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TRANSCRIPT OF PROCEEDINGS BEFORE
THE CANADIAN RADIO‑TELEVISION AND
TELECOMMUNICATIONS COMMISSION
TRANSCRIPTION DES AUDIENCES DEVANT
LE CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
Competing radio applications and other broadcasting
applications / Demandes concurrentes en radio et autres
demandes en radiodiffusion
HELD AT: TENUE À:
Provencher Room Salle Provencher
The Fort Garry Hotel The Fort Garry Hotel
222 Broadway Avenue 222, avenue Broadway
Winnipeg, Manitoba Winnipeg (Manitoba)
June 3, 2008 Le 3 juin 2008
Transcripts
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
Contents.
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Transcription
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès‑verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
Canadian Radio‑television and
Telecommunications Commission
Conseil de la radiodiffusion et des
télécommunications canadiennes
Transcript / Transcription
Competing radio applications and other broadcasting
applications / Demandes concurrentes en radio et autres
demandes en radiodiffusion
BEFORE / DEVANT:
Len Katz Chairperson / Président
Peter Menzies Commissioner / Conseiller
Marc Patrone Commissioner / Conseiller
ALSO PRESENT / AUSSI PRÉSENTS:
Cheryl Grossi Secretary / Sécretaire
Michael Craig Hearing Manager /
Gérant de l'audience
Peter McCallum Legal Counsel
Conseiller Juridique
HELD AT: TENUE À:
Provencher Room Salle Provencher
The Fort Garry Hotel The Fort Garry Hotel
222 Broadway Avenue 222, avenue Broadway
Winnipeg, Manitoba Winnipeg (Manitoba)
June 3, 2008 Le 3 juin 2008
- iv -
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PHASE I
PRESENTATION BY / PRÉSENTATION PAR:
Evanov Communications Inc. (OBCI) 5 / 27
Newcap Inc. 89 / 520
Native Communication Inc. 157 / 919
YO Radio Management Inc. 218 / 1243
PHASE II
No interventions / Aucune intervention
PHASE III
INTERVENTION BY / INTERVENTION PAR:
Jack Shapira 290 / 1722
Assembly of Manitoba Chiefs Secretariat Inc. 296 / 1745
Aboriginal Peoples Television Network 300 / 1770
Nostalgia Broadcasting Corporative Inc. 322 / 1875
PHASE IV
REPLY BY / RÉPLIQUE PAR:
YO Radio Management Inc. 337 / 1949
Native Communication Inc. 339 / 1967
Newcap Inc. 342 / 1978
Evanov Communications Inc. (OBCI) 343 / 1989
Winnipeg, Manitoba / Winnipeg (Manitoba)
‑‑‑ Upon commencing on Tuesday, June 3, 2009 at 0929 /
L'audience débute le mardi 3 juin 2008 à 0929
1 THE CHAIRPERSON: Good morning, ladies and gentlemen, and welcome to this hearing.
2 Je m'appelle Len Katz et je suis vice‑président des télécommunications au CRTC. Je présiderai cette audience en compagnie de mes collègues, Peter Menzies, conseiller, et Marc Patrone, conseiller national.
3 Joining me on the panel are my colleagues Peter Menzies, on my left, Commissioner, and Marc Patrone, National Commissioner, on my right.
4 The Commission team is assisted by Hearing Manager Michael Craig who is also Senior Radio Analyst, Peter McCallum, our senior legal counsel and Cheryl Grossi, our Hearing Secretary.
5 Please speak with Ms Grossi if you have any questions with regard to hearing procedures.
6 At this hearing we will begin by examining four applications, three of which are to operate a new English‑language FM commercial radio station in Winnipeg and, the fourth, an application to operate an English and Aboriginal‑language native Type B radio station in the same market.
7 Some applications are competing technically for the use of the same frequencies.
8 Next, the Panel will consider an application to operate an English‑language FM commercial radio station in Humboldt, Saskatchewan.
9 We will then proceed to and examine an application to renew the licence of radio station CFAR Flin Flon.
10 In August, 2004 this station's licence was renewed for a four‑year term rather than the customary seven years due to its failure to comply with the radio regulations of 1986 relating to the broadcast of Canadian content for Category 2 music.
11 This decision was also based on the station's noncompliance with its condition of licence to broadcast a minimum of 2 hours of Cree‑language programming during each broadcasting week.
12 It appears the station may have failed once again to comply with the regulations and its conditions of licence during the broadcast week of November 5 to 11, 2006. The Commission will examine the situation and expects the licensee to show cause as to why a mandatory order should not be issued at this time.
13 I will now invite the hearing secretary, Cheryl Grossi, to explain the procedures we will be following.
14 Ms Grossi.
15 THE SECRETARY: Thank you, Mr. Chairman.
16 Before beginning, I would like to go over a few housekeeping matters to ensure the proper conduct of the hearing.
17 Le service d'interprétation simultanée est disponible durant cette audience. Vous pouvez vous procurer un récepteur auprès du technicien a l'arrière de la salle. L'interprétation anglaise se trouve au canal 1, et l'interprétation française au canal 2.
18 When you are in the hearing room we would ask that you please turn off your cell phones, beepers and Blackberries, as they are an unwelcomed distraction and they cause interference on the internal communication systems used by our translators. We would appreciate your cooperation in this regard throughout the hearing.
19 We expect the hearing to take approximately two and a half days, starting today, until Thursday. Starting tomorrow, we will begin each morning at 9:00 a.m., we will take an hour for lunch and a break in the morning, and in the afternoon. We will let you know of any schedule changes as they may occur.
20 Salon A will serve as the examination room where you can examine the public files of all the applications being considered at this hearing. As indicated in the agenda, the telephone number of the examination room is 204‑946‑6535.
21 There is verbatim transcript of this hearing being taken by the court reporting sitting in the table in front of me. If you have any questions on how to obtain all or part of this transcript, please approach the court reporter during a break. Please note that a full transcript will be made available on the Commission's website shortly after the conclusion of the hearing.
22 Now, Mr. Chairman, we will now proceed with item 1, which is an application by Evanov Communications Inc. on behalf of a corporation to be incorporated for a licence to operate an English‑language FM commercial radio programming undertaking in Winnipeg.
23 The new station would operate on a frequency of 104.7 Mhz., channel 284B with an average effective radiated power of 6,500 watts, maximum effective radiated power of 10,000 watts, and an antenna height of 206.1 metres.
24 Appearing for the applicant is Bill Evanov. Please introduce your colleagues and you will then have 20 minutes to make your presentation. Thank you.
25 MR. EVANOV: Thank you very much.
26 Before we begin, previously we have appeared in front of the Commission with the Commissioner Katz and Commissioner Menzies. Today, for the first time we are meeting Commissioner Patrone, so we would like to say good morning and buongiorno.
‑‑‑ Laughter / Rires
PRESENTATION / PRÉSENTATION
27 MR. EVANOV: So officially, good morning Mr. Chairman and commissioner, my name is Bill Evanov, and I am the President of Evanov Communications Inc.
28 On my left is Ky Joseph, Vice‑President of Sales; on Ky's left is Sean Moreman, former News Director and our in‑house legal counsel; on my right is Ted Silver, Ted is former PD News Director for 292 in Montreal for 15 years, and Ted currently is PD for The Jewel in Ottawa; besides Ted is Gary Gamble, our PD and News Director for The Jewel in Newmarket; in the back row to my left and on your right is Chris Edelman, Regional Sales Manager for ECI; next to Chris is Debra McLaughlin from Strategic Inc., the author of our consumer demand and economic research; next to Debra is Mike Kilbride, our Vice‑President of Finance of ECI.
29 We are here today to present an application for a new easy listening format to serve Winnipeg.
30 Ky Joseph will begin with some facts about the market that support our choice for format. I will then walk you through how the music on our proposed station has been tailored to Winnipeg. Gary Gamble will speak to our extensive plans for spoken word and news programming and our internet strategy. Chris Edelman will then address the consumer advertiser demand and Sean Moreman will take you through our CCD initiatives. Finally, I will address why we are the best choice for this market.
31 MS JOSEPH: The initial fact that jumped off the page for us when reviewing Winnipeg was the number of major corporate radio operators active in this market. Not only are all the majors present, for the most part, they have reached their maximum FM ownership and none of them is a standalone in this market. They offer a range of formats and, despite significant duplication in music across services, cover some to some degree all major music genres.
32 The fact that struck us was, despite having all of these choices, listeners were clearly not satisfied. The decline in hours being spent with radio by residents is the clearest indication of this.
33 Beyond simply losing time spent with radio among youth, hours of tuning were lost in older demographics. Tuning among those aged 18 to 49 years, as well as 25 to 54 and 55 plus was down. And with just over 40 per cent of the population in the 40 plus age group, this results in a decline in Winnipeg overall.
34 Winnipeg is also a highly competitive radio market. Although retail sales are forecast to increase at a rate that exceeds the provincial average, it is in fact only in the last two reporting periods that Winnipeg radio services have realized double digit PBIT margins.
35 So the challenge of Winnipeg was three‑fold; identify a format that provides variety with minimal duplication of existing services, create programming that addresses a dissatisfied demographic and, because of the intense competition, find a broad enough format that can attract sufficient levels of advertisers while at the same time not disrupt Winnipeg's radio profitability.
36 MR. EVANOV: In order to determine what was possible in this market we looked at the formats currently available and did an extensive analysis of what they were playing. Clearly missing from this market was a broad‑based easy listening service. While there was smooth jazz, The Groove, many other component parts of the new easy listening format such as adult standard, soft pop, folk and international were missing.
37 Using Mediabase we also determined that the soft portion of the mainstream AC chart was the underrepresented. In fact, at the time of filing less than 50 per cent of the Mediabase chart was covered.
38 Looking at the tracks charting nationally the week of May 14 we could see the clear absence of several light or soft AC songs listed in the top 120 tracks according to BDS but absent in this market we found soft AC songs like Josh Groban's Awake, Norah Jones The Story, Anne Murray and Nelly Furtado collaboration on Daydream Believer and k.d. Lang's I Dream of Spring.
39 These songs are not a fit for the formats of the existing stations, but they are clearly popular and present an opportunity for a new entrant.
40 The format that could provide these missing music selections and genres is contemporary or the new easy listening, a format we have both the understanding and experience to operate.
41 As the Commission knows, we have three stations playing variations of this format in markets both big and small. Because the essence of the format is soft melodic music it transcends location. Listeners from a range of cultures and ethnicities and from both major urban and small markets find it appealing.
42 The sound of the station is often familiar, highly engaging, even if it is not identified as a primary service by a consumer. Because of the variety, familiarity and range, it is often listed as one of the stations listened to at some point of the week.
43 The inclusion of multiple genres and coverage of many eras means that the programming can be tailored to suit a market without losing the overall feel of the service. For example, in Ottawa we tend to play more AC and AC gold.
44 On CKDX‑FM in Newmarket we play more instrumental and international music. These programming skews are made in consideration of two important criteria; listener feedback and non‑duplication with other services.
45 In fact, one of the key elements behind our success, thus far, has been in finding music and creating formats that are both of great interest to listeners and unduplicated in the competitive landscape and we plan to create just such a service in Winnipeg.
46 Ted.
47 MR. SILVER: Our proposal for Winnipeg, while falling under the same general format descriptor as some of our other stations, that is new easy listening, will be unique to the market and unique among our services. For example, here we will play considerably less instrumental, no jazz and minimal blues.
48 In fact, our proposed breakout for the market is as follows: 65 per cent easy listening and 35 per cent soft AC.
49 The easy listening can be further defined as follows: adult standard 25 per cent with music from artists like Tony Bennett, Frank Sinatra and one of the new crooners Carly Simon.
50 Soft pop, 30 per cent; artists such as the Carpenters, Neil Diamond and Air Supply would make that up. Folk music, 5 per cent, with artists such as Winnipeg's own James Kellehan along with Joan Baez, Bruce Cockburn and others. International, 5 per cent, with artists such as Julio Iglesias, Sarah Brightman and Andrea Bocelli.
51 As mentioned earlier, a weekly review of the BDS data over the past five months has consistently pointed to a section of the AC chart that is not being played and artists that, while already represented, have portions of their catalogue that we can play without duplicating that which is in the market.
52 Borrowing from the triple A programming strategy, we will look deeper into artists catalogues and play more cuts from even recent CDs. Some softer AC services will play a single from a popular CD while we will play multiple tracks.
53 So while a classic hits station in Winnipeg may play Rod Stewart's Maggie May, we will play selections from his Great American Songbook, Volumes I through IV. Cyndi Lauper's Girls Just Want to Have Fun is also a staple of AC classic hits, however we will play selections from her tribute to American Standards.
54 Similarly, Michael Bolton's When a Man Loves a Woman would be heard in the market, but his contemporary renditions of Summer Wind and That's Life would only be heard on an easy listening service.
55 We will play AC artists that, while still recording, get very little air time. Bruce Cockburn, for example, has both a new album out and is touring. His manager will tell you he is doing this without the support of Canadian radio.
56 As mentioned earlier, Anne Murray released a duet CD last year. And yet coverage of this contemporary and current music is hard to find on radio in Canada.
57 Marc Jordan, Amy Sky, Joni Mitchell, k.d. Lang and even Susan Aglukark are talked about, but rarely heard. Not surprisingly, these artists and their catalogues test remarkably well with consumers. What is missing is a format that can incorporate both their current and classic performances. New easy listening is that format.
58 On our new service you will hear music from such musical icons as Barbara Streisand, Toni Braxton, Frank Sinatra, Celine Dion and Bette Midler. You will also hear contemporary artists such as Sarah McLaughlin, Dido, Josh Groban and Michael Bublé. While you might hear the latter on other stations, you will not necessarily hear the same selections.
59 Michael Bublé is largely known on AC services for Save the Last Dance and Home. On our service we will play his non‑charted music and rely on his voice and his unique sound to keep the listener engaged.
60 Groups such as the Bee Gees, Air Supply, ABBA, Bread and even Il Divo will be heard. Canadian easy listening artists including Serena Ryder, Molly Johnson, Matt Dusk and Lhasa de Sela will be played.
61 Our commitment to play 40 per cent Canadian content over the broadcast week will in itself distinguish us from the others in the market.
62 Now, Gary Gamble will speak to our spoken word content.
63 MR. GAMBLE: One of the opportunities that is clearly evident in this market is the provision of a new independent news voice. The consumer study indicated a demand for more local coverage. And eight out of 10 respondents reported being interested in having greater diversity in their news sources. ECI is well positioned to provide booth of these.
64 Our plans for spoken word include six hours of pure news over 84 newscasts, the highest of any applicant before you. In total, aside from announcer talk, we will provide 14.1 hours of news, surveillance and spoken word features. We expect that fully 60 per cent of our newscasts will be covering local and regional Winnipeg stories.
65 Winnipeg is culturally diverse. ECI's experience in working in small and large communities and our track record of serving the multicultural population in markets like Toronto will serve us well in Winnipeg. We will be able to bring full cultural representation to the stories that we air.
66 To accomplish this task we have six reporters and two interns in the market who will investigate and report upon what is happening in Winnipeg, providing a mature and balanced view of these local stories.
67 Having accurate, timely and comprehensive weather reports was especially important, ranking first among all programming elements. Our new station will fill this station with enhanced weather reporting in both our on‑air and website presentation.
68 Our website will be a major component in providing our listeners with information. Rather than viewing the internet as a competitor of commercial radio, we see it as an extension of our radio service featuring up‑to‑date local news stories, including school closures or urgent road closures as well as a news archive and sports scores. We will also make interviews and other features available to be downloaded.
69 As part of our commitment to new and emerging artists we will also have a dedicated page with artist biographies and information about the recording of these artist albums.
70 MR. EDELMAN: The emphasis on local news, enhanced surveillance and our choice of format was driven by consumer research. We hired Strategic Inc. to test the music we propose, assess the satisfaction with existing services and to identify programming elements that contribute to the choice of radio stations.
71 Over 600 interviews were conducted and the research revealed that the majority of persons in Winnipeg were less than satisfied with the radio choices they had. Four out of 10 agreed that radio stations sounded alike. Five our of 10 agreed that they found themselves turning to other sources to find the music they like. And only three out of 10 reported being very satisfied.
72 When asked about the music mix being proposed six out of 10 say that they were interested. When asked if they would listen six out of 10 stated that they would definitely or probably listen. Interest in the format was highest among females and correlated to age, with the oldest demographic reporting the greatest likelihood of listening.
73 Interest in this format was also evident among advisers. I came into Winnipeg to meet with advertisers personally and to get a sense of what was missing and what a station would have to offer to attract advertising dollars. As is the case with most markets where there is high concentration of ownership among the radio stations, there was interest in having more competition.
74 Secondly, interest in this demo was clearly evidence while at the same time there was a frustration at not being able to efficiently reach this group. CBC and News Radio were identified as having the best reach in this demo. The first does not carry commercial content and the second was seen as being overly expensive.
75 MR. MOREMAN: In addition to serving the interests of consumers the proposal by ECI advances the opportunities for Canadian artists and the development of content. As Bill mentioned, we will play 40 per cent Canadian content over the course of the broadcast week. We will commit 30 per cent of our Canadian content or 12 per cent of our total schedule to new and emerging artists.
76 Given the breadth of our format, we will be able to present more artists. And more artists means more tracks and more music overall.
77 In addition to meaningful airplay, our proposed station for Winnipeg will invest $1.4 million into local Canadian content development. The list of institutions we will support is detailed in our supplementary brief and we would like to highlight how truly local and diverse our proposals are. They represent both large and small organizations in the City as well as established and fledgling events.
78 We have attempted once again to ensure the broadest inclusion of cultural influences and provide funding support to the widest group of eligible recipients. Support has been given to education to through AMAF and the University of Manitoba.
79 We have allocated funding to grassroots festivals such as the Winnipeg Folk Festival, Manito Ahbee and Folklorama. We are offering support to Gay Pride and enhancing the investment in the Canadian catalogue of instrumental music, an initiative that is having terrific results and receiving rave reviews from musicians.
80 Finally, we are going to extend our capital concert program from Ottawa to Winnipeg. This concert provides an opportunity for new and emerging Canadian artists to perform in a large concert, large‑venue format alongside headlining artists.
81 In addition to the obvious exposure, opportunities that events of this size create, there is also the promotional value new and emerging artists receive through being part of the marketing campaign associated with such an event.
82 MR. EVANOV: In closing, I would like to summarize that distinguishes our proposal for this market from that of other applicants and why we feel we are the best use of the frequency.
83 First, we represent true diversity. We have no other radio or media holdings in this market, so we are a new voice. In the City where the interest from consumers and having a variety of sources of news is very high, this should be a key consideration. We offer the best diversity in terms of our music, as the chart included in your materials indicates. Our format is largely unduplicated. The music we play is not available and, among the playlists of the applicants before you, we have the lowest duplication against that which is available in the market.
84 Our plans for spoken word will expand information programming by replacing pop cultural banter with relevant and mature dialogue. And we represent both the highest commitment to news and information programming.
85 We bring a heightened sensitivity and experience in bringing cultural diversity into mainstream radio. Our music list includes international tracks and our news reports will draw on our connections with multicultural communities across Canada and abroad to fully represent and serve the cultural mosaic of the communities we serve.
86 We have the experience of successfully launching stations, competing in markets dominated by large broadcast interests that operate multiple formats. Our CCD commitments are local and demonstrate the importance we place on the celebration of our multiculturalism.
87 ECI has the highest commitment to both Canadian content and new emerging artists of all the applicants. ECI is financially very very strong, generating substantial positive cash flows over all and, as such, are sufficiently prepared to enter this market.
88 For all those reasons, we feel we are the applicant to be licensed in this market. We thank you for the opportunity for presenting our application to you. My team and I would be happy to answer your questions.
89 THE CHAIRPERSON: Thank you very much.
90 I have a couple of questions initially, and my colleagues may have some as well.
91 I am going to start with your submission this morning. On page 3, near the bottom, you talk about dissatisfied demographics, that your research has shown that notwithstanding all the radio broadcasting in this market that consumers and listeners are dissatisfied.
92 Can you expand upon that and elaborate on where you found this research and how you went about getting it?
93 MR. EVANOV: Yes. First, we have noticed a decline in listenership in the Winnipeg market over the last couple of BBMs. And because of that, and we analyzed that, then we asked Debra, our researcher, to really look into it. And I think I will ask her to really respond to the question.
94 MS MCLAUGHLIN: Thank you, Bill.
95 There are two bases for our conclusion. The obvious one up front is that if you look at what is happening in terms of the average hours per capita in this market you will see that there is a decline. It is not over one survey, it has been a continuing decline.
96 When we filed the research the 12 plus all persons average hours per capita indexed at 97, so it was less than it was in fall 2004. In the spring we checked again, obviously this was available post this filing, and the index had dropped to 89.
97 In terms of real hours, in fall 2007 there had been a loss of approximately .6 hours per week per population. By spring that had changed to a two‑hour loss per person, so that is fairly significant.
98 We looked at it across the demographics and what we noted was, certainly among the older ones who tend to spend more time with radio, by comparison in 1994 teens spent 8.5 hours, adults 35‑64 spent 20.2.
99 So the largest group of people, both in terms of the population and in terms of the time they spent with radio, were indexing very low. So that gave us concern or reason to believe that there was some sort of disconnect going on between the population and the radio services they had.
100 We went into the market through a standard customer research or consumer research peace and we asked satisfaction questions. So we asked them how they felt about radio, did they think radio sounded alike, could they distinguish it? We found that significant numbers thought all radio sounded alike.
101 We asked them if they had to go to other sources in terms of finding the music they liked. Again, significant numbers found that they had to go to other sources.
102 And then we asked them, after this battery of questions, if they could describe their satisfaction with radio. Only three out of 10 said they were very satisfied, and that's a very low score. It isn't saying that radio isn't satisfying some people, but in terms of meeting all of their needs, the conclusion would have to be that they're not.
103 So coupled with the actual tuning behaviour as reported by BBM and our own further investigation we concluded that there was an opportunity.
104 THE CHAIRPERSON: Okay, so if we accept that and then move forward on page 4 where you talk about clearly what is missing in the market is a broad‑based easy listening service. And then you go on to identify certain genres I guess; light or soft AC songs, and you listed a bunch of songs. And then you say toward the end of page 4:
"These songs are not a fit for the format of the existing stations, but are clearly popular and present an opportunity for a new entrant." (As Read)
105 If they are popular, wouldn't that be one of the reasons why the existing formats are looking at this type of music as well?
106 MS MCLAUGHLIN: Maybe it would help if I just explained the sources of that data, because that may be the confusion.
107 In order to determine what isn't being played in the market we took BDS and Mediabase, both of those are syndicated services that record all of the music being played in the market based on playlists submitted by the stations. They also create, based on national performance, a list of the top‑charting music.
108 So one of the ways to look at a market is to take those nationally charting songs and compare it to the list of the songs being played by the stations in the market. And we can see what nationally is popular and then we can extract from the list of all the songs being played in the market those that are being duplicated on the chart, which leaves you a list of songs that do not get played.
109 And what we found when we ended up with this list of songs, that there was a group of songs that could all be classed into soft AC. And Mr. Silver is probably better able to explain how those get classified.
110 But, in fact, there was a whole list of songs that a programmer could find a common thread in that would be available on a new easy listening station, but clearly had been decided by the programmers in this market not to be put on their stations. Therefore, our conclusion was that they felt it didn't fit their format. So it is popular nationally, not available in Winnipeg.
111 MR. SILVER: If I can just elaborate a little bit on that.
112 In the AC market here you have a couple of stations that more or less play to that area, and each station has to make its own decision as to what its sound is going to be.
113 The mainstream AC station in the Winnipeg Market is CKY, it is a typical mainstream adult contemporary radio station and, if you look at its playlist, it is representative of what you will see pretty well across the country in terms of that style.
114 So they are making decisions. They can't play all the records, for one, and they are making decisions as to where they want to be.
115 The evolution of AC, certainly over the last five to 10 years has been to a slightly more upbeat pop, contemporaries, light rock sound. And these artists that we mention here that, although they appear on the AC charts, don't appear on the radio in Winnipeg, represent more the softer side that the local stations have chosen not to play, because their sounds are slightly more edgy.
116 So that would explain why these ‑‑ they may be popular artists and popular songs, but that would be the reason why they are not being played here.
117 THE CHAIRPERSON: Okay. So CKY is one of those stations here that are offering a form of light music. Would you say that CFWM and CFZZ and CFRW also play some form of light music format?
118 MR. SILVER: Very different. Perhaps light by definition, as opposed to a rock station. CJZZ, which was actually the Groove, I believe it is CJGV now, it is a smooth jazz, instrumental based, very soft, but really very different to what a mainstream AC would be. It really is much softer, much more relaxed and a little bit farther off the beaten path in terms of being the core of what AC is.
119 The other one was I think CFWM, which is Bob, that is one of those classic hits pop rock stations that is a lot more edgy than a mainstream AC station would be. It is sort of in the middle between adult contemporary and rock usually, depending on the market and where you are.
120 The other one I believe was an oldies station, an AM oldies station, which is centred on 1960s rock oldies, Rolling Stones, Beatles, Mitch Ryder & The Detroit Wheels and that sort of thing.
121 Very different sounds relative to what AC is here in this market in CKY and what we are proposing.
122 THE CHAIRPERSON: What age group are you targeting, what is your median age group?
123 MR. EVANOV: Our median age group would be 53. And if you take a station as the one mentioned, CKY, their median age is 43. And our target demo would be 45 plus with the core demo being 55‑64.
124 THE CHAIRPERSON: So you are looking at 55 to 64 ‑‑
125 MR. EVANOV: As the core, but overall 45 plus. Whereas CKY, as we have mentioned, the median age is 43, so they are definitely programming younger and much more edgier.
126 MR. SILVER: And their core would be 35‑44 female.
127 MR. EVANOV: Yeah.
128 THE CHAIRPERSON: Okay. Let me move onto getting a better appreciation for the 126 hours of primetime programming a week. I am trying to understand how the hours all add up I guess.
129 You have identified 100 hours of local programming, including I think it is 18.3 hours of spoken word in your application. Can you sort of fill in the gaps there as to how we go from those numbers to 126 hours of prime hour listening?
130 MR. EVANOV: Yes. Well, we start with the spoken word component and, as you mentioned, it is 18.3 hours. The balance is basically made up with a format which is an easy listening format.
131 And even of that, that breaks down to 65 per cent would be easy listening, which would be adult standards, soft pop, show tunes, folk and the other 35 per cent would be a very light soft AC that is not played in the market by the other radio stations. That is the music component.
132 If we go back to the adult standards, the adult standards would rotate on the basis of perhaps three or four per hour, but you have got a combination of two types of adult standards; one is the legends, whether it be Sinatra or Tony Bennett, and the other one whether it be Melissa Manchester or Rod Stewart or Barry Manilow also singing, you know, the music of Gershwin, Sammy Cahn, Jimmy Van Heusen.
133 So the music is the difference that makes up the balance.
134 THE CHAIRPERSON: I guess what I am looking for is if there is 100 hours of local programming, as per your application, there is 26 hours ‑‑ if I take 18 hours, times seven days you get 126 hours ‑‑ there is still 26 hours there of I guess what would be ‑‑
135 MR. EVANOV: Oh, okay.
136 THE CHAIRPERSON: ‑‑ non‑local programming, if I can call it that ‑‑
137 MR. EVANOV: No.
138 THE CHAIRPERSON: ‑‑ is local?
139 MR. EVANOV: Okay, all the programming is local. There is 126 hours in the week, of which we said we will do a minimum of 100 hours per week of local. We left the 26 hours more or less open in case ‑‑ you know, seven years is a long time in the life of a licence and certain challenges could come up from competition in the market or great opportunities could come up.
140 And I guess what we wanted was the flexibility, that should something maybe in year five or year six come up, that we don't have to go back to the Commission, that we have said that we will do a minimum of 100 hours of local. As it is with all our stations now, even in the past when we have said we will do a minimum of 100 hours local, the fact is we have been doing 126 hours of pure local on all our stations.
141 So it is more than likely we will do 126 hours, and we are saying about a minimum of 100 hours. And it is only for flexibility purposes.
142 THE CHAIRPERSON: Okay. You also have a component of live‑to‑air I would imagine?
143 MR. EVANOV: Yes.
144 THE CHAIRPERSON: Can you expand upon what will be live‑to‑air and what will not be?
145 MR. EVANOV: Okay. The full day, from 6:00 in the morning until 9:00 at night, we will be with live announcers. We have set aside the evening program to do some voice tracking, which is limited voice tracking in terms of the schedule and also not at primetime.
146 Probably a number of reasons for this in terms of strategy of a radio station. But one of the reasons is we work with a lot of interns and we bring a lot of co‑op students in and we mentor students. And this is probably where we train them to be broadcasters. We don't put them on the air live, but we work with them and we teach them how to do a break or a cut‑in or to announce. It is pre‑recorded, they listen to it, once or twice they redo it, redo it, then we put it in as a voice track.
147 Whereas if you are a station in a major market you can't take the chance of putting ‑‑ let's say someone from the broadcast school just live and cold, I think it is unfair to them, so it is a perfect way of training them. So we have kept that option open for voice tracking so that when we do have co‑op students we can, on a rotational basis, teach them how to announce, to record, to do the voice tracks. And this is at night time.
148 THE CHAIRPERSON: This would be the 9:00 to 12:00 slot at night?
149 MR. EVANOV: The 9:00 to 12:00 slot at night.
150 THE CHAIRPERSON: Okay, thank you.
151 You have identified amongst your CCD plans an outreach program. Can you expand upon the outreach program as to how it would be managed, what would be included and how you believe it would qualify under our new policy as well?
152 MR. EVANOV: Okay, what I will do is ask Sean Moreman, who is the author of our CCD, to comment on that.
153 MR. MOREMAN: Commissioner Katz, I believe you are speaking about the outreach program associated with the Folk Festival, is that correct?
154 THE CHAIRPERSON: Yes, I guess, among others.
155 MR. MOREMAN: I mean, there are several ways that we have outreach programs associated to our CCD, I just wanted to know which one specifically you are talking about.
156 THE CHAIRPERSON: Well, we have got a new radio policy I guess, and the issue here is there is an outreach program you propose I guess as part of the catalogue of instrumental music, among other things, the Folklorama.
157 And the way our new policy reads, there must be clear directive finishers and must be allocated to support, promote training and develop Canadian musical and spoken word talent, including journalists.
158 So I just want to get a better understanding as to how your proposal for the outreach program will meet those obligations and criteria.
159 MR. MOREMAN: You mentioned in there the Folk Festival as well as the catalogue. Let met start with the catalogue. Let me start with the catalogue.
160 The catalogue is, as you know, an initiative that we started with our Ottawa station. Its purpose is to promote instrumental music to both radio programmers as well as the film and television industry.
161 Mr. Silver mentioned actually in the Owen Sound hearings that instrumental music is often a bit of a cottage country industry with people recording in their basements and not getting a lot of radio airplay. So they don't have the exposure to programmers or other industries that would like to source instrumental music.
162 What the catalogue does is it gives them that meeting place where they can put up their music, sample their music, and the people who want to source it out can go and visit, find out the type of music they want and setup a meeting between themselves.
163 What the catalogue has been already quite successful in doing is getting a lot of artists to be included on the catalogue and there has been quite a bit of interest expressed from both radio and other media in the catalogue and it has been used for that purpose.
164 Where it stands right now, several of independent production companies are putting samples onto the website so that it can be heard on the internet.
165 However, you wouldn't be able to find that right now by going and accessing the website, because two aspects of it are still in beta testing. Firstly, there is the artist uploading from their PC and then there is also consumer testing about how well it will work and how well it will be accessed. So we are still in testing on that, but it is happening.
166 THE CHAIRPERSON: Is there a timeframe for when the tests will be completed and it will actually be launched?
167 MR. MOREMAN: I believe Debra would be able to answer that question, as she is our contact with that.
168 MS MCLAUGHLIN: Yes. Right now, there is a panel of users. As you can appreciate, there has been a group of people who come in and used it a great deal, artists who have discovered in uploading it. So the panel has been created and they are feeding back. We think within a month both the upload feature and the actual consumer end listening.
169 What has happened is people ‑‑ it was ready to go, but it was setup so people could put samples up one at a time and these production companies want to dump 20 samples at a time, which is a different kind of system you have to set up to incorporate that sort of mass transfer of data.
170 So that is what has caused the delays, but we are hoping within a month it will be up.
171 THE CHAIRPERSON: Okay.
172 MR. MOREMAN: So carrying on, the people who have contributed to the catalogue, we have the full list of AMIA, the B.C. and Manitoba Music Association will be placing their links on the website soon, and CCIM. The catalogue will also be making a pitch to the Alberta and B.C. groups at artist development seminars which are hosted by those organizations.
173 We have received a number of accolades from artists who have used the catalogue and have received contacts from both radio programmers and the film industry, such as James Cohen, Paul Blissett and established artists such as Canada Brass.
174 We have also been able to establish links with other similar cataloguing services in the United States, such as NewMusicLabel.com, which profile and upload music of artists down there.
175 And the catalogue has been promoted on the Ottawa contribution dollar at events such as POPCOM in Berlin. The Department of Heritage took the catalogue with it on a trade junket to Japan and they just presented in the United Kingdom.
176 More locally, at the Toronto International Film Festival there was also a booth set up by the catalogue, so that the film and television industries could find out about the catalogue and start to source materials there.
177 And it's our understanding that Canada Brass has, in fact, received a contact from someone in the film industry through the Toronto International Film Festival.
178 So, all of that to get specifically to your question, what we're contributing now. All of what I've just talked about is on the Ottawa media dollar.
179 What we hope to do is to improve the services, improve the promotion of the catalogue at going forward.
180 One of the plans is to make it a bilingual website, right now it's in English only. Recognizing that, you know, we do live in a bilingual country, that is one of our objectives and that is somewhere where the money that will be contributed will definitely go.
181 But we feel that evidence has shown that it is a worthwhile endeavour, that there are instrumental artists who are seeing the benefits of the catalogue, however, everything, you know, every new endeavour takes time to set up, the process is rather slow and won't happen overnight.
182 We're just starting to see the benefits now and we feel that it's a legitimate and worthwhile effort to allow it to carry forward in order to improve.
183 THE CHAIRPERSON: And you are confident that it fits within our new policy?
184 MR. MOREMAN: Most definitely. The policy requires the promotion of local Canadian talent.
185 That's exactly what the catalogue does. It's a world wide medium that each of those artists can promote his or her works to the world by taking it to places like Japan, Pop Common, Germany, the United Kingdom and events in Canada.
186 That is nothing but promotion of Canadian talent.
187 Carrying on to the other aspects of the outreach program as you call it, from a pure policy point of view, we feel that all of our initiatives do qualify. All the fees will be paid to Canadian talent directly. Each of the initiatives has indicated that none of the monies will be used for administrative fees or to pay past liabilities.
188 THE CHAIRPERSON: Can I assume that the back end of your presentation this morning speaks to a playlist in part or in total?
189 One of the things that we would like to see is a playlist from you. I don't think you filed one with your application.
190 MR. EVANOV: We thought we had filed one. We didn't attach one today to the speech, but we will following ‑‑
191 THE CHAIRPERSON: Could you ‑‑
192 MR. EVANOV: We will submit one to the secretary.
193 THE CHAIRPERSON: If you feel you have, perhaps at the break you can check with staff and just clarify that.
194 MR. EVANOV: I will and if they haven't been, we will provide that.
195 THE CHAIRPERSON: Thank you.
‑‑‑ Laughter / Rires
196 THE CHAIRPERSON: Perhaps we can spend a bit of time talking about your audience projections and your share of market and how you went about coming up with these.
197 Maybe it's just my statistical background, but when I look at your seven‑year share of market it literally goes up the same amount every year over seven years to get to doubling from year one to year seven, I guess.
198 MR. EVANOV: Yes.
199 THE CHAIRPERSON: Is that just my math or there was some art behind that science?
200 MR. EVANOV: There's some pretty good art behind the science. And I think I'll ask Debra to first comment on it and then we'll go to Ky Joseph who's our Vice‑President of Sales.
201 So, Debra who did the research, perhaps you can talk about the share.
202 MS McLAUGHLIN: I will speak to audience share and how that's developed. How it translates into the revenue spread sheet, Ms Joseph will deal with.
203 When we go into the market and ask respondents to our survey their degree of interest in this service, we ask them ‑‑ they have five options: definitely listen, probably listen, probably not listen, definitely not listen and no answer.
204 We take each one of those responses by demographic and project out a likely amount of people in the population.
205 So, for example, if 10 per cent of the people said they would definitely listen, we would apply to ‑‑ and the demographic in which the 10 per cent was reported and then we would discount it. You obviously discount less for definitely listen and more for probably listen. So, we have a higher discount level.
206 These discounts are applied. They are added up to create a reach figure by demographic. We do that for each gender and each demographic, we add it up, and what we get is a reach per cent for the market and that we have reported.
207 We then go back and look again by each demographic and gender and age based at the average hours tuned in the market and to this type of format where it exists, and then we create a relationship between the hours spent in this market with this potential format based on the tuning to a similarly formatted station in another market.
208 That allows us to project the total hours tuned. From that we simply divide it by a projected total hours for the market at the time of launch and we get a share figure.
209 Now, that share figure is considered to be a mature share, which is not to say that it can't grow after that.
210 Obviously when you enter a market you are not going to get your mature share, you have to build your brand, you have to get the information out to consumers. So, we discount that mature share to represent the first year and then we grow it.
211 Again, the growth rate on the audience share is based on experience within that format, that demographic and we look to other markets and, fortunately, in this format we can look to Canadian markets.
212 So, for example, the share estimate in this case was ‑‑ the mature share was discounted to being only 60 per cent in year one. That was predicated on two understandings.
213 First of all, that this demographic, the 45 plus, are not necessarily early adopters or adopters, so they're not going to leap into this format if they are listening to other stations in the market.
214 But there is a group of listeners who are so disenfranchised, who have simply tuned out, that we think we can get right away.
215 So, we've taken that mature share and estimated year one share to be only 60 per cent.
216 We have estimated a significant growth in year two, a slightly declining growth in year three and then very minimal growth years four through seven.
217 Now, that's how we got to the audience share.
218 And then I give it to Ms Joseph who uses her experience in sales to say this is how it's going to translate into dollars, and I'll give it to her to answer that.
219 MS JOSEPH: Thank you, Debra.
220 If you notice in our sales expenses, ours as compared to all of the applicants is the highest. We incorporate the highest commissions of all broadcasters to develop new business. As a matter of fact it's a strategy of being stand‑alone in every market that we serve.
221 To that point we train our sales reps to specifically locate the categories that fit the audience demographic and then we dig deep locally to find whatever business we possibly can to get them all on the station.
222 Our sales reps' budgets are ‑‑ we've got ‑‑ basically we've got a formula that includes a standard budget and a new business development budget and all bonuses and commissions are linked to both.
223 So, what I'm trying to say is that from a ‑‑ you know, as you had mentioned that the increase year over year has not decreased, like in year four for example like Newcap's has, and the reason for that is because of our template that we use from a direct local sales point of view.
224 We're going to have to come into this market and develop the local market and we've already seen national advertisers respond to the economic shift of the older demographics.
225 A perfect example of that would be, you know, five years ago Additionelle, for example, who targeted a mature female, they bought 25‑54, they're now buying the 35‑64 female specifically because they're realizing that they have to be more niche in their approach to target those specific consumers.
226 And in 2013 baby boomers will be over 50 per cent ‑‑ will be over 50, excuse me, and they will represent 55 per cent of all discretionary income.
227 And we're noticing that ‑‑ actually there's, you know, there's a million reports that you can find, research reports that indicate that it's actually the baby boomers themselves, in some cases, that are responding to starting up their new businesses.
228 And it is forecasted that they will be successful because one, they understand the needs of, you know, of the baby boomer because they're baby boomers themselves; and, two, they are people who have a lot of experience, they're executive that are perhaps in their third career at this stage in their life, but they realize that there's a real business opportunity.
229 And we're seeing that more and more and there's a lot of research to prove that.
230 THE CHAIRPERSON: What do you forecast the annual growth in radio advertising revenue to be over the next seven years, roughly?
231 MS JOSEPH: Well, we forecasted roughly three per cent would be the market growth.
232 THE CHAIRPERSON: Year over year?
233 MS JOSEPH: Year over year.
234 THE CHAIRPERSON: Okay. And what impact would your entry have on the existing incumbents in the marketplace?
235 I think I read somewhere 35 per cent is where you'd, I guess, borrow from their revenue sales and the rest will be incremental?
236 MS JOSEPH: Well, there were two factors that we looked at. First, obviously, was the research. When trying to determine impact, you would identify the respondents that indicated that would probably or most likely listen to the station and of those 60 per cent, they said currently that their favourite radio station ‑‑ really it's a cross‑section of over 10 stations in the market with no one specifically standing out.
237 As a matter of fact, No. 1 was CJOB, but when we went out into the market ‑‑ and Chris Edelman can speak a little bit about this ‑‑ when we went into the market and talked to advertisers we got several stations that they're either currently advertising on or have advertised and, for one reason or another, they didn't get a response.
238 The response from those advertisers was very favourable to the station that we would bring to this market.
239 You'll notice also on page 20 in our impact survey that No. 2 was other, and other means that respondents couldn't name a specific radio station.
240 So, we've also ‑‑ in our research we've also realized that, you know, of the out‑of‑town, there's 10 per cent tuning out‑of‑market and we believe that based on drops in hours tuned and tuning out‑of‑market that we will be able to repatriate those listeners and, therefore, we believe that it wouldn't be so significant over all of those stations.
241 I mean, we're talking about $625,000, it represents about a per cent and a half of all radio revenue. With the growth, we believe that it will be absorbed by the growth.
242 And, again, you know, we're looking to bring a station to the market that is not currently here and there is a real need from advertisers as I would like perhaps Chris Edelman to tell you a little bit about, what we found on the streets.
243 MR. EDELMAN: Thanks, Ky.
244 Yeah, so going back to that 35 per cent of local radio stations based ‑‑ and, as I mentioned earlier on before, you know, I've been in Winnipeg making relationships with advertisers and retailers in the area, and based on my conversations with advertisers, there was a real cross‑section that came up.
245 So, our 35 per cent would not come from one particular service, but from six to 10. I mean, I heard every radio station under the sun mentioned as being used occasionally, maybe, sometimes, even this year, not next year, et cetera.
246 And as Ky also pointed out, that this 35 per cent represents a mere 1.5 per cent of the total Winnipeg radio market.
247 So, it's really insignificant in the big picture things.
248 Now, specifically, I'll share with you a couple of stories that I came across with dealing with particular people that do make these decisions in the marketplace.
249 One being David from David Hoffman Optical. He targets ‑‑ when I asked him if he would place a value on the baby boomer generation he described that the baby boomer generation is a very important segment to his business.
250 He uses newspapers and tries to reach this group with occasionally using CJOB but finds it too expensive. So, he usually keeps his dollars to the Sun and the community newspaper.
251 So, that might be an example of how we might impact one service, but it's very marginal and very minimal, most of his dollars are going into newspaper and community newspaper.
252 He said that if affordable he would allocate a much larger percentage of his media dollars, so away from print, into radio stations that targeted specifically the baby boomer generation.
253 Now, there's a few other interesting stories that I came across that I'd like to share with you.
254 I spoke with Audra Lazoski(ph) who works for McKim, Kriegan, George(ph), previously known as McKim Communications. She's a media planner and represents a whole bunch of clients within the area. To name a few, Manitoba Hydro, Warehouse I, Polo Park Shopping Centre, the Blue Bombers.
255 And sometimes her plans include radio and sometimes they don't. She was very engaged in our conversation about a possible new radio station that would specifically target the baby boomer generation.
256 I can quote her by saying, and she said that she might be listening here today, that:
"A radio station that targeted the baby boomer would open up a world of option for her clients. It would give her the justification to increase her clients' budgets." (As read)
257 MR. EDELMAN: The first client that came to her mind immediately was the Lottery Casinos of Winnipeg.
258 Currently she recommends doing loyalty programs using print and direct mail and newspaper, radio has never been a part of the equation.
259 If your service were to be available, she would one hundred per cent include us in her plans.
260 So, after canvassing the area and speaking with the retailers, the evidence was clear, there's a true demand for something that specifically and cost effectively targets the baby boomer generation.
261 THE CHAIRPERSON: And I don't want to put words in your mouth, am I to assume that you're saying that out of all the radio stations in the greater Winnipeg area, all 19, 20 or whatever, there are none that target the baby boomers right now?
262 MR. EDELMAN: Yeah. Okay. I'm not saying that there are ‑‑ if I look at a BBM ranking on, you know, 45 plus demographic on a wide base, what we're speaking to today, CJOB does do a good job at delivering them. The question in the mind of retailers is, do they get it cost effectively.
263 CJOB over all adults 12 plus is the No. 1 radio station in the market. There's a premium to be paid to be associated with that service.
264 So, when we're coming in as an entry specific to the baby boomer or 40 plus demographic, we come in and be much more cost effective to reach their target audience.
265 Does that clarify it?
266 THE CHAIRPERSON: What you're telling me is the advertisers will look at the audience, but then also look at price and will opt for a lower price if they can get the reach at a lower price.
267 MR. EDELMAN: Yeah, it's a measure of efficiency. So, with their dollar there's a higher likelihood that every investment, or everything that they put into advertising will in large part go to their target demographic.
268 So, it's a much more efficient buy at this point.
269 THE CHAIRPERSON: So, how sensitive is your business plan to the notion that if you were licensed and CJOB did see some erosion of their advertising revenue because of the efficiency of the model, the cost price, that they'd lower their price of advertising and impact your business?
270 MS JOSEPH: I think I can answer that question.
271 With ‑‑ just speaking about CJOB specifically, their efficiencies really lie in the younger end of the 45 demographic, where ours, our core demographic is 55 to 64.
272 You do need the broad range in order to bring in the revenue and to make the business plan, but it's unlike ‑‑ I can only say that it's unlikely that that would happen, that they would decrease their rates and, if they did, it really wouldn't impact our business plan whatsoever because ‑‑ because the impact is not sufficient on that station.
273 We're going to be ‑‑ as I mentioned, 65 per cent of our revenue is coming from completely new dollars to radio and that is the strength of our company, quite frankly, is to bring in local revenue.
274 THE CHAIRPERSON: Where does the 35 per cent of other media come from, is that newspaper?
275 MS JOSEPH: It comes from a cross‑section of media and, again, because Chris Edelman was the one who did the street level demand study, I'll ask him to speak on that.
276 MR. EDELMAN: Okay. So, the 35 per cent as outlined coming from other media is, in our estimations, comprised of print, flyers, direct mail, outdoor media and TV.
277 Now, I guess I'm at a huge bias to say so, but radio in my opinion is the most cost‑effective media option to speak to a targeted demographic.
278 We teach this to retailers and get them to expand or take money from other media and place it into radio.
279 Now, also Winnipeg which is considered to be a mature or full market, we need to plan on taking money out of other media in order to realize our revenue goals.
280 Direct mail or flyers are very expensive and do not target specific demos. And newspapers are simply not a part of everyday life of people as they used to be.
281 So, I would see us making a dent into the Winnipeg Free Press and the Sun specifically as the majority of the other media dollars.
282 THE CHAIRPERSON: Okay.
283 MR. EVANOV: The only thing I would like to add, if I could. If you take our Newmarket station, and we've analyzed it, it's just a very strong local sell, but 70 per cent of the clients that advertise on that radio station are brand new radio. They've never been on radio before, never spent their money on radio and we brought them into radio.
284 THE CHAIRPERSON: Can you spend a few minutes providing us with an understanding of how correlated your business plan is with your format?
285 Is there a correlation there at all? I mean, obviously it's audience, tied to audiences, but if your format changed tomorrow and you had the same level of audience, how would that impact your business plan?
286 MS JOSEPH: Well, from a revenue standpoint, you'll see that 20 per cent of our revenue comes from national business. National business is really the only thing that advertisers look at in terms of sheer numbers.
287 But even in our projections for national, we factor in national business that might not be traditionally considered national, and I know that sounds a little convoluted, but I'll try and explain.
288 Our experience with national advertisers and new business development opportunities, like we realize there's a real opportunity there for direct response business. We have been able to fish in the U.S. for businesses that spend upwards of $600,000 on our stations.
289 They're national, they've actually ‑‑ we brought them in most cases to Toronto first and it spilled over on all of our stations that we've got, Halifax and Ottawa, Newmarket as well and even Hawkesbury.
290 So, they're a national advertiser that are now spending across the board, across Canada. They would include products like Hero Tabs, which is a male enhancement product, perfect for this demographic; Zanarax, Intimax and they spend a heck of a lot of money in radio. They didn't before.
291 This is the kind of thing I'm talking about, when you really push your sales team to develop new business, they go in and they develop it.
292 So, it's national but technically it's not national from an advertising agency point of view.
293 So, aside from that we, again, focus on local business. The beautiful thing about local business is, I mean there are pros and cons, but the beauty is that it's not really tied to a ‑‑ it's not tied to a cost point, it's not even tied to an audience share.
294 What they're looking for is a return on their investment and if we can bring the audiences, and we've shown with all of our stations that play the same type of music, that the hours tuned are significantly high. So, for that reason our advertisers are getting responses and we're seeing re‑bookings for, you know, two, three, four years on our stations because of that.
295 So, if we don't get the audience share, per se, the business will still be developed. We stand strong with that claim because we've been able to do that.
296 THE CHAIRPERSON: But there is a very high correlation between your target audience, the genre, the format you're playing and the advertisers that actually advertise on your station.
297 MS JOSEPH: Yeah.
298 THE CHAIRPERSON: You won't get people in the, I don't know, 55 to 64 age group looking at Vesta Motor Bikes.
299 MS JOSEPH: That's correct. You're correct.
300 THE CHAIRPERSON: Okay.
301 MR. EVANOV: But there is a whole a market. They will look at Mercedes and Jags and everything else.
302 MS McLAUGHLIN: Commissioner Katz, I might just be able to clear this up, because when we go into the market to do research, we don't just research one format.
303 So, I think the question that ‑‑ or the answer that might help you understand the possibilities for a new entrant in this market lies in the fact that we look in other areas to see if there were other opportunities.
304 Ultimately having examined tuning losses across several demographics, looking at what the playlists were currently in the market, the conclusion was that this filled that hole that existed.
305 Respecting the three issues, the three challenges that Ky identified in the outset of the presentation, that being the fact that the market isn't particularly as robust as others that the Commission has looked at recently and, again, probably will look at this week.
306 It is a profitable market, it is not the most profitable market, it has had some challenges, it is in a growth phase, but how long that lasts we don't know.
307 So, you want to get a format that's going to have a solid base in terms of being able to develop a business plan, serve an under served demographic and not duplicate and cause unnecessary impact against the other stations.
308 Having said that, this was the ideal format, but there were other demographics where the tuning had declined, there were other opportunities, they just weren't, given the competitive balance in the market, going to have as little impact as this one.
309 So, could the format shift, and could they achieve shares of similar levels and find an advertising base? The answer is yes.
310 THE CHAIRPERSON: Those are my questions.
311 Commissioner Menzies.
312 COMMISSIONER MENZIES: Maybe just to follow up on that, Ms Joseph, could you help me understand a bit about how you would train the market ‑‑ the advertisers to be attracted to this 55 to 64‑year‑old age group, given that, traditionally, that is not an age group that is considered to be attractive to advertisers?
313 MS JOSEPH: It is actually not that it's not attractive to advertisers, it is attractive to advertisers.
314 Whenever we come into a market, we research the market from a street‑level advertiser demand point of view, and the demand is very strong here to target consumers 45‑plus in this marketplace. So it is, in fact, there.
315 Another thing that we would look at, of course, is the baby boomer generation. We have seen it already. The shift has been very, very slow, but even from a national advertiser point of view, advertising dollars are now streaming upwards because these advertisers realize that there is a heck of a lot of money there.
316 There is a really interesting research piece that I found in Reuters Life! from Toronto. It was the Canadian Newspaper Association that commissioned this poll through Ipsos Reid.
"The baby boomer generation, once the dominant influence on everything from fashion to haircuts to music, is getting older and feeling increasingly ignored by advertisers, even though boomers have money and are willing to spend it."
317 What has happened through this research is that we know that, in many cases, it's the baby boomers themselves who are getting inheritances. There are trillions of dollars that the baby boomer generation will get from inheritances, not to mention their own wealth.
318 The saying is true, "Sixty is the new fifty," and people are working well into what would be considered retirement age.
319 Maybe not you, by the look on your face ‑‑
‑‑‑ Laughter / Rires
320 MS JOSEPH: ‑‑ but it is a fact.
321 So these very clever, very smart executives and business people are going into business to respond to the economic shift.
322 There are, like I said, thousands of research pieces that you can find, even on Google ‑‑
323 COMMISSIONER MENZIES: I wasn't disagreeing with that, I was more trying to get to ‑‑
324 What you said at the beginning was that there is no need to re‑train advertisers.
325 MS JOSEPH: No.
326 COMMISSIONER MENZIES: But we constantly get this 25 to 54 ‑‑ 25 to 54 is the market that is the most attractive to advertisers.
327 MS JOSEPH: It would be easier to have a station that is 25 to 54, there is no doubt about that, but our company has never gone for easier.
328 We have proven that there are a lot of advertising dollars ‑‑ local dollars ‑‑ that no other radio stations go after, from the younger end to the older end, and we have found that there is a real market there, and we fish there and we get the money.
329 It's not training the advertisers, it's training our sales people to go out there and get the dollars. The advertisers are already there. They have told us that.
330 COMMISSIONER MENZIES: This touches a little bit on Commissioner Katz' question. If it is such a good idea, and there is demand by advertisers wanting this demographic, it kind of makes you wonder why nobody else is doing it. But more important is, what if you convince us that it's really a good idea, but you also convince competitors currently in the marketplace that it's a really good idea, and somebody shifts, or more than one person shifts format and starts to fish in your pond?
331 Do you have the flexibility to adjust to that?
332 MS JOSEPH: Absolutely, and I am saying that from experience, because we have been faced with that same situation in Toronto, with CIDC, with our station there. Not one, not two, but four stations flipped format to try to compete against us because they realized that there was an opportunity there, and then they flipped again.
333 We are still there, and we are very, very strong in terms of audience share.
334 MR. EVANOV: If I may add, if we are licensed and we begin the process, we will be entrenched, and once you are entrenched you are a little tougher to knock off.
335 Right now most people still have their eyes going down the middle, where the big money still is. They feel that it's easier, but there are, maybe, a dozen people going down the middle, and we thought that we would go for the upper end. There is probably just as much money there.
336 And slowly, as the whole market moves, down the road I can see what you are saying happening, to a degree. Some people may say: Let's go after the older market now, because they are the majority of the market.
337 But by then we will be solidly entrenched, and we are a good operator, and we have no fear of competition in the market.
338 COMMISSIONER MENZIES: Okay. Thanks.
339 How many additional licences do you think this market can bear, and how many did you assume in your business plan?
340 MR. EVANOV: The other three applicants are targeting much younger than what we are targeting, so we don't see running into them on the streets very often, or running after the same advertisers.
341 I guess we assume that you will probably license two of these, and the two will probably ‑‑
342 We don't have a concern. We know we are going to make it. We know who the clients are that will spend money with us. We know who we will convert and bring to radio.
343 We are not going there to take away major dollars from any particular radio station in town, so we don't have a concern in terms of reaching our projections.
344 Basically, you will decide ‑‑ I know that the PBIT for the last couple of years has been in the double digits. It's a good market now. We don't know what is coming down the road, but definitely, I think, there is room in the market for one station that doesn't duplicate anybody, which is ours, and then, I guess, there could be room for another station that does duplicate.
345 So I would say that perhaps you are looking at licensing two.
346 COMMISSIONER MENZIES: Regarding your news and spoken word format, you said that you would replace pop culture banter with relevant and mature dialogue. You also mentioned, in terms of your news, that it would be different, or that it would be a new, independent, voice.
347 I am always curious to know how it will be a new voice and not just another voice.
348 Do you understand what I mean?
349 MR. EVANOV: Yes.
350 When we came into the market, we listened to all stations and the newscasts and what was going on ‑‑ and I think that I should really let Gary Gamble respond to that, because he did that part of the research.
351 COMMISSIONER MENZIES: He had his light on first, too.
‑‑‑ Laughter / Rires
352 MR. GAMBLE: Thanks very much.
353 When we first came in, as Bill said, we took a look at it and monitored the music stations, and noticed that, traditionally, most music stations have their three minutes at the top of the hour, where they provide you with news headlines, and they possibly have a news update at the bottom, and they fill in your basic traffic reports throughout the day ‑‑ throughout the morning clock, for example.
354 In our Newmarket and Ottawa stations, we have trained our announcers that, because we are doing such a mature format, our talk has to be of a mature nature, also. We are not going to be talking about pop culture.
355 News and information programming ranks very, very high, especially here in Winnipeg, with weather being the top, at 93 percent. That's what people want to hear.
356 What we do is, we provide a five‑minute newscast at the top of the hour, which, of course, is 60 percent local.
357 As I was listening and monitoring these stations, there certainly wasn't 60 percent on any of the music stations that I heard providing local news.
358 Let me draw a picture for you.
359 A five‑minute newscast at the top of the hour and a one‑and‑a‑half minute update at the bottom of the hour is what we are working on.
360 Then, our announcers, instead of talking about pop culture and entertainment and the usual type of morning show talk and banter that you hear on stations, across the country, not just here in Winnipeg ‑‑ we are replacing that with quick snippets of what people want to hear, whether that's weather updates, whether that's talk about the transit dispute that is on right now, lifestyle, a little bit about health, a survey ‑‑ that sort of thing, in very, very quick snippets ‑‑ school closings, and if there is a major traffic problem, we are going to get in with that.
361 It is more of the talk that people want to hear.
362 If we go on the air and say, "It's 15 minutes past eight o'clock. It is 10 degrees outside. Here are the current numbers for the dollar," that's more of a mature thing that people want to hear, who are driving to work in the morning, who don't necessarily want to hear about Britney Spears, for example. They want to hear more about those types of things that are current to their lifestyle.
363 We will be running programming throughout the day, also, like "Health Watch", and book reviews, and that sort of thing. If there is a health matter that should be of concern to people who are driving to work in the morning, and we can do a quick snippet about it, we will do that.
364 Our announcers are trained to work with the news department, to find out what they are working on, and if they can take those news stories and talk a little bit more about them throughout the hour, and add in some other community events, or things that are happening throughout the hour ‑‑ make it a little bit more of what people, we feel, in our demographic, who will listen to our type of music, really want to hear when it comes to news and information.
365 We also do that by backing it up with a full news staff of six people: a news director, who also covers the morning show; an afternoon news person; two part‑time news announcers; and two stringers.
366 For example, if we have a five‑minute newscast and we have a stringer out on the road who has a report about Prince Edward's visit yesterday, or an update on the transit strike, or an update on sports, about the Blue Bombers' training camp opening this week, he will throw that in and make that five‑minute traditional newscast a little bit more full as to what we feel news really should be, and then, throughout the hour, keep expanding on news, school closings, bus cancellations and that sort of thing.
367 COMMISSIONER MENZIES: Thank you very much.
368 I have one, quick, final question.
369 When you said that your business plan would stand up among two new licences, did you mean two or two plus the Native Type B?
370 MR. EVANOV: We meant two plus the Native.
371 COMMISSIONER MENZIES: Thank you.
372 THE CHAIRPERSON: Thank you, Commissioner Menzies.
373 Commissioner Patrone.
374 COMMISSIONER PATRONE: Thank you, Mr. Chair.
375 Good morning. I want to start off with a couple of questions related to format. Specifically, you spoke about the appeal of this particular format toward ethnicities, various cultural groups, that kind of thing. Do you have any evidence to back that up, or is it largely anecdotal?
376 MR. EVANOV: To begin with ‑‑ and I will ask Debra in a moment to address some of the research ‑‑ we operate a multicultural radio station in Toronto, broadcasting in 30 languages. That station has tentacles, or a network, throughout the country, in terms of reaching various communities.
377 So that is available. The sources and information are available to our staff here in Winnipeg, in terms of when we are on the air with this programming.
378 Also, we tailor the music to the particular market.
379 I will give you one little example. In the Toronto area we play things that most English broadcasters don't. If there is a great song by Andrea Bocelli in Italian, we will play it. If Feliciano wants to sing in one of the Latin languages, in Spanish, or even in Italian ‑‑ Que Sera Sera ‑‑ we will play it.
380 We would take the same attitude here that relates to the population in this particular area, whether it be Ukrainian or German or whatever. If there is something popular and something elegant ‑‑ Nana Mouskouri is another singer who sings in four or five languages. We will play that particular music.
381 That relates to the people who live within the area, and that is how the music ties in with them.
382 It's not that we are an ethnic station, I am not saying that, but there is a respect for that type of culture.
383 Debra?
384 MS McLAUGHLIN: We test for cross‑cultural appeal of formats by two measures. One is based on mother tongue, another is ethnic heritage. And within the context of the survey, with respondents on the phone, we asked them both of those questions.
385 So we can then take the answers to the mother tongue and ethnic heritage and cross‑tab them against interest. When we do that ‑‑ on pages 16 and 17 of the consumer demand study, you can see that, for example, in mother tongue, only 76 percent of the core audience to this service actually had mother tongue English. The rest were spread across several languages ‑‑ obviously, the second official language, French, and the rest were spread across Ukrainian, German, Dutch, et cetera.
386 If you just take that breakout and index it against the market, in terms of how the distribution falls out within the population, we actually index higher on our interest among cultural groups than many formats would, and that is, as Bill said, something that they have direct experience with, because the response ‑‑ and I often review the responses for them at the station ‑‑ from consumer feedback is typical of this type of format.
387 COMMISSIONER PATRONE: Do you program some of the music to reflect that cultural diversity?
388 Is that correct?
389 The cultural makeup of, say, any given market.
390 MR. EVANOV: That's what we do, wherever possible.
391 COMMISSIONER PATRONE: Can you talk about how you would manage to incorporate diversity into your hiring practices?
392 MR. MOREMAN: If you refer to our application, Commissioner Patrone, I believe that we have our Diversity and Employment Policy included in the application.
393 One of our strengths as broadcasters is to bring in a variety of people at the management levels. Ms Joseph, here today, is a good example of women in senior positions within our company. We don't see a lot of that, still today, in the broadcasting industry, and Ms Joseph certainly isn't the only one within our company.
394 We actively encourage applications from not only ethnic and gender backgrounds, but sexualities, religions ‑‑ and the list goes on ‑‑ not only, again, relating to our ethnic station in Toronto, but across the board.
395 And we believe that we are quite successful in attracting a variety of people within our ranks, and hope to do so in the future.
396 COMMISSIONER PATRONE: You spoke about support groups like Gay Pride and that sort of thing. Could you talk a bit about how that support tends to manifest itself?
397 MR. MOREMAN: Specifically, to this application, it is a CCD initiative.
398 And I was going to say something before to your question about programming cultural diversity, so I will talk about the diversity within our CCD initiatives, as well, very briefly.
399 We believe that there is cultural diversity represented not only on‑air, but through our CCD initiatives.
400 One thing that stands out is, both the Folk Fest and Folklorama have people who perform not only in English, but in a variety of cultures and languages during the show, in 200 performances at Folk Fest.
401 And there are a number of international visitors who come to enjoy the Canadian talent in their home language.
402 So our funding will be there to support that cultural diversity.
403 We also have two Native Canadian endeavours that are being represented through AMEF and Manito Ahbee.
404 On the AMEF front, there is actually some cross‑over to the programming side in the news aspect. We have an agreement in principle with AMEF to set up a mentoring program, so that a Native individual from Manitoba ‑‑ from Winnipeg ‑‑ will be in our newsroom as one of the interns that Mr. Gamble mentioned before.
405 Their sole job won't be only to find Aboriginal stories, but that certainly will be within the ambit of their responsibilities. So that will be reflected in the newscasts ‑‑ perhaps not every single one, but there won't be an absence of Aboriginal stories.
406 To come back directly to your question about Gay Pride as a CCD initiative, we feel that cultural diversity goes beyond merely ethnicity, religion, or gender ‑‑ the obvious differences ‑‑ and that we need to support and celebrate other differences, as well.
407 So what this contribution does is, it certainly meets the objectives, as I explained to Commissioner Katz, of promoting Canadian talent on the stages, but it is there to show our support for the inclusion of an often under‑represented group.
408 COMMISSIONER PATRONE: You spoke a little bit about news there, so I will ask a question related to that.
409 There will be six reporters, and those individuals will be out on the street, covering stories?
410 MR. GAMBLE: There will be two full‑time on‑air staff, and one of them will be covering mornings and one of them will be covering afternoons. Both of them will be covering the noon hour newscast, which will be ten minutes long.
411 The other two will be covering part‑time newscasts midday, and then we will have two stringers, who will be dedicated to being out on the streets and getting a call for an assignment to cover something and report back.
412 Also, as Sean mentioned, our mentoring program and internship program has worked out very well, especially for our station in Newmarket. At any given time in our programming department we have two to four interns, who are available either for news or learning the board ‑‑ future broadcasters ‑‑ and what we do in the news department is that we take them from the beginning, directly out of college, and show them what a news story is all about, how a news department works, how to gather a story, how to follow up on it, how to chase after local news, which, of course, is not really available on a wire service, how to make those calls to the police department, and sit in on city council meetings ‑‑ how to work it right from the very beginning.
413 We have been very successful with the internship program. I would say that in the last 18 months, in Toronto alone, we have hired 10 of the interns that we brought into the program.
414 COMMISSIONER PATRONE: Do you have an evening reporter?
415 MR. GAMBLE: News will run until seven o'clock in the evening, but our news department will always be on hand. It's actually the part‑time reporters who will come in.
416 If something is breaking, and it is urgent information that has to get out, our announcers are trained, first of all, as they work closely with the news department, to get on the air and start not just introducing music, but now their focus turns toward getting this news story on the air.
417 And as soon as we can get a news reporter in to cover that on a more frequent basis, we will do that.
418 COMMISSIONER PATRONE: Do you have any plans for longer form stories?
419 I know you said that one of your newscasts will be 10 minutes long. That's a fair amount of airtime, as you know.
420 Will you have investigative pieces, and that kind of thing, or will it just be straight ahead?
421 MR. GAMBLE: No, that ten minutes of news, especially at noon, and in all of our newscasts ‑‑ if there is news that is of a headline‑type delivery ‑‑ if it's on a national basis, first of all, that we are getting on the wire, we are going to take that story ‑‑ not rip and read it, but we are going to qualify it and make sure that what we are reporting, first of all, is accurate, and second of all, if it has any relation at all to Winnipeg, we will follow up on it.
422 Sixty percent of that newscast, also, which runs ‑‑ out of the ten minutes, about six minutes of direct news will be local stories. Also, within that ten minutes, we will be focusing two minutes on an agricultural report, and also on sports. Of course, weather will be included.
423 We feel that ten minutes of relevant information, which is not available on any other music station right now, is going to keep people updated.
424 If you are listening in the morning and you are getting music and information, and we are carrying it through midday, and following up in the afternoons, we feel that has pretty well got it covered.
425 COMMISSIONER PATRONE: I want to ask a quick question about emerging artists.
426 To what degree will you be able to incorporate emerging artists into this particular format?
427 Obviously, you will be talking about older artists, in many cases. Emerging artists being new, how do you face that challenge?
428 MR. EVANOV: First of all, the people coming forward with new CDs and new recordings are no longer older. They are much younger, yet they are singing this type of music.
429 And I will ask Gary, in a moment, to talk about a new Canadian emerging artist who sent music to Afghanistan.
430 Our commitment is probably the highest. It is 12 percent overall new and emerging artists, and what we are planning to do in Winnipeg is that, when we launch emerging artists, we will not only play the song, but we will do, maybe, a 15, 20, 30‑second bio, or provide some information that is attached to that particular song, so that the audience understands that it's a new song, it's a new singer, and something interesting about it.
431 That will be done for about two to three weeks, and it will rotate as the new ones come in.
432 We have no trouble ‑‑ we have the highest commitment, I believe, of all the applicants for new and emerging, and we do that only because we are getting this input.
433 Gary is going to tell you about one now. Gary received a phone call ‑‑ and it's a fascinating story.
434 MR. GAMBLE: About a month ago I received a call from a friend of mine in a local studio in Newmarket. She said, "Look, I've got this young singer ‑‑ "
435 And we receive a lot of music. We have a lot of music that comes our way.
436 She said, "You've got to hear this young kid sing."
437 He won the York region talent competition, which is called "The Rising Star Competition", just north of Toronto.
438 So I got a hold of his CD. I was further told that he had done this song ‑‑ it was around Mother's Day that we received it. The song is a cover of the Il Divo's "Mama".
439 He sent a few copies ‑‑ I think about 100 copies to Afghanistan, to the troops over there, mothers of Canadian soldiers. The song was so popular that he ended up sending 5,000 copies of this particular song.
440 I thought, "I have to find out more about this young kid and what it is that he is doing."
441 We interviewed him on the air. He has not released to the public a song yet. What got me was, when I heard him, this young kid sounds ‑‑ he is the next Josh Groban. He should be on Canadian Idol.
442 To top it all off, he is 16 years old.
443 We had him on the air. He had never recorded anything before, except for this one song, and he is just ecstatic about how well he is being received.
444 This is one young kid, who is 16 years old. We are going to follow him and help him out as much as we can.
445 MR. EVANOV: And his name ‑‑ because we have talked about him, we should recognize him ‑‑ his name is Daniel Panetta.
446 COMMISSIONER PATRONE: I will listen for him.
447 Could you talk a bit about your efforts to monetize new media, and your success as far as that is concerned, as it is directed to that particular platform?
448 MR. EVANOV: We will start with the internet, obviously.
449 Gary, I think you can elaborate on that, as well.
450 MR. GAMBLE: Our internet ‑‑ our websites have grown drastically, as with any other internet website, but especially in radio. People in this day and age are looking for as much information as they can get.
451 Our internet background ‑‑ we consider it a companion of our radio station, a total extension of what it is that we do on the air.
452 Our website will feature local news, as we are reporting it on the air. Immediately, as soon as we can, we get it on our website.
453 Also, there will be archived stories. So if you want to check on what it was that we reported on two or three months ago, you will be able to click on the date and find that news story.
454 Along with that are our community events, weather updates to the minute, links to traffic cameras, and, of course, our emerging artist bios and that sort of thing.
455 It is a complete information website, more than just putting up our logo and "Here is what we play," and "Here is the next time you can win a car." It is more of a direct portal for information, which we will load on there as much as we possibly can.
456 COMMISSIONER PATRONE: Are you selling ads directly through the web?
457 MS JOSEPH: I can answer that.
458 We will not sell advertising on the web that will not include an on‑air component.
459 It is obvious that the younger demographic spends a lot more time with the internet than the older demographic. Having said that, though, the older demographic is certainly using it a lot more than they used to, and it is actually one of the categories that stands out for new business ‑‑ electronics, computers ‑‑ that category.
460 To answer your question, we believe that there will be revenue linked to the internet. However, it's within our revenue projections.
461 COMMISSIONER PATRONE: Thank you. Those are my questions.
462 THE CHAIRPERSON: Thank you very much, Evanov Communications.
463 MR. McCALLUM: Mr. Chair, could I ask a question or two?
464 THE CHAIRPERSON: I'm sorry. Yes, please, counsel.
465 MR. McCALLUM: I have a couple of very fast questions, if I may.
466 Your Schedule 5 is your financial plans, and there is a line for over‑and‑above contributions. I would assume that you would have no difficulty in making the line "Over‑and‑above contributions to Canadian Talent Development" a Condition of Licence, if the Commission wished you to do that?
467 MR. EVANOV: Yes.
468 MR. McCALLUM: Thank you.
469 Vis‑à‑vis the Outreach Program for the Winnipeg Symphony, could you explain, first of all, what that initiative is, and where the money for that initiative is going?
470 MR. EVANOV: I will ask Sean to comment.
471 MR. MOREMAN: When we spoke with the symphony, we understood that not only do they play music, but they try to engage people in music, which is what they call their Outreach Program.
472 We believe that the money that will be used for the Outreach Program will basically be a forum for them not only to play music for people, but to engage the audience and educate them about the music and that sort of thing.
473 To answer what I presume will be your next question, how does it qualify, we believe that it is part of the promotion of music, and that it will engage people in their performances and encourage them to go and see them.
474 MR. McCALLUM: If, by chance, the Commission determined that it did not qualify, could you say how you would redirect the money?
475 MR. MOREMAN: We would have to engage in new conversations with the symphony to see whether they could use the funds in a manner that would qualify, perhaps through the purchase of instruments or another way.
476 And if they were unable to apply the money to ways that qualify, we would redirect it back to FACTOR.
477 MR. McCALLUM: Thank you.
478 The same question vis‑à‑vis the Canadian Catalogue of Instrumental Music.
479 You may be aware that, in the case of Fairchild, CJVB Richmond, in a decision issued in 2007, the Commission looked at something that was maybe not identical, but similar. It was the Canadian Association of Ethnic Broadcasters. The Commission said that the initiative proposed by CJVB Richmond, Fairchild, would not qualify for Canadian Talent Development.
480 Can you say whether your catalogue is similar or different to that initiative?
481 MR. MOREMAN: Our understanding is that it is different, in both its approach and its purpose.
482 Debra, I believe, will speak more to the differences.
483 Without repeating my answer to Commissioner Katz on the catalogue from before, I will refer you back to the transcript on why we believe that this particular initiative, the Canadian Catalogue of Instrumental Music, qualifies under the policy.
484 MS McLAUGHLIN: My understanding ‑‑ obviously, I am not privy to the thinking of the Commission in terms of why it disqualified, but my understanding in terms of the catalogue for ethnic music is that it stalled because of limited participation. There wasn't really the promotion or the response being received.
485 But in terms of the Canadian Catalogue of Instrumental Music, it is actually putting money in artists' pockets.
486 We have people responding, saying they have made sales, they have made contacts. They now are in talks regarding providing their music, or licensing their music for soundtracks.
487 I would think that that is the goal of the policy, to actually increase opportunities for Canadian artists, and exposure.
488 I am not sure if that track record existed for the Catalogue of Ethnic Music. I cannot comment on that, but I do know, having spoken with broadcasters who participated in it, that they were somewhat disheartened by the progress in the ethnic music catalogue.
489 MR. McCALLUM: Thank you.
490 If, by chance, the Commission decided that that initiative did not qualify, how would you redirect the funds?
491 MR. EVANOV: FACTOR.
492 MR. McCALLUM: Thank you.
493 Thank you very much, Mr. Chair.
494 THE CHAIRPERSON: I would like to follow up on one question that I think I asked you a couple of weeks ago in Ottawa, and that is with regard to the third adjacent frequency issues.
495 Should your frequency bump up against that policy, can you confirm that you do recognize that there are some implications there, as well, that may cost some funds, all the way through to, if it can't be rectified, you don't have priority on that frequency?
496 MR. EVANOV: We have looked at the frequencies. We have identified three available frequencies in this market that could be used, which would not alter our business plan. They would be 106.3, 104.7, and then, also, 88.7.
497 MR. MOREMAN: To answer your question perhaps more directly, Commissioner Katz, we are aware of the policy as it relates to third adjacencies, and we will do everything necessary to rectify those situations, even if it includes moving or fixing it on the frequency we have actually applied for.
498 MR. EVANOV: I'm sorry, I misunderstood the question.
499 Mr. Chair, before we leave, we would like to read something into the record as part of our presentation, just to wrap up, if that's possible.
500 THE CHAIRPERSON: Certainly. By all means.
501 MR. EVANOV: Thank you.
502 Evanov Communications is a strong, well‑financed broadcaster. We believe that the proposal we have presented is the best of all the applicants before you.
503 In addition to benefiting the market by introducing diversity of ownership and news voices, as well as the highest levels of Canadian content and new and emerging talent, we believe that licensing ECI's application will benefit the system in the long term by strengthening an independent voice in a crowded radio spectrum.
504 As we told the Commission during the Vancouver hearings in February, ECI needs to become a national broadcaster to remain competitive in the age of consolidated ownership. Large markets, such as Winnipeg, are integral to the national business strategy.
505 ECI sees the importance of setting stakes in these markets in three distinct ways.
506 Firstly, we would gain critical mass of listeners that would allow us to compete with large broadcasters for increasingly valuable national advertising dollars.
507 Secondly, the spectrum is becoming more and more limited in larger numbers. In the two largest English markets, Toronto and Vancouver, there are no more frequencies available to be used.
508 As a result, the only way for us to expand will be to purchase assets, which we can only do with the revenues generated through large market revenues.
509 Thirdly, the revenue generated through large market stations will allow us to serve the less lucrative, underserved markets across the country.
510 ECI has the financial means, as well as the desire to plant roots in these markets. We have competed with the large five corporate broadcasters in Toronto and other large markets, and have overperformed our share in smaller markets.
511 We are able to recognize what our listeners want from their local radio station, and we are prepared to deliver it to the markets across the country.
512 Thank you very much.
513 THE CHAIRPERSON: Thank you very much.
514 It is 11:10. We will reconvene at 11:20.
‑‑‑ Upon recessing at 1110 / Suspension à 1110
‑‑‑ Upon resuming at 1125 / Reprise à 1125
515 THE SECRETARY: We will now proceed with Item 2 on the agenda, which is an application by Newcap Inc. for a licence to operate an English‑language commercial FM radio programming undertaking in Winnipeg.
516 The new station will operate on Frequency 106.3 MHz, Channel 292C1, with an effective radiated power of 100,000 watts, non‑directional antenna, antenna height of 223 metres.
517 Appearing for the Applicant is Rob Steele.
518 Please introduce your colleagues. You will then have 20 minutes to make your presentation.
519 Thank you.
PRESENTATION / PRÉSENTATION
520 MR. STEELE: Thank you very much.
521 Good morning, Mr. Chair, Commissioners and Commission Staff. I am Rob Steele, President and Chief Executive Officer of Newcap Radio.
522 Before we begin our presentation, I would like to introduce our team.
523 Seated to my immediate left is David Murray, Newcap's Chief Operating Officer.
524 Next to David is Randy Skulsky. Randy is the General Manager of our Winnipeg stations CKJS‑AM and CHNK‑FM, known as Hank FM.
525 Randy has 15 years in radio, all of them here in Winnipeg.
526 Next to Randy is Simone Gillies, the News Director for our Winnipeg station.
527 Simone is a native of Gimli, Manitoba, and a graduate of Red River College's Creative Communications Program.
528 In addition to her work with us, she also has worked with Global News in Winnipeg, as well as in radio sales.
529 Next to Simone is Steve Jones, Newcap's Vice‑President of Programming.
530 To his left is Jen Traplin. Jen is the afternoon drive announcer of our alternative rock station in Ottawa, Live 88.5, and is involved in the planning and promotion of our CCD initiative known as "The Big Money Shot".
531 We propose to bring that initiative to Winnipeg with this application, and Jen is here to explain the programs.
532 In the second row, to your left, is Glenda Spenrath, Newcap's Director of Operations.
533 Next to Glenda is Scott Broderick, who is Director of our Central Canadian Radio Operations.
534 Beside Scott is Mark Kassof, who conducted research for us into this market.
535 Winnipeg is a very important market for us. We have invested over $6 million in capital expenses in this market, acquiring an ethnic AM station, CKJS, and a specialty music station, Hank FM.
536 This application represents a substantial increase in our investment in this city.
537 We will inject an additional $1 million in new capital spending in the marketplace.
538 We will also make a significant investment in program spending, with $5 million in program spending over the course of the licence term.
539 We will also make a serious investment in Canadian Content Development of $2.8 million over the next seven years, providing support to the many emerging artists in this community.
540 Our CCD contributions will also fund the development of new Aboriginal journalists in our industry.
541 Our investment will increase our newsroom to five full‑time persons, along with stringers and our network of news gathering in the 18 ethnic groups that we serve.
542 This strengthened newsroom will allow us to provide an enhanced news alternative to the CBC, CTV, Canwest, Corus, Rogers and Astral.
543 I would now like to call upon Randy Skulsky to describe the market of Winnipeg to you.
544 MR. SKULSKY: Thanks, Rob, and good morning, Commissioners.
545 Winnipeg is an important Canadian centre, with a long cultural, social and economic history as the gateway to the west.
546 Winnipeg is the seventh largest market in the country. Its population continues to grow at a good pace. According to Statistics Canada, the CMA population was 694,000 people in 2006. It is projected to grow to 730,000 by 2012.
547 The population in the city skews younger than the national average, and one of the fastest growing segments of the population is young Aboriginal people.
548 The 2006 census reports that about 10 percent of the population has reported Aboriginal identity. This is two and a half times the national average.
549 The Manitoba economy has been quite robust over the past few years, and the Conference Board projects GDP increases of 3.4 percent in 2007 and 3.8 percent in 2008. This strength has been led by significant increases in exports, a substantial increase in farm receipts, and growth in a number of manufacturing sectors.
550 Retail sales have been strong in Winnipeg, and are projected to increase by 21 percent over the next five years.
551 The Winnipeg radio market has shown steady growth in terms of radio revenues, with an average annual growth rate of 5.6 percent between 2002 and 2006. We are confident that the market can support a new station, particularly one that can rely upon its existing operation to share facilities and back office functions, and, of course, one that has picked a viable format opportunity.
552 MR. JONES: Mr. Chair and Commissioners, when we started to review this market last May, we commissioned research from Kruger Media and concluded that the format to propose was alternative rock. That research was conducted over a year ago.
553 Six months later, Mr. Asper commissioned research from the same researcher, and the conclusion was a different kind of alternative format, as I am sure they will outline for you.
554 When these applications were Gazetted and we had a chance to review the only two studies that looked at more than one format, we realized that the opportunity is clearly some kind of alternative format.
555 When we examined the music playlists that we had proposed and that Mr. Asper proposed, we saw that there would be significant overlap. Many of the core artists would be the same.
556 What would set our station apart is that we will focus exclusively on alternative rock, while the Asper application includes elements of hip hop, rap and pop.
557 In January of this year we commissioned Mark Kassof & Company to do some ongoing research for our existing FM station, Hank FM, to get a sense of how it fit in the market. In the process, we discovered an opportunity for a classic‑based alternative in Winnipeg.
558 However, this ongoing research wasn't specifically designed to find format opportunities.
559 After the Winnipeg applications were Gazetted, we commissioned additional research from Mr. Kassof, the same type of format‑finder research that we presented in many of our applications.
560 He tested nine formats, including four alternative formats: Triple A, pop alternative, alternative rock, and classic alternative. What he found was that the best opportunity for an alternative station was in classic alternative.
561 We took his research and Mr. Kruger's research into account when we decided that our best opportunity was a classic‑based alternative station, devoting about 80 percent of its playlist to the alternative songs that Generation X and Generation Y grew up with, the alternative rock of the eighties and nineties, along with strong support for new music, including local artists and emerging Canadian artists.
562 We also confirmed the format opportunity by looking at various tuning trends in various age groups from BBM.
563 The chart below shows the declines in hours tuned by various age groups, and by gender, from 2005 to 2008, for both Winnipeg and for Canada nationwide.
564 We also checked the hours tuned in each of the demographic groups. What they show are declines in tuning in almost every group except 45‑plus.
565 The biggest declines in tuning are among 18 to 34 men, the core of an alternative rock station.
566 While women in this group have also declined in tuning, the decline is considerably less than among men.
567 The station we propose, which we are calling Live 106.3, will appeal to a broad alternative rock audience. Young men and women aged 18 to 34 find both today's alternative rock and the alternative rock of the eighties and nineties of interest.
568 For the generation who were forming their musical tastes in 1990, when a new sound emerged from garages and basements across North America and, in fact, the world, alt rock is their mainstream.
569 While the epicentre of this new sound may have been Seattle, with grunge acts like Pearl Jam and Nirvana, many others came from around the U.S. and the U.K.
570 Canada's contribution to this sound is immense. In the early 1990s, music critics and fans dubbed Halifax as Seattle of the North. Moncton's Eric's Trip became the first Canadian act signed to Sub Pop Records, the legendary record label, home to Nirvana, Soundgarden and Mudhoney.
571 While bands like Sloan and Thrush Hermit led the way on the east coast, Econoline Crush, Bif Naked, Crash Test Dummies, and The Watchmen all put Winnipeg's thriving alternative rock scene on the map.
572 This generation loves rock, but they don't find what they want on Winnipeg radio.
573 Over the past two years, the classic‑based alternative format has grown across Canada and in the United States, and is led by successful, classic‑based, alternative stations in Boston, Los Angeles, Philadelphia, Cincinnati, Kingston, and Calgary, where Newcap's Fuel 90.3 is experiencing solid growth.
574 Live 106.3 will derive its music from a number of sources and eras. Fifteen percent will be classic alternative rock from the late seventies and eighties, with bands like The Clash, The Payola$, U2, The Ramones, The Police and Depeche Mode.
575 Alternative rock acts from the nineties will make up the biggest part of our playlist, at 50 percent. This includes Nirvana, The Tragically Hip, Weezer, Our Lady Peace, Pearl Jam, The Matthew Good Band, and Stone Temple Pilots.
576 And alternative acts who emerged in the past eight years will make up about 15 percent of the playlist, including bands like Coldplay, The White Stripes, Three Days Grace, and Arcade Fire.
577 The remaining 20 percent of the music we will play will be new releases and emerging artists. Many of the artists noted above are still making great music. Every day there are new Canadian and international songs to profile.
578 There is also great music being made by Winnipeg artists like The Weakerthans, The Inward Eye, Hot Live Guys, Quinzy, Sick City and The Details.
579 The Winnipeg Alt Rock scene as many acts that will be natural fits for this station. We have seen this same trend emerge in Ottawa where our alternative rock station, LiVE 88.5 has played over 100 Ottawa area artists over the past three years.
580 Alternative fans live and breathe new music. They know the artists and their songs and they are constantly on the lookout for new trends and new bands. We will meet this need with a full range of speciality programs and with a very active website.
581 On Live 106.3 we will take an aggressive interactive approach, as we do with our alternative rock station in Ottawa, LiVE 88.5, and our Calgary classic alternative station, Fuel 90.3.
582 Using our website, various social networking tools, SMS text messaging and many other aspects of new media we will become completely integrated with our active audience.
583 Here to speak about our CCD is Jen Traplin.
584 MS TRAPLIN: Before I talk about our CCD initiatives I would like to describe some of the other ways in which we support the local music community and I will speak directly in terms of what we do in Ottawa.
585 LiVE 88.5 currently has a minimum of seven local bands in steady rotation through all day parts. Each local act receives up to 15 radio spins a week on LiVE 88.5 as well as a heavy promotion for upcoming shows.
586 We also have a daily feature we call the Indie Spotlight which highlights other local musicians who otherwise wouldn't be receiving any radio promotion in Ottawa. We also have created a strategic alliance with an Ottawa venue called the LiVE Lounge, a music venue in which we are responsible for booking talent and recording live shows.
587 When a band is scheduled to perform with the LiVE Lounge they receive at least two weeks of radio and web promotion, they are paid for each show and they take home recordings of their entire set free of charge.
588 In addition, in Ottawa our major CCD initiative is called the Big Money Shot, in Calgary, it is Big Rock Star. In both cases working bands and solo musicians perform at music venues. In Ottawa's case, at the LiVE Lounge, in front of a live audience and a panel of judges.
589 Annually 45 local bands compete in Ottawa and every year 15 of them win at least $5,000 or more. In Calgary 25 bands compete annually with every single band walking away with at least $1,000. All prize money in spending is approved by Newcap representatives to ensure the funds are used for the purpose of developing the careers of local musicians. Funds awarded to the winners are used to provide what is needed for each specific band.
590 For instance, in Ottawa, St. Joe's Mission used some of their $50,000 prize money to develop a USB drive that delivers the latest band info, tour dates and new songs directly to their fans. Currently, they are negotiating with representatives at Sony for the use of this technology for other Canadian artists.
591 They also recorded a new album with producer Russ Mackie who has worked with Alanis Morisette and Kim Mitchell and they have signed a contract with Indie label Bhurr Records.
592 After winning $40,000 in talent development funds, the members of The Prefect quit their day jobs to become fulltime working musicians. Currently, they are recording full‑length album with Juno Award Winning producer Gavin Brown. Gavin has worked with Billy Talent, Three Days Grace, Thornley and The Tea Party.
593 The money has also allowed them to hire one of the country's top radio trackers to work one of their singles in the next few weeks.
594 As well as the extensive support these winning bands receive from Newcap, we also provide them with great opportunities to showcase their talent with performances at HOPE Beach SummerFest in front of 30,000 people, and a Canadian music week where they perform in front of hundreds of industry reps.
595 We propose a Big Money Shot in Winnipeg as well. Each year we will hold contests over a period of six months at local venues. Our listeners will then choose the top 10 bands who will each receive $6,000 to advance their careers. The grand champion will receive $100,000 in talent development funds.
596 The band will also have airplay support from Newcap stations across the country, from St. John's to Halifax, Moncton, Fredericton, Ottawa, throughout Alberta and hopefully in Winnipeg. We have committed $1.12 million over the term of the licence to the Winnipeg Big Money Shot.
597 In all, we propose to contribute $2.8 million for the term of the licence to CCD over and above the basic amount here in Winnipeg.
598 Simone.
599 MS GILLIES: Before I begin to discuss some of the proposed news components on LiVE FM, I would like to explain how our newsrooms currently operate and in detail how LiVE 106.3 will contribute to create news programming and will provide a fresh alternative to other local news providers.
600 Within our existing stations we have two distinct newsrooms in operation. Mr. Bob Harris and I worked to produce news on Hank FM providing primarily local news with some reporting on national and international issues.
601 Now, at CKGS we broadcast in several languages other than English. Filipino director Lito Taruk plays the largest role in CKJS's news programming. His primary focus for the station is providing relevant news to Winnipeg's almost 40,000 person‑strong Filipino community.
602 However, because of the diversity of the remaining ethnic programming on CKJS, we essentially have 17 other people working in the news department. They cater to the distinct cultural and ethnic groups in Winnipeg providing not only local content, but community news and information regarding their respective homelands.
603 With Live 106.3's news staff we will employ a news team of five journalists and several stringers. This gives us the opportunity to better provide coverage of local, provincial and international news.
604 While each station will continue to have its own focus, our capabilities to gather news will be greatly expanded allowing us more overall coverage off issues and more depth in reporting. News staff will have the ability to tap into existing station resources and ensure a continued connection and sensitivity to the diverse nature of our city.
605 With LiVE's larger news team we will have time to spend in the community provide live in‑person interviews and instant feedback. As well, by operating 24 hours a day we will have the opportunity to have constant feedback from our audience through text messaging, email and phone.
606 LiVE FM will provide seven hours of newscasts a week with a total of 94 newscasts. The station will provide news in the evenings, Monday to Friday, as well as throughout the day on the weekend with full newscasts at times that many stations either don't have news or are reliant on broadcast news. In contrast, our news team will be constantly active with 75 per cent of the news we broadcast being locally focused.
607 In addition, we also plan a full range of services to the community throughout the day and evening. In fact, each night at midnight we are going to offer a special feature, Arrive Home Safe, with information, advice and, most importantly, discounted fares home from Winnipeg clubs, concert halls and other venues.
608 We also offer a unique interactive program we are calling Realtime. Every Saturday night we will invite listeners to takeover the radio station, talking to us about topics and issues that concern them. In all, we will provide over 20 hours of spoken word each week.
609 MR. MURRAY: At the beginning of this presentation Randy mentioned that the fastest growing segment of Winnipeg's population is Aboriginal people. And Aboriginal youth make up an ever increasing part of this growth, yet there is little reflection of this presence in radio and television, other than on NCI's station.
610 Part of the problem is that we do not have trained staff that can step into jobs in our industry. For this reason, we propose an annual contribution of $160,000 over a seven‑year licence term. That money will be used to fund Aboriginal students to follow a two‑year course in broadcasting journalism at Red River College. We expect that this will support the development of over 50 new young journalists for our industry.
611 As Rob mentioned at the outset, Winnipeg is an important market for Newcap. We have invested here by acquiring two stations with difficult mandates an ethnic station and a niche speciality service. We knew going in that we faced a challenge. We invested in improvements in our technical plant, in our radio facilities and we have expanded service with more service to more ethnic groups and in better programming on Hank FM. We are ready to devote additional investments in the market.
612 We have examined the market both through analysis of tuning trends and through ongoing surveys using two different research companies. The conclusion is clear to us, the underserved audience in the market is the 18 to 44 group and particularly 18 to 34. Within this group tuning by men has fallen significantly.
613 The clear need is for an alternative format that appeals to this group. And the best format to reach them is a combination of classic alternative and local emerging alternative artists. We will provide a new music alternative that Winnipeg wants.
614 With three new journalists supported by stringers we will provide a reinforced newsroom with newscasts throughout the day, evenings and weekends. We are particularly proud of our CCD initiatives that are double the amount proposed by the next closest applicant. And we are not merely throwing money, but taking an active role to develop both new alternative rock acts with a program that will make a difference in the careers of hundreds of Winnipeg artists and to develop over 50 Aboriginal journalists over the course of the licence term.
615 Newcap knows the Winnipeg market well. Our AM station, CKJS, serves 18 different ethnic groups every week and we have a good understanding of the concerns of over 20 per cent of the community whose mother tongue is other than English or French. We believe that we can marry that knowledge with our expertise in providing rock formats across Canada to ensure an excellent station that can reflect the diverse makeup of the City.
616 We would be pleased to reply to your questions.
617 THE CHAIRPERSON: Thank you very much.
618 Commissioner Menzies is going to lead on this application.
619 COMMISSIONER MENZIES: Thank you. You mentioned $1 million capital investment that you would make if this application was successful. What would that $1 million build, what would it look like? It is a capital investment, not an operating investment, right?
620 MR. MURRAY: Well, most of the money would go towards the technical plant itself, the transmitter and the facilities around that. We, of course, would need a lot of new studio equipment as well and we are also anticipating that we would have to move from our existing location to new studio facilities.
621 COMMISSIONER MENZIES: Okay, thank you. In your research, I know it is a pretty narrow difference, but the research you filed with us said your format had good appeal in the 35 to 44 crowd. But then you downplayed them in your primary target zone, went with the younger group, I think it was about a 1 per cent difference between the older group and the younger. And I want to know why you went with basically your one and three, your first and third place audiences, and moved the second down as a lower priority?
622 The reason I am asking is because it is helpful in determining impact on CJKR and CITI.
623 MR. MURRAY: Right. I think I will ask Steve Jones to answer that question. Thank you.
624 MR. JONES: The alternative format traditionally has its strongest appeal, 18‑34. It does reach higher than that, it does go up to 44, there is a significant 35‑44 component, especially as that generation we spoke of, that generation that was forming musical taste around the time that the Seattle grunge explosion happened, that group of people is now almost 40.
625 And so there is a significant amount of tuning in that older demographic. But the core of the format I think remains 18‑34 and that is why we speak probably more about that demographic than we do about the 35‑44.
626 I can address the specific overlap and how that might impact City or Power. And Power is a unique radio station. It is a very successful radio station that manages to cover a lot of different territory from new alternative rock to Eric Clapton's Cocaine and Led Zeplin and AC/DC and it marries all those together in one radio station. Traditionally, that is a difficult task, but they manage to do it very well.
627 But because they are so broad they are not devoting a lot of their playlist to the classic alternative and new alternative music that we would be playing. There is some cross‑appeal between classic rock and new rock and they manage to do it, but there definitely is an opportunity for a radio station here focusing strictly on the alternative music and not playing any of the traditional classic rock acts, like the Led Zeplins and AC/DCs and Pink Floyds and Aerosmiths.
628 And our crossover with Power would likely be about 30‑40 per cent and that would be primarily in the new music, the new artists.
629 With City, the crossover is maybe about 5 per cent maximum, it is very small and that is because our format would focus almost exclusively on music from 1990 and newer. There is only a small component of our music that is pre‑1990.
630 City, being a classic rock station, is based heavily in the 1970s and 1980s, plays a lot of classic rock by bands like Zeplin and Aerosmith and Pink Floyd and other ones we have mentioned. They only touch on the grunge era and hardly pay any homage to that kind of music and that is because it just doesn't fit their format perfectly. So the crossover with City would be about 5 per cent and that would be primarily in the Police, REM and the Clash and that kind of thing.
631 COMMISSIONER MENZIES: Okay, so 5 per cent on City and you said 30‑40 per cent on Power?
632 MR. JONES: Yes, about that.
633 COMMISSIONER MENZIES: That is a pretty high percentage. Can you help us as to how that qualifies as diversity?
634 MR. JONES: It is a fairly high percentage, but what we are focused on ‑‑ and, sorry, that high percentage is based primarily on that newer music that they are playing. We are focused exclusively on alternative rock and almost exclusively on classic alternative rock. And a lot of that classic alternative rock isn't being played consistently on Power.
635 There is a large chunk of music that is not being exposed. They are playing songs by Nirvana. But playing Smells Like Team Spirit or Come As You Are is pretty standard at rock radio. But going deeper into the Nirvana catalogue, going deeper into the Pearl Jam catalogue and other bands like that, that doesn't happen on those radio stations.
636 There is a significant diverse component to what we are offering here and 70 per cent is a fairly significant number.
637 COMMISSIONER MENZIES: You mentioned in your presentation your radio's application in terms of similarities along those lines. Do you have similar percentages where you could breakdown in terms of similarity and differences between them?
638 MR. JONES: Yes.
639 COMMISSIONER MENZIES: We need to get an understanding of how you are the same as them and how you are different from them and vice versa.
640 MR. JONES: Absolutely. It is difficult, because in the application we put forward a three‑hour sample playlist. And to take two‑three hour snap shots and compare them for exact overlap probably isn't fair.
641 What we did do is looked at the three‑hour sample playlist they provided and the actual playlist on our classic alternative station CFUL in Calgary and compared. And about 62 per cent of the songs on the YO group's application were being played on our classic alternative. And those were, again, mainly bands like Pearl Jam and Weezer, Blink‑182, The Cult and Beck.
642 What was substantially different is that the YO application takes a different turn and combines components of hip hop and rap, and I am sure they will have a better grasp on exactly what that entails. But that is the kind of music that we would simply not focus on. Exclusively on alternative music. We don't see the correlation as strong between those two kinds of music.
643 COMMISSIONER MENZIES: Okay, thank you. I have a series of specific questions here. You have been pretty good, actually, at answering a couple of my question with one answer so far. But these next ones, just try to keep reasonably specific on or we will be here all morning. Actually, we have already been here all morning.
644 Now, you have outlined a fairly sharp philosophy for programming. But this is where we need some specifics on how it applies. For instance, how will your content be designed to reflect the tastes of an audience that subscribe to an extreme lifestyle?
645 MR. JONES: Well, the lifestyle is hardly extreme by their standards. I think it is what you measure it against.
646 COMMISSIONER MENZIES: But it is the marketing name for it.
647 MR. JONES: Right. So how will we reflect that?
648 COMMISSIONER MENZIES: Yes.
649 MR. JONES: Our programming on all our stations, again I will keep it brief, reflects the audience thereafter. The country music audience demands a certain kind of approach and we taken that approach on our country stations to be successful.
650 So with a station like this, in Ottawa for example, we do a lot of promotion that appeal to that kind of listener. In fact, our motto in Ottawa is "live for the moment" is "live for today."
651 And one of our most successful promotions there is a flyaway promotion called 24 Hours in Vegas where we take a planeload of listeners and we fly to Las Vegas and we don't provide hotel room. You have 24 hours to live for the moment in Las Vegas and fly home the next day, and accomplish what you can while you are there.
652 It is the kind of for better or for worse, right?
‑‑‑ Laughter / Rires
653 MR. JONES: And I can't talk about it, because apparently what happens there stays there.
654 COMMISSIONER MENZIES: Of course.
655 MR. JONES: But other promotions like that that involve ‑‑
656 COMMISSIONER MENZIES: Let me be more specific. How would it influence news, sports, entertainment, surveillance packages, lifestyle, health and education fillers, that sort of thing?
657 MR. JONES: Really, it influences everything we do. We have to put everything we do through that filter. So while the news stories on Hank FM may focus one direction, the news stories on this station would focus on another.
658 And maybe, Simone, you are best qualified to answer that question.
659 MS GILLIES: Yes. We are looking at having our news be different from other stations by providing news that targets and identifies with our target demographic, which is a younger demographic.
660 News being reported on other stations, however, it is not necessarily ‑‑ the news now is not necessarily reflecting the interests of this younger demographic. For instance, if you were looking at gang violence in the city it affects everybody, it affects young and old.
661 But our demographic might be more interested in knowing who gang violence is affecting people in clubs or whether they are going to go downtown, in the downtown area, rather than how it is affecting, you know, a homeowner in St. Vital.
662 COMMISSIONER MENZIES: Are there any specific challenges that building your content around this type of audience ‑‑ are there any specific challenges you face by doing that?
663 MR. JONES: I don't think the challenges in this demographic are any different than they are in ‑‑ they are different challenges, they are no more difficult than they are with any other demographic. You put yourself in that mindset, you have a keen understanding of who you are speaking to and a keen understanding of the issues that affect them locally and you go forward with that in mind. And the challenges are there, but they are no more difficult to overcome than they would be for any other specific.
664 COMMISSIONER MENZIES: Okay. If you are trying to build something edgy that means you get toward the edge on things. So what sort of safeguards do you have in place to make sure you don't fall over the edge?
665 MR. JONES: Well, it goes back to educating your staff, to understand what the target of the radio station is and what the mission of the station is. You know, with on‑air interaction it would involve recording listeners who call in and not taking live calls, you know, on the air. And it really does go back to understanding your audience and understanding your market.
666 COMMISSIONER MENZIES: So your interactive content won't be live?
667 MR. JONES: I am saying if someone calls into the radio station to request a song you would probably record that call and play it back in between two songs as opposed to taking that call live on the air.
668 COMMISSIONER MENZIES: Okay. And you are going to use online content on the air as well?
669 MR. JONES: Absolutely, online content is completely integrated with a radio station like this, yes.
670 COMMISSIONER MENZIES: Is there anything traditional about your newsgathering format or is it non‑traditional?
671 MS GILLIES: We are going to be using text messaging, online, email, all the latest technologies that are, you know, kind of a platform for the generation and the target demographic for the station. So we are hoping to get response and feedback from our listeners and make them a part, give them a voice, make this forum for them to discuss topics.
672 It will be traditional newsgathering. We will be adding three fulltime reporters. We are going to use Hank FM's ‑‑ myself and Bob Harris as well, to create a five‑person new steam with a news director sending us out, going out and reporting on different stories, assigning stories. And then we will come back, reconvene and split the news essentially between the two stations for what is appropriate for each station.
673 Obviously, people how are listening to Pearl Jam and Depeche Mode will have a different interest than people who are listening to Hank Williams Jr. and Carrie Underwood.
674 COMMISSIONER MENZIES: Okay, thank you. Can you explain the transition of your scholarship program, how it was originally in your written application and then in your clarification response it went from 20 students to 8, for instance.
675 MR. MURRAY: Yes. I am going to ask Glenda Spenrath to answer that question.