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Please note that the Official Languages Act requires that government publications be available in both official languages.
In order to meet some of the requirements under this Act, the Commission's transcripts will therefore be bilingual as to their covers, the listing of CRTC members and staff attending the hearings, and the table of contents.
However, the aforementioned publication is the recorded verbatim transcript and, as such, is transcribed in either of the official languages, depending on the language spoken by the participant at the hearing.
TRANSCRIPT OF PROCEEDINGS BEFORE
THE CANADIAN RADIO‑TELEVISION AND
TELECOMMUNICATIONS COMMISSION
TRANSCRIPTION DES AUDIENCES DEVANT
LE CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT/SUJET:
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 12, 2007 Le 12 décembre 2007
Transcripts
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
Contents.
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Transcription
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès‑verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
Canadian Radio‑television and
Telecommunications Commission
Conseil de la radiodiffusion et des
télécommunications canadiennes
Transcript / Transcription
Various broadcasting applications 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 /
Conseillère juridique
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 12, 2007 Le 12 décembre 2007
- iv -
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PHASE I
PRÉSENTATION PAR / PRESENTATION BY:
Newcap Inc. 577 / 3466
Larche Communications Inc. 626 / 3754
Pineridge Broadcasting Inc. 658 / 3968
K-Rock 1057 Inc. 719 / 4349
Evanov Communications Inc. 773 / 4712
Frank Torres (OBCI) 823 / 5051
London, Ontario / London (Ontario)
‑‑‑ Upon commencing on Wednesday, December 12, 2007
at 0900 / L'audience débute le mercredi
12 décembre 2007 à 0900
LISTNUM 1 \l 1 \s 34613461 THE SECRETARY: Good morning and welcome to day three of the public hearing.
LISTNUM 1 \l 13462 We will now proceed with item 8, which is an application by Newcap Inc. for a licence to operate an English‑language FM commercial radio programming undertaking in Peterborough.
LISTNUM 1 \l 13463 The new station would operate on frequency 96.7 MHz (channel 244B) with an average effective radiated power of 17,000 watts (maximum effective radiated power of 50,000 watts/antenna height of 96.8 metres).
LISTNUM 1 \l 13464 Appearing for the applicant is Mr. Rob Steele.
LISTNUM 1 \l 13465 Please introduce your colleagues and you will have 20 minutes for your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 13466 MR. STEELE: Good morning.
LISTNUM 1 \l 13467 My name is Rob Steele, President and Chief Executive Officer of Newcap Radio, and joining me today are David Murray, Chief Operating Officer for Newcap Radio; Glenda Spenrath, Director of Newcap Operations; Steve Jones, Vice‑President of Programming; Josie Geuer, Program Director of Ottawa's Hot 89.9 and on the end, Scott Broderick, Director of Ontario Operations.
LISTNUM 1 \l 13468 Madam Chair, members of the Commission, Commission staff, we are very pleased to be presenting this application for a new FM radio station to serve Peterborough, Ontario.
LISTNUM 1 \l 13469 Peterborough is a thriving city whose residents enjoy lifestyle and economy fuelled by local manufacturing and recreation. Quaker Oats and General Electric maintain large operations in the city and from canoe building in the 1850s to today's status as a gateway to the Kawarthas, Peterborough has always had a special link to the outdoors.
LISTNUM 1 \l 13470 Peterborough's proximity to Toronto means that its residents readily receive a number of Toronto radio stations but, like Canadians everywhere, given the right choices residents of the city will naturally prefer local radio.
LISTNUM 1 \l 13471 Our research suggests a clear interest on the part of Peterborough residents for more local radio and greater format choice. According to BBM numbers, more than 40 percent of hours tuned in Peterborough currently go to stations licensed to other markets. Licensing a new entrant like Newcap will not only help repatriate such tuning but will strengthen local radio and its ability to successfully compete in the future.
LISTNUM 1 \l 13472 We believe that we have a strong application both because of our specific plans for serving Peterborough and because of what Newcap as a company can bring to the community.
LISTNUM 1 \l 13473 First, our local radio professionals always have the creative freedom to make the programming decisions that will best serve their local audiences.
LISTNUM 1 \l 13474 Second, we remain equally committed to growth in smaller and larger markets in Canada and we provide the research, resources and expertise needed to make it possible.
LISTNUM 1 \l 13475 And third, we make a difference by actively supporting local community organizations including hospitals, food banks and children's charities. Talent, growth and community are what we are all about.
LISTNUM 1 \l 13476 Newcap owns and operates radio licences across Canada but unlike Canada's large radio companies, most of our stations are in small and medium‑sized markets. But we are committed to serving diverse communities across this country.
LISTNUM 1 \l 13477 I would now like Steve Jones, our Vice‑President of Programming.
LISTNUM 1 \l 13478 MR. JONES: Newcap is proposing a Gold Based AC station for Peterborough.
LISTNUM 1 \l 13479 Adult Contemporary or AC as the format is known, is one of the most widely‑programmed formats in Canada. AC provides a non‑intrusive and familiar sound that appeals very strongly to the 25‑54 demographic, particularly with female listeners.
LISTNUM 1 \l 13480 Our selection of Gold Based AC came from our analysis of the existing formats in the market and an evaluation of the viability of nine different formats as diverse as Modern Rock and Country.
LISTNUM 1 \l 13481 The research initially uncovered two potential format opportunities in Peterborough, CHR and Adult Contemporary. Our research was confirmed and our choice made when shortly after CTVglobemedia converted CKPT from AM to FM and launched Energy 99.3 in the CHR format.
LISTNUM 1 \l 13482 We project a 10 percent share 18‑64 for a Gold Based AC format in Peterborough. We propose 35 percent Canadian content distributed equally throughout the broadcast day as the most appropriate level for this format.
LISTNUM 1 \l 13483 Gold Based AC is a natural complement to the existing FM stations in Peterborough of Rock, Country and CHR. Soft AC, Sixties and Seventies, Oldies and Classic hits are the primary components of a Gold Based AC station. These sub‑formats are familiar to Newcap as we operate stations in each of them, and our research shows that all would be in demand in Peterborough. Combined together in Gold Based AC they provide us with the best opportunity to add music diversity to the market and avoid the playlists of the incumbents.
LISTNUM 1 \l 13484 96.7 The River will focus on timeless music by artists such as Elton John, Sheryl Crow, Guess Who, The Beatles, Fleetwood Mac, Céline Dion, Bryan Adams, Phil Collins and many others. The music will be softer, older and more familiar than that of other available stations. Our listeners would expect to turn on 96.7 The River and hear songs they grew up with and have come to identify as the music of their generation.
LISTNUM 1 \l 13485 Although 96.7 The River will be rooted in the music of the past our playlist will not be entirely old. Today there is a strong crop of established and emerging stars such as Michael Bublé, Jann Arden, Nora Jones and John Mayer who are making exciting, fresh contemporary soft music. This rejuvenated new AC format combined with the music of the sixties, seventies and eighties is just right for Peterborough.
LISTNUM 1 \l 13486 96.7 The River will appeal to a core audience that is 65 percent female in the 35 to 44 demographic. At 40, the median age of our typical listener will reflect that of Peterborough itself.
LISTNUM 1 \l 13487 Not surprisingly, the other nine incumbent applicants in this hearing are all proposing either variations or elements of the Gold Based AC format. What sets Newcap apart is its ongoing ability to research and execute that choice to adapt and compete effectively with strong incumbents and to provide Peterborough with a strong local news and information programming that it deserves.
LISTNUM 1 \l 13488 MS GEUER: Our research demonstrated that there is a strong interest in news that is specific to Peterborough as well as to its status as an outdoor recreation destination. Our format will be flexible enough to permit frequent news flashes keeping our listeners up to date with timely capsules.
LISTNUM 1 \l 13489 96.7 The River will significantly increase the diversity and availability of local news and information programming. We will provide 79 newscasts throughout the week, including weekends, all sourced and presented locally. The station's news director will supervise a team of two journalist announcers in Peterborough.
LISTNUM 1 \l 13490 In addition to the local news team focusing on Peterborough news, the station will benefit from Newcap's existing news resources in Ontario and across Canada. We will offer our listeners 75 percent local and regional content in all newscasts with the remaining 25 percent being relevant news and information from other parts of Ontario, Canada and the rest of the world.
LISTNUM 1 \l 13491 Major hourly newscasts will run approximately five minutes inclusive of sports and weather, which together with half‑hourly updates will provide a total of over six hours of news content weekly.
LISTNUM 1 \l 13492 Frequent unscheduled updates on breaking news, weather, traffic and road conditions together with music and other commentary will bring our minimum total spoken word to 17 hours per week.
LISTNUM 1 \l 13493 Beyond the numbers, though, 96.7 The River will commit to gearing its news and information programming specifically to Peterborough City and County.
LISTNUM 1 \l 13494 Being so close to a major city like Toronto often a community such as Peterborough can find itself overwhelmed by the bigger city. Combating that means things like paying special attention to providing listeners with daily updates and scores from area high school and university leagues and games. It means Pause for a Cause, an hourly feature profiling community groups, non‑profit events and other causes that are relevant to the local community. And it means little things like visiting rinks with coffee and hot chocolate in the winter and stopping at the ball fields with water and pop in the summer.
LISTNUM 1 \l 13495 Other program features on 96.7 The River will include Change the World. One listener gets the opportunity to explain what they would do to make life better in Peterborough.
LISTNUM 1 \l 13496 Voices from Peterborough is a very unique concept to commercial radio. This will be brought to life on 96.7 The River. Half an hour on this station will be handed over to the personalities that make up the fine city, from politicians to poets, nurses to school teachers. Then we have River Requests. Every day listeners will have the chance to hear their requests on the air over the lunch hour. Listeners will be able to call, email or text message their request to the 96.7 The River studios.
LISTNUM 1 \l 13497 96.7 The River will also have an online presence that will go beyond the typical radio station website including a detailed and updated interactive community events calendar, Peterborough Picks; up to the minute local news direct from our newsroom and a local sports scoreboard featuring minor hockey, little league and school sports events.
LISTNUM 1 \l 13498 MS SPENRATH: Our commitment to commitment to community reflection on 96.7 The River will stem from a systematic approach to employment equity and include the three basic tenets of cultural diversity.
LISTNUM 1 \l 13499 First is our programming. Both our news and non‑news programming will reflect the cultural diversity of our audience. News stories will reflect the reality of Peterborough's cultural, ethnic, racial and aboriginal diversity. Our other spoken word will contain elements that appeal to our ethnic and aboriginal audience. In our River Requests feature we will appeal to our diverse audience to tell us what they want and we will listen.
LISTNUM 1 \l 13500 Second is our on air personalities. Our announcers and reporters will be representative of the ethnic mosaic that makes up Peterborough. Our culturally‑diverse audience will enjoy an association with the people delivering their daily entertainment and information.
LISTNUM 1 \l 13501 And third is our workforce. Both on and off the air our staff will be representative of the demographics of the community we serve. Our staff will be well versed in corporate policies designed to support cultural diversity in the workplace and the reflection of the diverse groups in our programming. Our goal will be to connect with the parents, network with the organizers and establish roots in the community. Consistent with Newcap's long tradition of providing intensely local service, this new station will make a difference to the community.
LISTNUM 1 \l 13502 Our Canadian content development plan is specifically designed to develop and expose emerging artists from the Peterborough area and Ontario. We have proposed by far the highest value package of Canadian content development among applicants, totalling $1,015,000 over the term of the licence with spending of the licence with spending of $145,000 in each year of the licence term.
LISTNUM 1 \l 13503 $609,000 or $87,000 annually will go in financial support to FACTOR. We will ask that FACTOR direct these funds toward artists and groups residing in Peterborough and Ontario.
LISTNUM 1 \l 13504 $406,000 will go to Peterborough's own Trent University which is $58,000 per year to help fund performance art programs, including such initiatives as scholarships and enhance aboriginal music theatre.
LISTNUM 1 \l 13505 Trent University is an exceptional post‑secondary academic institution based in Peterborough and we are delighted that they have agreed to work with us to develop and implement CCD programs that will make a difference to this community. Trent University was the first university in Canada to launch a native studies program in 1971 and is the only university in Canada to have a cultural studies program as a separate autonomous unit complete with a doctoral program, the focus of which is performance arts and the role of music and theatre and shaping culture.
LISTNUM 1 \l 13506 MR. BRODERICK: Ensuring new licensees do not have an undue impact on incumbents is an important objective of the Commission's licensing process.
LISTNUM 1 \l 13507 That said, in this hearing, we think that ensuring any new entrant has a reasonable chance of competing with the incumbents is also important.
LISTNUM 1 \l 13508 The four popular commercial radio stations in Peterborough are currently owned by Corus and CTVglobemedia.
LISTNUM 1 \l 13509 While CTVglobemedia's two FM stations may, theoretically, give them a slight edge over Corus' AM/FM combo, in reality the two companies are virtually neck‑and‑neck in the market.
LISTNUM 1 \l 13510 By contrast, any new entrant will be one station up against incumbent operators with two stations each, stations that have better frequencies, better coverage, and enormous corporate resources behind them.
LISTNUM 1 \l 13511 Additionally, we recognize that fully 40 percent of the radio tuning in Peterborough currently comes from outside radio stations, most notably the Toronto marketplace.
LISTNUM 1 \l 13512 Two of the top four 25 to 54 stations in Toronto are CHFI‑FM and EZ Rock. Based on the similarity of their playlists, the biggest opportunity for 96.7 The River will come from these Toronto radio stations, owned by Rogers and Astral, respectively.
LISTNUM 1 \l 13513 Coupled with the local multimedia competition from CTVglobemedia and Corus, and Quebecor's recent purchase of the Peterborough Examiner, the Peterborough media landscape truly is the land of the giants.
LISTNUM 1 \l 13514 Competing with these major players won't be easy, but we believe that Newcap and 96.7 The River are up for that competitive challenge.
LISTNUM 1 \l 13515 MR. MURRAY: Madam Chair and Members of the Commission, like most markets in Canada, Peterborough is a healthy market that can only benefit from the licensing of new entrants.
LISTNUM 1 \l 13516 The current competitive landscape is made up of large, experienced broadcasters, namely, CTVglobemedia and Corus in Peterborough, and Astral and Rogers out of Toronto.
LISTNUM 1 \l 13517 This will make Peterborough a challenging market to succeed in.
LISTNUM 1 \l 13518 We also believe that, over time, with competition from a range of new wireless, local, audio media, the environment will only get tougher.
LISTNUM 1 \l 13519 We feel that we are well equipped to serve local audiences in Peterborough in just such a market. We believe that our application strikes the right balance for Peterborough now and into the future. Newcap has the resources and commitment to build for the long term, and that would certainly be the case here: a strong business plan, based on deep resources, and our demonstrated expertise in bringing new formats to the market in exciting ways; a new format that presently is not available; a new editorial voice in the market; one of the highest commitments to local news and reflection; and the highest contribution to the development of Canadian content, more than $1 million over the next seven years.
LISTNUM 1 \l 13520 We look forward to the opportunity to serve this market.
LISTNUM 1 \l 13521 This concludes our presentation. We welcome your questions.
LISTNUM 1 \l 13522 THE CHAIRPERSON: Thank you, Mr. Murray, Mr. Steele, and your colleagues. Welcome to the hearing.
LISTNUM 1 \l 13523 I will ask Commissioner Menzies to lead the questioning.
LISTNUM 1 \l 13524 COMMISSIONER MENZIES: Good morning. Some of these questions are for the record. Your presentation answered a few of them, but I just wanted to go through a few of them, and then give you an opportunity to expand on a few areas.
LISTNUM 1 \l 13525 I need to confirm with you that you are committed to 6 hours, 7.5 minutes of news per week.
LISTNUM 1 \l 13526 MR. MURRAY: Yes, we are.
LISTNUM 1 \l 13527 COMMISSIONER MENZIES: Can you confirm that 75 percent of that will be local?
LISTNUM 1 \l 13528 MR. MURRAY: Yes.
LISTNUM 1 \l 13529 COMMISSIONER MENZIES: Maybe you could expand on the nature of your local news. Will that match or duplicate other local breaking news, or will it be distinctive in some way?
LISTNUM 1 \l 13530 Why would I tune to your news as opposed to anybody else's news, or is your news in addition to your core?
LISTNUM 1 \l 13531 MR. JONES: If I understand the question correctly, our news is designed to complement the service we provide, that being a gold‑based AC station.
LISTNUM 1 \l 13532 We recognize that we are primarily a music‑driven entertainment service to our listeners, but being intensely local in our news is what will set us apart.
LISTNUM 1 \l 13533 We commit to 75 percent local news, and we recognize that the only way to be successful is to be local. There are thousands of sources for what is going on overseas or in the U.S. or across Canada, but in your local market there are very few sources to find out what is going on around the corner.
LISTNUM 1 \l 13534 COMMISSIONER MENZIES: If I understand correctly, obviously music is the core product, and the provision of news ensures that people don't have to switch the channel and tune in someplace else to find out what is going on.
LISTNUM 1 \l 13535 Is that basically it?
LISTNUM 1 \l 13536 MR. JONES: Precisely, yes.
LISTNUM 1 \l 13537 COMMISSIONER MENZIES: And you have two journalist announcers. Typically, how would they work?
LISTNUM 1 \l 13538 Are they primarily in the station tracking news and giving updates, or do they get out and find things on their own?
LISTNUM 1 \l 13539 MR. JONES: We have planned for three full‑time news staff, and I believe a part‑time staffer, as well.
LISTNUM 1 \l 13540 One would be a news director, two news journalist announcers, as you noted, and one part‑timer.
LISTNUM 1 \l 13541 Their roles would be a combination of being in the station and being out of the station, but, for the most part, they would be in the station providing newscasts, as we have noted in our application.
LISTNUM 1 \l 13542 A lot of the collection of news and information these days is done electronically. They would pick and choose the events they would be personally covering.
LISTNUM 1 \l 13543 A lot of what they would do would be contacting the newsmakers and those involved in the news, and providing our perspective on the stories.
LISTNUM 1 \l 13544 COMMISSIONER MENZIES: Typically, where do you find the people to do that? Do you find them locally, or other places?
LISTNUM 1 \l 13545 If you find them other places, what do you do to make sure they have a sense of the local nuances in terms of interests?
LISTNUM 1 \l 13546 MR. JONES: In all cases, for all positions, it makes the most sense, generally, to hire locally. If we can find on‑air people who understand the community already, they are that much further ahead.
LISTNUM 1 \l 13547 For those that we cannot hire locally and we need to bring in from elsewhere, we try to create a staff that provides mentorship and leadership.
LISTNUM 1 \l 13548 An example might be in Thunder Bay, Ontario, where our news director has been the news director in that market for probably 20 years. When we bring new staff in, they mentor under his direction. He is able to give them a pretty good perspective on the market.
‑‑‑ Pause
LISTNUM 1 \l 13549 MR. JONES: We were just noting that the same case exists in Newfoundland, at our Heritage news talk station, VOCM.
LISTNUM 1 \l 13550 Newfoundland is a unique market. Sometimes it can be difficult to recruit people from the rest of Canada to come that far east. Often, once they do, it is hard to convince them to leave.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13551 MR. JONES: It is an example of where a keen understanding of the market is essential to success, and we do that same kind of mentorship there.
LISTNUM 1 \l 13552 COMMISSIONER MENZIES: Okay. Thanks.
LISTNUM 1 \l 13553 What, precisely, is your minimum commitment to spoken word in addition to news?
LISTNUM 1 \l 13554 I believe you answered that, but I would like you to expand on it a bit.
LISTNUM 1 \l 13555 MS GEUER: Thank you, Commissioner Menzies.
LISTNUM 1 \l 13556 The spoken word will total, including news, 17 hours per week, which is about 13.5 percent. That will involve features like "Change the World", "Voices of Peterborough", "Then and Now", "River Requests" ‑‑ I can go into a couple, if you are curious.
LISTNUM 1 \l 13557 COMMISSIONER MENZIES: Yes, just some "for instances", and expand on those.
LISTNUM 1 \l 13558 MS GEUER: Absolutely. For instance, we have "Pause for a Cause", which will be a 60‑second produced feature that will run seven days a week, each hour. It will profile community groups and non‑profit events in the Peterborough area.
LISTNUM 1 \l 13559 For example, if 96.7 The River were broadcasting today, we might use "Pause for a Cause" to highlight the concert fundraiser that is happening this evening at Thomas A. Stewart High School at 7 p.m. That is a fundraiser for the homeless.
LISTNUM 1 \l 13560 That is what we would use "Pause for a Cause" for, for example.
LISTNUM 1 \l 13561 Also, I mentioned in our opening remarks that we have something called "Voices of Peterborough", which we are hoping to launch on 96.7 The river. This is a really unique concept. It's a lot of fun, and it is something that we have never done in Ottawa, and I am actually considering it, because I think it is a really great idea.
LISTNUM 1 \l 13562 What we would do is, we would bring in a member of the community. It might be a nurse from the regional hospital in Peterborough, or it could be one of 600 of their volunteers.
LISTNUM 1 \l 13563 In this case, we would bring that person in, and they would get an announcer to sort of show them the ropes, and they would get to choose some music from our format that they enjoy, and then they would get a half‑hour show to talk about their life in Peterborough, and what interests them.
LISTNUM 1 \l 13564 We would pre‑record that and pre‑package it and air it, most likely, on a Sunday afternoon.
LISTNUM 1 \l 13565 COMMISSIONER MENZIES: Okay. And what type of people?
LISTNUM 1 \l 13566 MS GEUER: They could be teachers, coaches. It could be a city worker, it could be a poet, an artist ‑‑ anyone who listens, basically, to 96.7 The River would be welcome to come in and share a bit of their life with the community.
LISTNUM 1 \l 13567 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 13568 How much of your commitment is live‑to‑air?
LISTNUM 1 \l 13569 Could you confirm that for me again?
LISTNUM 1 \l 13570 MR. JONES: About 75 percent of our broadcast week would be live‑to‑air, and the remaining 25 percent would be locally originated voice tracking.
LISTNUM 1 \l 13571 COMMISSIONER MENZIES: So it would be 100 percent locally ‑‑
LISTNUM 1 \l 13572 MR. JONES: Yes. There may be opportunities here and there where it may make sense to carry a syndicated program of some sort, like most radio stations would when perhaps a certain artist is performing in Peterborough, and we can find a really good syndicated special that profiles their career.
LISTNUM 1 \l 13573 But in an average broadcast week, 100 percent of our content would originate locally.
LISTNUM 1 \l 13574 COMMISSIONER MENZIES: In your presentation you mention that there is some familiarity with the formats currently in place, and obviously, with the Toronto market, there is a lot of cross‑over.
LISTNUM 1 \l 13575 What are the things that you have in common ‑‑ and there will be a second half to this question ‑‑ format‑wise with the other applicants?
LISTNUM 1 \l 13576 MR. JONES: Almost all of the other non‑incumbent applicants have proposed some form of similar AC format. What differentiates us, as we look through the other applicants ‑‑ and I can't speak with a great deal of authority to their applications, but from what we have seen, our format is significantly older and based more on the music of the sixties and seventies.
LISTNUM 1 \l 13577 We estimate that 50 percent of our playlist would be pre‑1980, whereas, from what we can tell at this point, most of the other applicants appear to be a little more in the eighties and today.
LISTNUM 1 \l 13578 COMMISSIONER MENZIES: How does that give you an edge?
LISTNUM 1 \l 13579 MR. JONES: We believe, from our research, that the greatest format opportunity is an AC format that is more broad, that encompasses music from as early as The Beatles' arrival in North America in the sixties, up until the softer hits of today and that gives us, we believe, the best ability to reach the biggest possible audience.
LISTNUM 1 \l 13580 COMMISSIONER MENZIES: Okay. Your ‑‑ I am sorry, I will just make sure I don't have you confused with anybody else.
LISTNUM 1 \l 13581 Your target audience ‑‑ I mean everybody talks about the 25‑54 but that is too big to make sense entirely. But your target audience is mostly ‑‑ the median age?
LISTNUM 1 \l 13582 MR. JONES: It is 40.
LISTNUM 1 \l 13583 COMMISSIONER MENZIES: Forty?
LISTNUM 1 \l 13584 MR. JONES: Yes.
LISTNUM 1 \l 13585 COMMISSIONER MENZIES: And it is primarily female?
LISTNUM 1 \l 13586 MR. JONES: We estimate 65 percent female. And of that 25‑54 demographic, we plan to reach a core audience of 35‑44 female.
LISTNUM 1 \l 13587 COMMISSIONER MENZIES: And why is that important to you?
LISTNUM 1 \l 13588 MR. JONES: It is important because 25‑54 is the demographic that drives most radio advertising and you win ‑‑ there is a saying in radio that 25‑54 isn't a target, it is a family reunion. So you narrow it down.
LISTNUM 1 \l 13589 It is a little bit like an archery target and if you want to win the big target you have to shoot for the bull's eye. So our bull's eye would be that 35‑44 and by hitting that bull's eye well, we can win the bigger demographic of 25‑54.
LISTNUM 1 \l 13590 COMMISSIONER MENZIES: Okay. If you hit that bull's eye, how does it work for you commercially? Like why would advertisers ‑‑ and you are going to need those ‑‑ why would they find that attractive?
LISTNUM 1 \l 13591 MR. JONES: The 25‑44 ‑‑
LISTNUM 1 \l 13592 COMMISSIONER MENZIES: Not that there is anything unattractive about 35‑44 year old women ‑‑
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13593 COMMISSIONER MENZIES: ‑‑ but what is commercially attractive about it?
LISTNUM 1 \l 13594 MR. JONES: I think Scott Broderick, our Director of Ontario Operations, is best to handle that question.
LISTNUM 1 \l 13595 MR. BRODERICK: I think it comes down to money. It really does. I think there is a perception among advertisers that in order to spend money you have to have money, and under 25 the belief is that you probably haven't accumulated enough wealth at this point in time to be interesting as a consumer.
LISTNUM 1 \l 13596 And over 55 your buying patterns are probably pretty well established at that point and the advertising isn't what is going to drive your purchasing, it is more pre‑established loyalties and brand loyalties. Once you are satisfied it is pretty tough to move you.
LISTNUM 1 \l 13597 COMMISSIONER MENZIES: And why are women better than men as a commercial audience?
LISTNUM 1 \l 13598 MR. BRODERICK: I hope I am not the first one to explain this to you but ‑‑
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13599 COMMISSIONER MENZIES: I know the answer, I just needed you to say it.
LISTNUM 1 \l 13600 MR. BRODERICK: A commonly held belief that women would control about 80 percent of spending in the marketplace.
LISTNUM 1 \l 13601 COMMISSIONER MENZIES: Right, thank you.
LISTNUM 1 \l 13602 Your scholarship criteria, as you have laid it out, is specific ‑‑ or the Commission's scholarship criteria, sorry, is now specific to music and journalism students in terms of that, in other words, content that is specific to audio.
LISTNUM 1 \l 13603 Is that outlet available through Trent for you?
LISTNUM 1 \l 13604 MS SPENRATH: Yes, it is. We have had discussions with our representatives of Trent University and they have a very interesting and complete cultural program, and as part of that they have workshops and classes that specifically look at music and its role in culture, and so we have taken a look at the opportunity to provide scholarships that would work in that direction to promote the music part of the culture.
LISTNUM 1 \l 13605 COMMISSIONER MENZIES: If for some reason that doesn't become available at some point during the period of the licence or the Commission were to rule otherwise, how would you adjust?
LISTNUM 1 \l 13606 MS SPENRATH: Well, I guess primarily ‑‑ first of all, we would try to keep to our commitment to Trent University because there are other opportunities there for us to provide funding in other areas. They have the musical theatre for Aboriginal talent.
LISTNUM 1 \l 13607 So we would try in negotiations and discussions with Trent University to find other avenues that are eligible and I guess if that is not available then our other alternative would be to direct it towards FACTOR.
LISTNUM 1 \l 13608 COMMISSIONER MENZIES: Okay. Technically your application's projected CCD expenses don't include a provision for the basic, although the overall is significant.
LISTNUM 1 \l 13609 Can you just clarify this for the record, please?
LISTNUM 1 \l 13610 MS SPENRATH: Yes. What we have identified here is clearly over and above the basic CCD and the basic CCD we will make in addition to this amount that is promised.
LISTNUM 1 \l 13611 COMMISSIONER MENZIES: Okay, thank you. Your application ‑‑ as you have said, all your programming will be local.
LISTNUM 1 \l 13612 Are there synergies to your advantage in other areas?
LISTNUM 1 \l 13613 MR. JONES: You mean as far as our ‑‑
LISTNUM 1 \l 13614 COMMISSIONER MENZIES: Your other operations.
LISTNUM 1 \l 13615 MR. JONES: Yes. They are few and far between. They do exist and where appropriate we would certainly take advantage of them.
LISTNUM 1 \l 13616 For example, across Atlantic Canada last week there was a major winter storm that kept power out in parts of Prince Edward Island for upwards of a week. Our news operation in Prince Edward Island was able to share that with the rest of our Atlantic Canadian stations who were also very interested in that story.
LISTNUM 1 \l 13617 There may be programming cases ‑‑ as I mentioned earlier, if a certain artist is playing in Calgary on a cross‑Canada tour and we can interview him in Calgary and share that interview with Peterborough so that when the artist comes to that community we have a programming edge on our competitors, we would certainly take advantage of those.
LISTNUM 1 \l 13618 But as I mentioned, off the top those synergies are few and far between and are not really the foundation of our application, which is to be intensely local.
LISTNUM 1 \l 13619 COMMISSIONER MENZIES: Okay. You mentioned this in your presentation and touched on it quite confidently but I would like you to expand on it a bit more.
LISTNUM 1 \l 13620 If you get a licence in this market you will have CTV and Corus incumbents to deal with. As you have noted, you will have Rogers and Astral to the south of you, and as you also noted, you have Quebecor with the Peterborough paper.
LISTNUM 1 \l 13621 That is a pretty tough company to compete with and I just want to give you the opportunity to expand briefly on why I need to believe you are tough enough to make it through that crowd.
LISTNUM 1 \l 13622 MR. MURRAY: Right, thank you.
LISTNUM 1 \l 13623 Well, we compete with these large broadcasters in many of our markets, in Ottawa and in Calgary and in Edmonton, and we hold our own and do quite well. I mean they are very good broadcasters and they do get a good share of the market.
LISTNUM 1 \l 13624 Now, I think, as Steve has said, the key to success in Peterborough is to be intensely local and to repatriate a lot of that 40 percent or ‑‑ we have heard different numbers depending on which BBM book you are looking at.
LISTNUM 1 \l 13625 But that 30‑40 percent of out‑of‑market tuning, once that is repatriated and we create an intensely local product, we will get our share of the audience and that is all you need to have. You need to have that niche audience in our format and then we can ‑‑ Scott can sell it.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13626 COMMISSIONER MENZIES: Okay, thank you. How many licences do you think this market can handle?
LISTNUM 1 \l 13627 MR. MURRAY: We think that probably ‑‑ our business plan was based on the fact that you might approve two new licences for Peterborough.
LISTNUM 1 \l 13628 COMMISSIONER MENZIES: I am not going to answer that question.
LISTNUM 1 \l 13629 MR. MURRAY: Which one? Do you have anything in mind?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13630 COMMISSIONER MENZIES: But is that what you think it can handle? I mean if you think it can handle four, tell me. If you think it can handle just one, tell me.
LISTNUM 1 \l 13631 MR. MURRAY: Right. Well, I think the difficulty with more than two is that there is really only one reliable good frequency, 96.7. As everybody has applied for and all of their engineering consultants have advised them, that is the plum frequency.
LISTNUM 1 \l 13632 Every other frequency has some adjacency problems which could get ironed out but the reality is it is going to be ‑‑ you would get those at a much lower power and much lower coverage.
LISTNUM 1 \l 13633 So a possible alternative ‑‑ it appeared from yesterday's hearing and from our analysis of our engineering information that 102.5 might be the best secondary frequency but it appears to only be applicable or acceptable off the Corus site.
LISTNUM 1 \l 13634 So I don't believe Corus has given anyone else permission to use their tower. So probably 102.5 would only work for Corus. So it might be acceptable in their flip but we think that the best use of 96.7 would be a new licence to bring some new people to ‑‑ new formats available to the public for Peterborough.
LISTNUM 1 \l 13635 COMMISSIONER MENZIES: Okay, thanks. You spoke about the commitment to diversity and reflecting the ethnic community of Peterborough, et cetera.
LISTNUM 1 \l 13636 Can you give me some idea what Peterborough looks like demographically in terms of that, its cultural makeup and its ethnic makeup, et cetera?
LISTNUM 1 \l 13637 MS SPENRATH: Yes. With that market and with all the markets that we operate in we tend to look to Stats Canada as a standard for our research.
LISTNUM 1 \l 13638 It does have a small Aboriginal and ethnic population, not as much as the major metropolitan areas like Toronto or Montreal, but there is, according to the information that we have, just under 4 percent on the ethnic, and Aboriginal is close actually to the ethnic community.
LISTNUM 1 \l 13639 COMMISSIONER MENZIES: Okay. Now, what would ‑‑ a couple of years from now if you were to launch in Peterborough and I were to walk down the street and ask people about you, how would they describe you?
LISTNUM 1 \l 13640 MS SPENRATH: I would say a big part of the fabric of the community and, you know, a welcome member.
LISTNUM 1 \l 13641 COMMISSIONER MENZIES: Okay. Anybody else?
LISTNUM 1 \l 13642 MR. JONES: Just to expand a bit on that.
LISTNUM 1 \l 13643 From a programming point of view, I would like to have people recognize us, as Glenda noted, as being very much involved in the community, intensely local, a fun and entertaining radio station that is on top of what is going on in Peterborough.
LISTNUM 1 \l 13644 And from a corporate perspective, I think we would like to be recognized as a contributing member of the corporate community and a positive influence on the business community.
LISTNUM 1 \l 13645 COMMISSIONER MENZIES: Okay, thanks.
LISTNUM 1 \l 13646 Could you just expand a little bit on your revenue sources, just give me some examples of 40 per cent of first year revenues will derived from non‑radio advertisers, including new radio advertisers and advertisers in other media?
LISTNUM 1 \l 13647 As you mentioned, I don't think the guys at Quebecor are probably that interested in giving up the revenue that they have. Can you expand a little bit on where that is going to come from and how you are going to get it and what trends there are in the market that make it possible?
LISTNUM 1 \l 13648 MR. MURRAY: Sure. I will ask Scott Broderick to expand on those percentages and give you an idea.
LISTNUM 1 \l 13649 But I will say first that, you know, through our experience and with operating in many markets of this size, like Moncton and Charlottetown and Fredericton, et cetera, we believe that our projections are quite conservative. We have exceeded those projections in most of the markets where we have started up new licences.
LISTNUM 1 \l 13650 And I will ask Scott to talk about the actual percentages and the clients, et cetera.
LISTNUM 1 \l 13651 MR. BRODERICK: Sure thing. I think, as you said, yes, I don't think Quebecor is anxious to be giving up anything. But I think there is a trend. I mean, radio revenues I think are up something like 25 per cent over the last five years, whereas newspaper revenues in terms of dailies are down something like 17 per cent. So there is a trend and that has to do with circulation numbers I think overall.
LISTNUM 1 \l 13652 There is a scene from All the President's Men, and they kept saying follow the money, follow the money. And in this case, that is what is going to happen here. I think that it is most likely going to come from newspaper. I think that the tuning that we repatriate into the marketplace is going to be very saleable to the local advertisers. So whereas before there wasn't a local radio solution available demographically, they are going to find a really palatable and very cost‑effective solution.
LISTNUM 1 \l 13653 And the other thing is, and this is kind of an answer to your other question about, like how do we know that we can compete with these giants? And it is because I think our sales approach is results‑based, it is not directly tied to ratings. It is activity and account by account management. And I think that when you look at our projections, by the end of our first quarter, we need approximately 10 clients active on the radio station on a weekly basis.
LISTNUM 1 \l 13654 By the end of our first year each of our five representatives would need eight clients, each, active on the radio station on a weekly basis. I think any sales manager, you know, here today would say that those are pretty reasonable expectations and it really comes from having a radio representative in front of a business person asking business questions and providing radio solutions. And that is just going to naturally grow the radio revenues in the marketplace, so we are very confident.
LISTNUM 1 \l 13655 COMMISSIONER MENZIES: Why does it work commercially for you and/or why is it culturally relevant, important, to repatriate listeners? I know it is the term common usage, but repatriating people from a Toronto station to Peterborough, why does that matter?
LISTNUM 1 \l 13656 MR. BRODERICK: Honestly, one of the things I often say to people is that we don't create spending in the marketplace, we move market share around. People are going to, you know, spend their money where they choose. We are able to introduce new clients, new opportunities to the listeners.
LISTNUM 1 \l 13657 And if they are not listening to Peterborough radio stations, they are not going to be introduced to Peterborough businesses. And I think repatriating those listeners on behalf of the business owners is a big part of the business plan.
LISTNUM 1 \l 13658 COMMISSIONER MENZIES: In your business plan your total revenue is 1.1 for the first year. You seem to bite off a very large chunk right off the bat and then predict, well, I wouldn't call it modest, but not excessive growth after that.
LISTNUM 1 \l 13659 MR. BRODERICK: M'hmm.
LISTNUM 1 \l 13660 COMMISSIONER MENZIES: How can you hit the market that hard and that fast and get that much revenue that quickly?
LISTNUM 1 \l 13661 MR. BRODERICK: Again, I think that is what makes us a little bit different. Because of our experience in the small and medium markets where ratings are much less part of the sales game, so we are used to selling without ratings. In fact, depending upon when the station launches, we could be without ratings for quite a while. So it is about transferring confidence and sitting down. And, frankly, a good idea will work on any radio station, so we focus on ideas with our salespeople. So that is why I think we will have more success early on.
LISTNUM 1 \l 13662 But it is about activity management and it is about getting out, getting in front of people and asking questions. So you are not going to necessarily make twice as many calls in your seventh year as in your first year. Hopefully, with good sales management, you are going to make about the same because we are just going to be out there visiting, talking to people, providing solutions and getting results. So it won't change dramatically over the term of the licence.
LISTNUM 1 \l 13663 COMMISSIONER MENZIES: I am interested in that, how you sell without ratings in terms of that. And just to confirm what you indicate, is you are basically going to get in there and get yourself entrenched early. And then most of the growth ‑‑ there is some increase in the client base, but it looks like a lot of it is a rate after that.
LISTNUM 1 \l 13664 MR. BRODERICK: Not necessarily. I think that what happens is you have some success with clients early on and those stories become ‑‑ the results that you are getting for other clients become what you are really selling. Saying, hey listen, we have had a tremendous amount of success, in particular maybe in the automotive category. So I think those success stories become very marketable.
LISTNUM 1 \l 13665 COMMISSIONER MENZIES: Okay. Yes?
LISTNUM 1 \l 13666 MR. MURRAY: Yes, if I could add just something and I will just hand it back to Scott.
LISTNUM 1 \l 13667 An example of that is that we were recently approved for an AM/FM conversion for Carbonear, Newfoundland. And this year Carbonear AM will do approximately $600,000 of revenue total for the year. And we plan to launch that new FM station in February. Last week we went into the market and pre‑sold $400,000 on Carbonear FM in three days. So it was a very systematic approach, we did our blitz of our salespeople from St. John's, which is 45 minutes away and, you know, created that through stories and, as Scott is saying, through confidence. And we have done, whatever that is, two‑thirds of last years' results already into this year with that FM.
LISTNUM 1 \l 13668 So we would do a similar thing in any new market that we started. The sales force would be hired two months prior launch and we would go with a large blitz and then we would be selling and telling our story throughout the lead‑up period and also, obviously, after we launch.
LISTNUM 1 \l 13669 COMMISSIONER MENZIES: Okay. I just have, I think, just one more question, forgive me if there is another.
LISTNUM 1 \l 13670 Can you tell me how comprehensive your research was into that market, how many people were surveyed and how many businesses?
LISTNUM 1 \l 13671 Actually, I will have one more question. Go ahead.
LISTNUM 1 \l 13672 MR. JONES: Our research was conducted by Mark Kassof & Company, who has appeared before you earlier in the hearings for Owen Sound and, I believe, for Windsor.
LISTNUM 1 \l 13673 Mark has done a great deal of research for Newcap. We take a great deal of pride in the amount of research we do, research is a compass. And if you are lost in the woods, if you don't have a compass, you know, you could end up further away from your goal with every step you take. So we try to gauge our direction first before we take any big steps.
LISTNUM 1 \l 13674 Our research in Peterborough was nine different formats and 300 individuals 18‑64. The margin of error in that research would be, on the ratings projections, 3.4 per cent plus or minus.
LISTNUM 1 \l 13675 COMMISSIONER MENZIES: Within the structure in terms of that?
LISTNUM 1 \l 13676 MR. JONES: I am sorry?
LISTNUM 1 \l 13677 COMMISSIONER MENZIES: The margin of error is 3.4 per cent within the ratings structure?
LISTNUM 1 \l 13678 MR. JONES: Yes, within the final ratings projections.
LISTNUM 1 \l 13679 COMMISSIONER MENZIES: Okay, thanks. Have you surveyed the potential advertisers in terms of that and had any sense of any interest or otherwise from them in the marketplace or is that premature?
LISTNUM 1 \l 13680 MR. MURRAY: Yes, we had not done that.
LISTNUM 1 \l 13681 COMMISSIONER MENZIES: Okay. That is it for me, thank you.
LISTNUM 1 \l 13682 THE CHAIRPERSON: Thank you, Commissioner Menzies. The more of these you will do, the quicker you will learn you never say I have one final question.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13683 THE CHAIRPERSON: I just have a couple of follow‑up questions and one has to deal with growth. I, obviously, just heard your conversation with Commissioner Menzies. But one area in which you don't project growth is in your audience share. It is steady at 13 per cent for year one through to year seven. What is your rationale for not including any growth in share of tuning?
LISTNUM 1 \l 13684 MR. JONES: We believe that there is a hunger for this format in Peterborough and that hunger isn't necessarily going to take a long time to wrap up or grow exponentially once it is on the air. We have seen, in the case of the recent CKPT flip, where the station immediately gained a 20 share plus in the first book.
LISTNUM 1 \l 13685 So when there is a hunger for a new format there generally isn't a long ramp‑up of escalating ratings. Things can happen, quite often, fairly quickly and we believe we can sustain that over the course of the licence.
LISTNUM 1 \l 13686 MR. MURRAY: And I would add that it is not like instant 13 and then 13 forever. It is, you know, our average ratings for year one will be 13, our average ratings for year two will be 13, et cetera, because that is what we believe ‑‑ that is what our research told us that we would enjoy. Obviously, there is going to be fluctuations and you are going to have great book ‑‑ BBM is not particularly reliable in all situations.
LISTNUM 1 \l 13687 And as Scott said, you know, we really don't depend on ratings, we depend on providing results for clients and our community involvement and our local local ‑‑ and ratings are nice but, you know, they are not critical.
LISTNUM 1 \l 13688 THE CHAIRPERSON: Okay, thank you. And in terms of format, I did have up here your amended sample playlist. In light of the format change in the market, in particular CKPT, what are the differences between that format and what I see here in your amended playlist? Because a lot of these artists and a lot of these songs could fit into the Hot AC format, could it not?
LISTNUM 1 \l 13689 MR. JONES: Yes and no. We did look at CKPT's current playlist and did an analysis of what we would project the overlap would be. And it would be about 10 percent or less and it would primarily be in certain artists that are Canadian for the most part. There is not a lot of crossover.
LISTNUM 1 \l 13690 For example, CKPT's current playlist includes 60 percent from 2006 and 2007 so only 40 percent of their current spins are derived from previous to 2005. On our approach only 10 percent of our entire spins would be from 2000 to today.
LISTNUM 1 \l 13691 So we are really looking at two stations that although on the surface may have some artist overlap, the actual overlap is quite small.
LISTNUM 1 \l 13692 THE CHAIRPERSON: Okay, thank you for that.
LISTNUM 1 \l 13693 In terms of your news and spoken word in your oral presentation you said:
"The station's news director will supervise a team of two news journalists/announcers in Peterborough." (As read)
LISTNUM 1 \l 13694 THE CHAIRPERSON: You have among all the applicants ‑‑ wrong stickie. Excuse me for just a second.
LISTNUM 1 \l 13695 Yes, amongst all the applicants you have the highest level of programming expenditures, not that that's a bad thing. But just for comparison purposes what do you include in your programming line? Is that just news staff or is it also the rest of your programming staff, like I say for comparison purposes because yours is the highest?
LISTNUM 1 \l 13696 MR. MURRAY: Sure. We do that in detail and Glenda can.
LISTNUM 1 \l 13697 THE CHAIRPERSON: Okay, terrific.
LISTNUM 1 \l 13698 MS SPENRATH: Yes, that would include the entire programming costs, including of course the biggest is our payroll staff complement. But it would also include our broadcast news, the cost of any news vehicles; any other supplies or costs are included in running the news and programming departments.
LISTNUM 1 \l 13699 THE CHAIRPERSON: So how many staff members does that line item include?
LISTNUM 1 \l 13700 MS SPENRATH: That includes the equivalent of five programming and part time and three fulltime news, and a part time as well news person.
LISTNUM 1 \l 13701 THE CHAIRPERSON: Okay, thank you.
LISTNUM 1 \l 13702 So it's not like you just pay the greatest salaries?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13703 MS SPENRATH: We think so.
LISTNUM 1 \l 13704 THE CHAIRPERSON: To attract the best people.
LISTNUM 1 \l 13705 Again, in your oral presentation you said:
"The station will benefit from Newcap's existing news resources in Ontario and across Canada." (As read)
LISTNUM 1 \l 13706 THE CHAIRPERSON: And I am wondering if you could elaborate a bit for us on that in that is it ‑‑ are we talking about synergies with resources or news stories? How is the station going to benefit?
LISTNUM 1 \l 13707 MR. JONES: Well, as I mentioned to Commissioner Menzies earlier, the synergies are minimal but they are there. And the benefit would primarily be in content that is locally relevant to all those radio stations.
LISTNUM 1 \l 13708 The example earlier was the snowstorm on the east coast where the content that happened in Charlottetown was really very relevant to our audience in Halifax or St. John's, Newfoundland because those communities are so interconnected in terms of travel and family members.
LISTNUM 1 \l 13709 So when news breaks in Ottawa where we have two radio stations there may be an opportunity. If the news that breaks in Ottawa is relevant to Peterborough, we can share those resources with our station in Peterborough.
LISTNUM 1 \l 13710 THE CHAIRPERSON: So it's not that Newcap has or is planning on having a centralized newsgathering?
LISTNUM 1 \l 13711 MR. JONES: Right. At this point we don't have that and don't have plans to do that, although I will elaborate slightly on one point in terms of the east coast.
LISTNUM 1 \l 13712 We have radio stations in all of the Atlantic capital cities and created a report we call "The Capital Report" that airs in each market each day that details the lead stories affecting each capital city across Atlantic Canada.
LISTNUM 1 \l 13713 So as our company expands, you know, that may be something we look at, but at this point we don't have any kind of central news service.
LISTNUM 1 \l 13714 THE CHAIRPERSON: And would you consider that ‑‑ the example you just gave about Atlantic Canada, would you consider that network programming?
LISTNUM 1 \l 13715 MR. JONES: Not so much network programming as simply sharing the synergies that exist between the stations because each radio station in that group contributes to it. It's not something that's, you know, beamed down centrally. It's a group effort.
LISTNUM 1 \l 13716 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 13717 MR. MURRAY: Just to expand a little bit on that, all of our stations use broadcast news. We also use a product called KLZ which is a computerized network news system and it allows us to post news stories on a website and any of our stations can access that and draw those stories down.
LISTNUM 1 \l 13718 As an example, our VOCM full service news talk station in Newfoundland provides a large number of stories to BN and we get a huge credit for that. So those stories are also available to our other stations directly from VOCM.
LISTNUM 1 \l 13719 THE CHAIRPERSON: Okay. Thank you very much.
LISTNUM 1 \l 13720 Legal counsel.
LISTNUM 1 \l 13721 MS SMITH: I have just a few questions for you.
LISTNUM 1 \l 13722 We note your comment from your letter of September 27, 2007, page three, where you state that:
"The use of 100.5 would generate 10 to 15 percent fewer sales and would cause you not to reach a breakeven PBIT until year seven." (As read)
LISTNUM 1 \l 13723 MS SMITH: Would you accept licensing on this alternative frequency?
LISTNUM 1 \l 13724 MR. MURRAY: Since that letter and since coming to the hearing we have received more information from our engineering experts. And 100.5 has additional problems that we weren't aware of then. So it's difficult to know what the impact would be.
LISTNUM 1 \l 13725 I think ‑‑ apparently there is interference, potential interference with a Bellville station. So basically what they said, you would need Bellville's permission to use 100.5 at a certain power level and they would have to agree to not increase their power in the future. So it's not likely that they are going to do that. They now have permission to operate at a higher parameter.
LISTNUM 1 \l 13726 So I think 100.5 is a core alternative in Peterborough and I think what ‑‑ so the answer is "no".
LISTNUM 1 \l 13727 MS SMITH: Thank you.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13728 MS SMITH: I just have two CCD questions for you.
LISTNUM 1 \l 13729 Could you confirm your understanding that if licensed your station would have to contribute a basic annual CCD contribution imposed by COL 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, Public Notice CRTC 2006‑158?
LISTNUM 1 \l 13730 MS SPENRATH: Yes, that is my understanding. And we will be making basic CCD contributions in addition to the contributions that we have made in this application.
LISTNUM 1 \l 13731 MS SMITH: Thank you, just one additional question.
LISTNUM 1 \l 13732 Could you confirm your understanding as well that of this basic annual amount no less than 60 percent of the station's basic annual CCD contribution must be allocated to either FACTOR or MusicAction and that the remaining amount, if any, may be directed to any eligible CCD initiative at your discretion?
LISTNUM 1 \l 13733 MS SPENRATH: Yes, I understand that 60 percent must ‑‑ at least must go to FACTOR or MusicAction.
LISTNUM 1 \l 13734 MS SMITH: Thank you very much.
LISTNUM 1 \l 13735 THE CHAIRPERSON: Mr. Murray or Mr. Steele ‑‑ I'm not sure who it is ‑‑ but you have your final two minutes to give us your best pitch.
LISTNUM 1 \l 13736 Mr. Steele.
LISTNUM 1 \l 13737 MR. STEELE: And thank you, I appreciate that. I will be very brief and I will just cover some of the salient points.
LISTNUM 1 \l 13738 Well, thank you, Madam Chair.
LISTNUM 1 \l 13739 We believe that our application for 96.7 The River provides the best possible use of 96.7.
LISTNUM 1 \l 13740 96.7 is the only available frequency that can provide reliable coverage of Peterborough and the Kawarthas. Our application would maximize the public benefit from use of this scarce spectrum in four significant respects.
LISTNUM 1 \l 13741 First, we would be a new entrant and a strong new editorial voice in the market with a broad appeal format designed to add the greatest diversity.
LISTNUM 1 \l 13742 And secondly, we are an experienced midsize radio operator with the resources, the expertise necessary to compete successfully against the large experienced broadcasters who dominate the Peterborough radio landscape.
LISTNUM 1 \l 13743 And third, our contribution to the development of Canadian content of over one million is by the far highest before you and includes significant support for Peterborough's Trent University.
LISTNUM 1 \l 13744 And finally, our commitment to 17 hours of local spoken word, including over six hours of local news focusing on local and regional content is both one of the highest and will specifically appeal to residents of Peterborough and the broader region.
LISTNUM 1 \l 13745 We appreciate your consideration of our application and we look forward to subsequent phases of this proceeding.
LISTNUM 1 \l 13746 THE CHAIRPERSON: Thank you very much, and thank you to your colleagues.
LISTNUM 1 \l 13747 We will take a very short five‑minute break to allow for the change in panels.
‑‑‑ Upon recessing at 1000 / Suspension à 1000
‑‑‑ Upon resuming at 1005 / Reprise à 1005
LISTNUM 1 \l 13748 THE CHAIRPERSON: Madam Secretary.
LISTNUM 1 \l 13749 THE SECRETARY: Thank you, Madam Chair.
LISTNUM 1 \l 13750 We will proceed with item 9, which is an application by Larche Communications Inc. for a licence to operate an English‑language FM commercial radio programming undertaking in Peterborough.
LISTNUM 1 \l 13751 The new station would operate on frequency 96.7 MHz (channel 244B) with an average effective radiated power of 17,000 watts (maximum effective radiated power of 50,000 watts/antenna height of 96.8).
LISTNUM 1 \l 13752 Appearing for the applicant is Mr. Paul Larche.
LISTNUM 1 \l 13753 Please introduce your colleagues and you will then have 20 minutes to make your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 13754 MR. LARCHE: Thank you and good morning, Commissioners. Good morning, Chair, good morning CRTC staff.
LISTNUM 1 \l 13755 My name Paul Larche. I am President of Larche Communication.
LISTNUM 1 \l 13756 Again, it's very much always a privilege to present before you and we are doing that today for a new FM undertaking in Peterborough.
LISTNUM 1 \l 13757 Joining me is Mora Austin, Vice‑President of our company. Next to Mora is our company's Music and Program Director, Ted Roop, and next to Ted is our Marketing Director from CITZ FM Kitchener, Beth Warren.
LISTNUM 1 \l 13758 Now, since we just presented to you the other day and this is pretty much the same panel, for the sake of saving everyone some time we are going to skip some of the background on our company and our people and our vision and accomplishments as they are already on the public record and get right to the meat of the application.
LISTNUM 1 \l 13759 So Madam Chair and Commissioners, we are thrilled again to be here. Much like Owen Sound which we talked about the other day, the Kawarthas Region is like home to us because it so closely mirrors Simcoe County where our Midland operation resides.
LISTNUM 1 \l 13760 Both are considered cottage country to much of Southern Ontario. Their populations swell in the summer. They both rely heavily on tourism with a multitude of recreational opportunities. They are not only connected by the Trent‑Severn Waterway but by vibrant dynamic communities that share much of the same culture, values and challenges. Their economies are also alike and intertwined. That's why this application along with our application for Owen Sound, which is also part of cottage country, makes so much strategic sense for us.
LISTNUM 1 \l 13761 So let's get right into the business plan.
LISTNUM 1 \l 13762 Mora.
LISTNUM 1 \l 13763 MS AUSTIN: Thanks, Paul.
LISTNUM 1 \l 13764 Good morning, Commissioners.
LISTNUM 1 \l 13765 The Classic Hits format is the clear choice for Peterborough. LCI commissioned Radio Index Inc. to conduct a comprehensive market analysis to determine an underserved format opportunity for a new station and its impact on existing stations.
LISTNUM 1 \l 13766 The purpose of the study was to research the market viability of the top three FM radio formats currently not available on the FM dial in Peterborough at the time of the research; Top 40, CHR, Classic Hits and Adult Contemporary.
LISTNUM 1 \l 13767 Although all three formats showed a clear demand, Classic Hits showed the highest interest particularly with listeners 25 to 54. Over 43 percent of listeners in that demographic rated a high likeliness of listening to a Classic Hits station compared to 35 percent for CHR and 32 percent for Adult Contemporary.
LISTNUM 1 \l 13768 Furthermore, the radio index study concluded that 72 percent of listeners could not identify a local station that features Classic Hits music. It is the clear format void.
LISTNUM 1 \l 13769 Offering a local Classic Hits station will also bring listeners back to Peterborough. Many local listeners have left local radio and found Classic Hits on CKLY FM in Lindsay and CHUC FM in Cobourg or found other alternatives to get their Classic Hits music such as iPods, the internet and satellite radio. Currently, CKLY FM and CHUC FM garner a 4.3 share of hours tuned in Peterborough.
LISTNUM 1 \l 13770 To tell you more about our proposed Classic Hits format I will pass it to Ted.
LISTNUM 1 \l 13771 MR. ROOP: Thank you very much, Mora.
LISTNUM 1 \l 13772 Our new station is going to be called Classic Hits 96 and will feature a broad‑based music format that will air the biggest hits from the sixties to today with the primary focus on the eighties and nineties.
LISTNUM 1 \l 13773 The Classic Hits format derives much of its popularity from a very wide and diverse playlist covering many popular genres. Core artists would include Bryan Adams, Fleetwood Mac, Madonna, John Mellancamp, Corey Hart, Blondie, Tom Cochrane, Bonnie Tyler, B‑52s, The Police, Glass Tiger, Men Without Hats and Hootie and the Blowfish.
LISTNUM 1 \l 13774 Classic Hits 96's programming will be 100 percent locally produced and originating. We believe the only way to truly reflect the community you serve is to ensure all programming originates from the station.
LISTNUM 1 \l 13775 As mentioned in our Owen Sound application, our non‑music programming in a nutshell will be local, local and more local.
LISTNUM 1 \l 13776 Classic Hits 96 will offer Peterborough listeners over 12‑and‑a‑half hours weekly in comprehensive and local talk reflecting the community. This represents 10 percent of our total weekly programming and will include news, sports, weather, traffic reports, business reports and more.
LISTNUM 1 \l 13777 Our newsroom will broadcast every half hour in the mornings and again during selected hours during the day and weekend and we will provide close to four hours of news per week. The addition of this distinct news voice in Peterborough will increase diversity and add an alternatives news perspective to the market.
LISTNUM 1 \l 13778 Classic Hits 96 will also provide daily recreation reports from our station boat or station snowmobile on activities in the area. We will also provide daily relevant spoken word features such as community clips and the Peterborough Sounding Board on issues revolving around their lifestyle and local activities, and events that reflect the fabric and cultural makeup of Peterborough.
LISTNUM 1 \l 13779 We anticipate the impact on local stations will be minimal considering the current incumbent stations' formats and market growth. We will be repatriating out of market listeners and bringing back radio dollars that have left the market.
LISTNUM 1 \l 13780 Now, to talk about some of our exciting CCD initiatives here is Beth.
LISTNUM 1 \l 13781 MS WARREN: Thanks, Ted.
LISTNUM 1 \l 13782 Although we are applying for a Classic Hits format, LCI is dedicated to assisting and developing emerging Canadian talent. After all, today's current artists will become tomorrow's classics. That's just part of the reason why LCI is committing a total of $350,000 over the first licence term.
LISTNUM 1 \l 13783 Fostering emerging talent is not only an investment in radio but also in the artists, the music industry and in Canadian culture and heritage. Without the foundation to assist Canadian talent on record, most Canadian artists would never be able to afford to record. $20,000 per year will go to FACTOR in order to contribute to the growth and development of the Canadian recording industry.
LISTNUM 1 \l 13784 To help nurture the love of music in our young people another $10,000 per year will go towards the purchase of new musical instruments and equipment for Peterborough elementary and secondary schools.
LISTNUM 1 \l 13785 We have also committed $10,000 per year towards the Peterborough Kiwanis Festival of Music. These music festivals have been instrumental in developing the careers of some of Canada's biggest stars.
LISTNUM 1 \l 13786 Classic Hits 96 will also host the Star Quest Talent Search at a cost of $10,000 per year. This will be modeled on the successful Star Quest we conduct in Midland and Kitchener. The winner will receive studio time, reproduction and of course airtime on our station.
LISTNUM 1 \l 13787 Our application also outlines a commitment of $50,000 per year in airtime and features devoted to promotion of music‑related activities in Peterborough and area as it relates to emerging artists. This would include the promotion of concerts and performances by local artists, artistic and musical programs in the community and release of CDs by local artists.
LISTNUM 1 \l 13788 We are also planning a weekly one‑hour show called "Future Classics" featuring new Canadian music that fits the overall feel of the format.
LISTNUM 1 \l 13789 These are truly superior CCD initiatives that we believe exceed and surpass the Commission's CCD plan as outlined in the most recent radio review.
LISTNUM 1 \l 13790 Again, as mentioned in our Owen Sound application, LCI is committed to Canadian music. It's our lifeline and we realize we need a steady supply of high quality talent for our listeners. We always strive to introduce Canadian and emerging artists any time we are able to, often opening for a popular headliner so that there is a built‑in audience.
LISTNUM 1 \l 13791 LCI has presented many Country music concerts in both central Ontario and Kitchener‑Waterloo at our own expense and our own risk. As well, we often present concerts at no cost to the audience, creating a memorable experience for both the artist and our listeners.
LISTNUM 1 \l 13792 We hope to have the chance to do this in Peterborough.
LISTNUM 1 \l 13793 Paul.
LISTNUM 1 \l 13794 MR. LARCHE: Thank you, Beth.
LISTNUM 1 \l 13795 Again, sorry for the fact that we are repeating ourselves a bit, but we all do consider this a privilege.
LISTNUM 1 \l 13796 We understand and appreciate our mandate to the Broadcast Act, to give back, to bring value to our communities, to reflect like a mirror who we are as Canadians.
LISTNUM 1 \l 13797 Profits are not our main motivator. Sure, we need to stay economically sound, but an analysis of our returns over the past several years will show we invest our profits right back into our product.
LISTNUM 1 \l 13798 Too many in our industry are driven primarily by margin targets and shareholder expectations and others will run their operations on a shoestring, often because they can. Our motivator is to create great radio. We have a deep burning passion for this fantastic medium. To continue doing great radio we need some economies of scale to become more efficient, to weather the ups and downs of our business.
LISTNUM 1 \l 13799 Again, you have several great applications in front of you today by some really good broadcasters but we think ours holds up. To sum up, approval of this application will fill the largest underserved format in the market. Independent research clearly demonstrates the significant void Classic Hits will fill. This format will also repatriate some out‑of‑market tuning.
LISTNUM 1 \l 13800 We will provide a new distinct news voice. This application will result in over 12‑and‑a‑half hours of distinct and local news and spoken word programming in Peterborough.
LISTNUM 1 \l 13801 We will add an alternative news perspective to the market.
LISTNUM 1 \l 13802 We will invest considerably in Canadian talent development with $350,000 of expenditure over seven years.
LISTNUM 1 \l 13803 And also, approval of this application will benefit the Canadian broadcast system. As I mentioned in my introduction, Peterborough and the Kawarthas is part of cottage country and we know how to do great radio in cottage country. We have done it successfully for 10 years. Imagine the cross‑promotional opportunities and synergies that we could bring between our stations in Midland, soon to be Orillia, Peterborough and maybe even Owen Sound. They would not only be connected by water but by a group of radio stations that would reflect events throughout the region. Boating, fishing, snowmobiling, camping, cottaging, skiing, hiking, golfing; the list goes on.
LISTNUM 1 \l 13804 LCI could be the common bond and glue that pulls these communities together for the betterment of all. And isn't that what the Broadcasting Act is all about?
LISTNUM 1 \l 13805 Thank you.
LISTNUM 1 \l 13806 THE CHAIRPERSON: Thank you, Mr. Larche, and your colleagues. Welcome back.
LISTNUM 1 \l 13807 MR. LARCHE: You are welcome.
LISTNUM 1 \l 13808 THE CHAIRPERSON: And just so we are not accused of being repetitive I am going to ask you the CCD questions right off the top.
LISTNUM 1 \l 13809 So please confirm your understanding that if licensed your station will have to contribute a basic annual CCD contribution imposed by 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 the new radio policy, Public Notice CRTC 2006‑158.
LISTNUM 1 \l 13810 MR. LARCHE: Confirmed.
LISTNUM 1 \l 13811 THE CHAIRPERSON: Please confirm your understanding that of this base annual amount no less than 60 percent of the station's basic annual CCD contribution must be allocated to either FACTOR or MusicAction and the remaining amount, if any, may be directed to any eligible CCD initiatives at your discretion?
LISTNUM 1 \l 13812 MR. LARCHE: Confirmed.
LISTNUM 1 \l 13813 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 13814 And now we will move on to the specifics of your application. And as you know ‑‑ I will be repetitive here because I do like to start with format.
LISTNUM 1 \l 13815 MR. LARCHE: M'hm.
LISTNUM 1 \l 13816 THE CHAIRPERSON: And would I characterize your proposed format as the softer side of Classic Hits? Is that a fair characterization of what you are proposing?
LISTNUM 1 \l 13817 MR. LARCHE: I think the best characterization, and I'm sure Ted could talk more about this, we probably ‑‑ what we are proposing is as mainstream a Classic Hits format as you can without having launched it yet.
LISTNUM 1 \l 13818 Anytime you are going to launch a radio station you find the hole. But before we would launch we are also big believers in doing additional research, fine tuning, doing auditory and music testing to make sure that the music that we are going to play is exactly what the listener wants.
LISTNUM 1 \l 13819 So in a general sense I wouldn't want to say we are on the softer side of what a Classic Hits format would be because we would be Classic Hits and we would fine tune it to what the market wants, you know, if we have the good fortune to be approved for this.
LISTNUM 1 \l 13820 Ted, do you have anything to add to that?
LISTNUM 1 \l 13821 MR. ROOP: I would just ‑‑ as far as eras go with the music that we would be playing or playlists that we would probably be playing, about 20 percent from the sixties, 40 percent from the seventies, 20 percent from the eighties, 15 percent from the nineties and 5 percent current music.
LISTNUM 1 \l 13822 THE CHAIRPERSON: And just so I can increase my knowledge base what is auditory music testing? Is that ‑‑ do you bring in a focus group and play them a sample of what you will be playing on the station?
LISTNUM 1 \l 13823 MR. LARCHE: That is precisely what it is and the technology today allows an independent research company to bring in ‑‑ usually we do it with 75 to 100 people that fit the demographic we are going after. We will have them listen to basically hooks of upwards of 200, 300, 400, 500 songs and they have a little dial and they can punch in what they think of it. And we get data from that that allows us to tell us which songs they would prefer, which songs they feel they have heard too much and are burnt in the market. Again, it makes it very, very tuned to those listeners in Peterborough.
LISTNUM 1 \l 13824 THE CHAIRPERSON: And is this something you would typically do only once you are granted the licence as opposed to part of your application research?
LISTNUM 1 \l 13825 MR. LARCHE: Actually, many stations do it once a year. And online research as well ‑‑ you know, with our Country stations, Country is very much a current format versus a Gold Based format. So it's very important to find out things like you know, are people liking the music. And even more important is when are they getting tired of it because you can burn a song.
LISTNUM 1 \l 13826 And we do a lot of online research with a company called "Rate the Music" where we have literally hundreds and hundreds of listeners each week that will go through little clips of current songs. We get data back to tell us, okay, this song is getting a little tired, this one they really, really like.
LISTNUM 1 \l 13827 And what has been really great about that, you know from our perspective, is we found that a lot of Canadian music, and I'm talking Country, really fares very well. You know we don't have to pigeonhole what we are doing with music in terms of is it Canadian or not. We just want to play the music that people want and they are liking the most.
LISTNUM 1 \l 13828 But to answer your question, auditorium testing is often done on an annual basis or every second or every two years, especially on a Gold Based format like we are talking about.
LISTNUM 1 \l 13829 THE CHAIRPERSON: Okay. Well, thank you for that.
LISTNUM 1 \l 13830 Have you done a comparison of your proposed format with what is currently being offered in the market in terms ‑‑ to determine how much if any overlap there would be in terms of spins? We know that there might be in terms of artists but in terms of individual spins have you done that comparison?
LISTNUM 1 \l 13831 MR. LARCHE: The one that we would probably have the most spins with ‑‑ and again, Ted could talk more to this ‑‑ would probably be the Corus station, The Wolf.
LISTNUM 1 \l 13832 But our research shows that 72 percent of the listeners in Peterborough could not identify a station that would be considered Classic Hits in the definition that we gave them for Classic Hits. That station would probably have the most duplication but that's a rock station. They obviously would be, you know, considerably harder. They would also be playing some current rock. So we would have much of a different sound.
LISTNUM 1 \l 13833 In terms of AC, sure there would ‑‑ you know some artists in the seventies and eighties, the softer Elton Johns and so on and so forth, there would be some duplication there. But our sound would be very unique in the sense that we are very much an era‑based format. We are more of a Gold Based, a little more up tempo and not as soft as an AC station and that would really separate us from the pack there.
LISTNUM 1 \l 13834 Ted, anything to add to that?
LISTNUM 1 \l 13835 MR. ROOP: Yes, as far as duplication goes I think it would be probably about 50 percent between the current rock station Corus owns in Peterborough right now. It would be 50 percent, yes.
LISTNUM 1 \l 13836 THE CHAIRPERSON: 50 or 15?
LISTNUM 1 \l 13837 MR. ROOP: 50.
LISTNUM 1 \l 13838 THE CHAIRPERSON: 50.
LISTNUM 1 \l 13839 MR. ROOP: I mean they would be a lot harder than we would be, and then as far as the Hot AC station goes we would be a little hotter than they would be, a little edgier than they would be.
LISTNUM 1 \l 13840 THE CHAIRPERSON: And your target demo is 25 to 54 with a focus on 35 to 49?
LISTNUM 1 \l 13841 THE ROOP: And the median age probably would be ‑‑ well, it would be a 42 year old adult.
LISTNUM 1 \l 13842 THE CHAIRPERSON: You are a quick study, thank you.
LISTNUM 1 \l 13843 MR. ROOP: A man or a woman, sorry.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13844 THE CHAIRPERSON: We heard the previous applicant characterize Peterborough as "the land of giants" in that you would be competing with the two Corus and the two CTVglobemedia combo. As well, though, you will be competing with the out‑of‑market tuning to Kawartha Lakes, to Cobourg, to Toronto. I think the out‑of‑market tuning is as high as 43 percent in this market.
LISTNUM 1 \l 13845 What is going to allow Larche Communications to compete in this land of giants as it has been characterized?
LISTNUM 1 \l 13846 MR. LARCHE: That's a great term. It just came up this morning.
LISTNUM 1 \l 13847 Obviously, we wouldn't have applied if we didn't think we could compete.
LISTNUM 1 \l 13848 I think there are a few things we can bring to the table. Obviously, our experience. We compete in other markets, in Kitchener and in central Ontario, in Midland, Orillia and Barrie, with Corus and with Rogers and with CTV in these markets, and we hold our own. We run successful businesses.
LISTNUM 1 \l 13849 Also, one of the things I try to get across with our business plan ‑‑ and I say it time and time again ‑‑ is that we try to make it realistic, in the sense that we are not here with the highest cost for programming and for marketing and promotions.
LISTNUM 1 \l 13850 We are also not here with the highest revenue projections. We try to be conservative, because we know, as a small operator, that we have to live to the mandate of providing what we say we are going to provide in our applications, and give to the community, but we want to make sure that we are doing it not in a position where, financially, we could really get ourselves into some trouble.
LISTNUM 1 \l 13851 I think, if you were to look at our expenses, programming and otherwise, you would find that they are probably in the middle of the pack, but they are very realistic.
LISTNUM 1 \l 13852 I think that our revenue projections are also a little lower.
LISTNUM 1 \l 13853 We know that these are conservative numbers, and if that's the way it goes, then we can still weather it.
LISTNUM 1 \l 13854 I think there are a couple of other things, too. We will have some synergies throughout that region ‑‑ throughout central Ontario.
LISTNUM 1 \l 13855 Again, one of the things that excited me so much about the fact that there was a call for Owen Sound and Peterborough is that they are nice bookends for the part of the province that we live in and that we want to call home.
LISTNUM 1 \l 13856 There is no doubt that there are all kinds of great synergies that would abound, particularly when it comes to a lot of the culture in the area. We talk a lot about snowmobiling and skiing and golfing and boating. We all do a lot of it, because that is what people do in our area.
LISTNUM 1 \l 13857 We imagine having a marine team ‑‑ we do have one in Georgian Bay, but we imagine having another one in Peterborough, and possibly Owen Sound. On weekends they could be saying: If you are taking your boat through the Trent‑Severn system, let's see what the conditions are like on Lake Simcoe. Let's go to our sister station.
LISTNUM 1 \l 13858 That would be something that we could offer that wouldn't cost us any additional money, but would allow us to have a unique selling proposition, for lack of a better term, and keep our costs down.
LISTNUM 1 \l 13859 Then, of course, we would have the synergy of an engineer. We could have one engineer look after all of these radio properties, because they would be within an hour or an hour and a half's drive from where we are based. And accounting, and so on and so forth.
LISTNUM 1 \l 13860 To answer your question, because it is a good question and I was thoroughly expecting it: We could compete with no problem, if we were given the opportunity.
LISTNUM 1 \l 13861 I know you will probably ask about the frequency issue, so ‑‑
LISTNUM 1 \l 13862 THE CHAIRPERSON: Sure, jump ahead. Go for it.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13863 MR. LARCHE: When I say all of this, I want to preface it by saying that we would only be able to do this, we feel, if we received the frequency we applied for.
LISTNUM 1 \l 13864 We know that this is a competitive hearing. We know that there are a couple of other frequencies that are possibilities.
LISTNUM 1 \l 13865 Our alternate frequency is the same alternate frequency that Mr. Murray talked about this morning. Just a week ago we found out through Industry Canada that there could be issues with that frequency that could greatly diminish the coverage that that frequency would give us.
LISTNUM 1 \l 13866 THE CHAIRPERSON: So, as a result ‑‑ I believe it was in response to questions of clarification ‑‑ you said that it would have minimal impact on your business plan.
LISTNUM 1 \l 13867 MR. LARCHE: We say that it would have minimal impact on our deficiencies.
LISTNUM 1 \l 13868 THE CHAIRPERSON: Right.
LISTNUM 1 \l 13869 MR. LARCHE: But, again, since that time, Industry Canada ‑‑ and I think you will hear this, probably, from other applicants, as well, today. Many of us have applied for the same main frequency and alternate frequency, and there is an issue now with that alternate frequency.
LISTNUM 1 \l 13870 THE CHAIRPERSON: So is 96.7 the only viable frequency available in the market?
LISTNUM 1 \l 13871 MR. LARCHE: We believe it would be the only viable frequency available to us to be able to survive in that market, in the land of giants.
LISTNUM 1 \l 13872 THE CHAIRPERSON: If we were to grant you ‑‑ just to be absolutely sure, if we were to grant you a licence that was an approval, in part, which said, "Great idea. Yes, we approve your application, but go out and find another frequency," you would not accept that licence?
LISTNUM 1 \l 13873 MR. LARCHE: No, I wouldn't.
LISTNUM 1 \l 13874 THE CHAIRPERSON: Okay. Thank you. Best to be sure.
LISTNUM 1 \l 13875 In terms of the other characterization of the market, which is that of cottage country ‑‑ and we know that means that the population can swell on weekends, and in the summer in particular. How do you adjust in terms of audience share, and therefore advertisers, when you are in a market such as this, where the population does swell at different times of the year and throughout the week?
LISTNUM 1 \l 13876 MR. LARCHE: Again, we have been doing this for 10 years now. I think I mentioned the other day that, although we don't have an opportunity to translate a lot of the cottagers and people that come up during the summer into ratings, because, unfortunately, they are not rated, we do have a great opportunity to monetize them, in the sense that the local retail community knows that those people are going to be spending money in that area.
LISTNUM 1 \l 13877 It could be a box store, it could be a boutique, it could be groceries, it could be anything and everything in between.
LISTNUM 1 \l 13878 Obviously, when we are laying out our sales plan for the year, we know that. We build that into our cycle and we make sure that we are approaching clients at the right time to take advantage of that.
LISTNUM 1 \l 13879 But the population up there, again ‑‑ you know, you are looking across that region at a population base of probably close to 500,000 people, if you were to include the whole population base. Obviously, the people who live there buy their cars there and do most of their retail there, and those people we look after all year long.
LISTNUM 1 \l 13880 Mora, do you have anything to add to that?
LISTNUM 1 \l 13881 MS AUSTIN: As far as some of the things that we might do differently, if I understand your question correctly, about our on‑air product during the summertime?
LISTNUM 1 \l 13882 THE CHAIRPERSON: Yes.
LISTNUM 1 \l 13883 MS AUSTIN: We do some specialty programming at that time of year, such as "Cottage Country Traffic", for example. We probably triple our traffic reports on Friday evening and Sunday afternoon and Sunday evening, because there are so many people coming up from Toronto.
LISTNUM 1 \l 13884 As well, on Friday nights we do a drive‑through request show. We go to different ‑‑ we are out of Midland, but we certainly service a lot of other communities around there.
LISTNUM 1 \l 13885 So we would go there, and we would ask people to stop by and actually drive through and make a request. We are finding that we have the local people that come through, but, as well, we have some of the cottagers coming through, getting geared up for the weekend. They want to hear their favourite song.
LISTNUM 1 \l 13886 That kind of thing is where we would kind of tweak our programming.
LISTNUM 1 \l 13887 THE CHAIRPERSON: So, as it is commonly referred to, the DJ banter and the spoken word programming are then customized ‑‑
LISTNUM 1 \l 13888 MS AUSTIN: Yes.
LISTNUM 1 \l 13889 THE CHAIRPERSON: ‑‑ for those population swells at different times of the year.
LISTNUM 1 \l 13890 MS AUSTIN: Exactly, realizing that our main focus is our local residents.
LISTNUM 1 \l 13891 THE CHAIRPERSON: In speaking of spoken word, just to confirm, your application is proposing 12 hours and 38 minutes in total of spoken word programming?
LISTNUM 1 \l 13892 MR. LARCHE: That's correct.
LISTNUM 1 \l 13893 THE CHAIRPERSON: Seven hours of information programming, of which four hours would be news.
LISTNUM 1 \l 13894 MR. LARCHE: That's correct.
LISTNUM 1 \l 13895 THE CHAIRPERSON: The difference between the seven and the four, is that surveillance material for the most part?
LISTNUM 1 \l 13896 You say seven hours of information programming, and four would be news.
LISTNUM 1 \l 13897 MR. LARCHE: Yes. Four would be strictly news ‑‑ three hours and 58 minutes ‑‑ and then other surveillance material would make up a lot of the rest of it: traffic reports, obviously, being a big one; weather; sports ‑‑ Peterborough Petes coverage.
LISTNUM 1 \l 13898 We also are proposing community clips, which would be daily vignettes that reflect issues that are going on in the community.
LISTNUM 1 \l 13899 These are things that we currently do.
LISTNUM 1 \l 13900 Also, there will be features like the "Peterborough Sounding Board", where we allow people from Peterborough to give us their feedback on an issue of the day.
LISTNUM 1 \l 13901 Each day we talk about a local issue that is relevant, and usually we try to do it on something that is quite perishable. It is an issue that came up at council last night, or something to that effect. We would ask a question ‑‑ "Call on this line and leave your feedback", and the next day we would provide little snippets of people's comments in the area as it relates to that subject.
LISTNUM 1 \l 13902 We also do commentaries. One of our news directors, Brian Wicks ‑‑ we call it "Words of Wicksdom", where he will give 90 seconds of, basically, his opinion, or interpretation, of an issue, and we always solicit feedback on it.
LISTNUM 1 \l 13903 It is to give, again, an alternate perspective to what the mainstream might be doing.
LISTNUM 1 \l 13904 We also have in there entertainment reports and morning show interviews, and so on.
LISTNUM 1 \l 13905 THE CHAIRPERSON: As far as the news is concerned, the breakdown between local and national, regional, international?
LISTNUM 1 \l 13906 MR. LARCHE: We put 60 percent local, 20 percent regional, and 20 percent national/international.
LISTNUM 1 \l 13907 Again, those are guidelines, depending on what is going on.
LISTNUM 1 \l 13908 THE CHAIRPERSON: And for the regional news, there might be some synergies there with your Midland and Kitchener stations?
LISTNUM 1 \l 13909 MR. LARCHE: Yes, there would be.
LISTNUM 1 \l 13910 THE CHAIRPERSON: I believe your application calls for the hiring of two full‑time newspeople to produce this level of news.
LISTNUM 1 \l 13911 MR. LARCHE: That is correct.
LISTNUM 1 \l 13912 THE CHAIRPERSON: You heard my conversation with the previous applicant, in terms of programming expenses, and I believe yours are on the low side, when we compare those expenditures with the other applicants in this proceeding.
LISTNUM 1 \l 13913 Could you tell us what it is that you include in that expense line, just so we can compare that with what everybody else is doing?
LISTNUM 1 \l 13914 MR. LARCHE: We would include all of our on‑air staff, including news.
LISTNUM 1 \l 13915 THE CHAIRPERSON: What would that total? What would the staff complement be?
LISTNUM 1 \l 13916 MR. LARCHE: We have a total staff complement of 13 now. we have four on‑air, two news, and then there would be two part‑time news and two part‑time on‑air.
LISTNUM 1 \l 13917 So there would be six, and four part‑time.
LISTNUM 1 \l 13918 THE CHAIRPERSON: Which would translate into two full‑time, I guess; right?
LISTNUM 1 \l 13919 MR. LARCHE: Yes.
LISTNUM 1 \l 13920 THE CHAIRPERSON: Your expenditure line includes eight full‑time ‑‑
LISTNUM 1 \l 13921 MR. LARCHE: That's correct.
LISTNUM 1 \l 13922 THE CHAIRPERSON: ‑‑ equivalent full‑time people.
LISTNUM 1 \l 13923 MR. LARCHE: Yes.
LISTNUM 1 \l 13924 THE CHAIRPERSON: And their primary function is programming, whether it's news or ‑‑
LISTNUM 1 \l 13925 MR. LARCHE: It's programming produced on‑air, correct.
LISTNUM 1 \l 13926 THE CHAIRPERSON: Thank you for that.
LISTNUM 1 \l 13927 The capacity of the market to absorb new commercial radio stations.
LISTNUM 1 \l 13928 What do you believe the market can sustain?
LISTNUM 1 \l 13929 MR. LARCHE: The market can certainly sustain one. It possibly could sustain two.
LISTNUM 1 \l 13930 There are unique issues with this market: the application by Corus to flip their AM to FM, and the fact that there is only one, right now, really good frequency that is in the market.
LISTNUM 1 \l 13931 It goes back to what I said earlier. I think the market could possibly sustain two, but I wouldn't be the one that would want the frequency that may have an issue with it.
LISTNUM 1 \l 13932 I would need to have some very clear indication that there would be no issue that just popped up last week with an alternate frequency.
LISTNUM 1 \l 13933 To answer your question, I think the market could probably, for sure, absorb one, possibly two.
LISTNUM 1 \l 13934 It would depend on which two, as well; how the formats duplicate each other.
LISTNUM 1 \l 13935 If you were to license one that was going for a much younger demographic, and another station that was skewing older, then the impact wouldn't be as big.
LISTNUM 1 \l 13936 But it is a very healthy, vibrant market, there is no doubt about it.
LISTNUM 1 \l 13937 THE CHAIRPERSON: When you say that it could sustain two, does that include the Corus flip plus one, or is it the Corus flip plus two?
LISTNUM 1 \l 13938 MR. LARCHE: No, the Corus flip plus one.
LISTNUM 1 \l 13939 But if the Corus flip gave them 96.7 ‑‑
LISTNUM 1 \l 13940 THE CHAIRPERSON: Right, the frequency issue.
LISTNUM 1 \l 13941 MR. LARCHE: ‑‑ then it would be very tough for the plus one.
LISTNUM 1 \l 13942 I am speaking for myself. I certainly don't want to speak for ‑‑
LISTNUM 1 \l 13943 THE CHAIRPERSON: You are the only one you can speak for.
LISTNUM 1 \l 13944 MR. LARCHE: That's right.
LISTNUM 1 \l 13945 They might gladly jump on whatever frequency is there.
LISTNUM 1 \l 13946 THE CHAIRPERSON: Okay. Thank you very much.
LISTNUM 1 \l 13947 Colleagues?
LISTNUM 1 \l 13948 Legal counsel?
LISTNUM 1 \l 13949 MS SMITH: I have no questions. Thank you.
LISTNUM 1 \l 13950 THE CHAIRPERSON: Mr. Larche, you have your final two minutes.
LISTNUM 1 \l 13951 MR. LARCHE: Thank you very much. I will try to take half of that.
LISTNUM 1 \l 13952 Again, it is always a privilege and an honour to be in front of you. We are a young group of broadcasters ‑‑ well, I'm not that young, but most of the people who work with me are relatively young ‑‑ who, again, have a real passion for this business. Maybe the reason my costs aren't as high is because I bring in a lot of new people who are starting out in the business.
LISTNUM 1 \l 13953 Frankly, that is all I can afford, but I do look for ‑‑ we call them PLUs, people like us, who have that same passion for this industry and do what we do well. That is why I am really blessed with the fact that I have had employees who have been with me since Day 1, who are still here.
LISTNUM 1 \l 13954 We want an opportunity, again, to do that in Peterborough, but in a bigger sense ‑‑ and talking about Peterborough specifically ‑‑ I think our format choice is bang on. I think we are offering a format that will bring diversity to that market, because it is not there.
LISTNUM 1 \l 13955 Our research shows that 72 percent of the people couldn't identify a format like that.
LISTNUM 1 \l 13956 Obviously, we are going to bring in a new news voice.
LISTNUM 1 \l 13957 We are going to have minimal impact on the incumbents.
LISTNUM 1 \l 13958 We think we are bringing a pretty healthy CCD contribution for a company our size.
LISTNUM 1 \l 13959 Again, and finally, the bigger premise of this for us, from a strategic point of view, is that it would really allow us to solidify our company in cottage country, in that part of Ontario where we live and where we have decided we want to stay and contribute to the communities we serve, grow with them, and do good radio.
LISTNUM 1 \l 13960 That's it.
LISTNUM 1 \l 13961 THE CHAIRPERSON: Thank you very much, you and your colleagues.
LISTNUM 1 \l 13962 MR. LARCHE: Thank you.
LISTNUM 1 \l 13963 THE CHAIRPERSON: We will now take a 15‑minute break. Thank you.
‑‑‑ Upon recessing at 1045 / Suspension à 1045
‑‑‑ Upon resuming at 1100 / Reprise à 1100
LISTNUM 1 \l 13964 THE SECRETARY: We will now proceed with Item 10, which is an application by Pineridge Broadcasting Inc. for a licence to operate an English‑language FM Commercial Radio Programming Undertaking in Peterborough, Ontario.
LISTNUM 1 \l 13965 The new station would operate on Frequency 96.7, Channel 244B, with an average effective radiated power of 13,000 watts, maximum effective radiated power of 50,000 watts, antenna height of 150 metres.
LISTNUM 1 \l 13966 Appearing for the Applicant is Mr. Don Conway.
LISTNUM 1 \l 13967 Please introduce your colleagues. You will have 20 minutes to make your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 13968 MR. CONWAY: Thank you.
LISTNUM 1 \l 13969 Good morning, Madam Chair, Members of the Commission, and Commission Staff.
LISTNUM 1 \l 13970 Before we begin our presentation for a new FM licence to serve Peterborough, which we are calling Home 96.7, I would like to introduce our team.
LISTNUM 1 \l 13971 This is only our second oral presentation to the CRTC in our long history of providing quality radio service in the small market of Northumberland County. The first was in 1983, when we purchased CHUC‑AM out of bankruptcy.
LISTNUM 1 \l 13972 We have submitted a number of applications, so you are very familiar with us through the written and non‑appearing process. We know that you will appreciate that writing is not quite the same as appearing before you, so please excuse any nervousness, although we have been assured that you will not bite.
LISTNUM 1 \l 13973 THE CHAIRPERSON: We haven't so far.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13974 MR. CONWAY: Thanks. That's really encouraging.
LISTNUM 1 \l 13975 I am Don Conway, President and controlling shareholder of Pineridge Broadcasting. I have almost 35 years of experience in small market radio, in both Brockville and Northumberland County.
LISTNUM 1 \l 13976 Sitting at my immediate left is Dave Hughes, my business partner and General Sales Manager of our two Northumberland County radio stations, CHUC‑FM, known as 107.9 The Breeze, and CKSG‑FM, known as Star 93.3.
LISTNUM 1 \l 13977 Dave has more than 30 years of management and on‑air experience in the radio business.
LISTNUM 1 \l 13978 Next to Dave is Jennifer Thomson, our Retail Sales Manager. Jennifer has been with us for six years. She has a background in the financial industry, as well as in radio sales.
LISTNUM 1 \l 13979 To my immediate right is the newest member of our team, Jen Hudson. Jen is our recently appointed News Director. She has a great background in radio news. Most recently, she spent several years in Moncton, New Brunswick, and has also worked for Blackburn Radio in Chatham, and CJOJ and CJBQ in Belleville.
LISTNUM 1 \l 13980 Rounding out our team, on my far right is Joel Scott, our Program Director. Joel has been with us since 2002. He previously worked for the CHUM radio stations in Ottawa, Kingston and Brockville.
LISTNUM 1 \l 13981 Just before starting, I would draw your attention to the tabs in the folders that I presented to you. We will be referring to them during the presentation.
LISTNUM 1 \l 13982 Today we would like to describe to you the exciting new radio station that we propose to bring to the people of Peterborough, Home 96.7.
LISTNUM 1 \l 13983 We also want to tell you a bit about our company, and outline what led us to apply for a Peterborough radio licence.
LISTNUM 1 \l 13984 Almost all of the research conducted for this hearing came to a similar conclusion: What is missing in Peterborough is an adult contemporary radio station.
LISTNUM 1 \l 13985 AC is the most popular format in North America. In Canada, for example, Statistics Canada data for 2006 confirms that AC received the largest share of tuning of all radio formats, with more than one‑fifth of all hours tuned.
LISTNUM 1 \l 13986 Of particular note for Peterborough is the strong interest in this format by those over 35 years of age, and by women. Yet the FM dial in the market only has rock, country, and now a younger targeted hot AC/CHR.
LISTNUM 1 \l 13987 If you approve the Corus application, it will add an FM station focused on oldies or classic hits.
LISTNUM 1 \l 13988 Those who want the best pop and softer rock music available are not currently served by stations in the Peterborough market. In fact, they cannot even listen well to AC stations from Toronto because of the topography of the area.
LISTNUM 1 \l 13989 This is one of the reasons that Pineridge AC stations have drawn some listenership.
LISTNUM 1 \l 13990 We have included two maps under Tab 1 to demonstrate this.
LISTNUM 1 \l 13991 The spreadsheet and charts provided at Tab 2 of your binder are based on the fall 2007 BBM results, released just last week. It shows that people from a number of demographics listen to Peterborough stations.
LISTNUM 1 \l 13992 For example, teens listen predominantly to two stations, CKPT and CKWF.
LISTNUM 1 \l 13993 Women aged 18 to 34 listen mostly to CKPT, with some tuning to other stations, including out‑of‑market stations.
LISTNUM 1 \l 13994 Men 18 to 34 listen predominantly to the local rock station, CKWF, while older men listen to that station and to CKPT.
LISTNUM 1 \l 13995 But women 35 to 54 spread their listening across three stations, with a fair amount of listening to the market's only AM station.
LISTNUM 1 \l 13996 They may listen to out‑of‑market stations if they can receive them.
LISTNUM 1 \l 13997 To us, this means that there is no one station in Peterborough that is directed primarily to them. They settle for a rock station if they don't like country, or for a country station if they don't like rock or younger pop.
LISTNUM 1 \l 13998 In our view, what is clearly missing is a station that serves women from 35 to 54. This group makes up approximately 20,000 people in Peterborough.
LISTNUM 1 \l 13999 Five of the seven Peterborough applicants are proposing some variant of AC, whether soft pop and rock, or gold‑based AC, or mainstream AC. The exact mix of music they offer varies because no one really knew what the market would sound like. Researchers draw conclusions based on what respondents tell them is going on in a particular market. And there was a big change in the market just prior to the close of this call, unfortunately after the research was completed.
LISTNUM 1 \l 14000 CHUM had proposed a seamless transition for CKPT from AM to the FM band. This didn't come to pass. The station re‑launched as a hot AC/CHR hybrid, with a different sound and different audience appeal than their promised adult standards.
LISTNUM 1 \l 14001 We had foreseen that change, and therefore looked to other formats.
LISTNUM 1 \l 14002 Here to describe to you how our proposed station, Home 96.7 FM, will provide the format that will serve the largest unserved group is Joel Scott.
LISTNUM 1 \l 14003 MR. SCOTT: Thanks, Don.
LISTNUM 1 \l 14004 Good morning, Madam Chair and Commissioners.
LISTNUM 1 \l 14005 Home 96.7 will provide a music mix that is present in markets across Canada, but not in Peterborough. Home 96.7 will program a fairly broad range of mainstream pop and softer rock that will appeal to the whole of the under‑served group that Don mentioned.
LISTNUM 1 \l 14006 We will draw music from the sixties right through to the present, with about half of our music being relatively current from softer rock and pop artists like Celine Dion, Jan Arden, the new Anne Murray duets album, Michael Buble and Matt Dusk, as well as foreign artists like Phil Collins, Rod Stewart and Cheryl Crow.
LISTNUM 1 \l 14007 While the music will be on the softer side, it will not be the new easy‑listening. Rather, the music will be bright ‑‑ an at‑work and at‑home radio station aimed at adults 25 to 54, with a strong focus on women 35 to 54.
LISTNUM 1 \l 14008 If you want to think of a similar station, think of CHFI‑FM in Toronto, Majic 100 in Ottawa, CHQM‑FM in Vancouver, or perhaps Light 96 in Calgary.
LISTNUM 1 \l 14009 We recently conducted a comparison of one week of CHFI‑FM's playlist to the three Peterborough FMs using Mediabase, and we have included a summary at Tab 3 of your folder.
LISTNUM 1 \l 14010 Here is what we found.
LISTNUM 1 \l 14011 Eighty‑seven percent of all of the AC music broadcast on CHFI was not aired in the Peterborough market on FMs.
LISTNUM 1 \l 14012 Some 45 mainstream AC Canadian artists were not heard on Peterborough FMs that week. These included such stars as Celine Dion, Anne Murray, Diana Krall, Gordon Lightfoot, Burton Cummings, Jim Cuddy, David Foster, Corey Hart, Chantal Kreviazuk, Andy Kim and Jim Brickman.
LISTNUM 1 \l 14013 There are also a number of AC artists who are rising stars that are not heard on Peterborough radio. They include Ryan Malcolm, Amanda Stott and Shawn Desman.
LISTNUM 1 \l 14014 We have called our proposed station Home 96.7 for a number of reasons. Home 96.7 will be built on a strong foundation of familiar music and artists. Turning it on will be like coming home.
LISTNUM 1 \l 14015 We want Home 96.7 to be a station where listeners feel welcome, come to sit down, get comfortable and stay. In other words, long hours tuned.
LISTNUM 1 \l 14016 Home 96.7 will provide a wide range of features aimed at the heart and soul of most homes, the working and stay‑at‑home moms. In most homes the kitchen and family room are the heart of activity.
LISTNUM 1 \l 14017 For us, the morning and afternoon drive will be a beehive activity, with news features, and the best music available.
LISTNUM 1 \l 14018 Homes also have entertainment rooms. They have music rooms, and many have recreation rooms. Our equivalence will be the specialty programs.
LISTNUM 1 \l 14019 At noon every weekday we move into the dining room with our "All‑request Bistro", providing an opportunity for our listeners to program the radio station.
LISTNUM 1 \l 14020 Each weeknight we will move into the bedroom with Peterborough's "Pillow Talk" from seven to midnight. The emphasis will be on relaxing and romantic music.
LISTNUM 1 \l 14021 Saturday nights we move into the recreation and party room with "Party at Home". Here the music will be more uptempo and conducive to a party atmosphere.
LISTNUM 1 \l 14022 Sunday mornings we will put a hint of nostalgia in our morning brunch on the patio with "At Home with the Oldies".
LISTNUM 1 \l 14023 And Sunday evening we will venture out into the backyard to "Catch a Rising Star".
LISTNUM 1 \l 14024 But, of course, a radio station is much more than just the music, and to talk a bit about our news and community involvement, here is Jen Hudson.
LISTNUM 1 \l 14025 MS HUDSON: Thanks, Joel.
LISTNUM 1 \l 14026 Good morning, Commissioners.
LISTNUM 1 \l 14027 I just arrived at Pineridge from Moncton, but I do know that Pineridge puts a tremendous emphasis on news and other community involvement.
LISTNUM 1 \l 14028 For example, Don is the past president of the Northumberland Hospital Foundation and the Northumberland United Way.
LISTNUM 1 \l 14029 Dave is the current president of the Northumberland Central Chamber of Commerce.
LISTNUM 1 \l 14030 Jennifer is past president of the Northumberland Sunrise Rotary Club.
LISTNUM 1 \l 14031 Joel is very active in children's sports and the YMCA.
LISTNUM 1 \l 14032 In fact, every employee of Pineridge is involved in community volunteer activities.
LISTNUM 1 \l 14033 My new bosses have already asked me to join one of the many service organizations, and, in fact, I am about to join Hospice Northumberland.
LISTNUM 1 \l 14034 Our approach to serving Peterborough will have the same dedication to local coverage as the two Northumberland stations have today. We will hire two full‑time and two part‑time news staff to cover the market and to be our on‑air voices.
LISTNUM 1 \l 14035 Their work will also be supported by three regional stringers.
LISTNUM 1 \l 14036 During the summer months their work will be supplemented by the interns that we intend to hire.
LISTNUM 1 \l 14037 As well, our Peterborough news team will be supported by news stories developed in our Northumberland newsroom.
LISTNUM 1 \l 14038 The Peterborough news operation will be run separately, but where there are stories of common interest, we will benefit from the coverage initiated in Northumberland.
LISTNUM 1 \l 14039 Home 96.7 FM will broadcast six hours and 10 minutes per week of news, with over half of that devoted to coverage of Peterborough.
LISTNUM 1 \l 14040 But the news will only be the start of our reflection of the city. In our application we outlined the various scripted spoken‑word features that we will broadcast, news and features totalling 18 hours per week. Now, you will notice in your folders it says 12 ‑‑ 12 plus 6, apparently, equal 12 when we were typing.
LISTNUM 1 \l 14041 The real core of what we will do will be the unscripted, the improvised and the unexpected.
LISTNUM 1 \l 14042 In Northumberland our stations are deeply involved in the communities we serve. Here are just a few examples.
LISTNUM 1 \l 14043 Our morning shows have regular visits from those active in the community: social, charitable and political events. These include the mayors of the two major centres we serve, Cobourg and Port Hope, United Way organizers and local entertainers.
LISTNUM 1 \l 14044 We are very involved in the United Way of Northumberland, with on‑air promotions, interviews and even contests. Last year United Way recognized us for our contributions to setting a new fundraising record.
LISTNUM 1 \l 14045 When the Humane Society was in danger of closing we approached them to see how we could help. We were able to help raise enough money to get them back on their feet.
LISTNUM 1 \l 14046 We spearheaded a campaign to save the historic Capital Theatre in Port Hope. That campaign raised a million dollars.
LISTNUM 1 \l 14047 We are particularly proud of the initiative we took to get local residents to line the bridges over the 401 to show support when the bodies of slain Canadian soldiers from Afghanistan are brought from CFB Trenton to Toronto. That portion of the 401 is now known as the Highway of Heroes.
LISTNUM 1 \l 14048 We intend to follow these examples in Peterborough with regular morning show interviews and guest appearances by Peterborough Mayor Paul Ayotte; Len Lifchus, Executive Director of the United Way of Peterborough; Stu Harrison, General Manager of Peterborough and District Chamber of Commerce; just to name a few.
LISTNUM 1 \l 14049 These activities are above and beyond our hours of spoken word.
LISTNUM 1 \l 14050 Now, to detail our proposed contributions to Canadian content development, I would like to again call upon Joel Scott.
LISTNUM 1 \l 14051 MR. SCOTT: The format we are proposing is not one that generally breaks new artists, it is based upon familiarity, but we will introduce our listeners to new AC Canadian artists through a number of initiatives.
LISTNUM 1 \l 14052 While our proposed format does not lend itself to an elevated degree of Canadian content, our record at Pineridge speaks for itself. We always exceed the required 35 percent Canadian content level and Peterborough will be no different.
LISTNUM 1 \l 14053 Over and above our basic CCD commitment, we will contribute $25,000 annually to the development of Canadian content.
LISTNUM 1 \l 14054 In addition to our contribution to FACTOR, we will make annual contributions to developing new journalistic talent through scholarships and bursaries at our local school boards; support young emerging talent through a contribution to the Peterborough Kiwanis Music Festival; bring Canadian talent to summer concert stages through our contribution to Peterborough's Summer Festival of Lights; and bring emerging Canadian artists to the Showplace Performance Centre.
LISTNUM 1 \l 14055 While mainstream AC stations don't usually break new artists we believe that we have found an innovative way to feature new artists. Our program "The Rising Star of the Month" will provide exposure and experience to emerging Canadian artists.
LISTNUM 1 \l 14056 Each month we will feature an emerging Canadian artist whose music is compatible with our format. We will feature selections from their recordings, interview them on the air and link our website to theirs to help ensure that Peterborough residents know all about them.
LISTNUM 1 \l 14057 In addition to their exposure in the drive periods, our Sunday evening program will provide a longer look at them and we will try to tee this up with artists' touring schedules so as to create a buzz before they reach Peterborough.
LISTNUM 1 \l 14058 This initiative builds upon our commitment in Northumberland County to local artists. When we can we try to marry local community charitable and other activities with local artists and we will bring this approach to Peterborough as well.
LISTNUM 1 \l 14059 Don Conway now would like to tell you a little bit more about our company.
LISTNUM 1 \l 14060 MR. CONWAY: Pineridge began in 1957 as a standalone AM station, CHUC‑AM in Cobourg, the largest commercial centre in Northumberland County.
LISTNUM 1 \l 14061 We purchased the company out of bankruptcy in 1983. With a poor signal and competition flooding into our market from Peterborough and Toronto, we knew we had a long uphill fight to make the operation viable.
LISTNUM 1 \l 14062 In those early days, CHUC's signal and programming were so poor they were known locally as Upchuck Radio. Money was scarce and we had to learn to be very efficient and effective.
LISTNUM 1 \l 14063 In 1996 Dave Hughes joined Pineridge as a shareholder and General Sales Manager. Dave and I are the shareholders who run the station day to day.
LISTNUM 1 \l 14064 Over the years, through hard work, dedication to local and community service and thanks to the Commission's licensing process, we were able to put an FM station on air and convert our AM station to the FM band, giving us a more competitive playing field in our home market located just 20 kilometres south of Peterborough.
LISTNUM 1 \l 14065 The principal towns in our home market of Northumberland County are Port Hope and Cobourg, with a population of 18,000. Many of our residents commute north to Peterborough each day to work, to shop, study and be entertained.
LISTNUM 1 \l 14066 We have a relationship with many Peterborough merchants who wish to attract our Northumberland audience to their retail outlets and we have come to know Peterborough well.
LISTNUM 1 \l 14067 To tell you a bit more about the Peterborough market here is Jennifer Thomson.
LISTNUM 1 \l 14068 MS THOMSON: Thank you, Don.
LISTNUM 1 \l 14069 Good morning, Madam Chair and commissioners.
LISTNUM 1 \l 14070 When the Commission issued the call for applications in Peterborough we saw a great opportunity to develop a strong business plan to build upon our strengths and knowledge of the marketplace, and most importantly, to give our small independent company a new business opportunity.
LISTNUM 1 \l 14071 Our optimism is based on a number of factors:
‑ the relatively few radio stations now in Peterborough compared to other cities of its size;
‑ a growing population with the CMA expected to grow to 135,000 by our first year of operations, 2009, and this population is bolstered every summer by over 30,000 cottagers and tourists;
‑ a diversified economy with strengths in regional health and other services catering to a much larger market of 350,000 people;
‑ a strong private sector with employers such as Quaker Oats, General Electric, Siemens, Minute Maid and SGS Lakefield Research, to mention just a few.
LISTNUM 1 \l 14072 Peterborough acts as a regional retail centre attracting shoppers from Northumberland County to the south, from the new city of Kawartha Lakes to the west, and from Hastings County in the east.
LISTNUM 1 \l 14073 This results in a strong retail sales market that FP Markets indicates are 9 percent higher than the national average and these sales are expected to grow by another 8 percent by 2009.
LISTNUM 1 \l 14074 All of these indicators make us extremely optimistic about the capacity of the market to support a new radio station.
LISTNUM 1 \l 14075 You will see in Tab 4 that the topography makes a huge difference in the competitiveness of the radio listening market. While Pineridge competes in Northumberland with almost 100 stations, the Peterborough stations compete with only 20.
LISTNUM 1 \l 14076 At the same time we believe that a new station entering the market will not have it easy. Peterborough already has four commercial stations currently serving the city, operated by two of Canada's largest broadcasters, CTV and Corus.
LISTNUM 1 \l 14077 In addition to its two Peterborough FM stations, CTV also has an FM station in nearby Lindsay, now part of the city of Kawartha Lakes, which has a presence on the streets of Peterborough.
LISTNUM 1 \l 14078 At the same time Corus not only has its AM/FM combination, and they are here at this hearing to seek to make it two FMs, but it also has a Peterborough television station with a rebroadcaster serving neighbouring Oshawa‑Durham, with a sales presence throughout the larger Peterborough, Northumberland and Durham regions.
LISTNUM 1 \l 14079 Here is Dave Hughes with some further information.
LISTNUM 1 \l 14080 MR. HUGHES: Thank you, Jennifer.
LISTNUM 1 \l 14081 In order to be successful in Peterborough, a new station will have to pick the right format and have the market knowledge to take on these two existing giants, and it would help to be able to put the station on air with a minimal back office expense.
LISTNUM 1 \l 14082 We have that knowledge and we have those synergies. Here are a number of comparisons drawn from the competing applications that demonstrate this.
LISTNUM 1 \l 14083 The revenues.
LISTNUM 1 \l 14084 Our projected seven‑year revenues will all but match those of Corus at $6.6 million versus their $6.3 million. All other Peterborough commercial applicants are considerably higher, from a half‑million higher in the case of Evanov to about $3.5 million over seven years in the case of Newcap and K‑Rock.
LISTNUM 1 \l 14085 Advertising rates.
LISTNUM 1 \l 14086 We project an average first year of operation 30‑second unit rate of $15.00. The other applicants who have provided rates are projecting rates that in our experience are significantly above the current market rate.
LISTNUM 1 \l 14087 Expenses.
LISTNUM 1 \l 14088 We project to spend about the same as Corus, $5.6 million over seven years to their $5.8 million. All the other commercial applicants are much higher, ranging from $1 million to an astounding $3.5 million higher, and they are higher in the backroom costs as well for tech sales, promotion and administration.
LISTNUM 1 \l 14089 But at the same time our experience in efficient operations will ensure that we will provide as good or better a service as any of the applicants and I believe that Joel and Jen have made that adequately described in how they can do this.
LISTNUM 1 \l 14090 Don.
LISTNUM 1 \l 14091 MR. CONWAY: Thanks, Dave.
LISTNUM 1 \l 14092 Madam Chair, members of the Commission and Commission staff, we believe our application addresses all of the evaluation criteria.
LISTNUM 1 \l 14093 The Peterborough market can more than adequately absorb a new commercial FM station even with the conversion of Corus AM station.
LISTNUM 1 \l 14094 We have demonstrated that we can compete with Corus and CHUM, now CTV, two well‑entrenched broadcasting giants.
LISTNUM 1 \l 14095 We will provide a new editorial voice to Peterborough, one that is adequately resourced and has demonstrated its ability to serve local markets even in the most competitive of circumstances.
LISTNUM 1 \l 14096 We have proposed a high‑quality application, a robust and realistic business plan based upon the largest unserved format void in the market, a strong plan for local reflection, a record of exceeding our Canadian content requirements and strong locally focused Canadian content development proposals and an innovative on‑air support program for new Canadian softer pop and rock artists.
LISTNUM 1 \l 14097 Pineridge is a small independent company with two stations in a small market inundated with almost 100 signals from surrounding markets, including Toronto, Belleville, Oshawa, Peterborough, as well as many U.S. signals.
LISTNUM 1 \l 14098 We have competed with CHUM and Corus for years. Their signals penetrate our market and their sales and promotion people are active in Northumberland County.
LISTNUM 1 \l 14099 Despite these challenges, we have maintained profitability through hard work and strong community involvement.
LISTNUM 1 \l 14100 We ask that you permit us to bring the same attention to community to the Peterborough market.
LISTNUM 1 \l 14101 In our application we noted that we have two corporate reasons to apply for Peterborough. An additional source of revenues will help maintain our company on its solid footing.
LISTNUM 1 \l 14102 The recent fall 2007 BBM showed again that Peterborough stations draw more tuning in our market than do our two stations. The Peterborough stations put a good signal into Northumberland County.
LISTNUM 1 \l 14103 With the recent conversion of the CTV station to the FM band and the likely conversion of the Corus AM station we expect them to be even more competitive for audience in our market.
LISTNUM 1 \l 14104 In fact, for the first time Corus paid a premium to BBM for this fall to be included as the Northumberland market radio station. The only reason can be to draw off revenue from Pineridge stations.
LISTNUM 1 \l 14105 And even further, Corus, unlike any other applicant here, put less signal over the Peterborough market in order to push their 3‑millivolt contour over most of Northumberland County.
LISTNUM 1 \l 14106 Add to those conditions the addition of yet another new Peterborough FM station with a 3‑millivolt signal in parts of our market and a listenable signal throughout the whole market and we will lose further listening. This would raise serious issues for us as to our ongoing financial integrity.
LISTNUM 1 \l 14107 Thank you for your time and attention and we are more than prepared to answer any questions.
LISTNUM 1 \l 14108 THE CHAIRPERSON: Thank you, Mr. Conway and to your colleagues. Good morning.
LISTNUM 1 \l 14109 I see that you have done your research and you have figured out the cities in which all of us live when you cite examples of radio stations that are similar to your format.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14110 THE CHAIRPERSON: I will ask Commissioner del Val to lead the questioning. Thank you.
LISTNUM 1 \l 14111 COMMISSIONER DEL VAL: Thank you, Mr. Conway and your panel.
LISTNUM 1 \l 14112 Your application provides a lot of detail and your presentation this morning also covers quite a few of the areas that I had wanted to question you on, which is very good. So let's start with your success story in Northumberland County.
LISTNUM 1 \l 14113 When I was looking at page 9 of your supplementary brief, and you looked at the chart that you showed on the tuning for 12+ and what you have gained and how you have beaten up the giants, I don't want you to give away your trade secrets, and you touched on this, but what is setting you apart, do you think, in your market?
LISTNUM 1 \l 14114 MR. CONWAY: First, Madam Commissioner, page 9, I have the various formats, so I just want to make sure I am on the same ‑‑
LISTNUM 1 \l 14115 COMMISSIONER DEL VAL: Oh! 11, I am sorry.
LISTNUM 1 \l 14116 MR. CONWAY: Page 11, okay.
LISTNUM 1 \l 14117 COMMISSIONER DEL VAL: I should learn to count.
LISTNUM 1 \l 14118 MR. CONWAY: Now this is showing 2006 ‑‑
LISTNUM 1 \l 14119 COMMISSIONER DEL VAL: Yes.
LISTNUM 1 \l 14120 MR. CONWAY: ‑‑ and what I included in the tab ‑‑ and I can't recall which tab it is, I think it is 4 ‑‑ shows the share of tuning based on the most recent numbers of fall 2007. It is right after Tab 4.
LISTNUM 1 \l 14121 COMMISSIONER DEL VAL: Yes.
LISTNUM 1 \l 14122 MR. CONWAY: So presently we have 15 percent ‑‑
LISTNUM 1 \l 14123 COMMISSIONER DEL VAL: Yes.
LISTNUM 1 \l 14124 MR. CONWAY: ‑‑ and in the page you are referring to it was 17 percent, so somewhat similar.
LISTNUM 1 \l 14125 COMMISSIONER DEL VAL: A little bit but I see the CHUM CHQM has come up.
LISTNUM 1 \l 14126 But you are obviously competing very effectively in that market, which is the point you make, that you are up to the fight in this market.
LISTNUM 1 \l 14127 Now, what is it do you think that CHUM is doing to have given them a lead now in that market or what do you think you have been doing that has made it slip?
LISTNUM 1 \l 14128 MR. CONWAY: Well, Madam Commissioner, let me go back to the beginning.
LISTNUM 1 \l 14129 COMMISSIONER DEL VAL: Yes.
LISTNUM 1 \l 14130 MR. CONWAY: Let me go back to 1983 because that is pretty well base, when you buy a station out of bankruptcy and it is called Upchuck Radio.
LISTNUM 1 \l 14131 It took us quite a long time to turn that station around as an AM station in a small market. In fact, in our presentation, our supplementary, we said 55 stations competing in the market and that was, I think, unsuppressed that we had purchased three‑four years previously, and we said, okay, well let's see what it is now, a couple of weeks ago, and it is now ‑‑ 93, in fact, is what the new ones are.
LISTNUM 1 \l 14132 So the only way you can compete when you sleep beside the lion is to be very locally involved and that is how we have competed. Local news, we are out reporting on everything that goes on in the market.
LISTNUM 1 \l 14133 As you heard here, our people are all involved in various community organizations. We are very, very strong community people and that is something we intend, obviously, to bring to the Peterborough market.
LISTNUM 1 \l 14134 This year ‑‑ well, it goes up and down but the Peterborough stations put a very strong signal into our market ‑‑ very strong. So we have had to compete with them, you know ‑‑ even in 1983, CKQM, the country station, was there. It was the number one station in the market. And there were Toronto stations that were ‑‑ I mean we have brought them up since then.
LISTNUM 1 \l 14135 Maybe Joel would like to talk just about some of the community involvement that we have.
LISTNUM 1 \l 14136 MR. SCOTT: Commissioners, our community involvement with all of our staff, we encourage them to be involved in the community on any level they can. For those of us that are married a lot of us sit on our school councils and help out in the school areas. A lot of us have had involvement with United Way organizations.
LISTNUM 1 \l 14137 It really boils down to being involved any way you can because our source of survival is reflecting that back on the air. The more that our staff are in the community, the more that our staff are talking about people in the community and referencing people in the community or talking to people in the community, be it on the air, it really is what separates us from the giants.
LISTNUM 1 \l 14138 When your morning show is up against "Roger, Rick & Marilyn" and Erin Davis in the morning and these established talents, you have to do something to provide local and we have done the best we can to try and create partnerships in the community with a number of different organizations, a number of special events in the community.
LISTNUM 1 \l 14139 What we have seen through those partnerships ‑‑ for example, with the Town of Cobourg Events Department we have been involved with their Cobourg Sandcastle Festival, which has become one of the marquee tourism events in the region.
LISTNUM 1 \l 14140 Christmas Magic, which was an endeavour that was started by CHUC 10 years ago, where we put $150,000 Christmas lights in the downtown as a tourism venture, they get bus tours through.
LISTNUM 1 \l 14141 Those types of partnerships are what separate us from the other guys and that separate us from the Toronto and the American signals and it has been one of our sources of survival.
LISTNUM 1 \l 14142 COMMISSIONER DEL VAL: Thank you. I just want to go back to the signals from Peterborough and that leads to the question that has been quite obvious in this hearing, the frequencies.
LISTNUM 1 \l 14143 Now, as you know, you are asking for the best frequency for which everyone else is asking. So the bottom line is: If you were not granted that frequency, would you take the licence?
LISTNUM 1 \l 14144 MR. CONWAY: There are two frequencies.
LISTNUM 1 \l 14145 COMMISSIONER DEL VAL: Okay.
LISTNUM 1 \l 14146 MR. CONWAY: What CHUM has ‑‑ or Corus has proposed is 96.7 with an orientation north‑south. It drives their 3‑millivolt contour. They have shifted, as you can see, from all the other applicants. They have shifted it to the south in order to be able to put a stronger signal into Northumberland County.
LISTNUM 1 \l 14147 We had first looked at ‑‑ when we heard about the hearing we had looked at 96.7. Our engineers had come back actually with an east‑west orientation, which would have put the 3‑millivolt above Rice Lake. I don't know if you are familiar with where the lake is, between Peterborough and Cobourg.
LISTNUM 1 \l 14148 It would have not been in Northumberland County. We felt that was going to be what most people would look at because it was a good signal over Peterborough.
LISTNUM 1 \l 14149 COMMISSIONER DEL VAL: I am sorry, so that would be the same frequency but with a different orientation?
LISTNUM 1 \l 14150 MR. CONWAY: That is correct, it is an east‑west. They chose, however, to go north‑south and deep into Northumberland County. So they obviously had intentions of getting listenership in Northumberland County.
LISTNUM 1 \l 14151 So then when we found out that we could not go on the Corus tower ‑‑ we thought we could. We were given first indications that we could and then corporately they said no, we couldn't.
LISTNUM 1 \l 14152 So we looked at, first of all, other towers that we could use 96.7 on and we ended up with the CTV tower, which is off of Pigeon Lake.
LISTNUM 1 \l 14153 We also said, okay, are there other frequencies? We asked our engineer to look at other frequencies and he described 102.5 as another frequency probably better suited to Corus.
LISTNUM 1 \l 14154 In fact, he wondered why Corus wasn't taking that because the pop counts for 102.5 are exactly the same as 980 KRUZ. You asked the question yesterday and we already knew that. So it was surprising that 96.7 is what they ended up choosing but the pop counts are exactly the same for 102.5.
LISTNUM 1 \l 14155 So in our case if we were to have a choice, 96.7 running east and west, Corus having 102.5.
LISTNUM 1 \l 14156 COMMISSIONER DEL VAL: Okay.
LISTNUM 1 \l 14157 MR. CONWAY: And I believe you will see that map of 96.7 east and west was in the ‑‑
LISTNUM 1 \l 14158 COMMISSIONER DEL VAL: In your intervention?
LISTNUM 1 \l 14159 MR. CONWAY: In the Corus intervention, correct.
LISTNUM 1 \l 14160 COMMISSIONER DEL VAL: Okay. Thank you, that is helpful.
LISTNUM 1 \l 14161 Well, while we are ‑‑ well, we might as well stay on your business case since we are here already.
LISTNUM 1 \l 14162 Now given that you were not aware of CHUM's change to the new format on their flip to FM, can you lead me through the impact, if any, on your proposed business plan?
LISTNUM 1 \l 14163 Because I know you addressed this morning that that ‑‑ it sounded like you had anticipated part of it but is there any impact on your business plan that we should be aware of right now?
LISTNUM 1 \l 14164 MR. CONWAY: Maybe I am going to let our Sales Manager talk about the revenue potential of the Peterborough market.
LISTNUM 1 \l 14165 Dave.
LISTNUM 1 \l 14166 MR. HUGHES: Thank you very much, Don.
LISTNUM 1 \l 14167 In answer to your question we had some inside sort of knowledge that CKPT was going to be going to a hot AC format. So when we put our business plan together we had that knowledge already in advance of. So it was easy for us ‑‑ not necessarily easy but it was helpful for us to have that information.
LISTNUM 1 \l 14168 When we put together our business plan we assumed that KRUZ would be getting their flip and there would be a second frequency in the marketplace and that is the frequency, obviously, that we are going for.
LISTNUM 1 \l 14169 We have a tremendously strong working knowledge of the marketplace. We looked at building our business plan two ways.
LISTNUM 1 \l 14170 We looked top down, looking at the FP Markets information and the percentages spent on advertising by retailers and how much money is then allocated for radio.
LISTNUM 1 \l 14171 We then did a bottom up formula because we have such a good working knowledge of the marketplace and ironically, I guess, or maybe by design we came to almost the same figure.
LISTNUM 1 \l 14172 So we chose the optimistic figure from the FP model and that is how we came up with our revenue projections.
LISTNUM 1 \l 14173 COMMISSIONER DEL VAL: Now, what about the ‑‑ you did talk about the revenue projection today and how yours is comparatively very realistic.
LISTNUM 1 \l 14174 Now, the programming cost that you have included in your business case though, if you compare it to the rest, is on the low side. Would you care to comment on that?
LISTNUM 1 \l 14175 MR. CONWAY: Sure. Included in the programming, we have between programming and news seven and a half persons ‑‑
LISTNUM 1 \l 14176 COMMISSIONER DEL VAL: Mm‑hmm.
LISTNUM 1 \l 14177 MR. CONWAY: ‑‑ and we have the various things that you would do to run the programming department. We have two people in our news department and some production and some on‑air announcers.
LISTNUM 1 \l 14178 COMMISSIONER DEL VAL: Mm‑hmm.
LISTNUM 1 \l 14179 MR. CONWAY: The rest of the things that we would include in there would be the SOCAN fees and vehicles and that type of thing.
LISTNUM 1 \l 14180 COMMISSIONER DEL VAL: Okay. Now on the ‑‑ according to how you have run, and from your experience with your Cobourg stations, you are quite comfortable that those programming costs will allow you to compete very effectively with the giants?
LISTNUM 1 \l 14181 MR. CONWAY: Yes, no doubt, Madam Commissioner.
LISTNUM 1 \l 14182 When you buy a radio station out of bankruptcy you don't have a lot of resources to work with. So we have learned, in a small market surrounded by a lot of big players, that you have to do a lot of multitasking. So everyone pitches in and does various things.
LISTNUM 1 \l 14183 So the news director, Jen, would also be the co‑host on one of our stations and also works in the news. Okay, so she does more than one task. It would be the same thing with the music director. The music director could be afternoon announcer as well as doing the news, as well as possibly assisting with promotions. So there is a lot of multitasking and we have learned how to do that pretty well.
LISTNUM 1 \l 14184 COMMISSIONER del VAL: So then say your staffing costs ‑‑
LISTNUM 1 \l 14185 MR. CONWAY: Correct.
LISTNUM 1 \l 14186 COMMISSIONER del VAL: ‑‑ that are in the programming expenses, do they ‑‑ the staffing costs of say those who are multitasking, some of them would, you know, the same person would be performing some programming or administrative function. Which line do you put that in? Are those in your admin and general costs or would you put those in programming?
LISTNUM 1 \l 14187 MR. CONWAY: I mentioned the 7.5, they are all in programming and news. That includes four fulltime announcers, that includes two fulltime news, plus the part‑timers.
LISTNUM 1 \l 14188 COMMISSIONER del VAL: Okay, good, thank you.
LISTNUM 1 \l 14189 Now, you also commented on page 15 of your brief that you have some limited programming synergies with the Cobourg stations. So those would also lead to lower programming costs, would that be fair ‑‑
LISTNUM 1 \l 14190 MR. CONWAY: Particularly in the news department, there are some synergies, the fact that the Cobourg stations would be close, and it is a very regional area that we live in, between Peterborough and Northumberland.
LISTNUM 1 \l 14191 Maybe I can ask Jen to speak to that.
LISTNUM 1 \l 14192 MS HUDSON: Certainly. When it comes to the news department, for example, when we are talking about synergies between the Cobourg station and the proposed Peterborough station, as Don mentioned, it is a very regional place in which we live. For example, the school board is located in Peterborough but it oversees the schools in Cobourg.
LISTNUM 1 \l 14193 Currently, it takes some resources for us to be able to send a reporter up to Peterborough to cover those meetings. Whereas, if we were to have a radio station in Peterborough we would have the staff that would be able to not only cover that for their Peterborough market, but to funnel the stories down to us in Cobourg as well. So it saves us a reporter's salary to go up there, the gas, you know, all of the little necessary expenses that go on there.
LISTNUM 1 \l 14194 COMMISSIONER del VAL: Thank you. Do your synergies, with the Cobourg stations, would that include similar plans for packaging of sales, et cetera?
LISTNUM 1 \l 14195 MR. CONWAY: Well, we don't package presently and I will let Dave go further on that.
LISTNUM 1 \l 14196 MR. HUGHES: The Peterborough market will be standalone, sales for Peterborough will be Peterborough driven and in the market.
LISTNUM 1 \l 14197 COMMISSIONER del VAL: Now, if a licence in the Peterborough market were granted to someone other than yourself, what do you see would be the impact on your Cobourg stations?
LISTNUM 1 \l 14198 MR. CONWAY: Well, we will continue to compete, we have always competed against the big guys. But it would seriously impact on our financial ability. As you saw from 96.7, the other applicants, most of them come south of Rice Lake with their 3mV. So that means they are going to be well‑listened to in Northumberland County or available to be listened to.
LISTNUM 1 \l 14199 So you are going to have CTV, who has just flipped with a big station, who has taken share away from us because we were getting Peterborough's share by default. Basically, they have gone from a 2 to a 20, so they have taken that away from us.
LISTNUM 1 \l 14200 Corus, when they do their flip to classic hits, they will end up ‑‑ well, as you saw, if they use the 96.7 they are going to be all over Northumberland County. And if you licence someone else on a different frequency, we know from the map on 102.5, it does come into Northumberland County. So it would have a serious impact on us.
LISTNUM 1 \l 14201 COMMISSIONER del VAL: Now, CTV's KRUZ right now, from what I remember yesterday, was that they want to maintain the same footprint. So right now, the KRUZ 980, is that all over Northumberland County?
LISTNUM 1 \l 14202 MR. CONWAY: It can be heard in Northumberland County. But if you look at their contours, their contours are to the northeast and their footprint for the FM proposed is to the direct south, which is coming into the two most populated towns in Northumberland County, so it is slightly different.
LISTNUM 1 \l 14203 COMMISSIONER del VAL: Thank you. Okay, let us go onto something a bit easier, your format.
LISTNUM 1 \l 14204 You may have covered it, I know you have given a lot more information here, how much of your regulated broadcast week would you devote to live‑to‑air programming?
LISTNUM 1 \l 14205 MR. CONWAY: I am going to let Joel speak to that.
LISTNUM 1 \l 14206 MR. SCOTT: We are looking at producing 120 hours. We allowed for 120 hours a week of local programming, that allows for a potential weekend countdown show or syndicated program. As far as being live to air, we have endeavoured to try and make it 99 hours a week, being life primarily 6:00 a.m. to 9:00 p.m. at a minimum, Monday to Friday, and then 6:00 a.m. to 6:00 p.m. on weekends as well.
LISTNUM 1 \l 14207 COMMISSIONER del VAL: Okay. Then so the balance would be voice tracked or automated?
LISTNUM 1 \l 14208 MR. SCOTT: Off‑peak times, from 9:00 p.m. and overnights, yes, voice tracking done on a local level.
LISTNUM 1 \l 14209 COMMISSIONER del VAL: Okay. Your plans regarding the newsroom staff. I know you have given us some information about the programming staff and there might be some overlap. Now, who will be responsible for the news content?
LISTNUM 1 \l 14210 MR. CONWAY: Well, our news team would make decisions on a day to day basis.
LISTNUM 1 \l 14211 I am going to let Jen say, just a little bit more, how we operate presently.
LISTNUM 1 \l 14212 MS HUDSON: Well, currently, the way that it works is in my position as news director I am also doing the morning on‑air newsrun as well as co‑hosting on The Breeze. So my job and my priority every morning is not only to just do that news and gather the news and present it, but it is also an assignment editor for our reporters.
LISTNUM 1 \l 14213 Our on‑air news personalities also are sent out to do some reporting. We have some part‑timers, some stringers, so we send those out as well in order to have really good coverage of Northumberland County, the people, the events that happen and that make it what it is. We would endeavour to do the same thing in Peterborough.
LISTNUM 1 \l 14214 COMMISSIONER del VAL: And will you have student interns in Peterborough as well?
LISTNUM 1 \l 14215 MS HUDSON: We are looking to do that. As well, we are looking to hire two summer interns ‑‑
LISTNUM 1 \l 14216 COMMISSIONER del VAL: Okay
LISTNUM 1 \l 14217 MS HUDSON: ‑‑ to come on into the newsroom so that we can help mentor them and guide them and bring them along and have them really get some hands‑on knowledge of the industry.
LISTNUM 1 \l 14218 COMMISSIONER del VAL: And who typically is charged with mentoring or overseeing the interns' work?
LISTNUM 1 \l 14219 MS HUDSON: That would be the news director.
LISTNUM 1 \l 14220 COMMISSIONER del VAL: The staffing plans for on‑air talent, I think you have gone through that a bit. Do you care to elaborate with respect to news or..?
LISTNUM 1 \l 14221 MS HUDSON: Well, again, as a small operation and really, in the long‑run, it makes you a much better broadcaster if you wear a number of different hats because you have an opportunity to experience the other parts of the station, it works much more cohesively that way. And instead of sitting there and not understanding why something works the way that it does, say in the programming department, you have a much better handle on it because you have been there.
LISTNUM 1 \l 14222 With our news department, we want to see everybody become embedded and entrenched in the community. And the more that we can send out our on‑air announcers to do some reporting as well, they are going to get to know the newsmakers, they are going to get to know the people in the community, not just the people that are heads of organizations or, you know, the mayors, but they are going to get to know the people, in general, of the community. And that is what a good radio station is supposed to do, it is supposed to reflect your community. So the more that we can do that, the more that our staff can get out and work in the community, then the better job we are going to be able to do.
LISTNUM 1 \l 14223 MR. CONWAY: I can just follow‑up with that, Madam Commissioner. We have, in the planned station, two fulltime and two part‑time. I give you an example about how community involved and how we talk about multitasking. Everyone of our staff is charged with letting the news department know what is happening in the community.
LISTNUM 1 \l 14224 So, for instance, I will give you an example. There was a horrendous crash last winter where it closed the 401, it closed the 401 for the better part of two days. And one of our staff happened to be returning from a sales call and was able to provide live‑to‑air reports from the scene. Their car ended up being stopped about half a kilometre away. And so they knew, call in, let us get to air right away with this and then continue to provide reports. So everyone is charged with helping the station broadcast events that are happening in the communities.
LISTNUM 1 \l 14225 COMMISSIONER del VAL: What about syndicated programming? Do you have any plans for that as matters now stand?
LISTNUM 1 \l 14226 MR. CONWAY: Joel?
LISTNUM 1 \l 14227 MR. SCOTT; We left room for it in our application, if possible. We would evaluate that at the time of launch. It wouldn't be a necessity. But if there would be something there that we could capitalize on from a programming standpoint and a revenue standpoint then, yes, we would evaluate it at the time.
LISTNUM 1 \l 14228 COMMISSIONER del VAL: You haven't yet offered a specific commitment regarding the weekly level of spoken word. And would you be prepared to do so?
LISTNUM 1 \l 14229 MR. SCOTT: Our spoken word commitment that we are looking at, above and beyond our proposed news coverage, is 12.3 hours per week. And the spoken word coverage that we have defined is broken down under categories outside of newscasts, like frequent weather coverage, additional sports coverage in the community, traffic reports in morning and afternoon drives, public service announcements by the announcers, background information on our artists, both new and emerging, an artist spotlight feature that would feature an artist once an hour through the daytime show and also, on weekends, community cruiser reports and, during the week, parent guide reports focusing on community events that families in our target demo would like to attend.
LISTNUM 1 \l 14230 COMMISSIONER del VAL: And ‑‑
LISTNUM 1 \l 14231 MR. CONWAY: Madam Commissioner, at the very last page, right before the back cover, is a summary of our application and you will see the breakdown there of the spoken word.
LISTNUM 1 \l 14232 COMMISSIONER del VAL: Yes. You know, I just remembered the sheets. Now, would you be prepared to commit to the overall level of spoken word as a condition of licence?
LISTNUM 1 \l 14233 MR. CONWAY: Yes, absolutely.
LISTNUM 1 \l 14234 COMMISSIONER del VAL: Now, going back to the frequency. If 96.7 were awarded to someone else, would you be prepared to accept a licence on, a partial approval, on the basis that you find another frequency? Would you accept such a licence?
LISTNUM 1 \l 14235 MR. CONWAY: Our first choice is 96.7 because of what I explained to you before about ‑‑
LISTNUM 1 \l 14236 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 14237 MR. CONWAY: ‑‑ people coming into Northumberland County. But 102.5 would be our alternate choice.
LISTNUM 1 \l 14238 COMMISSIONER del VAL: Okay. And outside of those two?
LISTNUM 1 \l 14239 MR. CONWAY: Nothing else really works, Madam.
LISTNUM 1 \l 14240 COMMISSIONER del VAL: Okay, thank you very much.
LISTNUM 1 \l 14241 MR. CONWAY: You are welcome.
LISTNUM 1 \l 14242 COMMISSIONER del VAL: Thanks for your time.
LISTNUM 1 \l 14243 Those are my questions, Madam Chair, thank you.
LISTNUM 1 \l 14244 THE CHAIRPERSON: Commissioner Menzies.
LISTNUM 1 \l 14245 COMMISSIONER MENZIES: I noticed that in your presentation that your expenses were low and your revenue predictions were lower than some of the other applicants. Is there anything that we need to know on that that you might not already have touched on?
LISTNUM 1 \l 14246 MR. CONWAY: Well, we know the market I think a little bit better than maybe some of the other applicants, and maybe I can let Dave speak to that.
LISTNUM 1 \l 14247 MR. HUGHES: With respect to the revenue, Mr. Commissioner, we also took into account that CKPT was moving to the Hot AC format. And it certainly is acknowledged, when the BBM results came out, that they had about a 22 share in adults 25‑54, which is substantial.
LISTNUM 1 \l 14248 When CTVglobemedia did their projections for revenue at their hearing in December of 2006 they projected first year sales of approximately $400,000. Well, with a 22.1 share of the market, adults 25‑54, one can assume that they are going to do a little bit better than $400,000.
LISTNUM 1 \l 14249 So we factored those things into our revenue projections. That, in addition to the fact that we have a presence in the market, we understand the market, and the market sets rates for individual commercial units, the market bears so much. We predict that the going I rate is about $15. When we did that and based our sell out rate at about 60 per cent for the first year, that is how we arrived at our first year revenue projections.
LISTNUM 1 \l 14250 COMMISSIONER MENZIES: Okay, thank you. I am curious on knowing, and I know you have talked about it a bit here, but your corporate culture of embedding yourself in the community ‑‑ which I think is an excellent idea, most people who stay in newsrooms just reflect newsrooms and not their community ‑‑ and your commitments to things like school councils and chambers of commerce, etc. that is excellent.
LISTNUM 1 \l 14251 It is a bit of an open‑ended question, but I want to know a bit more about your corporate culture, how you manage to do all that. Because you have an operation that is operating 24 hours a day, you have a small staff, you are a lean, efficient operation, how do you sustain yourselves at those levels of commitment for a long period of time and retain staff and community involvement?
LISTNUM 1 \l 14252 MR. CONWAY: I am there seven days a week.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14253 COMMISSIONER MENZIES: Okay, I want to know how you do that. Is anybody else there with you?
LISTNUM 1 \l 14254 MR. CONWAY: Actually, yes. Jen, on Saturday, there is a perfect example.
LISTNUM 1 \l 14255 MS HUDSON: This past weekend there was a terrible and tragic incident that happened on the highway just south of Peterborough. It is something that made not only local news, regional news, also went national as well in regards to the two people that police were following from London ended up just south of Peterborough, when police approached the vehicle the two were dead.
LISTNUM 1 \l 14256 I got a phone call at home, so I immediately said good‑bye to my children, my husband, said love you, and I got in the car and went straight to the station and started making some phone calls to see what I could find out.
LISTNUM 1 \l 14257 This is the kind of organization that it is and it takes special people in order to make it all work. And I think that Pineridge Broadcasting has done an excellent job of searching out ‑‑ they don't hire people based on the fact that I need somebody here next week. They hire people based on the fact that they are ready to make that kind of commitment to the communities in which they live and to the company in which they work.
LISTNUM 1 \l 14258 So when Pineridge hires somebody that is all part of the interviewing process, that is all part of, you know, when you come on board you know this. And you know that this is the way that it is going to be, but you are doing it because it is what you love, it is part of who you are and part of what makes you proud to be in your community.
LISTNUM 1 \l 14259 MR. SCOTT: If I can add to that further. When we go through the hiring process, as Jen mentioned, we traditionally may take longer to hire people than we normally do because we are looking for those kinds of people. We look for people that are community involved.
LISTNUM 1 \l 14260 For example, our promotion director, York Bell‑Smith, came to us as a part‑time guy on weekends, he was let go from another radio station, he fit our format, he fit the dedication to community, he was involved in Kiwanis, moreover just loved radio, wanted to do anything he could. So York has covered off ‑‑ when he first came to us he was doing part‑time on weekends, he was doing production, he was helping out in promotion, helped do a little bit in sales. And when the time came in our growth that we had to add another person York was the natural fit, because he could fill an on‑air shift for us competently, he could run our promotions department because he had experience in promotions.
LISTNUM 1 \l 14261 We have an evening announcer right now that has done production, promotion and he's done some music work, he even cut the grass this summer, so that is ‑‑
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14262 MR. SCOTT: And we tell people when they come in and say, listen, this is a little bit different operation, we encourage you to try every aspect of the radio station because, as the radio market changes and as the personnel changes, we don't know where our needs may fall. And if we have got someone internally we can put into those places right away to grow their career and move them up, then that is where we look first.
LISTNUM 1 \l 14263 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 14264 Your last comment, not your most recent one, but in your opening presentation, in the concluding sentence you made reference to serious issues for ongoing financial integrity.
LISTNUM 1 \l 14265 Now, I just want to make sure I heard accurately what you were saying. What I heard, more or less, was you think these other guys are trying to mow your lawn and ‑‑
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14266 COMMISSIONER MENZIES: ‑‑ and you need to have a bigger lawn if that is going to happen for you to compete.
LISTNUM 1 \l 14267 MR. CONWAY: I like your reasoning. We have been through the process for the last five years. Let me just spend sometime and take you back.
LISTNUM 1 \l 14268 In 2002 we applied for an FM radio station. We all thought it was going to be ‑‑ we applied for a Northumberland radio station, Contours Northumberland whatever.. I provided you with a topography because, as we have seen today and yesterday, the other applicants have no idea why there is only 13 per cent Toronto tuning in Toronto. The Oak Ridges Moraine prevents signals from Toronto getting into Peterborough, so they have got nobody to listen to other than the Peterborough radio stations.
LISTNUM 1 \l 14269 In 2002 we applied for and we launched Star 93.3. The second day we were on I got a call from a guy. He said, "Are you the owner?" I said, "Yes, sir." "Are you really the owner?" I said, "Yes, sir." "Not a big company?" I said, "No, sir, it's independent, this is it, you're talking to the guy that sits in the corner that signs the cheques." Fine.
LISTNUM 1 \l 14270 And I won't use the words he used, he says, "I came from Hamilton, Ontario," he says, "I now live in Peterborough, I could sit in my office and all of my employees could hear almost any radio station format they wanted to. I had to move to this," whatever, "community and," he says, "I have to sit here and listen to rock or country, thank ‑‑ that you guys are here with the format, because now I can listen to music." "And if you need 100 people in my office, because I own an insurance company, if you need 100 letters to the CRTC then we will right them for you in support."
LISTNUM 1 \l 14271 That was the second day we were on air on Star. Peterborough was starved for an adult contemporary radio station. And we are there by default, we didn't know we could get in there, we didn't know about the Oak Ridges Moraine either. But that is how this whole thing started.
LISTNUM 1 \l 14272 The Corus and CHUM absolutely had this little pie that they split up between themselves, they had four radio stations, the rates are low, they just split up the advertisers and all of a sudden we came in from outside. And as you go back over the various applications that we have had to increase our signal in our own little community, because we have got a very bad signal along the 401, they have fought us everyway they could.
LISTNUM 1 \l 14273 And this past week when the BBMs came out and the fact that they are in BBM in Northumberland County, there is only one reason, they want to take revenue right away from us. They just hate us. Thank you.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14274 COMMISSIONER MENZIES: Or they want your money.
LISTNUM 1 \l 14275 MR. CONWAY: Yes.
LISTNUM 1 \l 14276 COMMISSIONER MENZIES: So what I am getting a bit from this and, again, I don't want to put words in your mouth, this is what I am understanding and I want you to confirm or clarify for me; is that you are up to the task of competing with all the big boys and girls in Peterborough and Toronto, but it can't last forever.
LISTNUM 1 \l 14277 MR. CONWAY: Well, right now, we are okay. But we have just got a competitor who was on AM 1420, he has just flipped and has stolen where we felt we had ‑‑ you saw the research. The research showed CKSG was being listened to in the Peterborough market. Now, we are a Northumberland radio station, we promote ourselves a Northumberland radio station, but a lot of our people drive to Peterborough to study, to work, to be entertained, whatever. So we do put Peterborough news and information on, surveillance information.
LISTNUM 1 \l 14278 I lost my train of thought, sorry.
LISTNUM 1 \l 14279 MR. HUGHES: Do you want me to jump in?
LISTNUM 1 \l 14280 MR. CONWAY: Yes, go ahead, sorry.
LISTNUM 1 \l 14281 MR. HUGHES: As Don was saying, we went to Peterborough by default, that really was what happened. When we did our application for Star there was no letters of intervention from anyone. It was a non‑appearing item and we got a brand new radio station.
LISTNUM 1 \l 14282 Since that time the giants have woken up and they said, "Oh, my God, these guys are competition". And for 20 or 30 years they had no competition. It was a pretty cozy little setting.
LISTNUM 1 \l 14283 So now at every turn ‑‑ we needed to apply a few years ago to improve our technical on Star so that we could better serve the market that we are licensed to. They challenged us on that. They challenge us at any turn that they possibly can. I worked there five days a week and I have to wear some armoured clothing to get ‑‑ there is so much going on trying to get us.
LISTNUM 1 \l 14284 So this is just the final indication when they have taken and bought ‑‑ built coverage through BBM into Northumberland for The Wolf. I think they are just trying to get us out of the picture.
LISTNUM 1 \l 14285 COMMISSIONER MENZIES: Okay. I'm sorry. I didn't mean to light you guys up like this.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14286 COMMISSIONER MENZIES: But you are capable ‑‑ what I am trying to get at, you are capable of ‑‑ you are capable of fighting back.
LISTNUM 1 \l 14287 MR. CONWAY: We are. It's just it's going to get worse, though. That's where the line was going, is CTV has flipped; Corus will probably flip. So they are going to come down into our market. So it's going to get very much tighter.
LISTNUM 1 \l 14288 COMMISSIONER MENZIES: Okay.
LISTNUM 1 \l 14289 MR. HUGHES: Could I just add the geography?
LISTNUM 1 \l 14290 I think it's very, very important to make it clear that from the top end of Northumberland County to the City Hall in Peterborough is 20 kilometres. So we are virtually one market. The continuation of Northumberland just flows right into Peterborough.
LISTNUM 1 \l 14291 So you know we have to compete with the giants we have. And we have done it very successfully, not just with the launch of Star back in 2002. We had a standalone AM station, CHUC, that had to compete with at the time Power, Corus and CHUM regardless of having an FM.
LISTNUM 1 \l 14292 We didn't have an FM. We had an AM station. And there was many, many events that go on in our home market communities of Cobourg and Port Hope that were presented by the Peterborough radio stations for some of the festivals. That was very frustrating on our part that they would come into our market and present a festival.
LISTNUM 1 \l 14293 So those are the challenges that we have had not just for five years but for a number of years, frankly since the company was purchased at a bankruptcy in 1983. I guess that's when it really started.
LISTNUM 1 \l 14294 COMMISSIONER MENZIES: Okay. Thanks very much.
LISTNUM 1 \l 14295 THE CHAIRPERSON: Just a couple of follow‑up questions.
LISTNUM 1 \l 14296 In your oral presentation on page 13 where you talk about your revenue projections and of course it's in the context of you know the market and you know what is realistic and that all other applicants have projected a much higher revenue potential. The other side of the coin, however, of your revenue projections could be you have underestimated so that you could underestimate the impact on the incumbents.
LISTNUM 1 \l 14297 How would you react to that characterization?
LISTNUM 1 \l 14298 MR. HUGHES: I believe that the Peterborough market has been underdeveloped with respect to radio spend. Our estimates were based on 12 percent of radio share of radio dollars. In a lot of markets the size of Peterborough it's probably 15 percent share of radio spent in the marketplace.
LISTNUM 1 \l 14299 I did have to go by what the street level talk is. As I said earlier, the market sets the rates; the radio station doesn't. And we have a tremendous history, for five years specifically, selling Star 93.3 in that marketplace to Peterborough advertisers who want to reach the populace in Northumberland County.
LISTNUM 1 \l 14300 So we know the rates. We are up against every radio station in some of those instances and we know where the market trades.
LISTNUM 1 \l 14301 I did not want to inflate the rates and imply that we could do a million dollars in our first year of operation because I know we couldn't do that. It wasn't even conceivable to do that.
LISTNUM 1 \l 14302 THE CHAIRPERSON: What percentage of your revenue currently comes from your Peterborough market?
LISTNUM 1 \l 14303 MR. HUGHES: Our revenue in Peterborough, we have a 3 share for each radio station today and that is 12 plus. When you go to the 25‑54 breakout; the demo breakout, our share combined is 4.8. Our share in Peterborough is about $60,000. So you can see where our revenue would be.
LISTNUM 1 \l 14304 THE CHAIRPERSON: Yes, because in your revenue projections you don't include a line for out‑of‑market tuning.
LISTNUM 1 \l 14305 In terms of your advertising revenues do you have an idea as to how much out‑of‑market tuning you will be able to repatriate?
LISTNUM 1 \l 14306 MR. HUGHES: Well, a lot of the ‑‑
LISTNUM 1 \l 14307 THE CHAIRPERSON: Because it's a two‑sided question too, of course, because of cannibalizing yourself, right?
LISTNUM 1 \l 14308 MR. HUGHES: That's exactly true. There is going to be a lot of cannibalizing on our radio stations. So I think the out‑of‑market tuning ‑‑ out‑of‑market radio revenue is really split between five and six stations. So when we add this new station we are going to cannibalize ourselves, that's true.
LISTNUM 1 \l 14309 THE CHAIRPERSON: Okay. And what percentage of your total revenues do you think will come from out‑of‑market tuning?
LISTNUM 1 \l 14310 MR. HUGHES: About 35 percent, 40 percent.
LISTNUM 1 \l 14311 THE CHAIRPERSON: Okay. Well, let's go through this then because in your projections you say:
"Existing Peterborough radio service is 40 percent."
LISTNUM 1 \l 14312 THE CHAIRPERSON: 40 percent of your revenues will come from that. Are you including out‑of‑market ‑‑
LISTNUM 1 \l 14313 MR. HUGHES: Yes, I am.
LISTNUM 1 \l 14314 THE CHAIRPERSON: ‑‑ tuning in that?
LISTNUM 1 \l 14315 MR. HUGHES: Yes, I am.
LISTNUM 1 \l 14316 THE CHAIRPERSON: Oh, okay, great.
LISTNUM 1 \l 14317 The devil is in the details, gentlemen.
LISTNUM 1 \l 14318 Okay, final question. Please confirm your understanding that if licensed your station 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 the new radio policy, Public Notice CRTC 2006‑158.
LISTNUM 1 \l 14319 MR. CONWAY: So confirmed.
LISTNUM 1 \l 14320 THE CHAIRPERSON: Please confirm your understanding that of this base annual amount no less than 60 percent of the station's basic annual CCD contribution must be allocated to either FACTOR or MusicAction and the remaining amount, if any, may be directed to any eligible CCD initiatives at your discretion.
LISTNUM 1 \l 14321 MR. CONWAY: So confirmed.
LISTNUM 1 \l 14322 THE CHAIRPERSON: You would think I would know these by heart by now.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14323 THE CHAIRPERSON: Legal counsel.
LISTNUM 1 \l 14324 MS SMITH: Yes, I have one question.
LISTNUM 1 \l 14325 You have mentioned news and spoken word. Can you please give us your total number of hours including news?
LISTNUM 1 \l 14326 MS HUDSON: The total number of hours including the news is 18 plus. We will have four hours and nine minutes of total core news, six hours and 10 minutes of complete newscasts and 12 hours and 20 minutes of other spoken word.
LISTNUM 1 \l 14327 MS SMITH: Thank you very much.
LISTNUM 1 \l 14328 THE CHAIRPERSON: Mr. Conway, you have your final two minutes to give us your best pitch.
LISTNUM 1 \l 14329 MR. CONWAY: Madam Chair, Commissioners, thank you for your patience and courtesy. I was informed correctly; you don't bite even though you are very thorough.
LISTNUM 1 \l 14330 Pineridge has presented an application whose approval will be fully in the public interest for a number of reasons.
LISTNUM 1 \l 14331 Our application assumes the conversion for CKRU to the FM band. Our format proposal takes into account the presence of an FM oldies/classic hits station as well as the re‑launched CTV FM station.
LISTNUM 1 \l 14332 We have chosen a format that will serve the largest unserved demographic group, women 35 to 54. While there are stations in the market providing programming for younger women and men, for much older women and men, for women who like to rock and men and women who like country, there is no one providing mainstream AC format that we propose.
LISTNUM 1 \l 14333 Other applicants propose various subsets of this format, some skewed a bit softer, others a bit harder but none are as broad as we are.
LISTNUM 1 \l 14334 We have provided a realistic and robust business plan. A new station in the market will face two of Canada's largest radio companies. We know the market. Our business plan mirrors the only applicant here with on‑the‑ground operational experience in Peterborough and that was Corus.
LISTNUM 1 \l 14335 We are a local area broadcaster rooted in community involvement. We already have community connections and credibility in Peterborough and we can hit the ground running with a strong local service.
LISTNUM 1 \l 14336 Awarding this licence to us will strengthen the small, independent regional broadcaster. We have worked hard to make our business a viable one through community service and involvement. An additional station will give us more scope and scale to meet the ongoing challenges of our market.
LISTNUM 1 \l 14337 And finally, if you award this licence to another broadcaster we will face additional challenges in our home market. We already face CTV and Corus with multiple stations and likely increased market share in our community with their FM conversions. Another new signal from a nearby market will further fragment our audience, making our job an even more challenging one.
LISTNUM 1 \l 14338 Thank you so much for your attention.
LISTNUM 1 \l 14339 THE CHAIRPERSON: Thank you, Mr. Conway, and to your colleagues.
LISTNUM 1 \l 14340 MR. CONWAY: Thank you.
LISTNUM 1 \l 14341 THE CHAIRPERSON: Before we break for lunch I just want to make a scheduling announcement.
LISTNUM 1 \l 14342 It's the panel's intention ‑‑ and this way you guys can plan the rest of your week ‑‑ it's the panel's intention to hear this afternoon the applications from K‑Rock, Evanoff and Frank Torres. We will then adjourn for the day and begin the day tomorrow with Andy McNabb and the Anderson Parish applications, followed of course by the intervention phases.
LISTNUM 1 \l 14343 I am going to ask you kindly, all applicants, to indicate to the hearing Secretary tomorrow at the end of hearing all applications, whether or not you intend to appear in Phase II, just to make things run as efficiently as possible. Of course, you will have to make that decision once you have heard all applications so please don't rush to poor Cindy's side now. But do that tomorrow.
LISTNUM 1 \l 14344 So we will now break for lunch and we will be back at 1:30. Thank you.
‑‑‑ Upon recessing at 1215 / Suspension à 1215
‑‑‑ Upon resuming at 1330 / Reprise à 1330
LISTNUM 1 \l 14345 THE SECRETARY: We will now proceed with item 11 which is an application by K‑Rock 1057 Inc. for a licence to operate an English‑language FM commercial radio programming in Peterborough.
LISTNUM 1 \l 14346 The new station would operate on frequency 96.7 MHz (channel 244B) with an average effective radiated power of 12,400 watts (maximum effective radiated power of 41,000 watts/antenna height of 116 metres).
LISTNUM 1 \l 14347 Appearing for the applicant is Mr. John Wright.
LISTNUM 1 \l 14348 Please introduce your colleagues and you will then have 20 minutes for your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 14349 MR. WRIGHT: Chairperson Cugini, Commissioner Menzies and Commissioner del Val, CRTC staff, I am John Wright. I am owner and operator of K‑Rock 1057 in Kingston.
LISTNUM 1 \l 14350 And with me today on the panel ‑‑ and I think they are not in the same order that you have them on here. So on my left is Andrew Forsythe and next to Andrew is Doug Elliott.
LISTNUM 1 \l 14351 Doug is our ‑‑ has started with us in August. He is Manger of Special Projects and has been responsible for product development for our Fresh FM application. And Doug came to us from Newcap in Thunder Bay where he was Operations Manager; prior to that he helped launch CKUE, which was talked about at the hearing in Windsor.
LISTNUM 1 \l 14352 Andrew is an Associate with Bond & Associates, Canada's foremost radio consultants, and Andrew has held various management and programming positions in radio and worked closely with Glenn Williams in the development of K‑Rock.
LISTNUM 1 \l 14353 To my immediate right is Glenn Williams. He is our Program Director at K‑Rock. He was the absolute first person we ever hired when we got the licence for K‑Rock. And Glenn is the architect of our product. He came to us after five years with The Bear in Ottawa where he was the Promotions Director.
LISTNUM 1 \l 14354 And next to Glenn is Kelly Spanton, and I have worked with Kelly for many, many years. Kelly started at CFJR in Brockville in sales. She is our Sales Manager, I think I said, and she spent 14 years at CHUM Regional Sales in Toronto where she developed new business for CHUM markets including the Peterborough market.
LISTNUM 1 \l 14355 My wife, Kim, was supposed to be here but she not only works at the station and handles all our agency business but she is also in charge of keeping balance in our lives. And we have a 13‑year old and Kim is at a Christmas recital with our 13‑year old.
LISTNUM 1 \l 14356 For Kelly, Doug and Glenn this is a first. It's their first time appearing before the Commission at a public hearing and they are the key members of our management team. Each of them is very excited about this application for reasons of their own, but what is common is the knowledge that our company has to grow to create more opportunities for all of us, and that Peterborough is almost a twin to Kingston and the perfect community for our growth.
LISTNUM 1 \l 14357 The Commission has identified the key criteria on which all applicants will be judged, and they are: In smaller markets under 250,000 it's the ability of the market to handle a new service; diversity of product and of ownership and the quality of the business plan along with Canadian content development.
LISTNUM 1 \l 14358 The challenge is clear for all of us. We have to show that Peterborough is ready for an additional radio service and then we have to show why our application is best of show.
LISTNUM 1 \l 14359 Peterborough is a city of natural beauty and culture. It's the heart of the Kawarthas and called often the "lift lock city". Somebody was mentioning lift lock yesterday. And it's reputed to be the world's highest lift lock, a true wonder of engineering. It shifts pleasure boats up and down at the height of a seven‑storey building.
LISTNUM 1 \l 14360 Peterborough has 116,000 people in the CMA and ranks 33rd in Canada. The Economic Development Commission says Peterborough has a healthy economy and a strong growth rate. They also say the population is expected to grow by 20,000 people over the next 10 years or just over 1.7 percent per year.
LISTNUM 1 \l 14361 The economy is a mix. It's a mix of government and it's a mix of manufacturing and tourism. And the tourism sector is fuelled by its position as Toronto's sort of growth cottage country area.
LISTNUM 1 \l 14362 General Electric, PepsiCo, Quaker Oats, Seimens lead the manufacturing sector while the Peterborough Regional Health Centre is the largest employer followed by school boards and local government.
LISTNUM 1 \l 14363 Retail sales, as we have heard before, are 9 percent above the national average.
LISTNUM 1 \l 14364 Is this local optimism and predicted growth enough to support an additional new FM radio service? Let's compare Peterborough to some other similar markets.
LISTNUM 1 \l 14365 Kingston has six commercial radio stations, Bellville has five, Moncton has six and Peterborough if a new licence is granted will have five. With this new licence there will be one radio station per 22,000 people in Peterborough, which is more people per station than either Bellville or Moncton.
LISTNUM 1 \l 14366 Retail sales tells a similar story. Peterborough has about the same retail sales per capita as Moncton and it's about 7 percent greater than Bellville.
LISTNUM 1 \l 14367 And finally let's have a look at profitability. Between the years of 2001 and 2005 Peterborough averaged 21.2 percent PBIT. During the same period Moncton was 23.1 percent and our home market of Kingston was a lowly 6.3 percent.
LISTNUM 1 \l 14368 The Peterborough we are looking at has a healthy economy, a population that's expected to grow by 20,000 people in the next 10 years, retail sales above the national average, a very healthy five year average PBIT in excess of 20 percent and with the addition of a new licence, a ratio of stations to people, if I can put it that way, similar to other markets.
LISTNUM 1 \l 14369 The two other broadcasters in Peterborough, CHUM and Corus, both have multimedia outlets and are well positioned to maximize their synergies and operate profitably after the addition of a new radio service to the market.
LISTNUM 1 \l 14370 Now, Peterborough and Kingston are very eerie in their similarities.
LISTNUM 1 \l 14371 MS SPANTON: CHUM Peterborough has two FM stations with a third that gets into Peterborough from Lindsay. CHUM Kingston is identical; two FM stations in Kingston and a third that gets into Kingston from Brockville. Corus in Peterborough has two radio stations and a TV station. Corus in Kingston has two radio stations and a TV station. The markets are twins.
LISTNUM 1 \l 14372 We believe Peterborough can support the addition of a new FM radio service. The question is can a new entrant compete against the formidable arsenal in the hands of CHUM and Corus?
LISTNUM 1 \l 14373 These are two very big and very good broadcasters. We are the only applicant that has successfully competed against CHUM and Corus in a very similar small market environment.
LISTNUM 1 \l 14374 The addition of Fresh FM to Peterborough will bring diversity to the market, a new news voice, a new format and a new independent owner headquartered in Eastern Ontario.
LISTNUM 1 \l 14375 Fresh FM will bring diversity to this dual owner, multi‑broadcasting outlet market. But even more important than just bringing diversity, we bring experience not only surviving but thriving in a similar market size against the same tough competition. We are currently number one, adults 25‑54, in Kingston.
LISTNUM 1 \l 14376 MR. FORSYTH: John retained our company, Bond & Associates, to determine a format choice. With country and rock already in the market, some form of adult contemporary was clearly the choice.
LISTNUM 1 \l 14377 CHUM stated in their application that CKPT would continue to operate as a soft oldies station offering music from such artists as Neil Diamond, Barry Manilow and Anne Murray.
LISTNUM 1 \l 14378 From the get go the Fresh FM format was designed to be different from CKPT. The opening for an adult station playing contemporary music was evident in the format search conducted prior to the conversion of CKPT to Energy 99.3. The format choice for Fresh FM is everything the name says. It is music that is new to Peterborough and it is designed for the 25 to 49 year old with particular emphasis on families.
LISTNUM 1 \l 14379 As I already mentioned, CHUM launched CKPT not as a soft oldies station but as Energy 99.3, a hot young station as the name implies. John commissioned Totum Research to determine how this impacted the application. The goal of the research was to determine; one, if there had been any change in the listening habits based on the launch of Energy 99.3; two, what effect does the launch of Energy have on the format proposed by Fresh FM and; lastly, to see if there is another format that would better meet the needs of the Peterborough audience since the launch of Energy.
LISTNUM 1 \l 14380 Totum tested four different music styles for respondents age 25 to 64. One montage was music presented in the Fresh FM application. The other music segments included a traditional soft adult contemporary, an older leaning gold based adult contemporary station and classic hits. The results show the most popular music style was the Fresh FM format with 76 percent of the respondents indicating they would listen often or occasionally.
LISTNUM 1 \l 14381 The research shows that there is no one station strongly identified with the proposed Fresh FM format. When asked if there was a station in the market already playing the music heard in the Fresh FM montage, only 15 percent of the respondents identified the music with Energy; 10 identified it with the rock station, The Wolf, and 13 percent named the out‑of‑market station Star 93.
LISTNUM 1 \l 14382 Interestingly, the classic hits format would have had the largest impact on the existing stations with 20 percent of the respondents identifying that music with The Wolf.
LISTNUM 1 \l 14383 The responses show that the proposed Fresh FM format would have a minimal impact on the existing stations.
LISTNUM 1 \l 14384 As a result of this additional research we determined that of the various adult contemporary format options our Fresh format was the preferred. This format was not strongly identified with any other station in the market and therefore there was no rationale for us to change the format or the business plan.
LISTNUM 1 \l 14385 MR. ELLIOTT: Our research also confirmed that Fresh will fall quite nicely between Energy, the format, and the format proposed by CKRU, the Corus conversion from AM to FM.
LISTNUM 1 \l 14386 Fresh FM is contemporary adult as opposed to adult contemporary and is different than any radio station that is in Peterborough right now.
LISTNUM 1 \l 14387 Based on our experience with K‑Rock in Kingston we can compete well with CHUM and Corus. It takes really good programming, top marketing and strong community involvement and we have great plans for Fresh in Peterborough.
LISTNUM 1 \l 14388 Fresh FM is Sarah McLaughlin and James Blunt, Rob Thomas, Bedouin Soundclash, Suzie McNeil, Tara Slone, Four80East, Hayley Sales. Fresh FM's music will add diversity and complement the music programmed in the market. Recent BDS monitoring tells us that 85 percent of Fresh FM's music is not played on any Peterborough radio station.
LISTNUM 1 \l 14389 Fresh FM will be distinctly different by design with music and spoken word, targeted to young parents that will engage in relevant conversation while still maintaining maturity and depth.
LISTNUM 1 \l 14390 Fresh FM is 40 percent Canadian content, 10 percent emerging Canadian artists. And based on our research we have concluded that the Fresh FM listener wants exposure to new local music. To put this into perspective how important it is, we have already determined that our listeners are parents of school‑aged children and they find that exposure to new local music almost as important as current information about school bus cancellations.
LISTNUM 1 \l 14391 At Fresh FM we will integrate ourselves with the local musicians, the producers and venues, like we have in Kingston so that we can play their music on the radio.
LISTNUM 1 \l 14392 Fresh FM is about supporting Peterborough musicians who receive no airplay like Chris Nettleton and working with local producers like Barry Haggarty.
LISTNUM 1 \l 14393 Fresh FM is the minivan station; soccer, baseball, 5:00 a.m. hockey practice, figure skating, dance lessons, gymnastics; almost interchangeable for the TV commercial for the Montana minivan with the Golden Lab lying down at their feet.
LISTNUM 1 \l 14394 The Fresh FM listener has a thirst for local news surveillance, mature engaging information that has relevance to their lifestyle. To that end we will commit to regularly‑scheduled news from our local team of three fulltime news people and will consist of 75 percent local news content. We may share regional stories with our Kingston newsroom. However, Peterborough newscasts will be produced in Peterborough.
LISTNUM 1 \l 14395 In addition to the consistent newscasts, Fresh FM will also provide extensive surveillance information that young families will need; school closures, bus cancellations, snow days, construction updates, the latest at the arenas, public parks.
LISTNUM 1 \l 14396 In addition to the surveillance information, Fresh FM will provide background information through relevant spoken word for young families that are handling life's challenges.
LISTNUM 1 \l 14397 Our programming features will be written and produced by our experienced team in programming and in use. For example, we envision a daily environmental report called "The Green Report" that will run in both drive times, be produced by our news director that not only discusses green issues like your home and global warming but also talks about the footprint our daily lives leave on the environment; also, to help translate the effect on our lives by our federal government's decision at the Bali climate summit on right now or the pressure our federal government is getting to protect the Canadian polar bear.
LISTNUM 1 \l 14398 In total over 13‑and‑a‑half hours weekly of spoken word, news, surveillance and features targeted specifically for active young parents and music played on a radio station by the artists that are listeners, are buying at the CD retailers or downloading and buying their concert tickets.
LISTNUM 1 \l 14399 MR. WILLIAMS: Madam Chair, Commissioners, CRTC staff, best of the season to you; talking about Canadian content development.
LISTNUM 1 \l 14400 You know our Kingston radio property has experienced incredible success over the close to seven years in operation. And our goal there was to really make a difference not only with our advertisers, our community, but developing Canadian talent was very, very important to us from the get go.
LISTNUM 1 \l 14401 The latter had a significant effect on our success for many reasons. First and foremost would be the goodwill from our listeners and our local artists being paramount. They hear the difference on the radio.
LISTNUM 1 \l 14402 The same strong commitment to build Canadian talent is planned for Peterborough ‑‑ regular programming to highlight new Canadian artists, both locally and nationally, and all focused on the end game for aspiring bands, a chance to hear their songs on the radio.
LISTNUM 1 \l 14403 Songs on the radio give aspiring Canadian artists a foundation to work from in their efforts to market themselves across the country.
LISTNUM 1 \l 14404 Our plan is pretty simply ‑‑ own your home market, then take over the world.
LISTNUM 1 \l 14405 Think of us as pre‑FACTOR ‑‑ out of the garage and onto a stage in their hometown, and with some hard work and the support of our radio station, onto the radio.
LISTNUM 1 \l 14406 The competition is tough on the national scale fighting for their piece of FACTOR pie. We like to work very hard to get them ready for that adventure.
LISTNUM 1 \l 14407 Some of our on‑air initiatives ‑‑ "Fresh and Live": We will be consistently supporting emerging artists through radio airplay and the opportunity for live acoustic performances.
LISTNUM 1 \l 14408 From our experience in Kingston, we have noticed that the feedback from our listeners has been incredible regarding the fact that we give this very unique opportunity to a lot of local and emerging Canadian artists to play their songs acoustically on our radio station and to tell their stories.
LISTNUM 1 \l 14409 "Fresh Online": Website applications that strongly tie our artist to their sites to give them instant credibility.
LISTNUM 1 \l 14410 "Lift, Lock and Load": Our fun, exciting, inde show that we have proposed. We will produce a one‑hour weekly program dedicated to emerging artists only, and each month produce a program that will be hosted and co‑produced by local artists themselves.
LISTNUM 1 \l 14411 "Fresh FM Presents": We will partner aggressively with local promoters and producers of live shows that highlight Peterborough and area talent.
LISTNUM 1 \l 14412 In our mission as the Pied Pipers, as we like to call ourselves, we will devote $20,000 annually toward the Fresh FM Idol Talent Search and the Fresh FM Music Festival.
LISTNUM 1 \l 14413 This area has been so successful in Kingston that we exceeded our commitment by 20 percent last year to get the job done, and we loved every minute of it.
LISTNUM 1 \l 14414 Our talent searches give us the opportunity to build relationships with the local artists. We average about 50 bands each year in Kingston that come in, and we begin that relationship. It is really a part of us making them shine.
LISTNUM 1 \l 14415 The greatest part is that, throughout the entire process, we involve our listeners in the process, which, of course, provides an opportunity for them to attach themselves emotionally to the artists. And, of course, we hope to have them as their future fans. That, of course, is our end game.
LISTNUM 1 \l 14416 We have prepared a short video from some of the bands and the community leaders that we have partnered with in Kingston, which we hope illustrates our commitment to our community and to Canadian talent.
‑‑‑ Video presentation / Présentation vidéo
LISTNUM 1 \l 14417 MR. WILLIAMS: As you can see, Madam Chair and Commissioners, we are very proud of our commitment to our community and to our local talent development, and we believe that we will hit the ground running in Peterborough with Fresh FM.
LISTNUM 1 \l 14418 MR. WRIGHT: Just a few comments regarding our business plan.
LISTNUM 1 \l 14419 The Commission has made it very clear that the quality of the business plan is a key criterion in determining the successful applicant.
LISTNUM 1 \l 14420 It is also clear that the Commission understands there is a big difference between small independent operators' business plans and those plans put together by the big regional independents and the publicly traded companies.
LISTNUM 1 \l 14421 Really, the biggest difference comes in the financing of individual market applications.
LISTNUM 1 \l 14422 The bigger independent and publicly traded companies finance individual markets with the strength of their overall company. We have to finance our Peterborough application based on our Peterborough business plan.
LISTNUM 1 \l 14423 This is a good thing. It brings a little bit of discipline to our financial planning.
LISTNUM 1 \l 14424 Our bankers have to be convinced that our business plan will succeed before they will sign off on the financing, and these guys focus on three main issues:
LISTNUM 1 \l 14425 Revenue ‑‑ How much revenue are you going to get, and is it a realistic, achievable figure?
LISTNUM 1 \l 14426 Then they focus on the product. In our case it's programming. They want to know if we are going to be able to compete.
LISTNUM 1 \l 14427 Then, the resources allocated to promotion and sales: Is it sufficient to make people aware of the new product and monetize the programming success?
LISTNUM 1 \l 14428 Let's have a look at the Peterborough market.
LISTNUM 1 \l 14429 We estimate that the current stations in launch year, when the new stations are launched, will average about $725,000 annually on programming, sales and promotion expenses. At an annual 3 percent increase, this will amount to about $5.6 million over the seven‑year period.
LISTNUM 1 \l 14430 In Peterborough right now there are only four commercial stations, so the fifth station will not be a niche format that can be operated at a lower cost, it is going to be a fully competitive station that will be competing to be the top station in the market.
LISTNUM 1 \l 14431 Our bankers and investors would not think it is logical for us to aspire to be the top station in Peterborough with programming, sales and promotion expenses well below the stations we are trying to beat.
LISTNUM 1 \l 14432 We have allocated over $6.3 million in programming, sales and promotion expenses over the term of the licence. That is about the same as Newcap, and well above all of the other applicants. And we haven't done this accidentally. We have planned this because of our experience competing with CHUM and Corus in a small market like Kingston.
LISTNUM 1 \l 14433 Our programming in Peterborough must be good enough that the target group will listen, and our promotion budget has to be big enough that we can get that target group to our position on the dial, and our sales department has to be strong enough that we can monetize our ratings against stations that have built up their relationships in the Peterborough market over many, many years.
LISTNUM 1 \l 14434 Madam Chair and Commissioners, that concludes our presentation. We welcome your questions.
LISTNUM 1 \l 14435 THE CHAIRPERSON: Thank you, Mr. Wright, and your colleagues.
LISTNUM 1 \l 14436 Mr. Wright, I am sorry that you are missing your daughter's Christmas recital. Hopefully your wife has a good camera.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14437 THE CHAIRPERSON: I would ask Commissioner Menzies to begin the questioning.
LISTNUM 1 \l 14438 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 14439 I will start a little differently this time, because I think our questions are becoming predictable.
LISTNUM 1 \l 14440 MR. WRIGHT: Oh, I had it all figured out!
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14441 COMMISSIONER MENZIES: In terms of the business community in Peterborough, what sort of advantage would K‑Rock bring to them?
LISTNUM 1 \l 14442 And I mean specifically in terms of what would a new station's ability be to stimulate retail growth, jobs, economic activity, and that sort of thing.
LISTNUM 1 \l 14443 MR. WRIGHT: When a new station joins the market, it adds another dimension to that particular market.
LISTNUM 1 \l 14444 When we came to Kingston, the first year there was a bump in the amount of dollars being spent on radio in general. In the second year there was a further big bump, before things started to flatten out a bit.
LISTNUM 1 \l 14445 But, really, a new entrant brings an enthusiasm, a new product, a new way of looking at things; and, generally, everybody brings new sales people to the market, as well, so there are more people selling the product of radio, and that increases the radio pie.
LISTNUM 1 \l 14446 COMMISSIONER MENZIES: But in terms of outside the radio pie, does it also ‑‑ if more people are buying ads, I am going to assume that more people are responding to ads and to the advertisers within the local market.
LISTNUM 1 \l 14447 Does that flow through, in that sense?
LISTNUM 1 \l 14448 Because people only buy ads if they sell stuff; right?
LISTNUM 1 \l 14449 MR. WRIGHT: They sometimes buy ads and they don't sell stuff, so they don't buy them again.
LISTNUM 1 \l 14450 COMMISSIONER MENZIES: That's right.
LISTNUM 1 \l 14451 MR. WRIGHT: We would certainly hope that it stimulates their business and that their business grows as a result of doing business with us, but I don't have any specific evidence of that.
LISTNUM 1 \l 14452 What we do in the communities is, we get terribly involved with the business community.
LISTNUM 1 \l 14453 As an example, right now ‑‑ I think you have all been reading about the Canadian dollar and its effect on local merchants. Kingston happens to be a community that is quite close to the border, and people can get to the shopping malls in Watertown pretty easily. They can get there in about 35 or 40 minutes, except for the crowds at the border, of course.
LISTNUM 1 \l 14454 Our local merchants ‑‑ we had discussions with them back in September, and we are looking at the biggest time of the entire year, leading up to Christmas. It is a very important part of their livelihood. They were quite nervous that people were going to start moving and spending far more dollars south of the border because of the impact of the Canadian dollar, and there was a lot of publicity that the pricing was quite different on the Canadian side.
LISTNUM 1 \l 14455 We started a "Shop Local" campaign. We put announcements on the radio station, telling people what was going on and why they should be shopping locally.
LISTNUM 1 \l 14456 We talked about the value of our merchants to the community, how our merchants support local hockey teams, they support charities, and they stand behind their products, so that when you buy something you know you are going to be taken care of.
LISTNUM 1 \l 14457 We had quite a campaign on "Shop Local".
LISTNUM 1 \l 14458 We then put a page or a button on our website and we invited the merchants to put items on our website that people could see on which the prices had been lowered because of the currency issues.
LISTNUM 1 \l 14459 We then started telling all of our people in Kingston that the merchants were trying very hard to reduce prices, that they were trying very hard to be competitive, and that "they deserve your support".
LISTNUM 1 \l 14460 The results have been absolutely amazing.
LISTNUM 1 \l 14461 That is the kind of thing that we are always looking at, and we are always trying to accomplish. We are trying to work as partners with the people we do business with.
LISTNUM 1 \l 14462 COMMISSIONER MENZIES: Your sources of revenue ‑‑ you have 32 percent for new radio advertisers and 32 percent for other media and out‑of‑market stations.
LISTNUM 1 \l 14463 In terms of the other media and out‑of‑market stations, how would you break that down?
LISTNUM 1 \l 14464 How much of that is other media, and how much of it is out‑of‑market stations?
LISTNUM 1 \l 14465 MR. WRIGHT: Kelly will have a comment on that. I haven't got the figure right here, but Kelly does have it, I think.
LISTNUM 1 \l 14466 MS SPANTON: From other media, including out‑of‑market stations, it is $250,000.
LISTNUM 1 \l 14467 COMMISSIONER MENZIES: No, I am trying to get an idea of, within that, how much of it is other media and how much of it is out‑of‑market stations.
LISTNUM 1 \l 14468 Out of the 250, is it a 125/125 split, or 150/100?
LISTNUM 1 \l 14469 MR. WRIGHT: The out‑of‑market number would be higher.
LISTNUM 1 \l 14470 The out‑of‑market number would be approaching $200,000 of the $250,000.
LISTNUM 1 \l 14471 COMMISSIONER MENZIES: Is that money that is coming from inside the Peterborough community and being spent on out‑of‑market media or ‑‑
LISTNUM 1 \l 14472 MR. WRIGHT: Correct.
LISTNUM 1 \l 14473 COMMISSIONER MENZIES: That's right?
LISTNUM 1 \l 14474 MR. WRIGHT: That's right, yes.
LISTNUM 1 \l 14475 COMMISSIONER MENZIES: The new radio advertisers, can you give me some idea of who they might be?
LISTNUM 1 \l 14476 That is a $250,000 number, too.
LISTNUM 1 \l 14477 I don't need to know names and addresses, but I do need to know ‑‑ is it the automotive sector, is it retail?
LISTNUM 1 \l 14478 MS SPANTON: When we refer to that, the new revenue from new advertisers, it is because there will be a new format in Peterborough that, maybe, advertisers who aren't currently using radio, or who are defaulting to another radio station because they thought it was close to their target, will now be able to use Fresh FM.
LISTNUM 1 \l 14479 COMMISSIONER MENZIES: These are people who haven't been advertisers before?
LISTNUM 1 \l 14480 MS SPANTON: Oh, no, they may have been advertising. They may have been, but they may not have been on radio.
LISTNUM 1 \l 14481 Maybe they have been using the newspaper, but now our format will fit the customers they are targeting.
LISTNUM 1 \l 14482 COMMISSIONER MENZIES: Okay. Give me an idea of what percentage of that group are current advertisers or people who simply haven't been advertising before and now have a good fit to advertise with.
LISTNUM 1 \l 14483 Because it seems to me that if they are current advertisers ‑‑
LISTNUM 1 \l 14484 MR. WRIGHT: No, they wouldn't be current advertisers with radio, they would be current advertisers in the market, but right now there is no station that is really targeting that female mid‑age group, that female 35 to 44.
LISTNUM 1 \l 14485 COMMISSIONER MENZIES: So if they are current advertisers, this is an increased spend rather than a redirection of money that is in the market?
LISTNUM 1 \l 14486 MR. WRIGHT: The ones that are not on radio that we are talking about, it could be an increased spend, or it could be that they reallocate some money that they are currently spending somewhere else.
LISTNUM 1 \l 14487 They could be spending it on television, or on flyers, or in print, but they haven't been using radio because radio wasn't strong enough in that particular area.
LISTNUM 1 \l 14488 A lot of that was going out of market, as well, so they decided, for whatever reason, not to advertise on out‑of‑market stations. So it's underdeveloped.
LISTNUM 1 \l 14489 COMMISSIONER MENZIES: Okay. I think I understand.
LISTNUM 1 \l 14490 If you want to make me understand more, I am open to it, but I will let you go for a bit.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14491 COMMISSIONER MENZIES: I need to clarify something on Canadian content development. You have $8,500 a year for the Fresh Idol Talent Search, and $7,500 for the Fresh Music Festival. Then there is $4,000 that is allotted as a contingency, which you indicated could go to FACTOR.
LISTNUM 1 \l 14492 The regulations state that it should go to FACTOR, and I want to clarify what your plans are for that $4,000.
LISTNUM 1 \l 14493 MR. WRIGHT: We firmly believe that in smaller markets the money that can be directed to the market is the most important money we can spend.
LISTNUM 1 \l 14494 It does a whole bunch of things. As Glenn said earlier, it is the pre‑FACTOR. It is getting them out of the garage and into a performing position, and getting them ready to go to places like FACTOR.
LISTNUM 1 \l 14495 It is also a big economic generator for the community when we start putting on festivals and events. It becomes an economic driver in the community, so it helps the community that way.
LISTNUM 1 \l 14496 We kept $4,000 in reserve, and the reason we did that was, as an example ‑‑
LISTNUM 1 \l 14497 When was "Across the Causeway"? Was that two years ‑‑
LISTNUM 1 \l 14498 MR. WILLIAMS: 2002.
LISTNUM 1 \l 14499 MR. WRIGHT: 2002.
LISTNUM 1 \l 14500 Every year an event comes up. We plan our spending, and then something comes up that is just so good that we would like to get involved in it.
LISTNUM 1 \l 14501 This year it was a Canada Day huge concert series at Fort Henry, with ‑‑
LISTNUM 1 \l 14502 Tell me about the bands.
LISTNUM 1 \l 14503 MR. WILLIAMS: It was a day‑long festival, and it was to recognize the 175th Anniversary and the World Heritage Site designation.
LISTNUM 1 \l 14504 These are the types of things that will come up, and in our desire to be there and help them, we have a reserve fund set aside for instances like that, and that, I assume, would be the $4,000 that we are talking about.
LISTNUM 1 \l 14505 MR. WRIGHT: Yes, but what bands were at that particular event?
LISTNUM 1 \l 14506 MR. WILLIAMS: They were all grassroots bands. The most recognized band there, now, because they have started to make it, would be Bedouin Soundclash, but they were all local area bands that we have worked up through our "Bandslam" process and in some of our club events throughout the year. All of them got a chance to play at an incredible venue.
LISTNUM 1 \l 14507 Some of the national promoters have come down and looked at it now as a possible venue for national touring shows, they love it so much.
LISTNUM 1 \l 14508 So it was a pretty exciting day.
LISTNUM 1 \l 14509 MR. WRIGHT: It is pretty spectacular. The back of Fort Henry is a hill that goes right down to the water. The concert was put on with the stage at the bottom of the hill, and then everybody would sit on the lawns, looking down at the stage.
LISTNUM 1 \l 14510 There were, I think, 13 local bands.
LISTNUM 1 \l 14511 They came to us two months or three months before this, and they needed additional funds to help them put on this huge event, so we spent $10,000.
LISTNUM 1 \l 14512 Now, that money we did not have put aside and ready to do that, but we thought the event was worthy, and it was dealing with emerging artists, and it was all the things we have always been, so we wrote a cheque to Fort Henry for $10,000 and helped put on the concert.
LISTNUM 1 \l 14513 That is the kind of thing the $4,000 is available for.
LISTNUM 1 \l 14514 Now, if, in the unlikely situation that something does not come along that is just that very appropriate, wonderful thing dealing with emerging artists, then we will write the cheque to FACTOR.
LISTNUM 1 \l 14515 COMMISSIONER MENZIES: That is in addition to your 20 percent requirement on over‑and‑above to FACTOR?
LISTNUM 1 \l 14516 MR. WRIGHT: That is a good point.
LISTNUM 1 \l 14517 COMMISSIONER MENZIES: I know that it sounds like a bit of a technicality, but ‑‑
LISTNUM 1 \l 14518 MR. WRIGHT: No, no, you are absolutely right.
LISTNUM 1 \l 14519 When we put this together, I think everybody was still working on how the "over‑and‑above" worked and where it came in. In looking at this, we have not allocated 20 percent of the over‑and‑above to FACTOR, the automatic part.
LISTNUM 1 \l 14520 COMMISSIONER MENZIES: Right.
LISTNUM 1 \l 14521 MR. WRIGHT: Right?
LISTNUM 1 \l 14522 COMMISSIONER MENZIES: Yes.
LISTNUM 1 \l 14523 MR. WRIGHT: I noticed that when I was reviewing this last night, as a matter of fact.
LISTNUM 1 \l 14524 I don't know quite what we do about that right now, but we would certainly do the 20 percent.
LISTNUM 1 \l 14525 It was something that, I think, was missed in the letters back and forth when we were talking about those funds.
LISTNUM 1 \l 14526 COMMISSIONER MENZIES: So that would either be that $4,000, or it would be ‑‑
LISTNUM 1 \l 14527 MR. WRIGHT: In addition to.
LISTNUM 1 \l 14528 COMMISSIONER MENZIES: ‑‑ an additional 4.‑whatever thousand it worked out to be.
LISTNUM 1 \l 14529 MR. WRIGHT: Correct.
LISTNUM 1 \l 14530 COMMISSIONER MENZIES: And you are comfortable and committed to that?
LISTNUM 1 \l 14531 MR. WRIGHT: I am, yes.
LISTNUM 1 \l 14532 COMMISSIONER MENZIES: Okay. Thanks.
LISTNUM 1 \l 14533 MR. WRIGHT: It was not intended to be that way.
LISTNUM 1 \l 14534 COMMISSIONER MENZIES: Is there a process that ensures that all of the Fresh Idol funding goes to third parties?
LISTNUM 1 \l 14535 MR. WRIGHT: Yes, there is.
LISTNUM 1 \l 14536 COMMISSIONER MENZIES: The Fresh Music Festival ‑‑ do you adopt one or do you build one?
LISTNUM 1 \l 14537 MR. WRIGHT: Well, it could be either, but Doug has done some investigation on this, so I will ask Doug for his comment.
LISTNUM 1 \l 14538 MR. ELLIOTT: At this point in time we really haven't had an opportunity to establish a phenomenal groundwork yet. However, we have had some initial consultations with some local musicians who are extremely interested, who don't get any airplay on the local radio stations right now.
LISTNUM 1 \l 14539 Chris Nettleton is one of them.
LISTNUM 1 \l 14540 I have been talking with Ronnie Hawkins' manager, who seems to be the hub of information for the local Peterborough musicians.
LISTNUM 1 \l 14541 I think that once the licence is granted, we could solidify those relationships a little bit better through our reputation at K‑Rock, and then we could easily develop either our own, or possibly help out an existing one that doesn't already have some sort of media sponsorship, as well.
LISTNUM 1 \l 14542 COMMISSIONER MENZIES: I just need to make sure ‑‑ do you have a Plan B for these events, just in terms of assuring the Commission that if they don't work out and you are not spending the money there that the money still gets spent someplace else?
LISTNUM 1 \l 14543 MR. WRIGHT: Yes, we undertake to take the money ‑‑ to spend the money and if it is not spent on any of the initiatives outlined, it will go to FACTOR.
LISTNUM 1 \l 14544 COMMISSIONER MENZIES: Okay, thank you.
LISTNUM 1 \l 14545 You spoke about the sort of natural relationship between Peterborough and Kingston.
LISTNUM 1 \l 14546 What are some of the synergies that will work for you between the two, if any?
LISTNUM 1 \l 14547 MR. WRIGHT: Yes, there won't be much. We have kind of looked at each area and I think the strength of radio in smaller markets is its focus on that market. So the only synergies that we can see might be a backroom synergy where our accounting might be done in one location for the two sites. But other than that, the programming is all totally separate and will remain that way.
LISTNUM 1 \l 14548 COMMISSIONER MENZIES: Okay, thank you.
LISTNUM 1 \l 14549 You have got the 120 hours a week being produced locally.
LISTNUM 1 \l 14550 How does the rest of the content get put together?
LISTNUM 1 \l 14551 MR. WRIGHT: The 120 hours ‑‑ we are allowing six hours for sort of countdowns and things like that. But of that 120 hours, I think 92 of those hours will be live local, will be live from 6:00 a.m. to 10:00 p.m. daily Monday to Friday and will be live from 6:00 to noon on Saturday and on Sundays.
LISTNUM 1 \l 14552 COMMISSIONER MENZIES: Okay, but ‑‑ I am sorry, I might have got ‑‑ either I got confused or I confused you.
LISTNUM 1 \l 14553 MR. WRIGHT: Or maybe I did.
LISTNUM 1 \l 14554 COMMISSIONER MENZIES: It's the hours in addition?
LISTNUM 1 \l 14555 MR. WRIGHT: The six hours?
LISTNUM 1 \l 14556 COMMISSIONER MENZIES: Yes, just break that down a little bit for me.
LISTNUM 1 \l 14557 MR. WRIGHT: Okay. The six hours would be for a countdown if we run it. We have allowed for some time for a countdown, a music countdown on the weekend.
LISTNUM 1 \l 14558 COMMISSIONER MENZIES: Okay, thanks.
LISTNUM 1 \l 14559 How much of your overall content will be live?
LISTNUM 1 \l 14560 MR. WRIGHT: It's 92 hours, so I think it is seventy ‑‑ what is it? ‑‑ 75 percent, close to 70. 92 hours out of the 126, so ‑‑
LISTNUM 1 \l 14561 COMMISSIONER MENZIES: Whatever percentage that works out to be?
LISTNUM 1 \l 14562 MR. WRIGHT: Yes. Yes.
LISTNUM 1 \l 14563 COMMISSIONER MENZIES: Okay.
LISTNUM 1 \l 14564 When you were talking about your business plan, I noticed you expect revenue to rise about 228 percent from years one to seven and the biggest single chunk of that is between years one and two ‑‑
LISTNUM 1 \l 14565 MR. WRIGHT: Yes.
LISTNUM 1 \l 14566 COMMISSIONER MENZIES: ‑‑ which makes some sense but it looks to me like it is ‑‑ I don't want to use risky but it looks to me like it is based on ‑‑ that that first BBM has to be really good.
LISTNUM 1 \l 14567 I just want to talk about like what if it isn't. That doesn't mean that you are doing a bad job but sometimes these things can have a little margin of error one way or the other.
LISTNUM 1 \l 14568 MR. WRIGHT: Mm‑hmm.
LISTNUM 1 \l 14569 COMMISSIONER MENZIES: If you are not succeeding with your business plan, what happens to a relatively small operator if that happens?
LISTNUM 1 \l 14570 MR. WRIGHT: There are a couple of things in here.
LISTNUM 1 \l 14571 First of all, our first four years, I believe it is, our business plan calls for 90 percent of our business to be local. While results is the game that we talk locally, ratings certainly help contribute to results but it is not as ratings‑based as national business is.
LISTNUM 1 \l 14572 We based that growth number on our history in Kingston. We had a ‑‑ when we launched in Kingston we launched with a 9 and a half share in Kingston. I had been in Kingston working in radio for many years ‑‑ I am not mentioning the number anymore ‑‑
LISTNUM 1 \l 14573 MR. FORSYTHE: No, no.
LISTNUM 1 \l 14574 MR. WRIGHT: ‑‑ a long time. Then I had been away in Toronto and I came back to Kingston with this new licence. So I thought ‑‑ I was very optimistic. I thought I know all these people, I know the merchants, I know the market and I should just do gangbusters in the first year.
LISTNUM 1 \l 14575 Well, it wasn't so easy, you know. We are competing against CHUM and Corus and these guys are good. They are really good and they have built all these relationships and all their management people and their salespeople have developed very close relationships with their customers.
LISTNUM 1 \l 14576 So we didn't just walk in the door and get the business. That is why we had the big bump‑up in the second year. As a matter of fact, I think year one, our first year in Kingston, the total market did about 4.7 million.
LISTNUM 1 \l 14577 In the second year it went to 5.4 and then ‑‑ our first year was a partial year. We were only on the air from March to August. So that had a little bit of a bump on the market to 4.7 million.
LISTNUM 1 \l 14578 The first complete year the market went to 5.4 and the second it went to 6.7. So our impact really built from year two to year three. That is really where it came in and that is why we put our numbers together here to kind of match that history that we are very aware of, that it takes you time to build this business.
LISTNUM 1 \l 14579 COMMISSIONER MENZIES: So your sales team is capable then, or your future sales team, assuming it will be built on the model of the current one, is capable of selling without having a book to sell from?
LISTNUM 1 \l 14580 MR. WRIGHT: Yes, I mean ‑‑ Kelly.
LISTNUM 1 \l 14581 MS SPANTON: Numbers, obviously, are one tool but we believe firmly at K‑Rock that relationships with our customers are the most important thing.
LISTNUM 1 \l 14582 We will show them the numbers if they want to see them but we are huge believers in getting to know our clients, finding out everything about their products, building our presentations so they are effective and they produce results.
LISTNUM 1 \l 14583 That does take time when you are new to a market and you have a new sales force but hopefully we can garner some of our sales force, or all of them, from Peterborough if that is at all possible so that there may be some relationships already established.
LISTNUM 1 \l 14584 But our key in the success in sales that we have in Kingston is the relationships that our salespeople have with their clients. The numbers are a tool but I believe, as their Sales Manager, they are absolutely secondary.
LISTNUM 1 \l 14585 COMMISSIONER MENZIES: I guess I just want to talk about this a bit because if you were a new entrant into that market, and you are up against Corus and all the others within that market, I think one of the keys is that ability to be able to build those relationships.
LISTNUM 1 \l 14586 I have been through a bit of that myself in the past and I know that as happy as people might be to meet you right away, they do have relationships that build up and it takes a while to build the trust that, as much as they may like you, as you said, in building the relationship, if they are going to give you money it has got to come back to them with interest on it essentially, and building the confidence in them that that will work is not easy, especially for a smaller competitor.
LISTNUM 1 \l 14587 I just want to get some more of your thoughts on that.
LISTNUM 1 \l 14588 MS SPANTON: One of the other things ‑‑ and I am sorry I didn't mention it when I first responded ‑‑ was the training that we give our sales reps. I don't sit in Corus' and CHUM's building ‑‑ well, I did in CHUM's once.
LISTNUM 1 \l 14589 So the training that we provide to our sales reps is more ‑‑ I believe is far more than Corus and CHUM do and that is a very important part of our sales. We spend a great ‑‑ as much time training as we do out on calls, one‑on‑ones. I believe we are the best at it.
LISTNUM 1 \l 14590 COMMISSIONER MENZIES: Thanks.
LISTNUM 1 \l 14591 Have you done any surveying of advertisers within that market yet to see if they would have any interest?
LISTNUM 1 \l 14592 MR. WRIGHT: No, we haven't.
LISTNUM 1 \l 14593 COMMISSIONER MENZIES: No. Okay.
LISTNUM 1 \l 14594 One of the economic trends that is taking place right now involves the auto industry. I understand that ‑‑ and you can correct me if this is wrong ‑‑ that GM is actually, obviously not in Peterborough but is the largest industrial employer of people who do live in Peterborough.
LISTNUM 1 \l 14595 I just wanted to know if you have taken trends in that industry into consideration and how much that matters to you or should it not.
LISTNUM 1 \l 14596 MR. WRIGHT: That is a good question. It really is.
LISTNUM 1 \l 14597 We look at the market overall and we look at the comments of the city officials and the economic development commission people and we look at their projections. And yes, there are sectors that may be having some tough times right now and there are other sections that are growing right now.
LISTNUM 1 \l 14598 So we take the overall direction from the people in Peterborough, the economic development commission, and they are bullish about Peterborough.
LISTNUM 1 \l 14599 I think that some of the automotive companies may be having some difficulties. At the same time tourism seems to be increasing quite a bit in Peterborough. So there may be that balance that gives the economic development commission the confidence to say that this market is healthy and it is growing.
LISTNUM 1 \l 14600 COMMISSIONER MENZIES: Because it does have a very healthy retail sales level.
LISTNUM 1 \l 14601 MR. WRIGHT: Mm‑hmm.
LISTNUM 1 \l 14602 COMMISSIONER MENZIES: And you are confident that that won't be affected by ‑‑ or it will balance out in the future?
LISTNUM 1 \l 14603 MR. WRIGHT: Well, I am an optimist at heart. So I am always hoping that it will be ‑‑
LISTNUM 1 \l 14604 COMMISSIONER MENZIES: All entrepreneurs are.
LISTNUM 1 \l 14605 MR. WRIGHT: ‑‑ better than we expect.
LISTNUM 1 \l 14606 COMMISSIONER MENZIES: I am curious. I have dealt with a couple of technical matters on the Canadian content development initiatives but I just wanted to get into that a bit more.
LISTNUM 1 \l 14607 Do they really work for you? The way you spoke about it, the benefits of this come back to you in terms of building content around that and, as much as I have heard, you seem to view them very much as an investment.
LISTNUM 1 \l 14608 I am not saying that anybody else doesn't, I just haven't had this conversation with anybody else in terms of that, that it is something that comes back to you in terms of content, in terms of marketing, in terms of goodwill in the community.
LISTNUM 1 \l 14609 Can you just expand on that a little bit?
LISTNUM 1 \l 14610 MR. WRIGHT: I would be glad to and I am going to ask Glenn to comment too.
LISTNUM 1 \l 14611 We have a mantra, a motto at the station and Glenn referred to it earlier. We want to make a difference and we want to make a difference with our listeners, our advertisers and our community, and certainly the budding artists in our community are a very important part of that.
LISTNUM 1 \l 14612 But Glenn has something that he calls ‑‑ and this is where we translated ‑‑ he calls it the cool factor. I will get Glenn to comment on that because it is ‑‑
LISTNUM 1 \l 14613 COMMISSIONER MENZIES: Is it with a "K" or with a "C"?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14614 MR. WILLIAMS: Everything is with a "K" in Kingston.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14615 MR. WILLIAMS: How I would relate that to cool is that, you know, we generate, obviously, business relationships and my job in that respect is to generate my business relationships, which is our product.
LISTNUM 1 \l 14616 As a truly local company and a local radio station that has built its success on that, I identified that very quickly in that market, that this is a great way for us to start the foundations of that, to become a part of that community, which is a part of our product. I mean we play music. There is a rich tradition of music, much like Peterborough, in that region. So part of it was selfish. I wanted to meet some of these bands.
LISTNUM 1 \l 14617 But we have spent a lot of time and a lot of effort in generating those relationships and the payback, of course, in the big picture could be monetized and it could be turned into ratings but the payback on a smaller scale is to actually see them progress and to see them come out of the basement. I mean a lot of us radio we are just bad musicians.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14618 MR. WILLIAMS: So it is to see this actually happen. We have had so many success stories and we have seen it happen and the part that we get at the end of the day is that it does come back in goodwill, both from our advertisers, from the bands, from their families.
LISTNUM 1 \l 14619 When you are a market the size of Kingston, which is pretty much identical to Peterborough, that is money in the bank. It is the endorsement of your population and I think that they see it, they hear it, they feel it. A lot of people say it but we are sincere about it and it has worked.
LISTNUM 1 \l 14620 COMMISSIONER MENZIES: Does it ‑‑
LISTNUM 1 \l 14621 MR. WRIGHT: Andrew has a comment. Can we ‑‑
LISTNUM 1 \l 14622 COMMISSIONER MENZIES: Oh! Please.
LISTNUM 1 \l 14623 MR. WRIGHT: ‑‑ expand on it a bit? Is that all right?
LISTNUM 1 \l 14624 COMMISSIONER MENZIES: It is your dime.
LISTNUM 1 \l 14625 MR. WRIGHT: Thank you.
LISTNUM 1 \l 14626 Andrew has a comment but just before we get to that.
LISTNUM 1 \l 14627 The cool factor, I think it was our second year and we had ‑‑ it created quite a ruckus in our building actually because we had Wide Mouth Mason in, and they are a reasonably loud rock band.
LISTNUM 1 \l 14628 We have created a little bit of a studio where we invite artists to come in and they do unplugs. We have a little stage set up and we have a chair. And they come in and they can plug their guitar in and then they can sing and we put it on the radio. It is really quite amazing.
LISTNUM 1 \l 14629 Well, they came in, and it wasn't just a little unplugged and a guitar. They had their drummer and they had everything going and we are in an office building. So we very quickly went to all the floors and invited all the people in the building to come down because they couldn't hear themselves think in their office.
LISTNUM 1 \l 14630 But that is part of the cool factor. When our listeners hear these artists in our radio station playing on the air it gives us the cool factor and that really is a big help to our listenership. They want to listen to the station that is the cool station, right?
LISTNUM 1 \l 14631 Andrew.
LISTNUM 1 \l 14632 MR. FORSYTHE: I just wanted to add something to this on the basis of ‑‑ you know, I think Glenn has very well articulated what they do every day and I guess I am going to sort of take the consultant's role and put it into another framework.
LISTNUM 1 \l 14633 I am going to use the word "brand" and I know that gets kicked around too often but I think this is a very good example.
LISTNUM 1 \l 14634 The way that K‑Rock has taken emerging artists, taken Canadian artists and put them on the stage and put them forefront has created not only a cool factor for the radio station but a brand and it is the way that this group has worked exceptionally well to be able to, for all intents and purposes, dominate a market and change that market.
LISTNUM 1 \l 14635 You have heard the testimonials from various artists but they have been able to take what they do and do it well and make it an engaging activity between the artist, the audience and the radio station.
LISTNUM 1 \l 14636 So it is another way, I think, that this group approaches the dynamic of working in a market differently from a lot of other groups.
LISTNUM 1 \l 14637 COMMISSIONER MENZIES: And that brand still works with the mini‑van thing?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14638 COMMISSIONER MENZIES: I mean I think it is kind of neat that it does. Mini‑van people still want to be cool but I just wanted to ‑‑ some people might say there is a stretch there.
LISTNUM 1 \l 14639 MR. WRIGHT: Well, every person has their brands.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14640 COMMISSIONER MENZIES: Okay.
LISTNUM 1 \l 14641 The next one, I think you just answered.
LISTNUM 1 \l 14642 How many new FM stations can operate in this market, in your view?
LISTNUM 1 \l 14643 MR. WRIGHT: When we sat down and did this, we certainly recognized that the Commission has kind of had a policy that existing AM stations can convert to FM. So we did our plans anticipating that KRUZ would be able to change from AM to FM and that there would be one other licence.
LISTNUM 1 \l 14644 COMMISSIONER MENZIES: Have you identified a frequency that would work for you?
LISTNUM 1 \l 14645 MR. WRIGHT: Sure have.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14646 COMMISSIONER MENZIES: We won't talk about that one right now but if ‑‑ I want to ask this question for the record anyway.
LISTNUM 1 \l 14647 If we were to grant a conditional licence based on your finding another frequency, would that still work for you or would you ‑‑
LISTNUM 1 \l 14648 MR. WRIGHT: I guess my concern would be that the 102.5 seems to be ‑‑ the place it needs to be is on the Corus ‑‑ as I understand it, on the Corus tower. Our consulting engineer wasn't available today to get confirmation on that but that is what I am hearing from the people here.
LISTNUM 1 \l 14649 So from a business side it is a little scary to say that we get the licence and the only place we can locate is on the competitor's tower and it kind of gives ‑‑ to me, it gives the competitor the ability to charge just about whatever they want to charge if it is the only place that you can be located.
LISTNUM 1 \l 14650 I would want to be at 96.7 and I think Corus should be at 102.5.
LISTNUM 1 \l 14651 COMMISSIONER MENZIES: Okay, thank you. That is it for me.
LISTNUM 1 \l 14652 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 14653 Let's go back to the CCD and maybe together we can work through this.
LISTNUM 1 \l 14654 MR. WRIGHT: Okay.
LISTNUM 1 \l 14655 THE CHAIRPERSON: And I understand how it can be confusing because the Regulations haven't come into force yet but they are there.
LISTNUM 1 \l 14656 So your total CCD commitment is $140,000 over seven years?
LISTNUM 1 \l 14657 MR. WRIGHT: No, that is the over and above.
LISTNUM 1 \l 14658 THE CHAIRPERSON: Okay. That is just the over and above?
LISTNUM 1 \l 14659 MR. WRIGHT: That is correct.
LISTNUM 1 \l 14660 THE CHAIRPERSON: So what is your total CCD?
LISTNUM 1 \l 14661 MR. WRIGHT: Well, based on our revenues in the model I think it is $156,000.
LISTNUM 1 \l 14662 THE CHAIRPERSON: Okay. So do you understand that of just the base amount ‑‑ right. Please confirm your understanding that if licensed your station will have to contribute that basic annual CCD imposed by condition of licence until the Regulations come into force as amended and it is based on the station's total annual revenues.
LISTNUM 1 \l 14663 MR. WRIGHT: Yes, I understand that.
LISTNUM 1 \l 14664 THE CHAIRPERSON: Okay. Now we will talk about the over and above.
LISTNUM 1 \l 14665 The Regulations require that of the over and above, 20 percent is allocated to FACTOR. Do you understand that?
LISTNUM 1 \l 14666 MR. WRIGHT: Yes. I thought that there was a ‑‑ and I am not sure where I got this, maybe I made it up. I am not sure but I thought there was a ‑‑
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14667 MR. WRIGHT: ‑‑ in markets under $250,000 that there would be the ability to take all the over and above and do it to your own local initiatives. Maybe it had been talked about but it wasn't brought in, I am not sure.
LISTNUM 1 \l 14668 THE CHAIRPERSON: That is right, it is not part of the new Commercial Radio Policy.
LISTNUM 1 \l 14669 MR. WRIGHT: Right. Okay.
LISTNUM 1 \l 14670 THE CHAIRPERSON: The Commercial Radio Policy is that 20 percent of the over and above be earmarked for FACTOR.
LISTNUM 1 \l 14671 MR. WRIGHT: Right.
LISTNUM 1 \l 14672 THE CHAIRPERSON: So will you accept as a condition of licence that 20 percent of the over and above will be allocated to FACTOR?
LISTNUM 1 \l 14673 MR. WRIGHT: Right. I will ‑‑ I would like to be able to slightly redo the numbers so I still have the $20,000 to be able to do our initiatives. So it will be a minor variance in the number to make sure ‑‑
LISTNUM 1 \l 14674 THE CHAIRPERSON: Well, perhaps what we could do, Mr. Wright, is if you wanted to, we could allow you whatever time ‑‑ well, I am sure the lawyer will tell me that we do have to put a limit ‑‑
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14675 THE CHAIRPERSON: ‑‑ and she is not going to say, no, you can't say whatever time you need, but we will allow you sometime to refile those numbers ‑‑
LISTNUM 1 \l 14676 MR. WRIGHT: Yes.
LISTNUM 1 \l 14677 THE CHAIRPERSON: ‑‑ and where you would allocate those funds. I think in light of fairness, we would not want to see that total amount be different than what you have proposed in your application. In other words, the total of your over and above must still be $140,000. I wouldn't want to see ‑‑ I couldn't allow you to increase that amount ‑‑
LISTNUM 1 \l 14678 MR. WRIGHT: Okay.
LISTNUM 1 \l 14679 THE CHAIRPERSON: ‑‑ based on now we are allowing you to refile ‑‑
LISTNUM 1 \l 14680 MR. WRIGHT: Right. Okay.
LISTNUM 1 \l 14681 THE CHAIRPERSON: ‑‑ where you would allocate that over and above.
LISTNUM 1 \l 14682 MR. WRIGHT: All right.
LISTNUM 1 \l 14683 THE CHAIRPERSON: Okay. And I am sure our Legal Counsel will follow up with a question that says: And will you file by this date?
LISTNUM 1 \l 14684 MR. WRIGHT: Okay. Thank you.
LISTNUM 1 \l 14685 THE CHAIRPERSON: The second part of the CCD question is: Please confirm your understanding of the base annual amount.
LISTNUM 1 \l 14686 MR. WRIGHT: Yes.
LISTNUM 1 \l 14687 THE CHAIRPERSON: So we are going back to that amount that is based on your revenues.
LISTNUM 1 \l 14688 No less than 60 percent of the station's basic annual CCD contribution must be allocated to either FACTOR or MUSICACTION and the remaining amount, if any, may be directed to any eligible CCD initiatives at your discretion.
LISTNUM 1 \l 14689 MR. WRIGHT: I understand that.
LISTNUM 1 \l 14690 THE CHAIRPERSON: Okay, terrific. Thank you.
LISTNUM 1 \l 14691 Those are all of my questions and I will turn it to Legal Counsel now. Thank you.
LISTNUM 1 \l 14692 MS SMITH: I am going to follow up with an additional question to your question, Commissioner Cugini.
LISTNUM 1 \l 14693 I would like to confirm your understanding that you will file with the Commission within one week, that is end of day, Wednesday, December 19, your over and above CCD commitments?
LISTNUM 1 \l 14694 MR. WRIGHT: I will.
LISTNUM 1 \l 14695 MS SMITH: Great, thank you.
LISTNUM 1 \l 14696 That is all my questions.
LISTNUM 1 \l 14697 THE CHAIRPERSON: Now, Mr. Wright, you have your final two minutes to give us your best pitch.
LISTNUM 1 \l 14698 MR. WRIGHT: Thank you.
LISTNUM 1 \l 14699 I think our application and our presentation today outlined all the reasons why we think we should be best of show and chosen to receive the licence for Peterborough. We had a lot of business discussions, but really what drives us more than anything is our desire to make a difference that we talked about earlier.
LISTNUM 1 \l 14700 And I have just got a very quick story that will illustrate this. July 18, a year ago, Jenna Lambert, who is a marathon swimmer, she is 15 years old, she has cerebral palsy and she jumped in the lake in New York to swim across Lake Ontario and land in Kingston. And we sent our morning man, Shadow, down. We actually organized the swim with Vicki Keith and John Munro from the Y. Glenn was instrumental and worked with them throughout the whole process.
LISTNUM 1 \l 14701 Our morning man went and he was in the kayak beside Jenna on the swim back to Kingston. And he would do reports and we would run all those reports on the radio on Jenna's progress on the way to Kingston. And she was due to come into Lake Ontario Park ‑‑ and she can only swim with her arms, her legs don't work, so it is quite an amazing story ‑‑ and we invited people to come down to the park to welcome Jenna in when she arrived.
LISTNUM 1 \l 14702 Well, she hit some pretty high waves and the weather was really really brutal. So this was supposed to be a 24‑hour swim, it turned out to be 34‑35 hours that she was in the water. So we had to keep updating everybody on the fact that, you know, not now, not now, we will keep you posted. And Shadow would send the reports in and Glenn was in the park and we had our entire staff down in Lake Ontario Park.
LISTNUM 1 \l 14703 We had rented this humongous sound system that went all through the park, so that we could welcome her in and we could do reports to all the people in the park about the progress. And then we saw the boat that was beside her, there was a couple of big boats, and there was a breakwater just outside and we could see the boat and we knew that she was really really close. And it just seemed to sit there for about a half an hour, we just saw the boat and no movement.
LISTNUM 1 \l 14704 Shadow gets on the phone with Glenn and Shadow says, "She's not moving, she's ‑‑ she's trying, but she's not making forward progress." And so it is just the most amazing thing, Glenn gets on the microphone, 4,000 people in the park and Glenn goes, "Jenna, Jenna." And then the 4,000 people started screaming, "Jenna."
LISTNUM 1 \l 14705 And then we got a call from Shadow out in the boat and Shadow said, "She heard it, she can hear it." And just something amazing happened. All of a sudden she had this new energy. And after being in one spot and not moving for a half an hour she got this superhuman effort and she started moving. And a half an hour later she arrived at Lake Ontario Park in Kingston with 4,000 people screaming her name. And she raised $200,000 for the Y and we were with it all the way.
LISTNUM 1 \l 14706 And that is what we call making a difference and we would like to do that in Peterborough. Thank you.
LISTNUM 1 \l 14707 THE CHAIRPERSON: Thank you, Mr. Wright, and to your colleagues.
LISTNUM 1 \l 14708 We will take a short five‑minute break just to allow for the change in panels. Thank you.
‑‑‑ Upon recessing at 1445 / Suspension à 1445
‑‑‑ Upon resuming at 1450 / Reprise à 1450
LISTNUM 1 \l 14709 THE SECRETARY: We will now proceed with Item 12, which is an application by Evanov Communications Inc. for a licence to operate an English‑language FM commercial radio programming undertaking in Peterborough.
LISTNUM 1 \l 14710 The new station would operate on frequency 96.7, Channel 244B with an average effective radiated power of 13,000 watts, maximum effective radiated power of 50,000 watts, antenna height of 150 metres.
LISTNUM 1 \l 14711 Appearing for the applicant is Mr. Paul Evanov. Please introduce your colleagues and you will then have 20 minutes for your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 14712 MR. EVANOV: Thank you. Good afternoon, Madam Chair, commissioners, Commission staff. My name is Paul Evanov, I am Vice‑President of Evanov Communications Inc.
LISTNUM 1 \l 14713 I started my career in broadcasting and programming and, in fact, was the programmer when ECI launched CIDC‑FM in its CHR format. I have overseen the launch of new services in Halifax, Ottawa and am presently engaged in making sure Hawkesbury gets on air.
LISTNUM 1 \l 14714 I am pleased to report that with the release of the Fall 2007 BBM we continue to be number one among to 12‑34 demographic in the Toronto CMA with CIDC.
LISTNUM 1 \l 14715 Now, I would like to introduce the panel here with me today. To my left is Carmela Laurignano, Vice‑President and Group Manager. Carmela has worked her entire professional career in broadcasting beginning with multilingual radio in Toronto and now oversees all radio properties for ECI.
LISTNUM 1 \l 14716 To my right is Dan Barton, Program Director for CKAD‑FM in Halifax. Dan has been in broadcasting for 18 years working in programming, both major and minor markets. Prior to joining ECI, Dan oversaw the programming for nine adult contemporary services.
LISTNUM 1 \l 14717 To Dan's right is Chris Edelman, Regional Sales Manager. Chris is one of ECI's success stories, starting with us as a sales rep, Chris's natural ability in converting prospects to sales made him the first choice to head the sales teams for the launch of our new stations in Ottawa and Halifax.
LISTNUM 1 \l 14718 In the back row, from left to right, is Debra McLaughlin from Strategic Inc., the author of our demand study and, by this point in the hearing, I am sure you will agree she requires no further introduction.
LISTNUM 1 \l 14719 Next to Debra is Shane Wilson, News Director for CKAD in Halifax. Shane has 20 plus years in producing news, including both print and broadcasting, and he brings a multidiscipline approach to news gathering and presentation. Prior to joining ECI Shane oversaw the Halifax News Bureau for VoicePrint Canada.
LISTNUM 1 \l 14720 Sitting in the audience is Stewart Robinson, our legal counsel, and with Stewart is our President and CEO, Bill Evanov, who also happens to be my dad.
LISTNUM 1 \l 14721 We are here to present our proposal for an adult contemporary format to serve Peterborough. Carmela will give you the overview of our approach, Dan will provide you with the description of the music we propose, Shane will provide details of our comprehensive presentation of news and information, Chris will discuss the economics of the market and the demand for the format we propose and, finally, Carmela will explain our innovative proposal for Canadian content development
LISTNUM 1 \l 14722 Carmela.
LISTNUM 1 \l 14723 MS LAURIGNANO: Thanks, Paul.
LISTNUM 1 \l 14724 When the Commission issued a call for applications we examined the tuning to the local stations, reviewed the existing formats and analyzed the tuning to out‑of‑market services. We found an obvious format opportunity, no one in the market was programming adult contemporary. There was significant tuning to out‑of‑market stations playing AC with services like Star and Bob generating sellable levels of hours tuned.
LISTNUM 1 \l 14725 AC, in is many incarnations, is the most popular music format in Canada today. According to the most recent BBM tuning data, tuning to AC stations account for 16.8 per cent of all time spent with radio and is second only to news talk on a national level. If you look at tuning data on the market level you will find that AC stations rank in the top three in most major markets.
LISTNUM 1 \l 14726 There are several streams of programming within the AC format. Three of the most common are CHR, Mainstream and Hot AC. Each of these attracts a slightly different audience with a distinctive age and/or gender skew and all of these demos served by these formats are showing declines in tuning in Peterborough. All three can easily coexist in a market and, in fact, do in many areas of Canada.
LISTNUM 1 \l 14727 Our challenge in preparing this application was in anticipating which void in the market would be filled after CTVglobemedia CKPT flipped from AM. Through their AM format they served an older audience. If they followed the plan they filed with the Commission, to stick with their audience, this would leave a void in the younger end of the AC spectrum. As it happens, according to the BBM Fall released just last week, they are now serving a younger audience with a Hot AC format.
LISTNUM 1 \l 14728 We knew at the time we tested and filed the application that the market was influx and what was happening in terms of programming would not be the case by the time the application as heard. For that reason, I will ask Dan to take you through what would happen today, if we were to program today if we were on the air, and describe how it is complimentary to the existing services.
LISTNUM 1 \l 14729 Dan.
LISTNUM 1 \l 14730 MR. BARTON: Thanks, Carmela. And good afternoon, commissioners.
LISTNUM 1 \l 14731 As we just mentioned, the Peterborough market now has one of the streams of AC following CTVglobemedia's conversion to FM, Energy 99.3 is a Hot AC format. This programming stream plays mainly current hits with very little from before 2002 ever making it to air.
LISTNUM 1 \l 14732 According to the last four weeks of media‑based data for the market, the CTVglobemedia station is playing, on average, over 60 per cent of the Hot AC chart. The audience data from BBM shows a strong younger skew with shares among persons 18‑34 that rival the long‑established rock station, The Wolf.
LISTNUM 1 \l 14733 It is notable that using the same time period and same database we can see that only 24 per cent of the Mainstream AC service is provided by originating stations. So if we were on air today we would fill the market need currently being addressed, in part, by outside services and alternate sources.
LISTNUM 1 \l 14734 Our new FM will introduce a Mainstream AC format to Peterborough, playing music from adult contemporary artists such as Celine Dion, Chez, Michael Bublé, Kaylynn Porter, the Eagles, James Blunt and Blue Rodeo as well as music from the 1980s and 1990s from artists like Elton John, Chicago, Fleetwood Mac, Rod Stewart, Amy Sky and Amanda Marshall.
LISTNUM 1 \l 14735 By creating a playlist focusing on the adult contemporary chart this new station will not only attract dissatisfied 25‑54 listeners, but also support new and emerging adult contemporary artists like Ali Slaight, Hayley Sales, Justin Hines and Brian Mello.
LISTNUM 1 \l 14736 Unlike the predominantly current hit base of CHR and Hot AC, we propose to play selections from the gold and recurrent categories, focusing on the 1980s and 1990s representing over 40 per cent of our spins each week with occasional selections from the 1970s.
LISTNUM 1 \l 14737 While this is typical of Mainstream AC stations, this balance and variety of eras of adult contemporary music is not currently found in the Peterborough market. The programming of our Mainstream AC will also be a nice balance to that of Hot AC where songs have a higher spin ratio and, without the benefit of a variety of gold selections, have fewer songs at any given time in rotation. We will have more tracks, more artists and discernibly less repeat plays on any single selection.
LISTNUM 1 \l 14738 The production of Canadian music for this format is prolific because artists producing in the rock, pop and even country music genres often cross over to the AC chart. So we can confidently propose to play 40 per cent Canadian content.
LISTNUM 1 \l 14739 In addition to playing Canadian artists, a portion of our playlist will be currents defined as less than two years old and, therefore, we will have the opportunity to showcase new and emerging talent. It is our commitment to dedicate 30 per cent of our Canadian content or 12 per cent of our total schedule to new and emerging artists.
LISTNUM 1 \l 14740 I will now ask Shane to describe our news and information component.
LISTNUM 1 \l 14741 Shane.
LISTNUM 1 \l 14742 MR. WILSON: Our consumer demand research demonstrated the importance of local news to the community. Overall, 90.3 per cent of the respondents describe it as very important. I the older demographics of our sample, that is among the 35‑44 and 45‑54 subgroups, news was the number one programming element in the selection of the radio station.
LISTNUM 1 \l 14743 Our schedule has been setup to ensure that our listeners get the news and information programming they want. We will offer 18 newscasts per day, Monday through Friday, in addition to seven hours, five minutes of structured news every hour in morning and afternoon weekday drive, we will offer regular surveillance on weather and traffic.
LISTNUM 1 \l 14744 We will round out the local reflection with a community calendar, expanded coverage of local sporting teams and interviews with local community newsmakers. On the weekend we will offer a lighter schedule, but still provide a frequency of newscasts that will keep our listeners informed.
LISTNUM 1 \l 14745 In total, we will provide 11 hours and 50 minutes of news and information programming per week.
LISTNUM 1 \l 14746 We take our responsibility to cover Peterborough news seriously. And, as can be confirmed by our performance on our other radio properties, we anticipate that no less than 80 per cent of the stories we cover will be local or regional in origin.
LISTNUM 1 \l 14747 A second finding from our research was the importance to consumers of having diversity in news sources. Well, we do not purport to be a news service and will be defined as a music format, devoting the majority of the schedule to AC selections. We will provide more news than is often found on the AC format. We wish to provide that diversity by on perspective and the depth of coverage we give local events.
LISTNUM 1 \l 14748 Chris?
LISTNUM 1 \l 14749 MR. EDELMAN: Thanks, Shane.
LISTNUM 1 \l 14750 It has been suggested by intervenors that Peterborough is a market in transition. While we agree this is the case in terms of format, the economic base remains solid and expanding.
LISTNUM 1 \l 14751 Our view of the economic indicators shows a healthy retail sales base that is 9 percent above the national average and expected to grow by 7 percent in the next 18 months. Further growth of 12.2 percent is expected between 2009 and 2012.
LISTNUM 1 \l 14752 Population has grown by 5.1 percent since last Census and is forecast to continue to grow. Housing prices are on the rise, confirming that the anticipated growth is indeed happening. In all, transition in Peterborough is to a more prosperous position.
LISTNUM 1 \l 14753 We met with advertisers in the market and found that limited format choice has been a deciding factor for their choice of including radio or not. Some have opted to use print, specifically local newspapers, while others have purchased ad time from stations originating outside the market like Star 93.3 from Cobourg and 91.9 BOB FM from Lindsay. It is these advertisers that we will be working with to expand the radio sales in the market. In my own in‑market survey I heard repeatedly that you cannot beat The Wolf if your target was men and if you wanted younger persons Energy was an efficient buy.
LISTNUM 1 \l 14754 The missing audience from an advertising perspective is the slightly older female. While a country service does deliver these listeners to some degree, it was seen as being more niche with limited reach. And in some cases it has been seen as being incompatible with the brands or service being advertised.
LISTNUM 1 \l 14755 Our mainstream AC will fill the hole in the broadcasting advertising spectrum. We will deliver the 35 to 54 year old population and, as is the case with most AC formats, we will be most efficient in the female demographics.
LISTNUM 1 \l 14756 Our goals are twofold; bring back the money currently leaving the market to stations like Star, and develop new revenue by giving advertisers using other media an effective local option.
LISTNUM 1 \l 14757 Our increased news coverage will quickly help us build a Peterborough‑centric brand and my experience tells me that with this established it will be easy to convert money from other media to the effectiveness of using radio.
LISTNUM 1 \l 14758 Carmella?
LISTNUM 1 \l 14759 MS LAURIGNANO: Thanks, Chris.
LISTNUM 1 \l 14760 We have also stayed true to the theme of local in our CCD proposal. In addition to making the commitment to FACTOR required by the new policy, we are proposing to support initiatives that are above and beyond the requirements.
LISTNUM 1 \l 14761 First, we will be giving money to the Aboriginal Media Education Fund. This funding body is a not‑for‑profit organization that is national in its scope and yet flexible enough in its programs to allow for regionalization of our investment. AMEF has agreed to direct the funding to assist aboriginal youth from Peterborough and central Ontario regions in receiving the training they need to start or advance a career in broadcasting or audio production. We will use our broadcast outlet in the market to promote this opportunity and partner with AMEF to take the message of their programs to other regions that we serve.
LISTNUM 1 \l 14762 In our second over and above initiative we will create an annual concert event that will pair successful artists with new and emerging talent to create a high profile showcase and at the same time provide an excellent concert experience for consumers. Under the working title of "Summer Rush" we have created these events for new artists for the past 15 years in Toronto and recently introduced it in Halifax to resounding success.
LISTNUM 1 \l 14763 This year alone we were able to present 10 new artists over the two cities and these are new and emerging artists. People like Jordan Croucher, Jamie Sparks, Belly, DJ No Love, Elise Estrada, to name a few, had the opportunity to play on the same stage in the same event with international recording sensation Rihanna and Enrique Iglesias.
LISTNUM 1 \l 14764 Feedback from these events from both the artists and the consumers is overwhelming. The event sells out quickly and performers either through direct sales or through their distributors report huge spikes in sales post‑Summer Rush.
LISTNUM 1 \l 14765 In Ottawa our concert takes a slightly different format because of the difference in our station format and audience but it too has made a huge impact in terms of exposure and promoting of Canadian artists and new and emerging artists.
LISTNUM 1 \l 14766 We have committed in our application all the money we have allocated to this concert will be paid out to performers in fees and Evanov Communications Inc. will underwrite the staging, promotion and event of the production. This additional investment is required to ensure that the event has the impact it can but in actual fact raises the commitment we are making to well above the value of the direct contribution.
LISTNUM 1 \l 14767 Based on our experience in other markets we believe this will represent an additional 100,000 each year of the licence term.
LISTNUM 1 \l 14768 Paul?
LISTNUM 1 \l 14769 MR. EVANOV: Thanks, Carmella.
LISTNUM 1 \l 14770 Our proposal for a new FM service for Peterborough has been carefully constructed to offer new music, increased coverage of news and information, while respecting the balance that currently exists in the market.
LISTNUM 1 \l 14771 We chose mainstream AC to fill an obvious void in the programming spectrum and to take advantage of the opportunity to recover revenue that is currently being placed on spill services that effectively deliver an older female audience. With only 24 percent of the mainstream AC chart being played on local services in the market, we can launch without forcing any current broadcasters to make radical adjustments to their playlist.
LISTNUM 1 \l 14772 Our unique approach to news and information programming in combination with our larger playlist, fewer repeats and higher Canadian content will ensure that our new FM station has a distinctive sound. We will avoid the complaints currently heard in the market that most radio stations sound alike and there is too little variety.
LISTNUM 1 \l 14773 We will also bring new artists and new songs to consumers, a role that the internet has been increasingly filling.
LISTNUM 1 \l 14774 We think that playing new artists is an excellent way of distinguishing our sound. In markets where no commitments have been required of ECI we are currently playing new and emerging talent in excess of 12 percent. And this is calculated by using the more restrictive CAB definition.
LISTNUM 1 \l 14775 Carmella?
LISTNUM 1 \l 14776 MS LAURIGNANO: In summary, we know that AC is a broad enough format with built in flexibility. For example, if the incumbent station decided to abandon the younger audience and age their playlist to mainstream AC, then we would program to the younger market with our version of a hot AC.
LISTNUM 1 \l 14777 The point is that there are programming opportunities within the scope of our proposal that will allow us to adjust to market forces without abandoning our plans or competing directly with the incumbents.
LISTNUM 1 \l 14778 We are experienced broadcasters with the energy, experience and motivation to seek out and develop new revenue streams and new audiences. We are capable of competing with large incumbents as a standalone and our track record confirms this.
LISTNUM 1 \l 14779 We have direct experience in smaller markets and in particular smaller markets that have tremendous spill from larger nearby centres. Nothing we have seen in the data or in the hearing thus far is either new or daunting to us.
LISTNUM 1 \l 14780 Further, we have taken a leadership role in presenting new and emerging artists.
LISTNUM 1 \l 14781 Peterborough is an economically sound market with a solid future, ambitious plans and a strong probability of expansion. We think what we have proposed is ideal for the current conditions and can withstand any challenges presented by changes in the broadcasting landscape.
LISTNUM 1 \l 14782 So we respectfully ask for part of this market in transition and to be given the opportunity to serve the people of Peterborough.
LISTNUM 1 \l 14783 Thank you for your time and attention and we would be happy to answer your questions you might have.
LISTNUM 1 \l 14784 THE CHAIRPERSON: Thank you, Ms Laurignano. Mr. Evanov, welcome to you. I was planning on saying welcome back but it's good to have the junior.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14785 THE CHAIRPERSON: I'm going to start my questioning with specifics unlike some of the other applicants that I have asked, just to change things up a bit. And the first thing we are going to talk about is your level of spoken word programming.
LISTNUM 1 \l 14786 In your presentation this afternoon you said that there will be a total of 11 hours and 50 minutes of news and information programming throughout the broadcast week. Correct?
LISTNUM 1 \l 14787 MR. EVANOV: Yes.
LISTNUM 1 \l 14788 THE CHAIRPERSON: And of that how much is just pure news?
LISTNUM 1 \l 14789 MR. EVANOV: I will have Shane Wilson, our News Director, break it down for you.
LISTNUM 1 \l 14790 THE CHAIRPERSON: Sure.
LISTNUM 1 \l 14791 MR. WILSON: Pure news weekly seven hours and five minutes.
LISTNUM 1 \l 14792 THE CHAIRPERSON: And how much will be surveillance material?
LISTNUM 1 \l 14793 MR. WILSON: Surveillance material will be ‑‑ okay, for weather two hours, five minutes per week; traffic two hours and 10 minutes per week.
LISTNUM 1 \l 14794 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 14795 And that leaves us with another half hour.
LISTNUM 1 \l 14796 MR. WILSON: Those would be our community‑based features.
LISTNUM 1 \l 14797 THE CHAIRPERSON: Community‑based features.
LISTNUM 1 \l 14798 MR. WILSON: M'hm.
LISTNUM 1 \l 14799 THE CHAIRPERSON: The whole ‑‑ for the entire 30 minutes?
LISTNUM 1 \l 14800 MR. WILSON: That's correct, spread over 90‑second increments.
LISTNUM 1 \l 14801 MS LAURIGNANO: There are two news features within that. One is a community news feature and the other one is entertainment news.
LISTNUM 1 \l 14802 THE CHAIRPERSON: Now, usually we see these high levels of spoken ‑‑ not just spoken word but really of news, because this is essentially what you are offering here, in formats that target a much older demographic than your format does.
LISTNUM 1 \l 14803 So can you give me the rationale for these higher than what we are accustomed to see levels of news and information programming on this format?
LISTNUM 1 \l 14804 MR. EVANOV: I will start off and then pass it to Dan ‑‑
LISTNUM 1 \l 14805 THE CHAIRPERSON: Sure.
LISTNUM 1 \l 14806 Mr. EVANOV: ‑‑ extensive experience programming the AC.
LISTNUM 1 \l 14807 We did our research and we looked at the market along with the demand for the mainstream AC format. We also found that people were looking for diversity in news and information and that was a very important component along with the music. Over 86 percent said it was very important to them. So we wanted to incorporate that within a radio station.
LISTNUM 1 \l 14808 Still keeping in mind we are a music‑based station, you know our demographic is 35 to 54, we incorporated the news and the spoken word and the information in such a way where it would allow them to hear the music they want but also get the information, especially the local information they wanted.
LISTNUM 1 \l 14809 And I will have Dan kind of walk through how this is done.
LISTNUM 1 \l 14810 MR. BARTON: Thanks, Paul.
LISTNUM 1 \l 14811 In my experience with the adult contemporary format, news and information has always been a very important part of the format. Our research piece certainly backed that up. News and information was ranked second only to variety of music for what our demographic felt was important and hearing in the radio station.
LISTNUM 1 \l 14812 In order to differentiate ourselves from the incumbents in the marketplace what we want to do is make sure that we are accurately reflecting our target demographic, not just with the content of the news we are presenting but in how it's presented. So we are going to give an increased concentration of making sure it's reflecting the need of that 35‑54, the core of which being 35‑44 demographic. And we are allowing ourselves the extra time to be able to express that.
LISTNUM 1 \l 14813 THE CHAIRPERSON: And what is the median age of your listener?
LISTNUM 1 \l 14814 MR. BARTON: The median age is 40.
LISTNUM 1 \l 14815 THE CHAIRPERSON: 40, okay.
LISTNUM 1 \l 14816 Now, in order to accomplish this level of news and information programming what are your staffing plans in terms of how many people will you hire dedicated solely to the news and if it is a separate component how many people will you hire to do the other elements of your spoken word programming?
LISTNUM 1 \l 14817 MR. EVANOV: Okay. I will have Shane go over the news department with you and then I will cover over the other programming stuff.
LISTNUM 1 \l 14818 THE CHAIRPERSON: Sure. Okay.
LISTNUM 1 \l 14819 MR. WILSON: Our pure news department ‑‑ and I would like to expand on that if I can, but our pure news department will consist of a news director who is also an anchor and reporter, a fulltime anchor reporter and two stringers.
LISTNUM 1 \l 14820 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 14821 MR. WILSON: And just to expand a little bit, from my experience in our Halifax newsroom we really do bring in, in the Evanov Radio Group ‑‑ the whole staff become news gatherers because they are on the street. We have got folks in the clubs. We have ‑‑ our sales reps are out. So we really do become a team effort. But the production of the news is the numbers that I gave you.
LISTNUM 1 \l 14822 MR. EVANOV: And to go on the other part, in the programming department on top of the four news people we also have eight other people in programming consisting of a program director; music director who will also take on duties as announcers; morning show, evening show, two swing announcers midday to cover over their programming. So on top of the newscasts that are done by the news people Shane explained, we also have a full line of on‑air announcers that will communicate through jock talk, spoken word information there.
LISTNUM 1 \l 14823 THE CHAIRPERSON: And these are eight fulltime positions or fulltime equivalent?
LISTNUM 1 \l 14824 MR. EVANOV: Six are fulltime, and then we have the two swing announcers. So they would be part time.
LISTNUM 1 \l 14825 THE CHAIRPERSON: Okay, because your programming expenditures are pretty much in the middle of the pack when it comes to the other applicants. So how are you going to accomplish all this? What's your secret to being so cost‑efficient?
LISTNUM 1 \l 14826 MR. EVANOV: Years of practice.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14827 MS LAURIGNANO: We are from the Bill Evanov School of Economics which really is a good school to both be a student and a graduate.
LISTNUM 1 \l 14828 Well, as you saw, we are in the middle of a pack but approximately 36 percent of our budget is allocated to programming. We are experienced in running lean and efficient operations. That's how we do it.
LISTNUM 1 \l 14829 So we are confident. We have the breakdown. We have the actual salaries expensed and all that and how they would work. So it fits exactly with the plan.
LISTNUM 1 \l 14830 THE CHAIRPERSON: The reason I am asking is, as you know, as you heard ‑‑
LISTNUM 1 \l 14831 MS LAURIGNANO: Yes.
LISTNUM 1 \l 14832 THE CHAIRPERSON: This is being called the land of giants ‑‑
LISTNUM 1 \l 14833 MS LAURIGNANO: Yes.
LISTNUM 1 \l 14834 THE CHAIRPERSON: ‑‑ the Peterborough market. And I guess I just want to be sure that these staffing levels and what you are going to pay people to come to this market is going to enable you to attract the kind of talent that you are going to need to compete against these giants. That's the kind of assurances that I'm looking for.
LISTNUM 1 \l 14835 MS LAURIGNANO: Well, the assurance is again it builds on our business plan. We feel that we have both the staffing level and the level of compensation, you know, as starting points that will grow throughout the years.
LISTNUM 1 \l 14836 We are ‑‑ we have allocated a large number of our programming ‑‑ of our expenses to the programming which takes this into account. We do have some synergies within the company that will help balance things out.
LISTNUM 1 \l 14837 But finally, should there be any requirement at all we are a very solid, well financed company. We would have no hesitation in supplementing any of this at all. As you know, you always start with a hypothetical situation and that's ‑‑ in effect it is kind of that. You take your best estimate.
LISTNUM 1 \l 14838 But should there be any shortfall whatsoever we will not hesitate to put the necessary funds in there.
LISTNUM 1 \l 14839 If I may, I would just like to go back to your query before about the news and why so much. And it is true that a lot of the AC stations don't do that kind of thing, but when we looked at it we also looked at market conditions, what exists in the markets.
LISTNUM 1 \l 14840 So for example, like if we were programming an AC station in Halifax today or in Toronto, we would probably not do the same amount of news because there is a news/talk radio station there that fulfils the mandate the whole time.
LISTNUM 1 \l 14841 So there is a lot of factors into this that were factored. And there is also the research per se which I am just going to ask Debra to add to ‑‑
LISTNUM 1 \l 14842 THE CHAIRPERSON: Sure.
LISTNUM 1 \l 14843 MS LAURIGNANO: ‑‑ a couple of points on that because it might just frame it better for us.
LISTNUM 1 \l 14844 MS McLAUGHLIN: As the Commission has heard from other applicants today and yesterday in this process, there is a great deal of spill into the market and when you are relying on bringing tuning back from spill stations the single element that's going to help to differentiate is that sense of local, and local is the most ‑‑ news is the most compelling identity for news.
LISTNUM 1 \l 14845 Can I start again?
LISTNUM 1 \l 14846 THE CHAIRPERSON: Absolutely.
LISTNUM 1 \l 14847 MS McLAUGHLIN: News is the most compelling element to identify a station as local.
LISTNUM 1 \l 14848 THE CHAIRPERSON: Right.
LISTNUM 1 \l 14849 MS McLAUGHLIN: And if you look at the research you see that we ask respondents to tell us what the most important element is in choosing a station and variety of music and news, particularly local news, was very close. They were only separated by about one percentage point.
LISTNUM 1 \l 14850 So we knew that if we could introduce that in an amount that may seem atypical to AC, it would best serve the market and help us compete with those giants by bringing that tuning back to a local service.
LISTNUM 1 \l 14851 THE CHAIRPERSON: And of those who responded ‑‑ I mean, did you ask the news question to those who only responded that they want ‑‑ that they would prefer the AC format or did you ask your whole sample?
LISTNUM 1 \l 14852 MS McLAUGHLIN: We asked the whole sample.
LISTNUM 1 \l 14853 THE CHAIRPERSON: Would you expect that the ‑‑ if you were to ask only the AC, the people who responded that AC was the preferred format, would you have expected that percentage to be higher or lower?
LISTNUM 1 \l 14854 MS McLAUGHLIN: Well, we actually did do cross tabs. So what you do is you have the people who said, "Yes, I was interested" and then you look at their interest in news, and that news was higher. That was one of the deciding factors in putting that higher level in. Because often I find when you do that cross tab and people are definitely interested particularly in, you know, music‑intensive formats like AC, that interest in news drops off because they have a preferred news service in the market.
LISTNUM 1 \l 14855 But it was the inverse in this market. So that's what made me recommend, based on the research findings, that if it was at all doable from a programming perspective, that they increase their output, their production of news.
LISTNUM 1 \l 14856 THE CHAIRPERSON: I want to thank you for that additional information and I have learned a new term "cross tab".
LISTNUM 1 \l 14857 Ms Laurignano, you spoke of synergies and I am wondering if you could at this point elaborate on what those synergies might be and, in particular, do you see any synergies in the programming department?
LISTNUM 1 \l 14858 MS LAURIGNANO: Actually, Paul will address that.
LISTNUM 1 \l 14859 MR. EVANOV: I can address this.
LISTNUM 1 \l 14860 Peterborough will be locally operated with a staff of about 20 people locally in Peterborough. So the station will run on its own; own programming department, own news department.
LISTNUM 1 \l 14861 The synergies we see between our stations now and our company are ‑‑ I guess Carmella was touching on that as far as a bit of cost savings and you know, in general now accounting, some technical and some engineering. Those fall under kind of cost savings, synergies there.
LISTNUM 1 \l 14862 The same synergy that we feel is beneficial, and Peterborough is independent on its own there, but the fact that we communicate with other program directors and our other music directors in other radio stations in order to share information and, more importantly, share information on Canadian artists and new and emerging artists.
LISTNUM 1 \l 14863 Obviously, local Peterborough artists are very important for this Peterborough station but there is a whole slew of great Canadian talent across the entire country. And we have been fortunate to find quite a bit in, you know, southern Ontario, in Ottawa and also, you know, quite a bit in Halifax since we launched a year and a half ago.
LISTNUM 1 \l 14864 So it's sharing the resources to the degree of if we find some great Canadian talent in say in Halifax, new and emerging talent in Halifax ‑‑ the program director there, Dan, could contact the program director in Peterborough and say, "Hey, take a listen to this. It might fit your format. Take a listen. I found this person, you know maybe Jamie Sparks. Maybe not all his songs from the album do but a few songs might fit. Take a listen."
LISTNUM 1 \l 14865 So it offers that opportunity there that might otherwise might not have been found. The program director and the music director in Peterborough might not have found Jamie Sparks who is in Halifax because they are located in Peterborough.
LISTNUM 1 \l 14866 So it's more of a helpful programming synergy. But it's really kind of the sharing of ideas and to be able to discover new and emerging Canadian talent in that sense.
LISTNUM 1 \l 14867 THE CHAIRPERSON: And what about in the news department, do you foresee any synergies there?
LISTNUM 1 \l 14868 MR. EVANOV: No, with again the small exception of our Peterborough news department is local. But if a story makes sense and actually I am going to ask Shane to just maybe give a quick sample here ‑‑ if a story makes sense in southern Ontario or Halifax or one of our other markets that might be compatible to Peterborough or say the prime minister is somewhere in Halifax or Toronto or southern Ontario and something happens, or in Ottawa and something major happens, well, we have our news department there that can give the information or the audio say to Peterborough and it's up to them if they want to use it. But they might not have access to that audio or to the specific news element that's right in that city that could be breaking all across the country that's very important.
LISTNUM 1 \l 14869 So it's more of a sharing of that. But the news department is 100 percent local to Peterborough.
LISTNUM 1 \l 14870 And Shane, I think, has an example here.
LISTNUM 1 \l 14871 MR. WILSON: As an example, this summer was quite a rough summer youth crime‑wise in Halifax. And we were able to share information with Ottawa and with our Orangeville station that led into looking at individual local issues with youth crime in Ottawa and in Orangeville. And that in turn led to a national story which was our prime minister discussing changing the Youth Justice Act.
LISTNUM 1 \l 14872 So it just sort of fed in from a very local level right up to a national level in just sharing that information.
LISTNUM 1 \l 14873 THE CHAIRPERSON: And what are your plans in terms of the news content? How much of it will be local versus regional and national or international?
LISTNUM 1 \l 14874 MR. WILSON: Of course, news content is based on the events of the day. Sometimes in our business it's events of the hour.
LISTNUM 1 \l 14875 We are looking at 50 to 60 percent local, approximately 30 percent regional to take in the Kawartha Lakes area and that entire region and then the remaining being national and international news.
LISTNUM 1 \l 14876 THE CHAIRPERSON: And even there you don't see any synergies in the national or international news with your other stations?
LISTNUM 1 \l 14877 MR. WILSON: Not ‑‑ not really. It would be a case by case basis, but right now I can't really think of anything that would be specific.
LISTNUM 1 \l 14878 THE CHAIRPERSON: So even the Peterborough station will produce its own national news?
LISTNUM 1 \l 14879 MR. WILSON: Absolutely.
LISTNUM 1 \l 14880 THE CHAIRPERSON: Okay. Thank you.
LISTNUM 1 \l 14881 MS LAURIGNANO: Just to clarify, w will of course subscribe to national services such as BN.
LISTNUM 1 \l 14882 The synergies are really if something happens or you have an on‑the‑spot reporter, you know that we have the advantage from the other markets of just having them call in or if, as we mentioned even the other day, if a guest or a newsmaker happens to come by one studio, then we feel it is incumbent upon us to capture that and make it available to the other programmers whether it's in the news or programming. And then the production is always 100 percent local, at the local level.
LISTNUM 1 \l 14883 So it's really a matter of providing content rather than any package or any features or any news per se.
LISTNUM 1 \l 14884 THE CHAIRPERSON: And how much of the 126 hours of the broadcast week will be live to air?
LISTNUM 1 \l 14885 MS LAURIGNANO: We said ‑‑ within the application we said that a minimum of 100 would be local.
LISTNUM 1 \l 14886 There are no plans to do anything but the full schedule of 126 hours local programming, that that is something we felt might come in handy at some point in the future. Seven years is a long time, so it is just an option that we have, but there is really nothing in mind or in the plans right now.
LISTNUM 1 \l 14887 Also, because this would be the only AC station that we are operating, it is not compatible with any other AC station.
LISTNUM 1 \l 14888 We don't program another AC station currently, so there wouldn't really be that much of a fit in any event.
LISTNUM 1 \l 14889 THE CHAIRPERSON: If we go with the 100 hours, what would the other 26 be?
LISTNUM 1 \l 14890 MS LAURIGNANO: Right now they are 100 percent local.
LISTNUM 1 \l 14891 There are no plans to put anything but 100 percent live programming there.
LISTNUM 1 \l 14892 THE CHAIRPERSON: Okay. And, of that, is there any voice tracking or automated programming?
LISTNUM 1 \l 14893 MS LAURIGNANO: No, none at all.
LISTNUM 1 \l 14894 THE CHAIRPERSON: So you will be live‑to‑air?
LISTNUM 1 \l 14895 MS LAURIGNANO: Live‑to‑air through the broadcast day, 6 a.m. to midnight.
LISTNUM 1 \l 14896 THE CHAIRPERSON: Okay. CCD ‑‑ can you confirm with us what is your over‑and‑above commitment of CCD?
LISTNUM 1 \l 14897 MR. EVANOV: I will have Camela address that.
LISTNUM 1 \l 14898 THE CHAIRPERSON: You get the hot seat today.
LISTNUM 1 \l 14899 MS LAURIGNANO: Our total commitment is $500,000. The CCD owing under the new policy on the minimum is $7,000 over the seven years.
LISTNUM 1 \l 14900 The 20 percent over‑and‑above totals $98,600.
LISTNUM 1 \l 14901 THE CHAIRPERSON: The 20 percent being the 20 percent that goes to FACTOR.
LISTNUM 1 \l 14902 MS LAURIGNANO: That's on top of that.
LISTNUM 1 \l 14903 Therefore, our investment elsewhere is $347,200.
LISTNUM 1 \l 14904 THE CHAIRPERSON: And you will accept that as a condition of licence?
LISTNUM 1 \l 14905 MS LAURIGNANO: Sure will.
LISTNUM 1 \l 14906 THE CHAIRPERSON: Okay. Then I will move on to the questions that I have to read to you.
LISTNUM 1 \l 14907 Please confirm your understanding that, if licensed, your station will have to contribute a basic annual CCD contribution, imposed by 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 the new Radio Policy, Public Notice CRTC‑2006‑158.
LISTNUM 1 \l 14908 MS LAURIGNANO: Confirmed.
LISTNUM 1 \l 14909 THE CHAIRPERSON: Please confirm your understanding that, of this basic annual amount, no less than 60 percent of the station's basic annual CCD contribution must be allocated to either FACTOR or Musique Action, and the remaining amount, if any, may be directed to any eligible CCD initiative at your discretion.
LISTNUM 1 \l 14910 MS LAURIGNANO: Confirmed ‑‑ and, luckily, you only have to do that three more times.
LISTNUM 1 \l 14911 THE CHAIRPERSON: Maybe my colleagues will do a couple.
LISTNUM 1 \l 14912 Thank you for that.
LISTNUM 1 \l 14913 We have talked about you competing against these giants.
LISTNUM 1 \l 14914 I think Newcap is going to start to regret the fact that they called it the land of the giants today.
LISTNUM 1 \l 14915 MS LAURIGNANO: We think they are mini giants.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14916 THE CHAIRPERSON: You think you are a mini giant?
LISTNUM 1 \l 14917 MS LAURIGNANO: They are mini giants.
LISTNUM 1 \l 14918 THE CHAIRPERSON: That Newcap is a mini giant?
LISTNUM 1 \l 14919 MS LAURIGNANO: Yes.
LISTNUM 1 \l 14920 THE CHAIRPERSON: That is a whole other conversation.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14921 THE CHAIRPERSON: In terms of your impact on these giants, your business plan projects that 35 percent of your revenues will come from existing Peterborough stations.
LISTNUM 1 \l 14922 Once again, can you tell us what are the factors that you considered in coming up with that percentage?
LISTNUM 1 \l 14923 MR. EVANOV: I am going to have Chris Edelman walk you through how we came to all of those numbers.
LISTNUM 1 \l 14924 MR. EDELMAN: Essentially, as you have outlined, 35 percent of our revenue source will come from local radio stations, but I want to frame up exactly what we mean when we refer to local radio stations.
LISTNUM 1 \l 14925 When we refer to the local radio stations, we are including out‑of‑market stations, such as Star 93.3 in Coburg and 91.9 Bob FM out of Lindsay, which are taking money out of the Peterborough market, as well as the stations in Peterborough.
LISTNUM 1 \l 14926 I can get very specific with the breakdown, if you wish.
LISTNUM 1 \l 14927 THE CHAIRPERSON: In terms of that 35 percent, how much do you think will be repatriated and how much will come from those incumbent radio stations in the market?
LISTNUM 1 \l 14928 MR. EDELMAN: Absolutely. Okay. From that figure, the 35 percent, approximately 50 percent, or $131,000 in this case, would come from the out‑of‑market stations.
LISTNUM 1 \l 14929 I am specifically referring to the Coburg service and the Lindsay service, 91.9.
LISTNUM 1 \l 14930 The remaining 50 percent would come from the Peterborough stations.
LISTNUM 1 \l 14931 THE CHAIRPERSON: I don't think we need to get more specific than that, I just wanted to get a sense of ‑‑ like I said, what the impact is that you are going to have on CTVgm and Corus, and then the level of repatriation.
LISTNUM 1 \l 14932 MR. EDELMAN: Overall our impact will be very minimal.
LISTNUM 1 \l 14933 If you do all of the additions on all of the new revenue that we plan on bringing in, the math works out to about 82 percent of new revenue coming back into the Peterborough market.
LISTNUM 1 \l 14934 THE CHAIRPERSON: In terms of other media, at 35 percent, is that primarily print or ‑‑
LISTNUM 1 \l 14935 MR. EDELMAN: Yes, absolutely.
LISTNUM 1 \l 14936 I think the main three forces there would include print, flyers or direct mail, and outdoor media, all of which are currently the only general advertising grounds.
LISTNUM 1 \l 14937 What I mean by general is, I mean addressing that 24 to 54 demographic.
LISTNUM 1 \l 14938 It is my personal estimation that the biggest portion of this would come from the Examiner, which currently has a monopoly on delivering Peterborough‑relevant news through print to the 25 to 54 demographic.
LISTNUM 1 \l 14939 I feel confident that advertisers that see value in the Examiner will also see value in our service as a 24‑54, which would bring money into radio.
LISTNUM 1 \l 14940 THE CHAIRPERSON: Okay. Thank you very much for that.
LISTNUM 1 \l 14941 The other big factor in licensing, or not, of Peterborough is the frequency issue. Initially we asked you in deficiency questions, "If there was another frequency that would meet your purposes..."
LISTNUM 1 \l 14942 You did identify two others, I believe, initially, and you said that the use of either alternative frequency would not affect your business plan.
LISTNUM 1 \l 14943 Is that still your position?
LISTNUM 1 \l 14944 MS LAURIGNANO: It is our position, with the understanding that ‑‑ we also understand that there are some site‑sensitive issues around it, limitations, and we would hope that, in the interests of our system, and as broadcasters working together, those could be worked out.
LISTNUM 1 \l 14945 THE CHAIRPERSON: Would you, therefore, accept an approval in part?
LISTNUM 1 \l 14946 MS LAURIGNANO: We would. Obviously, we would prefer our initial choice, but sure.
LISTNUM 1 \l 14947 THE CHAIRPERSON: That's a given.
LISTNUM 1 \l 14948 MS LAURIGNANO: Yes.
LISTNUM 1 \l 14949 THE CHAIRPERSON: So you would accept an approval in part.
LISTNUM 1 \l 14950 MS LAURIGNANO: We would.
LISTNUM 1 \l 14951 THE CHAIRPERSON: In terms of the overall Peterborough market, can you tell us how many new commercial FM stations you believe the market can absorb?
LISTNUM 1 \l 14952 MS LAURIGNANO: If we take Corus at its word that they are flipping the station and they are keeping the integrity of their programming, we don't believe that that is an additional service.
LISTNUM 1 \l 14953 Therefore, we believe that it can take up to two.
LISTNUM 1 \l 14954 THE CHAIRPERSON: Two plus the flip?
LISTNUM 1 \l 14955 MS LAURIGNANO: Yes.
LISTNUM 1 \l 14956 THE CHAIRPERSON: Okay. Thank you very much, those are my questions.
LISTNUM 1 \l 14957 Do my colleagues have any others?
LISTNUM 1 \l 14958 Commissioner del Val.
LISTNUM 1 \l 14959 COMMISSIONER del VAL: The first question is on your opening statement. It is just for my own interest. I thought it was very interesting that you were calculating that you are playing new and emerging talent in excess of 12 percent. This is an average across all of your properties, is it?
LISTNUM 1 \l 14960 MR. EVANOV: No, not all of them. More predominantly Z 103.5 in Halifax and Z 103.5 in Orangeville, in southern Ontario.
LISTNUM 1 \l 14961 It has been an integral part of our programming. Actually, one of the reasons for our success is being different and kind of going against the grain of other broadcasters, playing new music and new and emerging artists, especially Canadians.
LISTNUM 1 \l 14962 That has given us a real advantage, we feel, in both markets, and we have seen that.
LISTNUM 1 \l 14963 I was referring to those two radio stations in particular.
LISTNUM 1 \l 14964 MR. BARTON: I would just like to add ‑‑ Paul is correct. Our new and emerging talent commitment is definitely progressive, in more ways than one; first of all, because we are synonymous with the definition of new and emerging talent given by CAB and given by CRIA, but also because we are promising not only 12 percent of our overall playlist, but that is 12 percent of our overall playlist played all week long.
LISTNUM 1 \l 14965 One trend that we have seen in broadcasting for radio stations is to support new and emerging talent, but then to take that music and ghettoize it by sticking it in a one‑hour time block, outside peak hours, on, say, Sunday night or early Sunday morning.
LISTNUM 1 \l 14966 We are adamant that if you are going to expose this new and emerging talent, it has to be part of your regular format.
LISTNUM 1 \l 14967 So we, as Paul mentioned, currently, in both Orangeville and in Halifax, play that new and emerging talent as part of our regular playlist, so they do get exposed in morning drive, midday, afternoon drive, and evening, all week long.
LISTNUM 1 \l 14968 One other commitment we have in playing this new and emerging talent is to make sure they get an increased number of spin, so that they are actually playing more per week than established artists.
LISTNUM 1 \l 14969 Our CCD is definitely very aggressive, and it is a very important part of the process, but we feel that, hand‑in‑hand with that, we are a radio station, and part of exposing these new artists is giving them the airplay that they need in order to be heard and appreciated.
LISTNUM 1 \l 14970 COMMISSIONER del VAL: From the public's perspective, have you received any response specifically to the emerging artists play that you ‑‑
LISTNUM 1 \l 14971 MR. BARTON: Absolutely, we have, and I can speak directly to a Halifax experience, actually.
LISTNUM 1 \l 14972 When that station was launched about a year and a half ago, we launched with this pent‑up demand in the market of all of these artists coming to our door saying, "Oh, my goodness, there is someone here who will play our music. We are not being heard in this market."
LISTNUM 1 \l 14973 In addition to playing them on our regular playlist, we are at the point now, after being in the market for a year and a half, where we have artists who have new releases who give them to us before the label is even putting them out.
LISTNUM 1 \l 14974 We have a feature that we run in Halifax called "Head‑to‑Head", where we allow our listeners to vote for their favourite.
LISTNUM 1 \l 14975 These new and emerging artists, some of whom don't even have record deals, are absolutely killing ‑‑ the people that are calling in to vote for these shows are loving this music, loving the fact that they have a radio station they can hear it on, and they are voting for it in droves.
LISTNUM 1 \l 14976 We are getting huge feedback on it.
LISTNUM 1 \l 14977 MS LAURIGNANO: Commissioner del Val, I would just like to add one thing about our Ottawa station, because Paul and Dan referred to the younger stations.
LISTNUM 1 \l 14978 For our Ottawa station, we are also doing about the same level, and we are blessed with an abundance of new and emerging artists there, especially given that we play instrumental artists there, so there is a wider pool to draw from.
LISTNUM 1 \l 14979 So we are anywhere from 12 percent and up in any given week on new and emerging artists.
LISTNUM 1 \l 14980 For an easy‑listening station, that is quite remarkable, in our opinion.
LISTNUM 1 \l 14981 And it is one of the things that we are proud of that makes us different, and people tune in because they do hear something different.
LISTNUM 1 \l 14982 COMMISSIONER del VAL: That's great. Thank you, that's good to know.
LISTNUM 1 \l 14983 I have a follow‑up question on your response to Chair Cugini, in that you believe the market can take up to two in addition to the flip.
LISTNUM 1 \l 14984 If one of the licensees were you, who would you think would be the best to complement this entire market?
LISTNUM 1 \l 14985 MS LAURIGNANO: From a logical point of view, it would be someone who would be serving a different demographic, and possibly a different format. That would just make sense.
LISTNUM 1 \l 14986 But having said that, if there is some other wisdom out there that would come to some other conclusion ‑‑
LISTNUM 1 \l 14987 As we said, we are not really afraid. There was a time when we were surrounded by giants within the same format, and we are still here.
LISTNUM 1 \l 14988 We are confident. We don't build our business plans on the shares. We really go out and get new business.
LISTNUM 1 \l 14989 I think that Chris did some analysis just on where our revenue comes from with our Halifax station, which is a case in point. We are in the same situation, a stand‑alone among some giants and multiple owners there.
LISTNUM 1 \l 14990 Quickly, Chris, could you just tell us what your findings were there?
LISTNUM 1 \l 14991 MR. EDELMAN: Yes, absolutely.
LISTNUM 1 \l 14992 When I did a breakdown of where we are getting money from, I didn't want to discount the reality of the competition in the Peterborough market.
LISTNUM 1 \l 14993 Essentially, we will be hitting the streets against both Corus and CTV. They have stations with tremendous heritage, such as The Wolf, which currently dominates the market.
LISTNUM 1 \l 14994 They are not going to simply hand over a portion of the buy. It is imperative that we find revenue streams outside current radio advertisers to survive.
LISTNUM 1 \l 14995 We need to go after other media to bring money to radio, and we have an outstanding track record for doing just that.
LISTNUM 1 \l 14996 A recent initiative of mine was to be hands‑on with our Halifax operation, Z 103.5. In doing a quick analysis in preparation for today's hearing, I took a look at last week's sales. Seventy‑seven percent of sales from last week were from new businesses to radio after Z 103.5 had its launch. That is a staggering number of people who are trying the medium for the first time.
LISTNUM 1 \l 14997 I then tried to take a trend or an average over the past four weeks to a month, and it came up in excess of 50 percent.
LISTNUM 1 \l 14998 We are street fighters. It is something that we do well. It is something that we have a long heritage of doing, and we intend to continue to do so.
LISTNUM 1 \l 14999 COMMISSIONER del VAL: I have a question on the frequencies. You may not have gathered this information already, and that would be okay.
LISTNUM 1 \l 15000 I know that everyone's number one choice would be 96.7. Would you have a ranking of, say, the other available frequencies that you have identified?
LISTNUM 1 \l 15001 What would be your second and third choice?
LISTNUM 1 \l 15002 MS LAURIGNANO: I don't have one, but I could certainly undertake to file one within the next day or so.
LISTNUM 1 \l 15003 COMMISSIONER del VAL: That would be good. Thank you very much.
LISTNUM 1 \l 15004 Those are my questions, Madam Chair. Thank you.
LISTNUM 1 \l 15005 MS SMITH: For the record, I just want to clarify your CCD again ‑‑ over‑and‑above.
LISTNUM 1 \l 15006 You said a total of $500,000, and then $7,000 over seven years to basic?
LISTNUM 1 \l 15007 MS LAURIGNANO: Yes.
LISTNUM 1 \l 15008 MS SMITH: And then you would have ‑‑
LISTNUM 1 \l 15009 MS LAURIGNANO: I'm sorry. The compulsory is $4,200.
LISTNUM 1 \l 15010 May I give you a chart which has it all?
LISTNUM 1 \l 15011 I will still confirm that.
LISTNUM 1 \l 15012 MS SMITH: If you want to read into the record what you have there, that would be ‑‑
LISTNUM 1 \l 15013 MS LAURIGNANO: I'm sorry, I misread something.
LISTNUM 1 \l 15014 The compulsory contribution is $4,200.
LISTNUM 1 \l 15015 The whole planned contribution is $500,001, actually.
LISTNUM 1 \l 15016 MS SMITH: And that's for your over‑and‑above. Correct?
LISTNUM 1 \l 15017 MS LAURIGNANO: No, 20 percent of the amount over base is $98,600. So the total FACTOR contributions are $102,800.
LISTNUM 1 \l 15018 And, then, to be invested elsewhere is $397,201.
LISTNUM 1 \l 15019 I did prepare a chart, which I am prepared to file, because I know there is some confusion.
LISTNUM 1 \l 15020 MS SMITH: Thank you for your answer, and perhaps you could file that on the record within one week, please.
LISTNUM 1 \l 15021 MS LAURIGNANO: I can file it right now. I have it.
LISTNUM 1 \l 15022 MS SMITH: That would be great. Thanks very much.
LISTNUM 1 \l 15023 Those are my questions. Thank you very much.
LISTNUM 1 \l 15024 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 15025 To you, the last word.
LISTNUM 1 \l 15026 MR. EVANOV: Thank you.
LISTNUM 1 \l 15027 We are here today as a member of a declining group in the Canadian broadcast system, small independent broadcasters. We fill a unique and irreplaceable role in serving communities through our often singular or regional focus in the markets we are licensed to.
LISTNUM 1 \l 15028 In the shadow of the mergers that have taken place in 2007, the disparity between large and small broadcasters has greatly increased. If we accept the premise that the mergers were required to arm these multi‑market and multimedia broadcasters with the resources they need to combat new technologies and new distribution streams like the internet, we would have to conclude that smaller broadcasters require this to the same extent or more.
LISTNUM 1 \l 15029 Peterborough represents an opportunity for an expansion, and these opportunities are becoming less and less available.
LISTNUM 1 \l 15030 So we are here before you asking for the opportunity to expand, to ensure that we can best serve the markets in which we operate today, and, most importantly, serve them in the future.
LISTNUM 1 \l 15031 Most relevant to these proceedings, however, is what we are uniquely proposing for Peterborough, and how we will be in the best position to serve the goals of the broadcast policy long‑term.
LISTNUM 1 \l 15032 We are the right choice for Peterborough because we offer programming that is not currently available from a Peterborough radio station. We will add diversity.
LISTNUM 1 \l 15033 We will make a truly substantial commitment to new and emerging artists through broadcasting their music, throughout the day and week, along with established artists, ensuring that the work of new and emerging artists will represent at least 12 percent of all the music played on our station.
LISTNUM 1 \l 15034 If you go by the CAB/CRIA definition of a new and emerging artist, our commitment to playing their work is by far the greatest commitment in the Peterborough call.
LISTNUM 1 \l 15035 Our commitment of 11 hours and 50 minutes to news and information programming ensures a new voice in the community, and will help to bring listeners back from out‑of‑market, AC‑formatted stations to Peterborough.
LISTNUM 1 \l 15036 Our CCD commitment is substantial, and it has been designed to be of particular benefit to the Peterborough area. It will also allow us to showcase a number of new and emerging artists in the Summer Rush Concert held each year.
LISTNUM 1 \l 15037 We will commit 40 percent of our schedule to promoting Canadian artists.
LISTNUM 1 \l 15038 We will bring new advertisers into radio in Peterborough. That is how we run our businesses, and we have had success in other markets bringing new money into radio, as you just heard from Chris.
LISTNUM 1 \l 15039 With the calibre and clout of the incumbent broadcasters, a new player must be able to compete and withstand the rugged competition it will certainly face. Neither is out‑of‑market spill going away. The competition for audience and the possibility of competing broadcasters rolling over onto a new player's format are challenges that few can survive.
LISTNUM 1 \l 15040 We can and do survive in some of the most competitive markets in the country, and we look forward to whatever Peterborough can offer.
LISTNUM 1 \l 15041 We started down this path of expansion 10 years ago. We are diligently working to fulfil the expectations of and obligations to our audience. We need to expand, we are positioned to expand, and we hope, with your permission, to take our next steps as a result of these proceedings.
LISTNUM 1 \l 15042 Thank you very much for your time.
LISTNUM 1 \l 15043 THE CHAIRPERSON: Thank you very much, Mr. Evanov, Ms Laurignano, and the rest of your colleagues.
LISTNUM 1 \l 15044 We will now take a 15‑minute break.
‑‑‑ Upon recessing at 1550 / Suspension à 1550
‑‑‑ Upon resuming at 1625 / Reprise à 1625
LISTNUM 1 \l 15045 THE CHAIRPERSON: First of all, I just want to thank you for your patience. The panel had to deal with another matter and I just wanted everyone to rest assured it had nothing to do with this hearing.
LISTNUM 1 \l 15046 Madam Secretary.
LISTNUM 1 \l 15047 THE SECRETARY: Thank you, Madam Chair.
LISTNUM 1 \l 15048 We will now proceed with item 14, which is an application by Frank Torres, on behalf of a corporation to be incorporated, for a licence to operate an English‑language FM commercial radio programming undertaking in Kawartha Lakes/Peterborough.
LISTNUM 1 \l 15049 The new station would operate on frequency 96.7 MHz (channel 244B) with an average effective radiated power of 11,694 watts (maximum effective radiated power of 50,000 watts/antenna height of 116.8 metres.
LISTNUM 1 \l 15050 Appearing for the applicant is Mr. Ed Torres. Please introduce your colleagues and you will have 20 minutes to make your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 15051 MR. E. TORRES: Good afternoon, Madam Chair, members of the Commission and Commission staff.
LISTNUM 1 \l 15052 My name is Ed Torres and I am the President and co‑founder of Skywords Radio.
LISTNUM 1 \l 15053 I would like to begin by thanking the Commission for entertaining our application for a new blues format FM radio licence.
LISTNUM 1 \l 15054 I will now take a moment to introduce our panel.
LISTNUM 1 \l 15055 Seated to my right is my brother Frank Torres. Frank is the Chief Operations Officer at Skywords, and together we founded Skywords in 1991.
LISTNUM 1 \l 15056 Beside Frank is Todd Bernard, the General Manager of Ottawa and Eastern Canada for Skywords. Todd is a part of the ownership group for this proposed licence.
LISTNUM 1 \l 15057 To my left is Yves Trottier. Yves is the former Program Director at Couleur FM in Gatineau and has held various program director positions before joining us.
LISTNUM 1 \l 15058 Beside Yves is Robyn Metcalfe, the Vice‑President of Programming for Skywords and also a part‑owner in this application.
LISTNUM 1 \l 15059 In the second row directly behind me is Ron Ford. Ron is a chartered accountant and CFO for Skywords.
LISTNUM 1 \l 15060 Beside Ron, to his right, Aubrey Clarke, Director of Business Development at Skywords and former Sales Manager.
LISTNUM 1 \l 15061 Al Kirkaldy, to the left of Aubrey, writes a regular blues column in the Peterborough Examiner and has produced a blues radio show on Trent Radio 92.7 FM for the past 10 years and the blues is what this application is about.
LISTNUM 1 \l 15062 Our presentation today will illustrate:
‑ that we have crafted a quality application;
‑ that we are experienced broadcasters;
‑ that the economic condition of the market is more favourable in Kawartha Lakes than it is in Peterborough;
‑ that we will increase plurality and provide the only other independent news voice on mainstream English‑language radio in the market of Kawartha Lakes;
‑ that we have created a solid, conservative business plan based on our 14 years of selling radio advertising in the local market; and
‑ that we provide a missing highly‑desired radio option to the Kawartha Lakes and Peterborough region listeners.
LISTNUM 1 \l 15063 We will also show that our format will help break and launch new Canadian blues artists through commercial airplay of their music on FM airwaves.
LISTNUM 1 \l 15064 Our application includes over 400 individual letters of support, including letters from:
‑ Rick McGee, the Mayor of the City of Kawartha Lakes;
‑ Dave Marsh, Councillor Ward 16 for the City of Kawartha Lakes;
‑ Barry Devolin, Member of Parliament Haliburton‑Kawartha Lakes‑Brock;
‑ Jeff Gould, owner of Pizza Nova, Lindsay;
‑ Terry Merrill, General Manager, Holiday Inn Peterborough;
‑ Mary Anne Greco, owner of the Legendary Red Dog live blues venue in the City of Peterborough;
‑ and blues artists such as Gary Kendall of the Downchild Blues Band, Jack DeKeyser, Jim Byrne and Rick Fines, to name a few.
LISTNUM 1 \l 15065 We have conducted extensive formal research into the viability of our proposed format in seven markets across Canada. Our research is ongoing but unequivocally points to a clear need for a blues format on commercial radio.
LISTNUM 1 \l 15066 To supplement our formal research we created an online survey at our website bluesincanada.com. It has garnered over 1,300 page views and generated over 350 responses. Overwhelmingly, respondents to the survey indicated they would listen to our station.
LISTNUM 1 \l 15067 The blues is a vibrant format. It exists on the internet, Galaxy, SIRIUS and on XM but it is not widely available on conventional over‑the‑air radio in Canada.
LISTNUM 1 \l 15068 Kawartha Lakes in Peterborough has a vibrant blues scene. The area has produced some of Canada's greatest blues artists such as Ronnie Hawkins, the Band, Rick Fines and Kevin Carley.
LISTNUM 1 \l 15069 Brian's Blues Fest is one of the region's biggest summer festivals. In fact, the blues is so important to Peterborough that the Peterborough Examiner features a regular blues column and we are fortunate to have that columnist on our panel to talk about the vibrant blues scene in Kawartha Lakes and Peterborough.
LISTNUM 1 \l 15070 MR. KIRKALDY: Thank you, Ed.
LISTNUM 1 \l 15071 I have produced a blues radio show for over 10 years on Peterborough's campus community station Trent Radio CFFF 92.7 FM and I do write a regular blues column in the Peterborough Examiner.
LISTNUM 1 \l 15072 I also sit on Canada's Maple Blues Awards nominating panel as well as the Blues Foundation's Blues Music, formerly WC Handy Awards nominating panel based in Memphis, Tennessee.
LISTNUM 1 \l 15073 In addition, I have served as a judge for the Juno Awards Best Blues Album category on many occasions.
LISTNUM 1 \l 15074 In 2007 alone there were some 115 new Canadian blues releases listed for consideration in the Maple Blues nominating process, many of which I received as a blues music programmer, but two or three hours of blues radio per week does not even begin to expose all of the wonderful artists in this genre and the listening public is out.
LISTNUM 1 \l 15075 A commercial blues radio format would provide listeners with unlimited hours of recordings by new and emerging artists from Canada and all parts of the world.
LISTNUM 1 \l 15076 I am also a successful promoter of blues music events in Peterborough, a community that has consistently nourished live blues music and its growing number of venues for well over two decades, and it is one that has produced many well‑known blues artists such as Jackson Delta, Rick Fines, Jimmy Bowskill, Bobby Watson, Buzz Thompson and Brock Stonefish.
LISTNUM 1 \l 15077 Nightspots like the Legendary Red Dog Tavern, Gordon Best Theatre and the Montreal House have flourished presenting live blues in the city for decades.
LISTNUM 1 \l 15078 In recent years they have been joined by the Black Horse Pub, the Rusty Snail, the Phoenix Room and the Holiday Inn, whose 12‑week summer Patio Blues series is entering its sixth year and is filled to 200‑seat capacity each and every week.
LISTNUM 1 \l 15079 As recently as last month a new upscale blues supper club, The Dobro, has opened its doors with an all‑blues live entertainment format on the city's main street.
LISTNUM 1 \l 15080 Kawartha Lakes and Peterborough is, in my opinion, ready to support a commercial blues radio format and the list of deserving artists, local, Canadian and international, is endless.
LISTNUM 1 \l 15081 MR. TROTTIER: DAWG‑FM will play 70 percent Cat 2 songs from the Rhythm and Blues and Blues Rock Category.
LISTNUM 1 \l 15082 The 70 percent will include some rock songs from blues artists. The blues is the root of most all modern music genres and as such blues listeners expect when they attend a blues concert you are going to hear some rock, particularly blues rock.
LISTNUM 1 \l 15083 In Cat 2 we will play rock songs from blues artists like the "Flip Flop and Fly" by The Downchild Blues Band or Sue Foley's "New Used Car" or Colin James' "Into the Mystic."
LISTNUM 1 \l 15084 We will play pop rock songs with a bluesy rhythm like "Ain't No Sunshine" from Bill Wither, "Come Running" from Van Morrison and "Look at Little Sister" by Stevie Ray Vaughn.
LISTNUM 1 \l 15085 We will complete the lineup with popular pop rock songs like "Susie Q" from CCR, "American Woman" by the Guess Who and "Fly Like An Eagle" by the Steve Miller Band.
LISTNUM 1 \l 15086 DAWG‑FM will play, as a condition of licence, between 20 and 30 percent of selections from Category 3 blues, including classic blues, delta blues, Chicago blues and contemporary blues.
LISTNUM 1 \l 15087 Our goal is to play 29 percent blues music, the maximum that we can. Most of this will come from emerging Canadian artists like J.W. Jones, Garrett Mason and Jimmy Bowskill. Forty percent of all selections will be Canadian content.
LISTNUM 1 \l 15088 DAWG‑FM will prepare specialty shows, syndication ready, for export to the rest of Canada and the world. Two examples of these shows are "Canadian Women of Blues" and "The Blues in Quebec." Such features will expose blues artists and their music globally.
LISTNUM 1 \l 15089 MR. BERNARD: There are two compelling reasons to locate this frequency in the City of Kawartha Lakes.
LISTNUM 1 \l 15090 Firstly, there is only one originating commercial mainstream radio station in Kawartha Lakes to serve a population of approximately 75,000 or on a per capita basis, the City of Kawartha Lakes has one station for every 75,000 residents.
LISTNUM 1 \l 15091 By comparison, Peterborough has four commercial mainstream radio stations to serve a population of approximately 117,000 or on a per capita basis, Peterborough has one station for every 29,000 residents.
LISTNUM 1 \l 15092 Further, Kawartha Lakes has no independently owned news voice in the market. The only voice in the market is that of CTVglobemedia. This fact is a concern within the community.
LISTNUM 1 \l 15093 Member of Parliament for Haliburton‑Kawartha Lakes‑Brock, Barry Devolin, makes this concern very clear in his letter of support for this application and I quote:
"As I am sure you are aware, the City of Kawartha Lakes, with a permanent population of 75,000 and tens of thousands of seasonal residents, is currently served by just one radio station. Unfortunately, BOB‑FM is a music‑driven radio station which dedicates very little time and resources to local news coverage. To make matters worse, the City of Kawartha Lakes no longer has a daily newspaper. As you can imagine, this makes it very difficult for residents to get local news. I believe this community needs a distinctive voice for local news and public affairs." (As read)
LISTNUM 1 \l 15094 Consider that CKLY was licensed in 1955. Since then not a single commercial mainstream station has been licensed in the City of Kawartha Lakes. This point is punctuated by out‑of‑market tuning, which accounts for over 85 percent of listening.
LISTNUM 1 \l 15095 The second compelling reason to locate the station in Kawartha Lakes is the strength of the economy in Kawartha Lakes compared to that of Peterborough.
LISTNUM 1 \l 15096 Peterborough's population growth from 2001 to 2006 lagged behind the national average of 5.4 percent. Kawartha Lakes, on the other hand, saw phenomenal population growth of 7.8 percent, outpacing the Canadian average by 2.4 percent.
LISTNUM 1 \l 15097 Peterborough has steadily lost manufacturing jobs and the age of its population has steadily increased. In fact, Peterborough has the second‑oldest population in Canada. This explains why Peterborough's largest employer is the hospital. Average household incomes in Peterborough are 7 percent below the national average and unemployment at 6.5 percent is 4 percent above the national average.
LISTNUM 1 \l 15098 Kawartha Lakes, by contrast, has a strong agriculture‑based economy, and most importantly, the City of Kawartha Lakes has been designated a place to grow by the Government of Ontario's Places to Grow At. As such, the city is part of a strategic growth plan that will see funding for additional infrastructure and programs. This designation is a key positive economic factor that will drive the success of our business and the City of Kawartha Lakes.
LISTNUM 1 \l 15099 MS METCALFE: DAWG‑FM will be a positive and enjoyable workplace. As a programmer I look for people with a passion for radio, a team mentality that will work together to come up with great products and amazing radio.
LISTNUM 1 \l 15100 The station's people are key to building a community connection and will partner with service clubs, the BIAs, commerce chambers, churches and local community organizations to create a radio station that is locally focused.
LISTNUM 1 \l 15101 DAWG‑FM will be young, energetic and bring new ideas to radio. We like to say that we aren't the big dogs on the block but we have attitude.
LISTNUM 1 \l 15102 Our radio station will have a brand and it will have a feel. The feel is the blues.
LISTNUM 1 \l 15103 I would like to play you a sample of our feel.
‑‑‑ Audio presentation / Présentation audio
LISTNUM 1 \l 15104 MS METCALFE: I am proud of our commitment to break new blues artists. FACTOR supports 241 blues artists and assists them with recording, marketing and in various other capacities but without a commercial outlet the careers of these artists hit the glass ceiling. Many are successful and well‑known abroad, selling out venues and a large number of CDs but at home they are virtually unknown.
LISTNUM 1 \l 15105 I am equally proud to highlight the fact that our station will be a good corporate citizen, engaged and connected with our community and environmentally responsible. Yes, the blues are green.
LISTNUM 1 \l 15106 We take pride in proposing that DAWG‑FM be the first carbon neutral broadcaster in Canada. We will offset our carbon footprint by using the Zerofootprint Carbon Calculator. We will seek out alternative energy, saving ways to heat and light our operations.
LISTNUM 1 \l 15107 Further, we will offset the impact of our carbon footprint with real, tangible, additional benefits to the environment. For example, if we use six tonnes of CO2 per year, we will pay the environment by purchasing carbon credits from environmental organizations that are researching and implementing new strategies and programs to minimize the amount of CO2 in the atmosphere.
LISTNUM 1 \l 15108 We want to ensure that there is a place for our future generations of our DAWGs to play. We will examine the use of Bullfrog Power versus hydro. We will use envirocards for station vehicles to do our part for the earth. Through our recycling programs and our Greenhome Minute feature we plan to take a leadership role in the promotion of a greener Canada and an ecofriendly radio industry.
LISTNUM 1 \l 15109 Our station will be live, local and loaded. That is right, lots of spoken word.
LISTNUM 1 \l 15110 To speak about our 16‑year track record in the broadcast industry and our background in spoken word, I would like to introduce Frank Torres.
LISTNUM 1 \l 15111 MR. F. TORRES: Thanks, Robyn.
LISTNUM 1 \l 15112 Skywords began providing traffic reports to stations in Peterborough and Kawartha Lakes regions in 1994. Success came quickly through crafting a unique traffic report aimed at cottagers. Our cottage country reports are sold by our in‑house sales force to ad agencies and to clients directly.
LISTNUM 1 \l 15113 Our intimate knowledge of the market comes from having served it for the past 13 years. The proximity of our head office and our experience in selling non‑traditional radio advertising in the area make the market a perfect fit for our current operations.
LISTNUM 1 \l 15114 Over the past 16 years we have developed a sales strategy that focuses on non‑traditional radio advertisers. In fact, many of our existing radio clients were introduced to radio by Skywords, companies such as Holy Cow Canoe, Dollar Thrifty Rent A Car, Off Skintastic, Langford Canoe and a host of others. Skywords brought these clients to radio and in many cases these advertisers have since incremented their radio budgets.
LISTNUM 1 \l 15115 Skywords is a Canadian home‑grown entrepreneurial success story. The next logical extension of our business is into full radio operations. As part of our strategic plan we have submitted five applications in 2007 and we will submit more in 2008.
LISTNUM 1 \l 15116 With this background in spoken word and with 16 years of industry experience DAWG‑FM will be live, local and loaded. We will put the people of Kawartha Lakes first and their stories front and centre.
LISTNUM 1 \l 15117 Newscasts will lead with City of Kawartha Lakes council activity or stories of local interest in Kawartha Lakes, field reports will encompass Bobcaygeon, Fenelon Falls and other smaller centres that make up this expansive city.
LISTNUM 1 \l 15118 Sportscasts will lead with Muskie scores and then go in‑depth into other minor sports associations of Kawartha Lakes.
LISTNUM 1 \l 15119 Our research shows that our target listener is very interested in news and information. Eight‑four per cent of people surveyed feel that news and information are important. While other stations shy away from using spoken word, DAWG‑FM embraces it. Our background as leader in production of spoken word content means that DAWG‑FM will provide listeners in Kawartha Lakes with high‑quality news, weather and sports.
LISTNUM 1 \l 15120 Business reports will air three times per day with real‑time market numbers, school bus cancellations and snowmobile trail condition reports will air seasonally. In addition, our commitment to 24/7 staffing will ensure that news breaks where emergencies occur and we will relate that important information to our listeners immediately.
LISTNUM 1 \l 15121 DAWG‑FM will participate in the OPP's AMBER Alert Program and will play an active role in community safety. DAWG‑FM will take a leadership position in terms of traffic reports by providing traffic reports every 15 minutes during morning drive and around the clock.
LISTNUM 1 \l 15122 MR. TROTTIER: Our Canadian content development has been carefully crafted in association with two of the most reputable promoters of Canadian talent and Canadian musicians. DAWG‑FM will provide $350,000 over seven years to Canadian content development. FACTOR will receive $30,000 annually that will go to fund blues genre artists. This is a substantial investment in musicians that will promote the blues and help launch careers and the music of emerging Canadian artists.
LISTNUM 1 \l 15123 Canadian Music Week will receive $16,000 annually to sponsor the Indie Blues Artist or Duo of the Year Award at the Independent Music Awards. Further, they will create three blues series shows at the Canadian Music Week Festival that don't currently exist. And CMW will provide scholarships to the TuneUp Conference during Canadian Music Week for local musicians to attend. CMW will also direct funds on behalf of DAWG‑FM to Brian's Blues Festival.
LISTNUM 1 \l 15124 To offset costs in school board budgets, DAWG‑FM will provide $2,000 per year to local school boards for the purchase of musical instruments to foster an appreciation of music in our youth.
LISTNUM 1 \l 15125 Mark Philbin creates Canadian programming for syndication across Canada and the rest of the world. DAWG‑FM will provide $2,000 per year to produce blues shows in partnership with DAWG‑FM and to syndicate these shows in Canada and on a global basis.
LISTNUM 1 \l 15126 Now, I will ask Ed to wrap this puppy up.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15127 MR. ED TORRES: The approval of this application will accrue substantial benefits to the public and, as such, it is in the best interest of the public. It will provide the 74,000 residents of Kawartha Lakes with a second local news option.
LISTNUM 1 \l 15128 It will provide a format that is not currently available on conventional over‑the‑air radio. It will repatriate listeners that tune to out‑of‑market stations or listen to satellite or internet feeds for their desired programming. It will accrue substantial benefits to the Canadian blues industry, artists, promoters and the like. We will add diversity to the ownership of the Canadian broadcast system and encourage the participation of minorities and women.
LISTNUM 1 \l 15129 They Mayor of the City of Kawartha Lakes, in support of this application states, and I quote:
"The blues format is a new choice for listeners and deserves to be made widely available to Canadian radio listeners. Our area is underserved." (As Read)
LISTNUM 1 \l 15130 Barry Devolin, Member of Parliament for Kawartha Lakes states, and I quote:
"I believe this community needs a distinctive voice for local news and public affairs." (As Read)
LISTNUM 1 \l 15131 And support letters of over 400 people that we have filed with the Commission, in addition to letters that continue to arrive after the submission deadline, are unanimous in their call for the approval of DAWG‑FM.
LISTNUM 1 \l 15132 So we ask that over the holidays, when you have time to reflect and possibly when your best furry friend is curled up at your heel, we ask you to think of our application favourably. Please expect to see us a number of times in the new year as we continue our attempts to give the blues in Canada a commercial voice on radio. After all, to paraphrase the Blues Brothers, we are on a mission from DAWG.
LISTNUM 1 \l 15133 We look forward to your questions.
LISTNUM 1 \l 15134 THE CHAIRPERSON: I don't quite know how to react to that.
‑‑‑ Laughter/Rires
LISTNUM 1 \l 15135 THE CHAIRPERSON: Other than to say thank you very much for your presentation.
LISTNUM 1 \l 15136 I will ask Commissioner Menzies to lead the questioning.
LISTNUM 1 \l 15137 COMMISSIONER MENZIES: Thank you.
LISTNUM 1 \l 15138 Could you just give me a bit ‑‑ I don't need a long story, but the Coles Notes version of Skywords?
LISTNUM 1 \l 15139 MR. ED TORRES: Sure, the Coles Notes is in 1991 my brother and I started a company with the idea that traffic reports on radio were really bad. We were both pilots and we would look down at the traffic and then we would listen to it simultaneously. And what was being reported on radio wasn't what was happening that we could see.
LISTNUM 1 \l 15140 We took that idea to one radio station in Toronto in 1993 and with the caveat that we would not be exclusive to their station. They said, sure. And the next year we were on seven radio stations. They year after that we were on 38 radio stations.
LISTNUM 1 \l 15141 Today we are on 150 radio stations, we have five offices across Canada, we have an office that we have just opened in Edmonton that we are very proud of, we have an office in Vancouver, an office in Halifax and our head office in Markham and our office in Ottawa.
LISTNUM 1 \l 15142 COMMISSIONER MENZIES: Thank you. Sorry.
LISTNUM 1 \l 15143 MR. ED TORRES: I mean, I could talk at length about Skywords, but not only did we provide traffic reports, but a host of other radio products. We have diversified from our initial product offering, so we offer business ‑‑
LISTNUM 1 \l 15144 COMMISSIONER MENZIES: You guys did this on your own?
LISTNUM 1 \l 15145 MR. ED TORRES: Yes, we started it, my brother and I.
LISTNUM 1 \l 15146 MR. FRANK TORRES: And I guess, just to further expand, but to maintain within the Coles Notes, clarification. We generate our revenue by selling air time on the radio stations and we have done that from day one and we continue to do that successfully 16 years later.
LISTNUM 1 \l 15147 MR. ED TORRES: Yes, the hook for the station was, look, we can really improve your traffic and it is not going to cost you an extra dime. We are just going to send that little 10‑second avail at the end of your traffic report.
LISTNUM 1 \l 15148 In 1991, in Toronto when we started, a lot of stations weren't doing traffic reports. It is hard to believe that in a major urban centre like Toronto a station that was based in Oshawa or Ajax, they wouldn't do traffic reports. So we added spoken word in the form of traffic reports from the very beginning and we have made our revenue, again, from selling those 10‑seconds that nobody else really wanted to sell at the time.
LISTNUM 1 \l 15149 COMMISSIONER MENZIES: Okay, thanks. I am very curious actually to know more about your key demographic in terms of the presentation. I am not overwhelmed by the information I have had so far on the research into that, and so I need to know more and I need to know roughly who your target audience is that you are going to deliver to your advertisers.
LISTNUM 1 \l 15150 MR. ED TORRES: Okay. Our general target is 25‑54 and I know you have heard that before, our core target is 35‑54, and our median age is 40 years old, and it is not a male, it is a male/female. In all our research ‑‑
‑‑‑ Laughter/Rires
LISTNUM 1 \l 15151 MR. ED TORRES: I will tread lightly here.
LISTNUM 1 \l 15152 Our research shows that it is almost split right down the middle. Generally, it is a 58/42 and we have researched, again, into seven different markets, we have had formal research carried out.
LISTNUM 1 \l 15153 So now, let me also state that we went beyond the formal research and we created an online survey. In fact, the online survey at Blues In Canada is the same questions that the research company came up with. And what happens is that when you go online and people find this through the World Wide Web we get an email sent to my PDA, and I received one today, and it was 35‑44.
LISTNUM 1 \l 15154 So we have received 360 responses to the online survey. So one thing that we are pretty locked in on is the demo. Further to that, we have done the ground‑level research, and it is tough work, but we sent Todd and Robyn and Jamie Campbell our Sales Manager and I may have been there as well, but we went to the venues in Peterborough, we have been to venues in Ottawa extensively, we have travelled to venues in Belleville, but 35‑44 are the people that are listening to the blues.
LISTNUM 1 \l 15155 And it is the music that is happening throughout Ontario on a regular basis and every night, Thursday, Friday, Saturday people go out to see blues bands and those people are in that demo.
LISTNUM 1 \l 15156 COMMISSIONER MENZIES: Okay. There is a few technical issues here, so forgive me if I confuse them. In your application you commit to a 110 hours of local broadcast. When the Commission asked for clarity on the other 16 hours we heard back that 10 hours would consist of "local programming of syndicated products."
LISTNUM 1 \l 15157 Now, by definition, syndicated programming can't qualify as local unless it is produced by the station or for you in the local community. Can you clarify that for us?
LISTNUM 1 \l 15158 MR. ED TORRES: Absolutely. I mean, syndicated programming, if you want to call it that, that is what we do at Skywords. And we certainly want to expose this music and make it available to as many people across the country as possible, so we would produce our own local syndicated‑ready product.
LISTNUM 1 \l 15159 So it would be voiced in our Kawartha Lakes studio, it would originate from the Kawartha Lakes studio but it would be national. So what would happen is the announcer would not make reference to the local weather, he would not make reference to time checks, it would be packaged and it would be shipped to other stations participating on a network basis.
LISTNUM 1 \l 15160 So we would be producing it locally and then we would be exporting it, not only to Canada, we think that this is a viable export product into the Caribbean, into parts of the UK and into Australia.
LISTNUM 1 \l 15161 COMMISSIONER MENZIES: Would that carry Canadian content as well?
LISTNUM 1 \l 15162 MR. ED TORRES: Absolutely, yes. And we do this ‑‑
LISTNUM 1 \l 15163 COMMISSIONER MENZIES: So the 40 per cent would be packaged within that?
LISTNUM 1 \l 15164 MR. ED TORRES: Yes. We do this already, we do an 1980s show that we produce, it is called Back to the 1980s, and we syndicate it to radio stations across Canada. It is already packaged with the 40 per cent CanCon.
LISTNUM 1 \l 15165 What we found that our feedback from our radio clients or affiliates, they take all this American programming like Rick Dees and Casey Kasem and John Tesh and then they spend hours fixing the music so that it meets Canadian content requirements. So we said, well, if you are going to carry an 1980s show we will give you one that is already produced in Canada, right, by Canadians, we should know the market and the music that Canadians want to hear, and then we will give it to you already in a package, good to go, and we are not even going to charge you for it, just going to take a little time.
LISTNUM 1 \l 15166 COMMISSIONER MENZIES: You are giving it away?
LISTNUM 1 \l 15167 MR. ED TORRES: We do a trade for advertising.
LISTNUM 1 \l 15168 COMMISSIONER MENZIES: Yes, okay. That makes sense. I would have been worried if you were giving it away.
LISTNUM 1 \l 15169 There might be some confusion in the application regarding news content and we will see if we can clear that up. You have committed to 5 hours and 45 minutes of news, but in your application that seems to include sports, business and entertainment items which were defined as surveillance items.
LISTNUM 1 \l 15170 MR. ED TORRES: Yes, I think we have clarified that. Frank has a laundry list of how it plays out.
LISTNUM 1 \l 15171 MR. FRANK TORRES: And we did provide a breakout of spoken word content in the response to deficiencies. And to summarize in brief on the major points, we had a total spoke word content of 14 hours, of that news content is 4 hours and 45 minutes, and that is news not including surveillance.
LISTNUM 1 \l 15172 And we have a list of surveillance items, I won't go into too much detail, but surveillance items that are not counted in that news total of 4 hours and 45 minutes are weather, traffic, sports, business, vignettes, the local features, community cruisers and entertainment reports.
LISTNUM 1 \l 15173 COMMISSIONER MENZIES: It was 14 hours in all?
LISTNUM 1 \l 15174 MR. FRANK TORRES: Correct, 14 hours of total spoken word.
LISTNUM 1 \l 15175 COMMISSIONER MENZIES: And 4.45 is news, so that leave us with what, 9.25 of ‑‑ do those surveillance items account for the rest of it?
LISTNUM 1 \l 15176 MR. FRANK TORRES: Correct, 4 hours and 45 minutes are news, not including surveillance items.
LISTNUM 1 \l 15177 COMMISSIONER MENZIES: On the news, you mentioned in your presentation that ‑‑ was there a newspaper there once but there isn't anymore?
LISTNUM 1 \l 15178 MR. ED TORRES: There was, the Lindsay Post existed until recently.
LISTNUM 1 \l 15179 COMMISSIONER MENZIES: Okay, the newspaper is dead and there is one radio station. And there is a need for news.
LISTNUM 1 \l 15180 Now, help me understand how you are going to meet that with 4 hours and 45 minutes.
LISTNUM 1 \l 15181 MR. ED TORRES: Well, that is a minimum, so we are talking about a minimum news commitment. So when we get into the market we will test that more with focus groups and, you know, if we have to move that number up we certainly will.
LISTNUM 1 \l 15182 Another thing that is not included in the spoken word content is the number of interviews that will happen in the course of morning shows. So we have already talked about having the mayor on once a week for the mayor's wrap‑up. So this is included in the deejay banter or announcer speak, but it is going to be news oriented.
LISTNUM 1 \l 15183 So again, those are minimum numbers, but the strategy and really the point of this application is to provide news content to the people of Kawartha Lakes, because we know that news and information drives local listening and we think that our unique format will as well.
LISTNUM 1 \l 15184 But we want the people of Kawartha Lakes to be able to hear, you know, their son's name when he scores a goal playing rep hockey or that the local soccer team, you know, beat Peterborough in the final, so that is where we are aiming. So really, these are minimum numbers.
LISTNUM 1 \l 15185 COMMISSIONER MENZIES: Okay. In your live‑to‑air you indicate you will have live announcers 24 hours a day. I need from you, in order to compare with the other applicants to identify specific commitments that will provide live‑to‑air, voice tracked or automated programming.
LISTNUM 1 \l 15186 MR. ED TORRES: Okay, I think Yves has a breakdown of the 24/7 information.
LISTNUM 1 \l 15187 MR. TROTTIER: Yes, we are going to have 24 hours live announcers on the air, so there will not be voice tracked or something like that. So in our plan we are going to hire five announcers fulltime and four announcers halftime, so there will be nine at the end.
LISTNUM 1 \l 15188 COMMISSIONER MENZIES: So you will go right through seven days a week, 24 hours a day?
LISTNUM 1 \l 15189 MR. TROTTIER: Yes, we will, except for the hours of ‑‑
LISTNUM 1 \l 15190 MR. ED TORRES: The syndicated shows.
LISTNUM 1 \l 15191 MR. TROTTIER: ‑‑ the syndicated shows.
LISTNUM 1 \l 15192 COMMISSIONER MENZIES: For that 10 hours of syndication that you ‑‑
LISTNUM 1 \l 15193 MR. ED TORRES: Yes.
LISTNUM 1 \l 15194 COMMISSIONER MENZIES: Okay.
LISTNUM 1 \l 15195 MR. ED TORRES: And again, the 24/7 is born out of our frustration as content providers. We staff our offices as late as radio stations will take our traffic reports and our information content. What happens is at 6:00 everyone flicks on the automation and we are out of inventory, we can't get in there to provide reports.
LISTNUM 1 \l 15196 And it is something that we also think is not in the public's best interest, because when an emergency happens the radio station is your first point of contact. And whether it is an accident, an ice storm, we want to make sure that we are there 24/7, so when news breaks we can put it on the air.
LISTNUM 1 \l 15197 COMMISSIONER MENZIES: Okay. In terms of your revenue base you mention that you are going to draw 50 per cent or your business plan has you drawing 50 per cent of your revenue from Peterborough, Peterborough comprising roughly 40 per cent of your news content or spoken word content.
LISTNUM 1 \l 15198 I am just curious about that, because sometimes the needs of advertisers in terms of drawing an audience and the needs of listeners don't always sync. And I am thinking that if you have half your revenue based in Peterborough that there would be quite a temptation there to work half your content towards the Peterborough market. Maybe you can clarify how that will work?
LISTNUM 1 \l 15199 MR. ED TORRES: Sure. You know, we think that our audience will be driven in Peterborough by the format. Peterborough residents and Peterborough advertisers have enough news choices and enough news options. We think that it is more strategic to be Kawartha Lakes centric on the news side, you know, the sponsorship of news is actually a premium item, sponsorship of spoken word is a premium item, you can charge more.
LISTNUM 1 \l 15200 You can see that with only one player in the Kawartha Lakes market if the local car dealer locks up the news for 52 weeks a year, that shuts out all the other car dealers. So, you know, our commitment to drive that 50 per cent out of Kawartha Lakes is going to be what ensures that our news and information is Kawartha Lakes centric.
LISTNUM 1 \l 15201 MR. FRANK TORRES: And if I may expand on that as well. Although 50 per cent of share will be derived from Peterborough, it doesn't necessarily mean that 50 per cent of revenues will be derived from Peterborough. In our experience of selling inventory across Canada on over 150 radio stations most of those radio stations are unranked. We have become very good at selling radio inventory not based on share and that would be a perfect example.
LISTNUM 1 \l 15202 COMMISSIONER MENZIES: Okay. I am not that familiar with these communities, but it strikes me that it doesn't make a heck of a lot of difference if you are in Kawartha Lakes or Peterborough in terms of that. So I am trying to figure out how anybody would define Kawartha Lakes news from Peterborough news.
LISTNUM 1 \l 15203 MR. ED TORRES: I mean, I live in a small community, in Trenton, Ontario, which is just southwest of Kawartha Lakes, and Belleville is the big brother. Belleville has a big population centre, has the big‑box stores, so I always here what the Bulls are doing, but I don't get the scores from the Trenton pack. And my son plays for the Trenton Golden Hawks and the only time I hear his name on the Belleville radio station is when they play Belleville. So the local market is not providing that need for me. So Lindsay is a little brother to Peterborough, Kawartha Lakes is a little brother to Peterborough, so that is kind of to give you some insight into the markets. That is why we have decided we are going to serve that population.
LISTNUM 1 \l 15204 COMMISSIONER MENZIES: Your application kind of indicates to me that you believe that you have spotted a demographic shift or trend so that Kawartha Lakes is the growing area whereas Peterborough ‑‑ I don't want to put words in your mouth ‑‑ not exactly in decline, but that its pace of growth is not going to be as intense as Kawartha Lakes and that you believe you have spotted something and are trying to get ahead of the curve on that, is that..?
LISTNUM 1 \l 15205 MR. ED TORRES: Well, you know what, we have been servicing the market for 14 years and we know it intimately. And, you know, really, when the call comes out in Peterborough which is, you know, very well served by radio, it has eight radio stations in the market, it has one TV station and a newspaper.
LISTNUM 1 \l 15206 Then you look at the neighbouring community, which has a population that is comparable. Well, what we really looked at was, wow, this is the last viable frequency. This 96.7 actually serves Kawartha Lakes. All the other frequencies serve Peterborough nicely, but they don't serve Kawartha Lakes nicely. So the time to act was now.
LISTNUM 1 \l 15207 COMMISSIONER MENZIES: Okay. How many staff would you have in place at launch?
LISTNUM 1 \l 15208 MR. ED TORRES: I think Yves has got the numbers.
LISTNUM 1 \l 15209 MR. TROTTIER: Yes. Thirteen persons for programmation and the news service. And we are going to have a salesman ‑‑
LISTNUM 1 \l 15210 COMMISSIONER MENZIES: Sorry, I misheard, how many people did you say?
LISTNUM 1 \l 15211 MR. TROTTIER: I said 13 people ‑‑
LISTNUM 1 \l 15212 COMMISSIONER MENZIES: Okay.
LISTNUM 1 \l 15213 MR. TROTTIER: ‑‑ for the programmation and news service. And for about the news and the direction, we are going to have five. So four news people and one secretary who is going to do the log at the same time.
LISTNUM 1 \l 15214 MR. ED TORRES: Okay. Can you break the whole number down for me in terms of what the staff structure looks like?
LISTNUM 1 \l 15215 MR. TROTTIER: Yes.
LISTNUM 1 \l 15216 COMMISSIONER MENZIES: You have got five news ‑‑ you got it all there?
LISTNUM 1 \l 15217 MR. TROTTIER: We are going to have two fulltime journalists, 40 hours each, who are going to be based in Kawartha Lakes and one halftime in Peterborough.
LISTNUM 1 \l 15218 COMMISSIONER MENZIES: But what other staff do you have, salespeople, administration?
LISTNUM 1 \l 15219 MR. TROTTIER: Yes, we have one sales director and he will be the general manager at the same time. We have three salespeople and, after that, the secretary is going to do the log too and, after that, we are going to the programmation and journalist staff.
LISTNUM 1 \l 15220 COMMISSIONER MENZIES: Okay, thank you.
LISTNUM 1 \l 15221 MR. TROTTIER: So it is around 18.
LISTNUM 1 \l 15222 COMMISSIONER MENZIES: Right. One question I was going to ask in terms of your news content and the splits that you put down, would you be willing to take that on as a condition of licence?
LISTNUM 1 \l 15223 MR. ED TORRES: Yes, absolutely.
LISTNUM 1 \l 15224 COMMISSIONER MENZIES: All right. Thanks.
LISTNUM 1 \l 15225 So what happens if the revenue isn't there in terms of this, because one of the things I basically wanted to talk about is if it isn't there and the blues format doesn't work, how do I know you don't just change your format two years down the road?
LISTNUM 1 \l 15226 MR. ED TORRES: That's a good question, Mr. Commissioner. We have indicated that we are willing to accept as a condition of licence up to 25 per cent of Category 3. So really what that does is it really locks us into the format. I mean, if we are going to play blues genre music from Category 3, there is not a lot of ‑‑ I mean, you can tweak the other 70 per cent, but you certainly couldn't put AC, Celine Dion, Michael Buble, you couldn't really put that. I mean, you would end up with an odd duck.
LISTNUM 1 \l 15227 COMMISSIONER MENZIES: Yes, it would be different.
LISTNUM 1 \l 15228 MR. ED TORRES: Or an odd "DAWG".
LISTNUM 1 \l 15229 COMMISSIONER MENZIES: If conditions of licence were imposed, as you said, on format, specifically ‑‑ you may just have answered this, but I need to get this on the record, specifically subcategory 3, 4, jazz and blues, at 25 per cent to 30 per cent. I think you just said 20 per cent, but if I said 25 per cent to 30 per cent, would that still work?
LISTNUM 1 \l 15230 MR. TROTTIER: 25 per cent would be perfect, because we got to have 70 per cent of Cat. 2 to respect the licence, so if we accept 25 per cent of Cat. 3 music, we are going to have 5 per cent to be sure that we are going to be on the edge between Cat. 2 and Cat. 3.
LISTNUM 1 \l 15231 COMMISSIONER MENZIES: What if it was specific to parts of the day?
LISTNUM 1 \l 15232 MR. TROTTIER: Yes, it will be Cat. 2 and Cat. 3 30 per cent ‑‑ 30 per cent Cat. 3 music all day, in the morning ‑‑
LISTNUM 1 \l 15233 COMMISSIONER MENZIES: 6:00 to 6:00.
LISTNUM 1 \l 15234 MR. TROTTIER: ‑‑ 6:00 to 6:00, and 40 per cent for all day, too.
LISTNUM 1 \l 15235 COMMISSIONER MENZIES: All right. Is there any problem hitting Cancon requirements in that subcategory?
LISTNUM 1 \l 15236 MR. TROTTIER: No. As we said before in the presentation, just for this year there were 115 new blues albums, just for this year. So there is no problem with Canadian content.
LISTNUM 1 \l 15237 COMMISSIONER MENZIES: All right. Thank you.
LISTNUM 1 \l 15238 You are proposing in your over and above ‑‑ which is sort of switching now ‑‑ a $2,000 annual to Starboard to produce blues programming.
LISTNUM 1 \l 15239 Will you be broadcasting this, the programming that is produced?
LISTNUM 1 \l 15240 MR. ED TORRES: Yes. I guess our intention is to foster that talent that Mark Philbin has for creating these syndicates shows. He is the person behind our "Back to The 80s" show.
LISTNUM 1 \l 15241 Again, we haven't looked at specifically the shows that he would produce for us, but it was our thought that one of those shows would end up on our station.
LISTNUM 1 \l 15242 COMMISSIONER MENZIES: Isn't that just a cost of doing business in terms of that?
LISTNUM 1 \l 15243 MR. ED TORRES: Well, to be honest, I never looked at it that way. One thing that we did with our Canadian content is we really tried to be as unselfserving as possible.
LISTNUM 1 \l 15244 The problem that we have with the "Back to The 80s" show is it's very hard to syndicate into the major markets because they are all controlled by the big five broadcasters. So we took on this initiative with Starboard in a partnership and we are trying to bolster a revenue stream into that until that gets its legs and gets going. So that we the idea behind it.
LISTNUM 1 \l 15245 COMMISSIONER MENZIES: All right. I didn't quite understand that.
LISTNUM 1 \l 15246 MR. ED TORRES: Basically we created the "Back to The 80s" program, as we talked about, and we are trying to create syndication products that are exportable to the United States and Australia and across the world. It is very hard actually to just export them into the major markets in Canada because four weeks after we launched our "Back to The 80s" show CHUM came out with a "Made in The 80s" show which they syndicate right against us, right, and they have the stations in the major markets.
LISTNUM 1 \l 15247 So they looked at our product and they saw it as competitive and they adjusted to compete with that. So what we are trying to do is we are trying to use some leverage as a radio station to continue the encouragement of the production of syndicated programs that are Canadian
LISTNUM 1 \l 15248 COMMISSIONER MENZIES: I see.
LISTNUM 1 \l 15249 MR. ED TORRES: Does that make it any clearer?
LISTNUM 1 \l 15250 COMMISSIONER MENZIES: A little bit, but I'm still trying to figure out how you are going to do all that with $2,000.
LISTNUM 1 \l 15251 MR. ED TORRES: Yes. I mean, that's a start.
LISTNUM 1 \l 15252 COMMISSIONER MENZIES: All right.
LISTNUM 1 \l 15253 Is this spoken word or music‑based stuff, or have you got there yet?
LISTNUM 1 \l 15254 MR. ED TORRES: The...?
LISTNUM 1 \l 15255 COMMISSIONER MENZIES: What we were just talking about.
LISTNUM 1 \l 15256 MR. ED TORRES: Yes, it's music‑based.
LISTNUM 1 \l 15257 COMMISSIONER MENZIES: Music‑based.
LISTNUM 1 \l 15258 If it was found by the Commission to be ineligible, what are your plans for it, or do you have plans for it?
LISTNUM 1 \l 15259 MR. ED TORRES: We would redirect those funds to FACTOR.
LISTNUM 1 \l 15260 COMMISSIONER MENZIES: All right.
LISTNUM 1 \l 15261 Now, can you confirm for us that your $50,000 over and above in your application does not include the annual basic contribution and is therefore separate?
LISTNUM 1 \l 15262 MR. ED TORRES: Yes, that is correct.
LISTNUM 1 \l 15263 COMMISSIONER MENZIES: Can you confirm this would be the case for every year of the seven year term?
LISTNUM 1 \l 15264 MR. ED TORRES: Yes, that's correct.
LISTNUM 1 \l 15265 COMMISSIONER MENZIES: Are you proposing to give FACTOR $30,000 a year or 60 per cent of your over and above when you are only required to give 20 per cent?
LISTNUM 1 \l 15266 MR. ED TORRES: Yes, we are.
LISTNUM 1 \l 15267 COMMISSIONER MENZIES: What if the Commission imposed that as a condition of licence?
LISTNUM 1 \l 15268 MR. ED TORRES: we would accept that.
LISTNUM 1 \l 15269 COMMISSIONER MENZIES: All right.
LISTNUM 1 \l 15270 I know you are entrepreneurial and I know you have experience selling in that market, but one of the big issues around this whole thing is how do small independents survive in this market where you are up against the big players, the land of giants I think we called it ‑‑ somebody will regret this ‑‑ but how are you going to do that?
LISTNUM 1 \l 15271 MR. ED TORRES: Well, you have to be David, right, if you are dealing with giants, and you have to position yourself as the underdog, as the independent.
LISTNUM 1 \l 15272 You have the ability to move quicker. You can make decision a lot faster. We have to live in the communities, we have to partner with our clients, we have to give our clients solutions that work, and we do that on a regular basis.
LISTNUM 1 \l 15273 One of our great success stories was the Ontario Lottery Corporation had invested a lot of money in a marketing survey that found that people buy lottery tickets when the jackpot rolls. They went to radio and they said: Look, we want to change the creative on Wednesday morning, because the jackpot ‑‑ pardon me, on Thursday morning because the jackpot is won on Wednesday evening. Radio unequivocally said: We can't do that. We can't traffic that. Our traffic manager is not in until 9:00 in the morning. That was money that was earmarked for print.
LISTNUM 1 \l 15274 We found them and we said: We can do that. We will put a manager in place.
LISTNUM 1 \l 15275 In fact what we want to do, though, is we need to create a system by which it's foolproof, we know exactly what the jackpot is, our manager checks it in the morning and then at 5:00 in the morning when my traffic reporter goes in there he has the correct script.
LISTNUM 1 \l 15276 So that turned to into a multi‑million dollar campaign for radio. What happened is, after we aired those spots, radio came around and commercial radio stations started to adopt that.
LISTNUM 1 \l 15277 So that's one example. There are many that I could give you.
LISTNUM 1 \l 15278 MR. FRANK TORRES: I think another way that we can answer that question is, we are presently in that very relationship that you mentioned. Our biggest competitor in Canada is an American public corporation that's a global corporation that is financed by CBS Radio. It really doesn't get any bigger as far as giants go and that is our biggest competitor and we still manage to find a way to provide a better product.
LISTNUM 1 \l 15279 As far as this market goes, though, I think it's really a case where the one giant has left the beanstalk. I think where we will excel as far as competing against the giant in that market is to be in the market. Kawartha Lakes has one originating radio signal, but no head offices. We need to be in the community and we need to be part of that community.
LISTNUM 1 \l 15280 That's how those size markets, from our experience not only in working and selling in the markets but in living in small markets, that's how businesses succeed in those markets, by becoming part of the community and investing yourself in the community. That's how the investment comes back.
LISTNUM 1 \l 15281 MR. ED TORRES: Aubrey likes to say that: Forget emerging artists, I'm looking for emerging advertisers.
LISTNUM 1 \l 15282 So what we do is, we go through the shopper's market and we find out who are the advertisers that are about to emerge, those guys that they are not buying big budget items, they are not buying the Peterborough Examiner, they are buying, you know, the coffee news. That's who we target.
LISTNUM 1 \l 15283 We can also leverage our current relationships. One thing that we do that other applicants don't do is, we have our own national sales force. We are not repped by CBS or IMS or Target because nobody would take our little 10‑second inventory. They couldn't understand it. Plus, we package it all together. So we have had to go to the national advertisers ourselves. So that gives us a certain amount of insight into what the national advertisers are doing and what markets they are trying to target.
LISTNUM 1 \l 15284 MR. CLARKE: I would like to also say that we also train our sales force, we train them in radio, we train them in television, we train them in all sorts of media, so when they go out there to the advertiser they are fully equipped to be a full consultant in every area of media. So even if they turn us down in radio on day one, we are still in there consulting with them and by day two they are back knocking on our doors ready to go on radio. We build strong relationships. Relationships is the key to sale, especially in a market.
LISTNUM 1 \l 15285 Then there is the $1.337 billion spent on internet advertising in Canada this year alone. That is just easy pickings. We have a specialty in taking money from internet as well, too. Internet is local to every market in Canada.
LISTNUM 1 \l 15286 COMMISSIONER MENZIES: How do you take money from internet? I'm curious to know more about that. I think there are lots of people who are, but I am particularly.
LISTNUM 1 \l 15287 MR. CLARKE: Well, I mean this is a public hearing, I would be giving away my secrets to everybody who advertised, right.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15288 COMMISSIONER MENZIES: But there must be ‑‑
LISTNUM 1 \l 15289 MR. CLARKE: There is a strategic way and we have found it. We have compiled the data into information in order to show advertisers that when they use radio and internet together that they increase their business.
LISTNUM 1 \l 15290 COMMISSIONER MENZIES: All right. I'm just going to do a little devil's advocacy on this, just because I want to get it back. I'm sure you have done this with yourselves, but I kind of want to make sure.
LISTNUM 1 \l 15291 If you were licensed in there and you have an incumbent heavy hitter with a neighbouring sister heavy hitter, and if I was one of them and you guys did have the market that you think you have, I would just swing into my playlist a little living on faith or something like that here and there to capture that audience. I would cut my rates here and there strategically and target the advertisers that you do have, and I would try to squash you like a bug.
LISTNUM 1 \l 15292 MR. CLARKE: Well, I can answer that.
LISTNUM 1 \l 15293 75 per cent of our advertisers every year right now are new people that we are bringing in every day. There is so much money out there that I don't think they can squash us.
LISTNUM 1 \l 15294 MR. ED TORRES: I think, you know, we look at the Evanovs, who launched a dance station when there were no other dance stations, and they built FM 108 in Burlington. They turned it into a radio station, a giant in Toronto that cumed over 700,000. They had similar success with Z‑103.
LISTNUM 1 \l 15295 So we look at what they did and we weren't the only one that saw the success. Rogers and Corus saw it and they launched formats with huge budgets, 92.5 with over a million budget, to go directly at Z‑103s core audience.
LISTNUM 1 \l 15296 But, you know what, "Z" had the street. Right? They were in the venues. They had the ear of the people. So in the face of two head‑to‑head competitors the big guys, they gave up. They lost money in that format and they lost share. They said, "Hey, it's easier for us to flick a jukebox on then to go head‑to‑head with the Evanovs.
LISTNUM 1 \l 15297 So you have to be street savvy, right, and you have to be in the community.
LISTNUM 1 \l 15298 And we have the heritage also. We are talking about small towns here. We have talked to just about everybody in those bars and in those venues. If somebody, an incumbent in that station does a quick flip, the people are going to see it for what it's worth.
LISTNUM 1 \l 15299 MR. FRANK TORRES: I think also with this format and this particular music style ‑‑ I would like to have Al expand on these comments, please ‑‑ it is a very true and honest form of music. You don't ‑‑ there is no place to hide when you play the blues. You have to be a good musician and you have to be true to the art form.
LISTNUM 1 \l 15300 I think listeners that would listen to our proposed radio station would be that way. I don't think you steal that listener away by throwing in a little Muddy Waters or a little David Wilcox in there, but Al is the true expert in that area.
LISTNUM 1 \l 15301 MR. KIRKALDY: Well, I think that what you have said, Frank is true. There aren't many bad blues bands and if there are they don't stay around very long. Much like jazz, it is driven by the virtuosity as much as anything. The people I think that we are trying to capture are real music fans and not somebody that wants it on in the background or just to get news and weather and then shut the radio off, it's people that really appreciate the blues for what it is, much like jazz, absolutely.
LISTNUM 1 \l 15302 COMMISSIONER MENZIES: All right.
LISTNUM 1 \l 15303 MR. BERNARD: I would also just quickly add that we are in sort of that situation now where in markets where the big stations are selling traffic and weather, just like we are out there ‑‑ so again we are in situations now where we are in competition at times selling the same products ‑‑ and they obviously do quite well selling their traffic and weather, but we have done just fine, too. We haven't declined and we haven't maintained status quo. We have actually grown and thrived in that competitive environment where, again, we are looking at ‑‑ we are competing out there with similar products and services. Again, they do well, but we have managed to do well at the same time, in the same markets, doing the same sorts of things so it is something that we are certainly quite used to.
LISTNUM 1 \l 15304 COMMISSIONER MENZIES: All right. Thanks.
LISTNUM 1 \l 15305 Your revenue projections are pretty aggressive, too. They kind of caught my eye in terms of that, particularly with the very high level of local.
LISTNUM 1 \l 15306 Can you just expand on that a little bit?
LISTNUM 1 \l 15307 MR. ED TORRES: Well, we looked at the retail spending in Kawartha Lakes. We crunched the numbers, the percentages from the Retail Council of Canada. With only one station in the market and no print source, there is $23 million in that market available for advertising. And there are no bus shelters either.
LISTNUM 1 \l 15308 So we think that there is a lot of money to be made in Kawartha Lakes, but we think that that up market is being under utilized. It is probably so because the incumbent split their office in Kawartha Lakes between Kawartha Lakes and Peterborough. So we think Kawartha Lakes is an attractive market.
LISTNUM 1 \l 15309 But we didn't go into the projections and I would say that we are middle of the pack in terms of the other applications. But what we did was, we went to our current exiting clients that buy the local market and we put together a launch package.
LISTNUM 1 \l 15310 So we have a media rate, a rate card and a media kit ready to go and we have commitments from four of our sponsors to buy into a launch package. The launch package includes promos, it includes 30 seconds, it includes a bunch of features that aren't available in the market and, on top of that you get a plaque in the radio station so your image is immortalized as a launch sponsor of our radio station.
LISTNUM 1 \l 15311 COMMISSIONER MENZIES: So you have commitments should you get a go ahead?
LISTNUM 1 \l 15312 MR. ED TORRES: Yes, we have commitments.
LISTNUM 1 \l 15313 MR. FRANK TORRES: We have also filed with the Commission 30 letters of support from local businesses.
LISTNUM 1 \l 15314 COMMISSIONER MENZIES: Good. All right. Thanks.
LISTNUM 1 \l 15315 If you were us, how many licences would you approve for this market, or grant?
LISTNUM 1 \l 15316 MR. ED TORRES: We think that Kawartha Lakes is in desperate need of another voice, another radio station. We certainly think that Kawartha Lakes is healthy enough to support one.
LISTNUM 1 \l 15317 We looked at Peterborough and the business case for an additional licence in Peterborough to us really wasn't there. So we look at it really as the market can handle one radio station.
LISTNUM 1 \l 15318 Maybe the incumbent flipping would not have such a large effect. Now, I say that and, in light of what they said yesterday, I may rethink that position, but we certainly think that 96.7 is the only frequency that will service Kawartha Lakes and, as such, we really think that 96.7 needs to be designated for Kawartha Lakes.
LISTNUM 1 \l 15319 COMMISSIONER MENZIES: How many licences would you grant if you were ‑‑
LISTNUM 1 \l 15320 MR. ED TORRES: One.
LISTNUM 1 \l 15321 COMMISSIONER MENZIES: Thanks.
LISTNUM 1 \l 15322 Have you identified another frequently that would work for you?
LISTNUM 1 \l 15323 MR. ED TORRES: Yes, we have. Actually Pineridge identified it for us, it's 102.5.
LISTNUM 1 \l 15324 Now, 102.5 has what I would say is an awesome contour if you want to serve Peterborough, not great if you want to serve Kawartha Lakes. Most of the three millivolt contour sits right over Peterborough.
LISTNUM 1 \l 15325 So 102.5 also comes with the caveat that you have to locate it on a Corus tower, so it really seems to be the perfect frequency for what Corus is trying to achieve. 96.7 really provides a superior signal to Kawartha Lakes.
LISTNUM 1 \l 15326 MR. FRANK TORRES: We heard from another applicant during this process that an applicant had stretched their contour signals north and south, stretching it south towards different regions, different geographical regions.
LISTNUM 1 \l 15327 What we did in our plan is, we positioned the transmitter and we shaped our contours and our signals so that we could include Kawartha Lakes and still get Peterborough coverage as well. That mechanical adjustment of the frequency can only be done with our chosen frequency.
LISTNUM 1 \l 15328 COMMISSIONER MENZIES: All right.
LISTNUM 1 \l 15329 If the Commission were to consider granting a conditional licence based on your finding another frequency, would you continue with this business plan or would you decline?
LISTNUM 1 \l 15330 MR. ED TORRES: Yes, we would continue with the business plan.
LISTNUM 1 \l 15331 COMMISSIONER MENZIES: All right. Thanks very much.
LISTNUM 1 \l 15332 If it helps any, if you feel a little beat up I was tapping my toes when you were playing the music.
LISTNUM 1 \l 15333 MR. ED TORRES: Well, we think a lot of people will tap their toes.
LISTNUM 1 \l 15334 Thank you.
LISTNUM 1 \l 15335 COMMISSIONER MENZIES: All right. Thank you.
LISTNUM 1 \l 15336 THE CHAIRPERSON: Commissioner del Val...?
LISTNUM 1 \l 15337 COMMISSIONER del VAL: I have a nagging concern that I decided that I should talk to you about.
LISTNUM 1 \l 15338 From what I have seen, some of the limited formats, the specialty formats like jazz and stations and all, really have a difficult time making it a go. Now, correct me if I'm wrong and your view of that is different.
LISTNUM 1 \l 15339 If that is the fact, why do you think blues, a specialty station with blues, is different? Is the audience different? Are they more like country fans?
LISTNUM 1 \l 15340 Can you help me out there, please?
LISTNUM 1 \l 15341 MR. KIRKALDY: Can I just add that three are hundreds of thousands of blues fans this summer in North America will attend hundreds and hundreds of blues festivals. Blues has gone on an ebb and flow. It almost died, along with all other live forms of music in the '70s, in the disco era. It has come back and there has been an ebb and flow.
LISTNUM 1 \l 15342 Today, live blues music and concerts are at a peak. People like myself would not have believed it would have been possible 15 years ago to see the number of festivals and the crowds.
LISTNUM 1 \l 15343 One of the large blues magazines, "Blues Review", has to insert a special edition just for the festivals.
LISTNUM 1 \l 15344 They have a special edition that you pull out. It has its own staples and everything else, and it is listed state‑by‑state, province‑by‑province, and country‑by‑country worldwide.
LISTNUM 1 \l 15345 MR. E. TORRES: Al, if I could interrupt, just to talk about specialty formats ‑‑ and we are fortunate that we have Yves on our team. Yves was the program director at Couleur FM.
LISTNUM 1 \l 15346 Certainly we have been asked, why not apply for a Category 3 licence and just go strictly with the Category 3?
LISTNUM 1 \l 15347 We think that a straight Category 3 licence has limited options for success. That's why we want to be a commercial Category 2 radio station, and we want to provide songs that are popular.
LISTNUM 1 \l 15348 If you tap your toes to it, you will listen to it. And those are not obscure music selections. We are not going to be in the hinterland of playing guys with a broken instrument, we are going to be a mainstream radio station.
LISTNUM 1 \l 15349 MR. TROTTIER: I can say that I was the program director of a classical and jazz radio station, and we had a share of 5.2 in Gatineau. And I was there when we launched a jazz radio station in Montreal, which struggled a little bit with just 2 shares.
LISTNUM 1 \l 15350 So I know what is going on, what is good and what is not good.
LISTNUM 1 \l 15351 For blues music, I have done a lot of research about what people like about music, and blues is not the first choice of a lot of people, but for a lot of people it is the second or the third choice.
LISTNUM 1 \l 15352 With all of the radio stations in the surrounding area, if they want, they can hear five Celine Dion songs in the same hour, but there is just one radio station where they can hear Stevie Ray Vaughan. That is the main difference.
LISTNUM 1 \l 15353 We will put some good stuff on the air so that people have a choice. That choice doesn't exist right now.
LISTNUM 1 \l 15354 Blues music is very popular. It may be the second or third choice of all people, especially people who like rock music, and rock stations in Ontario have had great success.
LISTNUM 1 \l 15355 MR. E. TORRES: We went to the bars ‑‑ the venues ‑‑
LISTNUM 1 \l 15356 We were told by our consultant not to say "bars", and I have said it several times.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15357 MR. E. TORRES: We went to the venues ‑‑
LISTNUM 1 \l 15358 THE CHAIRPERSON: We are all grown‑ups here, it's okay.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15359 MR. E. TORRES: On a snowy Thursday night in Belleville, Ontario, the sidewalks are rolled up, except for, at the Bohemian Penguin, Garrett Mason is playing and 150 people are packed in there.
LISTNUM 1 \l 15360 If you start to aggregate all of the small towns in Ontario, and all of the small towns in Canada, and you go to a bar, it's a blues act that you are going to see.
LISTNUM 1 \l 15361 This timely front page of the Arts Section of the Ottawa Citizen is about Fred Litwin. He is the owner of NorthernBlues, and he has written us a letter of support. I don't know how he timed it that in yesterday's paper he would get the full page ad, but it's there if anyone wants to see it.
LISTNUM 1 \l 15362 What we have seen is a trend. Blues is coming to the forefront.
LISTNUM 1 \l 15363 When you go home tonight, you are bound to see the Nissan Altima commercial, and its pride and joy, Stevie Ray Vaughan, and you will tap your feet to it.
LISTNUM 1 \l 15364 Dan Akroyd syndicates a show which is called "House of Blues". It has come out of the hinterland and onto 200 radio stations.
LISTNUM 1 \l 15365 That is syndicated out of the U.S., We want to duplicate that and do it in Canada.
LISTNUM 1 \l 15366 I was watching "House" the other night with my wife, and there goes Dr. House, and he sits down at a piano and he starts playing a 12‑chord blues song.
LISTNUM 1 \l 15367 We really think that blues is at the tipping point.
LISTNUM 1 \l 15368 The Ottawa Bluesfest is the second‑largest blues festival in North America.
LISTNUM 1 \l 15369 We think that we are at the tipping point, and we can help push it over.
LISTNUM 1 \l 15370 MR. KIRKALDY: Again, I don't mean to take up so much time, but this is a very important question, and certainly one that we spent a lot of time on before we even considered this type of application format and commitment.
LISTNUM 1 \l 15371 If we were at this seat perhaps eight years ago, we might have been having the same discussion about smooth jazz, or about urban or dance formats and their perceived relegation to a specialty‑type format.
LISTNUM 1 \l 15372 What a group of committed entrepreneurs and visionary Commissioners did was, they managed to see that the formats were at a tipping point at a certain point. They were becoming very popular, very successful in the mainstream.
LISTNUM 1 \l 15373 And that article and that cover page really illustrates the fact that we are at the same point with blues music. We may not all know it just now, but it is out there, and it's very popular.
LISTNUM 1 \l 15374 People know a lot more blues music than they think they know, and we will teach people that.
LISTNUM 1 \l 15375 MR. BERNARD: Madam Commissioner, the last part of your question asked: Are blues fans different?
LISTNUM 1 \l 15376 When we started going out to the clubs and talking to people, we very quickly realized that there are blues societies all over the country. There are, literally, dozens and dozens of them.
LISTNUM 1 \l 15377 Then we sort of thought to ourselves: There aren't classic rock societies, per se. There might be fan clubs for specific artists, but societies not so much.
LISTNUM 1 \l 15378 Alternative societies? No.
LISTNUM 1 \l 15379 Country music societies?
LISTNUM 1 \l 15380 You know, that is just another example. And yet the one format, the one genre that doesn't get commercial mainstream FM airplay is the one where there are, literally, dozens of blues societies from coast to coast, where people give their free time to foster and nurture and grow the format.
LISTNUM 1 \l 15381 I think that is great evidence that, yes, blues fans are different. They are passionate about it. It is part of their lifestyle. It is ingrained in who they are, and they have organized, where fans of other genres haven't so much.
LISTNUM 1 \l 15382 It is ironic that this one group of people who have organized are the ones that don't have the music they enjoy so much available on FM airwaves.
LISTNUM 1 \l 15383 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 15384 I think earlier you said that you would commit to a COL of 25 percent blues music.
LISTNUM 1 \l 15385 Is that correct?
LISTNUM 1 \l 15386 MR. TROTTIER: In Cat 3, 25 percent.
LISTNUM 1 \l 15387 COMMISSIONER del VAL: Just on the issue of formats for radio stations, do you think that is ‑‑
LISTNUM 1 \l 15388 You know that we don't regulate format.
LISTNUM 1 \l 15389 Do you think that is something to consider, in terms of, maybe, everyone should commit to a certain percentage by COL, say, 25 percent or whatever, to a certain category of music?
LISTNUM 1 \l 15390 MR. E. TORRES: I think that is very hard, and maybe I will ask Yves to comment.
LISTNUM 1 \l 15391 We have thought about this at length, and we have been to the CAB and they have discussed it at length, the pros and the cons.
LISTNUM 1 \l 15392 When you look at it, I think, really, you have to let the market forces go as they may, and it may be tough for us independents. Certainly, if somebody flips to a blues format in Kawartha Lakes tomorrow, we are out of luck. But I think that is preferable to regulations that might be hand‑tying.
LISTNUM 1 \l 15393 Yves, I don't know if you have an opinion on that, but that is just a personal opinion.
LISTNUM 1 \l 15394 MR. TROTTIER: The opinion of the radio business is that we already have a lot of rules, and we don't need another one.
LISTNUM 1 \l 15395 MR. E. TORRES: I think the Commission does a very good job at seeing through those types of manoeuvres, and that is really what is at the heart of my comments. You may look at that and you may say, "I remember that. I remember that happened."
LISTNUM 1 \l 15396 We have that faith in the Commission.
LISTNUM 1 \l 15397 COMMISSIONER del VAL: Thank you. Those are my questions.
LISTNUM 1 \l 15398 Thank you, Madam Chair.
LISTNUM 1 \l 15399 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 15400 I, too, had some questions about your format, but I think we have covered the ground.
LISTNUM 1 \l 15401 I also think, now that I am looking at your sample playlist, which is ‑‑ I think I am looking at the one that is more extensive than the other, and I didn't realize, myself, that I was this much a blues fan.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15402 THE CHAIRPERSON: I see here, Mr. Torres, that you did pay attention in Kelowna when you came to watch. You have Brian Ferry on here.
LISTNUM 1 \l 15403 I would have been more impressed if you had put zukid on, but that's a whole other story.
LISTNUM 1 \l 15404 You used the term "man/woman". I am not going there, but the reality is, you are applying for a Kawartha Lakes/Peterborough station.
LISTNUM 1 \l 15405 I mean, that is the reality ‑‑ revenue 45 percent from Kawartha Lakes; 55 from Peterborough. The share of your audience is fifty‑fifty. Programming ‑‑ 60 percent to Kawartha Lakes; 40 percent to Peterborough.
LISTNUM 1 \l 15406 This is a Kawartha Lakes/Peterborough application.
LISTNUM 1 \l 15407 MR. E. TORRES: We plan to serve both markets, but, really, our studios are going to be located in Kawartha Lakes. Our originating programming is all going to come out of Kawartha Lakes. Our sales force will be centred in Kawartha Lakes. Our news teams will be dispatched from Kawartha Lakes. Our cruisers will be in Kawartha Lakes.
LISTNUM 1 \l 15408 When you look at what is a radio station ‑‑ I mean, they are all regional signals that go all over the place.
LISTNUM 1 \l 15409 It is a Kawartha Lakes radio station, and we are going to talk about the Lindsay muskies, we are going to talk about all of the local sports. We are going to have the local mayor.
LISTNUM 1 \l 15410 If you have to define where your radio station is from, really, it is where the offices are, where the people are, where you are in the community.
LISTNUM 1 \l 15411 Yes, I think our business plan is crafted because we look at Peterborough, being 25 minutes away, as a source of revenue, and I think it is balanced fairly evenly, but, really, this is going to be a Kawartha Lakes radio station.
LISTNUM 1 \l 15412 THE CHAIRPERSON: Your business plan was predicated on no other radio station being licensed in Peterborough?
LISTNUM 1 \l 15413 Because, as you know, in part of these proceedings we have radio stations that are calling themselves Peterborough radio stations.
LISTNUM 1 \l 15414 What would happen to your business plan if we were to license you and another commercial FM station that qualifies itself as a Peterborough radio station?
LISTNUM 1 \l 15415 MR. ED TORRES: Our business plan is predicated on the revenue that we think that we can derive from the market as it existed. If you license ‑‑ so that includes CRUZ. We think that CRUZ flip to FM would have a negligible impact on our business plan.
LISTNUM 1 \l 15416 So if you were to license another FM on top of the flip in Peterborough, it would have a negative impact.
LISTNUM 1 \l 15417 I don't know, Aubrey ‑‑ I think Aubrey has done the revenue crunching on the numbers that we would get out of Peterborough.
LISTNUM 1 \l 15418 I don't know if we have drilled it down to look at the effects if one or two additional licences were added.
LISTNUM 1 \l 15419 MR. CLARKE: Actually, it would have a negative impact, but we would be able to survive it if you did.
LISTNUM 1 \l 15420 THE CHAIRPERSON: All right. I accept that.
LISTNUM 1 \l 15421 Perhaps your PBIT number might be in a later ‑‑ you might get a positive PBIT a later year than you had projected. Is that...?
LISTNUM 1 \l 15422 MR. ED TORRES: Yes. I think that again Peterborough is at 50 per cent of our revenue. If we look at the impact of having nine stations in the market instead of eight, we still think that our revenue is going to be derived by the fact that we are different. So when we go and we sit down at the local car dealer and there is nine guys pitching AC or Hot AC or Soft AC or Lite AC, or whatever they are calling it, we are the Blues guys. We are going to be a little different.
LISTNUM 1 \l 15423 We think that we can work that to our advantage. So it will have a negative impact, but I think it would be a negligible impact.
LISTNUM 1 \l 15424 THE CHAIRPERSON: Based on what you have heard from those applying for Peterborough, is there one service over another that would have the least impact and, by the same token, is there one that would have more, the most impact?
LISTNUM 1 \l 15425 MR. ED TORRES: No. I think they are all reputable operators and I think that, you know, they would all do an excellent job servicing the market. So I don't think there is one service that would be less injurious to us.
LISTNUM 1 \l 15426 THE CHAIRPERSON: All right.
LISTNUM 1 \l 15427 MR. FRANK TORRES: That may be a no comment.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15428 THE CHAIRPERSON: You were paying attention earlier this week I see. All right.
LISTNUM 1 \l 15429 Please confirm your understanding that if licensed your station will have to contribute a basic annual CCD contribution imposed by 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 the new radio policy, Public Notice CRTC‑2006‑158?
LISTNUM 1 \l 15430 MR. ED TORRES: Yes, we understand that.
LISTNUM 1 \l 15431 THE CHAIRPERSON: Please confirm your understanding that of this base annual amount no less than 60 per cent of the station's basic annual CCD annual CCD contribution must be allocated to either FACTOR or MUSICACTION and that the remaining amount, if any, may be directed to any eligible CCD initiatives at your discretion?
LISTNUM 1 \l 15432 MR. ED TORRES: Yes, we understand.
LISTNUM 1 \l 15433 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 15434 Legal counsel...?
LISTNUM 1 \l 15435 MS SMITH: I have a few technical questions. I'm sorry to prolong this for you, but I just have to confirm a few things for the record.
LISTNUM 1 \l 15436 You made reference to a condition of licence that would ensure a distinct Kawartha Lakes/Peterborough local programming orientation in your newscasts. I believe it was 60 per cent Kawartha Lakes and 40 per cent Peterborough local news orientation.
LISTNUM 1 \l 15437 Can you confirm for us that you would adhere to this split as a condition of licence?
LISTNUM 1 \l 15438 MR. ED TORRES: Yes, we would.
LISTNUM 1 \l 15439 MS SMITH: Thank you.
LISTNUM 1 \l 15440 You referred to specific subcategory 34, which is Blues, and Category 3, which is a broader category in terms of Cancon levels.
LISTNUM 1 \l 15441 For the record, I just have a few more questions.
LISTNUM 1 \l 15442 By condition of licence the minimum level of subcategory 34, which is just Blues ‑‑ sorry, Jazz and Blues to be broadcast each week.
LISTNUM 1 \l 15443 MR. TROTTIER: Normally it's 15 per cent. That's what you want to say for Cat. 3 music?
‑‑‑ Pause
LISTNUM 1 \l 15444 MS SMITH: It's 20 per cent for subcategory 34.
LISTNUM 1 \l 15445 MR. TROTTIER: Right now it's 20 per cent, yes.
LISTNUM 1 \l 15446 MS SMITH: All right. So you would confirm that, 20 per cent?
LISTNUM 1 \l 15447 MR. TROTTIER: Yes.
LISTNUM 1 \l 15448 MS SMITH: All right. So by condition of licence the minimum level of Canadian content to be broadcast each week overall for Category 3?
LISTNUM 1 \l 15449 MR. TROTTIER: Yes, we accept that.
LISTNUM 1 \l 15450 MS SMITH: So what would be the number you would accept?
LISTNUM 1 \l 15451 MR. TROTTIER: The minimum of 20 per cent.
LISTNUM 1 \l 15452 MS SMITH: So the minimum amount you would accept?
LISTNUM 1 \l 15453 MR. TROTTIER: For Cat. 3.
LISTNUM 1 \l 15454 MS SMITH: The minimum is 10 per cent for Cat. 3.
LISTNUM 1 \l 15455 MR. TROTTIER: The minimum is 10 per cent?
LISTNUM 1 \l 15456 MS SMITH: Yes.
LISTNUM 1 \l 15457 UNIDENTIFIED SPEAKER: I think we need further clarification on the question.
LISTNUM 1 \l 15458 MR. TROTTIER: For Canadian content in Cat. 3 music?
LISTNUM 1 \l 15459 MS SMITH: It's 10 per cent.
LISTNUM 1 \l 15460 MR. TROTTIER: It's not 20 per cent?
LISTNUM 1 \l 15461 MS SMITH: That would be for the subcategory 34.
LISTNUM 1 \l 15462 MR. TROTTIER: Well, okay, we will accept 10 per cent, no problem.
LISTNUM 1 \l 15463 MS SMITH: All right.
LISTNUM 1 \l 15464 The new Commercial Radio Policy imposed a specific level of Canadian content which is tied to subcategory 34 of 20 per cent.
LISTNUM 1 \l 15465 Would you agree to this by condition of licence?
LISTNUM 1 \l 15466 MR. TROTTIER: Yes.
LISTNUM 1 \l 15467 MS SMITH: All right. Thank you very much. I appreciate your patience.
LISTNUM 1 \l 15468 MR. TROTTIER: Thank you.
LISTNUM 1 \l 15469 THE CHAIRPERSON: Mr. Torres, you have your final two minutes to give us your best pitch.
LISTNUM 1 \l 15470 MR. ED TORRES: All right.
LISTNUM 1 \l 15471 There are four key points that we feel ‑‑ four compelling reasons to license DAWG.
LISTNUM 1 \l 15472 First ‑‑ and we don't mean a dog licence, we mean a radio licence ‑‑
‑‑‑ Laughter / rires
LISTNUM 1 \l 15473 MR. ED TORRES: The City of Kawartha Lakes is number one.
LISTNUM 1 \l 15474 Our second reason is our format, the Blues.
LISTNUM 1 \l 15475 Reason number three is our experience and our long‑term commitment.
LISTNUM 1 \l 15476 Last, we are a new player, we are going to add diversity to the Canadian broadcast system.
LISTNUM 1 \l 15477 Back to Kawartha Lakes.
LISTNUM 1 \l 15478 The City of Kawartha Lakes is clearly under serviced with only one radio station per 74,000 residents. The last licence was issued in Kawartha Lakes in 1955. In fact, it is arguably one of the most under served radio markets in act, a fact underscored by out‑of‑market tuning which runs at about 85 per cent. There is only one news voice in that market.
LISTNUM 1 \l 15479 To the Blues now.
LISTNUM 1 \l 15480 It is currently available on satellite, it is on the internet, it is thriving, it is on the front page of the Ottawa Citizen and it does pretty well in the market as well. CBC's "Saturday Night Blues" ranks as the number four show in Peter market, adults 12+, and it's third in the Lindsay market.
LISTNUM 1 \l 15481 Our format is going to be mainstream Blues artists. 70 per cent of those songs will be recognizable songs just like you were tapping your toes to, commercial Gold songs like "Leila", "Domino", "Voodoo Thing", "Pride and Joy".
LISTNUM 1 \l 15482 The ancillary benefit of playing approximately 25 per cent of Cat. 3 music is huge to the Blues and to emerging Canadian Blues artists. They don't have a commercial outlet to play right now.
LISTNUM 1 \l 15483 We are going to change that, and we are going to change it with our experience. At the table we have over 96 years of radio experience. We look young, but we have been at it for a while.
LISTNUM 1 \l 15484 We are a young, enthusiastic company, we have extensive knowledge of the broadcast system, we are committed to this format. We have researched it across the country and we are committed to make it available to Canadians coast‑to‑coast.
LISTNUM 1 \l 15485 Last, we are a new player. We are going to add diversity to the Canadian Broadcast system. We bring cultural diversity of ownership. We want to be a role model for minorities and women. We intend to increase the plurality of news voices.
LISTNUM 1 \l 15486 We are new player with fresh ideas like our environmental commitments that we have made and, with those, I think if you license us you may send a clear message to the rest of the broadcast system about the need for radio to be environmentally sensitive. We think it's in the public's best interest to license another Kawartha Lakes radio station, the second one, that's us.
LISTNUM 1 \l 15487 Thank you for your consideration. Please don't stick us with a dog frequency.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15488 THE CHAIRPERSON: All right
LISTNUM 1 \l 15489 Mr. Torres and your panel, thank you very much for your patience this afternoon with our questions.
LISTNUM 1 \l 15490 We stand adjourned. Everyone have a great evening. We will see you at 9 o'clock tomorrow morning.
‑‑‑ Whereupon the hearing adjourned at 1750, to resume
on Thursday, December 13, 2007 at 0900 / L'audience
est ajournée à 1750, pour reprendre le jeudi
13 décembre 2007 à 0900
REPORTERS
____________________ ____________________
Beverley Dillabough Monique Mahoney
____________________ ____________________
Jean Desaulniers Jennifer Cheslock
- Date modified: