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Please note that the Official Languages Act requires that government publications be available in both official languages.
In order to meet some of the requirements under this Act, the Commission's transcripts will therefore be bilingual as to their covers, the listing of CRTC members and staff attending the hearings, and the table of contents.
However, the aforementioned publication is the recorded verbatim transcript and, as such, is transcribed in either of the official languages, depending on the language spoken by the participant at the hearing.
TRANSCRIPT OF PROCEEDINGS BEFORE
THE CANADIAN RADIO‑TELEVISION AND
TRANSCRIPTION DES AUDIENCES DEVANT
LE CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
Various broadcasting applications further to calls for
applications for licences to carry on radio programming
undertakings to serve Chilliwack and Vancouver, British Columbia /
Plusieurs demandes en radiodiffusion suite aux appels de demandes
de licence de radiodiffusion visant l'exploitation d'une
entreprise de programmation de radio pour desservir Chilliwack et
HELD AT: TENUE À:
The Empire Landmark The Empire Landmark
1400 Robson Street 1400, rue Robson
Vancouver, B.C. Vancouver (C.-B.)
March 3, 2008 Le 3 mars 2008
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès‑verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
Canadian Radio‑television and
Conseil de la radiodiffusion et des
Transcript / Transcription
Various broadcasting applications further to calls for
applications for licences to carry on radio programming
undertakings to serve Chilliwack and Vancouver, British Columbia /
Plusieurs demandes en radiodiffusion suite aux appels de demandes
de licence de radiodiffusion visant l'exploitation d'une
entreprise de programmation de radio pour desservir Chilliwack et
BEFORE / DEVANT:
Helen del Val Chairperson / Présidente
Rita Cugini Commissioner / Conseillère
Elizabeth Duncan Commissioner / Conseillère
Peter Menzies Commissioner / Conseiller
Ronald Williams Commissioner / Conseiller
ALSO PRESENT / AUSSI PRÉSENTS:
Jade Roy Secretary / Secretaire
Joe Aguiar Hearing Manager /
Gérant de l'audience
Carolyn Pinsky Legal Counsel /
HELD AT: TENUE À:
The Empire Landmark The Empire Landmark
1400 Robson Street 1400, rue Robson
Vancouver, B.C. Vancouver (C.-B.)
March 3, 2008 Le 3 mars 2008
- iv -
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PRESENTATION BY / PRÉSENTATION PAR:
Golden West Broadcasting Ltd. 1580 / 9315
Newcap Inc. 1659 / 9782
Radio CJVR Ltd. 1710 /10037
Vista Radio Ltd. 1780 /10370
Frank Torres (OBCI) 1827 /10610
INTERVENTION BY / INTERVENTION PAR:
Golden West Broadcasting Ltd. 1873 /10838
Radio CJVR Ltd. 1874 /10847
Vancouver, B.C. / Vancouver (C.‑B.)
‑‑‑ Upon resuming on Monday, March 3, 2008 at 0930 /
L'audience reprend le lundi 3 mars 2008 à 0930
9307 THE SECRETARY: We will now start the hearing with an application by Golden West Broadcasting for a licence to operate an English‑language FM commercial radio programming undertaking in Chilliwack.
9308 Please introduce yourself and your colleagues, and you will then have 20 minutes to make your presentation.
9309 Thank you.
9310 THE CHAIRPERSON: Mr. Hildebrand, before you start, the Commission would like to congratulate you for the CWC award for employer of the year.
9311 MR. HILDEBRAND: Thank you very much.
9312 THE CHAIRPERSON: Another announcement, it is Mr. Williams' birthday today. He is looking dapper as ever.
9313 MR. HILDEBRAND: We were actually going to have a chorus sing happy birthday, but they didn't make it, so happy birthday.
9314 COMMISSIONER WILLIAMS: Thank God for that.
PRESENTATION / PRÉSENTATION
9315 MR. HILDEBRAND: Members of the Commission, Commission staff, fellow applicants and listeners, we are pleased today to be here and underline the need for our kind of radio service for Chilliwack.
9316 My name is Elmer Hildebrand, President of Golden West. With me today are Lyndon Friesen, Chief Operating Officer and Executive Vice‑President, Robin Hildebrand, Director of Human Resources, Darryl Porter, President, Chilliwack Bruins Hockey Club, Trevor McDonald, local musician, Ken Goldstein, economic guru.
9317 The reason we are here today is very simple. On January 4, 2007, that is 13 months ago, we filed an application for a new FM station to serve Chilliwack. Our application was the result of many discussions with area individuals and business leaders asking us to bring Golden West local community service radio to the valley.
9318 The need for our kind of local service is illustrated by Mayor Hames letter accompanying our application, which said:
"Our community has been without substantial local radio service since Fraser Valley Broadcasting sold their stations some years ago. The current Chilliwack stations now have much of their programming originating from Vancouver‑based studios and the local relevance has been greatly diminished."
9319 Chilliwack is a market of over 80,000‑plus, and the people here deserve to be served by a station that is committed to local service 100 per cent.
9320 In addition to local all the time, another very significant Golden West policy is to hire local people to work at the radio station. We will endeavour to develop a strong, local, valley‑based staff who will know the area they are talking about, on the air and on line. Included in your package, we have listed our employees and their involvement in the community. You will see that they are involved with every facet of life in the community, and this is what our radio stations are about.
9321 As the Commission knows, this kind of local service is the hallmark of what Golden West provides and we will do this for Chilliwack, in spades.
9322 The economic activity of the valley is most vibrant, and you can be assured that our entry into the market will have no negative impact on the stations currently licensed to the region.
9323 Our kind of service is focused on the community in various ways. Not only do we cover fully what happens in city council, the Chamber of Commerce and the other civic organizations, we also report on activities that would normally not be headline grabbers.
9324 This includes covering what happens in schools, in churches, the agricultural community and every day business community.
9325 We also plan to be full media partner with the Chilliwack Bruins, which will be more fully elaborated on by Darryl Porter.
9326 MR. PORTER: Thanks, Elmer.
9327 Just to give you a bit of a favour of who the Chilliwack Bruins are, we are a team that is just under two years old in the Western Hockey League. We were launched into Chilliwack some two years ago. Really, we have been an unqualified success on and off the ice except for the issue I am going to talk about in a second.
9328 A couple of highlights. We were the best expansion team in the history of the CHL on the ice last year. We are operating at 90 per cent capacity as far as our attendance goes. We have two drafted players in the National Hockey League. One that has played on the World Juniors this past season. We have hosted an ADT, a Canada/Russia game. Our corporate support has been unqualified. We have made the playoffs both of our first two years.
9329 The highlight there is that we have been very successful.
9330 Why I am standing here, and I have been endorsing Elmer and asking him to apply for a licence for some two and a half years now is in spite of everything I have just said, there is very little buzz and excitement about us day to day in the fabric of the community because we really have been reduced to a print only marketing strategy based on the media situation in Chilliwack. The successful Western Hockey League team, a junior hockey team is all about integrating with your community and giving back to your community every step of the way. It is tough to do that and get your message out when you have absolutely no radio support from a day‑to‑day chatter standpoint.
9331 We had our biggest curve ball when we were announced and we assumed that the current local station would broadcast and partner with us. But for business reasons, they stated that they don't broadcast games, and we were surprised. I take ownership that I should have done that homework before I arrived, but it has been a real tough thing for us to try to operate under.
9332 We actually self‑broadcast our games at this point by linking into a CBC feed and doing it ourselves. That doesn't provide you with any marketing. It just gets your game on the air in a very small footprint.
9333 The key thing that I wanted to communicate today was that we really researched Golden West from our standpoint when it was first brought to our attention that they might be interested.
9334 I just got off a ten‑day road trip. I can explain more later, but what I saw on this trip with the three teams that they work with is exactly what the Chilliwack Bruins want and desire, and I know Golden West can deliver. So I hope that their application is approved, and I really hope that we can be on the air for August of this summer because our team desperately requires it.
9335 Thank you.
9336 MR. HILDEBRAND: Thanks, Darryl.
9337 One of the other hallmarks of Golden West is the promotion and support of local musical talent. We will program 40 per cent Canadian music and we will be active in promoting and providing exposure for local musicians. We will air and produce weekly 30‑minute programs featuring local artists. We know there will be more than adequate material readily available.
9338 Trevor McDonald has a little more of the impact that we would have on Chilliwack. Trevor.
9339 MR. McDONALD: Good morning. I have lived in Chilliwack for 30 years and have spent 20 years in the music industry; I never left. I am the owner of McDonald Entertainment and I am a general contractor of entertainment services. I provide local artists with the tools to move to a professional level from the beginning marketing of their songwriting to recording at my studio. Once I get them in the studio, I give them the CD or the DVD product to promote.
9340 This is no difference from myself and 15 other local studios in the Fraser Valley. We all share a common complaint: Why is there no local radio support for emerging talent? My avenues of promotion for these emerging artists are the internet for mass market and live venues for the artist to promote their product grassroots‑style through live venues.
9341 Where our community is greatly lacking is in a grassroots radio station that will support our vibrant music community with locals only type programming. It has been my own experience as a recording artist that there is no local promotion for emerging artists no matter how driven an artist is to present their material. Artists have gone all the way to Bellingham, Washington to promote a local Canadian product. That is wrong.
9342 In my research of Golden West, Mr. Hildebrand, and their commitment to local programming, I have seen time and time again that they stand by what made them a success for all those years. A grassroots radio station with a very local focus. Chilliwack deserves a broadcasting company like this that will match with reputation the talent our artists have to offer.
9343 I firmly believe in Golden West as the right choice for our growing community, and look forward to the open doors that Golden West will provide for myself and many, many hundreds of artists that the station will promote.
9344 Thank you very much.
9345 MR. HILDEBRAND: Thank you.
9346 The station format will be one of news, music and information, and not only with a new radio station, but also a new media component to complement the radio station.
9347 To outline this process in more detail, here is Lyndon Friesen.
9348 MR. FRIESEN: Good morning.
9349 Sitting on the doorstep of Canada's third largest city, Chilliwack already has access to any music they want. The internet, satellite radio, Vancouver radio, American radio, it is all there. But there is a critical element missing: A dedicated and exclusively local approach to gathering and delivering fresh and current local content about Chilliwack for Chilliwack. When we provide that comprehensive, interactive content, combined with a carefully crafted music package, we believe the level of service to the community will be above and beyond anything they have experienced.
9350 However, we don't want to fill the gap in local content just by providing the news they are not getting right now. The local content we will consistently deliver will go far deeper than traditional newscasts. It will be personal, interactive coverage of the events happening on their streets and in their neighbourhoods, delivered at the fast pace that new media users have grown to expect.
9351 Chilliwack deserves and in fact is asking for local content on‑air, on‑line and on‑demand, and we are prepared to deliver exactly that.
9352 The cornerstone of our local content will be the most comprehensive, fully staffed news and surveillance team in the valley. Our experience in other communities tells us that the city of Chilliwack needs at least half a dozen Chilliwack reporters to fully cover ongoing news stories and events, while also giving in‑depth coverage to a huge sports community, a large and quickly growing arts community, and an under‑serviced ag industry. The pulse of Chilliwack is its people, and it is only by hitting the streets and interacting with them that we will be able to serve them to the extent they need.
9353 To support Chilliwack's newest newsroom, a full contingent of local staff and announcers, all with their own ties and interests in the community, will serve as additional content gathers as they interact with Chilliwack in person, on the phone, and most importantly, on the air. Fully‑equipped with microphones and cameras, the result will be fresh, relevant content that keeps pace with the valley. As we said before, on‑air, on‑line and on‑demand.
9354 Let's narrow the focus and give you more concrete examples of the content we will provide for Chilliwack, starting with the news department.
‑‑‑ Video presentation / présentation vidéo
9355 MR. FRIESEN: Of course, we will be talking to the mayor, but we will also be consistently reaching out to the men and women on the street, and just as often bring them into our facilities to have their voices heard on‑air and their faces seen on‑line.
9356 And we will do the same thing for sports. As you heard from Darryl Porter earlier, we have years of commitment and experience in promoting and supporting local sports, and this starts well before the level of play we see with the Bruins.
9357 Chilliwack will receive full coverage and interactive promotion of sports, from a huge commitment to the Bruins, to athletes and teams at a far more basic level. Local sports will be our focus, from play‑by‑play game coverage to getting the athletes and coaches on the air, throughout the day, every day, and we will also serve fans with scores and results from all their favourite teams and events.
9358 Here is a sample story that happens to be about the Bruins, but throughout the day listeners will be drawn to similar stories about every sport, at most levels, in Chilliwack.
‑‑‑ Video presentation / présentation vidéo
9359 MR. FRIESEN: The large sports community is an obvious source of content in a city that is growing as quickly as Chilliwack, but just as important are the groups that are always overlooked, including the valley's number one industry, the ag sector. Here is an example of delivering what these people are telling us they want to hear.
‑‑‑ Video presentation / présentation vidéo
9360 MR. FRIESEN: Facts are important, but people are more important, and we will provide a voice for an unprecedented number of people who care about and are committed to their community.
9361 For example, as we explored Chilliwack, we discovered an incredibly involved arts community. At present, they are rallying around a new Performing Arts Centre. This kind of project requires huge community involvement, support and exposure and we look forward to partnering with them to provide exactly that ‑‑ something like this.
‑‑‑ Video presentation / présentation vidéo
9362 MR. FRIESEN: These samples demonstrate our ability to generate more than local information. They are an example of our commitment to deliver exclusively local and consistently relevant content. But that only covers the informational side.
9363 To deliver everything Chilliwack is asking for, we have carefully designed a powerful blend of bright, upbeat and positive music to entertain an exciting and growing city.
9364 The best rock, pop, and AC songs from the last 25 years will be woven together with the biggest multi‑format hits of today. About 35 per cent of our spins will come from currents and recurrents.
9365 An extensive library of over 1500 specially selected songs will ensure a broad, family‑friendly appeal that will always sound fresh. Here is an example to give you a sense of the overall flavour of the music Chilliwack will be tuning in to.
‑‑‑ Video presentation / présentation vidéo
9366 MR. FRIESEN: That sample of well‑known performers and incredibly popular songs was 60 per cent Canadian artists, which tells you that our commitment to 40 per cent Canadian content will easily energize the music available locally in Chilliwack. As well, we will create a separate music category specifically for emerging B.C. artists, scheduled a minimum of three times a day, seven days a week, all in prime time, 6:00 a.m. to 6:00 p.m.
9367 To expand on one of Elmer's earlier comments, a half‑hour program features made in the Valley music will highlight emerging singers and songwriters from the region.
9368 The thousands of artists we have partnered with in similar programs find this kind of promotion and airplay to be extremely helpful in jumpstarting careers. It also happens to be really good local music that local audiences love.
9369 That is what we will do on radio, and we will multiply all those same benefits by giving Chilliwack a new media platform, an on‑line, on‑demand source of content, the same content that is on the radio, with an exclusively local focus, updated several times a day, seven days a week, influenced and controlled by the people it serves through state‑of‑the‑art web 2.0 technology.
9370 You have seen glimpses of the site throughout the presentation. Here is a quick but more detailed overview.
9371 Onsite weather will display real and current local conditions.
9372 When significant news goes on the air, it also goes on line, refreshed every day
9373 Enjoy any time, anywhere content.
9374 Reporters will frequently and accurately relay relevant information to new media users about all the relevant issues in their community, and we will invite listeners to contribute to those issues with web 2.0‑based discussion and feedback platforms.
9375 Because today's new media users expect it, on‑demand video is an integrated feature of this website, and will even allow the uploading of user‑generated content.
9376 And, of course, Chilliwack will have access to classifieds, job listings, community entertainment and more 24 hours a day, seven days a week.
9377 It is a level of service well beyond anything Chilliwack has experienced or imagined. It is what Chilliwack is missing and what Golden West is committed to providing, because our experience tells us it can and should be done, and because the people of Chilliwack have told us it is what they want and need. Here are just a few of those people.
‑‑‑ Video presentation / présentation vidéo
9378 MR. HILDEBRAND: Thanks, Lyndon.
9379 As you can see, by approving our application, the city of Chilliwack will not only have their own local radio station, they will also have, as an instant bonus, a new media partner in chilliwacknow.com, something that will enhance and complement our service to the city.
9380 MS HILDEBRAND: As the Commission knows, Golden West has the experience, the commitment and the track record to guarantee that this new station for Chilliwack will be all it is expected to be, and more.
9381 We are a family‑owned radio company, one of a few in Canada, committed 100 per cent to service for smaller communities and cities. We are a radio company pure and simple. We have 50 years of experience which was marked during our celebrations in 2007.
9382 As already mentioned earlier this morning, we are a leader in promoting women in the workplace, which was recognized last week in Ottawa at the CWC Annual Awards Gala. Golden West was the recipient of the employer of the year award for outstanding leadership in the promotion and advancement of women. At Golden West, women represent 40 per cent of our management team and 72 per cent of our sales force.
9383 We have been, and continue to be, a leader in serving smaller markets with a unique brand of radio, and the leaders in Chilliwack obviously realized this when they asked us to come to Chilliwack.
9384 MR. HILDEBRAND: Three of the other applicants for Chilliwack are also applying for a licence in Vancouver, and may well be looking for a back door entry into the city, as has been the case in the past. We are totally committed to Chilliwack and have zero interest in Vancouver.
9385 We note that some of the applicants have offered to provide more direct Canadian content funds than we have.
9386 We think it is much more important to provide in‑depth community service than cash donations to FACTOR and other national organizations.
9387 As an example, our weekly half hour program featuring local artists will have a value of more than $200,000 in real exposure over the first licence term.
9388 We would ask that the Commission not look at these applications as an auction, where the licence is awarded to the highest bidder.
9389 In conclusion, we note that the other applicants ‑‑ Newcap, CJVR and Vista ‑‑ are all preparing to produce double the revenue we are projecting in the first year. We know we can provide what Chilliwack wants and needs, and we are ready to do so at realistic projections.
9390 We think that not only would our proposed service to Chilliwack be the best for the community, it would also have the least financial impact on the broadcasters in the market today.
9391 Madam Chair, that concludes our presentation and we are ready for questions. We are one minute over, sorry.
9392 THE CHAIRPERSON: Thank you, Mr. Hildebrand and your panel.
9393 Commissioner Duncan will lead the questions.
9394 COMMISSIONER DUNCAN: Good morning, and Mr. Porter, my husband and I are season ticket holders for the Halifax Mooseheads in the Quebec Major Junior Hockey League. So I certainly can appreciate what radio means in promoting that hockey team.
9395 I want to start first of all with programming. I am sure, as you know, the Commercial Radio Policy 2006 states:
"In their local programming licensees must incorporate spoken word material of direct and particular relevance to the community served. This must include local news, weather, sports coverage and the promotion of local events and activities."
9396 Your message is certainly clear. You are planning to have a lot of that. I would like to get some more specifics.
9397 When I look at your letter of April 17th, you included a chart with it of your programming which was called "Local News and Sports." On that chart there was nothing indicated for Sunday. So, I was wondering what your intentions are for Sunday programming?
9398 MR. FRIESEN: We staff our radio stations seven days a week. Every Sunday morning we will start at the same time we start the rest of the week. Our first newscast will be 6:00. We will have a few less newscasts. They will look exactly like Saturdays.
9399 COMMISSIONER DUNCAN: So it was just an oversight it wasn't on the chart?
9400 MR. FRIESEN: We should have added Sunday to that. It is an oversight, absolutely.
9401 COMMISSIONER DUNCAN: Thank you.
9402 I am wondering what the total number of hours per broadcast week will be devoted to spoken word programming?
9403 MR. FRIESEN: If it would be possible for me to do the math after this and provide it for the record after.
9404 COMMISSIONER DUNCAN: That is fine. Because the next few questions sort of deal with the timing as well, so we can get the whole picture.
9405 I am also interested to know the breakdown of hours per broadcast week to be devoted to news and to sports. So I am looking for total news: Local, regional, provincial, national.
9406 MR. FRIESEN: That is simple because 100 per cent of what we do will be local. At all of our FM stations across the company, we don't subscribe to national services. We don't do any kind of national news.
9407 If it is a major event provincially, we will send somebody to pick it up, but it is all information that we gather.
9408 Is that the question?
9409 COMMISSIONER DUNCAN: Wouldn't you report on national events?
9410 MR. FRIESEN: Very seldom. We will refer to some national activities, but most of that is available everywhere else. So our focus will be 100 per cent on local.
9411 Of course, if 9/11 happens, we have facilities and arrangements with national news service providers to be able to cover that kind of thing off, but our focus is all about what is happening in the community. We tell our listeners all the time that we just care about that. If they want more information about what is happening in the rest of the world, there are services that are already there that provide that.
9412 COMMISSIONER DUNCAN: So this morning's lead item, for example, Steven Harper and he is serving libel notice I guess on Stephan Dion and a few other prominent liberals ‑‑
9413 MR. HILDEBRAND: That would get some mention, but wouldn't get a lot of in‑depth coverage because our experience has been that people everywhere have access to daily newspapers and to television news channels 24 hours a day. So, that information is readily available to everyone. We have found that if we provide the local service ‑‑ what is happening in Chilliwack, what is happening in the schools and city council, all of that ‑‑ that makes far more sense and is far more relevant to the area.
9414 We have just found that that is something that the communities can relate to and they like, and the national and international news, they can get it from other sources.
9415 COMMISSIONER DUNCAN: Would you say then probably less than 2 or less than 5 per cent?
9416 MR. HILDEBRAND: Certainly less than 5 per cent for sure.
9417 COMMISSIONER DUNCAN: All right. Then talking about the local news and surveillance material, which is news, weather, sports coverage and the promotion of local events and activities, what will be the total number of hours per week devoted to pure local news? I guess what you are telling me is 98 per cent?
9418 MR. HILDEBRAND: Pretty much everything, yes.
9419 COMMISSIONER DUNCAN: Can we break that down? Can you break out the surveillance material from the pure local news? So, the surveillance is the weather, traffic, sports, entertainment.
9420 MR. HILDEBRAND: Again, that would be hard to actually schedule in advance because some days you have a lot of weather reports and other days you don't in different parts of the country. I guess if you have a lot of sunny days, you don't have as much weather information as you do when it is snowy or rainy or that kind of thing.
9421 So, I think it is very hard to in advance give exactly the amount of time you would use there.
9422 The same as with sports. During certain playoff times you would have a lot more sports going than you would have the rest of the time. That is why it is very hard to quantify in advance the exact number of minutes and hours you would have.
9423 But suffice it to say if something happens in the Valley, we are there and it would be on the air.
9424 COMMISSIONER DUNCAN: Your sports as well, then, is only local sports?
9425 MR. HILDEBRAND: By and large we would use the scores of the Vancouver Canucks obviously because it is important here, but we would designate our local talent to local information.
9426 COMMISSIONER DUNCAN: I think you have probably made this point, but I will just ask you again in case you want to cover it.
9427 We are just wondering why you think that such a considerable amount of news and information is so important to your business plan given that it is a music‑driven format?
9428 MR. HILDEBRAND: Again, we have found over the years, as Lyndon said at the outset, music is generally available everywhere and local news isn't. So, even though your music is a very important part of the radio station, in our experience it isn't the most important piece.
9429 The most important piece is the local information, the local news and surveillance and all of those kind of things, local interviews, because that sets us apart from every other radio station.
9430 We have found in markets where we operate, nobody else does this. Because we are doing it, we are more relevant, we have more loyal audience and we can, in that sense, then, have a successful business in markets that otherwise might not be large enough.
9431 With the size of Chilliwack, we think that this kind of thing would work in spades because the music at the end of the day is not going to set it apart because, again, as was mentioned by a number of panellists, especially in this part of the country, music is available everywhere with satellite, music on the internet. From our perspective and for our business plan, it just not as important as local information.
9432 COMMISSIONER DUNCAN: Just referring to a point you made there, how many communities are you currently serving that would be the size of Chilliwack, 80,000 in that area?
9433 MR. HILDEBRAND: Saskatoon would be the largest community that we are serving and then other cities would be smaller. But Saskatoon is probably three times the size of Chilliwack. So we have experience in that size city.
9434 COMMISSIONER DUNCAN: Twice the size, did you say, Saskatoon?
9435 MR. HILDEBRAND: Three times I guess. It is 250,000. I have three radio stations there. So I have experience in both larger and smaller markets.
9436 COMMISSIONER DUNCAN: The live‑to‑air programming, how many hours of live‑to‑air are you planning in the broadcast week?
9437 MR. FRIESEN: We would think we would need a staff, the radio station for sure from 6:00 a.m. to 12 midnight, including weekends. Weekends in the evenings we could probably staff it till about 9:00 p.m., but we do start really early. In all of our communities, our news people are going in already at 4:00 or 5:00 in the morning for the 6:00 o'clock start. So, we have fully staffed radio stations.
9438 COMMISSIONER DUNCAN: You said 6:00 to midnight Monday to Friday, and what were the hours on Saturday and Sunday?
9439 MR. FRIESEN: 6:00 to about 9:00 p.m.
9440 COMMISSIONER DUNCAN: How many full and part‑time newsroom employees do you expect that you will have?
9441 MR. FRIESEN: For sure we would need to have six, as mentioned in the earlier thing. Then what we do is add community players, get community reporters involved as well.
9442 COMMISSIONER DUNCAN: Are those paid positions?
9443 MR. FRIESEN: Mostly they are, but in some cases we have people that just want to become part of what we do. We often use students to help us. It gives them an entry into our business, and we start to use them part time and we pay them for that.
9444 But we have stringers out there as well that provide ideas and coverage. One of the things I guess with new media is there is a new interest in people wanting to provide information that gets exposure, so they have all the equipment. So it is that kind of information, too, that is of real benefit to us.
9445 MR. HILDEBRAND: The other thing that adds dramatically to whatever happens in our news department is that the people that work mornings on air in all instances at our radio stations are involved with the community and many times will be doing evening MC jobs or attending functions, and they will then feed more information back. So, they become actually reporters as well.
9446 So, we like to see all our employees really act as news funnels back to the station. So, again, we found that that works very well.
9447 COMMISSIONER DUNCAN: Again, I noticed in your April 17th response that you referred to voice tracking on parts of Sunday evening. We were just wondering specifically how many hours of voice tracking you are planning. In the broadcast week first, I notice you do say that you plan to voice track through the evening, but in the broadcast week, voice tracking?
9448 MR. FRIESEN: The way that we operate, we have staff in the building the entire schedule that I mentioned to you.
9449 Sometimes they will voice track a piece or two early so they can go and do something else in the community and come back. Whoever is on the air, whether it is voice tracked or live, is responsible for the product on the air. So, we don't leave the building, but we do occasionally voice track so that they can go and do something else and then come back.
9450 So, it is not just a black and white question. But we do staff it the hours that I mentioned to you and they are there to respond and we answer the phones during those times.
9451 COMMISSIONER DUNCAN: So, it is a tool to let you operate more efficiently really is what you are saying?
9452 MR. FRIESEN: Yes, for sure.
9453 COMMISSIONER DUNCAN: I was curious to know, this sort of comes out of last week's hearings. Is your music all scheduled locally or do you centralize the play of your music? Does somebody else make that decision and just communicate it to the folks operating the station here in Chilliwack?
9454 MR. HILDEBRAND: If you are referring to do we use consultants for our music?
9455 COMMISSIONER DUNCAN: No. I just meant if you centrally organize and decide what songs you are going to be played when.
9456 MR. FRIESEN: We have people that are experts in scheduling. They help contribute to the local person doing it.
9457 So, the answer is both. The end result comes from the people on site massaging and adding the local content. The general format would be laid out.
9458 COMMISSIONER DUNCAN: I think what we were hearing last week, maybe that is where we are missing the local input, or not as much play, anyway, of local artists.
9459 MR. FRIESEN: No, very important in the kind of thing that we do across the prairies and then for Chilliwack is we have to be able to provide the local nuances and the local edition of local artists. That is what makes this.
9460 COMMISSIONER DUNCAN: Your emerging artists I notice you said 2 to 5 per cent, but it sounds more than that when I listen to you this morning, because you are talking about B.C. artists.
9461 MR. HILDEBRAND: It probably is more than that percentage. Again, it is so difficult to say exactly what it will be when you are putting these things together.
9462 One of the things that we have found is that we actually ‑‑ I don't know if we can call them emerging artists. They are local artists. They may never emerge past the local area, but again they have relevance to the community.
9463 So, we always have a little difficulty with a national formula or a national name for these things because it is rare that certainly from the smaller markets that they will become stars in Vancouver or Toronto or Montreal. But they are stars in their own right in their local community.
9464 One of the things that we would try to always do in our applications, and I think I mentioned, we will over perform in whatever commitments we have made in our application. So, there are always minimums there because we think we can do more but we also don't want to exaggerate the process. So, we are always using those as conservative estimates.
9465 COMMISSIONER DUNCAN: So your minimum 2 to 5 per cent would include the reference this morning then to B.C. artists in general and to local but it could be more is what I am understanding?
9466 MR. HILDEBRAND: Oh, for sure.
9467 MR. FRIESEN: B.C. and local artists, I think the current average is about 2 per cent. Just the three times per day, 6:00 a.m. to 6:00 p.m. I think comes out to about 4 per cent of the total spins, of just the spins. That doesn't include the feature programs we would have on the weekends.
9468 COMMISSIONER DUNCAN: Thank you.
9469 I was just wondering if you could elaborate on the synergies that you expect to realize between Chilliwack and your other stations, and if they have been incorporated or how they have been reflected in your financial projections?
9470 MR. HILDEBRAND: There will be significant synergies. Much of the backroom work is done. We have a central traffic location; we have a central creative department; and we have a centralized accounting and billing department. So, all of that has been taken into account in our financial projections.
9471 We have developed a variety of systems over the years that enable us to do those functions that are not visible in a community from a central location. Then we spend all of our efforts and our resources on on‑air talent, news talent and sales people that are visible in the community.
9472 So, there is huge synergies.
9473 COMMISSIONER DUNCAN: I can understand there will be synergies. In your projections do they reflect an allocation of some portion of those costs?
9474 MR. HILDEBRAND: For a news station, they would really be minimal. Once the station is established and has a track record, then we would ultimately start allocating some of those costs to it. But initially, those would be overhead costs that wouldn't impact the local operation.
9475 COMMISSIONER DUNCAN: So, in the seven‑year projections that we have, would they be reflected in the years, say, 4, 5 and 6?
9476 MR. HILDEBRAND: Marginally, yes, but not significantly.
9477 COMMISSIONER DUNCAN: Just out of interest, is that all centralized in Altona or do you have different points that you ‑‑
9478 MR. HILDEBRAND: Our traffic is centralized in Altona; our creative is centralized in Steinbach; our accounting is also centralized in Altona.
9479 COMMISSIONER DUNCAN: Is that for all three provinces?
9480 MR. HILDEBRAND: Yes. That centralizing process enables us to put more resources into on‑air talent and to news talent. We have developed our own systems that actually work very well and they are very efficient. We see that as one of the synergies that makes these things possible.
9481 COMMISSIONER DUNCAN: Just a little bit about the CCD. I am sure that you know that the policy requires that the initiatives involve direct expenditures and that they be allocated to the support, promotion, training and development of Canadian musical and spoken word talent, including journalists.
9482 In your April 17th reply you confirmed that 80 per cent of your over and above CCD contributions would go to local groups. But we don't have any details on the local groups that you intended.
9483 MR. HILDEBRAND: I think they were included in your packet today. There was a schedule of material. It would be chart number 2.
9484 COMMISSIONER DUNCAN: Thank you.
9485 MR. HILDEBRAND: We have allocated funds to a variety of organizations. We have also for years 5 and 6 out ‑‑ or 6 and 7, we have not designated individuals. Some of the money is not designated.
9486 We feel it is probably irresponsible to designate that far ahead because there is going to be emerging artists that aren't even known yet that will be coming on the scene over the next three or four or five years. So, we have allocated some of the money for years 6 and 7 to be determined.
9487 COMMISSIONER DUNCAN: I can understand your point on that. I guess we just need your assurance that you will ensure that these expenditures do qualify as direct contributions.
9488 MR. HILDEBRAND: For sure. Again, this is something that over the years I have handled personally the entire process. I can assure the Commission that not only will it qualify, but it will be spent and we have historically spent more than we committed in applications. We generally spend far in excess of that, but again we feel these are conservative estimates and we want to make sure we continue that process.
9489 COMMISSIONER DUNCAN: Have you already had discussions with some of the groups that are mentioned here?
9490 MR. HILDEBRAND: Yes.
9491 COMMISSIONER DUNCAN: Thank you.
9492 Also on the CCD, I notice that in your letter you refer to the $200,000, including total, the basic and the over and above. I just wanted to confirm that, that it does include both.
9493 MR. HILDEBRAND: The chart that we have here, the $200,000 is over and above the base fees.
9494 COMMISSIONER DUNCAN: Is over and above the basic?
9495 MR. HILDEBRAND: Right.
9496 COMMISSIONER DUNCAN: I notice in your projections you just have one line that shows $200,000.
9497 MR. HILDEBRAND: Right.
9498 COMMISSIONER DUNCAN: Where was the basic shown in your projections?
9499 MR. HILDEBRAND: That was actually done before the new policies came out. When the application was originally filed, that was prior to your December release. Originally the basics were relatively minor and so wouldn't be material.
9500 COMMISSIONER DUNCAN: So, the $200,000 is over and above, just to be clear?
9501 MR. HILDEBRAND: Right.
9502 COMMISSIONER DUNCAN: That eliminates the rest of those questions on that. That answers that.
9503 I would like to understand how your proposed format will bring diversity to the market. Rogers, I understand, has a soft AC and a light rock format. So I am just wondering what the similarities and differences would be on the music side? I gather from the spoken word ‑‑ I think you have made that quite clear ‑‑ that your spoken word will be quite different, but on the music side.
9504 MR. FRIESEN: I think your description of the other local broadcaster as being very light is probably ‑‑ I think the music that you heard on our clip gives a better ‑‑ I think the music that we have prepared is far more upbeat, far more brighter, fast paced. It is a different brand. It is a faster‑paced AC blend. There is some HOT AC in there, there is some adult hits, and there is some classic hits that are actually part of the blend of music that we put together for a place like this.
9505 So, there really isn't a similarity. There will be some similar artists, but it won't have a similar pace.
9506 We thought it was the most logical way to go in that market, at least sitting next to Vancouver. We wanted to provide a blend of popular music that we thought would be, just as we described earlier, something that was well crafted just for a market to have the widest appeal. So we won't be too soft and we won't be too hard. We will be, we like to use the word "safe." We are going to be safe but we are going to be really upbeat, bright and in the popular music category.
9507 MR. HILDEBRAND: In Canada, the adult contemporary formats amount for about 22 per cent of all formats. So there obviously are various corners that you can be in in that adult contemporary arena.
9508 We don't think that we will sound at all like the station in Chilliwack now.
9509 COMMISSIONER DUNCAN: When you make that statement, are you talking about both Rogers' statements, including the one that appears to be somewhat directed to Vancouver?
9510 MR. HILDEBRAND: I think that is country now, is it not?
9511 COMMISSIONER DUNCAN: The information I have is soft AC and light rock.
9512 MR. HILDEBRAND: Again, we will certainly sound quite different than the Rogers stations for sure. And you add to that the preponderance of local material that we have, and again, I can't stress this enough, the thing that will really make the radio station different is the local information surveillance and all of the local news. I mean, this will be such a different radio station that there will be no similarities and the people in the Valley will really benefit from that diversity.
9513 COMMISSIONER DUNCAN: I noticed in your letter January 5th, 2007 ‑‑ so this has been underway for a while for you people ‑‑ you had a letter from the CBC about shared use of their broadcast facilities, and I was wondering if you were still intending to do that?
9514 MR. HILDEBRAND: Yes.
9515 COMMISSIONER DUNCAN: What type of costs or are those costs included in your projection?
9516 MR. HILDEBRAND: Those costs are included. That is just a rental process.
9517 COMMISSIONER DUNCAN: So it is a relatively minor amount?
9518 MR. HILDEBRAND: Yes.
9519 COMMISSIONER DUNCAN: Would that be included in admin and general or technical?
9520 MR. HILDEBRAND: Yes, in the technical.
9521 COMMISSIONER DUNCAN: I want to now talk a bit about the economic impact. I am referring to the sources of revenue that you gave us, 5 per cent you expect to take from existing stations and 25 per cent increase in existing advertising spins, and new radio advertisers 65 per cent, 5 per cent from other media.
9522 What percentage of the revenue that you are going to get do you expect will be garnered from out‑of‑market stations?
9523 MR. HILDEBRAND: I would like Ken Goldstein to address this.
9524 MR. GOLDSTEIN: We have a station here where there is essentially one station serving Chilliwack and the rest almost all is going to Vancouver tuning.
9525 The amount of advertising that might be going into Vancouver to come back to Chilliwack would be very small because if you are a local advertiser, as a rule the rates would not work. If I want to reach the 80,000 or 90,000 people in Chilliwack, I am not going to spend at audience reaches of two million. So, I think that a very small amount would be really coming from Vancouver stations.
9526 What we have here is an opportunity to recapture more of the potential that would be there from local retailers by having another station that is truly local, local, local. So, the largest amount here, as you can see, is new radio advertisers, which would be people who haven't found a home on the current station and don't have another station that makes economic sense.
9527 COMMISSIONER DUNCAN: I think I didn't phrase my first question properly, but I will come back to it because you are into my next track anyway. So, that is okay.
9528 How did you arrive at the 65 per cent? Did you do door‑to‑door or based on your other ‑‑
9529 MR. HILDEBRAND: These estimates are really taken from 50 years of experience in this business, in communities large and small. From previous applications that we made and our experience, we have a track record of what works and the impact on existing broadcasters. So, these are really estimates that we have experienced in our previous applications and launches.
9530 COMMISSIONER DUNCAN: Does that also apply to expecting that current advertisers will increase their advertising buys by 25 per cent?
9531 MR. HILDEBRAND: Exactly, yes.
9532 COMMISSIONER DUNCAN: Not by 25 per cent but that you ‑‑
9533 MR. HILDEBRAND: We find that when we provide the kind of local service that we are proposing, that attracts advertisers in a whole different way because they want to get involved with that. So, that is why we are very confident that, number one, we won't be taking money from the existing broadcaster, and certainly we won't be making any impact on Vancouver broadcasters. They won't even know we exist here, and that is fine with us. We are just happy to be under the radar entirely for them and just we are Chilliwack.
9534 As Ken Goldstein has done a number of studies, he has very interesting stats on how this works and only confirms what our experience has been.
9535 COMMISSIONER DUNCAN: The 5 per cent from existing incumbent stations seems low.
9536 MR. HILDEBRAND: It is low and nobody can know exactly whether it will be 4 or 7 or whatever, but, again, we don't think that we are taking money from existing broadcasters. We may get business from the same clients, but that is revenue over and above because the existing clients that are on the radio stations in Chilliwack, they are looking to reach the Chilliwack listeners that that station has.
9537 We propose to have different listeners. We would be repatriating listeners from Vancouver stations, from U.S. stations, from satellite. So, this was a new audience. So, we don't expect that we will be moving audience from that radio station, nor will we move much revenue from that radio station. We will develop new revenue.
9538 COMMISSIONER DUNCAN: That actually dovetails into what I had intended to be my earlier question, which was which Vancouver stations, then, which out‑of‑market stations do you expect that you are going to get your audience from?
9539 MR. HILDEBRAND: We will get some from everywhere.
9540 COMMISSIONER DUNCAN: Not your revenue but your audience.
9541 MR. HILDEBRAND: We will get some from everywhere because, again, as we said earlier, right now people are listening to a broad spectrum of available signals, even though there isn't really a lot of local service.
9542 As these people find out there is local service here, they will gravitate to that radio station. That has been our experience.
9543 MR. GOLDSTEIN: If I might just amplify on that a bit. First of all, yes, indeed it will be a sliver from here and a sliver from there, but the key point here, and I think your question focuses on that key point, is why so little from the current local station?
9544 It is because we are not dealing with a fully developed potential here. If the full potential in the market was now being realized or virtually the full potential and you were talking about a rearrangement of shares within a full potential, you have here a situation where, based on the retail data and I provided in our report a range, you have a range of possible radio revenues that are greater than what the current station is taking and, consequently, recapturing some of that unrealized potential is where the greatest opportunity is, rather than necessarily cutting into the other guy.
9545 COMMISSIONER DUNCAN: I did read your report. I saw that.
9546 I am curious because you did have quite a bit on new media in your remarks this morning. Are you into new media in a big way in some of your other stations or are you just entering that?
9547 MR. FRIESEN: Certainly what we found in all the other communities is that if we do the radio part right, we have all this content and all this information that nobody has on the internet, and if we can get it there quickly, new media is a very, very important part of people's lives. We can't operate in the next generation without having an on‑line component that is absolutely fast paced. We have to provide that information to the internet as much and as quickly as we do, but this isn't a radio station website. We do have radio websites and that is where we run contesting and the fun parts maybe go there.
9548 But for the community, all that information we have, we think it is vital that we provide that to the community. Yes, we have nine portals similar to this across the prairies. The town I lived in I was mentioned not long ago it was minus 45 and they are closing schools. I live in a town of 10,000. We had 17,000 computers go on our site that morning to find out if there was school.
9549 We know that it impacts. We drive activity both ways. So, it is a very important part of our future. We think we have to do that to stay relevant on the radio side.
9550 COMMISSIONER DUNCAN: Are you just streaming the exact radio station?
9551 MR. HILDEBRAND: No, we don't stream. This is totally different. The local news and information that we gather appears there. The weather is there all the time. Lyndon is a little modest. In Steinbach where we started this process, steinbachonline.com is the second busiest site in Manitoba, second only to Manitoba Telephone System.
9552 So, it is a huge part of our business and is growing. So, that is what I said before in my remarks. I said Chilliwack would not only be getting a new radio station, they would be getting a new media component that would explode the process even more dramatically.
9553 So, we see that radio and the new media going forward will be an integral part of being viable, and we see the new media piece actually growing in communities where we are already doing it at a much greater percentage than radio revenue.
9554 This is almost like another business.
9555 COMMISSIONER DUNCAN: So, you are generating revenue on those sites now?
9556 MR. HILDEBRAND: We are.
9557 COMMISSIONER DUNCAN: Which is not in your projections?
9558 MR. HILDEBRAND: No, this is not radio revenue. So, this is not part of the projections there at all.
9559 COMMISSIONER DUNCAN: Do you have an interactive so that if I was on my computer I could give you back information or feed comments to you? Do you do that as well?
9560 MR. FRIESEN: We do that. That is why I made reference to the web 2.0 technology. We want to be totally interactive. We want to have discussions with the community. We want to throw out stuff on the radio and ask questions so that they can debate it on line. We have also a user generated portion where users with cameras or videos or comments can automatically put it into the categories in the community portal so that they can interact.
9561 So, it is all going on there as well at the same time that we are stimulating some of that on the radio.
9562 COMMISSIONER DUNCAN: Is this in place now and operating, for example, in a community the size of Steinbach, fully operating?
9563 MR. FRIESEN: We have this. We are just upgrading to 2.0 in the next month. But we are doing all the same things in nine communities now.
9564 MR. HILDEBRAND: There is nine across Manitoba and Saskatchewan.
9565 COMMISSIONER DUNCAN: So, I would assume probably your larger ones; is that what you are doing?
9566 MR. HILDEBRAND: We have experience in this.
9567 MR. FRIESEN: As well Saskatoon.
9568 MR. HILDEBRAND: Yes, Saskatoon is doing it as well. So it is working in both Estevan and Weyburn of the size of 10,000 and 250,000 in Saskatoon. So the process works in both of those sizes and, as I said before, it is just growing. We think this is a very, very important part of our future.
9569 COMMISSIONER DUNCAN: I am just curious because, as you know, one of the applicants is for Chilliwack/Abbotsford. I am just wondering if you didn't consider Abbotsford or will your signal reach into Abbotsford?
9570 MR. HILDEBRAND: We did consider Abbotsford but we thought we would apply for Chilliwack and hopefully we would get an approval for Chilliwack and once that was done, then we would apply for Abbotsford. We see these as two separate markets, two totally different communities. So, we didn't want to mix them up. We didn't want to apply for both at the same time to confuse the Commission. We wanted to focus on Chilliwack.
9571 COMMISSIONER DUNCAN: I appreciate you not confusing us, me in particular.
9572 How many new licences do you think that the market could support?
9573 MR. HILDEBRAND: It might support one or two, but it appears there is only one frequency. So I think the Commission's task is going to be more difficult. From a market size itself, we would have no objection at all if there would be two new stations, but we don't see where there is a frequency that will make it work. I think that may be the problem.
9574 COMMISSIONER DUNCAN: Thank you, Mr. Hildebrand, team.
9575 THE CHAIRPERSON: Commissioner Williams, please.
9576 COMMISSIONER WILLIAMS: Good morning, Mr. Hildebrand and Golden West panellists.
9577 I am going to start with Mr. Porter. You stated earlier that you have been encouraging Golden West for about two and a half years. How did you meet? How did you find Golden West and have you encouraged other applicants as well or was this primarily a Golden West focus?
9578 MR. PORTER: It wasn't really us finding Golden West. We were surprised, as I said in my initial comments, about the decisions that were made about not supporting us when we got to town. And we got into we have to do something about this mode really fast. We hired a consultant who I think has been in communication on and off with the Commission over this. We were working with what was going to be civil radio in Abbotsford, and we just put it in the hands of the mayor; the former owner of the local station in Chilliwack years ago, went to him, just anybody.
9579 I think it came where Golden West was the first that showed any interest. We then started the conversations from there. As a business owner, I decided I better learn who these people are and started doing my research and liked what I saw, and that is when I said I would like to endorse them for sure.
9580 COMMISSIONER WILLIAMS: Thank you.
9581 It is just Mr. Hildebrand said about 13 months ago he applied, and I guess what I am hearing is that there was 13 months of preparatory work before that application was even filed. Would that be correct?
9582 MR. HILDEBRAND: I would like Darryl actually to talk a little bit about his experience. The team just came back from a prairie road trip which took them to many of the communities in Saskatchewan where we are media partners with teams in the league, including Swift Current and Moose Jaw and Saskatoon. I would like to have him elaborate a little bit of his experience in Saskatoon which outlines exactly the kind of thing that we propose to do.
9583 MR. PORTER: It was impactful because when I first researched Golden West I simply went on line and made some calls and actually phoned some teams that deal with them. I didn't know them. I liked what I heard around local relevance.
9584 In Chilliwack, when you are a bedroom community ‑‑ and they hate that terminology, I know ‑‑ when we are so close to Vancouver, you run the risk all the time of being very forced to deal with the Vancouver‑based media, which is exactly who we cannot be. In fact, right now 80 per cent of our media spin is in Vancouver. So, some of your previous questions, we would stop doing that because we don't want to do that. We have to be about Chilliwack.
9585 That is what we were told Golden West does. So, I go out on the road with my team, and you have a lot of hours to pass when you are waiting for games every day and I see in Saskatoon, Swift Current, Moose Jaw, but in Saskatoon especially, it was so integrated to the point where you couldn't tell during the game who works for who. Was it the team that was putting on the game or was it the radio station? It was all blended.
9586 I was going that is exactly what Chilliwack needs and the Chilliwack Bruins need because that means you get all day chatter; there are just chatting about you, and that is where vibrancy and excitement comes from. What I saw was local relevant radio is exactly what Chilliwack needs to be because we are only 30 minutes away from Abbotsford and we don't want to be that. So, at the end of the day that is what these people do. So I came back excited about what I saw.
9587 COMMISSIONER WILLIAMS: Thank you, Mr. Porter and Mr. Hildebrand.
9588 Mr. Friesen, you gave us a demonstration of your new media initiatives or Golden West new media initiatives. I understand you have nine portals doing similar.
9589 Is this monetized? Is there a way that you are getting revenue? Do you sell classified ads? Do you have to buy a radio ad before you can buy a classified ad? Do you need both? Is it an emerging revenue stream? What percentage, say, in rough terms if you have monetized it, are you drawing into Golden West from that opportunity?
9590 MR. FRIESEN: First of all, we don't ask our audience or our users to pay anything to use our sites. All the user generated and all the other benefits to the community, it is all free. The information is free. There is no sign up. There is nothing that costs money.
9591 We have always thought we were relatively good at selling advertising so we wanted to be advertising‑based. So, we are utilizing both the visual ad space as well as the pay per clicks or the other side of the internet as well.
9592 So, it is totally advertiser based, and at this point it is growing faster than anything else that we have done. It is growing at probably 50 to 100 per cent in most of our markets.
9593 COMMISSIONER WILLIAMS: That is great. That is my next question. So, it is growing at a rapid pace.
9594 MR. FRIESEN: And it is making maybe 10 per cent, Elmer; is that fair?
9595 MR. HILDEBRAND: There is a significant revenue stream that we are developing with these portals, new media. I shared this with the Commission earlier that our new media business for our company will likely hit $1 million this year across our company. It is starting to be significant.
9596 We see this growing rapidly. So, that is why we want to marry the two together. We see this as a business that is so complementary that at the end of the day they merge like that.
9597 COMMISSIONER WILLIAMS: The information or the content that is on your new media sites, you have gathered it through your traditional methods, but is it presented exactly the same or is it reworked in some way?
9598 MR. HILDEBRAND: All of the content on there is our own. We don't have anybody giving us content.
9599 One of the things that we have done over the years, because we have made our living on local information, we saw that we had this bag of local information. If we can reuse it again in another form, then that only makes some sense.
9600 So, we have been putting all of the information that we gather on to this community portal. So, if you happen to go away for a day, you come back tomorrow, or if you are away and you want to see tonight what happened in Steinbach during the day, you click on and it is all there.
9601 COMMISSIONER WILLIAMS: Is it verbatim to what is on the radio?
9602 MR. HILDEBRAND: No, it wouldn't be verbatim. It wouldn't be like 24‑hour information. But all of the local news and local weather, sports, that is all there.
9603 MR. FRIESEN: Writing styles change not a lot, but conversational writing versus visual reading, but it is essentially the same information. Our news team basically writes another version or two for the internet and it is so simple. It automatically feeds to the website.
9604 So, it is an extra jump. That said, the audio portion that we are showing here in terms of podcasts, we are really doing some of that. That is a little more labour intensive but it is all radio product that we already have that is repurposed for this.
9605 COMMISSIONER WILLIAMS: And the growth rate, if I can hear again, what percentage was it growing?
9606 MR. HILDEBRAND: The growth rate is dramatic. We don't want to overdo it.
9607 COMMISSIONER WILLIAMS: Yes, dramatic it is.
9608 Thank you very much. Those are my questions, Madam Chair.
9609 THE CHAIRPERSON: Commissioner Menzies, please.
9610 COMMISSIONER MENZIES: Just quickly, there are newspapers in Chilliwack; right?
9611 MR. HILDEBRAND: Yes, weekly newspapers.
9612 COMMISSIONER MENZIES: Mr. Porter, just to clear this up for me now, your organization owns the Langley Chiefs as well?
9613 MR. PORTER: No. The former Chilliwack Chiefs moved to Langley. We went into Chilliwack as the Chilliwack Bruins. We don't own them.
9614 COMMISSIONER MENZIES: Are a couple of your owners also working on the Langley arena project or is that just separate?
9615 MR. PORTER: They have a minority share in the Bruins company, but that is a whole different company that is building that arena in Langley. But, yes, they are involved in that.
9616 COMMISSIONER MENZIES: That is a smaller arena in Langley; right? So there is no chance that you would be moving there?
9617 MR. PORTER: Oh, God, no. I wouldn't be sitting here doing this if I was planning a move.
9618 MR. HILDEBRAND: He wants to stay in Chilliwack.
9619 COMMISSIONER MENZIES: Because that is 5100 or something in Chilliwack so it is much bigger?
9620 MR. PORTER: Yes.
9621 COMMISSIONER MENZIES: In terms of the music formatting, I just want to get a chance to more fully understand that. You made reference to the fact that there is somebody centrally in the company who helps with the music formatting. Just to be clear, I mean, "Hi, I'm from head office and I'm here to help," I don't want to be sarcastic about it, because it is fine with me either way it goes, but is there local input on music formatting or is it central or, if not, help me understand the nature of the relationship.
9622 MR. FRIESEN: Our program director for the company provides guidance and direction. We do some standardized things, but, no, absolutely it is finished on site. So, the guidelines are provided. Much of the work may be done, but then it goes on site where the local part is finished.
9623 We are very aware of that. And to come from head office, we have done that a few times. We know as well as anyone that is not how we are going to get a buy in from the community; that is not how we are going to get a buy in from our staff. We try to guide them and influence what we can and try to set up the basics that we know makes sense with our experience. Then we give it to the local people and they have to program. We don't know the artists that are local. We know Trevor. We will rely on the local artists to provide the local influence to that sound.
9624 So, the answer is both. We provide guidance, but they finish it on site.
9625 COMMISSIONER MENZIES: Thank you.
9626 MR. HILDEBRAND: One of the things that I guess we have developed in many facets of our radio business over the 50 years are certain templates that we know work in every market, whether it is news or music or other things. There are certain similarities.
9627 So, we feel it is only prudent to use the experience that we have already gained in other markets to say, these kind of things actually work; so, here is a framework of how we are going to do that, then you finish it up locally. That is sort of the modus operandi that we have used and it works quite well.
9628 COMMISSIONER MENZIES: Thank you.
9629 You may have mentioned this and I may have missed it. Forgive me if I did. I found a reference on line to the fact that you might be using the call letters CHWK. Is that the case?
9630 MR. HILDEBRAND: Yes. We have already had the Department of Industry approve those call letters. So, they are reserved for us.
9631 COMMISSIONER MENZIES: That is the historic founding call letters for Chilliwack radio; right?
9632 MR. HILDEBRAND: That is right, yes.
9633 COMMISSIONER MENZIES: I was curious because there was a guy named Menzies involved and from what I found he forgot to put the station on air sometimes because he was too busy selling radios.
9634 MR. HILDEBRAND: We were very happy that those call letters were still available because they do have heritage going back probably 50 years as well. So, when we trotted those out in the community, they said, wow, this will be great.
9635 COMMISSIONER MENZIES: I am interested in a little expansion on what sounds to me like a very strict definition of "local." I don't mean that either positive or negative.
9636 Given the nature of the Fraser Valley and the way commerce and traffic and jobs and things flow through, I was surprised that you were excluding Abbotsford even, for instance, from your coverage area. Could you just expand on that a little bit for me?
9637 MR. HILDEBRAND: Technically it is very hard to cover Abbotsford from Chilliwack because of the rocks that get in the way. Again, that is why I said if we were successful with this one, then we would readily apply for Abbotsford to give them their own radio station.
9638 But, again, the local process, in many areas, we are in the shadows of large cities. A good example would be Calgary. We have radio stations in High River and Okotoks, which is in the shadow of Calgary. When we went there, the Commission was asking, how much time are you going to spend in Calgary, what are you going to do there? We said the same thing there as we say here. We are not interested in Calgary. Over there we actually have a signal because there is no mountains in the way. But we don't go to Calgary to solicit business. There is enough business in Okotoks and High River to provide more than adequate base for our growth. When we do that, the local communities are actually very appreciative of the fact that they don't have to compete with a Calgary advertiser on the Okotoks radio station. By concentrating on local, you sort of eliminate that.
9639 So, we are experienced with that both in Calgary, Regina, Moose Jaw is close to Regina, and in Winnipeg, where we have a number of stations within 40 miles of Winnipeg and the signals cover there. But we don't go there; we concentrate on the local communities.
9640 It has just been our business practice. It is surprisingly simple and it works very effectively, and that is what we know would work here as well.
9641 COMMISSIONER MENZIES: Thank you very much.
9642 THE CHAIRPERSON: Commissioner Duncan.
9643 COMMISSIONER DUNCAN: I have a few more questions that I overlooked asking.
9644 I notice in your December 3rd response you projected your audience share would grow from 15 per cent in year 1 to 30 per cent in year 7. Is it possible for you to give us a breakdown of those projections by year for the seven years?
9645 MR. HILDEBRAND: Yes, we actually have a graph of the audience share that we are projecting, and we would be happy to file it with you.
9646 COMMISSIONER DUNCAN: That is great.
9647 Can you also give us the detail of your minimum annual over and above contribution for each of the seven years?
9648 MR. HILDEBRAND: We can file that with you as well, yes.
9649 COMMISSIONER DUNCAN: Are you also agreeable to accepting a COL that your total over and above contribution over the seven years would be $200,000 for CCD?
9650 MR. HILDEBRAND: Yes.
9651 COMMISSIONER DUNCAN: I am just curious about the staff employed that would be, for lack of a better word, repackaging the content to go on the new media. Are they included in the staff employed at your ‑‑
9652 MR. HILDEBRAND: No, that would be separate.
9653 COMMISSIONER DUNCAN: That is it. Thanks very much, Mr. Hildebrand.
9654 THE CHAIRPERSON: Thank you.
9655 I just have a few follow‑up questions. I wasn't following very well the full‑time and the staffing that you would have at the station. I know that you have said several times that it is six reporters.
9656 So, can you explain to me again on how many of the reporters will be full‑time, how many part‑time and then in addition to the six reporters, what other paid staff there will be?
9657 MR. FRIESEN: We will require at least six full‑time news people. Then we are going to need a full complement of announcers and backroom staff and sales people and everything else that makes a radio station.
9658 With six people, we will need to at least have 21 to 25 employees at the outset in order to operate the kind of service that we need to. It is far more employees than we need to have, but because of our service on the local side it takes a lot more people. So, we will likely start with a lot more people than we need, but we say at least a minimum of six on the news side, as well as a full complement of announcers and support staff.
9659 THE CHAIRPERSON: In terms of the full complement of support staff, staff other than the six reporters, how many head counts do you anticipate right now?
9660 MR. FRIESEN: I would think we would need at least another four or five just on the on‑air side, plus some part‑timers.
9661 MR. HILDEBRAND: Again, all of these things would be similar to our operations that we have in other communities. We want to commit to the Commission that the kind of service that we are proposing to do, we will put the horsepower behind it to make it happen.
9662 THE CHAIRPERSON: Thank you.
9663 Generally I have heard about voice tracking and that there is some negative perception on voice tracking. I know that you don't have much in your application and live‑to‑air programming is a better reflection of ‑‑ the local programs will be better than voice tracking.
9664 Do you have a comment on that, just your perception?
9665 MR. HILDEBRAND: My perception on voice tracking, as I think Madam Duncan said before, it is an assist. So you have a person in the studio, he or she can voice track part of a program that they are doing and then do some other productive work while the hour or two hours are passing. Whereas it used to be this person would have to sit in the control room watching the records spin, and now if they didn't do any voice tracking they would have to sit there and watch the computer do all the work. So, there is time in between voice tracks when they can actually do some other productive work, do some production work, make some calls, surveillance calls, that kind of thing.
9666 So, we see voice tracking as an assist to be more efficient, to sound better, but we still like to have people in the building so that we can answer the phone and we see that as being live. Again, we find that that makes the most sense.
9667 THE CHAIRPERSON: So, it is sort of not necessarily true that the voice track programming will be far inferior; it doesn't necessarily have to be that case; right?
9668 MR. HILDEBRAND: No.
9669 THE CHAIRPERSON: For Mr. Goldstein and Mr. Hildebrand, I think, Mr. Hildebrand, you commented that had it not been for the lack of frequencies, probably the Chilliwack market can sustain two new entrants. I will just throw this question out.
9670 On what basis do you come to that conclusion, and then I am wondering if, Mr. Goldstein, you can also comment on the Chilliwack BBM market is very, very large, and can you add any information to assist the Commission in terms of the commuter traffic and the population being concentrated along the Fraser River corridor, just to give us more information about the economics of the area, please.
9671 MR. HILDEBRAND: Maybe I will ask Mr. Goldstein to go first and then I will follow up.
9672 THE CHAIRPERSON: Thank you.
9673 MR. GOLDSTEIN: There is indeed commuter traffic, but I think it is important to understand the way Statistics Canada defines a census metropolitan area or, if it is less than 100,000, usually they call it a census agglomeration.
9674 The underlying definitional idea that goes into that is to say that you have a core urban area and then you are going to include in the census metropolitan area near that core area, areas from which a lot of commuting takes place.
9675 So, the fact that Statistics Canada has defined the Vancouver census metropolitan area, which is essentially the same as the Greater Vancouver Regional District, the GVRD ‑‑ Abbotsford is now a separate census metropolitan area, and Chilliwack, not yet over 100,000, although clearly heading in that direction, is a separate census agglomeration ‑‑ tells us that although there is some commuting, there is not that much commuting, certainly not enough for them to say that it would be the Abbotsford/Chilliwack census metropolitan area.
9676 So, they are clearly distinct communities.
9677 In terms of estimating the economic activity, I looked on line at the Chilliwack Economic Partners Corp. website, and it was actually quite interesting to see the mix in Chilliwack. Obviously it is growing because it is a nice place. I mean, people want to live there. But you have a company called Stream International, which is in the high tech area there, for example, that I think has over 1,000 employees now in Chilliwack, perhaps more.
9678 But I looked at the list, and just to read the list, without trying to put a specific number to each, of how they divided up the Chilliwack economy, agriculture, aviation and aerospace, education, film, food processing, health care, manufacturing, professional services, real estate, retail/wholesale trade, technology and tourism.
9679 Well, that is a very nice mix. That is really a very nice mix and they all seem to be firing on pretty good cylinders.
9680 To get down to the specifics of the radio projections, of course with only one station there and even if we counted the other station that is there but, as you observed last year in your decision on the renewal of the licence, it is really in Vancouver, it is under one owner; there is one station, we can't get the specific results, but what we can do is an exercise that takes a couple of steps, and I did it in the report.
9681 First of all, you can get a good estimate for the retail trade in the area. The next thing you can do is you have published the data for Vancouver radio and you have published the data for Victoria radio. So we can start to do some subtraction, and we can say that outside of Vancouver/Victoria radio in British Columbia is a certain amount, and the relationship between that and the retail trade outside of Vancouver and Victoria is a certain amount, and that then gives us a basis for a range for a market like Chilliwack.
9682 What I found when I analyzed this application was that the experience that Mr. Hildebrand was talking about has put their audience projections and their revenue projections, as far as I am concerned, right in the sweet spot, exactly where it should be if you look at the current station, what audience it has at the moment. It hasn't been overly optimistic or overly pessimistic. I think it is exactly where it should be.
9683 MR. HILDEBRAND: To add to that, if there was a frequency, and maybe you could licence two stations, when we look at some cities, for example, Brandon is 35,000, 40,000 people, they have four radio stations. So that Chilliwack at 80,000 people could certainly have at least three. That was the basis of my comment that if there was a frequency, certainly from our perspective two licences wouldn't be an issue.
9684 Does that answer the question?
9685 THE CHAIRPERSON: Yes, I will come back to this one.
9686 Mr. Goldstein, I should know this, but what is the most easterly community within the Chilliwack BBM? Merritt is not in there, is it? Merritt is the Nicola Valley.
9687 MR. GOLDSTEIN: The answer is I am not sure, but even if Merritt were included, most of the 80,000‑plus is Chilliwack. So, even if you had some small communities to the east included, the economic impact of those communities on the projections would be relatively small.
9688 THE CHAIRPERSON: Do you know what proportion of the 80,000‑plus commutes to Vancouver for work?
9689 MR. GOLDSTEIN: I do not, but because of the definitions of the CMAs, I would guess it would be a modest amount.
9690 THE CHAIRPERSON: Modest would be a third?
9691 MR. GOLDSTEIN: Oh no.
9692 THE CHAIRPERSON: Less than that.
9693 MR. GOLDSTEIN: If it was as high as a third, Stats Can would have somehow linked it to either Abbotsford or Vancouver. That goes into the definition of a census metropolitan area or a census agglomeration. Commuting is one of the key factors.
9694 THE CHAIRPERSON: Thank you very much.
9695 Mr. Hildebrand, based on your answer, you would feel that even if we were to licence two in Chilliwack, your business case would not be adversely impacted?
9696 MR. HILDEBRAND: Not really, no.
9697 THE CHAIRPERSON: If we were to licence two, in addition to you, who do you think we should licence or who would be the most compatible; who would be the most not compatible?
9698 MR. HILDEBRAND: They are all my friends so I don't know.
9699 THE CHAIRPERSON: You can just talk about the format.
9700 MR. HILDEBRAND: Again, as we have said before, format is important, but for us, format is only this piece. The information, the news is the other piece. So it is like a total package.
9701 As we know, there are a variety of formats available now, and who, if we are successful, by the time we sign on, one or two of the stations could have changed formats. So, that is always a moving target. I think the Commission has a great challenge in trying to deal with a format process simply because it is so fluid.
9702 We basically decided to hang our hat and our future on not just the musical format, but an entire community service format that includes far more news and information and music to make one conglomerate picture that then makes some sense.
9703 THE CHAIRPERSON: Mr. Friesen, just on the format, when I was listening to the music, I agree with you, I think it is a little harder than 104.9, Clear FM, but do you think it is accurate to describe it between 104.9 and maybe JACK‑FM, 96.9?
9704 MR. FRIESEN: It could have those similarities.
9705 THE CHAIRPERSON: I believe legal has some questions. Ms. Pinky.
9706 MS PINSKY: Thank you. I just have a few questions of clarification with regard to your presentation this morning.
9707 First, with regard to your statement, and you did discuss the issue with Commissioner Duncan, that you would be creating a separate category specifically for emerging B.C. artists and you state that it would be scheduled a minimum of three times a day. I just want to understand what that meant.
9708 Is that referring to three tracks a day, if you could elaborate on that, please?
9709 MR. FRIESEN: Our intent with that category was three times a day, 6:00 a.m. to 6:00 p.m. every day to play three local B.C. emerging artists.
9710 MS PINSKY: Thank you.
9711 With respect to the CCD commitments, because you have newly identified the specific initiatives, I wonder if I could ask a few questions of clarification so we have a better understanding of what the initiatives will consist of.
9712 Firstly, with regard to the McDonald recording studio, you indicate that the money would be allocated to the production of music CDs by local artists. Could you just elaborate as to would that money be earmarked for studio time or is that money for the actual production of the CD?
9713 MR. HILDEBRAND: What we have been doing in some other provinces with recording studios, we would provide $10,000 toward the production of a CD. That could then include both studio time and some production time. In many cases they have done the complete job, including packaging, everything. That is the way that we have been working with existing studios in Manitoba and Saskatchewan.
9714 So we provide the money to the studio to then work with the artist or the group. The outcome is then a CD.
9715 MS PINSKY: Also just to clarify, McDonald Recording Studio, is that independent of your station?
9716 MR. HILDEBRAND: Yes, totally independent.
9717 MS PINSKY: Who would be responsible for identifying the local artist that you would target?
9718 MR. HILDEBRAND: That would be done in conjunction with the station and the local music community. So that if there was an abundance of material that was available, we would set up an independent panel in the community and Trevor is well versed with the musicians in the Valley and we would then determine who was most deserving of this contribution.
9719 MS PINSKY: So the station would be spearheading the ‑‑
9720 MR. HILDEBRAND: We would work with the music community.
9721 MS PINSKY: But it is not the production studio?
9722 MR. HILDEBRAND: No.
9723 MS PINSKY: Then with regard to the Chilliwack Symphony, if you could just explain what they would be ‑‑
9724 MR. HILDEBRAND: Again, this would be a donation to the symphony to underwrite their expenses. There would be no strings attached to it.
9725 MS PINSKY: And with the Academy of Music?
9726 MR. HILDEBRAND: The same with the academy. The academy, I think, currently has about 1,000 students that they are working with on a regular basis. The academy is an interesting organization. They start students in some cases in pre‑school, taking music lessons. So, we would envision, again, this would be a contribution to the academy with no springs attached.
9727 MS PINSKY: Just to clarify, in both these instances, the Academy of Music and the Symphony, the money would be given to the institution to allocate to expenses? It won't necessarily be, for example, funding a student?
9728 MR. HILDEBRAND: It would be at their discretion.
9729 MS PINSKY: With regard to the high school music scholarship, would you be identifying the high school?
9730 MR. HILDEBRAND: No, we would want the people involved with the music program to actually identify the individuals that would get the scholarship.
9731 MS PINSKY: Excuse me, but is there only one high school in Chilliwack?
9732 MR. HILDEBRAND: We would provide this amount to the schools on a rotating basis. So this would be an annual amount that we would provide.
9733 MS PINSKY: Then with regard to years 6 and 7 for the money to be allocated to the artists who have not yet emerged, I understand you obviously couldn't identify the artists, but would you be giving money directly to the artists? What would the initiative consist of?
9734 MR. HILDEBRAND: We would be giving it to qualified artists or qualified organizations that would appear between now and then. Again, all of this would be done with the local music community and, as I say, the reason we are doing it this way, we don't know who they will be at this point.
9735 MS PINSKY: I understand, but you are saying it could either be given to an association involved with local musicians or the local musicians themselves.
9736 MR. HILDEBRAND: We would coordinate with the local music community to determine where that would go.
9737 MS PINSKY: With regard to the 20 per cent contribution to FACTOR, that would be attributable to the $200,000? Should we add that money on top of the 200,000?
9738 MR. HILDEBRAND: You can if you want.
9739 MS PINSKY: Because I notice the chart doesn't refer to the 20 per cent FACTOR contribution.
9740 MR. HILDEBRAND: You can add it on top of that if you want, Yes.
9741 Given the opportunity here to speak about FACTOR, I wouldn't mind if I could make an aside comment on this.
9742 We think FACTOR does a great job in many instances, but we have also found that in many of the smaller markets, the FACTOR money never sort of gets down that far. So, we will be happy to provide money to FACTOR if that is what the Commission determines we should do.
9743 We would prefer that money go to local organizations rather than to national organizations. We see it going farther in the smaller markets if we do it that way. We have been sending money to FACTOR for many years and we haven't seen any of it ever come back to our markets. Yet, we know there are artists there that would benefit from it.
9744 So, FACTOR, from our perspective, and we may have the wrong perspective, but from our perspective, it is more an organization that supports and helps the major markets of Canada, which we aren't one of.
9745 That is just my editorial, Madam Chair.
9746 MS PINSKY: Should any of these initiatives be determined to be ineligible by the Commission, would that money be ‑‑
9747 MR. HILDEBRAND: Reallocated to whatever is eligible, for sure.
9748 MS PINSKY: Thank you.
9749 Would you be able to provide for us letters from at least from the Academy of Music, the Symphony and McDonald Recording Studio and perhaps any of the high schools indicating that all monies received would be dispersed according to CRTC criteria?
9750 MR. HILDEBRAND: Surely, yes.
9751 MS PINSKY: When would you be in a position to provide that?
9752 MR. HILDEBRAND: Again, as soon as possible. Probably not before today or tomorrow, but shortly.
9753 MS PINSKY: For the purpose of that letter, if you could provide that by the end of Friday, that should be adequate.
9754 MR. HILDEBRAND: Fine.
9755 MS PINSKY: You have also undertaken to provide the total amount of spoken words to take into account the Sundays.
9756 MR. HILDEBRAND: On the weekend, yes.
9757 MS PINSKY: Could you provide that by tomorrow end of day?
9758 MR. HILDEBRAND: Sure.
9759 MS PINSKY: As well, you have undertaken to provide the break down of the audience share. Could you provide that by the end of day ‑‑
9760 MR. HILDEBRAND: We have some charts that we could actually leave with you, I think as we walk out now.
9761 MS PINSKY: Great. I think that is it.
9762 I just wonder if I could ask one last question. You have been discussing your new media initiative and have been saying that it is an integral component of the station of the undertaking that, for example, the news team would be used to produce and repurpose material. The fact that you report your revenue separately, is that a function of the distinct regulatory frameworks that apply?
9763 MR. HILDEBRAND: Yes.
9764 MS PINSKY: Thank you very much.
9765 THE CHAIRPERSON: Thank you, Mr. Hildebrand and your team.
9766 This is your opportunity to have your last pitch on why you believe you are the best.
9767 MR. HILDEBRAND: If we haven't convinced you by now, I am not sure what we will say, but maybe just recap a bit.
9768 The most relevant reason we should be licensed is outlined in the supporting letter from Mayor Clint Hames. I think that says it all.
9769 The city of Chilliwack asked us to come and provide a local radio service for one simple reasons. Mayor Hames told me at our original meeting that they had done their homework in checking out broadcasters and wanted the Golden West brand of service.
9770 The same is true on our planned relationship with the Chilliwack Bruins. They operate in a league where they can see first hand the kind of media partner Golden West can provide in cities like Moose Jaw, Swift Current and Saskatoon.
9771 I also think the Commission is well aware of our track record. We generally deliver more than we promise at hearings.
9772 The Commission is also aware that in areas where we operate in the shadow of major markets, we continue to focus only on our local markets. In Manitoba we operate in the shadow of Winnipeg; in Saskatchewan we operate in the shadow of Regina; and in Alberta we are in the shadow of Calgary. In each case we ignore the fact that we could do business in these major markets for a number of reasons.
9773 First of all, we told the Commission we were not looking at those markets. We would rather focus only on the local community. Second, it actually makes business sense to concentrate on the local markets because local businesses like the fact they do not have to compete with city advertisers on our airwaves.
9774 The two letters in our original application, both from Mayor Hames and from Darryl Porter I think underline the reason.
9775 Our financial projections are most realistic, as are our audience projections, and we will have the least impact on the incumbent broadcasters in the Valley.
9776 Lastly, we have the history, the track record, the resources and the commitment to do a great job for Chilliwack.
9777 Thank you.
9778 THE CHAIRPERSON: Thank you, Mr. Hildebrand and your team. Thank you for your time.
9779 We will take a 15‑minute break right now and be back for 11:25, please.
‑‑‑ Upon recessing at 1109 / Suspension à 1109
‑‑‑ Upon resuming at 1125 / Reprise à 1225
9780 THE SECRETARY: We will now proceed with item 19, which is an application by Newcap Inc. for a licence to operate an English‑language FM commercial radio programming undertaking in Chilliwack.
9781 Please introduce yourself and your colleagues, and you will then have 20 minutes to make your presentation. Thank you.
PRESENTATION / PRÉSENTATION
9782 MR. STEELE: Madam Chair, members of the Commission, and Commission staff, thank you for considering this application from Newcap for a new FM radio station to serve Chilliwack, B.C.
9783 My name is Rob Steele, President and CEO of Newcap Radio. Joining me today are Glenda Spenrath, Director of Newcap Operations, David Murray, Chief Operating Officer for Newcap Radio, Steve Jones, VP of Programming, and Josie Geuer, Program Director of Ottawa's Hot 89.9.
9784 Chilliwack is a vibrant community of close to 80,000 people and one of the fastest‑growing mid‑sized cities in B.C. Chilliwack is a beautiful city nestled in a wide river valley surrounded by lakes and mountains. While only 100 kilometres east of Vancouver, Chilliwack enjoys milder temperatures, a lower cost of living, and a slower pace lifestyle that makes it a great place to live, and an increasingly attractive alternative for Lower Mainland residents.
9785 Most Vancouver stations, to one degree or another, are heard in or near Chilliwack, as well as several cross‑border stations from Washington state. However, Chilliwack is served by only one local commercial radio, that is Rogers AC station STAR‑FM.
9786 Newcap Radio has a strong track record for operating radio stations in mid‑sized markets like Chilliwack. It takes a certain kind of radio company to be successful with both audiences and advertisers, and maximize their contribution to the Canadian broadcasting system. Many large broadcasters don't bother. The profits are too thin and management's priorities are elsewhere.
9787 We see it differently at Newcap. Partly because our roots are in smaller and mid‑sized radio markets, and partly because we do keep a lean head office, and we put our resources where we think it matters most ‑‑ at our local stations. But mostly, I think, it is because we do have a passion for it and we are pretty good at it.
9788 Our small and mid‑sized market stations are all highly rated commercially, and highly rated for their commitment to their local communities. Our staff across the country generously give their time to raise money and awareness for a variety of charitable efforts, developing strong partnerships where we can make a difference. Last week, our Charlottetown stations Ocean 100 and K‑Rock raised $120,000 for the IWK Children's Hospital in Halifax.
9789 Rest assured that if you choose to licence a Newcap Radio station in Chilliwack, the community will get nothing but the best.
9790 MR. JONES: In Chilliwack, we researched the viability of nine different formats: Classic hits, classic rock, country, 60s/70s oldies, 80s/90s, soft AC, Hot AC, CHR, and new rock. We looked at a wide demographic group, 18 to 64, and surveyed 300 Chilliwack residents, describing each format using artist examples and playing music montages.
9791 Our research uncovered a strong desire for a local radio station playing what we call classic hits. Our broad based format includes elements of 60s and 70s oldies, classic rock and 80s and 90s hits.
9792 Classic hits ranks number one in positive interest. Forty‑eight per cent express positive interest in classic hits, of which 19 per cent indicate they would listen to it all the time. Twenty per cent expressed positive interest in classic hits and could not associate any station with the format, what we call the per cent of format void.
9793 Potential listeners for a classic hits station are also less satisfied with their radio choices than Chilliwack listeners as a whole. Only 11 per cent of those we have identified as potential listeners for classic hits say they are 100 per cent satisfied with Chilliwack radio today, and 25 per cent say they are not at all satisfied.
9794 As a result, we believe our proposal for a broad based classic hits format represents the biggest unserved listening need in Chilliwack radio.
9795 The classic hits station that we propose for Chilliwack will be called The Peak. We believe it is a perfect name for a station serving this area, as it stands for both the essence of the region and the essence of the format, playing only the best of the best from what many consider the peak musical years.
9796 The Peak will focus on timeless music by artists our target audience grew up with, including The Beatles, The Guess Who, The Beach Boys, and many others from the 60s. From the 70s the station will feature Elton John, Gordon Lightfoot and Fleetwood Mac. From the 80s our listeners can expect to hear Bryan Adams, Phil Collins, Tom Cochrane and, yes, even Chilliwack. The music will be older and more familiar than the music on other stations available in the market. Our listeners will expect to turn on The Peak and hear songs they grew up with and have come to identify as the music of their generation.
9797 The Peak will attract a strong following of listeners, especially in the 25 to 54 and 35 to 64 demographics. The median age of our target listener will be approximately 45, and the audience will skew slightly male, although it will remain fairly balanced between the genders.
9798 As a result, we predict a 9 per cent share 18‑64 for our classic hits format, and a 12 per cent share 25‑54.
9799 MS GEUER: While the focus of The Peak will be music, we are proposing a radio station to serve the residents of Chilliwack on an equally, if not more important, level: The community.
9800 The Peak will provide a strong local news and community presence, and act as a fresh radio news voice that is simply not present in Chilliwack today. We will present 79 traditional weekly newscasts, all of them sourced and presented by our staff in Chilliwack. The Peak will offer our listeners 75 per cent local content in all newscasts, with the remaining 25 per cent being relevant news and information from British Columbia, Canada, and the rest of the world. Combined with 126 scheduled surveillance reports, total news programming will exceed eight hours per week.
9801 Newscasts on The Peak will be geared toward news and information specific to Chilliwack. Being so close to Vancouver, a community such as Chilliwack finds itself inundated by traffic and local news stories from the bigger city. Our newscasts will be researched, written and produced by three local professional radio news journalists, who live and breathe the community they serve.
9802 But as important as it is, the local news we will put on the air is only a small part of what we will bring to Chilliwack.
9803 Consistent with Newcap's long tradition of providing intensely local service to the communities it serves, this new station will trigger a growth spurt in service and benefits to the local community.
9804 Hundreds of young people in the Chilliwack region participate in high school and college sports leagues, as well as minor hockey and little leagues, while senior teams are active in curling, soccer, baseball and more. Every day thousands of residents cheer on their kids and their favourite teams. Yet, little, if anything, is ever reported on radio.
9805 The Peak will work closely with the Chilliwack School Board, The University College of the Fraser Valley, and local community sports clubs to create a real‑time reporting system for scores and results which will be broadcast on The Peak. Our goal will be to connect with the parents and fans, network with the organizers and establish roots in the community. From the local games and road trips of the Chilliwack Bruins to the University Cascades and the teams of school district 33, we will provide coverage of the events our audience is taking part in and interested in.
9806 Each day The Peak will feature an hourly Pause for a Cause that will serve to further update our listeners on what is going on in their community by profiling different community groups, charity events, and other causes that are relevant to the local community. One day might feature fundraising for the new Chilliwack Cultural Centre, and another the Chilliwack and district Crime Stoppers. These will air seven days each week, around the clock, and will also be profiled on our website. They will be immediately relevant to what is going on in the community that day.
9807 Other program features on the Peak Will include:
9808 Voices From Chilliwack, which is a unique concept to commercial radio, brought to life on The Peak. Half an hour on the station will be handed over to the personalities that make up the community, whether it be coaches or politicians, farmers or call centre employees of Stream International.
9809 Peak Performances is a daily feature treating listeners to live music from their favourite artists. Fantasy concerts could be high‑profile concerts such as Woodstock, or low‑key live recordings made in clubs.
9810 All together, The Peak's news and spoken word programming will be over 21 hours per week.
9811 Finally, if licensed, The Peak will complement its on‑air programming with a host of on‑line initiatives that go well beyond the typical radio station website. Our on‑line content will take the interests of our target audience to heart, and present unique content such as:
9812 A detailed and updated interactive community events calendar allowing non‑profit groups to register and post their upcoming events on their own.
9813 Chilliwack Pics will feature listener pictures and video taken around the community.
9814 Our website will also feature up to the minute local news direct from our newsroom, and a local sports score board featuring minor hockey, little league, and school sports events.
9815 MS SPENRATH: Newcap actively and aggressively employs an employment equity strategy dedicated to increasing representation of women, visible minorities, persons with disabilities and aboriginal peoples.
9816 This, we believe, is sound business practice in an industry where success depends heavily on how effectively we reflect the communities we are licensed to serve. In our view, drawing on the talent found in the designated groups is a major factor in achieving success.
9817 Our approach in Chilliwack will have three key elements.
9818 First, our news and non‑news programming will be designed to reflect the reality of Chilliwack's cultural, ethnic, racial and aboriginal diversity. Our spoken word will contain elements that appeal to our aboriginal audience, in particular.
9819 Second, our announcers and reporters will be representative of the mosaic that makes up Chilliwack. Our audience will enjoy an association with the people delivering their daily entertainment and information.
9820 And third, 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.
9821 We will be truly reflective of Chilliwack on and off the air, in our people and our programming, and in so doing, establish firm roots in the community.
9822 There is a phenomenal amount of musical talent in the Fraser Valley. For example, five Canadian idol finalists in the past few years have come from the Valley.
9823 To support and help further grow this tremendous base of local talent, we have proposed a package of Canadian content development totalling over $700,000.
9824 First, Newcap will contribute $280,000 to the University College of the Fraser Valley in partnership with the Chilliwack Academy of Music, to expand their music program. Monies will be used for new courses, graduate scholarships and support for local music festivals.
9825 A further $280,000 will go to FACTOR. We will ask that FACTOR direct these funds toward artists and groups residing in British Columbia, with a preference to Chilliwack and the Fraser Valley.
9826 Seventy thousand dollars will go to the National Aboriginal Recording Industry Association, funding two scholarships to be awarded to aboriginal music artists residing in B.C., with preference to artists in the Chilliwack region.
9827 And finally, $70,000 will go to the Canadian Society for the Recording Arts for an annual recording grant to support an emerging artist in Chilliwack or the broader Fraser Valley. These grants will provide concrete new opportunities for Chilliwack musical artists to advance their careers, directly benefitting the region.
9828 MR. MURRAY: Given Chilliwack's strong economy and the clear market void for our proposed classic hits station, we strongly believe The Peak could be absorbed with minimal negative impact on the incumbent station.
9829 Indeed, as The Peak will attract its audience primarily from out‑of‑market stations, we project that the majority of our revenue will come from other sources.
9830 We will employ a team of five to six well‑trained and highly motivated sales people to monetize that repatriated tuning.
9831 Madam Chair, Commissioners, our company prides itself on a reputation of effecting significant and unequivocal contributions to the Canadian broadcast system wherever we hold licences. We also strongly believe that applications for new licences must be based on sound research and realistic business plans.
9832 Repatriating out‑of‑market tuning and building local retail revenues will not be a cake walk, but with our experience and track record, we believe we are uniquely positioned to do both and provide a strong new radio voice to Chilliwack.
9833 Newcap's 89.5, The Peak will fill a local service void with exceptional commitments to local programming and reflection.
9834 We will provide a truly alternative local radio service that is not presently available in the market; offer a strong new editorial voice in the market, with 79 news packages, over eight hours of news content weekly, and 21 hours of spoken word overall; and contribute over $700,000 to Canadian content development initiatives designed to support future and emerging local Chilliwack and B.C. artists, including specific initiatives for aboriginal talent.
9835 We look forward to your questions.
9836 THE CHAIRPERSON: Thank you, Mr. Murray and your panel.
9837 Commissioner Menzies will lead the questions.
9838 COMMISSIONER MENZIES: Thank you.
9839 First of all, I would like to just clarify precisely the news presentation in terms of hours. I see the sheet that you have provided us with has pure news at four hours and 30 minutes, sports at 1:37:30 and surveillance at 2:06 for 8:13:30 total. That is consistent with your previous submissions regarding six hours, seven and a half minutes to newscasts including sports.
9840 In your supplementary brief, you mentioned that that 6/7th point five included weather. I am just trying to find out where the weather belongs essentially. Is it in the ‑‑
9841 MS SPENRATH: It is actually dispersed throughout all of our newscasts, as well as being in the scheduled surveillance reports. If you look at the deficiency letter, the first two lines together, weather is in amongst those two in total. In amongst the newscasts, the total weather would be approximately two minutes.
9842 COMMISSIONER MENZIES: It is bundled then between surveillance and the news portion?
9843 MS SPENRATH: Yes, that is correct.
9844 COMMISSIONER MENZIES: It is fairly straight forward in Chilliwack, isn't it, rain in the winter and sun in the summer.
9845 When you talk about 75 per cent ‑‑ and you have it here ‑‑ of your news being local, how do you define local?
9846 MR. JONES: We define local as what happens in the community we serve, in the area covered by our signal footprint. In the case of Chilliwack, 75 per cent of our news would be events that happened in the immediate region, and the remaining 25 per cent would be split amongst the area in the Lower Mainland, British Columbia, Canada and the rest of the world.
9847 COMMISSIONER MENZIES: So, anything outside of your immediate area ‑‑ let me put it this way. Chilliwack is your local and regional in that sense, and anything outside, the rest of the Lower Mainland, B.C. and Canada goes into the other 25 per cent?
9848 MR. JONES: That is correct. With that other 25 per cent, we recognize that we live in a global village and to ignore what happens outside of our backyard is probably not the wisest move. So, what we try to do with our news that happens elsewhere is find a way to bring it back our community.
9849 In the case of Chilliwack, events happening in Vancouver are very easy to relate back to Chilliwack because they probably have a much more immediate impact, events that happen in Victoria, in the capital city.
9850 But we do try to turn stories that happen elsewhere across the country or around the world and focus them back and how they impact the listener in our community. That may be a story as encompassing as the war in Iraq affecting the gas prices in Chilliwack, for a specific example.
9851 COMMISSIONER MENZIES: It is fairly clear from your presentation that this amount of news coverage and the resources you plan to put into news is very key to your sense of identity in terms of connecting with the community, and you presented yourself as a company that is interested in being very local in that sense.
9852 Can you take me through your ‑‑ actually, I will ask this question first. I am curious to know, there is lots of research about the music format. Have you done research on the news portion as well?
9853 MR. JONES: In our research we did look at other programming elements that were important to our listeners. For example, was it important to them that their radio station originated in Chilliwack or was it somewhat irrelevant because there are so many radio stations serving the market from outside.
9854 We found that it was very important for numerous listeners, especially those interested in our format, that their radio station be from Chilliwack.
9855 We also looked at non‑musical elements like traffic and weather and how important those things are to people, and we discovered they are quite important.
9856 COMMISSIONER MENZIES: How important?
9857 MR. JONES: They are a very high priority, indeed in all our markets. Chilliwack is no exception. Behind music, local weather and news generally ranks as the most desired elements in all of our stations across the country. That very seldom changes.
9858 Things that you hear on radio stations like contests and promotions on the big scale of things generally rank quite low. People want a format, a musical choice that appeals to them, and they want content in between the songs in the form of news and information and weather that is relevant to their local market.
9859 COMMISSIONER MENZIES: What I am trying to get at is reasonably specifically what data or what feedback you are working from in building that newsroom and that news/sports/arts structure. Where did you get that from?
9860 MR. JONES: Within our research study of the 31,864 Chilliwack residents, we asked them questions about programming elements. We asked them about Chilliwack area news, B.C. news, weather, traffic, how important were compelling announcers and personalities, how important was national and international news, how important was Vancouver area news to them, and how important was Vancouver area new to them, and how important was information on outdoor recreation because the area of the Fraser Valley is kind of a prime spot for a lot of outdoor recreation.
9861 So, we asked that question and we got the response that the number one most important thing to the audience was music, which collectively ranked a 4.4 out of 5, which means that, regardless of what kind of music you like, the most important thing to you is a format that appeals to you.
9862 Second to that among our entire panel was Chilliwack area news at 4.0. B.C. was next at 3.8, followed by weather at 3.7, and traffic at 3.6.
9863 COMMISSIONER MENZIES: Thank you.
9864 I know that you can't make news exactly fit a percentage format in any given day because you don't know what is going to happen, and different things happen. But I would like one of you to be able to take me through the structure of your newsroom and give me a sense of the beats that you would be focusing on primarily and how much time would be devoted to that? Will you have, for instance, one person or a percentage of an FTE devoted to city council, school board, regional, district, agriculture, business, whatever; if you can maybe take me through your beat structure. I would like to know your staffing numbers and what your plan is on that.
9865 MR. JONES: Glenda Spenrath can elaborate on the specific staffing numbers, but the structure of our newsroom is generally the same across the country where one news director within our building would lead a team of news journalists.
9866 They would be assigned based on their skill sets and various other criteria the different beats they would follow. For example, you may be one of our news reporters who does a certain number of newscasts on the air and also covers the city council beat. Another newscaster may do a different set of newscasts on the air and cover provincial information or, as you mentioned, agriculture and other issues like that.
9867 Each newscaster is generally assigned a specific challenge, a specific beat to follow.
9868 MS SPENRATH: Additionally, to speak to your personnel question, we are looking at three full‑time news people, and often we do have stringers out in the community as well, and a producer that would assist with putting together the newscasts. That would be the staff complement.
9869 MR. JONES: I might also add that what listeners perceive as news and what we perceive as news sometimes is different. We are talking right now, I realize, about structured newscasts and what might be considered hard news, the true news.
9870 But what happens in our community in all different forms is often information of interest to our listeners. So by looking at some of the other options we have, like a street team of individuals who go out and cover community events and report back, while that might not be something that is quantified in our news numbers or in these particular staffing numbers, it is another way in which we are able to gather information from the community.
9871 COMMISSIONER MENZIES: Thank you for that.
9872 What I am speaking of is more in terms of what I would call strategic news content objectives. So, how much of it would be, let me put it this way, reactive so that it is what I would call cops and courts, that whatever happens that day is what happens, and would you have the resources or do you have the plans to do what I would call enterprise reporting, which is original work that is unique. Everybody else has access to cops and courts and city hall and they decide whether they want it or whether they don't to a certain extent.
9873 Do you have the resources within this plan to do, like I said, enterprise reporting, original material that would be unique to you and unknown to other media until you broadcast it?
9874 MR. JONES: Yes, we do. We do recognize that we are a music‑based radio station and that to do long form in‑depth investigative reporting is probably out of our realm, but we do proactive, as you said, enterprise work. A lot of that is through networking, establishing the contacts in the community. So that you have inside information on what is happening, what sort of decisions are being made, what sort of projects are likely to come up, and you can get on those stories before your competitors do. That is that original content that we are proactive to take.
9875 COMMISSIONER MENZIES: With three announcers I am thinking that a lot of that or some of that or the time to do that would come from your part timers or stringers that you called them.
9876 What would the part timers and strangers amount to in terms of an FTE or full‑time equivalent employee?
9877 MS SPENRATH: I would say probably at least half to three‑quarters of a full‑time equivalent person.
9878 COMMISSIONER MENZIES: Where do you expect to obtain the talent to do this in terms of, well, your news staff to begin with, but not just your news staff. In order to be effective and serve the Chilliwack market, these people will have to understand the nuances of the community.
9879 Where will you find them and how will you recruit them? What will the job posting look like?
9880 MR. MURRAY: We have had some experience in launching new stations in Kemptville and Sydney and Carbonear, et cetera. We found that most often the people that are in the community now are the most skilled and equipped to provide that service.
9881 We often do have many people, close to 1,000 employees, in the company now, and quite often when we launch a new station in a Chilliwack or a Vancouver or wherever, many of our employees are from there and they do have a great deal of experience from that.
9882 I think I will ask Glenda Spenrath to talk about how we approach the employment equity aspect of that and how we reach out to the communities to make sure that we are reaching the representation that is in that community as well.
9883 MS SPENRATH: We do have very well defined policies as far as recruiting and hiring personnel for our stations that are reflective of the communities that we serve. We do go and speak to the educational institutions, the colleges, recruiting agencies and the like, and we have had success in this regard.
9884 I look at Alberta, for example, where a large part of our staff complement is in Alberta, and we have some 15 aboriginal workers in our stations across the province. We find that it has been very successful. It is good for your programming as well, because when you are looking at bringing in local people, they have the flavour of the community based on the relationships, based on their family, friends, experiences growing up in the communities.
9885 So, we find it is a successful way to get good programming out to our communities.
9886 MR. STEELE: Mr. Menzies, maybe I can just comment on that, in terms of a practical approach or how we actually go about staffing stations, in practice what we find works for us is first we will hire the general manager. We will look internally first before we look externally.
9887 Then we put that general manager on the ground in the community, like we did in Sydney, like we did in Kemptville. That general manager is basically responsible for recruiting his staff in the area or wherever, through networking and that kind of thing, and it goes from there.
9888 COMMISSIONER MENZIES: Those were all good answers, but I guess typically would these news people be people with one to three years of experience, three to ten years of experience, ten years plus? Just give me an idea, I guess. I should have been more specific in the beginning.
9889 MR. JONES: It varies a great deal by market. There are many cases where even in smaller markets there are veteran people with a great deal of experience who jump at the opportunity to go somewhere geographically they want to go.
9890 So, if there was someone from the Lower Mainland elsewhere in our company or in a different company, they may have a great deal of experience but come back to a smaller market because it affords them the opportunity to go home and, in other cases as you said, in a small and medium market you are hiring people with maybe slightly lesser experience in that 1 to 3 range.
9891 We would strife to put together a team that was complementary to each other. If we had a junior person, you would want a more senior person on the staff to be able to mentor them and develop them.
9892 MS SPENRATH: In that regard, we have some strong relationships built over a long period of time with organizations such as NAIT in Edmonton and SAIT in Calgary, training facilities that are specifically for broadcast talent. So, we have the resources at hand and we use them.
9893 COMMISSIONER MENZIES: Thank you.
9894 Concerning synergies, reading your material, I am working on the assumption, and I would just like to confirm that this assumption is correct or incorrect, that you won't be benefitting from a lot of programming synergies within your 126 hours of programming which is all being locally produced; is that correct?
9895 MR. MURRAY: That is correct, 100 per cent of that will be locally produced.
9896 COMMISSIONER MENZIES: Given the size of your company, where do you expect to most experience corporate synergies, in what areas?
9897 MR. MURRAY: I didn't quite catch that.
9898 COMMISSIONER MENZIES: What sort of synergies do you hope this new station would enjoy from your other properties?
9899 MR. MURRAY: Certainly being part of a larger company and being part of 1,000 employees, we will provide many training synergies, exchange of best practices, opportunities to meet regionally with ‑‑ the program director will meet with the other program directors in the region.
9900 You heard us say last week that actually more than half of the company now is in western Canada, and we have regular meetings with our program director; our internal news meeting where all the news directors will go. Just yesterday and today, we had a sales training conference in Edmonton. It is based in Edmonton, and all of the sales people in Alberta attended that conference, not just the sales managers.
9901 So, we have those types of synergies.
9902 Having said that, most of the synergies that we bring to the table are those of an administrative nature, like payroll and accounts payable and human resource benefits, things of that nature. We have come to learn over the years that local radio is local radio, that Chilliwack signal only goes 50 kilometres, sort of thing. This particular one is actually fairly quite small, the 3 millivolt curve, and everything that happens happening inside that footprint.
9903 So, other than some exchange of news stories, where a regional or national news story might be of interest and can be localized and of interest to Chilliwack, it is really a local business.
9904 COMMISSIONER MENZIES: In terms of your business plan, especially with the administrative synergies, were you able to put a number on that and include it in your calculations of your business plans?
9905 MS SPENRATH: Yes, it is in there. Again, it is very nominal. We run a very lean head office. I think most of us are here today.
9906 COMMISSIONER MENZIES: Is this it, everybody?
9907 MR. MURRAY: All the good ones.
9908 MS SPENRATH: It is in there, but again it is in administration; it is in the other category. It is very nominal. The strength of our business is right at the station level.
9909 COMMISSIONER MENZIES: You better hope they weren't listening.
9910 MR. MURRAY: They know I was kidding.
9911 COMMISSIONER MENZIES: I thought I would give you the chance to...
9912 How much time do you plan to devote to syndicated programming in any given week?
9913 MR. JONES: At this point we don't have any syndicated programming as part of our programming schedule. That is not to say that something wouldn't come up down the road, but if it did it would be extremely small. It may encompass an hour or two a week. So the answer to your question right now is none at all, and if it happens it will be minimal.
9914 COMMISSIONER MENZIES: If it happened would it be Canadian content, music, spoken word?
9915 MR. JONES: It would most likely be music programs and most likely Canadian‑generated music programs to allow us to meet the regulations effectively. But that is my best guess at this point.
9916 COMMISSIONER MENZIES: Your median age target is a 45 year old, correct, skewed slightly male?
9917 MR. JONES: Yes, 55 per cent male. Consider the listener himself is 100 per cent male but the demographic is skewed slightly. Just for the record.
9918 COMMISSIONER MENZIES: Thanks for that. It helped.
9919 What I am trying to get at is the broader range, if you can just broaden that range. That is the number 45, but your core demographic, is it 40 to 50?
9920 MR. JONES: We look at programming targets like a bulls eye, and the centre is that 45 year old male, and the rings as we go out would be 45‑54 and 35‑64 and 25‑54. So, 25‑54 is our broad goal. It is where the vast majority of advertising money lies; 35‑65 is a little tighter target. Then we get down to that bulls eye of that 45 year old male listener.
9921 COMMISSIONER MENZIES: How would you describe your ideal listener to an advertiser?
9922 MR. JONES: We usually put together a profile of who that target listener is. My end as the VP programming I do that for the benefit of the on‑air people so that they have a firm grasp on who it is they are speaking to. If it is that 45 year old listener, we may go as far as to create an individual and give that person a name and what they do for a living, what kind of income bracket they are in, all of this based on who we are after.
9923 From a sales point of view, some of that may be applicable. We would develop a profile and, as I mentioned, come up with that income bracket and that job and try and create as clear a picture as we can based on our target listener for our advertiser who is likely to be reached by their message.
9924 COMMISSIONER MENZIES: A little bit more detail on that. How much money does he make? Where does he or she work? Are they a commuter? Are they a resident? It doesn't have to be to the advertiser, but if you have just hired me to be your on‑air talent, what are you telling me to shape it to?
9925 MR. JONES: We would be looking at that 45 year old male who is a resident of Chilliwack who works in the community, is employed, likely is married with children, considering the age of our listener, the children are likely in their later teens or possibly even going into college.
9926 We try to use information like that to create that profile. To create it here on the spot might be a little difficult, but those are the kind of elements that would go into that.
9927 MR. MURRAY: We are talking pretty finite here, of course, this is a broad‑based format. We are hoping to attract a fairly large segment of that community and very many females, very many males. I don't know that we would nail it down that finely for sales, or we wouldn't.
9928 COMMISSIONER MENZIES: Thank you.
9929 What specifically is it about your proposal that would convince us would bring diversity into this market?
9930 MR. JONES: You mean musical format?
9931 COMMISSIONER MENZIES: Music and spoken word.
9932 MR. JONES: Definitely Josie Geuer can jump in with some elements of our spoken word programming, and if we want to address some cultural diversity, Glenda Spenrath would have that information.
9933 But purely musically, we have put together a format that our research shows is in high demand and is missing from the market. Those are the two keys when we look at what format choices are available. How many people are really interested in it and do they think they can get it right now.
9934 This classic hits proposal encompasses a variety of different formats, 60s, 70s, oldies, 70s pop music, classic rock and some 80s and 90s hits. So, it is fairly broad.
9935 What is important is that it is not being heard in the market right now. We need to put something on the air that is unique and something that is relevant and topical and local. So, from a musical point of view, I believe our format is entirely unique. There is no station like it in Vancouver and certainly it is very, very different from what is being heard on STAR, the present station serving the market.
9936 There are elements of our format being heard on various Vancouver stations, but no one station doing it. That is important because so many out‑of‑market signals get into Chilliwack. Listeners do have a lot of choices. If they choose not to listen to a local station, there is a great deal of choice. So, putting on a format that is unique to Chilliwack and unique to Vancouver is vital. The second part of that, though, is making our spoken word content relevant and topical and local, and maybe Josie can provide some examples of that.
9937 MS GEUER: Sure. The way that we would do that, for example, is through one of our features called Voices From Chilliwack. This would be a half hour show that we would put on the air once every week. This is really neat because you have to remember sometimes we are so close to radio, we forget what a thrill it is for someone in the community to even hear a song that they requested being played on the station. That can be a real thrill. That can be something that they share with their family and friends and colleagues, hey, did you hear when they played my tune on The Peak today, that was so awesome.
9938 The fact that we are actually going to bring a member in to our radio station from the community to have their own half hour show is really something very special and unique. For example, if The Peak was on the air right now, we may ask Bruce Renwick to come in. Bruce is the manager of the Chilliwack Curling Club. He is going to act as the coach for the Chilliwack secondary senior boys curling team because they just made it to the provincial curling championship, which is going to take place this weekend.
9939 First of all, it is a thrill because the senior boys team, as well as the senior girls team, made to it the provincial championships. So he can talk about that. But he can also talk about what it is like to be a member of a curling team. A lot of people might be interested in that.
9940 My dad, he is a little bit older than 45, but he is under 64 and he actually just started curling. He just took it up. This is something that, besides the music ‑‑ he would love the music that would be played on The Peak ‑‑ he would also be interested in listening to Bruce talk about how he got involved with the sport and perhaps how he could get involved in the community of Chilliwack as well, if my dad lived in Chilliwack.
9941 MR. JONES: I might also add that some of our public service programming I think is fairly unique and will add a lot of diversity. Right now with one local radio station serving the market, no matter how good they may be at public service, there is simply not enough hours in the day to cover off every single thing going on in the community. Certainly the Vancouver stations have very little interest in covering specific public service and community events going on in Chilliwack.
9942 So, we have created Pause for a Cause which is a one‑minute feature running hourly 18 hours a day, seven days a week. That Pause for a Cause is a comprehensive and always updated listing of important community events and not‑for‑profit initiatives, things like sports registrations and school events and just things that are important to the community on a very local level.
9943 This kind of public service programming is a cornerstone of our programming everywhere. A good example might be in Charlottetown at K‑Rock, which we applied for a few years ago and were fortunate enough to be awarded that station. In the application we made a significant commitment to public service and it has paid off. Our station in Charlottetown has become a template for our company to use when we look at how to create that important bond between the community and the radio station.
9944 COMMISSIONER MENZIES: What are the top three items that you would list that would differentiate you from the other applicants that you would most want us to remember, but also that would be of most importance to the people of the Chilliwack area?
9945 MR. JONES: Top three. I think we start with, as I mentioned earlier, that when you put a new radio station on in a community you have two things to make you unique. One is what music do you play. FM radio stations are mainly music based. That is sometimes the first thing that sets you apart from every other radio station.
9946 I believe that our format from our research is the one that is in most demand in Chilliwack. It is a broad format, about to reach a wide variety of listeners, yet have a very specific appeal. It is unlike anything on the air in Chilliwack or in Vancouver. It is entirely unique to the market from a musical point of view.
9947 I think our spoken word and news programming is very, very local, very, very relevant. Our approach is very, very topical. We have a tremendous track record of public service, of comprehensive news coverage. We recognize that even as music‑driven radio stations, we have not only an obligation, but we need to make smart business decisions and that means being incredibly comprehensively local 24 hours a day.
9948 Possibly the third element is our business plan and hiring practices. Maybe, Dave, you can elaborate a bit on that.
9949 MR. MURRAY: When I think of the answer to that question, I think of the licensing criteria. We take a lot of time and we look at that market very carefully before we apply and we create a business plan that we believe in and we believe we can do and provide the service. At the cornerstone of that is the format, and I won't repeat that.
9950 Another very important criteria is not affecting the existing stations in the market, and clearly with only one station, STAR, it is not even the number one station ‑‑ it is not even the number two station in the existing market. The country station from Vancouver is the top and then ROCK 101 is the next stop station in Chilliwack. And STAR, the local station, is the third station.
9951 So, Chilliwack is screaming for a new local station, and we think that our format is so different from STAR, we will get completely different listeners and completely different revenue and have very little impact on them.
9952 Then another element is, not to repeat our whole application here, but the local Canadian content development. Clearly 60 per cent or really 100 per cent of it is local because we are asking FACTOR to direct their funds to Chilliwack and to British Columbia, and then we have all of the other very important aspects of the CCD as well.
9953 COMMISSIONER MENZIES: Thank you.
9954 Your audience share projections show you immediately grabbing a 10 per cent share and then basically holding flat at that throughout the rest of the licence term.
9955 That, on the face of it, appears initially audacious and then suddenly modest. Can you help me understand how you came to those conclusions?
9956 MR. JONES: Certainly. As I have mentioned I believe last week in discussing Vancouver, our belief is that when you provide a product that is not there, something that is unique, people will gravitate to it and you will get your audience quickly.
9957 Our research estimates have indicated that this is the audience we can expect and we shouldn't have expectations on doubling that or tripping that. And to build a business plan wisely, we need to keep our expectations somewhat modest. So, we have developed those projections to launch with our ratings share and sustain it.
9958 It is worth noting, though, that that 10 share isn't carved in stone. One ratings period it might be a 12 and the next it might be 8. We realize there will be fluctuations, and it is likely an average.
9959 MR. MURRAY: The excellent radio stations that are in Vancouver now and coming into Chilliwack are going to continue to get substantial share of audience. They are spending millions and millions of dollars on these products. They are researching their music intensely two and three and four times a year.
9960 To see STAR's share being 12 and our research telling us we are going to get a 10 is very logical because that is the type of things you would expect when you have so many out‑of‑market, very good out‑of‑market signals coming into the market. We are not going to go 10 and no one is going to get a 30 share ever in the shadow of Vancouver.
9961 COMMISSIONER MENZIES: How much of your tuning then do you expect to win by converting Chilliwack listeners from Vancouver stations?
9962 MR. JONES: The majority of our share would come from converting people who aren't listening to Chilliwack radio stations. STAR doesn't lose a great deal of tuning to our radio station. They are a very different format. They have their distinct mission and we would have ours. Our mission would be to repatriate out‑of‑market tuning to bring back listeners who are listening to Vancouver and Washington state radio, satellite ratio or internet radio or possibly have given up on local radio.
9963 COMMISSIONER MENZIES: How big a majority, 60, 70, 80 per cent?
9964 MR. JONES: I would say at least 80 per cent.
9965 COMMISSIONER MENZIES: Thanks.
9966 In your revenue per audience share predictions, what you have outlined appears from our staff analysis to be almost twice as much per percentage point as what is currently being achieved in the market. I need you to help us understand why we shouldn't consider that a little optimistic.
9967 MR. MURRAY: Are you saying twice as much as the existing broadcasting in the market or are you saying as the other applicants?
9968 COMMISSIONER MENZIES: No, it is what is happening in the current market, not of the other applicants. This is 69,000 per 1 per cent. And yours is more like 143,000 per 1 per cent.
9969 MR. MURRAY: I understand the question, thank you.
9970 When we prepare our application and we determine we are going to apply in a particular market, one of the things that we do initially is try to determine what we think the market revenue is.
9971 Somewhere in our supplementary brief we said we thought the market was $7 million. I think that is not accurate. But the reason we think that that number is a real number is that we look at markets in similar sizes and where we do operate and where we do know pretty much where the revenue is.
9972 For example, in Fredericton with a very similar population of 80‑some thousand, retail sales of $1.5 million, the market revenue is around $7 million. Moncton, with 130,000 people and $1.8 million retail sales, we know the market revenue is around $12 million.
9973 So, with Chilliwack with around 80,000 people and $1.2 million retail sales, we said we assume it might be more prosperous than New Brunswick or Nova Scotia, and we said, could it be $6 million or $7 million, and we thought, yeah, it should be.
9974 So I think that is the potential. But what we then did ‑‑ I am losing my train of thought here a little bit ‑‑ I think that is the potential if there were the proper number of local services. For example, in Fredericton there is four local radio stations; in Moncton there is eight or nine local radio stations.
9975 In Chilliwack, because of the inability or the lack of availability of frequencies and because of all the out‑of‑market tuning, the retailers are advertising in other means. Perhaps it is billboards, perhaps it is the weekly newspaper, it is Yellow Pages, things of this nature. With only one format, they are not able to reach the target customers that they want to reach.
9976 I think where I am going with this is that when we launch a completely unique product, we will generate, through a great deal of activity and having five or six brand new sales reps on the street, knocking on doors, we will grow very quickly and probably equal, close to equal what Rogers is doing in the market locally now.
9977 COMMISSIONER MENZIES: Just on that, your business plan shows about 70 per cent of your revenue would be generated from people who aren't currently advertising on radio. So those would be people who, if they are advertising, are using out door or print or some other vehicle or simply aren't advertising.
9978 MR. MURRAY: Right. That number is probably higher than 70.
9979 COMMISSIONER MENZIES: I guess what I am trying to get to is do you have any commitments or anything from people or any shoe leather being applied to having talked to some of these people that would give you confidence that they do have potential as a source of revenue for you?
9980 MR. MURRAY: We haven't talked to potential clients in Chilliwack, but we would rely on our experience of launching Sydney and Fredericton a couple of years ago and Kemptville. We have talked to clients there now in anticipation of the launch, and those are very similar markets, not inundated with local services now.
9981 We are getting an extremely positive feedback and we believe our revenue numbers in those markets will easily be achieved.
9982 COMMISSIONER MENZIES: There is no specific research but experience is what you are depending on.
9983 MR. MURRAY: For example, in Fredericton, when we launched, our application I believe said we would do about $1.1 million in the first full year. In Fredericton we did $1.8 million. So, that is just an indication of how we approach a market and partner with the clients in that market.
9984 I think our revenue here is slightly conservative, but you don't want to go in and promise the world.
9985 COMMISSIONER MENZIES: Just to go back a few minutes, we spoke earlier about so much of your tuning coming from people who are currently listening to Vancouver radio stations. You don't have to be, but it would be helpful if you could be a bit more specific about which of those stations you think represent the lowest hanging fruit.
9986 MR. JONES: We do have in our research a ranking of what Vancouver stations are listened to the most in Chilliwack.
9987 The number one station in Chilliwack is the country station, Pattison's JR Country out of Vancouver, followed by ‑‑ let me just cross‑reference that information so I don't quote something inaccurate to you.
9988 The most listened to radio station is JRFM, followed by ROCK 101, The Beat, JACK‑FM and CBC.
9989 Definitely ROCK 101 and JACK‑FM both play elements of our format. We would be a broader format than they are. So in terms of lower hanging fruit, I guess bringing listeners back to Chilliwack stations who have turned to stations like ROCK 101 and JACK‑FM for their music is probably the first place we would get out‑of‑market tuning.
9990 MR. MURRAY: I thought this page in our research went deeper, but for example, where we have our share projected in our research, it shows that 2 per cent of our 9 per cent would come from ‑‑ or 2 per cent would come from STAR, 2 per cent would come from ROCK 101, nothing would come from JR. I thought this spreadsheet went a little deeper, but it doesn't. We could certainly get that from Mark Kassof if you think you would like us to do that, but all we are showing is that 4 per cent, 2 from STAR and 2 from ROCK 101 of the 9.
9991 COMMISSIONER MENZIES: Thank you very much, Madam Chair. That concludes my line of questioning.
9992 THE CHAIRPERSON: I am sure you have gone through this, Mr. Murray and Mr. Jones, with Commissioner Menzies, but I missed this. At any one time what amount of tuning, according to your estimate, will always be to Vancouver?
9993 MR. JONES: I think that is hard to say. We don't have a specific number, but there will always be a significant amount, it is unavoidable, but we don't have a specific number.
9994 MR. MURRAY: This won't be exact because there is tuning from other sources like Washington, et cetera, but we are showing that we would have, after we launch, 18‑64, which is what our research was, a 9 share, STAR would have a 9 share. So there would be some tuning from Washington and then pretty much the balance would be from Vancouver, so 70‑some per cent.
9995 THE CHAIRPERSON: One aspect of your presentation and your application I just wanted to chat about.
9996 It is the cultural diversity of the Chilliwack population. I think the agriculture industry there employs a significant number of farm workers who, for example, are South Asian.
9997 In your market research, did you find out whether there will be any programming for the different cultural groups, how you are going to incorporate those into your programming or there is really no need to target this group because they are well‑served by the ethnic stations. Could you comment, please?
9998 MS SPENRATH: In our research of the demographics and the diversity in this market, there really is quite a bit smaller component to the visible minority than, say, Vancouver. I think it was like 5 per cent as compared to Vancouver which is, as we know, 50 per cent. I do know that the trend they say over time will be that the visible minority population will increase over time as people spread out and move away from Vancouver.
9999 We certainly will have an ethnic component in our station. Again, we are always looking to be representative of the community and our programming to be as well.
10000 To answer your question, yes, we would have an ethnic person on staff and we would certainly be looking to make connections in the community with organizations that have an interest in programming that would be directly related to their interests.
10001 MR. JONES: I may also add to that. Our initial research is designed to be as representative as possible of the population so we do not exclude anyone from our research.
10002 Our ongoing research would be that way as well. So, if there was a significant portion of the population, they would in all likelihood in a random sample be represented.
10003 Also, in our spoken word programming, in Voices From Chilliwack, you mentioned the South Asian workers or there may be migrant farm workers from other parts of the world who come to Chilliwack. It may be a perfect opportunity in a program like that to discuss their arrival in Canada and their impressions of the country or the different challenges and issues they may face as newcomers.
10004 THE CHAIRPERSON: Thank you.
10005 Questions from legal counsel, please.
10006 MS PINSKY: Yes, thank you.
10007 I just have a few questions of clarification.
10008 With regard to your CCD commitments, in your application it indicates that there would be $420,000 allocated to FACTOR. In your presentation today, you state that $280,000 would go to FACTOR and I assume the difference is $70,000 would go to the National Aboriginal Recording Industry Association and $70,000 would go to the Canadian Society for the Recording Arts; is that correct?
10009 MS SPENRATH: Yes, that is correct. At the time that we were doing this application, over time our CCD has grown and we have a lot of other opportunities that come up since we have put together this application. So, for that reason we have been in contact with a couple of very good organizations that specifically are head officed in western Canada and they had some really good interesting opportunities that we thought would allow us to better direct our CCD funds to artists in B.C. and, in particular, to Chilliwack.
10010 So, those two organizations we felt could more pointedly direct our CCD funding at a grassroots level to artists residing in the area. That is why we have done that.
10011 Having said that, we still have our FACTOR commitment at double what the requirement is.
10012 MS PINSKY: Thank you. So, as I understand it, the money would specifically be allocated for scholarships in the one case and grants in the other case?
10013 MS SPENRATH: Yes, that is correct.
10014 MS PINSKY: Would you be able to provide for us letters from both of these organizations indicating that the money would be dispersed according to CRTC criteria?
10015 MS SPENRATH: Yes. Actually we do already have letters from both of those organizations, so I can provide them to you.
10016 MS PINSKY: Okay, thank you.
10017 Just a very technical point of clarification. In the handout that you provided today, it identifies the core audience as 35 to 54 and just in your discussions you were mentioning 35 to 64. I just wanted to clarify for the record which one we should be using?
10018 MR. JONES: Certainly. Discussion of radio targeting can get into all kinds of different demographics, but the research we did was 18 to 64. The core of that was 35 to 64.
10019 MS PINSKY: To 64?
10020 MR. JONES: On that sheet, 35‑54 is right. It can be classified any number of different ways, but 35‑54 is correct.
10021 MS PINSKY: Thank you very much. Those are all my questions.
10022 THE CHAIRPERSON: Thank you, Mr. Murray.
10023 Would you like to give us your two minute pitch on why you believe you should be licensed.
10024 MR. STEELE: Madam Chair, members of the Commission, and Commission staff, thank you for considering this application for a new FM radio station to serve Chilliwack, British Columbia.
10025 We believe 89.5 The Peak, is the right station for Chilliwack, striking the right balance with your licensing criteria.
10026 First our proposed broadbased classic hits format is specifically designed to appeal to the widest and most complementary set of Chilliwack music preferences. This will maximize our listener base and minimize their tuning back to the narrower formats available from Vancouver, as we discussed earlier in our presentation.
10027 Secondarily, our share projections and revenue estimates are realistic and they recognize that repatriating out‑of‑market tuning and building local retail revenues will not be easy and our business plan is sound, and that we will dedicate the resources necessary to deliver on it.
10028 Just for the record, it certainly isn't any kind of back door attempt to gain access to Vancouver, as was suggested by the earlier applicant.
10029 Third, our over 21 hours of weekly spoken word, including over eight hours of news, is the highest before you. This reflects an unparalleled commitment to local programming, as well as a distinct and necessary competitive advantage for 89.5 The Peak in competing with out‑of‑market stations.
10030 Finally, we will make a significant contribution of over $700,000 to Canadian content development, initiatives designed to support the future and emerging local Chilliwack and B.C. artists, including specific initiatives for aboriginal talent.
10031 Madam Chair and Commissioners, with our experience and with our track record, we are uniquely positioned to provide a strong editorial radio voice to Chilliwack and to fill a clear format void with exceptional commitments to local programming and reflection. We are pretty excited about this market, if we were fortunate enough to receive this licence.
10032 Thank you for this opportunity to present our application.
10033 THE CHAIRPERSON: Thank you, Mr. Steele and your panel. Thanks for your application.
10034 We will take a lunch break now and be back at 1:30, please.
‑‑‑ Upon recessing at 1233 / Suspension à 1233
‑‑‑ Upon resuming at 1330 / Reprise à 1330
10035 THE SECRETARY: We will now proceed with item 20, which is an application by Radio CJVR Limited for a licence to operate an English‑language FM commercial radio programming undertaking in Chilliwack.
10036 Please introduce yourself and your colleagues, and you will then have 20 minutes to make your presentation. Thank you.
PRESENTATION / PRÉSENTATION
10037 MR. FABRO: Good afternoon, Madam Chair, Commissioners and staff. Thank you for allowing us this opportunity to appear before you once again.
10038 Before we begin our presentation for the new FM licence for Chilliwack, I would like to introduce the members of our team.
10039 My name is Gene Fabro. I am the President and owner of Fabmar Investments Limited of Calgary, Alberta. My family and I have been in business for over half a century and through our holding company, Fabmar Investments Limited, have for the past 21 years invested heavily in a broad cross‑section of industrial activities, including land development and home building, manufacturing, wood lot management, oil and gas exploration, coal resource holdings, office and retail buildings and for the past 17 years radio broadcasting.
10040 To my left is Dean Sinclair, a broadcast veteran whose 30‑plus years in the business includes programming on‑air, sales and senior management experience. Dean has provided us input and direction for our proposed diversified rock musical format.
10041 To Dean's left is Lang McGilp. Lang has over ten years of market research experience, working with some of the largest research firms in Canada, including Ipsos‑Reid. Currently Lang is Vice‑President of Research for Insightrix Research Services, a national marketing research firm with offices in Saskatoon, Saskatchewan and in Australia.
10042 On my far right is Linda Rheaume, our administrative manager for Radio CJVR's two Melfort stations, CJVR and CKJH and our FM station in Whitecourt, Alberta, CIXM‑FM. Linda has been with our company for 16 years.
10043 Next to Linda is Kevin Gemmell, station manager and sales manager of our two Melfort stations. Kevin was raised in the Lower Mainland and is a graduate of the B.C. Institute of Technology radio program. Kevin visits the area often and he has immediate family in Chilliwack. He has been with our company for over 11 years.
10044 To my right is Ken Singer, who is Radio CJVR's Vice‑President of Broadcast Operations. Ken has been in the broadcast business for over 40 years and is currently a member of the CAB's Radio Sector Board.
10045 MR. SINGER: Madam Chair and Commissioners, Radio CJVR Limited is pleased to introduce ROCK 89 and its unique programming format, which, if approved, will provide important benefits to Chilliwack and surrounding Fraser Valley communities, strengthen British Columbia's private radio sector and further advance the objectives of Canada's Broadcasting Act.
10046 After extensive market research and consultation with a diverse cross‑section of Chilliwack's broader community, CJVR has tailored ROCK 89s programming to meet the specific needs and stated listener preference of those underserved radio consumers aged 18 to 54 who currently have access to only one local radio station.
10047 CJVR's diversified rock format will, among other objectives, enhance the level of programming diversity and listener choice in the market; add a distinct alternative editorial voice; champion the development and on‑air exposure of new and emerging Canadian artists; significantly reduce the level of out‑of‑market tuning by local residents; and draw lost listeners from other audio sources back to local radio.
10048 ROCK 89 will also establish competitive balance in the market, increase ownership diversity and ensure the presence of a strong independent radio voice within Chilliwack's private radio sector.
10049 Further, approval of CJVR's proposed diversified rock undertaking will optimize the utilization of the 89.5 frequency through extension of its unduplicated music format to the more than 81,000 persons living within the station's principal marketing area.
10050 MR. GEMMELL: Madam Chair, CJVR's commissioned market studies, along with our own direct interventions in the marketplace, clearly illustrate the needs of residents and the business community alike, for an additional FM station.
10051 Given its close proximity to Vancouver, Chilliwack is bombarded by out‑of‑market stations whose dominating presence is due to accidental spillage of their signals into Chilliwack, rather than by any design or intent on their part to provide service to the local market.
10052 In view of the fact that the distant signals are devoid of any locally relevant content and given that the market has only one originating station, Chilliwack and area residents suffer from a number of music and programming voids.
10053 Dissatisfaction among residents relative to their local radio choices is evidenced by the fact that while CKSR‑FM is the most listened to radio station with a weekly reach of 48 per cent, 73 per cent of local listeners tuned to at least one out‑of‑market station during the past week, while only 25 per cent named CKSR‑FM as their favourite.
10054 Further evidence is reflected in the fact that 62 per cent said they would listen to radio more often if the programming they liked was available, 47 per cent said there is often little on radio that they like to listen to, and 69 per cent wished there were different types of music available on local Chilliwack radio.
10055 As well, 38 per cent stated they frequently or sometimes listen to music on an iPod or similar device, 37 per cent said they access their musical preferences through cable or satellite TV, and a similar number download music from the internet.
10056 With respect to Chilliwack's business community, 70 per cent of retailers surveyed said they were not satisfied with existing local radio advertising choices, and 50 per cent stated they do not advertise on local radio. Many ruled out advertising on Vancouver stations simply because of the cost.
10057 In the fact of such dissatisfaction on the part of listeners and the business, ROCK 89, if approved, will fill the programming voids, answer the needs of the underserved 18 to 54 listenership and provide and cost‑efficient advertising vehicle for local businesses to target their preferred demographic.
10058 MR. FABRO: Madam Chair, like our Kelowna and Red Deer proposals, Chilliwack is integral to CJVR's broadcast development plan in terms of growing our company's critical mass, increasing operating efficiencies between existing and proposed new stations and extending a strong independent radio voice to other western Canadian markets.
10059 As the broadcast arm of Fabmar Investments Limited, an Alberta based corporation engaged in a diverse mix of commercial activities, CJVR is fully committed to growing its radio business through acquisitions and the pursuit of new broadcast licences. Our level of commitment can be measured in part by the number of recent Commission calls in which CJVR has been a participant.
10060 CJVR's 41 years of broadcasting experience, coupled with Fabmar's business acumen, financial strength and entrepreneurship, places our company in an ideal position to extend its brand of radio across western Canada. But.
10061 As a dedicated radio company, CJVR brings to Chilliwack a nationally acclaimed reputation for programming excellent, a proud record of achievement in development new Canadian talent, a corporate culture which embodies a deep‑rooted sense of communities and owners committed to making a difference in the lives of their employees, their listeners and their communities.
10062 My family believes it is important to Canada's broadcasting system that strong independent radio voices like CJVR be encouraged to play a continuing role at a time when ownership diversity within the private broadcasting sector is being seriously diluted by major media corporations.
10063 CJVR was therefore encouraged by Broadcasting Public Notice 2008‑4, which introduced a series of new policies to ensure that a "diversity of voices is maintained in the Canadian broadcasting system."
10064 We also took heart with the CRTC Chairman's statement that the new policy initiatives "is an approach that will preserve the plurality of editorial voices and the diversity of programming available to Canadians, both locally and nationally, while allowing for a strong and competitive industry."
10065 Consistent with the policy objectives, ROCK 89, if approved, will bring to Chilliwack's private radio sector a fresh alternative editorial voice, both heightened programming and ownership diversity and competitive balance.
10066 MR. SINGER: Madam Chair, the economic analysis conducted by Insightrix Research Services clearly shows that Chilliwack has enjoyed continuous growth in its population and local market economy over the past 15 years.
10067 More than 260,000 people live within a 30‑minute commute of Chilliwack and over 865,000 people live within 90 kilometres of the city.
10068 Other key indicators which reflect Chilliwack's healthy and expanding market economy are the following:
10069 The population grew 43 per cent between 1991 and 2006 and is projected to increase by 42 per cent over the next 15 years; local retail sales are estimated to be over $1 billion for 2007, some 18 per cent above the national average, with a spend of $37,000 per household; unemployment rates are the lowest Chilliwack has experienced in the past 18 years; since 2000 the number of business licences distributed in Chilliwack has increased by 35 per cent; and housing starts have increased by 126 per cent between 2003 and 2006.
10070 MR. GEMMELL: Madam Chair, CJVR's analysis estimates that total market advertising expenditures are approximately 4 per cent of retail sales, indicating that total advertising dollars available to all media in the Chilliwack market in 2007 would amount to $46 million.
10071 CJVR concludes that 11 per cent or $5.6 million of that $46 million should be obtainable by local radio. We believe CKSR‑FM garners about $2.5 million, leaving $2.6 million in untapped revenue. CJVR's estimated revenue in year 1 is $1.5 million, of which we anticipate only 3 per cent will come from CKSR‑FM.
10072 CJVR believes the appeal of its diversified rock format will result in more local hours tuned and the generation of new radio dollars, neither of which will come at the undue expense of CKSR‑FM. In fact, ROCK 89's unique format will be more complementary than competitive with CKSR‑FM's AC/pop format. As such, the biggest winner at the end of the day is the listening public.
10073 MR. SINCLAIR: Madam Chair, approval of ROCK 89 will introduce to Canadian radio a unique new music programming format known as diversified rock, which was developed by CJVR for its proposed new Chilliwack station.
10074 CJVR's diversified rock format was born out of the eclectic musical tastes of Chilliwack's underserved 18 to 54 listenership spectrum, that in large part are forced to tune out‑of‑market or seek other audio sources to satisfy their musical needs and interests.
10075 In assessing the music voids in Chilliwack's radio market, CJVR employed a multi‑level approach to identify the most preferred format for a new local station. Diversified rock was the clear choice over its nearest competitor, country music, by a margin of 62 per cent to 34 per cent.
10076 It is important to note that while classic rock led through all stages of the format selection process, there was a consistent interest shown by respondents in 70s rock and modern rock.
10077 This fact, coupled with the question of whether a more narrowly focused music format could be sustained in a market the size of Chilliwack, led CJVR to conclude that broadening the station to include classic rock, 70s rock, modern rock and current based rock would offer a more diverse rock station that would appeal to a wider audience and ultimately better serve the musical interests of the various age groups within the broader 18 to 54 demographic spectrum.
10078 CJVR's diversified rock programming approach will be developed from an encyclopedia of rock music that spans over five decades. We will blend diverse genres from rock legends and introduce and help develop new and emerging artists.
10079 In step with our targeted 25 to 44 male leaning core audience and a large playlist of over 1,000 titles, no less than 35 per cent of our music will be new and recent, released within the past four years, while established and legendary tracks of the last 50 years will complete our diversified rock sound. Here's ROCK 89.
‑‑‑ Audio presentation / présentation audio
10080 MR. SINCLAIR: A further key component to our diversified musical agenda evolves around the creation of a series of special music‑based programs that will be produced and aired on ROCK 89.
10081 These special programs, in keeping with CJVR's approach to Canadian content development, combine on‑air exposure of talent along with financial support through a series of direct expenditures on a diverse mix of initiatives.
10082 The following programs, as detailed in our supplementary brief, will feature many new and emerging artists: Rock 89's Release Party; Canadian Rock Coast to Coast; Great Western Rock; Rock N' Roll Roots; Canadians On Track; and BC Rocks.
10083 Over the course of a week, ROCK 89 will have a total of 13 hours and 50 minutes dedicated to 100 per cent Canadian music.
10084 MR. SINGER: Madam Chair, to define CJVR's overall commitment to Canadian performers and to new and emerging artists specifically, ROCK 89 will play a minimum of 40 per cent CanCon applied to both the entire broadcast week and the period between 6:00 a.m. and 6:00 p.m. As such, CJVR has no objection to this being a condition of licence.
10085 Of the 40 per cent CanCon, no less than 25 per cent of the selections played will be by new and emerging Canadian rock artists.
10086 MS RHEAUME: Madam Chair, in applying a community oriented approach to its broadcasting responsibilities, CJVR views its relationship with each community served as a partnership forged on the basis of mutual trust, commitment and respect. The following are brief comments from but a few of those community partners.
10087 Pat Dolo, manager of the Northeast Unit, Canadian Cancer Society in Melfort writes, "If the CRTC was to approve CJVR's application, clearly the citizens of Chilliwack will be gaining a true community partner, committed to serve and inform, as they have in northeast Saskatchewan for over four decades."
10088 Whitecourt, Alberta Mayor Trevor Thain states, "Since its inception, the station has proven its commitment to the community and surrounding area by establishing itself as a community‑minded corporate citizen and continually provides support to local initiatives and projects."
10089 Curtis Knight, President and Governor for the Humboldt Broncos Saskatchewan Junior A Hockey Club states, "We have a unique situation where CJVR covers the Humboldt Broncos, the Melfort Mustangs and the Nipawin Hawks. This works well for us as the play‑by‑play allows our fans to stay up to date on how the team is doing."
10090 Chilliwack's Mayor Clint Hames writes, "I understand that Radio CJVR Limited has a great track record for real local service in the communities where they have stations...and I know that such a station would receive strong support in the community."
10091 Brian Antonson, Associate Dean of the B.C. Institute of Technology writes, "The Radio CJVR folks have established an enviable reputation for solid broadcasting in their work in Saskatchewan and can be expected to bring similar focus, enthusiasm and experience to bear in establishing a first rate operation in Chilliwack."
10092 Finally, Tisdale, Saskatchewan Mayor Roland Zimmer writes, "Northeast Saskatchewan is indeed fortunate to have a radio station with the calibre of Radio CJVR Limited. CKJH‑AM and CJVR‑FM have played an important role in keeping the 100 Saskatchewan communities they serve informed entertained and connected."
10093 MR. SINGER: Madam Chair, ROCK 89 will provide listeners with locally relevant, community‑driven spoken word programming that will portray Chilliwack, its people and its culture through the daily coverage of local events and activities happening in the city and surrounding communities including play‑by‑play of Chilliwack Bruins hockey games.
10094 To ensure its spoken word programming objectives, CJVR has developed an inclusive plan to keep a steady finger on the daily pulse of life and times within Chilliwack and surrounding communities. This will be achieved in a number of ways, including the production of special features, ranging from 60 seconds to 60 minutes in duration.
10095 As well, ROCK 89 will provide five hours and 17 minutes of regular local news and surveillance information packages across the broadcast week. In all, ROCK 89 will provide 14 hours and 40 minutes of spoken word programming each week.
10096 CJVR is also strongly committed to reflecting the diversity of the Fraser Valley region's cultural heritage through its daily musical and spoken word programming, as well as through vignettes provided by groups and individuals from various backgrounds with stories to tell.
10097 Furthermore, CJVR, in recognition of the importance that Chilliwack places on culture, will establish an arts and culture beat that will keep residents well informed of all cultural activities.
10098 MR. GEMMELL: Madam Chair, the history of Chilliwack stretches back thousands of years beginning with the first nations community who lived in this beautiful area and gave it the name Chilliwack, meaning quieter water at the head.
10099 Today it is left to young aboriginal story tellers to perpetuate their stories, culture and traditions of the Sto:lo Nation, as passed down through the centuries to the present. It is important that such a richness of culture traditions and history be preserved for future generations of the Sto:lo Nation and for the broader Chilliwack community to gain greater insight and understanding of the aboriginal community.
10100 With this in mind, CJVR will appoint a full‑time aboriginal news and community reporter and develop a series of first nations initiatives, both in the context of spoken word programming and CCD undertakings that are directly relevant and beneficial to Chilliwack's aboriginal population.
10101 MS RHEAUME: Madam Chair, approval of CJVR's application will significantly impact Canadian talent in Chilliwack and the Fraser Valley as ROCK 89 implements its meaningful array of direct and indirect spending initiatives and special program undertakings.
10102 CJVR brings to Chilliwack a proud legacy of excellence, achievement and commitment to talent development that has advanced the careers of many successful Canadian artists. It will be ROCK 89's goal to build on that legacy which first took root on the Saskatchewan prairies 41 years ago.
10103 CJVR's CCD plans over seven years call for a minimum direct expenditure of $1 million, plus an indirect on‑air expenditure budget of $1 million.
10104 The ten direct initiatives ranging from $28,400 to $276,000 per initiative are detailed in the supplementary brief and include: FACTOR Talent Fund; Music Business 101; Opening Act; Horizons Unlimited; aboriginal and non‑aboriginal journalism scholarships; Sto:lo Nation Act III on the air; blue grass festival; Canada Day Rocks Stage; and Chilliwack Symphony.
10105 MR. FABRO: Madam Chair, central among the many positive elements that CJVR brings to the table is my family's firm commitment as owners to provide a high quality, locally relevant programming service to the residents of Chilliwack that will be second to none.
10106 Chilliwack, for its size and prosperity, is one of the most underserved radio markets in Canada. With only one originating service, Chilliwack is besieged by out‑of‑market stations whose program offerings do little to reflect the identity of the community and the real listening needs of its residents.
10107 Approval of ROCK 89 is important to the residents of Chilliwack who have been left thirsting too long for a local FM service that represents true musical diversity and spoken word programming that will reflect daily the unique character of their communities and the richness of their cultural heritage.
10108 It is my family's firm conviction that ROCK 89's diversified rock music format, locally relevant spoken word programming and substantial CCD initiatives truly reflects our commitment to Chilliwack's residents, its businesses and cultural communities and emerging local talent.
10109 In turn, approval of ROCK 89 is very important to CJVR as its need to expand our business, enhance our competitiveness, achieve greater operating efficiencies and position ourselves as a viable licensing alternative with a strong independent radio voice.
10110 For all these reasons we respectfully urge you to approve our application.
10111 My colleagues and I will be happy to answer any questions that the panel may have.
10112 Merci, thank you.
10113 THE CHAIRPERSON: Thank you.
10114 Commissioner Williams will lead the questions.
10115 COMMISSIONER WILLIAMS: Good afternoon, Mr. Fabro and CJVR Limited panellists.
10116 MR. FABRO: Good afternoon.
10117 COMMISSIONER WILLIAMS: In reading through the material and some of the history of your company, I notice that over the past 18 months you have applied for nine separate licences, with seven of them being unsuccessful and two applications, including the application currently before us today, under consideration today, being the final two.
10118 Radio CJVR Limited describes itself as a determined career broadcaster. Could you give me some indication of the average cost involved of applying for licences in the various markets?
10119 MR. FABRO: It depends on the level of application and some of the ones you see are pretty minimal; some of them are pretty upscale.
10120 I would say our average application cost would range from $70,000 to $120,000, depending on how much research we have to do in the market.
10121 COMMISSIONER WILLIAMS: So, you have invested over $1 million in application fees?
10122 MR. FABRO: Well, less than a million, but we are up there for sure. We haven't got anything yet, but we are tenacious, we are going to keep trying.
10123 COMMISSIONER WILLIAMS: A determined independent broadcaster I think you described yourselves.
10124 MR. FABRO: "Determined" is the right word, yes.
10125 COMMISSIONER WILLIAMS: In your supplementary brief you talk about the importance of licensing small or independent broadcasters. Could you tell the Commission why applicants like Radio CJVR Limited are good for the Canadian private radio sector? What would they add? We hear much of companies consolidating and purchasing and buying others, and I guess does size matter, and if size doesn't matter or if small size is better or large size, I would like to hear that. But most importantly, I would like to know what Radio CJVR Limited sees as licensing a company like theirs is so good for the Canadian private radio sector.
10126 MR. FABRO: It is my belief that the smaller broadcasters, they can react quicker in the market. Their programming isn't done from some central headquarters in central Canada. The way we operate is our managers on site have a great amount of responsibility to manage what goes on the air.
10127 We have quicker response. We can move and adjust according to what happens in the local market. We don't have a plug and play cookie cutter programming. We manage it according to what the community wants, much more than a program book that is defined very clearly on what can happen across multiple markets a lot of times with the larger broadcasters.
10128 In short, I guess we are not just a voice in the box.
10129 In addition, we really strive to hire locally so that it is in the life blood of those people on the air and in the back office in terms of how they speak to the community. They understand, they grew up in the river swimming, they played hockey with the local arena, they collected eggs from the henhouse in the local community. They are not from some far away place.
10130 So, they have a belief in the culture of the area that they serve. So, I think the smaller broadcaster and, specifically CJVR Limited, is more in tune with the market. That way, I think too, our news and information package is much more focused on local than I think the large broadcasters.
10131 Maybe Mr. Singer, Ken, can add something to that or anybody else on the panel.
10132 MR. SINGER: I guess when we talk about ownership diversity, we also just talk about something that is unique to the marketplace. I think if you review the many applications that you referred to, Commissioner Williams, you will see that in each case, CJVR has not come to the table with a reworked version of our last application. We begin from the ground and build the application based on the community's needs.
10133 Conversely, when we view our competitive applications, especially the bigger ones, we see a tremendous similarity, that the name of a community may have been changed and for the most part it is pretty well the same game plan.
10134 Just diverse thinking and building our game plan based on the needs of the community is quite unique as compared to the way that the bigger players do it because understandably they are operating in many larger markets and they are employing those ideas in many cases that work for them very well in very, very huge markets and also just reapplying kind of the corporate traditional programming ideas, whether it be a market of 50,000 or a market of several million.
10135 MR. FABRO: Also, I would like to add that, as you may know, and some of the panellists and the staff may know, is that our applications were not second rate. They were just as good or better than some of the larger broadcasters. We didn't come here with a cap in hand today. We have the largest CCD commitment because we believe in what we are doing is right. You will hear more of that probably in the question period here.
10136 So, it is not a second‑rate application. We are small, but we can compete. But we need to grow in order to reach a critical mass to make this business a success, and we are not there yet.
10137 Just another thing on the large broadcasters, I think what happens is they tend to concentrate on their network and how the network operates and how they can become more efficient. You know, you can't blame them for that because it is all about return on investment and keeping the shareholders for some of these public companies happy. So, they tend to try to bring costs down and bring margin up and that is where they focus on the network and try to make it work for them more than work for the people, where I think where we come from, we believe if we service the people, the money will come.
10138 COMMISSIONER WILLIAMS: Earlier today one of your competitors, Golden West Broadcasting, put forward the notion that how you service a market is equally, if not more, important than how much CCD you put into a marketplace in order to get a licence and, further, that the licensing process shouldn't be in the nature of an auction procession, where the highest bidder, I guess, takes all.
10139 What would your comments be on that notion?
10140 MR. FABRO: I tend to agree with that. If it was all about an auction, then we probably couldn't stand a chance because some of these larger broadcast companies have big and deep pockets. But what we did was we went back and looked at what the CCD commitments were for other markets of this size, and we believe in what was offered in other cases and we came up with what would be fair and reasonable for this market.
10141 We truly believe what we have in our CCD commitments is going to come more locally focused than some of the other applicants here today. So, the injection will be good for us anyway in the long run because what we will get back is more following from the community.
10142 I don't know if Ken or somebody else wants to add anything to that.
10143 MR. SINGER: I think the comments made by Mr. Hildebrand were valid, as well. But at the same time, I also think that broadcasting today, to hold a licence today is a tremendous privilege. We certainly wince a little bit when we think how much of every dollar is going back to service the CCD initiatives, but we built our game plan for this particular application in Chilliwack based on that commitment.
10144 We are not going to suggest a CCD figure that we can't live with. We can live with that figure. We think that it complements our all inclusiveness of our approach to serving the community. Every one of our initiatives is directed locally. That includes the FACTOR funding with their letter of commitment that they will endeavour to spend the money in the market.
10145 I think it is very important that those initiatives work hand in hand with our overall mandate of locally relevant service to the community.
10146 MR. FABRO: May I just add one more thing? I believe, and I couldn't swear on it, but you may want to check this, we were the first ever to schedule our CCD commitments as we grow our business in any application. So, that would give the operation a little more leeway to pay it out and to make both investors and the public happy.
10147 We have seen other broadcasters now copy that model. We think it is a win/win by doing that. When we get big we will give you more, that kind of thing.
10148 MR. SINGER: If I can just add one more thing, Commissioner Williams.
10149 In our investigation of the Chilliwack market, once again, we heard loud and clear how important it was to have that indirect CCD support. We think that that is, in some cases, even more important than the cash put on the table. That is why, again, we have carefully allocated how we are going to I guess employ our indirect CCD initiatives in the marketplace because they really go hand in hand again with developing talent, and real hard air time is essential for especially many of these new and emerging artists and organizations who certainly need the cash injection to help them grow, but they need the promotion, they need a radio station behind them to make their events more successful.
10150 COMMISSIONER WILLIAMS: Focusing on some elements of your CCD initiative, such as the bridge, which you describe as being able to bridge the gap between the aboriginal and non‑aboriginal sectors and then your plans to hire aboriginal full‑time journalists, and also another CCD initiative, the aboriginal journalism scholarship, have you met and consulted with the local aboriginal communities like the Sto:lo First Nation in developing these or is it something that if you are successful you will meet with them? How did you come up with this initiative? What was the evidence of need and opportunity for you?
10151 MR. SINGER: We did meet with several individuals in the first nation and from the community employment services, Sto:lo First Nation; also, the aboriginal department of the University College of Fraser Valley, both of which we hope to have representation in Phase III of these hearings. They are attending these hearings because they are extremely interested in our proposals.
10152 They encouraged us because they felt that currently in Chilliwack there is very little representation on the local station of the aboriginal focused features and coverage.
10153 Again, talking about our CCD initiatives, we feel that again these go hand in hand with our efforts to provide meaningful spoken word programming that is relevant to the audience, and also direct some assistance in that area.
10154 On the scholarship vein, it makes good sense to us that when we invest in future journalists, we might be the benefactors of that in many ways. We feel that there are more and more opportunities for aboriginals in broadcasting in Canada, as more licences are handed out for organizations such as AVR and so on, but in communities such as Chilliwack, where there is a component, a first nation component with a proud history there, I really do feel that there is a fit and that is why we do feel that some support should be led in that direction, and also to offer some employment opportunities and some development as well.
10155 Our full‑time aboriginal news reporter will be recruited in consultation with the first nations to help us get the message out in the community, and we will work closely with them because we feel that is the best way to approach this.
10156 COMMISSIONER WILLIAMS: Thank you, Mr. Singer.
10157 Given that 25 per cent of your 40 per cent Canadian content will be devoted to new and emerging artists, have you identified any new and emerging artists from the Chilliwack region that you can work with immediately?
10158 MR. SINGER: I will ask Dean to comment on our specific inclusion of new and emerging within our playlist, and perhaps he can identify some of those local artists.
10159 MR. SINCLAIR: Thank you, Ken. Thanks, Commissioner Williams.
10160 In putting the application together in new and emerging artists, the great thing with this particular format in rock, there is an abundance of product out across Canada right now, and a lot of it in British Columbia, and a lot common to the Chilliwack region, including Vancouver, Victoria and this area. So, we have identified some of those. They are outlined actually in the supplemental brief in terms of the music that we provided as well. They include common play throughout the day, through all day parts, as well as some of the special feature shows that we have identified to put together as well.
10161 COMMISSIONER WILLIAMS: In your application you indicate that you would offer five hours of news and surveillance material. Of that total, what would be the amount of hours devoted to pure news, excluding any surveillance material?
10162 MR. SINGER: Commissioner Williams, I know where you are going with this question, but if you will allow me, I would like to elaborate.
10163 First of all, our regular newscasts, the top and bottom of the hour newscasts, when you take out the surveillance of the weather, sports and traffic, works out to two hours, 22 and a half minutes. However, within our 14 hours and 40 minutes of total spoken word, we look at that as potentially that is all news to us.
10164 When you consider the market of Chilliwack has a couple weekly newspaper sources, they have all of the news sources by satellite and cable delivery, they have radio signals bringing news into the marketplace, and of course the new media news sources as well. So hard news is certainly available in many, many different formats coming into the marketplace.
10165 When we developed our initiatives in the spoken word genre, we really had news in mind, news and information. For example, on Friday in Chilliwack, this past Friday, there was a news story concerning the local first nations dissatisfaction with provincial government and suggesting there may be demonstrations in the near future over issues that were raised in that news story.
10166 Well, within the format of our radio station, we would very likely devote one to two minutes in our newscast that day to covering that story. But further to that, we might have the leader of the Sto:lo Nation as a guest on our Let's Talk Chilliwack program for an entire half an hour to discuss this further and take some calls from our listeners.
10167 We may use a portion of his comments in the bridge program, for example, and then carry that on to our weekend one‑hour spoken word program, The Fraser Valley Perspective and use that in the aboriginal segment of the program.
10168 So, taking a news story and working it into our other areas in a different format or more in‑depth all becomes a part of what we call news.
10169 I think the other thing I would like to point out is that, no different than the newspaper business that has got many, many pages of different sections ‑‑ the business section, the farm section, the lifestyle section ‑‑ it is all a part of the newspaper, and it all is news and information. So, the short answer, two hours and 22 minutes is pure news when you just calculate the minutes devoted to newscasts, but when you look at our 14 hours and 40 minutes total spoken word in some weeks, perhaps upwards of 90 per cent of that could be considered news.
10170 COMMISSIONER WILLIAMS: Thank you.
10171 MR. SINGER: Does that give you relevance?
10172 COMMISSIONER WILLIAMS: Yes, it gives a good answer. The two hours, 22 minutes and the 14/40, I will deduct the two hours, 22 minutes to answer the next question, which was the breakdown of the amount of time to be devoted to various surveillance material per broadcast week. My math, of course, is subject to check. It comes to 12 hours and 18 minutes of time to be devoted to various surveillance material per broadcast week. Would that be correct?
10173 MR. SINGER: Yes, but a good majority of it being news content.
10174 COMMISSIONER WILLIAMS: Thank you.
10175 As you are aware, two other applicants appearing at this hearing are proposing a somewhat similar rock music format proposal designed to serve a similar adult audience in Chilliwack. We of course are referring to Vista, which is proposing a classic rock music format, and Newcap Inc., which is proposing a classic hits format.
10176 I would like to discuss with you your choice of music format for your proposed radio station, given the presence of CHQM, CISL and CKBD in this market. Why do you believe your format will provide the greatest degree of programming diversity and represent the best choice of format to serve the adult portion of Chilliwack?
10177 Maybe in your answer you could give a very clear description of this diversified rock format.
10178 MR. SINGER: The word "diversified" is the key difference here. The stations you referred to are programming a pure format. Our format is a blending of three or four different types of rock.
10179 I will ask our chief chef in the music department, Dean, to give you a further description, if you wish.
10180 MR. SINCLAIR: Thank you, Ken. Thank you, Commissioner Williams.
10181 I caught three questions so I hope I get all the answers, but if not, please redirect me back.
10182 Just so I am clear, you mentioned from Vancouver, was it CIQM, CIBD and CISL; is that correct?
10183 COMMISSIONER WILLIAMS: CISL, CHQM, CKBD, and why would your format provide the greatest degree of programming diversity.
10184 Then if I could just add a bit now that we have you on the job, if you could explain how your format proposal differs from the two other applicants at the same time.
10185 MR. SINCLAIR: Two other rock applicants, sure, absolutely.
10186 The three stations you mentioned, first of all, are AM‑based stations. CISL is an oldies station by nature; QM is light, I should say it is an FM; and then BD as well.
10187 I think the biggest thing with the diversified rock format, we talk about, as Ken had mentioned, a blending of sounds. We started off with the research where, as we talked about phase 1 through 4 of the research, we ended up with country as an option in there at one point, and then rock. The easiest place to start was familiar rock, which was classic rock. As we talked about classic rock led through each of the phases that we spun out as we continued with the research.
10188 The other things that we found, though, there were other forms of rock like modern rock and 70s that also showed up and favoured very highly in terms of want in the market that weren't here.
10189 There are two rock‑based stations that come out of Vancouver that enjoy some tuning here, although limited. Those are both owned by the same company. The two stations are CFOX and ROCK 101, CFMI. One is more of a classic rock basis and the other one is more of a new rock basis as well.
10190 In terms of putting this together, we looked at those styles, modern rock, new rock, 70s rock, classic rock, all those formats, chose the best records out of those.
10191 The other component that came into play was that there wasn't any current‑based rock in the market as well, and that started to show up.
10192 I think that is where part of the skew, the 25 to 44 male‑leaning audience comes into this. That bullet for that radio station is about 34 year old male, although a lot of women will like the radio station as well. That is how we ended up with the sound of diversified rock. It just was diverse in all the various forms of sub‑genres and music that we had available to us that clearly the marketplace wanted.
10193 With respect to the two other applicants that are proposing forms of rock, classic hits actually, by true nature really isn't a rock format. Classic hits is really a gold‑based pop station. It probably covers more material than we saw today that happens in the market currently with STAR. Hits, by nature, goes back to top 40 and pop material. It borrows some of the music, maybe an Eric Clapton track or two, Paul McCartney and that, but it is not a pure classic rock station.
10194 In the other application, classic rock, in our view is part of the format, but I think what would happen is that it greatly misses an opportunity to service and provide a wider range of material that is sorely needed in the marketplace.
10195 So, the classic rock, in terms of the definition of what we are doing, would be a small component of the radio station. The classic hits station would borrow maybe a handful of records, about 100 records from what we are doing.
10196 Does that help?
10197 COMMISSIONER WILLIAMS: Yes, that is very helpful, thank you, Mr. Sinclair.
10198 I would like to spend a bit of time on your business plan now. What percentage of tuning to your proposed station would be garnered from out‑of‑market stations, which stations and approximately how much tuning from each of them?
10199 MR. SINGER: Overall, we feel that our initial share in the market would come in at around 25 per cent. Of our entire universe, or 100 per cent of our audience, I guess, what we consider is that about 10 per cent would come from non‑radio sources, bringing some people back to radio from their iPods and internet and what have you.
10200 We figure our greatest opportunity is from the out‑of‑market tuning. To repatriate that segment is probably our greatest opportunity by providing locally relevant information, providing some musical diversity in the market that has only one choice at this time for local. The remaining 20 per cent we feel would come from STAR‑FM in our initial year.
10201 COMMISSIONER WILLIAMS: What per cent from STAR‑FM?
10202 MR. SINGER: Twenty per cent of our total audience would come from STAR‑FM, which would represent about a 5 per cent share, 5 per cent of their audience.
10203 COMMISSIONER WILLIAMS: If you are receiving 5 per cent of your revenues from the local station through the competitive process, your format, the format of diversified rock, is that the driving force to attract new advertisers compared to that of the other formats?
10204 MR. SINGER: Most definitely it factors into it because advertisers will now, for the first time, have an opportunity to target a different and unique audience than what they have now in the marketplace because of the music format.
10205 But equally as important is the local content, which is a new flavour of radio for Chilliwack. I shouldn't say "new." From our research and in discussion with many people in Chilliwack, there once was a time when Chilliwack had a very locally oriented radio station, back to the CHWK days.
10206 But that seems to have gone away with the transfer of ownership to one of the bigger players in the country in STAR‑FM.
10207 So, the feedback we got in our advertisers' survey and from talking to people on the street was most definitely they would welcome an alternative. There was a fair amount of comment from our advertisers in the market who said that they wanted more choice in the way they spent their money; they had tried Vancouver stations and could not afford the Vancouver rates to buy adequate frequency; and they wanted to explore, they said bring it on, we would love to have another radio station in the market.
10208 As our survey indicated ‑‑ and if you wish I could have Lang elaborate on the results of that retail study ‑‑ half of the advertisers we talked to had stopped using local radio for various reasons.
10209 COMMISSIONER WILLIAMS: It may be helpful to have Lang spend some time on that.
10210 I guess where I am going with this line of questioning is in year 2, 95 per cent of your revenues come from sources other than the existing local stations, and I would like to know what you base that on and if you have established or received any commitments from advertisers, should you be successful, and how you would base that large percentage of our revenue.
10211 MR. SINGER: I will ask Kevin to speak to that, if you wish, Mr. Commissioner.
10212 MR. GEMMELL: Commissioner Williams, we show 95 per cent of our second year revenue coming from other sources other than STAR‑FM, most of which will be new advertisers returning or doing radio or, in many cases, returning to radio. As we discussed in our advertisers' survey, half of our respondents don't currently use radio, but it is interesting to note that about 20 per cent of those respondents used to be heavy radio users.
10213 One of them was a car dealership that until about 2000 spent close to 80 per cent of his budget on local radio, but when Rogers took over, they dried that budget up because they weren't getting the results they wanted, and the reason they weren't getting the results is Rogers wasn't participating in the community the way that we will, the way that we do and have been in other markets.
10214 COMMISSIONER WILLIAMS: Where would they redeploy that spending?
10215 MR. GEMMELL: Pardon me?
10216 COMMISSIONER WILLIAMS: Where did they begin spending once they withdrew it?
10217 MR. GEMMELL: In some cases they aren't spending that money now. In some cases they would invest greater into newspaper; they would investment greater into electronic advertising, billboarding, flyering, but probably a good chunk of that ‑‑ and Lang may know the answer, we may not know the answer, it might have been just discussion ‑‑ in some cases some of that money just doesn't get spent, which is always a shame.
10218 MR. McGILP: Certainly in that case there is a variety of things that could have happened in terms of where the spending had gone.
10219 In terms of the research, we did do over 900 interviews overall in the research. Specifically with businesses we did 20 in‑depth interviews. You have heard some of the statistics and the outcomes of that research already.
10220 But definitely a strong dissatisfaction with the local choice available. One‑half of the businesses not advertising on the local radio. As Kevin mentioned, there is a contingent who used to and no longer do, due to effectiveness. Really, what it came down to is not even as important as what sort of music was on the radio. It was more about the ability to target a specific demographic that was not currently available to them.
10221 In addition to component of local content, we had three‑quarters of the businesses comment that that was a critical need for them.
10222 MR. SINGER: Commissioner Williams, too, it is a given that the people of Chilliwack know that the audience, a great deal of their potential customers are tuning out of market. As an advertiser, I am sure they don't put a lot of faith that they are getting good value when, as our research indicated, up to 70 or more than 70 per cent of people are spending some time with out‑of‑market signals.
10223 So, in walks the local salesperson from the radio station, suggesting that this is a good buy, so it is a bit of a hard sell. We have mentioned in several locations in our application how the introduction of ROCK 89 into the Chilliwack market would complement STAR‑FM. Probably the most important element of complementing STAR‑FM would be to make the local radio market stronger, to give some strength back to the market because truly, if you add another player to Chilliwack, the interest in radio will improve as that has been proven in other markets where new licences have been added. It is good for everybody.
10224 MR. GEMMELL: To interject, Ken, that comes down to selling the power of what local radio can do, not selling against each other, but really trying to complement each other and selling radio as an excellent electronic medium to brand and to catch period for long periods of time.
10225 So, as we build our share year over year, we are going to become a better buy and the Rogers station, CKSR, will also become a better buy as well, which should help maintain and build their revenues.
10226 MR. SINGER: It should also be pointed out that many of the advertisers in our survey, the ones that were advertising with STAR‑FM, indicated if we were to come on board, they would continue to advertise on both radio stations.
10227 MR. FABRO: Maybe, Kevin, if you have that information for Edmonton handy.
10228 MR. GEMMELL: Commissioner Cugini and Commissioner Williams, you are going to be bored of hearing this one again. I would like to give you an explanation of what often happens in markets when new radio stations are introduced.
10229 We discussed this in Kelowna back in October.
10230 In the Edmonton market in 2003 the Commission granted three new licences to that market. At the start of 2004 there were 12 licences in Edmonton, and they billed roughly $52 million in revenue.
10231 At the end of 2005 two new licences had signed on, and the revenue billing was $58 million for that year, and at the end of 2006 we were up to 15 licences, so the introduction of the third licence. There was $64 million in revenue.
10232 So, the market revenue grew, but the revenue per station stayed within about $10,000 the same. So, you added new licences and the revenue to the market grew.
10233 I do have this in a nice little graph form, if you would care to have a copy. It just shows you that as you add more radio, more dollars are spent on local radio.
10234 The other point that should be made is that up until 2003 average market growth had been 5.8 per cent annually. In the two years where stations were introduced the market growth average was 12 per cent. Now, of course we don't have the 2007 year so I can't see where that has gone, but certainly you have that information available to you.
10235 COMMISSIONER WILLIAMS: The information will be helpful, and I am sure you can make arrangements to provide it to legal counsel for review and she can see if she is going to include it.
10236 MR. GEMMELL: Yes, we will hand it in after we finish.
10237 COMMISSIONER WILLIAMS: Let's talk about the capacity of the Chilliwack market. Can it support the licensing of more than one news station?
10238 MR. SINGER: On the sheer basis of population and number of radio stations, it is quite evident that there is an awful lot of room there. Then when you factor in the potential to repatriate those out‑of‑market tuners back to their local market, it is very potential.
10239 I would like to turn it over to Kevin to give you some further statistics on that.
10240 MR. GEMMELL: We compared a number of markets of similar sizes across the country and the number of licences they have, right from Ontario through to B.C. Probably the two important ones, Kamloops with a population of close to 93,000 has four stations, and Prince George with a population of 83,000 has four stations as well.
10241 It is all well and good to say they are on their own, there is no impact from out‑of‑market such as the 19‑plus licences that come from Vancouver, but Red Deer, with a census population in 2006 of 71,000 has four stations and as you know there is a call. They have an influx of 28 radio stations coming from the north and south, signals that are not hampered by mountains like we are in Chilliwack. So, very similar to the one‑station situation with Chilliwack, where the population is 82,000 but we have 25 per cent the number of radio stations.
10242 They are different provinces but very identical circumstances. So, we feel that based on that alone, the market availability in Chilliwack could certainly sustain more than one new entry.
10243 COMMISSIONER WILLIAMS: Thank you, Mr. Gemmell.
10244 Mr. Fabro, as I mentioned at the beginning of my questioning period, we have a couple applications before us, the one today and the one we heard in Kelowna. Are both of these British Columbia applications required in order to provide synergies needed to succeed or can this application that we are hearing today succeed on its own independently?
10245 MR. FABRO: I guess every new operation we were to add to our small group would marginally make a major difference. So, were we to get one licence, it makes a major difference. As we add further licences, the difference on the whole operation would be less.
10246 I don't want to tell you that one is any less important than the other. I think they are both very important.
10247 COMMISSIONER WILLIAMS: I am confining our discussion to the one that is before us today.
10248 MR. FABRO: Pardon me?
10249 COMMISSIONER WILLIAMS: I am trying to fence in our discussion on the Chilliwack application. So, can the Chilliwack application stand on its own?
10250 MR. FABRO: It can stand on its own from our point of view?
10251 COMMISSIONER WILLIAMS: Yes.
10252 MR. FABRO: I am not sure what you mean.
10253 COMMISSIONER WILLIAMS: Do you need synergies from other stations that you either have licences for now or hope to get licences for to make the Chilliwack station work or can the Chilliwack station work without that?
10254 MR. FABRO: If I am answering this correctly, are you saying that if we didn't have other operations could Chilliwack work?
10255 COMMISSIONER WILLIAMS: Yes.
10256 MR. FABRO: The answer is yes.
10257 COMMISSIONER WILLIAMS: Thank you.
10258 Mr. Fabro, given your company is clearly a determined independent career broadcaster that has been frustrated to date in the licensing process, you may be encouraged to learn that Canada's largest broadcaster, Astral, has never won a licence according to their testimony last week during the Vancouver public hearing. I don't know if those are words of encouragement or not.
10259 Mr. Singer, do you care to comment?
10260 MR. SINGER: But they have purchased one or two stations.
10261 COMMISSIONER WILLIAMS: I suggest that is the way they got there, yes.
10262 MR. FABRO: There you go.
10263 COMMISSIONER WILLIAMS: Madam Chair, that concludes my line of questioning for this applicant. Thank you.
10264 THE CHAIRPERSON: Thank you, Commissioner Williams.
10265 Commissioner Cugini, please.
10266 COMMISSIONER CUGINI: Thank you, Madam Chair. Just a couple of follow‑up questions.
10267 I am going to begin with your format because I am looking at your playlist and I have to say this, I see Jeff Healey on the playlist and we did suffer a great loss yesterday with his passing.
10268 MR. SINGER: Absolutely.
10269 COMMISSIONER CUGINI: But my question is: I am really having a hard time trying to figure out the logic of your playlist in terms of attracting a core group of listeners. We know that radio also relies on loyalty, and it relies on listeners going back to your station on a regular basis.
10270 I am looking at it and I am being devil's advocate of course, but I am looking at it, and I can't help but feel that people are going to come to your station to sample what is going to be on there because I can't find what is in common with 5440 and ZZ Top.
10271 How do you avoid that listener that is just coming to your station and says I wonder what is on, I don't like ZZ Top, I am switching to another station and I may never come back because I can't find the common thread in your playlist?
10272 MR. SINCLAIR: Thank you, Ken.
Laughter / Rires
10273 MR. SINCLAIR: Thank you, Commissioner Cugini.
10274 The short answer to it, and I think what we tried to do is build a case, I may need a little more clarification. This radio station is built on pretty much five decades of music overall.
10275 One of the great things about rock music, not that pop music isn't a great universes to be in, and certainly we have worked with lots of those radio stations, rock music really has more common threads that run through it than most people realize, right from the beginning. That goes back, without getting into a long history lesson, and I know you are a music fan, from the 60s on up.
10276 What is cool about that, each genre that comes out through accident or by design over time, whether it is created through radio or created through the clubs or the musicians themselves, really borrows on what has happened previously in a lot of cases. We know that is true. We know that if we look at a spider model of how music came about in terms of modern rock, we talk about, we can say what are the groups synonymous with some of those formats, like modern rock.
10277 We can talk about at one time U2, and today we would talk about the pop in a lot of cultures as well. I think what is important to know is that the history that has happened beforehand, and we have borrowed from that, we talk about classic rock, modern rock, 70s rock, we talk about new rock as well, and merge that into current, a lot of current‑based music today is built on what has happened in years past.
10278 You will find, especially in the British Columbia region, there are a lot of old rockers out here that help a lot of new rockers. That is clear right across Canada. We had this conversation the other day about this, where, you will take an artist that comes out with brand new material and they want to put their footprint on the map, their album comes out, and then all of a sudden you go back a couple of years after that with their follow‑up album, and quite often it is cover material.
10279 You mentioned Jeff Healey who was an amazing fellow, and I am sure a lot of us in the room knew Jeff as well too. Jeff, as you know, in the last few years really had left his pop rock roots and really gone into jazz and blues. A lot of people didn't know that. It is interesting in an interview he would talk about how that really had influenced his life all along and it was important to him. He could make that connection.
10280 I was watching a piece this morning on television, Richard Flohil was on there and they were talking about being in his basement with scores of 78 records and how he would marry those different styles. In his case, that formed a basis of the product that he put out, and you are right he will be sorely missed.
10281 There are more artists like that out there today and newer artists that can talk to that. I was talking about an artist the other day. If we take Tal Bachman, Randy Bachman's son, who had an album out four or five years ago, huge hits, She's So High, and then later on after that product comes out the interview comes along, he says actually it really was The Guess that kind of influenced me along the way. So, there is more of a common thread.
10282 The short answer to your question about blending that, sometimes on paper it may look a little bit harsh, but I have to tell you the music artisans that put this product together do an amazing job. If we look at those sample hours that we have submitted in terms of what we put in, that radio station does sound phenomenal and there is more of a common blend to that station than you would imagine.
10283 If you are a 5440 fan and you are hearing that and you don't like Led Zeppelin or you don't like Hot Hot Heat or Pride Tiger, there is probably a good chance you are going to keep coming back. It is not going to be the slam dunk station that says, I'm the rock person, like, bring it on. In some of it, it may be that case; it may be more of an acquired case with others.
10284 But I still think at the end of the day the opportunity to provide a much broader sound than just a classic rock station is huge here.
10285 COMMISSIONER CUGINI: Let me ask you this many. You are making a huge demand on your DJs now, on your on‑air talent. This is not just about knowing music and/or having a great voice for radio. These are musicologists now, especially for the 18 year old. The 54 year old might tie it all together because they have been exposed to the music for a longer period of time.
10286 But your target demo is 18 to 54. That 18 year old has to have that explanation in order to enjoy your radio station.
10287 MR. SINCLAIR: That goes without saying. Another way to look at that, Commissioner Cugini, is not as much at the extremes because the extremes of 18 to 54 really look more like a family reunion than they do a demographic.
10288 COMMISSIONER CUGINI: That is what a Rolling Stones concert is; right?
10289 MR. SINCLAIR: That is exactly right.
10290 One of the ways to look at this is to start at the bullet and go outward, and go to the centre of the bullet in your mid‑thirties, 34. I think what we want to talk about or the point that we want to portray here is that 18‑34 and some of that 45‑54, more of that is going to be not by accident, but by association. So we are not sitting there saying we are gearing this radio station to 18 year olds, so we hope your parents and grandparents are really going to like it. Likewise, we are not going to pattern this to 54 year olds and just play April Wine and work backwards.
10291 So, starting in the middle, there is more of a common thread than you would think. You know what, having been on on‑air announcer for too many years and a Program Director and a General Manager, I have never worked with a radio station where we haven't expected absolute excellence in people knowing what their product is on the air. That is just a given. In this day and age with the technology we have available to us, we don't have to worry about cards crashing on us, we don't have to worry about records running out. We have lots of time. And with the internet, that music information is at everybody's fingertips.
10292 If you want to do a great job you should be a musicologist. If not, then you should go do something else.
10293 MR. SINGER: Commissioner Cugini, if I could call on Lang to give you a bit of a picture of how people felt about this mix because we did test it in front of like over 900 people in our study. So, this isn't just something that magically came to us one night.
10294 COMMISSIONER CUGINI: No, didn't mean to imply that it did.
10295 MR. SINGER: Of course, we asked the same questions: Would this work. That is where Insightrix came in to help us get a sense of this, because if you went through our materials, you will that our research actually had about four stages to it, and when we learned this much, we said, okay, now, let's take that and apply it.
10296 If you don't mind, I would like Lang to share what I think are some pretty valid findings in the study.
10297 COMMISSIONER CUGINI: Absolutely.
10298 MR. McGILP: As Ken mentioned, we did go through four phases of the research. I will just draw to light the ones that are most relevant.
10299 We first went in the market and interviewed 500 randomly selected individuals over the telephone in Chilliwack and listed off 17 different music varieties. Classic rock came out, as was mentioned in the opener, that was the number one pick. The 70s rock came out really strong as well. It was actually in second place in terms of level of interest. We had 61 per cent of people saying that they would frequently or sometimes listen to that kind of music as described to them.
10300 Modern rock also came in there as a strong contingent, not as strong as the other two, but we saw an opportunity to look at them together.
10301 When we added people who said they liked those three styles of music together into a group, that came out to 57 per cent of people saying that they are interested in that kind of music. That is a pretty good chunk right off the bat.
10302 From there we then went to the chef and created a variety of music to blend that all together to make it diversified. We then went back into the market to test that. We also tested another format that was mentioned. We played a 30 to 60 minute clip of minute, playing them together, and we ended up with strong interest in that 61 per cent again saying that they are interested in what they heard in terms of this mix or variety.
10303 When we looked at that by the various demographic breaks, that is partly where the interest comes and where the male leaning target and the age is coming from.
10304 But we are seeing interest, even in those 18 to 34 year olds. We had 53 per cent of those people saying, yeah, I'd listen to that station all the time.
10305 COMMISSIONER CUGINI: Thank you very much for that response. It does give me a better understanding of where the format came from and where you hope to take it, if you are licensed.
10306 Mr. Singer, just a follow‑up question for you. You did have a fulsome conversation with Commissioner Williams regarding your news, and I may have missed your answer on how many hours of just news you will be broadcasting. I do have the chart that you submitted with your oral presentation.
10307 MR. SINGER: Yes, and I would also like to point out, this isn't new information, but we just thought it would be easier to follow on the same page here.
10308 Two hours and 22 and a half minutes is the figure of our newscasts only, without weather, traffic and sports.
10309 COMMISSIONER CUGINI: Because I heard your conversation and your definition of news, and that you do consider that all the information that you are providing to be news. I just wanted to make sure that we were talking about what we consider to be the definition of news in the program category's definition PN that we put out in 2000, and that is what you are referring to here.
10310 MR. SINGER: I appreciate that. At the same token, I would ask the Commission to seriously consider that our spoken word initiatives be evaluated as a news component and not just as we have heard earlier, happy talk. It is news and it is meaningful, otherwise there is no point in doing it. The most important thing is it is locally relevant.
10311 COMMISSIONER CUGINI: I appreciate that. Thank you very much. Thank you, Madam Chair.
10312 THE CHAIRPERSON: Commissioner Duncan.
10313 COMMISSIONER DUNCAN: I apologize if I should have already come away with these answers, but I will just ask a couple of questions so I don't leave without all the information I need.
10314 I notice that your projected 12‑plus tuning shares are much higher than the other applicants. When I look at the projected revenues, two ranked in comparison to the other applicants.
10315 For example, if I just take year 3, you are at $2.2 million and Torres is at $1.7 million, Vista at $1.5 million, Newcap at $1.4 million, and Golden West at $850,000
10316 I don't know that you have had a chance to look at everybody's application in‑depth, but I am curious if you could just explain to me how you would expect to get so much more revenue than the others.
10317 MR. SINGER: First of all, I will ask Kevin to give you an overview of how we plotted year 1, and then we can talk about how the increases would spread over the seven years.
10318 MR. GEMMELL: From the revenue standpoint, I may not answer this the way Ken is asking me, but we looked at year 1 opportunities by determining first of all what the market could bear. We figured, based on 4 per cent of retail sales, there is about $46 million in total advertising, and then 11 per cent would be the radio share, which varies from market to market.
10319 Though we haven't seen you before, Commissioner Duncan, on any panels, in the past we have pitched as high as 20 per cent for radio share in a market and as low as 9 per cent. We figure the average is probably 13 to 14 per cent. We feel that it is lower in Chilliwack than it should be because of lack of community participation. Eleven per cent would create about $5.1 million for the radio revenue and we felt that the Rogers station currently attracts about $2.5 million out of that market, leaving the $2.6 million for future revenue.
10320 Knowing that, we then determined what we could sell for spot loads and, generally speaking, a sold out hour would be about ten minutes or 20 30‑second units. We wouldn't expect to achieve that in our first year. An excellent goal over the 52 weeks would be about 50 per cent sold out, which in order to make our budget, if we used a dollar figure of $25 a spot, just to pull it out of the sky for now, we would need to sell about nine units per hour on average, 126 hour week over the course of the year, and that would sell us the $1.5 million in first year revenue.
10321 I think that is very attainable. That is a reasonable spot rate. We used a slightly higher spot rate, more like $30 when we put our business plan together based on our investigation of the market at the time.
10322 What will the spot rate be or the rate card be when we actually sign on? It would be a year from now, we hope, and we would investigate the market at that time by talking with the business people and trying to find out what the competition is charging so we can match it. We can't be higher. We are going to have to be a little bit lower as a new entrant, but come close to charge a reasonable price that will be acceptable to the advertisers and help us attain our goals.
10323 Did that answer your question?
10324 COMMISSIONER DUNCAN: I think that is very helpful. Obviously you have spent a lot of time on it and given a lot of detailed thought.
10325 I notice that in year 1 there is not as much a difference between the other applicants in year 1, but it increases more rapidly.
10326 MR. GEMMELL: Our increases in years 1, 2 and 3 are ramped up. We feel that the first three years of operation we are going to see a significant increase and then years 4, 5, 6 and 7 levels out. Though I don't have the percentages on hand, year 1 to year 2 we would see approximately a 10 per cent growth; year 2 to 3 also that 10 per cent. Then it levels out down to a more reasonable level of 3 to 5 per cent from years 3 through 7.
10327 Again, taking the Edmonton situation into consideration from the 2004 to 2005 year, the market growth was 12 per cent versus an average of 5.8 years before. When you add a new player into the market, the market will react and spend more on radio when you participate in the community and do what we plan to do.
10328 MR. SINGER: One more thing that is important to point out is that the playing field in the market of Chilliwack is quite different than anything we have considered applying for before by the very nature that there is only one local radio station serving 80,000‑plus people. In other markets where we have applied, we are always coming to grips with that question, of course, is how much of the local market is going to be impacted by our new radio station.
10329 In this case, our greatest opportunity, as mentioned earlier, is this huge pocket of listenership that has gone away from local radio. I guess we are more optimistic that we can win them back with local content because we have been doing this for 40 years and winning back and maintaining audience with local content. No different than you heard from Elmer and his team this morning.
10330 I think it is a very, very doable business plan, and from the point of view of our percentage of revenues, how we arrived at that, it is fairly consistent with our projected share of audience, if you look at our $1.5 million.
10331 So, while the growth might seem a little aggressive, we also have to remember that we are really only fighting it out if it is a local fight with one other, and if you licence more than one, perhaps two others. We are basing this plan on one station being approved. If two were approved, then that growth would take a little longer.
10332 MR. GEMMELL: I think it is also fair to say, Commissioner Duncan, if two were approved, ours and another one, there is enough head room in the pool of radio dollars to afford that space. Newcap this morning told you there is as much as $7 million.
10333 We all have different ways of formulating what radio share is, but we are suggesting about $5.1 million. The market will grow in the time before anybody signs on. So there is definitely room for any combination of the two applicants in the business plans, I would think.
10334 MR. SINGER: In closing, I would just like to say that it is almost a pattern where we have applied in same markets as Golden West that they are the lowest in their revenues and usually the lowest in their operating costs as well. I am not making a judgment call here; I'm saying that is the way it usually is.
10335 COMMISSIONER DUNCAN: Similarly, then, just picking up on Newcap's comment, because theirs was 10 per cent straight across the board and they felt they would get their audience in the first year and they didn't show big growth after that, as opposed to yours, where yours is showing 25 per cent, which means in the first year you are going to come right up to where Rogers is now, I gather, and then you are going to grow from there.
10336 But you have done the work and that is your projection.
10337 MR. SINGER: Our research indicated that Rogers had about 48 per cent of the tuning in the market. So, I guess what we are looking at, basing it on if we did the same research a year after we had been on the air, the same style of research and we were right in our projection, we would hope that Rogers would still be in around that 48 per cent because there would be growth in the market and we would achieve our 25 per cent or in that 20 to 25 per cent.
10338 COMMISSIONER DUNCAN: Thank you, that is helpful.
10339 MR. FABRO: Commissioner Duncan, just to add one more thing. These projections, I think they are pretty realistic. It is very, very difficult for anybody, as you probably know, to be right exact on.
10340 COMMISSIONER DUNCAN: Yes.
10341 MR. FABRO: But I think we are realistic in everything we have done here in terms of coming to grips with what we think we can do in the market.
10342 If you really want to find out how accurate we are, if you give us the licence we promise to show you how we do.
10343 COMMISSIONER DUNCAN: That is a good line too.
10344 I have one other question for you. I think that Commissioner Williams touched on this too, but again I don't have a clear picture in my mind. Why is it that you are able to offer 25 per cent Canadian content ‑‑ 25 per cent or 40 per cent?
10345 MR. SINGER: It is 40 per cent Cancon; 25 per cent of our 40 per cent would be new and emerging.
10346 COMMISSIONER DUNCAN: So, 10 per cent.
10347 MR. SINGER: It works out to about 11 per cent of all of our music overall.
10348 COMMISSIONER DUNCAN: That is fine. Thank you very much.
10349 THE CHAIRPERSON: Just one follow‑up question. I think that some of these clarification questions are coming up because the CRTC is too cheap to pay for the expedited transcripts, so I can't refer to them.
10350 I believe it was Mr. Sinclair who made a comment about classic rock is missing a component of the population; is that correct? When Commissioner Williams was asking you to describe the similarities and differences between your proposed format and the proposed formats of the other two applicants, and you went on to describe, when it came to classic rock, you said something to the effect that it was missing a component of, and I missed ‑‑
10351 MR. FABRO: I am sorry, yes, Madam Chair, I think I understand what you are saying. I don't have the transcript in front of me either.
10352 What we were talking about was with the two other rock sort of under the guise of rock, one is classic hits and I think we talked about how in its pure form it really isn't a rock station. It borrows some of those songs from it. But it more than anything straddles a pop universe as well because that is a lot of where that music is from, The Police and others.
10353 In terms of the classic rock station, it is a whole format by itself and it is made up of fewer sub‑genres of music, and arena rock and industrial rock and old rock and all that. What we talked about with our diversified rock format, we are saying in terms of the comparison, classic rock is a component of what we are proposing in terms of diversified rock.
10354 Does that help?
10355 THE CHAIRPERSON: Yes, I got it. Thank you very much. Thanks for your time.
10356 Those are the questions, and here is your opportunity to give us your pitch why you believe you should be licensed in Chilliwack.
10357 MR. FABRO: Madam Chair, approval of ROCK 89 is very important to Chilliwack. Although it is a vibrant and growing community, it has significant service voids within its local radio market. As such, ROCK 89's diversified format will provide Chilliwack's thirsting public with a locally relevant, community focused FM station, whose music and spoken word initiatives will provide true programming diversity and listeners choice to the areas underserved 18 to 54 demographic spectrum.
10358 Further, ROCK 89 will establish a competitive balance, increase ownership diversity and introduce a distinct alternative editorial voice to Chilliwack's radio market.
10359 ROCK 89 will also maximize the utilization of the 89.5 frequency by extending its unduplicated diversified rock music format to more than 81,000 persons living within the station's principle marketing area. As well, ROCK 89 will further strengthen Chilliwack's private radio sector by significantly reducing the level of out‑of‑market tuning by local residents and by drawing lost listeners away from other audio sources and back to local radio.
10360 In addition, ROCK 89 will champion local talent by providing on‑air access to new and emerging artists, and through the direct expenditure of $1 million on a mix of meaningful Canadian content development initiatives.
10361 Madam Chair and Commissioners, approval of ROCK 89 is also very important to CJVR as a dedicated career broadcaster with both a need and a desire to extend our local brand of radio beyond Melfort, Saskatchewan and Whitecourt, Alberta.
10362 Chilliwack is integral to part of CJVR's broadcast plan to grow a critical mass, increase operating efficiencies, enhance our competitiveness, and extend and preserve a strong independent radio voice amidst a swelling sea of concentration within British Columbia's and Canada's private broadcasting sector.
10363 It is for these reasons that approval of ROCK 89 will best serve the public interest and in so doing, launch Chilliwack and CJVR into an exciting new era of locally relevant community‑focused radio. As such, we respectfully ask the Commission to approve our application.
10364 On behalf of my CJVR colleagues and the Fabro family, I wish to thank you for the opportunities to present our story. I want to also thank the Commission staff for the courtesy they have extended us here at the hearings and at all other times.
10365 Finally, we wish you well in your deliberations and have a safe trip home. Thank you, merci.
10366 THE CHAIRPERSON: Thank you, Mr. Fabro and your panel. Thanks for your application.
10367 We will take a 15‑minute break now and return at 3:15.
‑‑‑ Upon recessing at 1500 / Suspension à 1500
‑‑‑ Upon resuming at 1515 / Reprise à 1515
10368 THE SECRETARY: We will now hear the application by Vista Radio Limited for a licence to operate an English‑language FM commercial radio programming undertaking in Chilliwack.
10369 Please introduce yourself and your colleagues, and you will then have 20 minutes for your presentation.
PRESENTATION / PRÉSENTATION
10370 MR. EDWARDS: If I may, just before I make the introduction, once again a little housekeeping. You have a re‑formatted 7.1 in your package. The same error we made last week. It is simply the PBIT. The operating numbers and the revenue did not change.
10371 For clarity, because you may ask, we just included a CCD chart, again no difference in numbers.
10372 The spoken word grid that we provided is the exact same one we filed, except the one we filed is very tiny and hard to read. So, for convenience, that is what we have done today.
10373 Madam Chair and members of the Commission, before we start our presentation, of course I would like to introduce our team.
10374 I am Brian Edwards, Vice Chair of Vista Radio Limited and a founding shareholder of the company.
10375 To my right is Sean Matheson, Regional Sales Director. Before joining Vista three years ago, Sean spent a decade with Telemedia Radio and Standard Broadcasting in both Sudbury, Ontario and Kelowna, B.C. His area of expertise over that time was in building non‑traditional revenue divisions for those companies, as he has done for us at Vista. His passion is sales and in training sales reps in the art of closing. Sean is also a shareholder.
10376 To my immediate left is Carol Gass, Morning Show host and Program Director for The Wolf in Prince George and a performing artist. Carol Gass has been the Morning Show host for The Wolf for seven years and is very involved in the community of Prince George, an MC for most of the major festivals and events around town and an advocate for local folks, groups and charities to have their voices heard in the community.
10377 Behind Carol is Jason Mann, VP of Programming, also a founding shareholder.
10378 Beside Jason to his immediate right is John Yerxa, our research consultant.
10379 Beside John to his immediate right is Glenn Hicks the Regional News Director for Vista Radio. Glenn has been a broadcast journalist for 22 years. He produced and presented national and international radio and television news and programming for the BBC and South African Broadcasting Corporation. Currently he oversees news and spoken word delivery for all Vista markets. Glenn is also a shareholder.
10380 The team here today is slightly different from our previous experiences, demonstrating the depth of the talent in our company.
10381 Madam Chair, we are now ready to begin our presentation.
10382 Today Vista operates 22 radio stations, most of them based in British Columbia. We have been new operators in every one of our markets. In most cases we took over stations in difficulty, facing strong competition, including from Pattison, Astral and Rogers. Our approach is to be efficient by using our synergies to minimize back office costs and concentrate on improving local service.
10383 For example, when we took over the Coast group of stations on Vancouver Island, we found a group of communities with little local service, heavily reliant on a centralized programming hub and archaic facilities. We invested heavily in staff and those facilities. The results are a restoration of local service, with better news and community service, resulting in better sales. These better sales have permitted us to continue to grow our service there. And all of this with Pattison as a strong regional competitor in the marketplace.
10384 As well, in Smithers, where the station we purchased faced Standard Broadcasting, we have increased the focus on local programming with stronger news and community involvement. This has resulted again in increased sales. Once again, this better financial position has allowed us to improve our local programming in that market.
10385 The Commission's Diversity of Voices proceeding pointed out the need for diverse programming and diverse voice within the system. We feel independent radio voices like ours have an important role to play in Canada's private broadcast sector, especially given the growing concentration of radio properties in the hands of only a few major broadcasting corporations. We believe that a company like ours can deliver on this promise, by combining managerial, sales and programming expertise with back office synergies, and we can concentrate on improving local service.
10386 It is clear to us from the research we and other applicants conducted and from our own contacts with people in the market, that Chilliwack is crying out for a focus on local service that puts them first. Vista brings expertise in serving difficult B.C. markets and in providing high quality local service to satisfy this need.
10387 MR. MATHESON: Historically Chilliwack was a centre of agriculture and forestry. Yet today it is a thriving and economically diversified community exhibiting a clear long‑term trend toward more service‑producing economic activity. It is a separate economy from Vancouver.
10388 There are a number of financial indicators that give us confidence that we can develop a viable business in Chilliwack.
10389 Chilliwack was B.C.'s faster growing mid‑sized city in 2006. Chilliwack's population reached 78,925 residents in 2007 and is expected to increase by almost 6 per cent in the next five years.
10390 Chilliwack's overall living expenses are about 35 per cent less than Vancouver's and it has the third lowest cost of living of any city in the Pacific coast region of North America.
10391 Last year, construction values in Chilliwack broke a record $200 million. Housing starts have also nearly doubled.
10392 The local unemployment rate had fallen to 6.4 per cent, its lowest point in two decades, and even further improvement is expected down to 6 per cent.
10393 Retail trade in Chilliwack is vibrant, with spending that is 18 per cent higher than the national average. Estimates show retail sales will increase by 21 per cent as well over the next five years.
10394 These economic indicators give us confidence that Chilliwack can absorb a new radio station.
10395 MS GASS: Today only two radio stations are licensed by the CRTC to provide any local radio service to Chilliwack. However, both of them are regionally focused and both are owned and operated by Rogers Communications, one of the largest private radio operators in the country.
10396 CKCL‑FM, known as Clear FM, is licensed to serve both Abbotsford and Chilliwack. That has left its sister property, STAR‑FM, as the only station providing any type of local programming for Chilliwack residents. However, STAR‑FM also employs a broader regional focus covering the communities of Abbotsford, Chilliwack and Hope, British Columbia.
10397 The result is that Chilliwack is now one of the largest cities in Canada without a full range local radio service. Yet, other cities in western Canada that are roughly the same size of Chilliwack already have as many as four or five local radio stations. The chart on the next page indicates that.
10398 STAR‑FM offers Chilliwack residents on adult contemporary format, primarily targeting women. Consequently, local rock music fans, in particular men, have no choice but to listen to stations outside of the Chilliwack region in order to receive their preferred music choice.
10399 That is likely why, in recent BBM surveys, STAR‑FM has been unable to capture more than one‑quarter of the local radio listening population. Put differently, three‑quarters of all local radio listenership currently goes to out‑of‑market radio stations.
10400 To determine the best format to meet the needs in the market, Vista asked John Yerxa to work with Banister Research in devising a format‑finder study.
10401 MR. YERXA: Banister Research conducted a survey of 400 Chilliwack radio listeners 18‑plus years of age.
10402 When asked, is there a local Chilliwack FM radio station that currently plays enough of your favourite music right now? only one‑quarter of all respondents answered in the affirmative, thereby indicating that three‑quarters of all Chilliwack area residents cannot presently find a local FM radio station that plays enough of their favourite music.
10403 When all respondents were asked if they would like to hear a new local FM station in Chilliwack, almost nine out of every ten respondents replied yes.
10404 Vista's primary challenge was to determine which music formats are the most popular among local adult radio listeners, as well as which music partisans feel most underserved. Banister therefore tested six popular mainstream formats: Country, soft rock, modern rock, classic rock, current pop/top 40 and classic hits.
10405 The formats which exhibited the greatest reach and share potential were classic rock, soft rock and country. But to determine the format void two measures are needed: Popularity and availability, and once respondents were asked to rate how difficult or easy it is to currently find a local FM radio station which plays each music type, it became evident that classic rock and country were the two most difficult to find music types, whereas soft rock was the easiest format to find on the local radio dial.
10406 Further analysis led Vista to conclude that classic rock clearly represents the best format option at this time, given its core male strength and the fact that it presently fills the largest music hole on the local FM radio dial.
10407 A new classic rock FM's audience would primarily be made up of radio listeners 35 to 54 years of age, and an overwhelming two‑thirds of its partisanship would be male.
10408 MS GASS: In order to fill the largest music hole and offer the most musical diversity in the Chilliwack market, Vista proposes a rock format encompassing music from the 1970s through to today. Therefore, the era balance will skew about two‑thirds in favour of classic rock from the 70s and 80s and one‑third towards music from the 90s and today.
10409 Core artists would include Chilliwack, of course, Led Zeppelin, April Wine, Pink Floyd, AC/DC, Rush, ZZ Top, Tom Cochrane, Van Halen, the Tragically Hip, Red Hot Chili Peppers, Colin James and Aerosmith.
10410 Classic Rock 89.3 will play newer Canadian rock artists like Sam Roberts, Hedley, Matt Mays & El Torpedo, Theory of a Deadman, Stabilo, Default and Nickelback.
10411 Further, Classic Rock 89.3 will also play emerging B.C. and Canadian artists like The Sled Dogs, Crop Circle, Shattered Tone and Mr. Completely.
10412 MR. HICKS: When asked by Banister Research, would you be interested in hearing more news, weather, traffic and community information, concerning the Chilliwack region, almost two‑thirds of all respondents replied yes.
10413 Banister revealed exceptionally low satisfaction with the amount of local information currently provided on the radio dial in Chilliwack. Indeed, greater than seven out of ten respondents indicated they are only somewhat or not satisfied with the amount of local information currently provided on the radio.
10414 To meet this need, Vista will incorporate a significant amount of local news and spoken word programming into its proposed classic rock format.
10415 The four cornerstones of Vista's spoken word programming plan are news and sports, surveillance, community information, and music or entertainment features.
10416 Classic Rock 89.3's target audience has expressed an exceptionally strong desire for relevant local information. We will hire three dedicated news journalists, as well as one part‑timer, to gather, report and present a total of 92 scheduled newscasts for five and a quarter hours of pure news content a week. Vista guarantees that at least 80 per cent of its news content will be local in scope.
10417 In addition to its regularly scheduled newscasts, Classic Rock 89.3 will also create a distinct Agri‑Biz feature, relevant to those who gain their living from one of the key economic drivers of the region. This daily report will introduce local farm producers and agri‑business people to industry innovators, issues and trends, with a focus on becoming an idea bank for our listeners within the local ag community.
10418 The core audience for classic rock is male and loves sports. At Vista we know local sports is important to our audience, so Classic Rock 89.3 will present a base of 62 scheduled sportscasts, covering local schools, collegiate and amateur sports. This will total over 50 minutes of sports content a week.
10419 In Chilliwack the local junior hockey team, the Chilliwack Bruins, draws large crowds to its home games. If we are awarded the new FM licence in Chilliwack, we have offered the Chilliwack Bruins play‑by‑play coverage for the hockey season. That would increase Vista's local programming commitment by about six hours a week or an extra 258 hours a year. We intend to follow the Bruins closely with special features during the season and, of course, even more attention during a playoff run.
10420 Vista stations in other markets already successfully carry play‑by‑play for other teams. In Trail and Grande Prairie, we provide play‑by‑play local junior hockey. This kind of arrangement allows us to provide strong local reflection in our Morning Shows, reviewing the previous night's game, and in the afternoon drive, teeing up the upcoming games.
10421 MS GASS: Chilliwack is near a critical junction of highways 1, 3 and 5, which stretch into the mountains and are often subject to closures and dangerous conditions. As well, because of Chilliwack's proximity to the higher elevations, local residents experience more winter‑like driving conditions than one would expect. That is why Classic Rock 89.3's news and on‑air staff will be providing local weather and road information every hour of every day.
10422 At the same time, Classic Rock 89.3 will keep its listeners abreast of the latest ski conditions at nearby Manning Park Resort and other B.C. destinations. And in the off season, we will provide local golf, fishing, boating, rodeo and camping information in support of the outdoor, adventure and recreation lifestyle that is abundant in the Chilliwack region.
10423 Vista's local weather, road and outdoor activity information will total at least two hours and 16 minutes per week.
10424 Chilliwack's cultural scene extends from various local bistros, pubs and clubs all the way to the Chilliwack Arts Centre, as well as Heritage Park and the Prospera Centre, which is a 5,000 seat concert and trade show venue that is home to the Chilliwack Bruins hockey team. In support of all these facilities and their weekly events, Classic Rock 89.3 will supply its audience with local concert and event information airing five times daily, seven days per week.
10425 Additionally, in every hour, Classic Rock 89.3, will provide live announcer features entitled "Chilliwack Today," which promote current local happenings along with grassroots fundraisers and other activities that contribute to the local spirit.
10426 And because Vista believes in rolling up its sleeves and getting involved in the community, its community cruiser will be at numerous events each week throughout the year, enabling our staff to provide on‑location reports to Classic Rock 89.3's audience.
10427 Vista's concert and event guides, its Chilliwack Today features and its cruiser reports will total not less than one hour and 46 minutes every week throughout the year.
10428 Vista will also ensure that the latest local, national and international music and entertainment news is heard in its Rock Report feature which airs five times each week day. Then every Saturday and Sunday, Classic Rock 89.3 will present its Special Weekend programming, with such themes as the A to Z Weekend, the Top 500 Songs of All Time Weekend, the 70s Weekend, the Number One Songs Weekend, the New Music Weekend, et cetera.
10429 Each and every weekend, Vista will present a different theme that encompasses hourly spoken word foreground features highlighting relevant historical information, little known artist facts and the latest music news.
10430 MR. HICKS: Vista's news and spoken word commitment is exceptionally strong. Local content will be the backbone of this commitment.
10431 In Chilliwack, Classic Rock 89.3 will present over 17 hours of spoken word programming each week, and keep in mind this total does not include Classic Rock 89.3's proposed hockey coverage.
10432 MS GASS: This application contributes significantly to the objectives of the Broadcasting Act because it reflects the same local commitment that Vista Radio Limited brings to all of its stations.
10433 In every community it is licensed to serve, Vista has restored or increased local service.
10434 It has established itself as a high quality operator through a significant investment of financial and human resources.
10435 And Vista has returned each of the stations it has acquired in challenging markets to positions of profitability.
10436 MR. HICKS: Vista excels in all of its communities because we specialize in local radio.
10437 The people of Chilliwack deserve to be served by an operator like Vista that is committed to being local 100 per cent of the time, and it is also prepared to get involved with the community on a 24/7 basis.
10438 At Vista we get it.
10439 MR. MATHESON: Vista is proposing a broad classic rock format that will complement the existing light rock format presently being offered by STAR‑FM.
10440 Given the nature of classic rock, the most fundamental difference between Vista's new FM and the local Rogers station is that two‑thirds of Classic rock 89.3's partisanship will skew male, whereas STAR‑FM's core audience presently skews female.
10441 More significant, however, is Banister's finding that only 8 per cent of local classic rock partisans currently select STAR‑FM as their favourite radio station. This result suggests that very little audience overlap will exist between the two stations and Vista's new classic rock FM will repatriate much of its partisanship from out‑of‑market radio stations like ROCK 101, JACK‑FM and CFOX.
10442 In addition to having a minimal audience impact on Rogers, Vista's new classic rock FM will be able to attract new advertising dollars to Chilliwack's radio market with very little financial impact on Rogers as well.
10443 In its last BBM ratings survey, STAR‑FM achieved a 26 share in the Chilliwack central area, while Clear FM only registered a three share. This means that over 71 per cent of all tuning went to stations outside of the Chilliwack region. Upon repatriating many of these listeners Vista will build local radio market revenues by attracting many non‑radio advertisers, while giving current radio clients a valid reason to now increase their existing budgets in support of an exciting new male advertising option that Vista will provide.
10444 MR. EDWARDS: Members of the Commission, we have demonstrated that Chilliwack is seriously underserved in terms of local radio. There is no local station that focuses purely on Chilliwack, and there is no local station that serves men at all.
10445 We have identified the musical format to serve the market. And, as importantly, we have proposed a range of news and other spoken word features to make our station an integral part of the Chilliwack market.
10446 Our application meets the goals and objectives of the Broadcasting Act and your licensing criteria for new stations.
10447 The research shows that Chilliwack will respond with overwhelming support for the introduction of a new classic rock FM. Our format will be complementary to the existing local station and bring musical diversity to the market.
10448 Vista's proposal answers the Commission's call for a diversity of news voices, as well as the community's cry for a committed local voice in Chilliwack.
10449 With $455,000 of direct cash benefits to FACTOR, Vista's CCD plan is substantial and well placed. This amount is over and above the basic requirement.
10450 Vista's business plan is well researched and realistic, given current market conditions that indicate a new station will be easily absorbed into the local radio marketplace.
10451 As an emerging B.C.‑based regional broadcaster, Vista is well funded and has the resources to successfully launch and operate this new FM against a much larger incumbent company. We have the back office synergies and the experience of competing with Pattison, Astral and Rogers that assure us that we can deliver on our promises.
10452 Thank you for much for the opportunity to explain our proposal. That was the easy part. Now your questions.
10453 THE CHAIRPERSON: Thank you, Mr. Edwards and your panel. I will ask Commissioner del Val to lead the questions.
10454 Why don't we start with the format. I am sure a question that you have been anticipating would be: What is the difference between your format and the ones proposed by the other applicants for the Chilliwack market and why do you think yours will be the most successful?
10455 MS GASS: Thank you.
10456 Well, I think basically our excellent research from John Yerxa has showed us that really the music hole is rock, classic rock because men are woefully underserved in this particular community.
10457 So, Golden West is proposing an AC format, and that is more skewed towards women. I think that Mr. Torres is looking at more of a narrowly focused blues format, and although we may have some artists that are similar and the same, I think that we would play more classic rock than he would. Also, I believe that Mr. Torres wants to service both Abbotsford and Chilliwack. We are simply looking at servicing the Chilliwack community.
10458 So, the three of us that are maybe lumped together or closely together, Newcap is classic hits. I am thinking 70s and 80s, and I am also thinking that that is skewing a little bit more to women, and I also think that that is already what is in the marketplace to some degree.
10459 CJVR, likely the most similar to us. They are looking at a target demo of 25 to 44, skewed somewhat younger than we are, a bigger component of modern rock maybe, although I will say that our format, classic rock, is looking at 70s and 80s, 90s through today. So we are looking at a diverse format, but I think we are looking at targeting 35 to 54 as our target demo, and I think that those are more radio friendly listeners; they like to listen to the radio; they turn it on maybe more easily.
10460 Two‑thirds men. I mean, women love to rock too, but I think mostly two‑thirds men, so I think that really when you look at the research, we are answering what Chilliwack is asking for, local service to men and that is classic rock.
10461 I think maybe John Yerxa's research would support that.
10462 THE CHAIRPERSON: In terms of the sound, does it sound more like 101.1 and 99.3?
10463 MS GASS: 101 is classic rock definitely, but they don't have the diversity that we will have because we are also going to include 90s through to today.
10464 The thing about it is that we want to superserve the community of Chilliwack and I think we can do that. I think ROCK 101 plays more classic rock, and if you are looking at CFOX, they are the other way around.
10465 MR. JASON MANN: Maybe I can just chime in from the back seat here.
10466 In looking at the demography of the marketplace, the greater population bulge is in the 35 to 54 age demographic, greater than the 25 to 44 age demographic. So, in a way we position to serve the greatest number of people without losing the premise, I guess, of a distinct sound.
10467 There is a sort of an axiom, I guess, that says if you don't stand for something you will fall for everything, and the temptation would be to serve as wide of a path as possible, but the music that you select from the newer generation, because rock and the sub‑genres of rock can be quite different from one end of the spectrum to the other, one might term it as chainsaw rock, if you will, to lighter rock, you have to be very selective.
10468 We run two stations that are exactly like what we are proposing in fact musically for this marketplace. There is an art to selecting those songs from the current generation that will fit and mix with the core of the base of the sound of the radio station. She is quite right in indicating that it would lean probably a little bit more towards the sound of ROCK 101, but that newer rock sound that would be mixed in, while might be partly a component of, say, CFOX, you couldn't just take the two and mesh them together.
10469 THE CHAIRPERSON: Do any of your existing stations have this format?
10470 MR. JASON MANN: We have a couple stations, one in Courtenay called JET‑FM and one in the Kootenays called Mountain‑FM. They are both programmed musically by two different program directors.
10471 They have the same philosophy, if you will, but they don't share playlists; they don't share music scheduling at all. Music directors in each location, program directors in each location make the music decisions specifically for their station, but they are very, very close stylistically, given basically the nature of the competition in each of those markets, they are very similar to this and we have been very successful in maximizing the tuning to the radio station with this recipe, if you will.
10472 THE CHAIRPERSON: Then for this particular station, would you have its own music director as well, and its own playlist?
10473 MR. JASON MANN: Independent decision making, yes.
10474 THE CHAIRPERSON: Why do you think this particular format will attract more new advertisers to radio compared to the other formats?
10475 MR. YERXA: Likely because the core demo is 35 to 54 years of age, which is much more advertiser friendly than, say, the 18 to 34 or 25‑34 generally.
10476 Also, when one looks at the Chilliwack market, basically half the population is not being served. In other words, men are simply not being served in the Chilliwack market. The female component is served to some degree by STAR‑FM. So, that is primarily why the format would be appealing to advertisers.
10477 THE CHAIRPERSON: On your presentation on page 5 where you have the chart showing markets of similar size and the number of local stations, for Chilliwack you show two, and can I assume that the two are Clear and STAR?
10478 MR. EDWARDS: That is correct.
10479 THE CHAIRPERSON: Let's go to your spoken word now. I realize that you have filed the excerpt today. I am trying to reconcile some of the numbers. I was under the impression, and I could be wrong, that from your application there was 11 hours and 46 minutes devoted to news and information; is that correct?
10480 MR. HICKS: Yes, that is right. If I can show you how we have totalled it at the bottom of the matrix there. You can actually see the column third from the bottom or the line third from the bottom, it says "Total Scheduled Spoken Word/Week." It is decimalized, 11.108.
10481 THE CHAIRPERSON: Yes.
10482 Then this chart might help, but where did you include the other spoken word elements, like announcer talk and promo of local events?
10483 MR. HICKS: Certainly. If I can again draw your attention to the bottom lines, the very bottom one in this matrix talks about adding the extra, if you like, jock presenter reflections incidental sort of chat.
10484 So, take those three bottom lines, 11.1 is the total spoken word component. The next line down, if we were to have hockey coverage, as we said in our presentation, that would give us the six hours extra. Then there is the additional six in that bottom line.
10485 That is how you get from 11 and it goes up to 23 for a grand total. So, scheduled newscasts, weather, traffic, surveillance, our special features and community features, plus if we were to have the hockey, that is the grand total of 23. If you subtract the hockey, that is how you get the total of 17.1.
10486 THE CHAIRPERSON: Thank you.
10487 So the total hours of spoken word programming per week, which would include announcer talk, promotion of local events and other information of public interest, but excluding station promos would be?
10488 MR. HICKS: Just over 17 hours.
10489 THE CHAIRPERSON: Great. And you had said in your presentation that 80 per cent of the news would be local?
10490 MR. HICKS: That is absolutely right. That is across the board at Vista Radio. That has been our rock solid philosophy since Vista came in on the scene: 80 per cent local, audio and commitment. If you can get your head around this, if you were listening to a typical newscast on this radio station, on the hour, bottom of the hour, for every five stories we would put out on the air, four of them would be local, with local audio clips. There is your 80 per cent.
10491 The other 20 per cent would be split up as per the need between regional/provincial, national/international. But a number of our stations, and I am news director for the Kootenay group, very often we have none. We have 100 per cent local newscasts. Obviously, when there are provincial, national or international stories that we think relate to our community, that is where that extra 20 per cent comes in.
10492 THE CHAIRPERSON: I believe it was in your appendix 4.4 to the application, you showed that you had 92 newscasts per broadcast week. You have only three full‑time and one part‑time reporter for 92 newscasts. That sounds a little bit low. Can you comment on that?
10493 MR. HICKS: Yes, I certainly can. We have a lot of experience with those sort of sized news teams and these sort of markets. I don't think 3.5 is out of the ballgame. I can break that down how we would run this news operation.
10494 The .5, we will start with the part‑time, would typically operate over the weekends where typically there is less breaking news going on. That half‑timer or part‑timer would also be responsible for some sort of occasional beat or meeting in the evenings.
10495 The other three full‑timers would handle the day part, the load. The news directors would set assignment and run the newsroom, would also probably have some specialist beats and the other two full‑timers would also have specialist beats and divide presentation, editing and production of news between them.
10496 I am comfortable, with my experience in these markets and the delivery of breaking news versus issue‑driven news, and that is where your time goes, and I was delighted earlier today to hear Commissioner Menzies ‑‑ I think you should be bronzed ‑‑ for his comments about strategic news content objectives, were your precise words, sir, versus enterprise reporting. Bingo, thank heavens that has been brought up big time in this Commission.
10497 We have heard other applicants talking about dedicating their time to news. You don't have breaking news every hour in most markets. Maybe in a big city you do. At Vista, we completely understand. Our full‑time journalists are dedicated to that exclusive issue‑driven news, not event driven. Event‑driven stuff lands in your lap dead easy.
10498 With Vista news, we understand 70‑80 per cent of it is getting into the community, getting to the night time meetings and coming back with a hat full of stories, issues and follows. I am quite happy that three people could look after that.
10499 THE CHAIRPERSON: How do they work in terms of it? The 3.5 staff, what are their shifts?
10500 MR. HICKS: Again, I guess in the market we would have to work it out, but typically, off the top of my head, a market like this would have city council meetings. So, somebody who goes to a city council meeting in the evening, perhaps the following week they have a planning or financial part of that city council.
10501 So, if they go out from 7:00 at night until 10:00 at night, come back and turn a story around for the very next morning, perhaps turn another story for the noon news the next day, they would then come in a little later the next day. That is how you kind of work that pattern.
10502 But everybody is working a 40‑hour week. So if you are doing stuff at night you come in a little later the next morning.
10503 THE CHAIRPERSON: Who are the other staff besides the three and a half news reporters in your station?
10504 MS GASS: On‑air staff would be five on‑air staff likely. So, you have 2:00 in the morning, you have a mid day and a drive and then swing, junior swing. Those people, of course, are all handling other jobs at the same time ‑‑ well, not at the same time as their air shift, but obviously production and voice tracking when needed and that kind of thing.
10505 THE CHAIRPERSON: I suspect that you were here when Mr. Hildebrand was talking about his newscasts, and I believe that he named about half a dozen for news.
10506 Can you compare why one station would have six and another would have only three and a half?
10507 MR. HICKS: I was very interested to hear that as well. Obviously, we saw from the presentation earlier that there seemed to be a dedication towards their new media on‑line scenario. I wasn't entirely sure from listening to them whether some those six reporters would be dedicated to looking after the on‑line stuff.
10508 From my experience with on‑line work, you are going to need to use much of the working hours of those six reporters to look after all the new media stuff.
10509 Again, just to reiterate, I am comfortable for this market, surveying on a seven‑day a week situation, making sure we cover the breaking stories during the day and night if they are needed, but really to cover the issue‑driven news agenda, which these small‑to‑medium communities really throw up at you, I would be very comfortable with three and a half news people managing that newsroom.
10510 THE CHAIRPERSON: You do offer for your station a considerable amount of news. Do you consider the proposed station for Chilliwack predominantly music‑driven?
10511 MS GASS: Yes, it is a classic rock station, diverse with 90s through today and local coverage. We are about local, absolutely, but it is a music station.
10512 MR. HICKS: If I can perhaps follow up on what Carol was saying. The music format drives the station, yes, but really hand in hand with that has to be the news coverage.
10513 From my experience and with real local radio that gets it right, local news breeds local news. The more people hear, gee, is this company actually that interested in my community that they are prepared to talk about that issue and put it on the main newscasts ‑‑ I am not talking about the side little featurettes that we have heard a number of the presenters already here today talk about.
10514 News is important, and I have heard your questioning and where it has been coming from.
10515 Stuff at the top of the hour, on the half hour and the Morning Show, yes, local content is strong enough to go into the proper pure newscast and we tie that in with the rock music. For us they go hand in hand. Local news breeds local news, good music, extra local content, the more the merrier; the more the advertisers, the more the community is happy.
10516 THE CHAIRPERSON: Tell me about the hockey. Have you had any negotiations with the Bruins and have they indicated whether your coverage of their games, if you were to be awarded the licence, are they on board?
10517 MR. EDWARDS: We certainly talked to them and I think they represented the fact that they need to be on the air. We do it in two other markets. My good friend Elmer got there a week and a half earlier than we did because we didn't respond to the call ‑‑ if you look at the dates of our filing, we were about a week and a half behind Elmer. So, we do that, and it is one of the reasons we picked, of the two viable formats, the male‑dominated one. You really can't run play‑by‑play on a female skewed radio station.
10518 THE CHAIRPERSON: Actually, I like hockey too.
10519 Can you tell me about your live‑to‑air programming, what percentage of your programming would be live‑to‑air and what amount would be voice tracked?
10520 MR. EDWARDS: Again, the problem with the application process is we look at a seven‑year window. So, the answer is year 1.
10521 As the business grows, the numbers will change. But in year 1 we would expect 54 hours of voice track, and that is going to be evenings, post 1:00 o'clock on Saturday and all day Sunday, subject of course to weather conditions and any other kinds of emergencies that happen. That is the plan to start.
10522 THE CHAIRPERSON: And then I assume that you are hoping that it would reduce, the voice track portion, over the years?
10523 MR. EDWARDS: Yes, particularly on weekends you would like to try to be there at more events. We have developed a technology that no longer requires an operator back in the station. We can take the whole station with a computer out on remote. We have deployed it in three of our markets. It is very, very exciting because it means that the morning team the afternoon before can decide that they want to go some place and they just go. There is no prior hookup or anything.
10524 Chilliwack is going to be that kind of a marketplace, providing we can deploy the technology there that allows radio to get out of the studio and back into the community.
10525 THE CHAIRPERSON: That is on site broadcasting?
10526 MR. EDWARDS: Yes, which may or may not be commercial. If a hockey team, for example, a minor, I am talking about, is having sign up, we have the ability to appear and give them extra coverage, even if it is on a weekend and we are in a voice track period. It is just marvellous technology that we have developed.
10527 THE CHAIRPERSON: I don't understand how voice track relates to what you were talking about, the on‑site broadcasting.
10528 MR. EDWARDS: What I am saying is that even though I am giving you an answer of how much voice tracking we will do, there is always exceptions. When certain community events happen, we have the ability to step in.
10529 THE CHAIRPERSON: I had asked another applicant to comment on this on the perception that voice tracked programming shows less of a commitment to live‑to‑air programming.
10530 MR. EDWARDS: And I heard you ask that question. I don't believe that that is the case at all.
10531 Voice tracking is a separate art form. It is completely different than just sitting in a room and laying down this was, that was, this is voice track that will air in two or three hours.
10532 Voice tracks are hard to do and we have trained a lot of our announcers to do them.
10533 The beauty of voice track is, given the station format, you are guaranteed to get more local content in because the voice tracker is required to read certain material, mostly community announcements, those kinds of things, into the voice track.
10534 The other thing is in some of the smaller markets where you have more inexperienced announcers, they get to do it again. We get rid of the ahs and the uhms. There are stations that we have purchased that were proud that they were live 12 hours a day, and then you sit and listen to an air check and it is the time and temperature 12 times during the hour, it is the latest Britney Spears controversially, it is Paris Hilton. There is no relevance to the marketplace.
10535 That is the difference in pre‑programmed voice tracking as opposed to the sort of, well, we are not interested, we are not here. So, that is our approach to voice tracking.
10536 I defy anyone to listen to any of our stations and tell if we are live or memorex.
10537 THE CHAIRPERSON: Thank you.
10538 Do you see or anticipate any synergies between this new Chilliwack station and any of your existing stations?
10539 MR. EDWARDS: The only synergies that we would get ‑‑ I think we have said it several times ‑‑ is the back office software and those kinds of things. There is a synergy that is probably difficult to articulate, and that is the creative ideas. We have an FTP site, we share commercial ideas, we share promotional ideas, those kinds of things.
10540 The station in Grande Prairie may pick up or run a similar campaign that we would in Chilliwack, for example. That kind of synergy obviously takes place.
10541 The larger the organization is with brighter on‑air people and music programmers, you are just going to get better ideas.
10542 I heard another applicant talk about having a convention. We run a sales convention for our company once a year and we do a programming one once a year where we bring them all in. The energy that comes out of that is just amazing. So, that is a synergy.
10543 I think your question is more like are you going to share programming or networking, and the answer is no. Our success has been letting each and every one of these markets have its own personality because they do.
10544 THE CHAIRPERSON: I also ask about the synergies to see if when you were talking about some of sharing the back room expenses, administration, whether those expenses, the synergies are reflected in your financial projections for the station?
10545 MR. EDWARDS: Yes, they are.
10546 THE CHAIRPERSON: Your audience share, you go right up to 18 per cent year 1 and then it stays at 18 per cent for the 12‑plus tuning. How do you justify the 18 per cent as not being too optimistic?
10547 MR. EDWARDS: I am going to ask John to answer that first.
10548 MR. YERXA: The 18 per cent was the size of the classic rock life group, not taking into account any possible appeal to either partisans within the classic hits music life group or the modern act of rock life group. So, that was a conservative estimate, especially taking into account that the incumbent was already receiving approximately a 25 per cent share.
10549 The other thing is that when you look at the stations that are coming from outside the community, with one exception the three largest stations in our research were all male oriented, for example, CFMI was the largest, followed by JACK‑FM, all male targeted, 35‑54, and that also was built into the calculation.
10550 THE CHAIRPERSON: Your audience share projections, I am turning to appendix 4.4 of your application, on the sources of advertising revenues. Are you there? On the chart that is 4.4 and it sources are first year revenues.
10551 MR. EDWARDS: I just want to be sure we are on the same application because we filed two because the forms changed.
10552 MR. MATHESON: Yes.
10553 THE CHAIRPERSON: I understand the percentage of revenue from incumbent 30 per cent, and there the incumbent, is it both STAR‑FM and Clear FM?
10554 MR. MATHESON: Yes.
10555 THE CHAIRPERSON: Growth via ad budget share print TV, from other media?
10556 MR. MATHESON: Yes.
10557 THE CHAIRPERSON: What is the movement from outdoor Yellow Pages?
10558 MR. MATHESON: In that we are just referring to outdoor print advertising, billboard, Yellow Pages, et cetera.
10559 THE CHAIRPERSON: From the incumbent, do you have a breakdown between how much would be from STAR, how much from Clear?
10560 MR. MATHESON: No. Clearly STAR would be dominant.
10561 THE CHAIRPERSON: Since 70 per cent of your first year revenue is really from sources other than the existing stations, do you have any commitments as things now stand from new advertisers?
10562 MR. MATHESON: We don't have commitments per se, but we wondered a lot about this and talked a lot about it, what the feeling in the market would be amongst the advertisers. This is a rather unique situation in having one female‑dominant station and then the male audience that is left.
10563 So, as opposed to wondering, we called, and myself and a colleague got the opportunity to do a small informal survey to a lot of the advertisers that were in the market. When I say a lot, I really mean a handful. I think we called about 30 to 40 clients. But the answers were very similar.
10564 When you negotiate and talk to as many clients as myself and my colleague had at the time, we saw the trend. A couple of questions that we asked tended to be if there was a new local radio station in the market, would you use it? And the answer was predominantly we would have a look at it. When you get an answer like that, print as well they noted was the key area that they use was another question that we asked, but when they say, "We'd have a look at it," from a sales perspective, that is a very bitter sweet answer. It is very exciting to hear that because you know that you are going to have an awful lot of prospects there that you are going to be able to call on; that is a rather warm answer. But on the other hand that can also indicate that there is some trepidation there, some hesitation.
10565 Our approach has to be in dealing with this that it is a slow build and we educate, educate, educate. This is going to be a relatively new experience for a lot of advertisers that are in Chilliwack that either didn't use Vancouver stations due to pricing or didn't buy STAR due to the fact that they thought they couldn't reach enough audience.
10566 This is the fun part, getting in there to talk to them about what local radio can do and showing them what their investment in local radio can mean. So, we are really looking forward to that as a challenge. From a sales perspective, if you don't get excited about a situation like this, you probably shouldn't be in sales.
10567 THE CHAIRPERSON: You referred in your presentation to being able to turn many of the stations that you took over around and bring them to profitability. If I said, okay, just name two things, two of the most important things that you did to turn those stations around, what would you say those two things are?
10568 MR. EDWARDS: The two things we did, we put the right musical format on the air, and the second thing we did is we put a lot of emphasis on local news and local content.
10569 We seem always to get hung up on local news, but local content is just as important.
10570 If I may, just for a moment, we talk about classic rock stations and what comes into our mind is this music machine that just grinds the stuff out. Well, we have two of them, as we have talked about. JET‑FM is a very male‑oriented classic rock station, and, yet, on the Morning Show there are at least two or three guests or groups of guests that come to the studio and talk about whatever it is they are doing that day. So, we mix, if you like, mainstream spoken word and community events in with this classic rock station. The success is the success. It works.
10571 THE CHAIRPERSON: One thing on your CCD commitment and the allocation to FACTOR, I think one of the applicants have said with FACTOR you don't see as big of a return into a small market, say such as Chilliwack.
10572 Do you have a comment on that?
10573 MR. JASON MANN: Maybe historically that might have been the case. That would be evidenced by the number of people in markets where we currently serve or have just recently started serving that weren't aware of FACTOR or Radio Starmaker, and hence the absolute commitment on our behalf to reach out to the music community at all levels, locally and on a provincial basis, to educate and make those people aware and inform them on FACTOR and the benefits that they could derive from it.
10574 The other thing about FACTOR, in talking with them, they do have partnerships with small regional groups as a part of what they do, and some of those organizations would include, in fact, Music BC, who was here earlier or I guess last week.
10575 They essentially are FACTOR'S feet on the street. They provide the jurying service; they determine which FACTOR applicants from B.C. gain funding. FACTOR also funds a Music BC educational program ‑‑ sorry, FACTOR funds an educational program that Music BC funds, and Music BC also provides feedback to FACTOR, not only on their programs, but also they are their experts on the local music scene.
10576 Other groups that they serve or fund include the Merriman Music Festival, the Walk of Fame and other strictly local regional B.C. organizations. They are almost like a United Way in a way.
10577 I am confident that the funds that we would put there would get handled in a diligent manner without duplicating infrastructure.
10578 THE CHAIRPERSON: Do you want to add to the comments on the capacity of the Chilliwack station to support more than one new radio station?
10579 MR. EDWARDS: Certainly. I don't think that technically it can be done. If I read the Industry Canada comments which came out quite late, as you know, it doesn't look like there is another frequency and the one we have applied for is the one is that was allocated for Chilliwack.
10580 Having said that, is there room for two more stations? I think there is.
10581 THE CHAIRPERSON: Commissioner Duncan.
10582 COMMISSIONER DUNCAN: I do have a couple of questions.
10583 In your opening remarks you mentioned testing six popular mainstream formats. I was just wondering how do you determine the six popular? Do you do some survey first and then determine which ones you are going to test?
10584 MR. YERXA: No. In most of the small and medium markets that we go into certainly across western Canada, the formats that we have selected are a cross‑section that historically have always filled the biggest holes in the market.
10585 In the case of Chilliwack, we know that there is always potential, let's say, assuming that the demography suits the area and that, that there is always room for a country format perhaps. As far as rock, generally it will skew either younger or older. The classic hits concept has come into vogue more recently to the extent that it appeals to more women and that it is more pop as opposed to rock oriented. Then, of course, you always have a younger skewing format, a more popular format, the pop/top 40.
10586 So, generally those are the six formats that we always bring into test first in a small/medium market situation. Of course, in a larger market, we begin first looking at the demography, knowing that because a lot of the players are going to congregate in the middle, we are going to have to maybe introduce some niche elements or we are going to have to look at hybrid possibilities and we can't just go in and fill a mainstream hole. That is generally our approach in small to medium markets.
10587 COMMISSIONER DUNCAN: So you didn't go in with a pre‑conceived notion that the males were underserved? That came about as a result of your research?
10588 MR. YERXA: Right. Had we looked at the demography, we probably could have arrived at that conclusion right away, but we always use the same approach, knowing that there are usually one, perhaps two holes in most small/medium markets, given just the number of frequencies that are available.
10589 COMMISSIONER DUNCAN: Thank you.
10590 THE CHAIRPERSON: One last question before your pitch.
10591 I believe Golden West this morning alluded to some of the applicants here are the same applicants in Vancouver and that this could be considered as a back door entry into Vancouver. Do you have a comment on that?
10592 MR. EDWARDS: I certainly do, a very strong comment on two fronts.
10593 One, technically, this application cannot get into Abbotsford or areas west. If you read the Industry Canada comments, you see that there is some protection we are going to have to give to the campus radio station in Abbotsford. So that part of the signal will not get there.
10594 Chilliwack, ten years ago had a very strong, committed local broadcaster on the AM band and had a local radio station that provided service. I am pleased to tell you I was a member of the board of that company. We want to go back and we want to do it again.
10595 THE CHAIRPERSON: Thank you.
10596 So, this is your opportunity for your last‑minute pitch on why you believe that you are the best to be licensed for Chilliwack.
10597 MR. EDWARDS: Thank you for that.
10598 In a number of licensing decisions you have outlined your criteria for the licensing of new radio stations and we believe that our application for Chilliwack fully meets them all.
10599 The Chilliwack market can easily absorb a new radio station. The market is underserved in radio with much less choice on the radio now than any similar market in Canada. Approval of our application will provide competition to an existing incumbent that holds two Chilliwack licences, as well as a station in Abbotsford. Approval of Vista's application will add a new editorial voice to the market, a voice that has the experience of improving radio service in many B.C. markets.
10600 We think we have presented a high quality application. Our business plan is realistic and achievable. It is based on an extensive research where seven formats were tested with a large sample. We have chosen the right format to superserve the underserved male population.
10601 Our business projections are conservative based upon our experience in similar sized markets in the province. We propose a strong package of local news, information and community information to reflect the local community of Chilliwack and Chilliwack only.
10602 We have a strong track record of exposing Canadian artists and we will continue with that record in Chilliwack.
10603 We have proposed $450,000 of direct cash benefits to FACTOR. We believe our plan is substantial and well placed.
10604 Chilliwack has been ignored by radio for some time. The incumbent here holds two radio licences, one station concentrates its service on Vancouver, while the other seeks to serve, Hope, Abbotsford and Chilliwack. We believe it is time that Chilliwack received a high quality, locally focused radio station.
10605 Thank you very much.
10606 THE CHAIRPERSON: Thank you, Mr. Edwards and your panel.
10607 We will take a ten‑minute break and be back at 4:30.
‑‑‑ Upon recessing at 1620 / Suspension à 1620
‑‑‑ Upon resuming at 1630 / Reprise à 1630
10608 THE SECRETARY: We will now proceed with item 22 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 Abbotsford and Chilliwack.
10609 Please introduce yourself and your colleagues, and you will then have 20 minutes to make your presentation. Thank you.
PRESENTATION / PRÉSENTATION
10610 MR. ED TORRES: Good afternoon, Madam Chair, members of the Commission and Commission staff. My name is Ed Torres. I am the President and co‑founder of Skywords Radio. I would like to begin by wishing Commissioner Williams a happy 30th birthday.
10611 COMMISSIONER WILLIAMS: I don't know, once you get north of 50 it is not impressive to be 30 any more.
10612 MR. ED TORRES: You are really only seven in dawg years.
10613 COMMISSIONER WILLIAMS: There you go.
10614 MR. ED TORRES: Thank you for entertaining our application for a new blues format FM radio licence. I would like to take a moment now to introduce our panel.
10615 Seated to my right is my brother, Frank Torres. Frank is the Chief Operations Officer at Skywords. Together we founded the company in 1991. Today it is a national radio company with offices in five Canadian major markets.
10616 Beside Frank, Yves Trottier. Yves is the former Operations Director at Couleur FM in Ottawa/Gatineau. He has held various PD positions prior to joining Skywords as the General Manager of Quebec Operations.
10617 Beside me on my left is Robyn Metcalfe, the Vice‑President of Programming at Skywords and also part owner in this application.
10618 Seated directly behind me in the second row is Aubrey Clarke, the Director of Business Development and a former Sales Manager at Skywords.
10619 To his right, Jeff McFayden, the General Manager for western Canada based out of Edmonton.
10620 To his right, David Hoerl, Vancouver resident, lead member of blues band The Twisters.
10621 To the left of Aubrey is Clay Olsen, Senior Researcher, Sensus Research in Vancouver.
10622 We have changed our panel and our presentation slightly for the sake of keeping it fresh. Todd Bernard is attending to duties in Ottawa, and Michele Byrne has returned to her responsibilities at our Delta operations locally.
10623 We thank you for hearing this application. We believe that we have crafted a quality application and that Abbotsford is underserved in terms of radio options and news plurality. We believe that we could co‑exist with a licensee in Chilliwack and would urge the Commission to award a licence in Chilliwack, along with ours in Abbotsford, to give the people of the Fraser Valley as many radio options as is feasible.
10624 We believe we have created a solid conservative business plan based on 14 years of selling radio advertising in the local market, and that we have created a strategic radio option in the Fraser Valley and Lower Mainland by applying for two distinct radio stations with identical formats separated by a single dial position that will provide essentially a contiguous coverage for DAWG FM from the Fraser Valley to the west coast.
10625 We have received close to 1,000 individual letters of support for our blues radio station applications, including letters from Tom Lavin of the legendary Power Blues Band; Mario Miniaci, President Student Union, University College of the Fraser Valley; Christine Caldwell, councillor, city of Abbotsford; Jack Goeson, Owner and General Manager of the Abbotsford Pilots hockey team; blues artists Gary Kendall of the Downchild Blues Band, Jack DeKeyser, Jim Byrne and Rick Fines, not to mention Dan Ackroyd.
10626 We have commissioned extensive formal research by independent third party research firms into the viability of our proposed format in eight markets across Canada. To supplement our formal research we have created an on‑line survey at bluesincanada.com, a website that we own, and has generated over 450 responses.
10627 MR. FRANK TORRES: Abbotsford is severely underserved in terms of local radio, yet the economic conditions in Abbotsford rank amongst the highest in the country.
10628 Abbotsford, a community of 159,000, has only one originating mainstream radio station, owned by Rogers. A single voice for news: Abbotsford does not have a daily newspaper. Out‑of‑market tuning in Abbotsford accounts for 88 per cent of the market share.
10629 Comparing other radio markets, we see in terms of commercial radio: Halifax, one station for every 31,000 residents; Red Deer, one station for every 20,000 residents; Kelowna, one station for every 21,000 residents; Abbotsford, again one station, 159,000 residents.
10630 There has not been a new commercial mainstream radio station licensed in Abbotsford since 1962, the days that the Leafs were playoff contenders. The most recent licence was issued in Chilliwack in 1986.
10631 Canadian Business Magazine's most recent rankings of the "Best Places to do business in Canada" placed Abbotsford in 14th place, ahead of Toronto, Vancouver, Calgary, and Edmonton. I will quote from the article now:
"You don't have to look too far to find an incentive to pick up and move to Abbotsford,...instead of Vancouver. Indeed there are 5 million. That's the difference in the annual cost of running a 300‑employee business between the two cities. But Abbotsford has more than a cost advantage. The city's GDP growth was 3.9 per cent last year according to the Conference Board of Canada, tied for third best in the country and the number of building permits jumped nearly 16 per cent from the first half of 2006 while the unemployment rate dropped by the same amount...and small businesses take advantage of the nearly 8% growth in population from 2001 to 2006. Abbotsford was ranked fifth in a list of small business hotbeds in a 2005 BMO Financial study of 130 Canadian cities...While it's true that Abbotsford is blessed with Geography...there's more to this little gem in the valley than its proximity to other better‑known places. There's a U.S. border crossing, and a growing international airport ‑ the sixth busiest by plane traffic in Canada ‑ right in the city."
10632 And on that note I want to weave a sentimental thread that makes Abbotsford a fit for DAWG FM. Abbotsford is an aviation city. The Abbotsford Air Show ranks with the Paris Air Show as the world's major showcase of aeronautical products and aircraft. Our company's roots are in aviation and our commitment to airborne traffic is a perfect fit with this community.
10633 MR. McFAYDEN: As stated in the Canadian Business Article, and census data confirms, migration to the east of Vancouver will continue to outpace national averages. Along with that migration will come traffic congestion.
10634 The TransCanada highway through the Fraser Valley is already one of the most heavily travelled routes in the country. Yet none of the broadcasters in the area have committed the proper resources to survey the T‑Can from the air or otherwise.
10635 DAWG FM will employ an integrated multi‑media approach to traffic reports. We will provide traffic reports from a Cessna 172 based at the Abbotsford International Airport. Our traffic reports will provide critical information on area highways to help ease congestion and provide a tangible environmental benefit. Our traffic reports will run around the clock and will include airborne surveillance on weekends to cover border crossings. Currently no other radio stations in the market offer weekend airborne surveillance.
10636 Our over‑the‑air traffic reports will be supported by our propriety web‑based, real time, traffic maps to provide instant, on‑demand traffic to listeners through DAWG FM's website.
10637 MR. OLSEN: Our firm's research into the Abbotsford‑Chilliwack market focused on providing DAWG FM and the CRTC today with an objective assessment of the prospects facing a blues format in this market. As was stated at the hearing last week, our firm's reputation and the lifeblood of our business is in providing this third party objectivity.
10638 And, as in metro Vancouver, our research found a number of indicators to suggest that the DAWG format would be successful in the Abbotsford‑Chilliwack market.
10639 First and foremost, our research confirms that there is indeed room for this format on the air, with 62 per cent of the residents we surveyed unable to identify any locally played radio station that plays a blues format. By comparison, between 60 per cent and 70 per cent could recall one, two, three and possibly more than three stations that play rock, adult contemporary, top 40, and country music formats.
10640 And like their metro‑Vancouver counterparts, residents in this region of the Lower Mainland report being able to find and access blues music in a wide range of off‑air formats, including at clubs and bars, concerts, personal music collections including digital music, satellite radio, on television, and on‑line music sources other music genres, such as rock, top 40, adult contemporary, and country display somewhat higher levels of accessibility than the blues, but not at a level that is commensurate with their significantly higher on‑air representation. In other words, relative to their total overall availability, the blues appear distinctly under represented on‑air.
10641 Our research also suggest that there is a need for additional variety in the market, be it the blues or otherwise, as between one in five and one in four people surveyed strongly agreed that there is little on the radio that they like to listen to, most stations offer the same programming, and that they would listen to the radio more if they could find more programming that they liked. Chilliwack residents, in particular, expressed somewhat more agreement to the latter two sentiments than those in Abbotsford.
10642 And this is where a new format such as the blues comes in. Our survey finds a strong base of potential listeners for this format, with 19 per cent of the people surveyed answering that they would be very likely to listen to the DAWG format and a further 24 per cent answering that they would be at least somewhat likely. With a prospective core and secondary audience surpassing 40 per cent of adults, we feel very positive about this format's prospects in the Abbotsford‑Chilliwack market. We also believe that DAWG would "play nice" with existing stations, as nearly one‑half of those expressing interest in the format state that they would be likely to increase the total amount of time they spend listening to the radio.
10643 MS METCALFE: Last week you asked us, how will you be different from a rock station? We responded that DAWG FM's bark is worse than its bite. No AC/DC, no Pink Floyd, no Van Halen. In its place you might find Marvin Gaye, or Aretha Franklin or Ray Charles.
10644 Our morning and drive periods will have a rock/blues edge, to get you up for the day or give you that energy to feed the kids and get them ready for the hockey after you get home. Mid‑days will be on the softer side of the blues, more R&B, swing, some big band possibly as we try to be your office companion. Overnights, dim the lights, Venus fly trap is going to get you through the night shift by laying down the R&B groove all night long; that's right, live overnight announcers, part of our commitment to 24/7 staffing.
10645 We weren't going to play this again, It is starting to burn, but Commissioner Duncan seemed to like it and, frankly, so do we. Here's a sample of our feel.
‑‑‑ Audio presentation / présentation audio
10646 MS METCALFE: Last week you asked Tom Lavin of the Powder Blues Band, could this format be pulled off? To paraphrase his answer yes, if it was all blues, branded and promoted as such. Merely programming 10 or 20 per cent blues into a station, then adding world beat or AC or anything else would alienate your P1 listener; it would just end up being, well, a dawg's breakfast. He went on further to suggest that a station's success would depend on programming, music direction and other facets that go into making a radio business thrive.
10647 In our applications we have consulted with some of the greatest blues minds in the country, including Tom Lavin, David Hoerl, Jack DeKeyser, Holger Petersen, Al Kirkcaldy, just to name a few. The final DAWG product will be local to Abbotsford in this case as it will be with all of our markets and include input from local artists, promoters, venue owners and consultants.
10648 Local news and sports will be a priority. DAWG has already partnered with the Abbotsford Pilots hockey club of the PIJHL to provide live updates on game nights. Scores and standings from the Pacific Coast Hockey Association will be a fixture in every sportscast. The mayor, provincial and federal politicians will have weekly conversations with our morning team.
10649 DAWG FM promotions will be different. Instead of a week in Mexico on a beach, listeners will win a blues tour of Chicago, Memphis or New Orleans. Ratings promotions will see listeners whisked away on a cruise, but not just any cruise. You are going on a blues cruise, bands on every level of the ship playing late into the evening.
10650 MR. HOERL: As the founding member of the Canadian blues band, The Twisters, I cannot emphasize enough how important it is to have the blues genre broadcast and made available on FM to young and old. These days there are virtually no outlets for blues to be broadcast on AM or FM radio in this area except for the odd one‑hour special, or one day a week on a weak university or community radio station. CBC does a couple of hours every Saturday.
10651 As I mentioned last week, my band, The Twisters have been playing for approximately 12 years, recorded four albums, one of which won the Canadian Independent Music Awards "Blues Album of the Year" in 2003, and was nominated for a Juno award the same year. We were signed to NorthernBlues Music in 2006, and we have received many rave reviews and accolades from all over the world. We toured Europe last year and are set to go to Scandinavia this month. We desperately need more exposure in Canada, however, and FM radio play would certainly help in this regard.
10652 There are many clubs and festivals in the Abbotsford/Chilliwack area that I have played in the past, such as the Royal Hotel, Ernie's Piano Bar at the Empress, The Hope Blues Festival and the Harrison Hot Springs Blues Festival that have many fans and patrons who would support commercial blues radio. Just last August we were booked for an Abbotsford City Blues concert that was well advertised in the Abbotsford Post, with a full page article and various ads. I believe that this application will help address the scarcity of blues radio in the Fraser Valley and be supportive of local blues artists and this important genre of music. As Willie Dixon says, "The Blues is the roots & the rest is all fruits."
10653 Blues is a very general category of music which includes many varied musical styles as sub‑genres. Of course, everyone has heard of rock‑blues, the style made popular by the Rolling Stones, Hendrix, ZZ Top, et cetera, characterized by loud raunchy guitar. There are many other styles of blues, however, such as jump blues which employs the big horn section, and has a swing type beat to it, very popular with swing and jive dancers. In Canada, Downchild, Powder Blues and Colin James typify that style. Then there is west‑coast blues characterized by the electrified harmonica replacing the horn section, but very much still swinging and shuffling the music. The Twisters and JW Jones are exponents of this style in Canada. There is Chicago blues; Texas blues, Boogie Woogie Piano blues, soul blues/R&B. People may think that blues is one‑dimensional, you know, "The Tear in my Beer," "My Baby Left Me," "I don't have a job," cryin' and whinin' blues. On the contrary, it can be and usually is a very up‑tempo, danceable celebration of vitality and life. This station will demonstrate all the permutations and facets of good blues music.
10654 MR. TROTTIER: You have probably seen the Blues Brothers Movie, but have you ever seen the songs on the soundtrack? There are no traditional blues songs on that soundtrack. The soundtrack of this movie is full of Ray Charles, Aretha Franklin and other soul and rhythm and blues artists. Yes, it's the blues and yes, we know, you didn't realize that you were such a fan of the blues. We have been developing the blues brand for DAWG FM for an entire year, and we will continue to develop it over the next decade. We have planned focus groups prior to the launch of all our radio stations. In those sessions we will play 100 songs to our target demo to be sure that we are on the right track. At the same time, we will play different blues IDs and promos to refine our blues brand.
10655 Our format will be different from existing formats. Take Norah Jones as an example of how we can achieve the unique sound of our station. Norah Jones is an artist who crossed over from blues and became a mainstream artist. Her music doesn't play on rock stations, but she is one of the most popular artists on AC stations. We will not choose her songs based on the success that it has on the charts, but we will select the one that fits with our blues playlist like What I am to you?
10656 DAWG FM will play between 20 to 30 per cent of cat 3 blues songs, and 30 per cent rhythm and blues songs, 30 per cent of blues rock songs and finally 10 per cent of popular rock songs from category 2.
10657 MR. McFAYDEN: Our Canadian content development has been carefully structured to maximize support, growth and nurturing of some of Canada's greatest natural resources, Canadian talent and Canadian musicians.
10658 DAWG FM will provide $350,000 over seven years to Canadian content development.
10659 FACTOR will receive $15,000 annually, or $105,000 over seven years, that will go to fund blues genre artists. These funds are a substantial investment in Canadian musicians that will promote the blues and help launch careers and the music of emerging artists.
10660 Canadian Music Week will receive $15,000 annually to support the indies 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. CMW will also provide scholarships to the Tune‑Up conference for deserving Abbotsford area bands or musicians.
10661 Additional information with respect to our CCD plan is outlined in our supplementary brief.
10662 Now I will ask Ed to walk this doggy home!
10663 MR. ED TORRES: The approval of this application will accrue substantial benefits to the public and, as such, is in the best interest of the public ‑‑ we are the public's best friend.
10664 DAWG FM 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, satellite, or internet for their desired programming. It will benefit the Canadian blues industry, artists, promoters and the like and add diversity to the ownership of the Canadian broadcast system and encourage the participation of minorities and women.