 12012 DR. TEMELINI: My experience and my research have shown that the freedom to express oneself or to use one's language will foster confidence in one's individual identity. And a security identity will impact positively on responsible citizenship, harmonious society, at least social interaction that will lead to the ideal of Canadian multiculturalism, which is national unity.
LISTNUM 1 \l 12013 This is just a brief summary of an article that I have written some years ago. Thank you.
LISTNUM 1 \l 12014 COMMISSIONER MENZIES: I guess what I am trying to get at a little bit is your station versus your counterpart across the river, that if one is Canadian and one is American, I am just trying to get a broader understanding of what makes one Canadian and what makes one American other than the passport of the owner.
LISTNUM 1 \l 12015 MR. NEETI RAY: As far as news is concerned, let me start with that, with your permission, one thing that was similar between the two stations would be international news. But one thing that will not be similar would be local news, local information, events within the local community.
LISTNUM 1 \l 12016 Another very important aspect is for them to be able to interact through the radio, share not only their values but also their concerns, issues. And also services available, for example, English as a second language, we would promote that. One of the intentions of this proposed radio station, as was our brokered programming in Toronto, was to help the various communities to integrate into the mainstream. It would help those who are isolated come out and participate in the activities of the mainstream.
LISTNUM 1 \l 12017 There was research by Raymond Breten whose research has been very helpful to various social agencies in helping immigrants integrate. He commented at one point that for immigrant populations, the immigrant people who are of third language, who are not fluent in English or French, for them a radio program in their own language provides the comfort and solace similar to religious institutions that they go to, that cater to their own faith, whether they are Sikhs or Jews or Muslims, whoever.
LISTNUM 1 \l 12018 So our radio station, first, will provide that comfort to them. And having become comfortable, the information we impart to them that will help them to integrate, they will be more sensitive to that and we do intend doing that as effectively as possible. Through information about local laws, what is going on in the local community, what our obligations are and so on and so forth.
LISTNUM 1 \l 12019 COMMISSIONER MENZIES: Thank you for clarifying.
LISTNUM 1 \l 12020 Are there other ethnic media, not broadcast, but other print I guess or online currently in Windsor or circulating in Windsor?
LISTNUM 1 \l 12021 MR. NEETI RAY: Big time. In fact, one of the major Italian magazines is called La Gazetta, Dr. Temelini is the editor of that magazine. But that is not the only magazine. In every community the print media is about the only way for the ethnic population to read news, to find out about what is on sale in the ethnic stores and businesses.
LISTNUM 1 \l 12022 So to answer your question in short, yes, the print media is there big time.
LISTNUM 1 \l 12023 COMMISSIONER MENZIES: Okay. So there is an existing pool from which you can draw your 15 per cent from other media?
LISTNUM 1 \l 12024 MR. NEETI RAY: Absolutely.
LISTNUM 1 \l 12025 COMMISSIONER MENZIES: That would be what that represents?
LISTNUM 1 \l 12026 MR. NEETI RAY: Yes, yes.
LISTNUM 1 \l 12027 COMMISSIONER MENZIES: One last question was just in regarding ‑‑ and you may have touched on this earlier, but I would just like a final clarification.
LISTNUM 1 \l 12028 If you are looking at 20 per cent of your advertisers from the U.S. side of the border, you and I have both been around long enough to know that the needs of advertisers and the needs of listeners don't always coincide. And I want just to hear from you if you see that as being a possible conflict in terms of the Canadian identity of your programming?
LISTNUM 1 \l 12029 MR. NEETI RAY: It would ‑‑ the Canadian identity will not hamper, in our view, the development of audiences on the U.S. side of the border. In fact, it just came to me that my daughter, listens to 98.5 in Toronto, you know, fairly often, which is a station from Buffalo. And it has an American orientation, but because the programming is of high quality and the music is what they are looking for, then a lot of youngsters listen to that radio station.
LISTNUM 1 \l 12030 Similarly, our Canadian orientation is in context of the spoken word programming and in the Canadian content musically, which I would say the ethnic population in American would not only not mind listening to, would probably enjoy listening to.
LISTNUM 1 \l 12031 So whether it overlaps the needs of the business community and the audiences, what is fundamentally important for us is the audience. If we have the audience on this side of the border then, of course, we know it is very important to have on the other side of the border, simply because of the business side of it and to be able to fulfil the needs of the ethnic businesses in Windsor, our high quality programming itself would garner the businesses that we need.
LISTNUM 1 \l 12032 So the quality of the programming and the Canadian orientation will compliment the business possibilities.
LISTNUM 1 \l 12033 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 12034 THE CHAIRPERSON: Mr. Ray, I too have some follow‑up questions.
LISTNUM 1 \l 12035 Earlier, you said that there was little or no difference in the ethnic makeup of Detroit and Windsor, correct?
LISTNUM 1 \l 12036 MR. NEETI RAY: Yes.
LISTNUM 1 \l 12037 THE CHAIRPERSON: I am looking at your supplementary brief and you did provide examples of Detroit's ethnic population figures.
LISTNUM 1 \l 12038 My first question is: Are these population figures based on ethnic origin or mother tongue?
LISTNUM 1 \l 12039 MR. NEETI RAY: They are based on ethnic origin.
LISTNUM 1 \l 12040 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 12041 MR. NEETI RAY: Yeah. Otherwise ‑‑
LISTNUM 1 \l 12042 THE CHAIRPERSON: The reason I ask is with every ethnic service your core audience is mother tongue.
LISTNUM 1 \l 12043 MR. NEETI RAY: Yes.
LISTNUM 1 \l 12044 THE CHAIRPERSON: It may or may not extend to ethnic origin but the reality is your core audience is going to be mother tongue.
LISTNUM 1 \l 12045 MR. NEETI RAY: Yes.
LISTNUM 1 \l 12046 With your permission if I can just add to that.
LISTNUM 1 \l 12047 THE CHAIRPERSON: Please.
LISTNUM 1 \l 12048 MR. NEETI RAY: In fact, you asked me if it is my mother tongue or not. Well, it is not. For example, the German population in Detroit is over 900,000. This includes the second and third generation who have indicated an ethnic origin that is German but not all of them would be speaking German. A good proportion of them would speak German but also a good proportion of them who do not fluently speak German would relate to the music that would be played on the German programming. So I am giving you one example.
LISTNUM 1 \l 12049 But there are other communities, for example, the Indian community in Detroit, which is 45,000 to 50,000, if I remember correctly. A larger proportion in such communities would understand ‑‑ would speak their language more fluently. These are the groups that are not ‑‑ that came later into the United States and Canada, not the first wave, which was the Europeans but the second or the third wave of immigrants in which the population would have a much larger proportion of those who use their heritage language at home.
LISTNUM 1 \l 12050 THE CHAIRPERSON: And what is your definition of a good proportion? Is it more that 50 percent, is it more than 75 percent?
LISTNUM 1 \l 12051 MR. NEETI RAY: Well, every community would have its own proportion. The Indian community would have perhaps more than 75 percent. The Arab community would have more than 75 percent. The German community may not have more than maybe 15 percent. The Italian community might not have more than 30 percent.
LISTNUM 1 \l 12052 THE CHAIRPERSON: And are those the factors that you took into consideration in determining the ethnic languages in which you would broadcast?
LISTNUM 1 \l 12053 One of the reasons I ask the question is if we go back to your earlier statement that there is little or no difference in the ethnic makeup, the second largest group ‑‑ well no, it is equal to the five Arabic groups ‑‑ is Chinese, for example. So you are going to do 15 hours a week of Cantonese programming.
LISTNUM 1 \l 12054 We don't have a breakdown of the ethnic makeup of the Windsor market but if I look at the ethnic makeup of the Detroit market and refer it back to your statement, there is no Chinese.
LISTNUM 1 \l 12055 MR. NEETI RAY: That further confirms our ‑‑
LISTNUM 1 \l 12056 THE CHAIRPERSON: So why did you ‑‑ what made you decide to use Cantonese language programming on this radio station, as an example?
LISTNUM 1 \l 12057 MS PORTER: Excuse me, can I just state the 2006 Census that says the top countries of place of birth, the immigrant population as a percentage of total immigrants who came to Canada from 2001 to 2006 was U.S. first, followed by India, then China, then Pakistan, then Romania.
LISTNUM 1 \l 12058 THE CHAIRPERSON: I appreciate that but I want to know how many of those people came to Windsor.
LISTNUM 1 \l 12059 MR. NEETI RAY: Yes.
LISTNUM 1 \l 12060 THE CHAIRPERSON: Do you know what I mean? That is the relationship I need to know. I need to know what population this proposed radio station is serving.
LISTNUM 1 \l 12061 MS PORTER: That was Windsor.
LISTNUM 1 \l 12062 THE CHAIRPERSON: Okay, thank you.
LISTNUM 1 \l 12063 MS PORTER: Yes.
LISTNUM 1 \l 12064 MR. NEETI RAY: To answer your specific question, that we have a very good chunk of program for Chinese in Windsor even though there are not so many of them in the same proportion on the U.S. side as the other languages, is it further confirms our contention that this radio station is a Canadian radio station. Our orientation is Canadian.
LISTNUM 1 \l 12065 When we focused on the need we looked not at the U.S. side of the border, we looked at the Canadian side of the border and we believe that the Chinese community is very prosperous in Windsor.
LISTNUM 1 \l 12066 The Chinese business community is one of the strongest among ethnic communities of that size in Windsor. Therefore, we thought it would be good to have programming and also because the Chinese community is one of the communities who have ‑‑ we find that they have one of the largest proportions of the use of their mother tongue at their homes and at their work.
LISTNUM 1 \l 12067 THE CHAIRPERSON: So it is not necessarily true therefore that there is little to no difference in the ethnic makeup of Detroit and Windsor?
LISTNUM 1 \l 12068 MR. NEETI RAY: It is not like a mirror image of one to the other. But if you take overall, then every community, almost every community, if not all, have their sister communities on the other side of the border. So Chinese is quite exceptional.
LISTNUM 1 \l 12069 THE CHAIRPERSON: Okay. You also said that brokered programming will cost you nothing. But there is essentially a cost to your business of having brokered programming. That is in the way of not having those advertising minutes available to you to sell.
LISTNUM 1 \l 12070 Am I correct in that is how you will broker programming, that is, you will give it to a producer, that producer will sell the minutes of advertising in that program, therefore not available to you?
LISTNUM 1 \l 12071 MR. NEETI RAY: With the exception of every hour of the brokered programming, similar to every other ethnic radio station in Canada that brokers time out, every hour would have two minutes available to the radio station to satisfy the needs of our clients, mainly national advertisers.
LISTNUM 1 \l 12072 So that is not entirely true that we don't have anything in there. We do have two minutes in every hour of the brokered programming to advertise on.
LISTNUM 1 \l 12073 THE CHAIRPERSON: And you anticipate that those two minutes will be national advertisers?
LISTNUM 1 \l 12074 MR. NEETI RAY: Most of them would be national advertisers.
LISTNUM 1 \l 12075 THE CHAIRPERSON: Okay. And I want to go back a little bit to what both commissioners del Val and Menzies talked to you about, and that is advertising, because it is obviously the basis of your business plan and we are certainly not here to satisfy advertisers, we are here to satisfy Canadian listeners.
LISTNUM 1 \l 12076 So I get it completely why you would want to propose an ethnic radio station for Windsor and that we need to serve the needs and desires of the Canadian audience. I get that completely, of course, but the reality is that it does depend on advertising.
LISTNUM 1 \l 12077 So right now the situation is we have an American service that is available in the Windsor market. We have Canadian advertisers who are advertising on that U.S. service. We have Canadian listeners listening to that U.S. service. Your advertisers have told you: Yes, terrific, we will support you but you have to give me the audience that my current advertising on the American station gives me. That is basically the general picture.
LISTNUM 1 \l 12078 The result is, however, that if licensed you will be splitting the audience because the American station will still be available in Canada. So you are now giving Canadian listeners a choice between your service and the U.S. service because it is not going to go away. It is not like its signal is not going to be available in Windsor anymore.
LISTNUM 1 \l 12079 And of course, it is your hope that your programming will be compelling enough and relevant enough that the Canadian listeners will listen. But that won't necessarily be true of the American listeners.
LISTNUM 1 \l 12080 They are not going to necessarily listen to the Canadian service, correct, not necessarily, because their needs will be met by their American service?
LISTNUM 1 \l 12081 MS PORTER: I would like to say wearing my previous hat as communications ‑‑
LISTNUM 1 \l 12082 THE CHAIRPERSON: We wear all kinds of hats.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12083 MS PORTER: When I was at CBC in Windsor radio, we did numerous focus group studies and the reality of living in Windsor is, of course, the American border and the choice of a multitude of radio stations. It is the busiest place on the dial anywhere in Canada.
LISTNUM 1 \l 12084 Overwhelmingly, each focus group sessions, year after year, clearly identified a strong need by people who live in Windsor and Essex County to have Canadian programming, to have Canadian news and information, and I think that that holds true even from our immigrant population as they adjust to their new life and including the people who have been there for a long time.
LISTNUM 1 \l 12085 THE CHAIRPERSON: Oh! Yes. I get that completely.
LISTNUM 1 \l 12086 MS PORTER: Okay.
LISTNUM 1 \l 12087 THE CHAIRPERSON: I get that completely. The road I am going down is this quite simply.
LISTNUM 1 \l 12088 If your Canadian advertisers have said to you: Absolutely, we will support you but you have got to give us the audience or at least a comparable level of audience that the U.S. service gives us, you are now coming on with a Canadian service, the Canadians are going to be listening to that Canadian service; correct?
LISTNUM 1 \l 12089 You are cutting off from the American service, hopefully, the Canadian listeners who have gone to that American service. The Americans may not listen to your Canadian service because they have got their own.
LISTNUM 1 \l 12090 So are you not, therefore, decreasing the expectation from the viewpoint of the advertisers? In other words, what guarantees or assurances ‑‑ because guarantees may be too strong a word ‑‑ what assurances can you give the Canadian advertisers that your programming is going to be compelling enough to be able to give them the same rate of return on their advertising that they are getting on the American station?
LISTNUM 1 \l 12091 Because you are splitting the audience. And that is a good thing because, like I said, Canadians should have a Canadian service. So that is a good thing. I am not disputing that at all.
LISTNUM 1 \l 12092 But if your business plan is not realized because you cannot deliver the audience to your advertisers, we end up with no service to Canadians.
LISTNUM 1 \l 12093 So I want the hook, is really what I am after, as to what is going to make your service so terrific that Canadian advertisers will say: You know what, I am with you a hundred percent, may even decrease their budget on the American service, if not eliminate it altogether so that you can realize your business plan and therefore provide the best programming possible to Canadians?
LISTNUM 1 \l 12094 That is the bottom line. I went a roundabout way of doing that but that is what I want to know.
LISTNUM 1 \l 12095 MR. NEETI RAY: All the very more reason that the 95.9 FM frequency is widely important for us.
LISTNUM 1 \l 12096 First of all, we would have a competitive advantage over WNZK simply because they are on the AM band and we propose to be on the FM band, and I guess traditionally and even currently if you had a choice between AM and FM, then unless the AM programming is so compelling, of such exceptionally high quality that people would prefer that over the FM. That is one point.
LISTNUM 1 \l 12097 The other is the quality of programming. Like I said, most of these WNZK programs, in fact, all of them are brokered programs. So the owner of the station is more like a landlord and he has many tenants in there who can do what they want.
LISTNUM 1 \l 12098 We would focus on garnering audiences and in order to do that we would focus on the quality of programming. The overall quality of the programming is not only what we would do in the spoken word which is of Canadian context but also the entertainment programming.
LISTNUM 1 \l 12099 In the spoken word, the news programming, we would ensure that it is so interesting and attractive that audiences on both sides of the border would tune in to us.
LISTNUM 1 \l 12100 I am not sure if this will make sense or not. To cite an example, in 1995, if I remember correctly, in Toronto, 680News changed its format a year earlier than that to news from their music format. We had an ethnic programming catering to the South‑Asian community, and that was on the St. Catharines radio station.
LISTNUM 1 \l 12101 The BBM, which I agree cannot gauge the ethnic audiences as good as they can mainstream, it did ‑‑ because they send diaries to many South‑Asians as well, it recorded a listening audience for our programming which was 10 percent higher during our program time, which was 7:00 p.m. to midnight ‑‑ actually it was 7:00 p.m. to 6:00 a.m. ‑‑ but regulated time 7:00 p.m. to midnight, which was measured by BBM, was 10 percent higher than 680News, which was an average of only 8,500 per quarter.
LISTNUM 1 \l 12102 They do agree that they are not able to measure the ethnic audiences as accurately but having said that, that was a very conservative figure.
LISTNUM 1 \l 12103 So what I am trying to get at is simply that the audiences that we have had in the past ‑‑ we have the experience of gathering a large audience ‑‑ is based on the kind of programming that we believe we are capable of putting together and training our announcers, our producers to produce that kind of program, to make it compelling for the audiences to listen to those programs.
LISTNUM 1 \l 12104 A radio program has to simply sound good. That is the basis of holding onto our audiences and we believe that that is what our expertise is and we are going to implement that in the proposed Windsor radio station.
LISTNUM 1 \l 12105 My personal interest would be to meet up with every prospective producer and guide them and share with them the 27 years of my experience as a broadcaster, as a broadcast trainer, as a broadcast sales executive.
LISTNUM 1 \l 12106 I am going to be directly involved in doing that and I will use every other resource necessary in order to ensure that the quality of the programming is compelling for audiences on both sides of the border.
LISTNUM 1 \l 12107 There would then be no reason to have concerns, serious concerns about being able to retain, hopefully, a much larger share of the audiences in that big international market, the Windsor‑Detroit international centre.
LISTNUM 1 \l 12108 THE CHAIRPERSON: And if you were to write everything down that you just said in a proposal to advertisers in the Windsor market, you are confident that they will sign?
LISTNUM 1 \l 12109 MR. NEETI RAY: Yes.
LISTNUM 1 \l 12110 THE CHAIRPERSON: Okay. Your application says that you will broadcast 105 hours per week of ethnic programming and that is equal to 83.3 percent of the broadcast week.
LISTNUM 1 \l 12111 MR. NEETI RAY: Yes.
LISTNUM 1 \l 12112 THE CHAIRPERSON: Based on 126 hours.
LISTNUM 1 \l 12113 MR. NEETI RAY: I know that we have committed to 105 local ‑‑
LISTNUM 1 \l 12114 THE CHAIRPERSON: Ethnic programs, of ethnic programming?
LISTNUM 1 \l 12115 MR. NEETI RAY: Yes, you are right. I am sorry, yes, absolutely.
LISTNUM 1 \l 12116 THE CHAIRPERSON: Will you accept that as a condition of licence?
LISTNUM 1 \l 12117 MR. NEETI RAY: I would accept that as a condition of licence.
LISTNUM 1 \l 12118 THE CHAIRPERSON: Final line of questioning.
LISTNUM 1 \l 12119 You aren't the only new applicant in Windsor. Would the licensing of another FM station in Windsor have any impact on your business plan if we were to go that route?
LISTNUM 1 \l 12120 MR. NEETI RAY: None whatsoever except if the 95.9 FM was not allotted to us.
LISTNUM 1 \l 12121 THE CHAIRPERSON: Have you identified an alternative frequency that is acceptable?
LISTNUM 1 \l 12122 MR. NEETI RAY: There are two points I would like to make here vis‑α‑vis the alternate frequency.
LISTNUM 1 \l 12123 We have been flexible. Let's underline that. We have been flexible in that when we were specifically asked by the Commission that in the event that we are not given our first choice, would there be something else, and we said that yes, 102.3 would be sufficient for us to meet our business plan.
LISTNUM 1 \l 12124 But having said that, there are two points in there.
LISTNUM 1 \l 12125 Number one, CBC has also applied for that frequency and even though we have intervened, requesting that CBC should consider an alternate frequency, the fact of the matter is also that the 102.3, while it will give a reasonable coverage of the Windsor market, it will not give us what the Windsor advertisers have asked for.
LISTNUM 1 \l 12126 It will not give the coverage in the entire area in order to deliver to the businesses that we have spoken to, the clients that they are looking for. I will not guarantee an Italian restaurant that we will deliver a good number of clients to your restaurant from outside the Windsor market, which is what they are getting right now and who are very important to them.
LISTNUM 1 \l 12127 THE CHAIRPERSON: Your bottom line, Mr. Ray, is if you don't get coverage of the Detroit market you cannot make this business plan a go and you therefore cannot serve Canadian listeners?
LISTNUM 1 \l 12128 MR. NEETI RAY: I would ‑‑ okay, let me put the question to myself in a yes or no.
LISTNUM 1 \l 12129 Will we be viable, will we survive if we didn't get the 95.9, will we survive with the 102.3?
LISTNUM 1 \l 12130 The answer in yes or no, I would say yes categorically that we will survive but there would be difficulties, more difficulties or I would say there would be a lot less ‑‑ a lot less easy than to use the 95.9.
LISTNUM 1 \l 12131 We are a standalone radio station. We do not have the synergies from a local radio station, the managerial or, as one termed it, the backroom and the front room of an existing radio station to reduce our costs of the operation.
LISTNUM 1 \l 12132 So we would survive, Madam Chair, and the answer in yes or no, I would have to be forthcoming in that it is yes but we need the 95.9 badly to be able to serve the business communities well and to ensure that in the short term that we would be profitable.
LISTNUM 1 \l 12133 THE CHAIRPERSON: Thank you very much.
LISTNUM 1 \l 12134 Legal Counsel, do you have some questions?
LISTNUM 1 \l 12135 MS SMITH: Yes, I have one question for you.
LISTNUM 1 \l 12136 MR. NEETI RAY: Can Mr. Winn put a word in?
LISTNUM 1 \l 12137 THE CHAIRPERSON: Perhaps what we can do is have legal counsel ask her question and then you can do the wrap‑up. Thank you.
LISTNUM 1 \l 12138 MS SMITH: Mr. Ray, you have indicated that you will broadcast 105 hours or 83.3 percent ethnic programming per week. The Regulations require that at least 50 percent of all programming broadcast by ethnic stations be third‑language programming, that is, other than French, English or Aboriginal Canadian.
LISTNUM 1 \l 12139 What level of third‑language programming will you adhere to by condition of licence? So this is other than French, English or Aboriginal Canadian.
LISTNUM 1 \l 12140 MR. NEETI RAY: It is the percentage that you just quoted, which is a total of 105 hours third‑language programming.
LISTNUM 1 \l 12141 MS SMITH: So that will be other than French, English or Aboriginal Canadian, the 83.3 percent?
LISTNUM 1 \l 12142 MR. NEETI RAY: Correct.
LISTNUM 1 \l 12143 MS SMITH: Okay. Thank you very much.
LISTNUM 1 \l 12144 THE CHAIRPERSON: Okay, please go ahead. I will give you a couple of minutes just to wrap up and conclude. Thank you.
LISTNUM 1 \l 12145 DR. WINN: Just a brief word.
LISTNUM 1 \l 12146 The financial value to advertisers of advertising depends obviously on the size of the audience but it also depends on the character of the audience's relationship to the broadcaster and that is what gives this radio station proposal so much value. The intimate relationship would be so much more intense than in the case of the U.S. counterpart.
LISTNUM 1 \l 12147 THE CHAIRPERSON: Thank you. I appreciate those comments.
LISTNUM 1 \l 12148 Mr. Ray, you have the final word.
LISTNUM 1 \l 12149 MR. NEETI RAY: So I have two minutes?
LISTNUM 1 \l 12150 THE CHAIRPERSON: Go for it.
LISTNUM 1 \l 12151 MR. NEETI RAY: Well, this proposal, Madam Chair, is for the establishment of the first ever full service ethnic radio station in Windsor and the benefits of licensing this radio station are numerous.
LISTNUM 1 \l 12152 The proposed service will provide nearly 150 ethnic Canadians who have indicated origins other than English, French and aboriginal to benefit from it, but most particularly those who have indicated that their third language ‑‑ their mother tongue is other than English or French or aboriginal, which is about 75,000.
LISTNUM 1 \l 12153 This radio station if licensed would have the least impact on existing radio stations.
LISTNUM 1 \l 12154 This radio station would fill a gap that exists in the Windsor market.
LISTNUM 1 \l 12155 This radio station will provide vital service to communities who do not currently have any service.
LISTNUM 1 \l 12156 This radio station will repatriate the Canadian dollars and the Canadian audiences currently going to the U.S. radio station.
LISTNUM 1 \l 12157 Our business plan is attainable without problem and we have plans in place for programming that would directly benefit the local audiences with local news, local programming not currently available to them.
LISTNUM 1 \l 12158 It will have a positive impact on the development of Canadian talent through the direct contributions that we have committed to and the indirect and the participation of the Multicultural Council of Windsor Essex County, which is very active and has been there for 25 years.
LISTNUM 1 \l 12159 And our proposal would provide for the first time an ethnic radio station in the market of its size in Canada, and the proportion of immigrants in such cities do not have third language services because of their size and the business and the population.
LISTNUM 1 \l 12160 We are in a unique position to provide this service to the ethnic communities with the advantage of its geographical location in Canada. So I hope that the Commission would find our proposal approvable.
LISTNUM 1 \l 12161 MS RAY: And I would just like to quote one of the CRTC Public Notices released out to me. It is the 1985‑139, "A broadcasting policy reflecting Canada's linguistic and cultural diversity" which states that:
"The development of broadcasting services that reflect this cultural and linguistic plurality is an essential part of the Canadian social structure."
LISTNUM 1 \l 12162 MS RAY: The philosophy of our station will be to reflect Windsor's growing local multicultural community and I really believe that this would have a positive impact on Windsor's society and on Canada's society.
LISTNUM 1 \l 12163 MR. NEETI RAY: Thank you very much.
LISTNUM 1 \l 12164 THE CHAIRPERSON: Mr. Ray, and to your associates, thank you very much for also your patience in answering our questions this morning.
LISTNUM 1 \l 12165 We will take a 15‑minute break now.
LISTNUM 1 \l 12166 Thank you.
‑‑‑ Upon recessing at 1055 / Suspension à 1055
‑‑‑ Upon resuming at 1110 / Reprise à 1110
LISTNUM 1 \l 12167 THE SECRETARY: Before beginning we would like to remind you that when you are in the hearing room please turn off your cell phones, beepers and Blackberries as they are an unwelcome distraction and they cause interference on the internal communication systems used by our translators.
LISTNUM 1 \l 12168 We would appreciate your cooperation in this regard throughout the hearing.
LISTNUM 1 \l 12169 We will now proceed with item 6 which is an application by Blackburn Radio Inc. for a licence to operate an English‑language FM commercial radio programming undertaking in Windsor, Ontario.
LISTNUM 1 \l 12170 The new station would operate on frequency 95.9 (channel 240B1) with an average effective radiated power of 3,300 watts (maximum effective radiated power of 14,000 watts/antenna height of 145 metres).
LISTNUM 1 \l 12171 Appearing for the applicant is Mr. Richard Costley‑White.
LISTNUM 1 \l 12172 Please introduce your colleagues and you will have 20 minutes for your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 12173 MR. COSTLEY‑WHITE: Thank you.
LISTNUM 1 \l 12174 Good morning, Madam Chair, members of the Commission and Commission staff.
LISTNUM 1 \l 12175 My name is Richard Costley‑White. It is my honour and privilege to be before you here today, sitting over to your left this time, to present an application for a new FM radio station in Windsor, Ontario.
LISTNUM 1 \l 12176 Now, I would like to introduce our panel.
LISTNUM 1 \l 12177 With me today to my immediate left is our General Manager for Blackburn Radio stations in Leamington, Chatham and Windsor, Terry Regier. Terry has been with Blackburn for over 26 years, 10 years as a radio broadcaster and 16 in print. Terry's experience is in the area of sales and marketing. He has lived in Windsor for over 35 years.
LISTNUM 1 \l 12178 Next to Terry is Walter Ploegman. Walter is our Operations Manager for Blackburn Radio. He has been a radio broadcaster for more than 26 years and has experience as an on‑air host, music director and as a program director. Walter also oversees and manages the distribution of Canadian content development funds for Blackburn Radio in Essex‑Kent.
LISTNUM 1 \l 12179 To Walter's left is Sue Storr. Sue is currently Program Director for Blackburn's Country CHOK in Sarnia. Sue has spent the last 18 years in the broadcast industry as a reporter, news announcer and talk show host. Sue also taught broadcast journalism for 10 years at Lambton College.
LISTNUM 1 \l 12180 To Sue's left is Rod Martens who has been a radio broadcaster for more than 18 years and has been an on‑air host, music director, marketing director and program director. Rod is currently the Program Director for CKUE FM, a position he has held since 2005. Rod is currently overseeing the launch in March of our new Leamington Country FM station.
LISTNUM 1 \l 12181 Finally, in the front row is Lori Baldassi, Director of Community Relations in Windsor. We hired her because of her vast experience in the social services field in Windsor for more than 15 years.
LISTNUM 1 \l 12182 Now, in the second row, starting from your right is Jason Ploegman who we introduced during our Owen Sound presentation.
LISTNUM 1 \l 12183 Next to Jason is Carl Veroba. Carl was President and General Manager of CFCO AM, CKSY FM and CKUE FM for 20 years before selling his interest to Blackburn in 2004. Carl now consults for Blackburn Radio, covering a wide variety of technical matters.
LISTNUM 1 \l 12184 Next to Carl is Debra McLaughlin, an economic consultant with Strategic Inc. Debra has prepared many economic and market reports on new radio, television and other applications before this Commission.
LISTNUM 1 \l 12185 Beside Debra we would like to welcome back Mark Kassof, President of Mark Kassof & Co. Mark has researched radio markets and formats for broadcasters in Canada and in the United States for 25 years.
LISTNUM 1 \l 12186 As with the Owen Sound presentation, we have provided you with a binder with these remarks, our seating plan, copies of the PowerPoint slides and other materials to which we will be referring in our presentation or during the question period.
LISTNUM 1 \l 12187 We are here today to present our proposal to add a new Canadian radio programming choice for Windsor. Windsorites deserve an additional programming choice on their radio dial that provides local and regional Canadian news and reflection.
LISTNUM 1 \l 12188 Canadian country artists deserve exposure in one of Canada's larger cities.
LISTNUM 1 \l 12189 In our Owen Sound presentation I told you about the history and values of our company with particular emphasis on our passion for news and community service. We bring the same commitment to Windsor. Our stations in Chatham, Kent, Leamington and Sarnia have operated in challenging circumstances for many years with multiple American stations available. Our success is built on our local connection.
LISTNUM 1 \l 12190 With large newsrooms, synergies between our stations and strong and autonomous local management we have been successful. And when we entered Windsor with a rebroadcaster of our Chatham‑Kent rock station this attention to local reflection proved to be successful as well.
LISTNUM 1 \l 12191 I would now like to ask Terry Regier to speak a bit more about the market in which he has lived for the past 35 years.
LISTNUM 1 \l 12192 Terry.
LISTNUM 1 \l 12193 MR. REGIER: Thank you, Richard, and good morning, Commissioners.
LISTNUM 1 \l 12194 At present the Windsor CMA has over 320,000 residents and is served by the CBC, a student radio station, four stations owned by CTVglobemedia and a rebroadcaster of our Chatham station CKUE FM.
LISTNUM 1 \l 12195 Windsor presents a unique situation for Canadian broadcasters. Detroit, the United States' 11th largest market, is just across the river and presents both opportunities and challenges. Some 80 radio signals from Detroit and other U.S. markets are received in Windsor. This causes fragmentation to the radio listening.
LISTNUM 1 \l 12196 The CRTC has recognized the unique nature of the market and allowed exemptions to its rules. At the same time, the size of the Detroit market is a temptation to Windsor broadcasters. The most famous example is CKLW, at one time known as The Big 8, the number one station not only in Detroit but throughout Michigan and even into Ohio.
LISTNUM 1 \l 12197 The challenge for a new broadcaster is a recent cyclical downturn in the automotive industry. The proximity to the motor city automotive industry made Windsor a prosperous community but at the same time made it vulnerable to downturns in the market.
LISTNUM 1 \l 12198 The people of Windsor recognized this challenge a number of years ago and have worked hard through the Windsor/Essex Economic Development Corporation to diversify their economy.
LISTNUM 1 \l 12199 Our own modest success with the rebroadcaster of CKUE FM, known as The Rock, gave us some hope that a strong Canadian station oriented to local concerns could succeed, but before filing an application we wanted to be sure by hiring two topflight consultants, Strategic Ink. and Mark Kassof & Co., to check the financial capacity to market and the taste for a new station.
LISTNUM 1 \l 12200 Blackburn commissioned Strategic Inc. to do an economic study of the Windsor CMA to determine amongst other things the viability of a new radio entrant into the market. I would like to ask Debra McLaughlin to outline what she found.
LISTNUM 1 \l 12201 MS McLAUGHLIN: Thank you, Terry, and good morning, Commissioners.
LISTNUM 1 \l 12202 We found that the economic base has continued to diversify. Job creation has been steady over the past 20 years and has happened outside the field of automotive manufacturing. Service industries such as tourism, lifestyle and health are either rebounding or expanding.
LISTNUM 1 \l 12203 Additionally, employment in sectors such as finance, insurance and research is growing.
LISTNUM 1 \l 12204 The Ontario Lottery Corporation announced the arrival of 400 new well‑paying jobs in the market. Similar developments such as the significant investment at St. Clair's College converging media centre, the University of Windsor's investment in new medical and engineering faculties and the ongoing expansion of retail outlets in Windsor's CMAs outlying communities all give Windsorites ongoing confidence that they can weather the current storm.
LISTNUM 1 \l 12205 Retail sales have historically been underdeveloped because of the stiff competition from a large U.S. market but forecasters from both the Conference Board of Canada and FP markets are for growth that surpasses the annual inflation rate.
LISTNUM 1 \l 12206 All of these factors suggest cautious optimism for a new entrant to the radio market.
LISTNUM 1 \l 12207 We concluded in our report that the potential exists for a new service that can be offered at a price more in line with other comparable Canadian markets. If the service is branded as a Windsor station with clear, local news content and a suitable format, it should be able to compete effectively in the market for shares.
LISTNUM 1 \l 12208 All indicators suggest that the Windsor radio market is underdeveloped and this evidence alone is sufficient to conclude that the market can support a new commercial radio licence at this time. Add to this the expectation that a market that has seen hard times inevitably rebounds and you have an opportunity to introduce diversity with minimal impact.
LISTNUM 1 \l 12209 Here to speak about the audience research is Mark Kassof.
LISTNUM 1 \l 12210 MR. KASSOF: Thank you, Debra, and good morning.
LISTNUM 1 \l 12211 Our research was based on 500 completed interviews with listeners aged 12 to 64 in the Windsor CMA. We reviewed listeners' current radio usage, their perception of radio and how it serves Windsor, their interest in eight different formats and their perception of the availability of each format in their community. From this analysis we learned the following:
LISTNUM 1 \l 12212 Windsor's CMA listeners are very hometown oriented. 72 percent think of themselves as residents of the Windsor area rather than Detroit‑Windsor.
LISTNUM 1 \l 12213 43 percent are very interested in Windsor news, second only to music among the programming elements we tested and far ahead of Detroit news at 14 percent.
LISTNUM 1 \l 12214 63 percent would strongly prefer their ideal station to be from Windsor while only 7 percent would strongly prefer it to be from Detroit.
LISTNUM 1 \l 12215 Only 22 percent are 100 percent satisfied with how radio services Windsor at present.
LISTNUM 1 \l 12216 During the Owen Sound presentation I explained how we determine the best format for our market. In the case of Windsor three formats represented the biggest unserved needs, AC, CHR and New Country. When I projected the ratings for each format AC and New Country emerged as the better choices.
LISTNUM 1 \l 12217 MR. PLOEGMAN: Thank you, Mark.
LISTNUM 1 \l 12218 Good morning.
LISTNUM 1 \l 12219 We took Mark's analysis and decided that New Country was the right format choice for Windsor. In Windsor there is currently no outlet for Canadian country music. This void means that Canadian artists have not been able to tour in this area due to lack of exposure.
LISTNUM 1 \l 12220 The Wolf will give both star and emerging Canadian country artists the exposure needed. Artists like Shane Yellowbird, Aaron Lines, Paul Brandt, Terry Clark and many more will be getting airplay in the sixteenth largest Canadian market, a market where they receive very little exposure.
LISTNUM 1 \l 12221 While the conventional wisdom in this area is that stations must have a Canadian content break to be competitive, we believe that we can succeed with the regulatory level of 35 percent, just as we have done with our rock station.
LISTNUM 1 \l 12222 We will provide a wide range of special interest programs with an emphasis on interactivity with our audience.
LISTNUM 1 \l 12223 We believe that with imaginative promotion and marketing The Wolf can attract the audiences that we have projected in our application.
LISTNUM 1 \l 12224 We are also excited about our emerging artist initiative. To further extend the exposure in our market to Canadian country music artists, 95.9 The Wolf will have an emerging local and regional artist website which will allow independent emerging country bands and artists a place to promote their music to give them airplay on our station and to link with funding programs like FACTOR.
LISTNUM 1 \l 12225 We have a similar initiative proposed with our Owen Sound application and already in place with CKUE FM.
LISTNUM 1 \l 12226 Local artists will have the ability to create their own page on our site, include their bio, stream their music; offer downloads of their music, list upcoming concert announcements and more.
LISTNUM 1 \l 12227 Access to this emerging artist portal would be available on our radio station websites, clearly identified on our home pages.
LISTNUM 1 \l 12228 The Wolf will also promote this initiative through on‑air promos and liners as well as print material such as posters with distribution in various local music stores and venues that would target local country artists and listeners.
LISTNUM 1 \l 12229 The Kassof study determined that there is significant demand for a Windsor country station. Moreover, the projected core listeners to a new country station are less satisfied than average with how the station they presently listen to most serves Windsor. The Wolf will provide that missing link for listeners now turning into Detroit country radio. The Wolf will give Windsor area listeners a reason to change the dial from the American stations.
LISTNUM 1 \l 12230 I would now like to ask Sue Storr to explain how we will do this.
LISTNUM 1 \l 12231 MS STORR: Thank you, Walter.
LISTNUM 1 \l 12232 Good morning, Madam Chair and members of the Commission.
LISTNUM 1 \l 12233 Blackburn Radio has a longstanding tradition as a leader in news and information. There are a total of 28 new staff working for Blackburn Radio today.
LISTNUM 1 \l 12234 Our three Heritage stations, 1070 CHOK in Sarnia, 630 CFCO Chatham and 920 CKNX in Wingham have demonstrated that commitment and shown that news and information is the keystone of community involvement.
LISTNUM 1 \l 12235 In Sarnia our stations anchor the communications requirements for Canada's chemical valley. A cluster of plants along with the police and fire services depend on Blackburn's three stations to alert the community to any potential threat. Our news centre is linked by direct phone communications and 24‑hour pager systems. If shelter‑in‑place or evacuation orders are issued, Blackburn Radio takes the lead role in getting the word out.
LISTNUM 1 \l 12236 The Blackburn stations work together in news gathering, sharing the latest information from multiple locations across the South and Midwest. Chatham, Leamington, Windsor and Sarnia share upwards of 200 stories a month, partner an election and sports coverage and exchange stories on a daily basis. This does not mean that they are carbon copies of each other. Rather, our news directorates have the freedom to choose from a wider menu in deciding the stories that are relevant to their communities.
LISTNUM 1 \l 12237 We do not intend to reinvent the wheel with the new FM station but instead will build upon our successful models. The success of The Wolf will be in large part due to our commitment to keeping our listeners updated and informed with what is going on in the Windsor‑Essex area.
LISTNUM 1 \l 12238 The Wolf will hire three journalists to work closely with the three person CKEU news team in Windsor. In addition, we will supplement this coverage with access to stories generated by our staff at CHYR FM in Leamington and Essex County and we intend to hire correspondents in some of the outlying communities in the Windsor extended market.
LISTNUM 1 \l 12239 Having this large a newsroom will ensure that we can go beyond the usual short newscasts and actually have reporters develop expertise in various areas.
LISTNUM 1 \l 12240 We will provide 76 newscasts each week, including through the day Saturday and Sunday, for a total of six hours, 42 minutes. 75 percent of the news we will broadcast will be local Windsor news.
LISTNUM 1 \l 12241 The Wolf and Blackburn Radio will also offer a new and innovative interactive way to disseminate news. Listeners will be able to access a central database for all online news content throughout Essex‑Kent on Blackburn radio stations in the form of text, audio and video on Blackburn websites through podcasting, RRS feeds and other methods allowing end users to filter their stories by region, type and dates.
LISTNUM 1 \l 12242 Our news coverage will be supplemented by a wide range of other surveillance and community information.
LISTNUM 1 \l 12243 During our Owen Sound presentation we outlined the important role of our community marketing representatives. In Windsor, Lori Baldassi is our Director of Community Relations.
LISTNUM 1 \l 12244 Lori.
LISTNUM 1 \l 12245 MS BALDASSI: Thank you, Sue.
LISTNUM 1 \l 12246 As Director of Community Relations, my job is to be the ambassador for Blackburn Radio. A life‑long Windsor resident, I have worked in the social service sector for more than 15 years, where I have connected in someway with the majority of the non‑profit charitable organizations.
LISTNUM 1 \l 12247 Whether I am sitting on a committee for a signature marketing plan, creating a fund development initiative or assisting with arrangements for on‑air interviews or press coverage, emceeing events or speaking on behalf of a non‑profit, I connect personally with the community.
LISTNUM 1 \l 12248 This connection is not limited to non‑profit community, but extends into varied sectors, including the City of Windsor's Mayor's office and other political offices across the district. I would be pleased to expand on these activities during the question period if you wish.
LISTNUM 1 \l 12249 I would like to reintroduce Walter Ploegman to speak to our CCD initiatives.
LISTNUM 1 \l 12250 MR. PLOEGMAN: Thank you, Lori.
LISTNUM 1 \l 12251 In keeping with Blackburn's philosophy, we are pleased to help build and expand the musical development and diversity within the Windsor community through our CCD initiatives. We propose cash contributions over and above the basic requirement totalling $1,001,000 over the seven‑year licence term on CCD initiatives, two are national and four are regional.
LISTNUM 1 \l 12252 On the national level, we will contribute $70,000 to the Canadian Country Music Association for its new artist development project. FACTOR will receive a total of $200,200. In addition, we are already working with FACTOR on a number of non‑cash Windsor initiatives.
LISTNUM 1 \l 12253 Locally, we propose $350,000 to scholarships for journalism and music students at St. Clair College. We will earmark at least two of the 10 scholarships each year for students from visible minority and Aboriginal backgrounds. We will create internships for minority students at The Wolf.
LISTNUM 1 \l 12254 We will contribute $210,000 over seven years for the Blackburn new country talent search where 10 to 15 local, regional emerging country music artists and bands will be invited to perform at our new country talent search.
LISTNUM 1 \l 12255 We will ask our listeners to participate by voting on our website. The public votes will inform the choices made by our music director, establish local musicians and local and regional celebrities. The winning artist or band will receive a real boost to their career through the prize package outlined in our application.
LISTNUM 1 \l 12256 I would also like to highlight that we will finance time in a local studio to produce a single to be released to radio. The resulting recording will be guaranteed airplay on our country stations in Windsor, Sarnia, Leamington and Wingham and be included on the Blackburn Radio new country talent search CD compilation featuring winners from our other country stations in Wingham, Sarnia and Leamington.
LISTNUM 1 \l 12257 Also, $100,800 will be contributed to Windsor Summerfest just to bring in local and regional emerging Canadian country music artists at our cost for The Wolf Country Jamboree.
LISTNUM 1 \l 12258 And $70,000 to the St. Clair Centre for the Arts, the Chrysler Theatre, to present local and regional emerging Canadian country music artists. Now, this initiative will encourage Windsorites to come out and see great Canadian country acts in a city where promotion of such music has literally been non‑existent.
LISTNUM 1 \l 12259 Now, altogether, we feel that these CCD initiatives totalling $1,001,000, over and above the basic requirement, will be a significant benefit to the Windsor community at large and exceed and surpass the Commission's CCD policy.
LISTNUM 1 \l 12260 And now to sum up, here is Richard Costley‑White once again.
LISTNUM 1 \l 12261 MR. COSTLEY‑WHITE: Thank you, Walter.
LISTNUM 1 \l 12262 Our business plan is predicated on a strong independent radio station with its own news, programming and advertising personnel. There will be some cooperation on news which will enhance the service provided by The Wolf and by CKUE‑FM‑1. Each station will continue to have its own news director and synergies will come from news gathering rather than editorial control. The station will benefit from back office synergies with CKUE‑FM‑1 and other Blackburn stations.
LISTNUM 1 \l 12263 The Wolf will have little negative impact on the existing stations in the market. With a format that does not overlap any of the CTVglobemedia stations in Windsor, the Wolf will draw much of its audience from American country music stations. Some tuning will come from Canadian stations, but this will be a small part of their audience share.
LISTNUM 1 \l 12264 Similarly, we expect little of the station's revenue to come from the existing CTVglobemedia stations. Given that FP markets and the Conference Board project steady growth in retail sales, we expect that the market will have grown by the time the station is launched.
LISTNUM 1 \l 12265 The research report from Strategic Inc. supports our revenue projections and concludes that the market can absorb a new station. We believe that our application addresses the Commission's criteria for evaluating new stations. The market can sustain a new entrant, there will be no negative impact on competitive balance, in fact, approval will ensure a better competitive balance, more Canadian stations to repatriate in the truest sense of the word, Canadian listeners from Detroit radio and a strengthened local competitor to Canada's largest private broadcaster.
LISTNUM 1 \l 12266 The wealth will bolster the only private Canadian news voice, other than CTV, in the market by providing a well‑staffed newsroom and 76 newscasts each week, including throughout the day on the weekends.
LISTNUM 1 \l 12267 The application is of high quality with a strong business plan based upon solid research, strong plans for local reflection, Canadian content commitments higher than the other stations in the market and a substantial package of Canadian content development initiatives.
LISTNUM 1 \l 12268 And now, we would like to introduce you to 95.9 The Wolf, Windsor's hot new country.
‑‑‑ Video presentation / présentation vidéo
LISTNUM 1 \l 12269 MR. COSTLEY‑WHITE: Thank you very much for your attention and we look forward to your questions.
LISTNUM 1 \l 12270 THE CHAIRPERSON: Thank you, Mr. Costley‑White, and thank you for keeping us on our toes by switching things up. I was already tested and failed this morning when I called Commission del Val Commissioner del Ray.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12271 THE CHAIRPERSON: These monosyllabic last names.
LISTNUM 1 \l 12272 So I am going to turn things over to Commissioner Menzies now. Thank you.
LISTNUM 1 \l 12273 COMMISSIONER MENZIES: Thank you. I would like to start ‑‑ just to talk about your Canadian content objectives of 35 per cent. I would just like to know a little bit more about how you came to that and why you think you don't need to live under the Windsor umbrella on that one?
LISTNUM 1 \l 12274 MR. REGIER: Thank you, Mr. Commissioner.
LISTNUM 1 \l 12275 I would like to answer that by starting off by saying we believe that the Canadian content isn't a hindrance to us because we have got currently a number of stations that are on border markets, Sarnia, Leamington can be considered that, Chatham, and our own rock station that lives under that environment of 35 per cent Canadian content.
LISTNUM 1 \l 12276 But I would like to have our program director, Rob Martens, speak more specifically to this issue.
LISTNUM 1 \l 12277 MR. MARTENS: Yes, thank you. We have never had a problem with 35 per cent content in many of our border communities. As Mr. Regier was saying, we have succeed in Sarnia with three stations playing 35 per cent content. Sarnia also features probably close to 70 signals from the U.S. coming into that market. We also compete very well in Windsor with a part‑time rebroadcaster of CKUE‑FM.
LISTNUM 1 \l 12278 With this part‑time broadcaster we play 35 per cent content. Our competitors in the Windsor market are not at that same level yet. We are the number one music station in that market, adults 25‑54 our demographic, playing 35 per cent Canadian content.
LISTNUM 1 \l 12279 Also, we would like to bring the fact that Leamington, our station, does very well as well, over 80 signals coming in from not only Detroit, but Toledo and Cleveland. And we have managed to do very well in being the number one station there, 12 plus as a matter of fact, playing 35 per cent Canadian content. So it has not been a hindrance whatsoever to us at Blackburn.
LISTNUM 1 \l 12280 COMMISSIONER MENZIES: So ‑‑ all right, go ahead.
LISTNUM 1 \l 12281 MR. REGIER: I would also like to add that the new country format lends itself well to the 35 per cent Canadian content we believe.
LISTNUM 1 \l 12282 COMMISSIONER MENZIES: More so than another format that you might not ‑‑
LISTNUM 1 \l 12283 MR. MARTENS: I think Canadian music is doing very well right now in all genres, country, AC, rock, we have a plethora of great artists. The industry of producing great music in Canada is better than I have ever seen it. I have been in broadcasting for 18 years and we have no problems whatsoever on either country stations, AC or rock, providing great content, great music that is not only listenable in our home markets, but maybe even picking up some interest in the States as well, we have noticed that.
LISTNUM 1 \l 12284 COMMISSIONER MENZIES: Okay, thank you.
LISTNUM 1 \l 12285 This is probably an area that you would have anticipated. How do you balance the needs of a Canadian audience in Windsor with American advertisers who you are obviously going to attract at some point if you are successful?
LISTNUM 1 \l 12286 MR. REGIER: Ironically, the issue of Canadian content and U.S. advertisers doesn't play on our stations as of yet in Windsor. We do not have any American advertisers on our radio station in Windsor and we have been there for three years and we are the number one rock station, number two in the last ‑‑ about 25‑54.
LISTNUM 1 \l 12287 And so we do not put a sales team in the U.S. We do not approach the U.S. market in that way. We are a low‑power radio station, so our signal doesn't penetrate far enough into that area.
LISTNUM 1 \l 12288 95.9 is also a low‑power frequency that will penetrate into Detroit, but only into a shorter density.
LISTNUM 1 \l 12289 COMMISSIONER MENZIES: So you wouldn't have any plans to sell or solicit in Detroit ads?
LISTNUM 1 \l 12290 MR. REGIER: I imagine that there are clients in Detroit that we would love to have on, but we do not subscribe to the Arbitron, so we are not on their radar in some cases. And we don't go over there and solicit.
LISTNUM 1 \l 12291 We believe, if I may speak with regards to The Rock, we believe that our strength is the fact that we ‑‑ and we promote it heavily ‑‑ that we are Canada's rock station and we position ourselves like that. We do not send sales teams over there. We can look our retailers in the eyes and say, you know, we are not going to deny you as advertisers if they picked up the phone and came in, I mean, I am a business man.
LISTNUM 1 \l 12292 COMMISSIONER MENZIES: Yes, people with money are usually welcome when they knock on the door, right?
LISTNUM 1 \l 12293 MR. REGIER: Yes, so we kind of welcome them. But we don't actively pursue it and it is part of our strategy. I can't speak to that for the future, but it has been like this for three years now and we are quite happy, our growth has been comfortable.
LISTNUM 1 \l 12294 COMMISSIONER MENZIES: So you can say that you currently have no plans to do this?
LISTNUM 1 \l 12295 MR. REGIER: I currently have no plans to do this. This business model was not setup with any U.S. advertising considerations.
LISTNUM 1 \l 12296 COMMISSIONER MENZIES: Okay, thank you.
LISTNUM 1 \l 12297 Are you comfortable with conditions of licence regarding news and spoken word, the 90 minutes news and 5 per cent spoken word?
LISTNUM 1 \l 12298 MR. COSTLEY‑WHITE: We are comfortable with that, yes.
LISTNUM 1 \l 12299 MR. COMMISSIONER MENZIES: Okay. How much of this work, in terms of the news, will be original work done at this station?
LISTNUM 1 \l 12300 MR. REGIER: I would like to have Sue Storr address the issue of news.
LISTNUM 1 \l 12301 MS STORR: Thank you, Terry.
LISTNUM 1 \l 12302 Mr. Commissioner, The Wolf, as I mentioned earlier, will have 76 newscasts per week, which brings us to a total of six hours and 42 minutes of news, 75 per cent of the content will be local, The Wolf will hire a news director and two fulltime journalists as well as two part‑time reporters to cover weekend news and assignments through the week. That will be supplemented by our correspondents from the Blackburn chain of 28 news staff to provide coverage of the outlying areas of Essex County and South western Ontario.
LISTNUM 1 \l 12303 The three‑person news team that we will hire for The Wolf would work along side the three‑person news team at CKUE‑FM, our rock station.
LISTNUM 1 \l 12304 The news director for The Wolf would assume the role of assignment editor for a total news staff of six in Windsor, and then stay in daily contact with our news directors in Chatham and in Leamington to make sure there is no duplication of coverage of the areas and to make sure nothing gets missed.
LISTNUM 1 \l 12305 COMMISSIONER MENZIES: So you essentially are setting up a news bureau of six, is that right? So you have got one ‑‑
LISTNUM 1 \l 12306 MS STORR: We have three news people working right now for The Rock station in Windsor.
LISTNUM 1 \l 12307 COMMISSIONER MENZIES: Right.
LISTNUM 1 \l 12308 MS STORR: Three more people would be hired to work news on The Wolf and we would combine the efforts of those six people so that you don't have an overlap, that you're not sending two reporters out to one event, you can send one.
LISTNUM 1 \l 12309 COMMISSIONER MENZIES: Yes, you can only chase so many ambulances in a day.
LISTNUM 1 \l 12310 MS STORR: That is right.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12311 COMMISSIONER MENZIES: But there will be a single assignment editor basically assigning ‑‑
LISTNUM 1 \l 12312 MS STORR: The news director for the Wolf would assume that role, yes.
LISTNUM 1 \l 12313 COMMISSIONER MENZIES: And who will make the decisions on what news content is picked up for each station?
LISTNUM 1 \l 12314 MS STORR: The news director. For each station, sir?
LISTNUM 1 \l 12315 COMMISSIONER MENZIES: Is there a separate news director for each station?
LISTNUM 1 \l 12316 MS STORR: Yes.
LISTNUM 1 \l 12317 COMMISSIONER MENZIES: Okay, but a single assignment editor?
LISTNUM 1 \l 12318 MS STORR: There is a separate news director in Chatham, in Leamington and in Windsor. The Wolf will hire a news director that will oversee the Windsor operations for The Wolf and The Rock stations.
LISTNUM 1 \l 12319 MR. REGIER: Okay, may I add something? Okay the issue of The Rock is a unique situation because it is a repeated signal. And so what happens is The Rock news director actually resides in Chatham. So what goes on the news content in Chatham for The Rock where the broadcasting is then sent out throughout the area, he would decipher what goes on The Rock.
LISTNUM 1 \l 12320 We originate our programming in the morning for The Rock. In the Windsor studios we go to the afternoon and then we flipped over to the Chatham market. And it is confusing, but it is 50/50. Literally, halfway through our news stories we will say, and in Kent County or ‑‑ and we will flip the news over.
LISTNUM 1 \l 12321 so he has got a difficult task of assigning which stories go on The Rock. So I can see the confusion, because the news director for The Wolf, their only mandate is to make sure that the stories on The Wolf relate to that audience.
LISTNUM 1 \l 12322 COMMISSIONER MENZIES: Right. I mean, don't get me wrong. I mean, I think it is a good efficient use of resources, and in terms of getting all those people around. I was just trying to get my head around who was making ‑‑ I knew who was sending them out, I just didn't know who was bringing them back in.
LISTNUM 1 \l 12323 MS STORR: Mr. Commissioner, our news directors are in daily contact within all of our Blackburn Radio stations by email and by phone. Just almost a, if you will, sort of how staff get together and say, okay, what is coming up today. We do that within our Blackburn stations to see what other news departments are working on.
LISTNUM 1 \l 12324 COMMISSIONER MENZIES: How is a country listener's news needs different from a rock listener's news needs?
LISTNUM 1 \l 12325 MR REGIER: For that, I am going to ask Mr. Kassof to maybe address that issue.
LISTNUM 1 \l 12326 COMMISSIONER MENZIES: Sure.
LISTNUM 1 \l 12327 MR. KASSOF: Well, I would say that, you know, one of the characteristics of the targets for this radio station is they are very hometown oriented, they care very deeply about Windsor news, they really don't care very much about what is going on in Detroit.
LISTNUM 1 \l 12328 As far as a comparison with rock listeners, really I found a high level of interest across demographics in this market into news. Obviously we, you know, see they typical skew of older listeners are more interested in news than younger, but the younger were very interested as well in local news. The younger listeners were very much preferring a Windsor station to one from across the river. So it is a very focused market in terms of interest and what is going on right in Windsor.
LISTNUM 1 \l 12329 MR. REGIER: I would like to ask Rod Martens to maybe comment a little bit further about the specifics of how they listen to it.
LISTNUM 1 \l 12330 MR. MARTENS: Well, news, as you are well aware, is different when you get to different formats. A news talk station delivers news different than a rock station and a country station would lend itself more to what a news talk station in the formatics, because they are gearing toward a female audience. Rock listeners are predominantly male, we are a 60/40 split male/female.
LISTNUM 1 \l 12331 So a rock newscast may be a bit more edgier, a bit more quick, a bit more slick. Whereas a country newscast would be a little more female oriented, which would mean it would be a little more geared toward a female listenership. And Sue Storr, who has worked in news departments for years, could expand more on that.
LISTNUM 1 \l 12332 But I think that would be the straight off difference. We are just going after different skewed demographics.
LISTNUM 1 \l 12333 COMMISSIONER MENZIES: But it is in the presentation ‑‑
LISTNUM 1 \l 12334 MR. MARTENS: It is in the presentation, more than the content. You would get more content on a country station than on a rock station. But the way it is presented would be different, yes.
LISTNUM 1 \l 12335 MS STORR: And if I can expand on that, Mr. Commissioner.
LISTNUM 1 \l 12336 I read the news on a rock format and in our building we have country, we have AC and we have rock. Each newscast is designed to sort of meet that audience's needs. Yes, I am a bit edgier when I read the news, maybe it is not as long and lengthy, it is hard‑hitting, it is headlines. Where, on our country station, the news is longer, the stories are a bit longer, there is more detail in it.
LISTNUM 1 \l 12337 THE CHAIRPERSON: So men have a shorter attention span?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12338 COMMISSIONER MENZIES: I was going to say that.
LISTNUM 1 \l 12339 MS STORR: Thank you, Madam Commissioner, you said that, not me.
LISTNUM 1 \l 12340 COMMISSIONER MENZIES: You stole my line. I was going to say it, but I couldn't think about it long enough to ‑‑
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12341 COMMISSIONER MENZIES: While we are on that topic, Windsor is a pretty big area and I am curious to know how you will ‑‑ even then, I appreciate the shared resources, the synergies that you would bring to the market in terms of actually having a fuller news bureau. But how do you choose where to assign those reporters in terms of general stuff?
LISTNUM 1 \l 12342 Do you just go head on with everybody else in cops and courts and city council and that sort of stuff or are you adding a particular type of enterprise reporting to the spectrum?
LISTNUM 1 \l 12343 MS STORR: There are a few beats, if you will, that when you are assigning news for your reporters to go out and cover that are common everyday, there is your municipal councils. And in Windsor Essex there is a number of councils that would need coverage. There is healthcare events, there is education, there are your police stories, as you have mentioned.
LISTNUM 1 \l 12344 So there are things that come up everyday that you would have a huge calendar that you would schedule people for and then there is just the everyday stories that you end up localizing. It could be a passport issue with the government working on ways of, you know, the enhanced licensing. Do we read the copy from Ottawa or do we localize that because we are border communities? Well, we get a local angle on that.
LISTNUM 1 \l 12345 So there is a lot of stories that will be developed from the national or provincial level that will have our reporters working the phones doing it.
LISTNUM 1 \l 12346 COMMISSIONER MENZIES: Okay, thanks. Can you tell me a little bit, I would like to just have you expand a little bit with your on‑air, your live presence. What are your plans to build personalities with the station so that you get that local celebrity flavour that you need to build audiences?
LISTNUM 1 \l 12347 MR. REGIER: Thank you, Mr. Commissioner.
LISTNUM 1 \l 12348 That is a very good question because that is something that we really battle with with The Rock. When we arrived into Windsor Blackburn purchased The Rock in May of 2005 and that was our number one challenge, was to identify a personality in the community or connect in the community in a special way.
LISTNUM 1 \l 12349 The role of community relations director is a unique role that we believe is unique to radio in the way that their only role is to get out there and work in the community, get a face, get a presence.
LISTNUM 1 \l 12350 But we have also done some really other interesting things in the programming area. We have a gentleman in the city who played drums for the Tea party, his name is Jeff Burrows. Jeff Burrows is very successful in Canada, Australia, Germany and throughout the world, I will say that. And we brought him on to do our midday show during the afternoons and he had created quite a presence, that is another connection. He brought his own set of drums into the studio and he setup there. We built a face utilizing decisions like that.
LISTNUM 1 \l 12351 We also brought in a gentleman from Toronto who is very polished in radio. So that connection is very important to make, especially when you have got to go person by person with that unique connection.
LISTNUM 1 \l 12352 So I would like to ask Lori maybe just to talk about how she connects to the community.
LISTNUM 1 \l 12353 MS BALDASSI: Thank you, I would be happy to tell you my part of the community relations department at Blackburn Radio.
LISTNUM 1 \l 12354 I am on the air Monday and Friday mornings, and Monday and Friday mornings I join the morning show and I talk about all things community, what is coming up, what events I have been to, that event people could take part in. For example, right now it is the Christmas season and the Red Cross asks for blood donors.
LISTNUM 1 \l 12355 What we did one time is we had the Canadian Red Cross come into the studios, pick everybody's blood on air so that they would know what their blood type is and what blood types were needed. Many people don't know that. Those are the type of things that I bring into the studio.
LISTNUM 1 \l 12356 I also have a community calendar that runs six times a day on The Rock. What I do is I initiate interviews and guest interviews and I voice it so that people know what is coming up, who is doing what, what initiatives are going on within the non‑profit, what food banks are open, who is doing a toy drive. I bring all that to the morning shows on Monday and Friday mornings.
LISTNUM 1 \l 12357 I really keep in touch with the community in other ways, is that I sit on committees. I have to really, really stress here that I don't come into their committees and take over. Each non‑profit is distinct, they have their mission statement, they have their goals and their objectives. I become part of their team and I use the resources of Blackburn Radio to assist them in any way that I can.
LISTNUM 1 \l 12358 COMMISSIONER MENZIES: Okay. So ‑‑
LISTNUM 1 \l 12359 MR. MARTENS: As for building celebrity, is that what you are ‑‑
LISTNUM 1 \l 12360 COMMISSIONER MENZIES: Well, what I am trying to get at is that 41 percent of the broadcast week is live programming under your application.
LISTNUM 1 \l 12361 MR. MARTENS: Yes.
LISTNUM 1 \l 12362 COMMISSIONER MENZIES: I am just trying to ‑‑ why only 41, I guess, is what I am trying to get to.
LISTNUM 1 \l 12363 MR. MARTENS: Well, 41 is the bare minimum. We are allowing for basically 66 hours a week, which is actually above the 41 percent but due to vacation time and sick days and just fluxes in the schedule, we don't want to overpromise.
LISTNUM 1 \l 12364 But 6A to 6P Monday to Friday and Saturdays from 6:00 to noon, not including some weekend news stuff as well in the afternoon and on Sundays.
LISTNUM 1 \l 12365 So I think from 6A to 6P we can be successful. It has been a model we have been able to use with our current rebroadcaster in Windsor, CKUE, and you can get a lot of personality in those 66 hours a week.
LISTNUM 1 \l 12366 Not only that but promotion. We are very ‑‑ we believe strongly in promoting our teams. If we are doing a ratings promotion it is going to be our morning team's promotion, so "Craig and Matt's Ultimate Garage."
LISTNUM 1 \l 12367 We buy billboards. We buy advertising time in the local daily newspaper. That is how we build our strength in the community and our name recognition, by being at all these events. We plaster logos everywhere.
LISTNUM 1 \l 12368 With a country station we would hire some great talent and make them a part of the community, which would in fact build their name.
LISTNUM 1 \l 12369 And just because their on‑air shift ends at 10:00 in the morning, our morning teams know that working for Blackburn Radio you are out in the community, which means you are going to be out there in the afternoon, you are going to be doing some weekend work, you are going to be at every single event that Lori decides is worthy of it and others that we decide are worthy of it from a programming standpoint.
LISTNUM 1 \l 12370 So in over 66 hours a week there is plenty of time to actually build a rapport with listeners in our listening area with the talent we have on the air.
LISTNUM 1 \l 12371 COMMISSIONER MENZIES: So you are aiming ‑‑ just so I get that right, are you aiming for 50 percent or you said 66 percent?
LISTNUM 1 \l 12372 MR. MARTENS: No, 66 hours per week ‑‑
LISTNUM 1 \l 12373 COMMISSIONER MENZIES: Sixty‑six hours.
LISTNUM 1 \l 12374 MR. MARTENS: ‑‑ of the 126. But we wrote in our deficiency 41 percent with 59 percent voice‑tracked just to make sure that if there were vacations, if there was sick time, we might have to voice‑track a shift or two and we don't want to underperform to the Commission.
LISTNUM 1 \l 12375 COMMISSIONER MENZIES: Okay. Well, I hope some of them do get a vacation.
LISTNUM 1 \l 12376 MR. MARTENS: Well, they will get some vacation time.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12377 MR. MARTENS: We are very generous in that, as Richard knows.
LISTNUM 1 \l 12378 COMMISSIONER MENZIES: Good. How generous of you.
LISTNUM 1 \l 12379 When they are on vacation and during those other ‑‑ what is the source of the other programming?
LISTNUM 1 \l 12380 MR. MARTENS: It would be additional people who would be part‑timers. It would be people we try and grow up through our system. Program directors such as myself who don't have a regular time slot. I call myself the highest paid part‑timer in Blackburn because I can slide in and do shifts.
LISTNUM 1 \l 12381 COMMISSIONER MENZIES: So it is still live programming?
LISTNUM 1 \l 12382 MR. MARTENS: It is still live programming, yes, it is.
LISTNUM 1 \l 12383 COMMISSIONER MENZIES: Okay, thanks.
LISTNUM 1 \l 12384 What portion of automated programming will be local?
LISTNUM 1 \l 12385 MR. MARTENS: All automated programming will be local.
LISTNUM 1 \l 12386 COMMISSIONER MENZIES: Okay.
LISTNUM 1 \l 12387 MR. MARTENS: Yes.
LISTNUM 1 \l 12388 COMMISSIONER MENZIES: How ‑‑ I think maybe we discussed this a little bit with the Canadian content but how will you differentiate yourself within that cross‑border market from the Detroit country stations or would you think that will just occur?
LISTNUM 1 \l 12389 MR. REGIER: I will ask Rod to ‑‑
LISTNUM 1 \l 12390 MR. MARTENS: It will be as simple as we will be playing ‑‑ new country is a very vibrant format. It does very well in markets across Canada right now: CHFX in Halifax, Y105 in Ottawa, CJBX in London, CKRY in Calgary, CISN in Edmonton. Very, very strong markets do very well with country.
LISTNUM 1 \l 12391 There are two stations in Detroit that play a new country. They are WDTW and WYCD and they do come into the Windsor market.
LISTNUM 1 \l 12392 Where we will be different is we will play the big stars of international fame, be it the Toby Keiths, be it the Martina McBrides, but we will also play 35 percent Canadian content, which will vastly differentiate ourselves from our competition in Detroit.
LISTNUM 1 \l 12393 There has not been a country station in the Windsor market, if memory serves correct, since 1975. So it has been over 30 years since there has been any country in the Windsor market. So we are basically treading on new ground in offering up an opportunity for Canadian artists to be heard in Windsor where they have never been heard before.
LISTNUM 1 \l 12394 So I find that is a great opportunity for us to say, look, we are something different, not only can we provide great local news which they are not getting right now from the Detroit country stations ‑‑ Detroit country stations do not care about what goes on in Windsor.
LISTNUM 1 \l 12395 We are going to be a Windsor country station that cares so much about the local news and community but we are also going to play the tunes that they love and give them music they have never heard before, the likes of Paul Brandt, Erin Lyon, Shane Yellowbird, Doc Walker, these artists who have received little to no airplay at all in Windsor from local radio stations.
LISTNUM 1 \l 12396 So that is how we are going to differentiate ourselves from our U.S. competition.
LISTNUM 1 \l 12397 COMMISSIONER MENZIES: Okay, thank you.
LISTNUM 1 \l 12398 Just one other ‑‑ we spoke about the newsroom but what other synergies do you expect to enjoy if successful here with CKUE?
LISTNUM 1 \l 12399 MR. REGIER: There is a number of synergies that we feel are available to us, and again, it is the back of house, front of house.
LISTNUM 1 \l 12400 We are dedicating 33 percent of our revenues to programming. So our synergies really have to occur in the operating lines such as one general manager, one overall sales manager, although there will be separate sales teams. We have one building, so we are sharing on economies there.
LISTNUM 1 \l 12401 There is the ability to save costs on a lot of different services that are provided in the community that allow us to actually expand our service while saving money. An example might be events that we attend through marketing, which gives us a presence but we can ride on that presence.
LISTNUM 1 \l 12402 There are a lot of events that we attend. An example, there is a huge event that occurs in the summertime, Bayfest, that draws ‑‑ Sue could give you the number.
LISTNUM 1 \l 12403 MS STORR: 20,000 people.
LISTNUM 1 \l 12404 MR. REGIER: So it is a big event.
LISTNUM 1 \l 12405 MR. MARTENS: Per day.
LISTNUM 1 \l 12406 MR. REGIER: Per day. And what happens is that it allows us to create a big presence without having to add a tremendous amount of cost to it.
LISTNUM 1 \l 12407 COMMISSIONER MENZIES: Okay, thank you.
LISTNUM 1 \l 12408 How are you going to wedge yourself into this market, up against CTV's four stations? That would appear fairly formidable from an economic point of view.
LISTNUM 1 \l 12409 MR. REGIER: Actually that is a good question because it is formidable. I mean they do have exemptions that we don't have, nor have we asked for.
LISTNUM 1 \l 12410 So in developing my business plan, sometimes what I do is ask questions to myself to say why shouldn't I do this and almost try and talk myself out of it. So if you give me a second here I am going to talk myself into this.
LISTNUM 1 \l 12411 COMMISSIONER MENZIES: Good!
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12412 MR. REGIER: Actually we see there is an opportunity in Windsor.
LISTNUM 1 \l 12413 One of the things that we do that is unique in Windsor that allows us to gain revenues without compromising what CTV might be doing is to recognize the fact that the station is very much different.
LISTNUM 1 \l 12414 We have separate sales teams. I have talked to that but that is very integral in our strategy because if you are a car dealership and I walk into your business and I am selling you The Rock, I am selling you The Rock for a certain model vehicle experience that each driver associates with.
LISTNUM 1 \l 12415 Now, if I am walking in there to talk about modern rock or hot AC, I am coming in with a different product line and I am talking to that issue.
LISTNUM 1 \l 12416 We have made significant gains on The Rock not because we have taken money from CTVglobemedia but probably more because we have educated the sales team through the R&B efforts, through our AB efforts, through a number of different areas to understand the unique differences for each model and by going into the client and saying: Yes, I know you are Canadian Tire and I know that you are on the radio stations across the world but this product over here is just right for you and that fits our audience and you can actually save money by niche marketing and going at it that way.
LISTNUM 1 \l 12417 So we are able to expand budgets and we have seen that occur on a number of occasions in the Windsor market. In fact, our growth has been comfortable in the last year because of that.
LISTNUM 1 \l 12418 COMMISSIONER MENZIES: So what does your target audience look like? If you are selling me, are you selling one specific profile or is it one of those stop me when you hear something you like ‑‑
LISTNUM 1 \l 12419 MR. REGIER: This is a good one because it is an exercise that we do when we are launching stations and it was derived from a gentleman out of our Sarnia stations and he brought it to my attention. I think it is an excellent thing to do.
LISTNUM 1 \l 12420 We put two names up on the board in the boardroom. We say this is Scott and Tracy. Scott is 41 years old. Tracy is 39 years old. Now let's go through all the things they like to do.
LISTNUM 1 \l 12421 I am going to let Rod talk to this a little bit more.
LISTNUM 1 \l 12422 MR. MARTENS: Well, you look at qualitative data. You find that thanks to BBM and we have heard other applicants talk about this yesterday. There are just reams of information you can glean from qualitative data on BBM.
LISTNUM 1 \l 12423 So we build a profile of what our listener is, how much is their household income, what kind of car do they drive, how many kids do they have, how many years left in their mortgage, are they buying fridges, are they buying stoves, are they buying sofas, are they buying this, that and the other.
LISTNUM 1 \l 12424 You can go in there with a great marketing plan for clients and say: Look, if you want a 39‑ or a 41‑year‑old ‑‑ now this is a typical, this would be the median age basically of what our format is going after but it gives you an idea of what the heart of our radio station is going after.
LISTNUM 1 \l 12425 So that is how we market our listeners. Yes, we do say: This is what our people normally like, and of course, that is not what they only like. There are going to be other people on the fringes, the younger demographics and the older demographics who will have a different view of life and a different spending habit that Scott and Tracy would have but Scott and Tracy are how we base ourselves to our local sales staff, and of course, national ad agencies just buy on numbers.
LISTNUM 1 \l 12426 COMMISSIONER MENZIES: Okay. Well, if we just continue on that sort of to my next question.
LISTNUM 1 \l 12427 You can build the audience and you can sell the ads but for the ads to work the community you are serving has to have disposable income to buy things with.
LISTNUM 1 \l 12428 You mentioned it, the previous applicant mentioned it, another applicant mentioned it a little bit, the current economic conditions in Windsor aren't conducive to creating the highest levels of disposable income in families.
LISTNUM 1 \l 12429 I haven't heard anything yet, but I am wide open to hearing it, to convince me that if I was starting a radio station I would be sure I would be making some money in that market, definitely short term, and I don't know the fate of the auto industry in the long term.
LISTNUM 1 \l 12430 MR. REGIER: Well, yes, we did anticipate that that would be a question that would be brought forward, and admittedly, Windsor's economy is going through some tough times.
LISTNUM 1 \l 12431 I've lived in Windsor 35 years and my father was employed by General Motors. I worked there when I was going to school. There are cyclical downturns and they are part of the market and the fact is that we residents of Windsor recognize that there are downturns.
LISTNUM 1 \l 12432 But we chose to believe that the downturn is a prelude to a comeback but instead of on the singular back of the automotive industry, it will be more of a diversified base.
LISTNUM 1 \l 12433 The last severe downturn occurred in the 1990's and we came out of it. We saw plants going to Ingersoll, Cambridge, all this shifting. And then the 402 opened up and it created a channel. Then they twinned the Bluewater Bridge in Sarnia, which created a corridor for that to go all the way down. That was in the nineties, early nineties and 2000 when they twinned the bridge. So Windsor has been experiencing this for a while.
LISTNUM 1 \l 12434 As that was occurring in the automotive industry, and I'm sure that the general manager from CTVGM would say the same thing, is that we weren't caught blindsided and we started to diversify.
LISTNUM 1 \l 12435 What happened was that a lot of these employees started losing their jobs and now you are left with this very senior core.
LISTNUM 1 \l 12436 And in the last round of layoffs they got tremendous buyouts and a lot of these individuals, and I can name four or five of them, started up their own little businesses and started hiring one or two more people and started to diversify.
LISTNUM 1 \l 12437 So we are positioned to come out of this a lot better.
LISTNUM 1 \l 12438 That doesn't include the expansion of the casino and its 400 additional jobs.
LISTNUM 1 \l 12439 That doesn't include the St. Clair College moving its campus downtown just in the next ‑‑ over the next couple of years and bringing more students and more vitality to the downtown.
LISTNUM 1 \l 12440 That doesn't include the University of Windsor's investment in the engineering and medical programs, finally in a significant way.
LISTNUM 1 \l 12441 All of these things are occurring in Windsor and we are sitting there and we recognize it.
LISTNUM 1 \l 12442 As a businessman outside of Windsor ‑‑ you may not look at it because you have been told the stories. You know, you have been told the stories that it is a tough economy. But we live it and so we have to endear ourselves here.
LISTNUM 1 \l 12443 We realize that we pushed hard for it. The automotive industry occurred ‑‑ has been occurring for a hundred years and we are not going to fix it in the next few years. But we are going to come out of it.
LISTNUM 1 \l 12444 I would like to call on Debra McLaughlin to speak more specific to 2006 in this area. Thank you.
LISTNUM 1 \l 12445 MS McLAUGHLIN: Our conclusion was twofold in support of a new station.
LISTNUM 1 \l 12446 First of all, the retail sales or the advertising sales appears to be underdeveloped in the market and that is because advertisers through the survey that we did say they are unable to successfully or efficiently buy the market at all times. And when we looked at it and compared it to other markets in terms of the development it seemed to be somewhat below what one would expect.
LISTNUM 1 \l 12447 But we also looked at the long term and we used the most current available data when we filed our report. Subsequent to that, although not released, the Conference Board of Canada prepared a study that, as I said, they will release in January and they have collected all the indicators again and it includes the layoffs that happened post the filing of the report in this proceeding.
LISTNUM 1 \l 12448 And all of those indicators continue to say the same thing that they found in spring 2007, that, as with all economies, this is cyclical. The restructuring will continue into 2008 and there will be a turnaround. The growth is in GDP personal income.
LISTNUM 1 \l 12449 But most important, and pointed out by the interveners in these proceedings, was that retail sales is the real indicator for a new station. And even with the downturn all the Conference Board has done in this new report that is coming out is adjusted the retail sales to 2.2 percent. After that, in 2008 and 2009, it jumps to 4 and 4.5 percent. Those are really strong numbers if you are developing a radio business.
LISTNUM 1 \l 12450 So in the short term we think there is room simply because there are advertisers whose demand is not being met. In the long term we think that the economy, as all economies are cyclical, will rebound.
LISTNUM 1 \l 12451 And I might add there was great notoriety over the CIBC report that suggested that Windsor was going to have a very dim future, at least into 2008.
LISTNUM 1 \l 12452 One of the first signs of an economy rebounding is the increase in investment by businesses and if you look at the rankings, while Windsor ranks the bottom on GDP and other key indicators, it is in the top six in the markets in terms of non‑residential building permits, which means businesses are coming into the market.
LISTNUM 1 \l 12453 All of us as investors in our own right know that you buy low and sell high. The time to come back to Windsor is now and the time to start building that and the opportunities are open for other businesses.
LISTNUM 1 \l 12454 So if you look at it, if you look singularly at the automotive industry, you might be led to believe that this is a market that may never recover. But the automotive industry, first of all, isn't going to take the competition lying down. For the first time in their history, they are working together. All of the big companies are working together.
LISTNUM 1 \l 12455 I was just reviewing this morning articles on the internet that say things like the North American automotive industry continues to deliver and because they are grouping together they are going to be able to work within a global market.
LISTNUM 1 \l 12456 But most importantly is if you look at the Conference Board material over the extended period of time, the diversification that has taken place in Windsor is what would lead one to have confidence that six years from now if the automotive industry finds itself in another one of these slowdowns or declines, as it were, that there will be other means by which Windsor residents will be able to produce and earn livings.
LISTNUM 1 \l 12457 COMMISSIONER MENZIES: Thank you for that.
LISTNUM 1 \l 12458 One point I wanted to go back on. In terms of the existing advertisers not being able to access the market, you were saying, in terms of buying the whole market.
LISTNUM 1 \l 12459 We have got 80 different radio signals in that market and I am just trying to figure out how adding one more is going to make it easier to buy the whole market, or did I misunderstand?
LISTNUM 1 \l 12460 MR. REGIER: Actually, Mr. Commissioner, I believe we filed in one of our interventions from a gentleman named Dave McDonald from M2 Universal that ‑‑ and it is another area of growth for us, is that agencies now are starting to view Windsor with the critical mass to be able to buy Windsor.
LISTNUM 1 \l 12461 In fact, your statement was true that they didn't have enough ‑‑ they couldn't buy enough weight to buy the Windsor market and in fact, over the last ‑‑ since a strong ratings period in spring of 2007, our revenues have grown considerably as advertisers. Ontario Ford dealers and advertisers like that can now start buying the market because there is enough weight in Canadian stations.
LISTNUM 1 \l 12462 So the fact of the matter is that by adding more Canadian stations to the market, you are giving Toronto the opportunity to see there is weight here to go and buy the market. They don't have to go over and buy the Detroit stations to try and get their weight that they need to cover the market off.
LISTNUM 1 \l 12463 COMMISSIONER MENZIES: That, again, takes me back just a little bit, and I'm not trying to be silly about it but it takes me a little bit back to the CTV thing.
LISTNUM 1 \l 12464 So if they want to buy the whole market ‑‑ I don't know that they do or that they don't but if I am CTV, I am thinking I am the whole market, I have got four stations here, buy me and we will give you what you need and you don't need to worry about these new guys and ‑‑ in that sense.
LISTNUM 1 \l 12465 How do you ‑‑
LISTNUM 1 \l 12466 MR. REGIER: Generally, excuse me ‑‑ sorry ‑‑
LISTNUM 1 \l 12467 COMMISSIONER MENZIES: Go ahead.
LISTNUM 1 \l 12468 MR. REGIER: Okay. Generally what happens is that there are four CTV stations, three of which are pointed towards the Detroit market, gaining their revenues from the Detroit market. So what happens is when you have got a station like, say, a very heavily penetrated station like CKLW, now you have given them the opportunity to buy two stations in the market.
LISTNUM 1 \l 12469 In Windsor we are the number two station with adults 25‑54. That is a prime demo that advertisers purchase. So they actually look at our station from that perspective when they are buying it by demo.
LISTNUM 1 \l 12470 They don't always try to buy everything up on an agency. We would like them to but they don't. They will buy a demo and they will buy as much penetration as they need to get the message across. It has got different weight levels.
LISTNUM 1 \l 12471 So in the case of ‑‑ we will say, an example, in the case of Home Hardware or Canadian Tire, they will be looking to get a certain amount of impressions in the market and they couldn't do that before because of the weight of the market.
LISTNUM 1 \l 12472 Now with The Rock in there, we are picking up dollars and I believe ‑‑ I can't state this for a fact but I believe that it is bringing more revenues to the market overall.
LISTNUM 1 \l 12473 COMMISSIONER MENZIES: Okay. How many radio licences do you think the Windsor market can handle?
LISTNUM 1 \l 12474 MR. REGIER: We are comfortable actually with the applications that have been put before the Commission. We believe that the multicultural station would not have significant impact on a commercial radio station and we don't ‑‑ and what CBC does doesn't as well. So we are comfortable with that direction.
LISTNUM 1 \l 12475 COMMISSIONER MENZIES: How flexible are you on frequencies?
LISTNUM 1 \l 12476 MR. REGIER: Well, the issue of frequency, our business plan was built on a very strong contribution to Canadian talent development. It was built on a full‑service radio station being able to penetrate the market significantly.
LISTNUM 1 \l 12477 It was built on a pattern that would give us the greatest amount of coverage to repatriate ‑‑ and the word "repatriate" is really repatriate in this situation because we are bringing them back from the U.S. I have heard it in other ones that they are kind of repatriating from out‑of‑market but this is really repatriate.
LISTNUM 1 \l 12478 So we believe that we need that signal 95.9 to cover that area that we need.
LISTNUM 1 \l 12479 The next available signal has a 27 percent deficiency in penetration. It would also cost us share points and I could have our engineer and Mark Kassof speak more specifically to that.
LISTNUM 1 \l 12480 As for whether we would accept another licence, I would ask our owner to answer that question.
LISTNUM 1 \l 12481 MR. COSTLEY‑WHITE: Yes. I mean that's an issue that speaks to my economic return, my return on investment. And the fact is that we really need this, this specific frequency to make this process work.
LISTNUM 1 \l 12482 If we were not granted it we would certainly endeavour to maintain our CCD commitments. That's an important element of our application of course. But we would probably have to revisit some of the ‑‑ well, we would have to look at the entire package including sort of the super servicing component that we try to bring to every market that we operate in.
LISTNUM 1 \l 12483 So it's pretty important for our plan that we get 95.5. In fact, it's pretty critical.
LISTNUM 1 \l 12484 COMMISSIONER MENZIES: Okay.
LISTNUM 1 \l 12485 MR. KASSOF: I did a ratings projection on 97.5 versus 95.9 and found that with the 97.5 frequency the station would give up one share point 12 to 64, two share points 25‑54, which would mean one point less from the Detroit ‑‑ each of the Detroit Country stations.
LISTNUM 1 \l 12486 COMMISSIONER MENZIES: Okay. And I imagine you can convert that into cash in fairly short order if you need to, one way or the other.
LISTNUM 1 \l 12487 One last thing before I turn it over to my colleagues. To what extent has the change in the shift in the Canadian dollar in the last two or three months has that impacted your business plan? And is it drawing more cross‑border shoppers out of Windsor into Detroit whereas I expect it might have done the opposite a few years back?
LISTNUM 1 \l 12488 MR. REGIER: Well, we are a radio station serving Windsor so we have predicated our whole business plan on that. But I understand your question which is are we going to be having shoppers drive across the border to purchase from retailers over there, causing problems over here?
LISTNUM 1 \l 12489 COMMISSIONER MENZIES: Yes.
LISTNUM 1 \l 12490 MR. REGIER: I think Debra kind of spoke to that issue by saying obviously the retail community is not too concerned about it because they are building and they are building big in that area.
LISTNUM 1 \l 12491 But Windsor has always faced a U.S. competitor ‑‑ competition before. Before it was the U.S. dollar, it was the great big U.S. box retailers that drove people over there so they could buy price and selection off of them. And then Windsor responded with the development of the Price Club, Best Buy. In its south area of Windsor out by the 401 they put in these big box stores and that addressed it. So then the Canadian dollar rose to par.
LISTNUM 1 \l 12492 Now, aside from a couple issues ‑‑ but the first issue being is you have got a 45‑minute wait. You have got to deal with passports.
LISTNUM 1 \l 12493 Stories that don't have an immediate impact but have a scare factor would be the story where the U.S. border patrol held up an ambulance of a guy who had two heart attacks in the span of ‑‑ and they held him up there. That makes people nervous for going over there. That doesn't stop them. They still go, but they have always been going and they have been going for different reasons.
LISTNUM 1 \l 12494 The impact of the Canadian dollar also has made some changes in our own community. An example, my brother‑in‑law owns a tool and die facility in Windsor and that U.S. ‑‑ that Canadian dollar put a big hurt on him from the automotive industry. However, the Canadian dollar didn't go from 64 cents to a dollar in a day. Now, they are getting business from Alberta, they are getting business from Calgary and they have changed their tooling to go out to the mining areas.
LISTNUM 1 \l 12495 People adjust, businesses adjust and the businesses in Windsor are just going to have to start competing, and they are, with the fact that the Canadian dollar isn't going to drop down to 64 cents again. They have to take that mentality and they have to understand that it's going to be in the 90 range, and so they are.
LISTNUM 1 \l 12496 Stores like Sears having a U.S. pricing policy in Windsor, they are examining that. The Chapters' issues that you hear about in the radio stations and that, Chapters on the back of the books their prices are different in U.S. and Canadian. They are having to deal with that, and they are all dealing with it.
LISTNUM 1 \l 12497 I believe that Windsor's economy based on all the investment and retail in the outlying areas that I am talking about that are adjacent to Windsor are going to ‑‑ are just a positive indication that the U.S. dollar is not scaring them off.
LISTNUM 1 \l 12498 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 12499 THE CHAIRPERSON: Just a couple of questions of clarification.
LISTNUM 1 \l 12500 In response to Commissioner Menzie's question with regard to your news, I think I heard you say you would commit to an hour and 30 minutes but your application actually says four hours and eight minutes of news.
LISTNUM 1 \l 12501 MS STORR: A total of six hours and 42 minutes, which is four hours and eight minutes of news ‑‑
LISTNUM 1 \l 12502 THE CHAIRPERSON: Yes.
LISTNUM 1 \l 12503 MS STORR: ‑‑ one hour and six minutes of sports, 32 and a half minutes of traffic reports, 38 minutes of detailed weather reports and 15 minutes of business.
LISTNUM 1 \l 12504 THE CHAIRPERSON: And you will commit to these levels as a condition of licence?
LISTNUM 1 \l 12505 MS STORR: Yes, you will.
LISTNUM 1 \l 12506 THE CHAIRPERSON: And your total spoken word commitment including news and surveillance is 11 hours and 13 minutes, correct?
LISTNUM 1 \l 12507 MR KASOFF: That is correct.
LISTNUM 1 \l 12508 THE CHAIRPERSON: And you will commit to these levels as a condition of licence?
LISTNUM 1 \l 12509 MR. KASOFF: Yes, we will.
LISTNUM 1 \l 12510 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 12511 Now, throughout your presentation you have been calling The Rock your Windsor station, but in effect it's your Chatham station with a transmitter in Windsor. Is that not correct?
LISTNUM 1 \l 12512 MR. REGIER: That is absolutely correct. We broadcast 42 hours of programming in Windsor as a condition of our licence.
LISTNUM 1 \l 12513 THE CHAIRPERSON: 42 hours in Chatham or Windsor?
LISTNUM 1 \l 12514 MR. REGIER: Well, actually, I will have ‑‑
LISTNUM 1 \l 12515 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 12516 MR. PLOEGMAN: The licence that was given to us for a repeater in Windsor is on condition that we do 42 hours of local originating programming out of our Windsor location. So there is a portion of originating programming from our Windsor studios. We built studios in Windsor based on that licence that was awarded to us. For all intents and purposes it is a Chatham radio station with a Windsor repeater.
LISTNUM 1 \l 12517 We speak to both communities with having a Windsor news team. Again, the news director is located in Chatham and oversees that. So there are stories originating from Windsor. There is programming originating from Windsor but the home station is Chatham.
LISTNUM 1 \l 12518 THE CHAIRPERSON: Okay. I just wanted to be ‑‑
LISTNUM 1 \l 12519 MR. PLOEGMAN: Yes, it is.
LISTNUM 1 \l 12520 THE CHAIRPERSON: ‑‑ absolutely clear because, like I said, you kept calling it your Windsor station.
LISTNUM 1 \l 12521 MR. PLOEGMAN: Yes.
LISTNUM 1 \l 12522 Yes, everything that we have said really is a Windsor repeater.
LISTNUM 1 \l 12523 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 12524 MR. PLOEGMAN: Yes.
LISTNUM 1 \l 12525 THE CHAIRPERSON: Thank you very much for that clarification.
LISTNUM 1 \l 12526 Legal counsel.
LISTNUM 1 \l 12527 MS SMITH: Yes, I have a couple of questions for you.
LISTNUM 1 \l 12528 With respect to your CCD I would like you to confirm your understanding that if you are licensed your stations will have to contribute a basic annual CCD contribution imposed by a condition of licence until the regulations are amended based on the station's total annual revenues and in the amounts as set out in paragraph 116 of new radio policy.
LISTNUM 1 \l 12529 Do you confirm your understanding of that?
LISTNUM 1 \l 12530 MR. PLOEGMAN: Yes, we confirm that.
LISTNUM 1 \l 12531 MS SMITH: Thank you, just one additional question.
LISTNUM 1 \l 12532 Again, please confirm your understanding of the base annual amount; no less than 60 percent of the station's basic annual CCD contribution will be allocated to either FACTOR ‑‑and the remaining amount if any may be directed to any eligible CCD initiatives at your discretion?
LISTNUM 1 \l 12533 MR. PLOEGMAN: Yes, we confirm that.
LISTNUM 1 \l 12534 MS SMITH: Thank you very much.
LISTNUM 1 \l 12535 THE CHAIRPERSON: Mr. Costley‑White, you have two minutes to give us your last and best pitch.
LISTNUM 1 \l 12536 MR. COSTLEY‑WHITE: Terry and I are going to both speak.
LISTNUM 1 \l 12537 MR. REGIER: Madam Chair, Commissioners and CRTC staff, Blackburn Radio sees Windsor as a strong business opportunity for a number of reasons.
LISTNUM 1 \l 12538 Windsor is the 16th largest market in Canada. Yet, it has only four Canadian‑owned private radio stations and one out‑of‑market part time rebroadcaster. At least three of these stations treat Windsor as a part of ‑‑ and I quote ‑‑ "larger homogeneous market" rather than as the unique Canadian city it is.
LISTNUM 1 \l 12539 Windsor does not have a local Canadian station providing a number of popular formats; Country music, Mainstream, AC and CHR. And even its Mainstream Rock station is a part‑time Windsor station originating in Chatham.
LISTNUM 1 \l 12540 The success of The Rock is eloquent. It is the strongest performer of any Mainstream Rock station in the Windsor market. For reasons we have explained, we chose Country, opening up significant opportunities for Canadian Country artists who currently get little or no exposure to this market.
LISTNUM 1 \l 12541 The same research shows clearly that Windsorites are eager to have local radio services that speak to them as Windsor residents rather than as a part of a Windsor‑Detroit market. The economic research reinforces that many advertisers do not currently use radio in the market because they do not want to pay Detroit rates. The American audience has no value to them. So the radio market is underdeveloped. Our experience with The Rock tells us that we will come to a station with reasonable rates based on reaching Windsor listeners.
LISTNUM 1 \l 12542 Windsor is undergoing some tough economic times but most observors and the Conference Board of Canada, which takes into account the widest range of indicators, believe that this will turn around in late 2008.
LISTNUM 1 \l 12543 Some years ago Windsor recognized the need to diversify its economy and has made big steps towards this goal. All evidence indicates that recovery is on the horizon.
LISTNUM 1 \l 12544 We want to be a part of helping Windsor build its future and we already have started this contribution. We are one of the anchor businesses in the Walkerville area, an historic part of the city that has fallen on hard times and has now undergone revitalization.
LISTNUM 1 \l 12545 We built the new Windsor studio for The Rock there. We would like to contribute even more by bringing our brand of radio to Windsor on a fulltime basis.
LISTNUM 1 \l 12546 MR. COSTLEY‑WHITE: Indeed.
LISTNUM 1 \l 12547 Madam Chair, Commissioners and CRTC staff, we again want to thank you for your attention.
LISTNUM 1 \l 12548 I am proud of this broadcast team that we have presented to you today, very much so. They have a great "can do" attitude and the expertise to deliver.
LISTNUM 1 \l 12549 I am also proud of the progress we have made in the market with our part‑time rebroadcaster of CKUE FM. It has been a lot of hard work and I want to take this opportunity to publicly compliment Terry and his team on their achievements.
LISTNUM 1 \l 12550 We feel that we have a great story to tell with this specific application and I will again echo the words that I said yesterday, if you grant us this licence you will not be disappointed.
LISTNUM 1 \l 12551 Thank you.
LISTNUM 1 \l 12552 THE CHAIRPERSON: Thank you, Mr. Costley‑White, and to your colleagues.
LISTNUM 1 \l 12553 Madam Secretary, do I need to throw it to you? Yes, I do.
LISTNUM 1 \l 12554 Madam Secretary.
LISTNUM 1 \l 12555 THE SECRETARY: This concludes Phase I of these items.
LISTNUM 1 \l 12556 THE CHAIRPERSON: Thank you very much.
LISTNUM 1 \l 12557 We will now break for lunch. We will be back at 1:45. Thank you.
‑‑‑ Upon recessing at 1225 / Suspension à 1225
‑‑‑ Upon resuming at 1347 / Reprise à 1347
LISTNUM 1 \l 12558 THE SECRETARY: We are ready to begin.
LISTNUM 1 \l 12559 We have now reached Phase II in which applicants appear in the same order to intervene on competing applications if they wish.
LISTNUM 1 \l 12560 Mr. Neeti P. Ray, on behalf of a corporation to be incorporated, has come forward to intervene on competing application.
LISTNUM 1 \l 12561 Mr. Neeti, you have 10 minutes for your presentation.
LISTNUM 1 \l 12562 MR. NEETI RAY: Thank you, and good afternoon again, Madam Chair and Commissioners.
LISTNUM 1 \l 12563 My name is Neeti Ray. We are one of the two applicants for the 95.9 FM frequency to serve the Windsor market, the other applicant being Blackburn Radio Inc.
LISTNUM 1 \l 12564 We would neither object to the licensing of nor the concerns about any impact that a proposed Blackburn station would have on our proposed ethnic radio station. The grave concern we have is in regards to the allocation of the 95.9 FM frequency.
LISTNUM 1 \l 12565 It has been made evident that the U.S. market is not vital to Blackburn. They have further confirmed this by committing to a 35 percent CCD. The CRTC has set at 20 percent the Canadian content requirements for the over four Windsor radio stations owned by CTVglobemedia.
LISTNUM 1 \l 12566 Blackburn stated that they themselves are not even on the radar to the U.S. It is not their strategy to reach the audiences on the other side of the border but it is an essential part of our strategy.
LISTNUM 1 \l 12567 In our case local advertisers will only become compelled to advertise on a station that provides them with the same reach as our American counterpart, 680 WNZK. This station currently ‑‑ that station currently monopolizes the Windsor ethnic market. Given that both applicants have stated a need to be granted the 95.9 FM frequency we believe the Commission must also look beyond this factor and judge which service is more required in Windsor.
LISTNUM 1 \l 12568 The fundamental question about the Windsor radio market that must be kept in mind when deliberating on the allocation of the 95.9 FM frequency to Blackburn are:
LISTNUM 1 \l 12569 Where is the most significant gap? Is it more important to enhance the services available through almost 1,200 hours a week ‑‑ 1,200 hours a week of programming from existing English radio stations by adding a further 168 hours per week of mainstream programming, or is it more important to provide service to the unserved segments?
LISTNUM 1 \l 12570 Where is the need most urgent?
LISTNUM 1 \l 12571 Which proposal would add greater diversity in the Windsor market with the least duplication of radio services, more specifically in the areas of language, new audiences and new dollars and new ownership?
LISTNUM 1 \l 12572 Which applicant is better equipped to be viable with a smaller frequency? Integration of backroom offices and managerial and other facilities of Blackburn's existing radio stations in the area means lower expenses, ensuring viability of a smaller frequency while still serving the intended market. Blackburn has the capability of these synergies, as we learned from their statements as well as their responses to the CTV intervention.
LISTNUM 1 \l 12573 It is our view that Blackburn should be flexible and be willing to take another frequency which would have the coverage in their intended area, for example 97.5 MHz, in the event that they are licensed without the 95.9 FM frequency.
LISTNUM 1 \l 12574 And that ends our intervention. Thank you.
LISTNUM 1 \l 12575 THE CHAIRPERSON: Mr. Ray, thank you for your intervention.
LISTNUM 1 \l 12576 Just for the record, I do want to correct one thing that you said in your oral presentation. It's in the third paragraph, "They have further confirmed this by committing a 35 percent" ‑‑ you said CCD. That is in fact their Canadian content commitment, because their CCD is over a million dollars.
LISTNUM 1 \l 12577 MR. NEETI RAY: I do apologize.
LISTNUM 1 \l 12578 THE CHAIRPERSON: No, I know our acronyms can get very confusing.
LISTNUM 1 \l 12579 MR. NEETI RAY: So it ‑‑
LISTNUM 1 \l 12580 THE CHAIRPERSON: I just wanted to correct that for the record.
LISTNUM 1 \l 12581 MR. NEETI RAY: Yes, thank you very much for that.
LISTNUM 1 \l 12582 THE CHAIRPERSON: Have you by any chance identified a third frequency that would meet your needs in the event that we were to grant Blackburn the frequency they have asked for? We talked this morning about 102.3. Is there a third frequency in the market that we should consider?
LISTNUM 1 \l 12583 MR. MOTLER: Commissioner, we actually have identified two other frequencies, one being the 97.5 which Blackburn identified and also 99.1. And we feel if we are not given our 95.9 frequency that either of those two frequencies would be more suitable for CBC.
LISTNUM 1 \l 12584 Therefore, our second choice would be 102.3 and we believe that the 97.5 or 99.1 would suit CBC's objectives.
LISTNUM 1 \l 12585 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 12586 Well, thank you very much, and thank you for your intervention.
LISTNUM 1 \l 12587 MR. NEETI RAY: Thank you.
LISTNUM 1 \l 12588 THE CHAIRPERSON: Madam Secretary.
LISTNUM 1 \l 12589 THE SECRETARY: Thank you, Madam Chair.
LISTNUM 1 \l 12590 For the record, Blackburn Radio Inc. have indicated that they would not appear in Phase II. This completes Phase II.
LISTNUM 1 \l 12591 We will now proceed to Phase III in which intervenors appear in the order set out in the agenda to present their interventions.
LISTNUM 1 \l 12592 For the record we have been informed that the President of Giavanni Cabodo Club of Windsor and the President of the Hungarian Cultural Centre listed in the agenda will not be appearing at the hearing.
LISTNUM 1 \l 12593 I would now call CTV to come to the presentation table.
LISTNUM 1 \l 12594 Please introduce yourselves before your presentation, and you will have 10 minutes for your presentation. Thank you.
LISTNUM 1 \l 12595 MR. ROMAN: And thank you. Good afternoon, Madam Chair, members of the Commission and Commission staff.
LISTNUM 1 \l 12596 My name is Duff Roman, Vice‑President, Industry Affairs for CHUM Radio.
LISTNUM 1 \l 12597 I am joined on my right, your left, by Eric Proksh our Vice‑President and General Manager of our Windsor radio stations. With his 19 years of experience in this market he has become intimately familiar with the challenges of the Windsor radio market.
LISTNUM 1 \l 12598 On my left, your right; is Carrie French, our Vice‑President Business Analysis. Carrie will answer any questions on our market and economic research.
LISTNUM 1 \l 12599 We will now begin our presentation.
LISTNUM 1 \l 12600 CHUM Radio's reasons for opposing the Windsor radio applications are clearly outlined in our written intervention. We are here today appearing as intervenors because, just like the Windsor market itself, these are unique circumstances. We do not believe that the economic conditions within the Windsor radio market can support any new radio stations.
LISTNUM 1 \l 12601 Operating radio stations in the Windsor‑Detroit market has always been a delicate balance. By the late seventies Radio Windsor, then owners of today's CKWW and CIMX FM and Russwood Broadcasting, which owns CKOW and CIDR FM, were losing significant amounts of money.
LISTNUM 1 \l 12602 The Detroit operators of some of the largest U.S. radio players seized every business opportunity, duplicating any Windsor format that showed promise and outspending the Windsor stations on talent, marketing and promotion.
LISTNUM 1 \l 12603 By July 1984 the Commission initiated a special hearing with the Windsor operators, representatives of local business, the Ontario government and the Canadian music industry all figuring prominently. We had spent half the day discussing Windsor as though it was any market in Canada. I vividly recall the hearing being recessed so that all participants could walk out to the parking lot of the Holiday Inn on the banks of the Detroit River where they could all see the looming presence of the Renaissance Centre a scant 1,000 metres away. It was a revelation.
LISTNUM 1 \l 12604 The result was the Windsor Radio Review in which the Commission acknowledged that the environment within which Windsor's stations operate offers special circumstances and that a flexible approach is desirable.
LISTNUM 1 \l 12605 Thus, with some optimism CHUM entered the Windsor market in September 1985 with the purchase of the CKWW and CIMX radio stations. However, even with the unique regulatory approach adopted by the Commission, the de facto small market of Windsor with upwards of 80 percent of tuning going out of market and out of country left both CHUM and Amicus Communications who had acquired Russwood Broadcasting in the interim during the same year, remaining unprofitable.
LISTNUM 1 \l 12606 It was clear that the market could not support two corporate groups and it made sense to consolidate the four radio stations. Consequently, in 1993 CHUM applied to the CRTC for approval to purchase CKLW and CIDR FM.
LISTNUM 1 \l 12607 In a public hearing that was informed by the new directions of the Windsor Radio Review and the stark characteristics of the Windsor radio environment, CHUM was granted an exception to the ownership policy with the approval to operate two FM and two AM stations in the same market. At the hearing CHUM undertook to operate the four stations in four diverse formats.
LISTNUM 1 \l 12608 Today, we operate an All Talk station, an Oldies station, a Triple A station and an Alternative Rock station. It took many years and lots of hard work and innovation but we were able to achieve financial success as an integrated whole.
LISTNUM 1 \l 12609 However, as the Commission can verify, not all of our stations have been able to turn the corner. The success we have had in this market is due to the ability of our stronger stations to support the struggling stations and, in no small way, the flexibility provided by the Commission. This is a delicate balance that could easily crumble with the addition of any new radio stations.
LISTNUM 1 \l 12610 MR. PROKSH: The environment that Windsor radio stations operate in today is much more competitive than it was at the time of the Windsor Radio Review. Now, over 58 U.S. radio signals penetrate the Windsor area. Large and well known U.S. broadcasters such as Clear Channel have seven radio stations in Detroit and approximately 800 across the U.S. and CBS has six radio stations in Detroit and approximately 150 stations countrywide.
LISTNUM 1 \l 12611 A simple statistic demonstrates the unique channels of the Windsor market. Canada‑wide only 3 percent of total tuning is to U.S. stations. In Windsor this number increases to 50 percent, whether we like it or not the practical reality of operating a radio station in Windsor means competing against large, well‑financed and unregulated Detroit radio stations.
LISTNUM 1 \l 12612 We are operating in a radio environment comprised of 64 radio stations of which only six are regulated by the CRTC. And it remains the case today, as it was in the 1970s, that Detroit stations will duplicate a Windsor format that shows promise and use their resources to outspend our stations on talent, marketing and promotion.
LISTNUM 1 \l 12613 The realities of the Windsor market have meant that if we are to be competitive and attract as many Windsor listeners as possible, we have needed to take a different approach for this market than the other local communities which we serve. Windsor and Detroit are homogeneous markets and to be competitive we need to recognize the impact that Detroit stations have on the Windsor stations. There is no border on the radio dial. If the listeners like the programming, no matter where it originates, they will listen to it.
LISTNUM 1 \l 12614 The truth has long been recognized by the Commission, first, in the Windsor radio review and in the Commission's subsequent decisions relating to the Windsor market. Moreover, our experience in Windsor has shown that it is the only way to succeed and be competitive in a radio environment that is inundated with 58 American radio signals.
LISTNUM 1 \l 12615 MS FRENCH: I want to turn now to Blackburn's analysis that the impact on the incumbent stations in the market would be minimal if the Commission were to licence their proposed station.
LISTNUM 1 \l 12616 First, the revenue of the Windsor radio market has been considerably over estimated. And starting with over‑estimated numbers for the market has lead to over‑estimated revenue projections for the proposed station.
LISTNUM 1 \l 12617 Second, if as Blackburn says in one part of their application, the minimal impact on CKLW will be two share points, that equates to half a million dollars. We don't regard that impact as minimal.
LISTNUM 1 \l 12618 Third, referencing the BIA Report for the Detroit market Blackburn states that Detroit is a much more robust radio market than Windsor. However, the report actually says:
"The Detroit radio market will have seen a decline in revenue of about 16 per cent from 2004 to 2009." (As Read)
LISTNUM 1 \l 12619 This does not meet the definition of robust.
LISTNUM 1 \l 12620 MR. ROMAN: While Windsor and Detroit's highly integrated media market is one reality of operating radio stations in Windsor, the other reality that must be heeded is Windsor's economic dependency on Detroit. This fact is demonstrated by the automotive industry, an industry that is shared by both Windsor and Detroit.
LISTNUM 1 \l 12621 Windsor, known as the automotive capital of Canada, is home to the headquarters of Chrysler Canada. Chrysler stopped producing the Pacifica in late November. The Ford engine plant closed its doors in the same week. The GM plant operates with minimal staff and may not be open much longer. The trickle‑down effect of these closures will have a negative impact on the tool and dye shops and automotive parts manufacturers located in Windsor.
LISTNUM 1 \l 12622 Windsor's reliance on the automotive industry as a major employer means that any downturns in this sector have a tremendous effect on the city's economic health.
LISTNUM 1 \l 12623 Recent news headlines have highlighted the troubles in the automotive sector. The big three automakers slashed their North American output by roughly 1.9 million vehicles over the last three years. And right here in Ontario, according to Ward's Automotive Reports, output is expected to slide by a further 600,000 vehicles over the next five years.
LISTNUM 1 \l 12624 In addition, almost 6,000 jobs have disappeared in the first seven months of this year alone. Last week, the front page of the Windsor Star carried the headline "City's Outlook Called Bleak." The CIBC World Markets report ranked Windsor as having the worst economic outlook of Canada's two‑dozen largest cities, citing downturns in the local manufacturing sector and a weakening U.S. economy. Windsor is facing major challenges.
LISTNUM 1 \l 12625 This economic reality must be taken into account in determining whether the Windsor radio market can absorb the impact of a new station. We recognize that the Commission has recently licensed stations in markets that were less than robust. But when it did so, the potential future growth of those markets played a major role in those decisions.
LISTNUM 1 \l 12626 And what works in other Canadian markets does not work in Windsor. Other Canadian markets do not consist of 64 radio stations where 58 are out of country competing for the same audience that our stations serve. The Commission has long understood that reality and reflected in their Windsor‑related decisions.
LISTNUM 1 \l 12627 In conclusion, we believe that the Commission should deny the applications before you for the following reasons. First, the highly integrated radio market of Windsor and Detroit which had been recognized and accommodated by the Commission must be taken into account in assessing whether the market can absorb the impact of any new radio stations.
LISTNUM 1 \l 12628 And, second, the applicants' overestimation of the Windsor radio market revenues has lead them to overestimate projected revenues for their proposed stations. The facts don't support their projections.
LISTNUM 1 \l 12629 Third, the Windsor radio market is economically challenged, Michigan's economy is in a slide, Michigan has one of the highest levels of unemployment in the United States and, as the largest city in Michigan, Detroit is also suffering.
LISTNUM 1 \l 12630 All these factors lead to the inescapable conclusion that the current conditions are not right to licence any new radio stations.
LISTNUM 1 \l 12631 So we would like to thank the Commission for the opportunity to appear before you today and we welcome any questions you might have.
LISTNUM 1 \l 12632 THE CHAIRPERSON: Thank you, Mr. Roman, and to your colleagues.
LISTNUM 1 \l 12633 So if I hear you correctly, what you are telling us to do is to continue to look at Windsor in a unique way, to not look at Windsor as simply a market where one broadcast group owns four radio stations, period, but rather to look at it as a market where one broadcast group owns four radio stations and competes with 58 stations across the border. Which, I do have to concede, as a radio listener, is unimaginable to me that I would have a choice of that many radio stations.
LISTNUM 1 \l 12634 But that is essentially your position, correct?
LISTNUM 1 \l 12635 MR. ROMAN: (nodding)
LISTNUM 1 \l 12636 THE CHAIRPERSON: Okay. You did say in your oral presentation that we have taken a unique regulatory approach to the Windsor market and we should continue to do so. CTV has been able to take full advantage of that unique regulatory approach in the conditions of licence of your radio stations in this market.
LISTNUM 1 \l 12637 You also say that in your written intervention, you certainly repeated it today, that if we were to grant Blackburn their request it would not be in compliance with our common ownership policy.
LISTNUM 1 \l 12638 Why shouldn't we take a unique regulatory approach to the common ownership policy in Blackburn's case as well?
LISTNUM 1 \l 12639 MR. ROMAN: Well, first of all, I think that the history and the trail that has lead from those early days in Windsor‑Detroit to the Windsor radio review onto the groundbreaking decision that allowed CHUM at that time, now CTVglobemedia, to own four stations is a lesson that really isn't that remote. We do a very delicate dance.
LISTNUM 1 \l 12640 We promised to undertake that we would operate four stations. The discussions those days would be close the unprofitable ones, for instance, CKWW. And there was some other discussions that were undertaken and we took a solemn position, not a condition of licence, but an expectation that we would maintain four diverse services.
LISTNUM 1 \l 12641 Today, we have one essentially break‑even FM, we have an AM that has continued to lose money, we have an AM and an FM that are essentially carrying the freight. Our suggestion to you is that now is not the time to upset that delicate balance, the economic conditions are right. And considering an exception to the rule, we think that the timeliness is not there. That what you have constructed ‑‑ and this is a great success story in my opinion ‑‑ is still very fragile.
LISTNUM 1 \l 12642 And, if I may, we don't operate in a market with infinite horizons. We are in a situation where we have to operate in niches, it is like Whac‑a‑mole. The minute we raise our heads above sea level a competitor in Detroit will duplicate the format and take it away.
LISTNUM 1 \l 12643 And I think I could have Eric maybe even discuss some of those situations that we have had to deal with where we get to a 4 or 5 per cent share and someone comes in unregulated and simply takes it away. That is a reality that won't go away. We can't keep growing the market, we can only take it to a certain finite level and then that 58‑station competitive factor kicks in very big time.
LISTNUM 1 \l 12644 THE CHAIRPERSON: But before we do that and just so I don't lose this track, you said the economic conditions, currently, do not grant the conditions necessary for an exception ‑‑
LISTNUM 1 \l 12645 MR. ROMAN: Yes.
LISTNUM 1 \l 12646 THE CHAIRPERSON: ‑‑ to the common ownership policy. We have heard from the Blackburn applicant that it is a blip and that Windsor goes through this all the time, it is cyclical, the economy in Windsor can be buoyant.
LISTNUM 1 \l 12647 Are you, therefore, suggesting that if the Windsor economy does improve then that would be the time at which we could look at an exception to the common ownership policy?
LISTNUM 1 \l 12648 MR. ROMAN: Depending on the depth of improvement, I would suggest to you that that would be the appropriate time for re‑examination of allowing a new entrant into the Windsor market, yes.
LISTNUM 1 \l 12649 THE CHAIRPERSON: I mean, CTVglobemedia is a big enough company that it can adjust or it can react to the kind of economic conditions that we are talking about as well as the changes in format from the U.S. stations. Is that too big of an assumption for us to make?
LISTNUM 1 \l 12650 MR. ROMAN: Well, I think that we look at all of our markets as, hopefully, being able to pay their own way and carry the freight and, certainly, Windsor is no exception. And, for us, the fact that we are able to maintain four discreet services is because we have the strong stations supporting the weak stations.
LISTNUM 1 \l 12651 So are we big enough? How long would we want to carryon with that? I mean, these are questions I think we grapple with every quarter of every fiscal year in terms of what we ourselves are going to do with this economic downturn in Windsor‑Detroit. It is a real issue for us and it is just really starting to kick in now. And the probabilities don't look good on the horizon that it is going to be a short‑term thing.
LISTNUM 1 \l 12652 I mean, plant closures are different than layoffs. And with the automotive industry under attack and heavy pressure, these are sea changes that are going through a major fundamental backbone industry to the Windsor economy. So I think both the regulator and the licensees are going to have to look very carefully at how they deal with this situation as it evolves.
LISTNUM 1 \l 12653 THE CHAIRPERSON: Now, you consider the Blackburn station out of Chatham to be a Windsor station essentially.
LISTNUM 1 \l 12654 MR. ROMAN: For all intents and purposes, yes.
LISTNUM 1 \l 12655 THE CHAIRPERSON: For all intents and purposes. And you have the same view of their Leamington station? I know that their Leamington station does come into the Windsor market, but it does not have the same conditions of licence as their Chatham station does.
LISTNUM 1 \l 12656 MR. ROMAN: Well, I would ask either Carrie or Eric to respond in terms of how Leamington impacts us in Windsor.
LISTNUM 1 \l 12657 MS FRENCH: Well I think, Madam Chair, it has been a recent development that the programming on Cheer has been directed towards Windsor. They do sell within the market, they do advertise for listeners within the market and they sell as a Blackburn combination of two stations in the market.
LISTNUM 1 \l 12658 So it is an everyday reality that we deal with, both with our audience and with our advertisers. So I think an illustration of the fact that it is being considered a Windsor station is in the software that most sales people in Canada use for radio is called air ware, both Blackburn stations are included in the Windsor market. And when you are not an originating station, you have to pay extra to be included.
LISTNUM 1 \l 12659 THE CHAIRPERSON: So obviously, what you are saying it is important enough for them to be included, that they pay to be included?
LISTNUM 1 \l 12660 MS FRENCH: Absolutely.
LISTNUM 1 \l 12661 THE CHAIRPERSON: Okay, thank you.
LISTNUM 1 \l 12662 Do my colleagues have any questions?
LISTNUM 1 \l 12663 Commissioner Menzies.
LISTNUM 1 \l 12664 COMMISSIONER MENZIES: You used the adjective unregulated when you referred to the Detroit stations and their stealing of formats and that sort of stuff. Is it the regulation that keeps you from competing in the Windsor‑Detroit market?
LISTNUM 1 \l 12665 MR. ROMAN: Well actually, it is the CRTC's flexible regulation that does allow us to compete in the Detroit market. We operate at 20 per cent Canadian content, we have a realistic spoken word requirement, and it allows us to operate in niches. So we can take a certain format to a particular level I think by very intelligent programming.
LISTNUM 1 \l 12666 But as it reaches a certain share point of say 4 or 5 per cent, it is then that the American stations take notice of us and they simply say, well, there is something that is showing some success, why don't we go after them by playing anything that we choose to play rather than having to make sure that you accommodate 20 per cent or 35 per cent Canadian content.
LISTNUM 1 \l 12667 It is a war of attrition. It won't show up in the first day or the first week, but certainly there has been a monumental change in the way Windsor's radio history was shaped with The Big Eight when it was incorporated into the Canadian content regulations. And that was the beginning of the corporate difficulties we had when the stations in the U.S. realized at that time these relatively unknown records, it was a very fragile music industry at the time, were occupying 30 per cent of their play list. It took them about 18 months, but they basically pushed them right out of that niche.
LISTNUM 1 \l 12668 COMMISSIONER MENZIES: Thank you for that. But what I am trying to get at a little bit is if you didn't even have the 20 per cent would you be able to compete or would it still not be manageable?
LISTNUM 1 \l 12669 MR. ROMAN: Well, if we had the same level playing field as the Americans, we would put ourselves up against any of them, yes, absolutely. I mean, essentially, there are things that would characterize us as a Windsor station, our local service to Windsor. But in areas of being able to present what is required in terms of our play list, its assembly, where we go with it, I think that it probably would always have a very very significant amount of Canadian talent because the music industry has matured and is providing some really great records.
LISTNUM 1 \l 12670 But the difficulty, and I don't know if you want to go there Mr. Menzies, but is that we have to do this week in and week out. Some weeks there are all kinds of new Canadian releases, but then we will have weeks where there are none. But the quota system requires you to always play, whether it is 20 per cent in Windsor, 35 or 40 per cent in the rest of the country, and those are the challenges.
LISTNUM 1 \l 12671 And what happens is if you dropped in on an unregulated player or 58 unregulated players, then you get a situation where they can gang up on you or they can target you directly, and it doesn't happen overnight, but eventually it does have its effect.
LISTNUM 1 \l 12672 COMMISSIONER MENZIES: Okay. And I am just trying to get my head around ‑‑ Blackburn is comfortable with 35. And I have got information from you that says 20, especially the way it is done on a weekly basis, is a bit of a tight collar. How do you suggest I view that difference in perspective?
LISTNUM 1 \l 12673 MR. ROMAN: Well, I think that I will ask either of my colleagues to address here. But what we think will happen is that the Windsor market, as I say, has finite limitations, it can't grow above a certain level. Because what happens when you get to a certain level is that you attract the attention of major competition, is that we will all be winding up eating from the same table, we will all be winding up in a situation where we will have to take the advertising wherever we can take it.
LISTNUM 1 \l 12674 And whether it is 35 per cent with a station with low overhead coming into the marketplace and filling a perceived niche, we will windup going after, I think, a lot of the same advertisers.
LISTNUM 1 \l 12675 And I would ask Eric to comment on that.
LISTNUM 1 \l 12676 MR. PROKSH: I don't have much more to add, but I think the same is true, we will probably end up cannibalizing the Canadian advertising in Windsor. As Duff pointed out, not all of our stations are profitable at this time. And to have a new player in the market, it is hard for me to realize that that wouldn't happen.
LISTNUM 1 \l 12677 COMMISSIONER MENZIES: But you sell advertising in Detroit, right?
LISTNUM 1 \l 12678 MR. PROKSH: Yes, we do.
LISTNUM 1 \l 12679 COMMISSIONER MENZIES: And I am sure it is here someplace, but just remind me what percentage of your revenue that is?
LISTNUM 1 \l 12680 MR. PROKSH: It varies by each station, but our total revenue would be approximately 40 per cent in the U.S. But we do have separate rate cards. The U.S. is a much more expensive market, being in the top 12 or 13 largest markets in the U.S. The cost per point in that market is substantially higher than in Windsor and we have a much lower rate card for Windsor.
LISTNUM 1 \l 12681 COMMISSIONER MENZIES: So U.S. advertisers are subsidizing Canadian advertisers more or less on your station?
LISTNUM 1 \l 12682 MR. PROKSH: If you want to put it that way. They pay the market cost that is relative to the Detroit market in Detroit.
LISTNUM 1 \l 12683 COMMISSIONER MENZIES: Okay. Thank you.
LISTNUM 1 \l 12684 MR. PROKSH: Thank you.
LISTNUM 1 \l 12685 THE CHAIRPERSON: Thank you, Mr. Roman, and to your colleagues, thank you for your intervention here today.
LISTNUM 1 \l 12686 MR. ROMAN: Thank you for your time.
LISTNUM 1 \l 12687 THE CHAIRPERSON: Madam Secretary.
LISTNUM 1 \l 12688 THE SECRETARY: Thank you, Madam Chair.
LISTNUM 1 \l 12689 This concludes Phase 3.
LISTNUM 1 \l 12690 We will now proceed to Phase 4 in which applicants can reply to all interventions submitted on their applications. Applicants appear in reverse order.
LISTNUM 1 \l 12691 We would then invite Blackburn Radio Inc. to come forward to the presentation table if they wish to participate in Phase 4.
REPLY / RÉPLIQUE
LISTNUM 1 \l 12692 MR. COSTLEY‑WHITE: Good afternoon, Madam Chair, members of the Commission and Commission staff.
LISTNUM 1 \l 12693 My name is Richard Costley‑White. I am here with the colleagues I introduced in Phase 1, they are Terry Regier, Walter Ploegman, Sue Storr, Rod Martens, Lori Baldassi, Jason Ploegman, Carl Veroba, Debra McLaughlin and Mark Kassof. We are here present our reply to the interventions to our application.
LISTNUM 1 \l 12694 The supporting interventions, the research studies we presented, our experience in Windsor and recent announcements by public officials present a much different view of the market than does Canada's largest private broadcaster.
LISTNUM 1 \l 12695 MR. REGIER: Much has been made of the recent economic difficulties in Windsor, including the Windsor Star report on CIBC's rating of this market. This news is a matter of concern to all of us Winsorites.
LISTNUM 1 \l 12696 Every Wednesday, The Rock invites the Mayor of Windsor on air to talk about the city. Last week our host asked him about the CIBC article and here is a part of his reply:
"So, yes, we are going through a perfect storm, we've been through storms before, absolutely. Will we come out of this one? Absolutely. We have strengths that we did not have before. We have a well‑developed, skilled workforce, we have a very important and critical tourism facility that is being built right now and that's the convention centre on the new Caesars property. So we have the best location, we have the tools and we have the strengths and we'll be positioned to come out of this stronger. But it's going to be hard for the next little while and that's something that everybody in Windsor I believe, and in this county ‑‑ it's not just Windsor, but it's in the entire region, it's something that everybody in this region I believe understands and is going through right now." (As Stated in Audio Presentation)
LISTNUM 1 \l 12697 MR. REGIER: We have provided you with a CD of the complete interview. The Mayor agreed that we have been through some tough times, but notes the difference with past economic downturns.
LISTNUM 1 \l 12698 Windsor has put in place structures to diversify our economy. CTVglobemedia stated in their written intervention, at paragraph 32, they believe and I quote:
"It is strategically necessary to treat Windsor and Detroit as a homogenous market." (As Read)
LISTNUM 1 \l 12699 They obviously don't agree with the 72 per cent of those who think Windsor is a unique market. Windsor and Detroit are different cities with different demographic, economic, social and cultural make‑ups.
LISTNUM 1 \l 12700 CTV provided a series of band news clippings to support their thesis. What they ignored is a diversification that happened over the years and some of the recent good news. Windsor's bond rating was raised from AA minus to AA, as reported in the Winsor Star on November 20.
LISTNUM 1 \l 12701 Data from the Canada employment office demonstrates that each job lost in the downturn is replaced by at least one new job. Per household income has increased at the same rate as the rest of Canada from 2004 to 2007 according to FP Markets.
LISTNUM 1 \l 12702 The CMI report filed by CTV notes that the Conference Board predicts growth for 2006 and 2007, minimal growth, but growth nonetheless. And the projections for the years 2008 and later are for more significant growth.
LISTNUM 1 \l 12703 I would like to ask Debra McLaughlin to add further comments here.
LISTNUM 1 \l 12704 MS McLAUGHLIN: Much of the focus of the discussions on the economics around this process has been on where Windsor has been. I think the focus is properly placed in the future.
LISTNUM 1 \l 12705 According to the Conference Board winter 2008 data from second quarter 2008 and onward GDP is projected to be positive. Despite the downturn in the automotive sector, growth in personal income in 2007 is expected to be positive, evidence of diversification.
LISTNUM 1 \l 12706 Further, growth in income is to rise to 4.2 per cent in 2008 and by 2009 be 3 per cent. This growth feeds the positive retail sales we discussed earlier. A balanced look at Windsor's economics would reveal a difficult current situation, but a future that is characterized by growth and not prolonged decline.
LISTNUM 1 \l 12707 Rod.
LISTNUM 1 \l 12708 MR. MARTENS: CTV suggests in its written intervention that the situation today is worse than it was in 1984, more U.S. stations with a "detrimental impact on the amount of tuning and revenues that Windsor stations garner." This is a misread of the actual situation.
LISTNUM 1 \l 12709 In 1984, Detroit radio stations dominated tuning and all four of the radio stations in Windsor were losing money. At that time the commercial Windsor stations received a total of 20 percent of hours tuned.
LISTNUM 1 \l 12710 In the fall 2007 BBM ratings, Canadian private radio stations received 37 percent of all hours tuned.
LISTNUM 1 \l 12711 In Decision 2003‑603, the Commission stated that the four then CHUM‑owned stations had been growing in revenues and profitability since 1999 and that their PBIT margins had exceeded the national averages for each of the previous three years.
LISTNUM 1 \l 12712 CTVglobemedia states that national advertisers do not want to buy Windsor stations since there is not enough reach by Canadian stations to justify this.
LISTNUM 1 \l 12713 Commissioner Menzies noted Windsor is hard to buy due to all the stations but Canadian advertisers cannot buy most of these stations since Detroit rates are four times that of Windsor.
LISTNUM 1 \l 12714 CTV's prescription is not to license more players in the market but we would suggest a market‑driven strategy: License more Canadian stations, aggregating Windsor audiences, and we will reach the required critical mass.
LISTNUM 1 \l 12715 Our own experience would seem to indicate that this kind of strategy works.
LISTNUM 1 \l 12716 In the spring of 2004, before The Rock provided a reliable signal in the market, private commercial Windsor stations received a 35.9 percent of all hours tuned 12+.
LISTNUM 1 \l 12717 A year later, in spring 2005, after the launch of The Rock in the market, the total hours tuned 12+ grew to 39.3 percent.
LISTNUM 1 \l 12718 The difference was above and beyond The Rock's share. In other words, the entry of a new station meant growth in total tuning to Canadian stations.
LISTNUM 1 \l 12719 MR. REGIER: CTV also makes a number of contradictory arguments.
LISTNUM 1 \l 12720 At one point in their written intervention they indicate that Blackburn has no experience in the challenging Windsor market and only they know what it takes but elsewhere they claim that our part‑time Windsor repeater CKUE and our out‑of‑market Leamington station CHYR have had an impact on their business.
LISTNUM 1 \l 12721 Put differently, we don't know what we are doing but somehow we are hurting them. In act, we have operated successfully in markets with multiple U.S. signals and know the trick to winning: local service and attention to your home market.
LISTNUM 1 \l 12722 We are not hurting them in Windsor. As demonstrated in our written reply, the only reason their four stations' combined share is down is that they switched from an AC format in Windsor to go triple A because of low ratings in Detroit.
LISTNUM 1 \l 12723 CTV indicates that their fear is that we will fail in the country format and then switch formats to come after one of their stations. We are very confident that we will succeed in the country station in Windsor.
LISTNUM 1 \l 12724 The Kassof research is clear. We have the potential to draw 7 percent of hours tuned in the market with a country station. Our decision was to be cautious and so we built our business plan and we built it on a modest 3 percent of tuning in our first year of operation and only reaching 8 percent by the seventh year.
LISTNUM 1 \l 12725 The U.S. country stations drew 9.6 percent of hours tuned in the spring of 2007 and we are confident we can repatriate a significant portion of these hours.
LISTNUM 1 \l 12726 We have done this before in Windsor. Before The Rock launched in 2004, U.S. mainstream rock stations drew 12 percent of hours tuned in Windsor. In the fall of 2007, The Rock drew 4.8 percent of hours tuned in Windsor and was the highest‑rated mainstream rock station in the market. Detroit rock stations drew a 5 share in points, less than in the spring of 2004.
LISTNUM 1 \l 12727 But even if we did stumble, why would we chase after their formats? The Kassof research shows that there are a number of format opportunities in the market, mainstream AC, the format abandoned by CIDR, despite shares as high as 8 percent of 12+ tuning in the Windsor market.
LISTNUM 1 \l 12728 &nbs