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Providing Content in Canada's Official Languages

Please note that the Official Languages Act requires that government publications be available in both official languages.

In order to meet some of the requirements under this Act, the Commission's transcripts will therefore be bilingual as to their covers, the listing of CRTC members and staff attending the hearings, and the table of contents.

However, the aforementioned publication is the recorded verbatim transcript and, as such, is transcribed in either of the official languages, depending on the language spoken by the participant at the hearing.

 

 

 

 

 

 

 

              TRANSCRIPT OF PROCEEDINGS BEFORE

             THE CANADIAN RADIO‑TELEVISION AND

               TELECOMMUNICATIONS COMMISSION

 

 

 

 

             TRANSCRIPTION DES AUDIENCES DEVANT

              LE CONSEIL DE LA RADIODIFFUSION

           ET DES TÉLÉCOMMUNICATIONS CANADIENNES

 

 

                      SUBJECT / SUJET:

 

 

 

 

 

 

 

Various broadcasting applications /

Diverses demandes de radiodiffusion

 

 

 

 

 

 

 

 

 

 

 

HELD AT:                              TENUE À:

 

Quartz Ballroom                       Quartz Ballroom

Matrix Hotel                          Matrix Hôtel

10001-107th Street                    10001-107th Street

Edmonton, Alberta                     Edmonton (Alberta)

 

June 4, 2008                          Le 4 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

 

 

 

 

Various broadcasting applications /

Diverses demandes de radiodiffusion

 

 

 

 

 

BEFORE / DEVANT:

 

Elizabeth Duncan                  Chairperson / Présidente

Rita Cugini                       Commissioner / Conseillère

Candice Molnar                    Commissioner / Conseillère

 

 

 

 

ALSO PRESENT / AUSSI PRÉSENTS:

 

Cindy Ventura                     Secretary / Sécretaire

Lyne Cape                         Hearing Manager /

                                  Gérante de l'audience

Véronique Lehoux                  Legal Counsel

                                  Conseillère Juridique

 

 

 

 

 

HELD AT:                          TENUE À:

 

Quartz Ballroom                   Quartz Ballroom

Matrix Hotel                      Matrix Hôtel

10001-107th Street                10001-107th Street

Edmonton, Alberta                 Edmonton (Alberta)

 

June 4, 2008                      Le 4 juin 2008

 


- iv -

 

           TABLE DES MATIÈRES / TABLE OF CONTENTS

 

 

                                                 PAGE / PARA

 

PHASE I (Cont'd)

 

 

PRESENTATION BY / PRÉSENTATION PAR:

 

CTV Limited                                      1574 /10321

 

Harvard Broadcasting Inc.                        1646 /10800

 

Evanov Communications Inc. (OBCI)                1711 /11202

 

Rawlco Radio Ltd.                                1766 /11525

 

 

 

PHASE II

 

No interventions / Aucune intervention

 

 

 

PHASE III

 

 

INTERVENTION BY / INTERVENTION PAR:

 

Paul Hothie                                      1843 /11931

 

Assist Community Services Centre                 1848 /11953

 

Lulu Bernal                                      1852 /11973

 

Punjabi Heritage Theatre Society of Alberta      1857 /11998

 

 

 

 

 

 

 

 


               Edmonton, Alberta / Edmonton (Alberta)

‑‑‑ Upon resuming on Wednesday, June 4, 2008 at 0904 /

    L'audience reprend le mercredi 4 juin 2008 à 0904

10314            THE CHAIRPERSON:  Good morning everyone.

10315            Madam Secretary.

10316            THE SECRETARY:  Thank you, Madam Chair.

10317            Before beginning, I have one small announcement.  For the record, Jim Pattison Broadcast Group Limited partnership has filed, in response to undertakings, a copy of the letter from FACTOR.  This document has been added to the public record, and copies are available in the public examination room.

10318            We will now proceed with Item 23 on the agenda, which is an application by CTV Limited for a licence to operate an English‑language FM commercial radio programming undertaking in Edmonton.  The new station would operate on Frequency 107.1 MHz, Channel 296C1, with an effective radiated power of 40,000 watts, non‑directional antenna, antenna height of 272 metres.

10319            Appearing for the Applicant is Chris Gordon.


10320            Please introduce your colleagues.  You will then have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

10321            MR. GORDON:  Madam Chair, Members of the Commission, Commission Staff, my name is Chris Gordon.  I am extremely pleased that my first appearance before the Commission as President of CHUM Radio is to present this exciting proposal for Edmonton's Essential 107.

10322            Before we begin our formal presentation I would like to introduce my colleagues on the panel today.

10323            To my right, your left, is James Stuart.  James Stuart is the Vice‑President and General Manager for CHUM Radio, Alberta.

10324            James has had over 15 years of experience in the Edmonton radio market, and joined CHUM four years ago to drive our launch of The Bounce.

10325            To James' right is Gisele Sowa, General Sales Manager and Assistant General Manager for The Bounce.

10326            To my left, your right, is Maie Pauts.  Maie is one of Canada's top experts in the genre of alternative music, and, specifically, this new and distinctive format of essential alternative.


10327            Maie was at the epicentre of the early alternative music scene, almost 20 years ago, when she was on‑air at CFNY, Canada's first alternative radio station.

10328            She has been with CHUM Radio for over seven years now, and will be the Program Director of Essential 107, should we be licensed.

10329            To Maie's left is Rob Farina, Vice‑President of Programming for CHUM Radio.  Rob works with our program directors across the country as they innovate with new formats and build multi‑platform connections with listeners.

10330            Behind us, in the second row, starting to my left, your right, is Lenore Gibson, Director of Regulatory Affairs for CTVglobemedia.

10331            Next to Lenore is David Goldstein, Senior Vice‑President of Regulatory Affairs for CTVglobemedia.

10332            Next to David is Kerry French, Vice‑President of Business Analysis for CHUM Radio.  She oversees our market and economic research, and provides our business development analysis.

10333            Next to Kerry, on the far right, is Jim Fealy, our Vice‑President of Finance.


10334            I would now like to ask James Stuart to begin our formal presentation.

10335            MR. STUART:  Thanks, Chris.

10336            I am extremely excited to be here with you today to share our vision for a new Edmonton radio station called Essential 107.  This application represents a truly distinctive take on the alternative format, one we are confident will resonate with the community of listeners who want to be a part of a social network of music and local reflection, but who cannot currently find what they are looking for on the Edmonton radio dial.

10337            We know there is room in the market for more choices.  The evidence is clear that the market is robust and shows signs of continued growth.  That said, we know that commercially viable spectrum is limited.

10338            In our time here today we will outline three key reasons why we believe the Commission should approve our application for Essential 107:

10339            One, our track record of success in Edmonton.

10340            Two, our unparalleled commitment to diversity and Canadian Content Development.

10341            And, three, our unique format responds to the needs of an underserved audience.


10342            Five years ago we sat here in Edmonton at an extremely competitive licensing proceeding.  CHUM Radio's response to the call was an innovative youth format for an underserved audience, with a view to changing the radio landscape for Edmontonians.  While there were skeptics, our local market research told us that the youth audience was looking for choice on the radio dial.

10343            We included in that proposal an investment in Canadian Talent Development of $4 million.  This was not simply a giveaway, but a purposeful series of targeted initiatives that were conceived to take unknown Canadian performers and create Canadian recording stars in the urban/contemporary/hit radio genre.

10344            In 2004, the Commission licensed what would become known as The Bounce.  Since its launch, we have managed to change the radio landscape in Edmonton, and we have helped repatriate young listeners to radio.

10345            We have also leveraged our CCD initiatives to create genuine Canadian stars.  While it has only been a few years, the results have been profound.


10346            Perhaps I could illustrate this with just two examples from one of those initiatives, The Bounce's "Showdown", an annual talent contest that we run.

10347            Kreesha Turner was our first winner.  As part of the prize package, we sent Kreesha to record with Vancouver's Hipjoint Productions.  This helped Kreesha meet Nelly Furtado's manager, Chris Smith, who agreed to represent her.  She has since signed an international recording contract with Virgin Music through EMI Music Canada, and I am very proud to say that her debut release "Passion" will be released internationally this fall.

10348            Our second winner was Shiloh.  Through the funding provided by CHUM Radio, she was also able to record with Hipjoint, where she attracted professional management, and is now on the verge of signing with a major record label.  In fact, as of late yesterday afternoon, we are very proud to confirm that Shiloh has now signed with Universal Canada.

10349            Her song "Alright" has been used in a broadcast of the U.S. television program "Gossip Girl".  More recently, her song "Raise a Little Hell" was featured in the new Ashton Kutcher and Cameron Diaz movie "What Happens in Vegas".


10350            You, the Commission, by that licensing decision, share in these successes, and we sincerely hope that our team's track record here in Edmonton will form part of your deliberations.

10351            Based on our success with The Bounce, we have discovered another opportunity to reach a truly underserved Edmonton audience, create a community, repatriate them to radio, and launch another series of groundbreaking CCD initiatives that will create the same kind of success for essential alternative artists.

10352            Our proposal for Essential 107 is designed to increase the diversity of music and spoken word programming available in the Edmonton market.  Essential 107 will have an intensely local focus.  This will include over 10 hours of spoken word programming each week, in a presentation style that is targeted to this underserved community.

10353            Our target audience is well educated, socially conscious, and politically aware.  To that end, we will offer them a minimum of 3 hours and 35 minutes each week of news and information programming, all of which will be locally produced and relevant to our specific audience.


10354            Essential 107 will also air a significant amount of Canadian music, with a minimum of 40 percent of the musical selections coming from Canadian artists.  A minimum of 25 percent of those musical selections will be from emerging Canadian stars.

10355            MS SOWA:  As mentioned earlier, when we applied for the licence to operate The Bounce, we made very ambitious promises relating to Canadian Talent Development.  With this application, we are looking to build on these significant achievements.

10356            The total value of our proposed CCD package is in excess of $10 million.

10357            To be clear, this amount is over and above the annual CCD obligations outlined in the Commercial Radio Policy.

10358            Of our proposals, there are two initiatives that we want to specifically highlight today.  The first is our proposal to provide a Community Radio Fund with $700,000 to establish an Alberta Cultural Diversity Program.

10359            This program will benefit campus and community stations in Alberta, and will allow them to fund local multicultural programming.

10360            In effect, the licensing of Essential 107 will result in the greatest increase in diversity, by allowing two of the three elements of the broadcasting system, private as well as campus community, to improve service in the market.


10361            The second is our cornerstone initiative, the Essential's "Start to Star" talent search.

10362            Building on the success we have had with The Bounce's "Showdown", this program consists of a comprehensive plan that involves the production of a CD, artist management, marketing, airplay and promotion.

10363            Local artists will submit three original songs to a panel of independent music industry judges.  Winning artists will get to work with the songwriters at Hipjoint to write and record a debut CD.

10364            The CD will be distributed and promoted by a Canadian‑owned record label, and all of the rights will reside with the artist.

10365            The lead single will be distributed to all format‑appropriate radio stations across Canada, not just to CHUM radio stations.

10366            A music video will be produced by a leading video director.

10367            The artist will automatically be enrolled in the CHUM Emerging Inde Artist Initiative, and receive guaranteed airplay, on‑air interviews, and marketing across all applicable CHUM radio stations.


10368            We will leverage all promotional opportunities to the benefit of Canadian artists, such as cross‑promotion on MuchMusic.

10369            And funds set aside for the Essential's "Start to Star" initiative will also be used for marketing materials, tour support and promotion.

10370            This level of commitment to an artist launch is unprecedented in Canada.

10371            I would now like to turn to Maie, to give you a better sense of the format in this underserved audience segment in Edmonton.

10372            MS PAUTS:  Essential 107 represents an exciting and innovative format that does not currently exist in Edmonton.  In fact, over 75 percent of the musical selections we propose for this station are currently not being played in this market.

10373            It would fill a musical void in the Edmonton radio community, and enhance the diversity of programming in this market.

10374            The format proposed is essential alternative.  In order to understand what essential alternative is, we need to look at how the alternative format evolved.


10375            Alternative music had its roots in the seventies, with punk, rock and electronic sounds.  It was reflected in the music of artists as diverse as the Sex Pistols, Craftwork, The Clash, and Canada's own Teenage Head, who just played Edmonton on Sunday night.

10376            While rooted in rock and pop music, alternative continued to evolve in the eighties to embrace a variety of sub‑genres ‑‑ for example, SCA, with the music of The English Beat; garage rock, with R.E.M.; the goth sounds of The Cure or Bauhaus; the grunge of Pearl Jam; and the list goes on.

10377            The genre was called "alternative", a word that described not only the music, but the fans that listened to it.

10378            Alternative music fans stood out because of the music they listened to, the way they thought, and how they looked.  Picture early eighties teens with pink streaks in their hair, and maybe a piercing or two ‑‑ pretty tame today, but the leading edge at the time.

10379            In the nineties, it was the Seattle‑based grunge rock sound that came to define alternative.  It escalated into a hard new rock sound, and came in and swooped up a huge audience of young male listeners.


10380            It became modern rock, and the alternative radio stations at the time all moved to serve this narrow market, which left all of the other genres of alternative, and the audience who was passionate about that music, without a home on the dial.

10381            In Edmonton, these fans have always had to work hard to find and support the music they love, through campus radio, music magazines, word of mouth, live venues, TV and the internet.

10382            They have been at the forefront of musical trends in the last three decades because they do welcome innovation and change.  They were among the first to jump on the internet, and to embrace all forms of technological advancements.

10383            These disenfranchised alternative music fans are now in their thirties and forties, and while they are not typically married with children, well educated and in good‑paying jobs, they still have that early‑adopter mentality.  They want to hear the music they grew up with, as well as the latest from the contemporary alternative music scene.

10384            MR. FARINA:  As an audience, these listeners are a disenfranchised segment of the population, who, in Edmonton, have never had a radio station to reflect their interests, music and ideals.


10385            In fact, out of the three formats we tested, essential alternative showed the largest underserved audience.  This could be partly attributed to the lack of exposure of true alternative artists, despite the launch of SONiC three years ago.

10386            Essential 107 will target adults aged 25 to 44, with a varied alternative music sound.  In order to reflect the music they grew up with, the station will air essential alternative tracks from the past 25 years.

10387            This audience still has a great interest in today's diverse alternative music scene, and, consequently, the station will feature a substantial amount of current alternative music not receiving any significant airplay in Edmonton.

10388            New music from emerging Canadian artists will also be featured prominently, including music from artists such as Buck 65, Emily Haines, Stars, Lites, and Patrick Watson.

10389            As mentioned earlier, Essential 107's listeners were early adopters of new media.  As such, the radio station will have an innovative web presence.

10390            Essential 107 will utilize several interactive touchpoints to forge a relationship with our listeners, and serve them on multiple platforms.


10391            At the core of our interactive plan for Essential 107 is a sophisticated social networking portal, which will allow our listeners to interact with friends and other music fans.

10392            The social networking component of Essential 107's website will let listeners know when their colleagues are online, and if their friends are attending any of the station events or concerts.

10393            Essential 107's web presence will also provide listeners extensive content modules that will keep them informed of local concerts, events, local news stories, and news about their favourite bands.

10394            Listeners will be able to not only access the information online, but will be able to update it and comment on it through message boards, blogs or podcasts.

10395            To further keep listeners engaged to Essential 107, our online platform will provide streaming of new and vintage music videos, full‑song streams of new emerging artists, or on‑demand content of shows previously aired live on the radio station.

10396            To give you added insight into the station, we have prepared the following short video.

10397            Please roll the tape.

‑‑‑ Video presentation / Présentation vidéo


10398            MR. GORDON:  As you can see, Essential 107 is clearly an exciting concept that will resonate with a segment of listeners in Edmonton who are currently disenfranchised with radio.

10399            Edmontonians want choice, and the market conditions are strong and show future prospects for growth.

10400            However, we are looking at the last few commercially viable frequencies, and we all know that the Commission is responsible for licensing based on the best use of scarce spectrum.

10401            We respectfully submit that our application is the most responsive to the listeners of Edmonton, as well as the objectives of the Broadcasting Act and the Commercial Radio Policy.

10402            As we have outlined for you today, we have a strong track record here in Edmonton at surpassing expectations.  Our application offers the most diversity and Canadian Content Development, both in quantum and potential impact.

10403            And we have researched the market and found a truly underserved local audience segment, which can be repatriated to radio with minimal impact on existing services.


10404            In a very short time, The Bounce's team here in Edmonton has worked to change the radio landscape, and has achieved admirable success in the face of a serious market imbalance.

10405            As a single FM operator in a market where several large players have two, three and four stations, we are easily left out of national advertising buys.

10406            As Gisele can tell you from personal experience, we are at a serious disadvantage in the local retail advertising market.

10407            By licensing Essential 107, our local team will have the tools, not only for a fair fight in the marketplace, but the critical mass to enhance our ability to provide diversity and service for Edmontonians.

10408            The Commission is well aware of CHUM Radio's long and proud legacy.  My personal vision includes a future for CHUM Radio that will build on that legacy by fostering intensely local Centres of Excellence, each with their own interactive community, while staying at the forefront of format innovation and content creation.

10409            I believe that this application for Edmonton's Essential 107 is part of that vision.


10410            For the benefit of Edmontonians, we sincerely hope that the Commission will give us another opportunity to surpass your expectations and share in our collective success.

10411            Thank you, and we look forward to your questions.

10412            THE CHAIRPERSON:  Thank you, Mr. Gordon.

10413            Commissioner Molnar will start the questioning.

10414            COMMISSIONER MOLNAR:  Thank you.  Good morning.

10415            I would like to begin by getting a better sense of your target market.  You say that they are 30 to 40‑year‑olds.  Is there anything more that you can tell me about your typical listener?

10416            Is it male?  Is it female?

10417            MR. GORDON:  The target market is adults 25 to 44.  The sweet spot, if you will, would be 30 to 40‑year olds.

10418            It's a pretty even balance between male and female.

10419            I would like to ask Rob Farina to expand on that a little bit for you, Commissioner Molnar.

10420            MR. FARINA:  Thank you, Chris.


10421            Commissioner Molnar, one of the things with the market that we are targeting, as well as looking at where they are today, is where they came from.

10422            As youth, this was a real disenfranchised market.  They didn't fit into the conventional rock scene or the pop scene.

10423            As Commissioner Cugini said yesterday, people were either rockers or into disco, but there was this third group that didn't fit into either of those genres.  They listened to this music.  Some of it originated from the U.K., but a strong alternative scene exploded throughout all of North America.  The music came from diverse genres, and this was an audience that didn't subscribe to convention.  They were very different.

10424            In growing up, they always had to seek separate avenues, rather than the conventional avenues to find their music.

10425            It is a very distinct audience, but now, as they have grown, and they are in their thirties and forties, they have real‑life issues like we all do.  They have kids, they have jobs, they have mortgages to pay.


10426            So, in terms of their lifestyle, there are many similarities, but yet that perspective, which they had from a very young age, gives them a very unconventional approach to how they look at things.

10427            COMMISSIONER MOLNAR:  So it is your view that this target audience is not listening to radio today?

10428            MR. FARINA:  It is our view that this target audience ‑‑ the music they grew up with is not widely available on radio today.

10429            So while they may be going to a series of different places to find it, there is no one avenue for them to have a format that really targets them.

10430            In fact, in Canada, the only format that targeted this audience during their youth, which was predominantly during the eighties, was CFNY in Toronto.

10431            This was a very small niche audience, and throughout the course of time the appeal for the music has grown, as the research has shown us.

10432            We were taken aback by the research findings, because a lot of this music was never really exposed in Edmonton.


10433            We approached the research study looking at the three holes that we thought the market could sustain, which wouldn't impede on the existing players, but we didn't know what to expect in terms of this essential alternative because of the lack of exposure that a lot of this music had gotten in the market.

10434            The first time this market got an alternative station was three years ago, with SONiC, and SONiC is very indicative of what the alternative rock format is today, which is completely different from what this format used to be.  The alternative rock format merged into a very young, male‑skewing, hard rock sounding station, and a lot of the artists that populated alternative playlists previous to that disappeared from playlists because they didn't fit that sound.

10435            COMMISSIONER MOLNAR:  Okay.  Thank you.

10436            I am just trying to get a sense ‑‑ as you know, there are many stations, including one of your own, in the market today, and there are many applicants here today, and I am trying to get a sense as to where these people are today and what they are listening to.


10437            Obviously, you believe that they will tune in and have a desire to listen to this more.  Would this, in your view, become their predominant station, their loyal listener station if you will?

10438            MR. GORDON:  There is no doubt that they are listening to radio stations currently, but they are searching in other places to find the music they are looking for on a regular basis.

10439            Yes, we believe that we will be able to repatriate a number of listeners back to radio who will make this their number one choice.

10440            I think that Maie Pauts could give you some real examples of what we would try to do, and how we would approach that audience, and how we would be speaking to them in a different manner.

10441            Maie...

10442            MS PAUTS:  Thank you.

10443            Let me preface my answer by giving you a little analogy that I could, maybe, associate with these listeners.  For example, if you are a vegetarian and you go out for dinner with your friends at any given restaurant, you can find a dish or two that you can eat and enjoy.  But you, as a vegetarian, would much prefer to go to a vegetarian restaurant, where you can enjoy everything on the menu.


10444            This is how I see the essential alternative listener here in Edmonton.  They are looking for a place where they can enjoy and find their needs in a full‑service radio station for them.

10445            This would not only be reflected in the music, but also in the spoken word.

10446            At this point these people are jumping around to various different ‑‑ not only radio stations, but other formats, to find everything they are looking for, whether it's getting the new music they want off the internet, maybe some traffic from one station, and maybe some news from another.

10447            What we would like to propose is that we can give them everything in one concise package with Essential 107.

10448            COMMISSIONER MOLNAR:  Is there any expectation, from an advertiser's perspective, that you can target these people in such a way that advertisers can reach a new audience through your station?

10449            MR. GORDON:  Absolutely.


10450            Some of the differences between this station ‑‑ and I am going to throw it over to Gisele Sowa to talk about some of the advertising and some of the advertisers we have spoken to, but the key thing in the differentiation between the format is that 75 percent of the music we will be playing on the station is not currently heard in the marketplace.  We feel that that, in and of itself, will repatriate a lot of listeners back to Essential 107.

10451            Gisele...

10452            MS SOWA:  And it will also provide a new group of listeners to showcase to the advertisers.  If they are not currently listening to anything specifically, we would be able to sell them to new advertisers.

10453            COMMISSIONER MOLNAR:  I apologize for going on about this, but I am struggling somewhat.  You say that they are thirty to forty‑year‑olds, they are male and they are female.

10454            Give me an example.  If you were to go to an advertiser, how would you define your market to the advertiser to say, "Here they are.  This is what they look like, and they are new to radio"?

10455            How will you do that?

10456            MS SOWA:  I think, to balance off what we offer with The Bounce, they would be the older generation, and we would be able to offer them a full complement package of the demographic.

10457            They would balance off The Bounce.

10458            Does that help?


10459            MR. GORDON:  We have done extensive research into what this audience profile looks like, and Kerry French has provided a lot of analysis of who the audience is and what they are.  Perhaps she could shed some light on it and help to answer your question.

10460            MS FRENCH:  Thanks, Chris.

10461            Commissioner Molnar, this is really a unique audience.  They are, from an age demographic, 25 to 44, and there is a balance between male and female, and they are like‑minded people.

10462            We referenced when Maie was on the air at CFNY, which was this audience 15 years ago.

10463            At the time, I was also selling CFNY, and it was one of the easiest radio stations I have ever had the pleasure of selling.  The reason was, the profile was so distinct.

10464            I look at that audience, which exists in Edmonton, too, and how it has grown in the past 15 years.

10465            Both Maie and I have kept in touch with that audience over the years, because it was so special.  They were all well educated.  They had a different approach to life.  They were into environmentalism before it became mainstream.  They were people who worked in high‑end jobs, even in their early twenties.


10466            They were, as we referenced before, early adopters of the internet.

10467            They were early adopters of technology.  They were the early workers in the technology industries in this country, and the electronics industries.

10468            The profile that we are going to be able to present to advertisers will really give us a heads up in the market, because these people have high disposable incomes, and they are loyal, as they were 15 years ago at CFNY.

10469            They are loyal not only to the radio station, but to the advertisers on the radio station, which doesn't always happen.

10470            It's a great profile.  They have disposable income, and they are the kind of people who most advertisers really want to reach with their message.

10471            COMMISSIONER MOLNAR:  Thank you for that.

10472            Just to ensure that our record is complete, I would like to ask you, if you would, to compare your format to some of those that exist in the market today.


10473            I would ask, specifically, if you could explain to us the similarities and differences between your format and CHDI, as well as CFBR, the Astral rock format.

10474            MR. GORDON:  Absolutely.  CHDI, SONiC FM, is a modern rock station which attracts a young, predominantly male‑skewed demographic, generally 18 to 34.  Our station is 25 to 44.  It will be attracting a male and female demographic.

10475            The Bear is also a male‑skewed radio station, which attracts an 18 to 44‑year‑old predominantly male audience, with a mix of classic and new music.

10476            Our station is completely different. Seventy‑five percent of the music that will be played on Essential 107 will be different from what is heard on those stations, and what is heard in the market currently.

10477            COMMISSIONER MOLNAR:  Could you also comment on some of the other applicants that we have in front of us with Triple A formats?

10478            I would note, particularly, Evanov, Harvard, Jim Pattison, as well as Don Kay, if you have had a chance to look at their applications and compare what you are proposing to what they are proposing for the market.


10479            MR. GORDON:  Sure.  I would like to ask Rob Farina to jump in here, as well.

10480            There are a lot of adult alternative applications in this proceeding.  Our research found that the appetite, on the whole, for adult alternative was very small, and, obviously, we took a much different approach in looking at what our niche was.

10481            Adult alternative is over here, on an older, male basis, and alternative rock is over here, on a younger, predominantly male basis.  Our station complements those two and fits nicely in the middle.

10482            Rob...

10483            MR. FARINA:  Thanks, Chris.

10484            We have a lot of experience, both in researching markets and researching music formats and operating formats.  We operate an adult alternative station in Windsor, which is, admittedly, a real struggle.

10485            In our research, we are finding that the adult alternative format isn't viable unless it is in a huge market, because the audience is so niche.  So markets like Vancouver and Toronto can sustain that format.

10486            When I make that comment, it is important that I clarify how we did the research.


10487            CHUM Radio was one of the first companies to implement market research into programming our radio stations, and what we found was, when you are testing a music format, giving a description of the format to the audience does not allow you to get beneficial information to get a business plan from, because that information is open to interpretation to each consumer.

10488            If you ask people, "Do you like The Beatles," The Beatles could mean "Helter Skelter" to one person and "Yesterday" to another.

10489            So the way we employ the testing of our music formats is that we play a composite of the radio station, which is an audio clip, where we play clips of the kinds of songs that format would represent.

10490            We then ask people whether this is a radio station they would listen to.

10491            Based on the people who say they would listen to the radio station, we then ask them, "Would this be your favourite radio station?"


10492            When we did that in our testing here, with the adult alternative audience, we only found that 9 percent of the people were the potential audience.  Of course, as the Commission is aware, you never get the full potential audience, but that is the maximum potential of what is there.

10493            We noticed, of the other applicants, that the only one that used a similar methodology in actually playing an audio representation of the radio station was Pattison, and Pattison's research showed an even lower appetite for the format.  Five percent of people said that it would be their first choice of radio station.

10494            With this format, we had 22 percent of respondents who told us that this would be their favourite radio station.

10495            Further to that, asking questions about general perceptions, like "Does this radio station play too many commercials?  Is the music too hard or too soft," that kind of information is very beneficial, but when you are asking about actual music, the artist's name ‑‑

10496            There are two factors at play.  First of all, there is the public persona of the artist.


10497            In the nineties, I know from programming radio that when we used to ask people "What do you think of Madonna?" they would say, "I hate Madonna."  But yet, you would test the music, and Madonna songs would test well.  There is a difference between a song that they like to hear and an impression of the artist.

10498            The other thing at play is, nobody wants to be uninformed.  Chances are, when you name artists, few people know who all of the artists are.  We have jobs and lives and all of that going on, but few people want to feel uninformed.  So, generally, there is a disposition in our research experience of being able to give an answer, so that the respondent doesn't feel like they are uninformed.

10499            I feel that a keynote differentiation is this research, which is the same methodology that we employ in making all of the programming decisions at all CHUM Radio stations, and it has allowed CHUM Radio stations to rank number one or two in their target demos in most markets that we operate in.

10500            COMMISSIONER MOLNAR:  Do you use this format anywhere else?

10501            MR. GORDON:  No, it's a brand new format.  We are developing it from the ground up, based on the research here in Edmonton.  It is an absolutely brand new entity that we are building right from scratch.

10502            COMMISSIONER MOLNAR:  Okay.  Thank you.


10503            I would like to ask about your programming.  You have indicated in your application that, although you plan on providing 125 hours of local programming, you are committed to offering a minimum of 84 hours of local programming per broadcast week.

10504            Is that correct?

10505            MR. GORDON:  That's correct.

10506            COMMISSIONER MOLNAR:  I am trying to understand what you would propose fits the difference between 84 and 125.

10507            MR. GORDON:  Well, 84 would be the minimum.  We actually propose that 125 hours a week would be local programming.

10508            The hour that we had not provided in here for local programming is a show that Maie was actually going to be producing for the station, but when Maie heard about the station, she loved the station so much that she agreed to be the program director.

10509            So, in effect, there will be 126 hours of local programming.

10510            COMMISSIONER MOLNAR:  So where you said that you were committed to 84 hours, that's not the case, it is 126 hours of local programming.

10511            MR. GORDON:  That's correct.  Eighty‑four was the minimum, yes.


10512            COMMISSIONER MOLNAR:  Thank you.

10513            I want to reference something that you mentioned in your supplementary brief, where you spoke about the outcomes.

10514            I don't think that you need to go to it, I can read it for you.

10515            You had indicated that approval of this application would result in a number of outcomes, and you said that it will increase the programming and cultural diversity available in the Edmonton radio market.

10516            I wondered if you could elaborate on how you felt your radio station would increase the cultural diversity in this market.

10517            MR. GORDON:  I would ask James Stuart to respond to that question.

10518            MR. STUART:  Thanks, Chris.

10519            Commissioner Molnar, with Essential 107 what we are going to do is, essentially, build on the success that we already have had in launching The Bounce in the community and making it a part of the community and the fabric of Edmonton.


10520            We are going to be looking at every opportunity to, essentially, bring the culture of this city onto the airwaves.  It is an exceptionally diverse and cultural city in Canada, whether it be the festival season, which is now starting ‑‑ you can't go for a week or a weekend from now until the end of the summer without going into another festival of some sort, whether it be The Fringe or the Heritage Festival or the Folk Music Festival, which is internationally known and, certainly, world famous.

10521            The festival season sort of takes over this city in the summertime and turns it into something that it really is well known for within the area, but certainly outside our boundaries, and a lot of people don't give us credit for that.

10522            What we want to really do is reflect that on a local basis by being involved in every single festival that we can possibly be involved in, especially within the target demographic of 25 to 44.  These people, as mentioned earlier, have kids.  They have families now, and they are going out and taking advantage of the festival season.


10523            The cultural side of the station will reflect what happens in the city on an annual basis, and certainly throughout the summertime, but throughout the entire year we are going to be airing, five times a day, a 60‑second vignette called "Edmonton Essentials", which will highlight what is going on in the cultural/artistic side of the city, whether they be concerts or plays or things that are coming to town of interest for anybody in the artistic world.

10524            MR. GOLDSTEIN:  Commissioner Molnar, I would like to add a comment specifically to the cultural diversity element.

10525            CHUM Radio has been at the forefront of cultural diversity initiatives for many years, and was the first radio group that proposed a cultural diversity best practices piece to the Commission.

10526            One of the things that we wanted to do to, if you will, buttress the application is something that we have had success with in the past, that is, targeting CCD initiatives that would also complement the desire to bring cultural diversity to the fore.

10527            Specifically, in this application, and in the past, we have used our partnerships with AVR and other initiatives, but in this specific application we have built a CCD initiative with the National Campus Community Radio Association for specific, targeted, multicultural advancement initiatives, so that they can build capacity within the community, as well.

10528            COMMISSIONER MOLNAR:  Thank you for that.


10529            Maybe I will move on, then, to CCD and ask, as it relates to your campus and community initiative, you had proposed to give money to the Community Radio Fund of Canada ‑‑ and I believe this is an issue of timing between when the applications were to be submitted and when we would have put out the decision relating to the Community Radio Fund.

10530            The decision on the Community Radio Fund allowed that, after the first $200,000 of funding, the Community Radio Fund could only retain 5 percent of revenues in excess of the $200,000 for administration.

10531            I wondered if you would be willing to obtain a letter from the Fund attesting to the fact that they would reinvest the difference between the 12 percent initially proposed and the 5 percent, and have that reinvested into the programs of your Fund.

10532            MR. GOLDSTEIN:  We have that letter, and we will submit it to Staff.

10533            COMMISSIONER MOLNAR:  Thank you very much.

10534            While I don't have other questions related to CCD, I note that you certainly have a very complete proposal for that.

10535            It was complete, so I have no questions.


10536            I would like to ask a more open question with respect to programming and the format that you are proposing.

10537            I wonder if you could tell me why you believe that the format would be the best choice and provide the greatest degree of programming diversity to serve the Edmonton market.

10538            MR. GORDON:  We believe that the station is a brand new entity.  It creates a new and very influential musical sound that will repatriate people back to listening to radio.

10539            As Maie was mentioning, a lot of these listeners have gone to different places to find the music they really love, and this station, based on the research we have done, will absolutely repatriate those people, to make it their favourite radio station.

10540            We firmly believe that local radio works, and when you provide a service that has local colour, local announcers, local personalities, local business, weather, traffic, and which speaks to those concerns, those people will come back to radio, and they will make that radio station their first choice.

10541            We believe that the audience is underserved, and we will bring them back to listening to radio.


10542            MR. FARINA:  I think the uniqueness of the format is an important part of this, too.  We analyzed all of the music played in the market of Edmonton for four weeks, using Mediabase, from April 27 to May 25.  We looked at the top 1,000 songs spinned in the market.  That represented 37,485 times that those top 1,000 songs were spun.

10543            Of those spins, 14 percent of them were titles that Essential alternative would play.  That represented only 11.9 percent of the spins in the market, or 4,463 spins.

10544            I think what is of note, though, is that these titles didn't come solely from The Bear or SONiC.  Actually, a lot of the new and emerging titles, and some of the older titles, came from stations such as JOE FM or even The Bounce.

10545            What we are finding is, the alternative music scene in Canada, a great segment of it, is made up of artists who don't really fit into a format right now.


10546            I want to use the example of Feist.  I know that the Commission is sick and tired of hearing every applicant talk about Feist, but she is an important artist to talk about, in that, when Feist's record first came out, there was no airplay on Feist.  They released a single called "One Evening", it didn't get any airplay, and the record was actually out for a couple of years before she got a little bit of airplay.

10547            Then, with the second album and the Apple commercial, Feist's career broke right open.

10548            This is the kind of format that an artist like Feist would get airplay on ‑‑

10549            I should not have put a candy in my mouth and tried to speak.

10550            This is the kind of format that an artist like Feist would get support on at the ground level, and it is targeted to an audience that is really engaged by new music.

10551            I have decided to shut up and eat this candy.

‑‑‑ Laughter / Rires

10552            COMMISSIONER MOLNAR:  Thanks for that.

10553            I have a candy in my mouth, too, so we will both be slurring on the transcript.

10554            MR. FARINA:  You are managing it much better than I am.

‑‑‑ Laughter / Rires


10555            COMMISSIONER MOLNAR:  You put into your financial projections that 35 percent of your revenue would be generated from existing radio stations.

10556            Listening to what you are telling me ‑‑ well, I am not going to presuppose your answer.

10557            Why don't you tell me where within the system you feel ‑‑ what stations do you feel that 35 percent would come from?

10558            MR. GORDON:  I am going to ask Kerry French to answer that question.

10559            MS FRENCH:  This is a very difficult question to answer, and there are a couple of reasons why it is difficult.

10560            Radio advertising and audience levels are kind of moving targets.  When we are on the air ‑‑ that will be a year or so from now.

10561            The audience that we see right now will move around from station to station.  The advertising revenue will also move around from station to station.

10562            So to get really specific as to where the money is going to come from is quite difficult, but let me also explain that the growth of radio advertising has been amazing in Edmonton over the past several years.


10563            We are looking at ‑‑ I think the figure is ‑‑ rolling 52 weeks, according to tram, the market is sitting at $82 million, which is $7 million more than the previous year.

10564            This year we are on track to hit, probably, $86 million to $87 million.

10565            We expect that this will continue for the next couple of years, and a lot of our revenue will come from that growth.

10566            The impact that we will have on the other radio stations is more that we will slow their growth curve a little, rather than actually take money away from them.

10567            Their increase might be a little less than it would have been if we weren't on the air.

10568            The particular stations that we are most likely going to affect going forward are the top stations in the market, particularly in the broader buying demographic of adults 25 to 54.

10569            Those top stations are JOE, The Bear, CISN Country, CHED and EZ Rock.


10570            They are the top five, and particularly with national advertisers.  When they buy a market like Edmonton, they don't buy just one radio station, they will buy three, four or five, to reach ‑‑ usually their target is around 50 percent of the market, and there is a pool of money that will go to reach that 50 percent.

10571            It is not that a certain part is apportioned to CHED or a certain part is apportioned to The Bear, there is the total amount of money, and each of the radio stations puts a presentation together to get part of that money.

10572            So we are going to get part of that money, and where it actually comes from is difficult to quantify, but some of those stations who are going to be on the buy with us may get a little less.

10573            COMMISSIONER MOLNAR:  Thank you.  That's a very fair answer, and it answered, in part, my next question as well.

10574            You have projected very positive revenues coming from this station, some $30 million over a seven‑year licence term of revenues, with a relatively small impact on incumbents.

10575            My question was going to be:  How does that play out?

10576            How do you see being able to generate such a significant amount of revenue with such a minimal impact on incumbents?


10577            I will let you answer.  I think that perhaps you have given me part of the answer already, but ‑‑

10578            MR. GORDON:  I think that, in the early part of the licence term, we are talking about 1.2 percent of the total market revenues in the first year.

10579            The majority of those dollars come in Years 5, 6 and 7.  We feel that early on, projecting to make $1.5 million in Year 1 ‑‑ over the term, the majority of that figure comes in Years 5, 6 and 7.

10580            MS FRENCH:  Commissioner Molnar, if I could add to that answer, when we put together our revenue projections, there are several ways we approach it.  One of the ways is to look at the available revenue in the market and what our projected audience levels are going to be over the licence term.

10581            We apply, then, a power ratio, which is really the difference between the percent share of tuning that you have and the percent share of revenue in the market.

10582            And we see that power ratio from a lot of experience.  We have tracked power ratios in all of our radio stations, and the ones we have launched, and we see how, generally, the power ratios grow over the seven‑year licence term.


10583            So we apply that factor and come up with revenue projections based on it.

10584            And then we do it a second way.  It's kind of a top‑down/bottom‑up methodology, where we will look at historical sell‑out figures, particularly with our new launching radio stations.

10585            It takes time to develop relationships with clients, so, in the initial stages, you don't sell all of the inventory you have available.  You start to grow in the percentage of sell‑out over time.

10586            In the first year, because we have audience projections, we can translate those into actual average quarter‑hour figures and rating point figures, and we know what the market can bear because, not only do we have a radio station in the market, but it is generally understood how the market is trading.

10587            So we get from that the kind of rate that we can expect to get from our clients in the first year, and as that grows.

10588            When we put those two methodologies together, if they are within a reasonable tolerance level, that gives us a lot of comfort that we are predicting the right level.


10589            In this case, with Essential 107, Gisele, who is the General Sales Manager, and I both looked at revenue projections, and we did them separately, without each of us looking at each other.

10590            So, when we got them together, we kind of joked and laughed about it.  She said, "I can't believe how close these are."

10591            So, in this case, there were three ways we did them, so we are pretty comfortable that we can achieve these projections.

10592            COMMISSIONER MOLNAR:  Thank you.

10593            With your research methodology, is there any impact at all on how many entrants would be licensed here today?

10594            MR. GORDON:  Our projections were based on the licensing of one station.

10595            COMMISSIONER MOLNAR:  Having listened to what has been occurring here this week, and speaking of the economic prosperity that is here, and how significant is the growth, what is your expectation, or what do you believe the market could actually afford as regards new licensees?

10596            MR. GORDON:  Based on the growth in the market in the last three years, we feel that the market could support three new entrants, one of them being an ethnic station.


10597            COMMISSIONER MOLNAR:  Just one more thing.  You mentioned in your opening remarks, and you have also commented within your application about the issue of competitive imbalance.  You noted in your opening remarks the impact that has on your ability to be successful in national advertising.

10598            I wonder if you could explain to me what other issues there are related to competitive balance between you and the other entrants here in Edmonton.

10599            MR. GORDON:  Sure.  When you have a consolidated environment, there are generally three issues that you are facing when you are a stand‑alone station and competing with other players.

10600            The first one is on the programming level.  Other players in the market can adjust the formats on any one of their stations.

10601            For example, if they have four stations, they can easily adjust the format of one of those stations to either get in your way or to even stop you from growing.

10602            Recently, right here in Edmonton, one of the companies changed the format of one of their underperforming stations in light of this hearing.


10603            There is also the issue of efficiencies and synergies.  When you are a stand‑alone station, you have all of the back office and all of the administrative costs that go with one station.  When you have more than one station, you can spread those costs over a number of other stations.

10604            Lastly, and, of course, the most important disadvantage is in sales.  From a national sales point of view, I could give you an example of something that took place three or four weeks ago, when a national car manufacturer came into the market and was looking at our station and looking at another station, which had, basically, the same demographic profile and the same audience numbers.

10605            The other company was able to offer substantially more in order to lure that business from the agency.  They were able to offer a live remote broadcast on one of their other stations.  They were able to offer a business interview on their news and talk station.  They were able to offer unsold inventory on a station that was not performing as well as their other three stations.

10606            If I was the agency, I would buy those other stations and not buy our station.

10607            That is the biggest disadvantage from a sales point of view.


10608            Gisele could give you some examples on a retail basis of how that affects us, as well.

10609            MS SOWA:  The same thing happens locally.  We will be invited to present our station, as all of the other stations in the market will be, and we will put together a great presentation ‑‑ which happened recently, and we were not awarded the contract because one of the clusters was able to offer 4:1 ‑‑ four of their radio stations versus one of our stations ‑‑ where they can offset the extra promotional time, and even the cost to do business.

10610            That is one case.  There are other cases where the clusters act as sort of a mini agency for the client, and will, I guess, not allow our reps any contact with the buyer.

10611            That is created, I guess, because they want to be the marketing expert, but we really have very little control over whether or not there is a change in the market if we can't really present our case.

10612            That happens quite often in the market.


10613            Our team started three and a half years ago, all very new to radio.  All of the reps have worked very hard to make inroads and create a difference in the marketplace, and become somebody who will super‑serve the client.

10614            So they have done a good job, but they are still being blocked out in certain areas and not able to really showcase what the station could do.

10615            With two stations, they would be able to bring more information and more benefits to the client, and, again, continue with that super service and be able to offer more and to compete better.

10616            COMMISSIONER MOLNAR:  Thank you.

10617            I just find that whole issue a bit troubling, as you see who is before us through this hearing.

10618            As you know, there are some brand new entrants, there are a number of regional players who are looking to enter the market with an initial station, and I just wonder how significant an issue this really is in competing in what is a highly concentrated market here in Edmonton.

10619            MR. GORDON:  It is an issue.  When you are a stand‑alone station in a major market competing against consolidated competitors, it is a more difficult path to travel than being in a cluster that has more than one station.


10620            MR. GOLDSTEIN:  If I could add, Commissioner, the Commission itself has grappled with this issue for a long time.  It presented the issue itself in the Commercial Radio Policy in 1998, when it first announced the new policy, and it raised it in several licensing decisions where there was an incumbent like ourselves who had one FM station in the market and was trying to compete against multi‑station groups.

10621            It is a difficult balance, but one that the Commission has grappled with itself.

10622            COMMISSIONER MOLNAR:  Fair enough.  I know that we have had some discussions.

10623            Let me ask about the efficiencies and synergies, and how this has all played out into your financials.

10624            You have a financial picture here, which I assume is based on the expectation of two stations, so stronger, more aggressive, or more successful sales.

10625            Is that right?

10626            Could you tell me what the impact would be of these synergies and the strengthened presence in the market, and does that show up within your financial projections?

10627            MR. GORDON:  It is in the financials.


10628            The synergies that you gain in a consolidated environment are in areas such as administration, finance, traffic, creative production and engineering.

10629            The separate and distinct parts of those are always in programming.

10630            For Essential 107, we would have 14 full‑time programming people who would be generating the on‑air content and the on‑air product of the station.

10631            In total, there would be 22 full‑time, new employees dedicated to Essential 107.

10632            COMMISSIONER MOLNAR:  Thank you, those are my questions.

10633            THE CHAIRPERSON:  Commissioner Cugini.

10634            COMMISSIONER CUGINI:  Thank you, Madam Chair, and good morning.

10635            Ms Pauts, I have to thank you for taking me down memory lane and reminding me of my Friday nights at the Silver Crown.

‑‑‑ Laughter / Rires

10636            COMMISSIONER CUGINI:  And I am only going to admit to piercings in my earlobes.

‑‑‑ Laughter / Rires


10637            COMMISSIONER CUGINI:  So I get the format, in other words.

10638            What I am curious to know, though, is, you do operate The Bounce here in Edmonton, and I know it is a completely different format ‑‑ or is it?

10639            Do you think that if you were licensed for Essential 107.1 you would have to make any adjustments to the playlist on The Bounce?

10640            MR. GORDON:  Absolutely not.  The Bounce is a highly targeted, youth‑based station, slightly more female than male.

10641            We feel that the youth market in Edmonton is very well served with The Bounce, as well as SONiC.  In the last round of licensing, both stations were granted licences and have done a tremendous job in repatriating the youth market.

10642            Statistically, since those stations came on three or four years ago, youth tuning in the market has actually increased by 4 percent.  BBM shows that in other markets across Canada youth tuning is down by 9.

10643            So we feel that the market is very well served, and licensing Essential 107 would make zero changes to The Bounce.

10644            COMMISSIONER CUGINI:  Let's talk a little bit more about the youth market.


10645            I am just going to ask you:  Do you think you are cutting yourself short by not doing something to get the youth ‑‑ the younger section of the demo to listen to this music?

10646            I will give you an anecdote.  My niece looked at the box cover of the Live Aid DVD and said, "Oh, my God, Auntie Rita, all of these people performed at this one concert?"

10647            She is only 22.

10648            Is there something that this station will do, either through its spoken word or through its music programming, to capture the younger demo?

10649            MR. GORDON:  When we look at the research, 25 to 44 is where 60 percent of the audience resides.  There is a large portion that resides below 25, and a smaller portion that resides above 25.

10650            The things that we will be doing on the air will be a lot different from what other stations will be doing.  It will be a very music‑intensive format.  The personalities on the air will be extremely well schooled in music.

10651            You mentioned the Live Aid box set.  Our on‑air personalities will have incredible knowledge about those artists and about those concerts.


10652            Maie can certainly speak to how we will be speaking to younger people about the music we play and the lifestyle of the radio station.

10653            MS PAUTS:  I think the interesting thing about this particular format, and why we are saying that we are targeting 25 to 44, is that it's not age that exclusively defines this audience, it's a cyclograph.

10654            When we are saying that, yes, me, as a 40‑year‑old, can totally remember and appreciate all of those artists on the Live Aid CD, so can an 18‑year‑old.

10655            As a matter of fact, I have a teenager at home, and when she saw the potential of this opportunity, she was like, "Oh, my gosh, if only we could have a station like this in Toronto, as well."

10656            I feel that it speaks to a broader spectrum than perhaps what we were initially targeting here on paper.

10657            That being said, when we are talking about cyclographs, these people, whether they are 18 or 55, have a passion for new music.  Of course, we will be featuring an awful lot of new music.  We will be talking about who is coming to town ‑‑ to Edmonton.

10658            Like I said, Teenage Head was here Sunday night.  I couldn't go ‑‑


‑‑‑ Laughter / Rires

10659            MS PAUTS:  ‑‑ but I am sure that if you went to that Teenage Head concert, there was an equal balance of people that ranged in age from ‑‑

10660            What's the drinking age, 19?

‑‑‑ Laughter / Rires

10661            MS PAUTS:  ‑‑ 19 to 60 in the audience.

10662            That is why I feel that this particular format will definitely appeal to a young audience.

10663            And when you were talking about the kinds of things that we will be speaking about, the passion that we older folks have for the music hasn't diminished.  It is on par with the passion that I feel the youth have for their music, and that will be reflected in our spoken word throughout the day.

10664            But this audience, even when we were young, was passionate about so many other things, as well.  Live Aid was about poverty and feeding people in Africa, and it was put together by people who were in their twenties at the time.


10665            Three years later, at Wembley, was the concert for Nelson Mandela, which addressed the anti‑apartheid issue.  It was put together by Jerry Dammers, who was at the helm of a SCA band called The Specials.

10666            When we are talking about this kind of audience, they are young, they are old, they are passionate, they care about music, they care about social issues, and this will all be reflected in Essential 107.

10667            MR. FARINA:  Further to that, one of the things we haven't spent a lot of time talking about is the interactive component of the radio station.  CHUM is in the process right now of unveiling a sizeable interactive campaign, some of which the Commission heard about in Kelowna, and it is going to be applied here to The Bounce, and applied to Essential.

10668            With these components, we always target them directly to the specific audience, and there are five main components to our interactive platform.

10669            One of them is listener reflection.  We need to give the listener access to in‑depth local news and information, the opportunity to upload their own news, community events, post commentaries and stories on a variety of platforms ‑‑ message boards, blogs, podcasts.


10670            The second is music discovery, which is very important and very key.

10671            Technology allows us now to finally assess listeners' personal music preferences, so we will have the opportunity of listeners being able to create their own mixed tapes online, of being able to introduce them to new music which is really fine tuned to their personal tastes, and be able to recommend ‑‑ as I said, recommend those artists to them, and be able to stream that new music, and also music before it is released.

10672            We are in the process of our content deals with all of the major labels, and also representing a lot of the independent labels, to be able to access audio and video content and have it streamed on demand.

10673            The third is personalization.  Very important.  The ability to really personalize their website.

10674            That ties into the next part, portability.  We are building our platform on an RSS platform, which stands for "Real Simple Syndication".


10675            What RSS will allow us to do is ‑‑ it allows the listener to embed live streaming of the radio station or components of the radio station onto their Facebook page, or MySpace page.

10676            We need to take the radio station wherever they are, both online and, secondly, wherever they are physically.

10677            We are building mobile platforms, so there will be components of the radio station that will be available via mobile phones and BlackBerrys.

10678            The fifth and very important part is, we view radio as the original social networking hub, and we feel now that technology allows us to bridge that gap, once again, with the listeners in new and enhanced ways.

10679            Listeners will have the opportunity to interact online, on a variety of platforms, on a variety of topics.

10680            They will also be able to connect with friends and other music fans ‑‑ things as simple as, when they go online and see that Tegan and Sara are coming to town, they will have an icon, so they will know that three of their friends have already bought tickets and will be able to go to the show.


10681            It is a very robust interactive approach that we are taking in marrying our terrestrial radio with interactivity, and we feel that will have tremendous appeal with the audience of Essential, who were the pioneers of the internet age, in its earliest times, as well as the youth market.

10682            We need to really understand that while there will be some appeal to this format among youth, the real wheelhouse will be 25 to 44.

10683            There is youth appeal to the classic rock format, as well, but, really, when you look at the breakdown of the audience, the real hub of it is that 25 to 44 base, or 30 to 40 in the case of Essential.

10684            COMMISSIONER CUGINI:  Thank you.  My next question was going to be on your new media plan, so thank you for that.

10685            That's a good thing.  Thank you for your answers.

10686            THE CHAIRPERSON:  Thank you.  I have a few questions.  I don't want to let you go without making sure that I understand everything you are telling me.

10687            First, I would like to go back to Mr. Farina.

10688            I think the question that Commissioner Molnar was asking was if you could explain the difference between adult alternative and the Triple A.


10689            If I understood your research, you thought ‑‑ I am repeating what is my understanding of what you said.

10690            The method of the research, or the research approach, was very significant in the results that were attained.

10691            I would ask you if you wouldn't mind explaining to me further, were your comments with respect only to the adult alternative format that Pattison is proposing, or, as well, to the Triple A?

10692            MR. FARINA:  They were to the Triple A and, also, the Yerxa application.

10693            I think that when you describe a format to somebody and you say, "How do you feel about a radio station that is going to play a wide variety of music not currently available on the radio, and that is going to feature artists from wide genres," it is easy to get a positive answer.

10694            In our experience, because we have been working with research for a long time, where we really get an accurate reflection on how we are going to affect consumer behaviour is if we play an audio composite of the radio station.  It's about 40 seconds long, and in that 40 seconds we play about six or seven song hooks.  The hook is the memorable part of the song.


10695            And please don't ask me to sing for you.

‑‑‑ Laughter / Rires

10696            MR. FARINA:  From that we are able to assess:  Would you listen to that radio station.

10697            If the answer is yes, we then say:  Would that be your favourite radio station.

10698            We look at the audience potential only on the people who say that would be their favourite radio station, because we can't build a business plan on maybe.

10699            We also can't build a business plan on skewing a question that plays on human nature, on being agreeable.

10700            In our findings, the only accurate way that we can assess the hole in a market for a music format, or even further to that, a music type, is by actually playing that type of music or that type of format in a composite.

10701            Another example that I would throw out, which is recent, is the Dixie Chicks, from about four years ago.  When you asked people about the Dixie Chicks, there was this ‑‑


10702            And it wasn't even a case of people being really well versed, but there was this kind of negative feeling about the group.  But yet you would play a clip from one of the Dixie Chicks hits, or some of their hits, and you would get more feedback about that song.

10703            Essentially, what we need to do on radio is, we have to make sure that when we play that song, people aren't going to turn off the dial, and we can't get that from their impression of an artist's name or a description of a format which is open to each individual's interpretation, it needs to be on a real‑life example, and on a music format a real‑life example is actually playing a selection of the music and having them tell us.

10704            THE CHAIRPERSON:  When you looked at the others' research, they didn't use the live‑clip approach?

10705            MR. FARINA:  Pattison did.

10706            THE CHAIRPERSON:  But their conclusion was 5 percent.

10707            MR. FARINA:  Correct.

10708            THE CHAIRPERSON:  In theirs, did they identify the format you are proposing?


10709            MR. FARINA:  They had a brief descriptor of the format, but they played a 40‑second composite and based the rating on feedback on that audio sample of the radio station.

10710            MR. GORDON:  I don't believe they researched the format that we are proposing today.

10711            THE CHAIRPERSON:  Because yours is truly unique.

10712            MR. GORDON:  It's different, that's right.

10713            THE CHAIRPERSON:  Why "Essential"?  What does that tell me?

10714            MR. GORDON:  Rob?

‑‑‑ Laughter / Rires

10715            THE CHAIRPERSON:  I need to listen?

10716            I think you are telling me that.

10717            MR. FARINA:  We have a history, again, of developing a lot of new formats, and when we were looking at this format, it was in conversation with ‑‑ talking about this music base that kind of disappeared from modern rock radio.

10718            I could make a parallel in how formats evolve with the country format.


10719            In the early nineties, there was this new wave of music, this new country that came out, and radio formats decided to throw out all of the heritage country artists.  You weren't going to hear Merle Haggard or Willie Nelson, they were going to be focused on this new country/pop sound.

10720            Similarly, the alternative format changed from alternative to alternative rock or modern rock.  So all of these diverse artists that used to be on the format disappeared.

10721            With the constant evolution of listeners' tastes and music tastes, we looked at this huge music base that, really, had disappeared from the airwaves, but still had great appeal, coupled with the contemporary sound coming from artists all over the world, but even, specifically, here in Canada.  We looked at a lot of the alternative artists coming out now, who don't really fit into a radio format, unless they are able to break through with a hit record.

10722            Interestingly enough, Alanis Morissette has a new record out right now that was released about a month ago.  Her new record is getting no airplay here in Edmonton.


10723            She is an example of an artist who, if the record becomes a big hit, she might get some airplay on AC or hot AC radio, but this is an artist who would be getting airplay right at the ground level, because the audience is still very interested in not only an artist like Alanis Morissette and what she is doing now, but all of the new and emerging artists around today who don't really have a home on the radio.

10724            I am talking about everybody from Stars to Patrick Watson to Emily Haines, Creature, out of Montreal ‑‑

10725            Buck 65 is another great example.

10726            There are these quirky alternative artists, who have great fan bases, but their music is exposed, predominantly, through word of mouth or the internet.  They fail to really find a home on a format, and a home that will support those projects at the ground level, and not wait for ‑‑

10727            I will use the example of the artist Lites.  She is 18 now, and has signed a deal with Universal.  The record is coming out.

10728            Lites got exposed through a television ad campaign.  That is her claim to fame.

10729            It would be great if all of the emerging artists could get on Old Navy campaigns or Apple campaigns to get that exposure, but they can't.

10730            This is a format that not only is able to showcase those artists effectively, but showcase them in a really focused way.


10731            There is one thing about playing these artists three times over the course of a week.  That's not how a career is built.  A career needs to snowball, and in order to snowball you have to make sure that the record is being played enough times so that people are going to start to hear it, get familiar with it, and as the familiarity builds the rotation of that record builds, and the notoriety of the artist builds with it.

10732            THE CHAIRPERSON:  Thank you.  I think I have a better picture now.  And I think that, probably, I should have been putting more of the emphasis on "alternative", rather than ‑‑

10733            I was looking at it and I was wondering "Why Essential", but I can appreciate that it is alternative music ‑‑ music that listeners don't normally hear.

10734            MR. FARINA:  Correct.

10735            THE CHAIRPERSON:  Okay.  I have it.

10736            MR. GORDON:  Rob just liked the word "Essential", that's all.

‑‑‑ Laughter / Rires

10737            THE CHAIRPERSON:  I was on the "Essential" hearing panel, so maybe I am not so enamoured with it.


10738            I have a question on the advertising side.  I notice in your remarks that you say you are easily left out of national advertising buys.  Is there more to expand on that, other than what you have just said about when you are competing against four stations in a market?

10739            MR. GORDON:  Gisele, do you want to jump in here?

10740            THE CHAIRPERSON:  Four stations owned by one party ‑‑

10741            MR. GORDON:  Yes.  Obviously, when you have more products to offer an advertiser, you are automatically at an advantage over a single offering.

10742            And that works both ways.  We have seen it in all markets that we operate in.

10743            You have to be very, very diligent.  When you are a stand‑alone, you have to be great programmers, you have to be great operators ‑‑ not that anybody in this licence proceeding is not, but you are at an extreme disadvantage because the other people can circle the wagons around you and take away things that you have from a sales point of view, but also from a programming point of view.

10744            THE CHAIRPERSON:  Thank you.

10745            I noticed on the financial end of it that you are projecting substantial losses in the first three years, and then it takes off quite quickly after that.


10746            I noticed that your programming expenses, for example, are considerably higher than some of the others, and I am just wondering, if you had a chance to look at that, if you would care to comment.

10747            MR. GORDON:  We haven't really looked at the other players, but what we do know is what it costs to put on the kind of radio station that we know this is going to be.

10748            And because it is very personality driven, it is very much a station that will be requiring people who have a high level of music and a high level of connectivity with the audience.

10749            We are going to be live and local around the clock, so our programming costs are reflective of that.

10750            THE CHAIRPERSON:  It is based on your experience.

10751            I notice that Canada‑wide it's 24 percent of gross revenues, and 36 percent for Alberta, and it's 69 percent for yours.

10752            Even with the competing applicants, it is quite a bit higher than the others, except for Pattison.

10753            I guess the answer is, that's what it takes.


10754            MR. GORDON:  That's what we believe ‑‑ the quality of the station is totally dependent on the people.

10755            Salaries and those associated costs are the number one expense in operating a radio station, and we know what it's going to take to put on a station that's going to compel people who are currently being underserved.  It's going to cost us a significant amount of money.

10756            MS FRENCH:  If I could add to that, in the first couple of years, particularly, there is a lot of money allocated toward marketing and advertising.  In order to break through, particularly in a market like Edmonton, which is so competitive ‑‑ and there are a fair number of radio stations which are constantly spending marketing dollars.  In order to get your message out to people that the radio station is here, you have to spend a great deal of money in regular advertising, in street marketing, in all kinds of ways.

10757            We know from launching several radio stations across the country what it takes in the marketing and promotion area in order to do it right.

10758            That's why, particularly in the first couple of years, the costs are very high.


10759            THE CHAIRPERSON:  Thank you for that.

10760            I notice that you have broken out interactivity as an expense line on your projections.  Are there revenues associated with your internet activities that are included in the revenue, or is it just as it reflects your ability to sell and generate radio advertising?

10761            There is no equivalent line in the revenue section.

10762            MR. GORDON:  In early days there would be very limited revenue, but we are obviously hoping that our online component is something that, down the road, will generate cash flow for us.

10763            THE CHAIRPERSON:  I gather from Ms French's remarks earlier that, because she and Ms Sowa came up with the same revenue projections, based on the way you had traditionally been doing things, you probably didn't anticipate any increased factor for internet‑generated revenues.

10764            MS FRENCH:  There are no internet revenues included in the projections.

10765            THE CHAIRPERSON:  Thank you very much.

10766            Legal?


10767            MS LEHOUX:  As a follow‑up question to your undertaking to provide a letter to the Commission confirming that the Community Radio Fund of Canada will reinvest the excess 7 percent in the Alberta Cultural Diversity Program, could you provide that by the end of the day tomorrow, so that we can complete the public record?

10768            MS GIBSON:  We, in fact, have it here.  We will provide it today.

10769            MS LEHOUX:  Thank you very much.

10770            THE CHAIRPERSON:  Thank you very much, counsel.

10771            Mr. Gordon, this is your two minutes.

10772            MR. GORDON:  Thank you.

10773            I have heard a lot of talk in these proceedings about local and regional and national, and one of the things that struck me is that we are, here in Edmonton, as local as it gets.

10774            To my right, Gisele and James have over 30 years of combined experience in this marketplace, and are currently operating a station here in Edmonton that we are extremely proud of, called The Bounce.  Because of that, I would like James to summarize our application.

10775            Thank you.

10776            MR. STUART:  Thanks, Chris.


10777            Madam Chair, Commissioners and Commission Staff, we want to thank you for giving us the time today to present our proposal for a truly new concept for the Edmonton radio scene.  Based on our local research and experience in the market, we are confident that Essential 107 will make a fundamental difference to a cross‑section of Edmontonians, men and women, aged 25 to 44, who currently don't have a home to call their own on the radio dial.

10778            Essential 107 is a fresh, new, music‑based format that is not on the dial in Edmonton.  At least 75 percent of the songs we will air on the station are not currently available in this market.

10779            Essential 107 will provide tailored spoken word programming on‑air and a portal to a rich online community, giving our sophisticated audience the window into news and current affairs that they so desperately want.

10780            Essential 107 will deliver CCD initiatives of $10 million, an amount that is unmatched in this competitive process, both in quantum and potential impact.


10781            Our local management team has an outstanding track record of building urban CHR stars, and we look forward to doing it again for emerging Canadian Essential alternative artists.

10782            The commitments in our application are strategic.  They are not random or symbolic, they are driven by our significant experience and success here on the ground.

10783            Creating true diversity in the radio market means increasing radio's audience by bringing listeners back to the medium.  People talk about repatriating listeners to radio.  In Edmonton, we have made it happen, and with Essential 107 we will make it happen again.

10784            We know how to identify an underserved audience, who the skeptics thought was lost to the internet and MP3s, and provide them with a personal experience that makes radio relevant again.

10785            On behalf of Gisele and myself, and our entire local team, who are here today in Edmonton, we sincerely hope that this is only the beginning.

10786            While we have had our successes, the road hasn't been easy.  Despite strong and committed resources, we are up against powerful station clusters in one of Canada's most competitive markets.


10787            Licensing Essential 107 will level the playing field, while enabling us to reach a new level of service to Edmontonians that a single station operator would be hard‑pressed to achieve.

10788            We look forward to having the opportunity to build another successful example of local radio doing what it does best, proudly supporting the community it serves.

10789            We hope the Commission will agree that Essential 107 will be an exciting addition to the Edmonton radio scene.

10790            Thank you.

10791            THE CHAIRPERSON:  Thank you, Mr. Stuart, Mr. Gordon, and your team.

10792            We will take a break now for 15 minutes, and reconvene around 10:50.

‑‑‑ Upon recessing at 1035 / Suspension à 1035

‑‑‑ Upon resuming at 1058 / Reprise à 1058

10793            THE SECRETARY:  For the record, Frank Torres, on behalf of a corporation to be incorporated, has filed, in response to undertakings, additional information with respect to share and economic impact calculations.

10794            Also for the record, Don Kay, on behalf of a corporation to be incorporated, has filed, in response to undertakings, the number of hours of Category 3 music that will be broadcast by the proposed station each broadcast week.


10795            These documents have been added to the public record, and copies are available in the public examination room.

10796            We will now proceed with Item 24, which is an application by Harvard Broadcasting Inc. for a licence to operate an English‑language FM commercial radio programming undertaking in Edmonton.

10797            The new station would operate on Frequency 107.1 MHz, Channel 296C1, with an effective radiated power of 40,000 watts, non‑directional antenna, antenna height of 272 metres.

10798            Appearing for the Applicant is Bruce Cowie.

10799            Please introduce your colleagues.  You will then have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

10800            MR. COWIE:  Thank you, and good morning, Madam Chair, Commissioners and Commission Staff.

10801            Before beginning our presentation, I would like to spend a few minutes introducing our management team, who will present to you an exciting new radio format, Jenn FM.


10802            My name is Bruce Cowie.  I began my career in radio in 1956, and the world didn't treat me all that well.  In the first 30 days, they had the largest shake‑up in the history of the Russian Presidium, of which no names were familiar to me at all, and unpronounceable.

10803            Not long after that the Russian army rolled into Budapest, and for some reason the British bombed the Suez Canal.  I can't remember why, but it happened in that first 30 days.

10804            I began my career in Saskatoon, and now in Edmonton, this is a bit of a homecoming for me, having lived and worked in Edmonton from 1988 to 1994, when I served as Vice‑President and General Manager of CFRN Radio and Television.

10805            Following my time at CFRN, I became the President of Electrohome Broadcasting in Kitchener, Ontario, and then served as the Executive Vice‑President and Chief Operating Officer of the CTV Television Network.

10806            I have been overseeing Harvard's western regional growth strategy since 1998, and it is my great pleasure to introduce to you the management team that will lead our expansion into the critically important Edmonton market.


10807            Seated in the middle, in the front row, is Karen Broderick.  Karen is Harvard's National Sales Manager.  She has over 20 years of experience in the radio business, in various capacities, all with Harvard Broadcasting.

10808            Karen, who grew up here in Edmonton, will serve as General Manager of Jenn FM, if we are successful in receiving your approval to introduce Jenn to Edmonton.

10809            Seated to Karen's left is Debra McLaughlin of Strategic Inc.  Debra is well known to the community and has over 20 years of experience in the radio, television and media industries.

10810            Debra conducted our market research, and was instrumental in the design of the Jenn FM format.

10811            Next to Debra is Pam Cholak.  Pam is a life‑long resident of Edmonton, where she owns and operates a very successful government relations firm.

10812            Prior to starting her own business, Pam held several important positions with the Alberta government, including serving as Executive Assistant to the Minister of Energy, and Director of Special Projects for Alberta's Department of Labour.


10813            Pam was instrumental in gathering feedback on Jenn, and has agreed to chair Jenn FM's Local Advisory Committee.

10814            We are delighted that Pam has agreed to join our team.

10815            Seated to Karen's right is Valerie Hochschild.  Valerie has held positions in radio stations in both Canada and the U.S.  She has worked in the Triple A format in at least three stations, and helped us develop the programming paradigms for Jenn FM.

10816            Beside Valerie is Tina Svedahl, Vice‑President of Investments for Harvard.

10817            Tina holds a Certified Management Accounting designation, and has been with the Hill companies for over eight years.

10818            Tina plays a key role in financial management, strategic and business planning for all of the Hill family companies.

10819            Next to Tina is Rosanne Hill‑Blaisdell, a Vice‑President and Managing Director with Harvard.

10820            Rosanne is a fourth‑generation member of the Hill family.


10821            With a B.A. in Broadcast Journalism from Gonzaga University, and an M.B.A. from the University of Manitoba, Rosanne embarked on a career that has spanned many disciplines, including several years of experience as a reporter on CJBN‑TV Kenora, and CKCK‑TV Regina, and over 20 years as a freelance writer.

10822            Rosanne has management experience in the commercial banking, investment management and commercial real estate sectors, and her role in the Hill companies is an integral part in the development of Harvard's western regional growth strategy.

10823            Seated on my right, here in the back row, is Michael Olstrom, Harvard's Station Group Manager.

10824            Michael is a career broadcaster, with 28 years of experience in the industry.  Michael oversees all of the Harvard radio stations, and was responsible for the launch of X 92.9 in Calgary, Mix 103.7 FM in Fort McMurray, and, most recently, Wired 96.3 FM in Saskatoon.

10825            Michael understands what it takes to compete as a stand‑alone operator in a major radio market, as evidenced by the success of X 92.9 in Calgary.

10826            Finally, seated on my left is Rob Malcolmson, a partner in Goodmans LLP, and our legal counsel.


10827            Rob has specialized in communications law for close to 20 years, providing strategic advice to radio and television clients in regulatory matters, strategy and business development.

10828            Madam Chair and Commissioners, you have before you an experienced management team, with the track record, passion and resources necessary to bring a new voice to Edmonton radio, a voice that is not heard in the market today.

10829            Before we begin, I wanted to make the Commission aware that we have just concluded successful negotiations with APTN to extend the mentoring project that we currently operate in Saskatoon, Fort McMurray and Calgary to both of our Red Deer and Edmonton licences, should we be successful.

10830            We had hoped to make this public prior to the hearings, but the details of such a program take time, and it is only now that we have extended the arrangements.

10831            We are now ready to begin our presentation.

10832            Karen...


10833            MS BRODERICK:  We are here today with an exciting concept for radio, a concept that is innovative, consumer driven, and unique to the market, a concept that we call Jenn FM.

10834            Jenn will have a core audience of women aged 35 to 54.  As the data in the chart attached to this presentation demonstrates, the spring 2008 BBM show that tuning for almost all demographics in Edmonton was up relative to the fall of 2004, but for the fourth year in a row, tuning among women 35 to 64 was well below the levels achieved in the fall of 2004.

10835            The greatest decline has occurred among women 35 to 64.  Time spent with radio by women 35 to 64 is down from 22.3 hours per week in 2004 to 20.5 hours in 2008.

10836            Hand‑in‑hand with the loss of hours spent with radio in Edmonton, a loss of reach has also occurred.  This loss of tuning is significant, because it signals a real sea change in the use of radio.

10837            Jenn is designed to address this decline in tuning among Edmonton's women, a group that represents 521,000 people, 276,000 of which are 35‑plus.

10838            Debra...

10839            MS McLAUGHLIN:  Harvard retained Strategic Inc. to research the Edmonton market and assist in the design of a format that would respond to the decline of tuning that Karen just talked about.


10840            We conducted extensive market research, including a complete review of syndicated tuning and spin data, two sets of focus groups, and a consumer demand survey.

10841            The research revealed that listener observations and reactions to radio programming had striking similarity with other markets we have studied.

10842            It is quite clear from the focus groups that women, in particular, are bored with high‑repeat formats that offer little variety of artists, and represent only a small portion of artist catalogues.

10843            They are tired of having to switch stations to create a listening experience that encompasses the range of music that interests them.

10844            Further, they feel shut out from traditional, alternative and rock radio stations, because the language and type of humour is very often intended for a decidedly male audience.

10845            The research identified an appetite for current, contemporary and alternative music, and a very strong desire for spoken word that is relevant to their age and life experience.


10846            We used the focus groups to engage Edmonton women in the design of a service they would like to listen to, and the result is Jenn FM.

10847            The programming concepts and music playlists were tested through a phone survey with the general population.  What we found was that, while women had the highest interest in the spoken word elements of our programming, the programming concept and presentation of music was of equal interest to both women and men.

10848            In the end, what we have crafted will serve both genders, but, in particular, it will engage women 35 to 54.

10849            Val...

10850            MS HOCHSCHILD:  Thanks, Debra.

10851            In Edmonton, we found that alternative rock, alternative country, pop, folk and world music were missing and of interest.  Jenn FM can supply all of these through a Triple A format.

10852            Jenn FM will provide:

10853            A larger playlist.  The current market average is 900 tracks, and Jenn FM will have a weekly rotation of 1,450.

10854            More genres.  With the largest mix of genres of any format to draw from, Jenn FM will be able to best represent the multi‑genre interests of the average listener.


10855            Unheard music.  By playing alternative tracks and digging deeper into artist catalogues, Jenn FM will be able to provide an unduplicated listening option in the market.

10856            More new artists.  Because Triple A is less hit driven than most popular formats, it is unique in being able to showcase new artists and fill listener demand for more new music, more often.

10857            A balance of eras.  Triple A is a fluid format, in that it can balance a representation of the eras of music, without noticeably changing the key elements of the programming.  So, Jenn FM will be able to continually adjust to the competitive market by making slight alterations to the emphasis between gold, current and recurrent music.

10858            While the musical emphasis may shift, Jenn will always provide an alternative and more comprehensive listening experience for our audience, combined with intelligent spoken word offered from a female perspective.

10859            When all of these opportunities presented by the Triple A format are realized, the result will be a station that addresses many of the tune‑out factors the research identified.  Jenn FM will be greater variety, fewer repeats, and more new music.


10860            Jenn will also be decidedly different from what is on the air in Edmonton today.  Because of the inclusion of new artists, including 20 percent Canadian new and emerging, the playlist has a higher turnover of tracks and is constantly changing.  This results in less duplication.

10861            We have attached to our presentation a BDS duplication analysis.  What this shows is that Jenn's playlist will offer the lowest level of duplication of tracks among the Triple A applicants.  In fact, only 6 percent of Jenn's playlist is heard on Edmonton radio stations today.  Clearly, Jenn's unique brand of Triple A offers the most musical diversity for the target audience.

10862            Karen...

10863            MS BRODERICK:  Jenn will also offer feature programming to fill perceived gaps in the radio landscape.


10864            For example, while 35 to 54 is not old by anyone's standards, it is still a period of life when people do start to look back.  Jenn FM will help listeners relive some of their special moments through "Return Engagements".  This program will be dedicated to replaying classic concerts and memorable performances, whether it is clips from the first Live Aid concert in 1985, revisiting the concert for Diana, or highlights from less global events like Lollapalooza.

10865            Responding to listener interest and having a more direct say in what they listen to, Jenn FM will run "Listeners' Choice" on Sunday afternoon.  This is an opportunity for listeners to pick the musical theme and have a hand in choosing the music playlist.

10866            Another feature program, "Music Notes", is a two‑hour music magazine that provides dedicated background and biographical information on the performers, groups and the production of classic and destined to be classic CDs.

10867            It will be the perfect environment for the introduction of new artists, and will allow the opinion leaders in our audience to formulate first‑hand impressions of new Canadian talent.

10868            Finally, Jenn's "Canadian Showcase", which will air six times daily, each week, will serve up a 60‑second infotainment break, which will be immediately followed by a track selection from the artist or production profiled.  Fifty percent of these features will be dedicated to new and emerging Canadian artists each and every week.


10869            And because FACTOR is such a huge opportunity that seems to be underutilized by artists in the west, one of the benefits we will deliver is promotion of the fund through a 30‑second awareness campaign that we will air throughout the year to improve access by local performers.

10870            Pam...

10871            MS CHOLAK:  Music is not the only differentiating factor on Jenn FM.  Spoken word programming was also identified as an area of disconnect by the women at the focus groups I attended, and as a resident of Edmonton, I wholeheartedly agree with this description of local radio.

10872            Sandra Sperounes, a writer for the Edmonton Journal, summed up radio in this market, and its strong male character, on her blog as recently as May 25th, 2008.  I quote:


"A lot of stations in Edmonton are so blatantly male, from their humour to their staff to their commercials.  I am an avid listener of The Team 1260.  The morning show goes out of its way to try and include women.  But some of the station's ads turn me off, especially those for a certain limo company.  The orgasmic female voices...tend to make the service sound like a brothel on wheels."  (As read)

10873            Jenn FM will program in contrast to this trend.  Spoken word will be focused on the areas that Edmonton women identified as being most relevant.  Topics typically associated with female interests, such as health, fitness, lifestyle, family and relationships, will be mixed with more gender‑neutral topics, such as personal finances, local issues, career advice, and adult education.

10874            One of the spoken word opportunities that a licence in Edmonton will give Harvard is a new regional newscast, called "The New West".

10875            In April of this year, Alberta's Premier, the Honourable Ed Stelmach, encouraged Saskatchewan to join Alberta and British Columbia to forge what he calls "The New West".

10876            Harvard will respond to this invitation through the creation of a news feature that will tie The New West together in each of the markets we serve.


10877            Anchored in Edmonton, the provincial capital and the epicentre of The New West, this news program will rely on contributions from each of the markets in which they operate, now and in the future ‑‑ Regina, Saskatoon, Calgary, Fort McMurray, possibly Red Deer, and, of course, Edmonton.

10878            With input from these major economic hubs in the west, this news program will provide listeners with insight into regional stories of importance and increase the understanding of how the futures of this vast area are inextricably linked.

10879            In Edmonton, "The New West" will follow our five‑minute update at noon.  Fifteen minutes in length, the program will air five days per week, Monday through Friday, with a 25‑minute wrap‑up of the week's stories on Sunday at 12:30 p.m.

10880            Jenn FM will also provide a drive‑time information series that will lend some predictability to our dialogue with our listeners, and provide something to think about while driving home.

10881            Our "Going Home" series is designed to focus on topics that most consistently ranked high in interest across all demos and both genders.


10882            While the perspective of Jenn FM will be female, the programming will be inclusive ‑‑ inclusive of gender, cultures, race, religion and affiliation.

10883            Jenn FM will accomplish all of this through clear and meaningful guidelines on language and content.

10884            The result will be a station that is intelligent, family friendly, and community based.

10885            Karen...

10886            MS BRODERICK:  Listener feedback will be critical to the success of Jenn FM.  One of the ways this input will be collected is through our website.  The plans for the internet go well beyond streaming.

10887            One of the most exciting aspects of the website will be a new opportunity for both consumers and advertisers.

10888            Despite the high use of the internet in Edmonton, and the advantages of it as a marketing tool, many radio advertisers have not taken advantage of this media.  JennFM.com will provide these retailers with an opportunity for a web presence that is more than a banner ad.  The JennFM.com "Marketplace" will allow a user to search by category, area of town or retail name.  This will provide our advertisers a chance for prolonged exposure through web presence, and provide our listeners with an invaluable resource.


10889            We will create an audio base of commercials, so that listeners who only hear part of an ad and wish to know more can go online and search by store name, topic, or partial text.

10890            And last but not least, we will give visitors to JennFM.com the ability to sign up for category sales and receive online notices of sales, events or promotions.

10891            These features will give our advertisers the efficiency of broadcast and the targeting of direct mail.  The potential for JennFM.com is exciting.

10892            Women make up slightly more than half of the population of Edmonton, and they are considered the primary decision‑makers in the purchase of the majority of packaged goods and services.  With an integrated approach to promotion, Jenn will be able to attract new advertisers to the medium, and through our efficiencies we will be able to increase spending in radio.

10893            Bruce...

10894            MR. COWIE:  Madam Chair, now that you have an idea of who Jenn FM is, I would like to turn to the matter of Harvard Broadcasting and why we are the ideal choice for Edmonton.


10895            As the Commission has heard from us before, we believe that diversity of voices is critically important to the industry and to consumers.  We believe that it is only through diversity of voices that the core objectives of the Broadcasting Act can be met.

10896            However, we also believe that the interests of short‑term diversity must be balanced against the potential for long‑term diversity.

10897            Edmonton is a very competitive radio market.  A well‑resourced company, with a demonstrated commitment to radio, and a track record of competing as a stand‑alone in major markets is the only way, in our view, to ensure that consumers will continue to have access to a variety of programming and a broad perspective on news and information in the future.

10898            Harvard knows the Edmonton market very well.  We are, therefore, well positioned to succeed.

10899            The Hill companies have been operating in this market for many years, and have a well established base of contacts, relationships and resources upon which we can rely.


10900            Edmonton is home to many of us at Harvard and, if licensed, we would represent a new voice, and local ownership, by an experienced broadcaster.

10901            Rosanne...

10902            MS HILL‑BLAISDELL:  Harvard is a western‑based company that remains true to its roots.  Our commitment is to serve the people of western Canada, and to do so means that we have to be present in major western markets.  Edmonton represents one of the last opportunities in a major radio market in the west.

10903            Having a base in Edmonton is critically important to Harvard Broadcasting and it will shape our ability to contribute to the achievement of the objectives of the Broadcasting Act through our programming and our contributions to CCD.

10904            This licence in Edmonton will move us towards effective critical mass in terms of population served on a national level, allowing us to engage in negotiations with advertisers from a stronger position.

10905            It will also assist us in maximizing the impact of our CCD initiatives, extending the exposure we can give new and emerging artists.

10906            A presence in Edmonton enables us to achieve programming synergies and to offer our listeners innovative new programming like the new west.


10907            Having a station in Edmonton will diversify our broadcasting revenue base and better allow us to maximize operating efficiencies.

10908            Bruce.

10909            MR. COWIE:  In summary, we think JENN FM is the right station for Edmonton for several reasons.

10910            With the help of the disenfranchised radio listeners, we have created the format to recover lost tuning in the market.

10911            We will expand diversity through an addition of new music, new artists and create a listening option through broader genres, fewer repeats and deeper reflection of catalogues.

10912            We will increase the perspective of the spoken word by providing a new editorial voice and introducing a feminine yet inclusive perspective.

10913            Although we've not spoken of it to any extent in this presentation, we propose an investment in CCD that is both significant in its size, $5.5‑million, or 18 per cent of our revenues, and significant because of the value it delivers to Edmonton.

10914            We always strive for meaningful and local initiatives and we're particularly proud of the commitments we have made here.


10915            And, finally, Harvard has amassed the experience needed to compete as a stand‑alone in a multi‑format, single owner environment like Edmonton.  We have demonstrated our capability to both finance and to manage launch scenarios.

10916            We are poised for this challenge, enthused by our format and excited by the opportunity to create a new programming service.

10917            In closing, I think it is best to let the music and the format speak for itself.

‑‑‑ Video presentation / Présentation vidéo

10918            MR. COWIE:  Madam Chair, before moving back to you, we did include some attachments with our presentation this morning and I would ask Debra McLaughlin, for clarity purposes, to discuss those with you.

10919            MS McLAUGHLIN:  In the interest of fairness, because we're going to be talking about this data, we wanted to put it on the record in Phase I.  So, what we've done is, the data that we presented as part of our application on the per capita tuning in the market, we simply updated to the most recent survey so you would have current data.

10920            That's the first chart.


10921            The second chart is the applicant playlist duplication that we've been talking about, so we've laid it out.  It seems to be coming up a lot, and just for clarity sake we wanted you both to see what we were talking about and for other applicants to have an opportunity to view it.

10922            And, finally, was a press release that APTN sent us yesterday and actually asked us if we could table, and we weren't sure if it was right, but we were doing it for them, so...

10923            MR. COWIE:  Again, thank you, Madam Chairman and Members of the Commission.

10924            We're now ready for any questions you may have, and we would ask that you direct those to Karen Broderick.

10925            Thank you.

10926            THE CHAIRPERSON:  Thank you for your presentation.  Commissioner Cugini is going to commence the questioning.

10927            Thank you.

10928            COMMISSIONER CUGINI:  A little hesitation is not lost on me.

10929            Thank you.


10930            Good morning.  And, Mr. Cowie, I do want to say that we're not used to seeing you in the second row, but I know that the composition of your panel is not just for the sake of optics and we sincerely do appreciate it and it is a reflection of your commitment to the format and to Harvard ‑‑ yes, and to Harvard's employment practices.

10931            So, thank you for that.

10932            I am going to start my questioning, as you may have guessed, with the format, and I'm going to ask you in the same way that I asked Yerxa the question.

10933            Why do you think that rock, pop, alternative country, jazz, folk, world music and blues, as you have described the format in your application, all belong on one radio station?

10934            What do they have in common and why are these formats compatible enough to all be on one radio station?

10935            MS BRODERICK:  Commissioner Cugini, this really came from the research that we did in the marketplace.  The format for JENN FM was built specifically for the Edmonton marketplace, and Debra can speak to the research that they conducted, which really attested to the fact that all of these music genres do, in fact, work together.

10936            So, perhaps Debra can address that.


10937            MS McLAUGHLIN:  Yes.  We did quite a bit of research.  When the call came out, we came into the market in November of last year or thereabouts and met with the general public to find out exactly what their interests were, their impressions of radio, how it worked.

10938            We had already looked at the BBM data up to spring, 2007 and we suspected that women would be the dissatisfied group considering the trend that had existed prior to that, but we did come in and we had groups with genders and we covered a range of age.

10939            What came out of that was a clear identification that most people can't say, I just listen to this, I am a rock fan or a pop fan, they could name stations that they spend the most time with, but coupled with being able to say, I spend the most time with radio station was a reaction to the specialization of music formats these days and the fact that they have to spend a lot of time going through the dial to put together the listening experience they want.

10940            So, they're just not a pop fan or not just a rock fan.


10941            And when we started talking to people, similarly in the way that we discovered this about youth, that if you go into their iPods ‑‑ and this group has iPods and they're making their own music mixes ‑‑ there's not, you know, differentiated segments, they actually go from one format to another.

10942            And I'm not a programmer, so I went and talked to programmers and people who put music together.  I went and talked to people who are in clubs to find out how they were putting music mixes together for clubs, and they were blending it seamlessly.

10943            So, we came back in January and we sat down with ‑‑ or sorry, yeah, we came back in January, we sat down with them, we tested some of the music mixes with them, got their reaction and the way to test it is to play it, let them hear it and then play similarly sounding from the same genre together to see if it flows.

10944            They rated high on their own.  They actually in some cases, not all, rated higher when mixed together.

10945            The last piece of research we did was in April of this year and we came and tested again because, of course, we're coming before you; have the music mixes changed, has anything happened in the market?


10946            And in all of those cases, in all three scenarios, we found that people were interested in a blend, they were not just interested in a singular.

10947            The last thing is, in our consumer demand there's a really large sample there, it's 809, and typically when you're sampling just a single format, if you're just doing pop, it would be about 400, but what we did was when we were asking the demand question we shifted around the genres of music that we put in because it's not that people stop listening ‑‑ because that would make all research sound bad ‑‑ but they do pick up on the first few words and they tend to lose others, so we wanted to make sure we weren't introducing a bias.

10948            And what we found was with the mix there was similar interest however we worded it or presented it.

10949            So, all of those four separate occasions, plus our own listening experience and the experience of the programmers, suggests that blending genres of music is actually pretty reflective of how people experience music themselves.


10950            COMMISSIONER CUGINI:  From both a researcher and a radio operator point of view, do you see this as a trend going forward, that is, the move away from, I guess, specialty radio, to one where ‑‑ because you're not the only market in which we've heard applications for a Triple A and you certainly aren't the only applicant for a Triple A, and we know that there are a couple in the country.

10951            So I guess, generally speaking, is this a trend that the music industry, the radio industry is going through?

10952            MS McLAUGHLIN:  You know, I certainly wouldn't summon a death knell for specialized music because I think there are people who ‑‑ and there's always room for specialized formats.  I mean, sometimes you just need to hear rock music, or you just need something soft and those stations will always have a market.

10953            What I think this is a reaction to is programming or a set of programming paradigms that have grown up that rely on a smaller list of music, and I think it reflects not necessarily the largest part of the market because, you know, I always present to you the degree of dissatisfaction with the market.  There is always that balance where there's people very happy with what's in the market.


10954            But what we're talking about now and with the markets where there's multiple formats and there's such specialization, and in the case of the rock format, for example, if I was to run a BDS analysis for you, I could find a large percentage of the playlist from each one of them that duplicates.

10955            So, the reaction is really to what's in the market and by a smaller group of people, albeit a large enough market to program to, simply what has been happening as a larger trend.  There will always be people who want something different, something more.

10956            Fortunately in the area of Triple A you can pull these together.  And I think the Triple A you would see in Edmonton would be different than, say, the Triple A in Vancouver.

10957            For example, alternative country got mentioned more often in this market than it would in Vancouver.  In Ottawa, we had more interest in some of the pop and, actually, there was a language interest, there was some interest in having alternative pop from Beck.

10958            So, I think what we're looking at is an opportunity to fill the gap that specialized radio services have created.


10959            It's not that they're not doing a good job and I think it's going to be, but I think  Triple A has room in the market, or there's room for it because there's people who really love music, who are out there, they're the early adapters, they're the people that are on the Internet, they're the first people to be leaving radio, and I think we can bring them back because, you know, local news is important and local information, so...

10960            COMMISSIONER CUGINI:  From an operator's point of view, Ms. Broderick?

10961            MS BRODERICK:  I think ‑‑ actually, I'm going to let Michael Olstrom address this, this is more from a programming perspective and he would probably have a better idea than I.

10962            COMMISSIONER CUGINI:  Sure.

10963            MR. OLSTROM:  Well, from a programming perspective, you come into a market and you look for those opportunities.  And, as Debra attests to in the research, there's some holes that you can find and, you know, we look ‑‑ when we go into any market we look at the research, we wait to see what the people of that city are telling us.

10964            We've come before you with a number of different formats, whether it be Saskatoon or Calgary, Fort McMurray.


10965            You find what works and what appeals to that portion of the audience that feels they're missing something, and so far it's proven out fairly well for us in each of those scenarios.

10966            And we believe what we've found here is, from a programmer and an operations standpoint is, we found a format with an audience that is not getting what they want from not only a music perspective, but from a spoken word and news and information and I think perspective, considering the fact that this is a female targeted radio station and, as you can see, I'm in my proper place on the panel.

10967            COMMISSIONER CUGINI:  So, I don't want to beat this point but, Mr. Olstrom, are you saying that more than a trend, it really has to stay on a case‑by‑case, market‑by‑market basis?

10968            MR. OLSTROM:  I believe so, and I believe as broadcasters we're looking for opportunities.

10969            There's many radio stations, many different formats, formats of the same kind in markets, formats that niche a little bit one way or the other, but as broadcasters, you know, we look for opportunities.

10970            And when the consumer demand comes back that says this is what we're not getting, it really speaks to us and it also speaks to us from an advertising standpoint as well.


10971            There's advertisers looking to reach out to these audiences that aren't spending as much time with radio or, you know, maybe they've got a radio station they listen to but it's not quite theirs.  That's what they're looking for.

10972            COMMISSIONER CUGINI:  Thank you.

10973            Category 3 music, because some of the genres that we have just been talking about do fall into the Category 3 bucket, how many hours a week are you proposing of Category 3 music?

10974            MS BRODERICK:  We are considering 18.9 hours per week.

10975            COMMISSIONER CUGINI:  And that represents what percentage?

10976            MS BRODERICK:  15 per cent of the number of spins, which is 1,450 per week, so it works out to be roughly 218 spins.

10977            COMMISSIONER CUGINI:  And you know the next question.

10978            MS BRODERICK:  Yes.

10979            COMMISSIONER CUGINI:  Will you accept that as a condition of licence?

10980            MS BRODERICK:  Yes, we will.


10981            COMMISSIONER CUGINI:  And of the subcategories of Category 3, from which subcategories will that music come from?

10982            MS BRODERICK:  I'm going to have Val explain that to you.

10983            COMMISSIONER CUGINI:  Certainly.

10984            MS HOCHSCHILD:  Of the 15 per cent, 10 will be from folk, three from world, and two per cent from jazz/blues.

10985            COMMISSIONER CUGINI:  And you are aware of the 2006 Commercial Radio Policy that requires that 20 per cent of subcategory 34 be Canadian.

10986            And will you accept that as a condition of licence?

10987            MS BRODERICK:  Yes, we will.

10988            COMMISSIONER CUGINI:  Thank you.

10989            I am going to speak more about the combination of music and spoken word and targeting your demographic group, but before we go into that, I do want to speak about your share projections.

10990            And we know that they start at 3.8 per cent, rising to 7.5 per cent in year seven.  You have identified throughout your application your core audience as being disenfranchised.


10991            What is the combination of music and spoken word going to do for this disenfranchised listener to enable you to achieve these share projections that you have in your application?

10992            MS BRODERICK:  Again, Commissioner, this really did come from the research, so I'm going to turn it over to Debra again to explain that.

10993            COMMISSIONER CUGINI:  Sure.

10994            MS McLAUGHLIN:  I think it is important to note that it is a combination, that the music alone addresses only part of the disconnect that women in this market in particular are having with radio.

10995            So, you know, as we discussed in our presentation and certainly in the application, you know, we're going to be including that broader mix so they don't have to go somewhere else.  So, that adds to our ability to develop those shares.

10996            We're going to be bringing in new genres that aren't heard as much, so people who are playing CDs in their car to get that music can stay with us, they can actually expect to hear it.

10997            We're going to be including their perspective in terms of the music, certainly in the spoken word, and Pam can speak to that in a second.


10998            But we have a program in the afternoon on Sunday that is listener's choice and it was totally developed by women, and not just in this market, it comes up spontaneously in other markets, where they sort of get excited about the thought of having some say.

10999            So, listener's choice on Sunday afternoon.  Isn't a request program in as much as people call in and you're going to have this wide‑ranging or more inappropriate for this format, the same songs every week, what it's going to be is a themed program that will be tested through the website and with consumer groups.

11000            So, for example, people who really like Motown, which isn't a genre of music that you get mixed in very much in this market or in many markets, but we would have a Motown afternoon.  And if you promote it right and you get the information out on the website and through various forms, people will come to tune to that.

11001            And we think the excitement of involving them and engaging them in this way and the possibility of having them hear music that they don't typically hear, I mean people have CDs and they have collections and some of this music is a bit older and they don't even know where to find it any more.  So, they have one sampling but they'd like to hear the whole thing.  So, we're including their views of it.


11002            So, that will look after the music portion with more artists and larger catalogues because people buy CDs, so they know all their songs, they just don't know the hits and, in fact, sometimes hits are the very reason people go to another station.  So, we have that.

11003            And then in the spoken word, you know, I'm always cautious when I'm talking about this because this isn't going to be the prissy station, it's going to be respectful but, you know, people have ‑‑ that we talk, and particularly the women, have very keen senses of humour but they don't necessarily just revolve around bathroom humour.

11004            COMMISSIONER CUGINI:  You can say it.

11005            MS McLAUGHLIN:  Okay.  Well, I was trying to think of just the politically correct term.

11006            So, anyway, you know.  And, so it is going to be funny, it is going to be topical and it's going to represent a female perspective.


11007            Having said that, there's a whole bunch of gender neutral topics that just don't get discussed.  And I think the best way to explain it is that there's an awful lot of pop cultural banter happening in between songs and the people that are dissatisfied and disconnecting with the spoken word  don't get it, or they don't want to hear it over and over again.  They want something a little broader, something that's relevant to their lifestyle.

11008            And I'll let Pam, because she's both a listener in the market, but also Pam spoke to an awful lot of people in this market when we were putting together this application.

11009            COMMISSIONER CUGINI:  Sure.

11010            MS CHOLAK:  Thank you, Debra and Commissioner.

11011            I think it's a really good question for this market because it would seem that the Edmonton marketplace has an awful lot of radio already, we have an awful lot of choice it would seem, and I don't think that it's absolutely fair to say that we do, that it's actually meeting the targets and the kind of demographic that's happening within not just Edmonton but the capital region.

11012            And I think when we talk about Edmonton, we have to be very cognizant that it's broader than just Edmonton, metro Edmonton and this radio station will serve that, the Sherwood Parks, the St. Alberts, the other communities that surround Edmonton.


11013            And the demographics that are in there are my demographic and the focus groups I've attended and the literally hundreds of people that I've been able to talk to are excited about this format, not just from a listener perspective, but certainly from a business perspective as well, because there is a new opportunity for advertisers to hit a market that they don't otherwise have an opportunity to do so.

11014            And in my opening remarks when I talk about the limo company, for example, and I did have to practise that by reading it, not certainly by practise, but it's important that we recognize that there's a whole business sector out there that is excited about this kind of a format because it gives them an opportunity to address a demographic that they wouldn't otherwise necessarily be able to attract.  And, so, I think from an operating standpoint, it's important.

11015            Certainly from a listener perspective there is a demographic out there and there is a listening audience that flip around on the channels, and I'll give you the perfect example, and that's me and my family.


11016            I am a businesswoman, but I'm also a mother.  I have two small children, and in this marketplace I often find myself fixated on the Disney Channel in my vehicle, which is not an FM station, it is not an AM station, it is not an Edmonton station whatsoever.

11017            So, I get inundated with some popular music, but it's certainly not local and certainly not necessarily the kind of music that I would like all the time.

11018            But I'll tell you why we listen to it, is because I know what I'm getting.  I don't have to worry about the kind of commercials that are going to be on there.  I can take my children to school in the morning and not be thinking, oh, my goodness, what did they just hear, because they're not going to hear ‑‑ I don't want them hearing the oh‑oh, conversation.

11019            And, so, I think we are not serving that particular market well.  And I need a station, and I know a lot of the women and men ‑‑ there is an awful lot, this isn't just focused solely on women, but certainly there is a proportion of the population here that would say, I need to have some respect in what we're talking about, I don't need all the banter, I don't need to know how many panties were hung in the barbecue pit last night with all the conversation that goes on.


11020            We need a little bit more respect, we need a presentation that is talking to a demographic  that's not dowdy.  Because we're 40 we're not  necessarily dowdy and we're not necessarily light, but we certainly have other considerations.

11021            And, so, I think the predictability that Harvard is presenting in JENN FM is also an important factor for us.  There's a format here of spoken word that we know what we're going to get when we're going to get it, in the a.m., in the p.m., and in between.

11022            So, in the a.m. I know I'm going to be getting advertising, I know that I'm going to be getting programming that is short, relevant but predictable in time.

11023            On the drive home, our going home series, our driving home series, three minutes in lengths on topics that are most relevant to what we as women, as well as what some of that demographic of age would be looking for, topics on health, nutrition.

11024            On Fridays ‑‑ Monday through Friday, a different topic every day, but Fridays, for example, a calendar of events.


11025            If you've ever been to Edmonton in the summer you know that it's a festival city.  Those things are very, very important, but we don't have a lot of time to spend on it, so we want it quick and snappy and I need to know when it is going to happen.

11026            And finally, again, I think the spoken word is all about perspective.  There is a female perspective here that is being missed, and we need to have a demographic on the radio that we hear that isn't doing just weather or traffic records.

11027            COMMISSIONER CUGINI:  I'm going to cap this line of discussion with what some may think is pretty blunt, but we all know of the terms chick flick, chick lit, some people think it's pejorative, some don't, some think it's great.  You know, Chapters will have a whole section that says chick lit.

11028            Is it a good thing or a bad thing in your perspective if you become known as the chick station?

11029            MS McLAUGHLIN:  I think for branding purposes it's probably pretty good.  I think it's probably unrealistic to think that a station that offers the kind of music we're going to offer isn't going to pick up a bunch of male tuners.

11030            But, you know, what you want when you're developing a business plan is to have a clear identifying view that is held by a majority of people.


11031            So, you know, are we going to exclude people intentionally?  No, but if people get to know that this station has a strong feminine identity and  then what they're going to hear is a bunch of topics presented from a female perspective and not necessarily what Pam calls the angry elf perspective, we think that's pretty good.

11032            COMMISSIONER CUGINI:  Fair enough.

11033            You know that we like to ask the similarities and differences questions with other applicants.

11034            But, you know, it's the last day of applicants appearing before us, so I'm going to do a different spin on the question.

11035            What, in your opinion, are the things that we should look at in determining whether or not applications before us are competitive one with the other?  What are the determining factors?  Is it format, is it the demographic group, is it the playlist, is it the commitment to Category 3 music or not?

11036            What, for us, should be the determining factors?


11037            MS BRODERICK:  The way we looked at it when we looked at us against the other applicants, we broke it down into probably five categories that we compared ourselves to and that was the target audience, the male/female split of audience, who's providing, you know, how much new and emerging, the duplication in the marketplace.

11038            Those are all areas that, you know, we try to differentiate ourselves from the other applicants.

11039            I'm not sure, Debra, if there's something you wanted to add to that.

11040            MS McLAUGHLIN:  Well, you know, if I had to weigh in on this, I think the importance is to be able to provide something that is different, but not for different sake, that it actually addresses the need.

11041            So, you know, trying to weight between is it truly unique to this market as in it doesn't duplicate anything else and does it serve this demo, I'm not quite sure what that balance is, whether it's 50/50 or 60/40.

11042            But, I mean, realistically this is a very competitive market, and just stepping back from a business perspective, if you're not different, I don't think you're going to do as well simply because you can already get something.


11043            And from my understanding of the research, all of the research that we've done and, in fact, a lot of research that I've reviewed from other applicants here is, there is a hole in the market, it's not a huge hole, just not anything could fill it.

11044            And if you look at terms of developing share of audience, almost all of the demographics ‑‑ and you can see by that chart we've included ‑‑ have grown in terms of the hours they're spending in the average week, but women haven't.

11045            So, I think you'd have to balance in who isn't being served, who is different and who is different in serving that group.

11046            And I don't know if that answers your question, but...

11047            COMMISSIONER CUGINI:  It does in part.  I think ‑‑ did you want to add something, Ms Broderick?

11048            MS BRODERICK:  If I can just say ‑‑ I wanted, I guess, to let you know how we feel that we're different from the other applicants in the marketplace.

11049            And when we looked at the market and came into Edmonton and decided what would be the best format, you know, one of the things that we found that was pretty significant was that there really is a hole in the market as far as the decline in tuning.


11050            The hole in the market is a formula that we feel that serves a female 35 to 54‑year‑old demographic, because that is the greatest year over year decline in tuning according to the most recent BBM data.

11051            So, of the three applicants that are applying for a female‑skewed Triple A format, ourselves, Pattison and Evanov, I just want, you know, to explain the differences between the three of us.

11052            And with a target audience, Harvard is 35‑54, Pattison is 35‑44 and Evanov is 35‑54.

11053            But then if you go to the male/female split, Harvard is 30 per cent male, 70 per cent female, where Pattison is 39 per cent male, 61 per cent female, and Evanov is 40 male, 60 female.

11054            And then if you look at the over 35 category, Harvard is 78 per cent of their audience will come from above 35, whereas Pattison's is only 47 per cent and Evanov's is 75.

11055            And then in the new and emerging category, 20 per cent for Harvard, 15 per cent for Pattison and 16 per cent for Evanov.


11056            And then the final category we looked at would be the duplication.  And Harvard's application for JENN would only be six per cent duplication in the marketplace, whereas Pattison would be at 27.8 and, because Evanov has not filed a playlist, we really don't know.

11057            But that's kind of how we stack up against them.

11058            COMMISSIONER CUGINI:  Which leads me to the question of how many new licences do you think that this market can support, and of the applicants who is the least competitive and who is the most competitive with yours?

11059            MS BRODERICK:  I think I'm going ‑‑ Mr. Cowie wanted to weigh in on this question, so I'll let him.

11060            COMMISSIONER CUGINI:  Sure.

11061            MR. COWIE:  Thank you, Karen.

11062            We've talked about this quite a bit, and the future, obviously, is harder to predict than the past and it just seems that this market is going to continue to grow.

11063            We have great faith in the west, and so we would recommend to the Commission that all viable FM licence options at this time be licensed.

11064            COMMISSIONER CUGINI:  And the least competitive and most competitive?


11065            MR. COWIE:  We've had great debates on this, and just including now.  Our view is that JENN FM can come into this market, stand alone and compete with all of the other signals here.

11066            COMMISSIONER CUGINI:  And including any of the other applicants?

11067            MR. COWIE:  Yes.

11068            COMMISSIONER CUGINI:  Okay.  Thank you.

11069            I have left the detailed questions until the very end.  And I apologize, I've lost the reference in your application, but it is the chart that shows the sources of your revenues for year two.

11070            And I am assuming there is a bit of a typo here, because those four percentages add up to 90 and not 100.  So, I'm just wondering if we could go through them.

11071            You say from existing radio stations, 20; new radio advertisers, 40; increased budgets of existing advertisers, 15; and other media, 15 and that adds ‑‑ that totals 90.

‑‑‑ Pause

11072            MS McLAUGHLIN:  Sorry.  We just have to check something.

11073            COMMISSIONER CUGINI:  Would you like to file that?


11074            MS McLAUGHLIN:  Yeah.

11075            COMMISSIONER CUGINI:  Okay.  That's fine.  Thank you.

11076            Your spoken word commitments.  I see news at seven hours and 29 minutes.  No sports coverage?  I didn't see any sports on that list.

11077            MS BRODERICK:  The sports is actually part of the surveillance ‑‑

11078            COMMISSIONER CUGINI:  Part of the surveillance?

11079            MS BRODERICK:  Yeah, it's not part of the pure news.

11080            COMMISSIONER CUGINI:  Okay.  So, the pure news remains at seven hours and 29 minutes?

11081            MS BRODERICK:  Seven hours and 29 minutes, yes.

11082            COMMISSIONER CUGINI:  Thank you.

11083            Now, one thing I didn't see in your application ‑‑ oh, sorry I did.  You will employ four full‑time newsroom staff, one news director and three reader/reporters.

11084            And you did provide the details as to what the responsibilities of those people will be, but it's a pretty high level ‑‑

11085            MS BRODERICK:  Mm‑hmm.


11086            COMMISSIONER CUGINI:  ‑‑ of spoken word programming.

11087            What, again, factors did you take into consideration in determining that this was the proper news complement for that level of spoken word?

11088            MS BRODERICK:  I think, again, ‑‑ I don't want to turn everything to Debra, but it did really come from the research as far as the news component and what we felt was appropriate for this audience.

11089            COMMISSIONER CUGINI:  Yeah, not so much the level of news.  What I'm asking is, you know, four people, four full‑time newsroom staff ‑‑

11090            MS BRODERICK:  Okay, I understand.

11091            COMMISSIONER CUGINI:  What factors did you take into consideration in determining that four was the right number to do the seven hours ‑‑ seven and a half hours of news?

11092            MS BRODERICK:  I think we looked at it from an experience aspect and how we operate in other marketplaces.

11093            And if Michael wants to weigh in on that, he could.

11094            MR. OLSTROM:  Sure. If I could add to that, Commissioner Cugini.


11095            In addition to those four people, we have the new west programming that comes out of the news component as well.  So there's ‑‑ somebody help me with my math, I'm terrible ‑‑ but 15 minutes over five days Monday to Friday and 25 minutes on Sunday, which we have an additional body and a half for, there will be a producer for this new west feature and, as well, someone assisting in the web component of that as well.

11096            So, there's actually more bodies.  So, from my experience and experience that Harvard has, we believe that's a sufficient number to be able to deliver the amount of the news and spoken word relevant to news that we're committing to.

11097            And, in addition, we have another body and a half that will produce that ‑‑ those additional five times 15 and 25.

11098            COMMISSIONER CUGINI:  And as far as your newsroom is concerned, did you take into consideration any synergies at all with other radio services that you operate?


11099            MR. OLSTROM:  Synergy questions ‑‑ Harvard, as I think we've expressed in the past, is a big believer in going into a market, defining what's required to serve that marketplace and, from a news perspective, you know, we don't look at it in that perspective.

11100            However, with the new west feature, maybe I can just sort of give you an idea of what that program is all about.

11101            So, there are some programming or news synergies there.  And what that does is, it's actually something that you've heard the discussion about the new west and it's something we've contemplated for a period of time and, of course, Edmonton gives us the opportunity to actually do that now and being present then in two of the capitals in two of the western provinces.  Without Edmonton, this would be pretty difficult to do and without the resources that an Edmonton radio statio would provide, would make it difficult to present.


11102            But what the intent is to do is each of our stations in Alberta and Saskatchewan would contribute to this feature, so they would package together one segment of what's going on in their region and area.  That would be submitted to the JENN FM new west producer here in Edmonton.  That would be packaged together, aired here in Edmonton but then, as well, that package would then go out to our other markets and the other markets would look at aligning and interweaving with the local voice those same stories.  So, there are some synergies there.

11103            But, as I expressed, we're big believers, you know, in the early stages of really focusing on the market and that's where, you know, a lot of our programming costs are generated, or situated.  You know, we put the money into the local effort.

11104            COMMISSIONER CUGINI:  My last question ‑‑ which is also a cue to my colleagues to get ready if they have any others ‑‑ is dealing with your CCD commitment.  And your total CCD commitment is 5.5‑million over seven years; correct?

11105            MS BRODERICK:  That's correct, yes.

11106            COMMISSIONER CUGINI:  Okay.  Again, this is going to be a little bit of detail.  I know that in correspondence with the staff, in your letter dated March 5th, you referred us to Section 8.1 of the application which lists the over and above CCD contributions totalling $5,392,375, and this excludes the basic contribution.

11107            But when we looked at Appendix 8(a) of the application form, the total CCD is 5.5‑million and there too, however, the basic contribution was not taken into account, and this leaves us with a discrepancy of $107,625 over seven years.


11108            So, I think at this point perhaps the best opportunity would be for you to take a look at that and file with us the correction and what the over and above commitment is each year over seven years.

11109            MS BRODERICK:  Yes, we will do that.

11110            COMMISSIONER CUGINI:  Thank you.

11111            And, Madam Chair, those are all my questions.

11112            THE CHAIRPERSON:  Commissioner Molnar.

11113            COMMISSIONER MOLNAR:  Thank you.

11114            I'd like to follow up first a little bit on the proposal of the new west news and it was a question you perhaps remember me asking you in the Red Deer application, and that is, what is it a regional broadcaster brings?

11115            And, you know, I see this new west is an example of how a western broadcaster can bring something together because of its presence, you know, in a particular market that might be unique.

11116            And I wondered if I ask you the question again, if you may want to expand on what is it, are the benefits?


11117            As you know, we have before us here, we have independents, we have some regional broadcasters moving forward and we have national broadcasters all looking for this market.

11118            And, so, would you like to expand at all on what it is that's particular to a regional broadcaster that you can bring to this market?

11119            MS BRODERICK:  Sure.  Thank you, Commissioner Molnar, and I will let Michael address that for you.

11120            And then, Michael, if you can turn to Pam, because I think Pam has some important things that she'd like to mention too.

11121            MR. OLSTROM:  I think from a ‑‑ a regional broadcaster brings ‑‑ you know, national broadcasters bring a national perspective, yes, they are local as well and they're working in those communities.

11122            Mr. Cowie explained ‑‑ talked a little bit in the Red Deer application about, you know, the perspective that the west has and the economy of the west and the things that we bring together as broadcasters, I think we understand ourselves maybe a little bit better.

11123            I don't know if I'm explaining it properly, but there is ‑‑ there is a difference in terms of the perspective that we do bring to the table.


11124            I think there's some synergies as well that we bring to the table on the programming side of things as well, and not being a larger company, being a smaller company and looking for new ways of moving forward with our business.

11125            And maybe I'd like to then have Pam just chime in on this a little bit.

11126            MS CHOLAK:  Sure.  I'm passionate about this piece of it because I think as a born, raised, operating, now raising my family here in the west, I think this is an exciting new kind of initiative that Harvard is bringing to the table, particularly as a western‑based broadcaster because, quite frankly, the west is not necessarily ‑‑ we're not new, but we certainly are moving and maturing in a way that is different than we've seen before.

11127            And I'm particularly excited by the fact that this is a ‑‑ the political landscape of what's been happening between B.C., Alberta and Saskatchewan has changed significantly in the last two, three years and it's offering some synergies there that would allow broadcasters to take advantage of.


11128            And Harvard is one of those that I see as saying, our Premier here in Alberta has made an invitation to politically, but as a business they're responding and it shows an interest in what's happening in the marketplace and I think that's a really positive sign.

11129            But there's more about the new west in this kind of programming than simply the geography and the politics.

11130            And I think what we're talking about here is developing a regional news program that looks at how we look at a perspective, again, that JENN is also talking about, from not just a female perspective but as westerners what ties us.

11131            There's geography, there's business, there's the economics, there's the community aspects, there's the health and wellness kinds of issues that are happening for us.

11132            And there's certainly a sports element out here in the west, that if you end up asking people when it's a Stanley Cup playoff game or when it's the CFL end of the time, will always pick a western team generally over an eastern team.

11133            There's just some common cultural kinds of ties and perspective and history that will really provide that fluidity of newscast.

11134            And I'd like to give you some examples of the kinds of things that I'm talking about.


11135            Certainly we've got in the Harvard Broadcasting world the advantage of having locations that are capital cities, if Edmonton is successful for them.

11136            So, you have a political stream of what's happening in the legislature.  The public policy, for example, around ‑‑ most recently here in Alberta the super board, the health super boards that have been announced by our Health Minister and our Premier.

11137            There is certainly an interest in Saskatchewan and in Alberta on how that's going to work, what does that mean for sustainability of health care, what does that mean for patient outcomes.

11138            And, so, those are really topical kinds of issues.

11139            And most recently even, yesterday, there was an article in the Saskatoon paper referencing that very topic in Alberta.

11140            Those are the kinds of things that we share in common.  We share the mobility of workforce, we share the mobility of interest on where our patients are going to go in the facilities.


11141            The other kinds of issues are obviously around the business and economics.  The first one that obviously comes to mind is around oil and gas.  While Alberta has tar sands up north, Harvard operates in Fort McMurray, there's certainly newscasts that can come out of there in regional aspects, environmental aspects associated with that that affect all their markets, Edmonton, Calgary, Red Deer, Saskatoon, Regina, that they would share in common.

11142            Certainly the community aspect, and I'll give you one example.  June is Stroke Month and we recently opened the Mazankowski Heart Institute here in Edmonton.  It is a world renowned facility that will deal with patients nationally, but certainly being located in Edmonton, there is great interest and what does that mean, again, for western‑based patients and outcomes.

11143            And certainly another example, just to highlight the sports, would be around the excitement that is building and certainly here in Edmonton and the province around the Olympics.  I mean, this is a bit of a gateway to the Olympics in Vancouver in 2010 and, so, as the excitement builds there's interest in regional athletes going to the Olympics.


11144            Certainly, things like the Memorial Cup where you have local athletes participating from Saskatoon, from Edmonton, from all those markets that Harvard operates in that have a story to tell when they go to national events, when they go to international events, there's something pretty special about being from western Canada and they often will be able to tell you that.

11145            So, those are some of the examples of the kind of flow.  There isn't one particular example, but there certainly is a number of things that tie us and would be of interest, I think, to the listening audience through Harvard's Broadcasting sector.

11146            COMMISSIONER MOLNAR:  Fair enough.  And just for your information, I'm from Saskatchewan, so I have no question that there are certainly ties between the new west.

11147            Just one more question, and that's related to the discussion I had with the last panel related to the competitive balance, and I expect you were in the room and you heard the CHUM Group talk about the challenges they face as a single system in a market that is dominated by multi‑system operators, large, national multi‑system operators.

11148            I wanted to get your perspective on how you view a regional single system operator can successfully compete in this market.


11149            MS BRODERICK:  Thank you, Commissioner.

11150            We're committed to this format.  We believe in it.  We are 100 per cent confident that it's the right fit for Edmonton and the best choice to address the largest decline in tuning.

11151            Harvard is a well‑financed company.  We're no strangers to launching a station in a major market as a stand‑alone.  We operate in Calgary with X92.9 and that station was launched approximately 18 months ago, and the service is more successful than we could have really ever anticipated.

11152            So, after this short time frame, X92.9 is actually ‑‑ it's No. 1 against its target demo of male 18‑34, and just speaking with their GSM a few days ago, they're going into week No. 4 of being sold out of advertising inventory.

11153            So, we're in this for the long haul and we anticipate that it's going to take time to build our brand, and with the experience of our team we really have no doubt that we will be successful.

11154            COMMISSIONER MOLNAR:  Thank you.

11155            Those are my questions.

11156            THE CHAIRPERSON:  I think actually the questions have been well covered.


11157            I'm just wondering, your financial projections then, were they based on one licensee or more?

11158            MS BRODERICK:  They were based on two licences being awarded.

11159            THE CHAIRPERSON:  Two?

11160            MS BRODERICK:  Yeah.

11161            THE CHAIRPERSON:  Okay, thanks.

11162            And I'm just curious, I understand your concept and you've done, obviously, thorough research.  I'm just wondering when you decide on a name like JENN FM, do you ‑‑ or are you concerned that you may alienate some of the population, obviously the other half, and also the impact that will have on advertisers, and I'd really be interested to hear what your comment would be on that.

11163            MS BRODERICK:  Sure.  I can let Debra address that from the research.

11164            MS McLAUGHLIN:  I think if you look at the audience tuning to Bob, Jack, all of those stations, what you find is that for the most part they're strongly male.  I think picking JENN FM is sort of a counter part.


11165            And, you know, JENN FM was a name that sort of came out of the research but it tested well when we talked to people how you advertise, how you encraft a brand.  So, it's all about creating the brand.

11166            And ultimately we would like to alienate some advertisers because we're not going to be the beer station, necessarily, and I think the mistake is, a lot of times, that people try to be all things to all people, and we think the way to succeed in this market and in most markets is to define who you are and to stick to that, and it doesn't mean that you don't change within the context of that broader definition, you adjust to market forces for sure but, in the end, you need to let people know who you are.

11167            So, you know, I wouldn't expect condom ads, necessarily, but that's not a bad thing because that was the part of the spoken word that offended some of our potential listeners.

11168            So, I think the people that won't advertise on us won't be missed by our audience, and I think the people who will advertise on us will get a sense of the strength of the brand and want to be connected.


11169            We have fewer minutes of advertising, and we do so we can specifically address the concern over clutter, but when you remove some of the inventory, you have to add value from an advertiser perspective and that clear branding is what will do it.

11170            THE CHAIRPERSON:  Thank you.

11171            I think my question is, I hear you talk about Bob and Jack.  It's a reflection of where I come from, because stations don't go by those names, so as soon as you said that it was sort of obvious to me.

11172            Thank you very much, that was very helpful.

11173            That's all my questions.

11174            Legal...?

11175            MS LEHOUX:  Could you file your  undertaking of providing your revenue sources for year two of operations by end of day tomorrow, and also your revised yearly over and above CCD by end of day tomorrow.

11176            And since the amounts might likely change, could you confirm by writing that you would accept a condition of licence for these amounts?

11177            MS BRODERICK:  We will, and we've actually corrected the typo or error with our revenue year two projections.  I can read that into the record for you now, if you would like.

11178            MS LEHOUX:  You could do that.


11179            MS BRODERICK:  Okay.  Existing radio, 20 per cent, new revenue brought into the broadcast industry would be 40 per cent, new revenue from increased spending will be 20 per cent, and other media is 20 per cent, for a total of 100.

11180            MS LEHOUX:  Thank you.

11181            THE CHAIRPERSON:  Thank you very much, Ms Broderick, or I don't know who's actually going to take your two minutes, but it's your two minutes, so you can decide.

11182            MS BRODERICK:  Madam Chair, Commissioners, by now we hope that we have convinced you that JENN is something different, something new and something that clearly does not exist today.

11183            JENN is eclectic music, intelligent spoken word and a fresh female perspective.

11184            JENN is a voice for those of us you see here in the front row.  Radio in Edmonton does not speak to 35 plus women as evidenced by the ongoing decline in tuning among our target audience.  JENN will address this format void in a way that no other western‑based broadcaster will do.

11185            The diversity JENN will offer goes beyond ownership, it goes to a perspective that is not on the air today.  JENN is radio for women programmed by women.  JENN is a concept whose time has come, in fact, it is long overdue.


11186            While JENN is made for women, it's not an exclusive club.  There's no sign on our front door that says, "no boys allowed", in fact, we hope that they will tune in and maybe even learn something.  They'll learn that we are smart, we're funny and we can program a radio station.

11187            And now I'll do something that JENN will never do, and that's to give one of the boys the last word.  Bruce.

11188            MR. COWIE:  Madam Chair and Commissioners, Edmonton is vital to our regional growth strategy.  It provides Harvard with critical mass and presence in each of Alberta's most important markets.  With a station in Edmonton we can have a meaningful voice in the new west, a voice that is grounded in our western perspective.

11189            Edmonton provides us with the size and scale we need to compete, grow and contribute in a significant way to Canadian talent development.

11190            Thank you for listening to JENN.  We hope that with your approval JENN will be heard in Edmonton as well.

11191            THE CHAIRPERSON:  Thank you very much, Ms. Broderick, and your panel.


11192            We're going to adjourn now until ‑‑ let's make it 1:30, it's a little more than an hour.

11193            Thank you.

‑‑‑ Upon recessing at 1219 / Suspension à 1219

‑‑‑ Upon resuming at 1337 / Reprise à 1337

11194            THE SECRETARY:  Good afternoon.

11195            I would like to mention that for the record John Charles Yerxa on behalf of a corporation to be incorporated has filed in response to undertakings their over and above CCD commitments.

11196            And also for the record, Black Gold Broadcasting Inc. on behalf of a corporation to be incorporated has filed in response to undertakings their over and above CCD commitments.

11197            These documents have been added to the public record and copies are available in the public examination room.

11198            We will now proceed with Item 25, 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 Edmonton.


11199            The new station would operate on frequency 102.3 megahertz, Channel 272C‑1 with an average effective radiated power of 51,000 watts, maximum effective radiated power of 100,000 watts, antennae height of 240 metres.

11200            Appearing for the applicant is Bill Evanov.

11201            Please introduce your colleagues.  You will then have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

11202            MR. EVANOV:  Thank you.

11203            Good day, Madam Chair, Commissioners, Commission staff, ladies and gentlemen.

11204            My name is Bill Evanov, President of Evanov Communications Inc., ECI.

11205            With me today on my right is Sean Moreman, former news director and our in‑house legal counsel.  To his right, Carmela Laurignano, Vice‑President and group manager of our operation and a part owner in this application.

11206            To Carmela's right is Dan Barton, Program Director of CKHZ FM, our Halifax station.  Next to Dan is Ky Joseph, Vice‑President of Sales, also a partner in this application.

11207            To Ky's right is Catherine Matheson, who is our designated Edmonton retail sales manager.


11208            ECI, Evanov Communications Inc. first came to Edmonton in 2003 when we applied for a youth format application.  Since that time our interest in the city has not waned and we have continued to monitor listening trends in the market to see whether an opportunity arose that would be a good fit between our company and the people of Edmonton.

11209            That time is now.  As we told the Commission during the Vancouver hearings in February, and on other occasions before them, we need to become a national broadcaster.  Large markets such as Edmonton are integral to the national business strategy.

11210            ECI sees the importance of setting stakes and roots in these markets in three distinct ways.  First, we would gain the critical mass of listeners that will allow us to compete with the large broadcasters for increasingly valuable national advertising dollars.

11211            Secondly, as the spectrum becomes more and more limited in large markets, these major market stations will allow us to expand through purchasing assets in the markets where frequencies are no longer available.

11212            Thirdly, the revenue generated through large market stations, will also allow us to serve less lucrative under served markets across the country.


11213            When the call came out for a new  service in Edmonton, we looked at the market and we were very happy with what we found.  Alberta and Edmonton are experiencing economic growth that shows no sign of slowing down and the radio market is definitely keeping pace. 

11214            Besides all that growth, we are confident we can achieve one of the highest revenues of all applicants.

11215            As shareholders together with Ky Joseph and Carmela, ECI will provide diversity of ownership in the market and will introduce a new editorial voice and will present a format not heard anywhere else.

11216            We'd now like to introduce you to EMILY.

11217            Carmela.

11218            MS LAURIGNANO:  When we examined the Edmonton market, we discovered for the most part all age demographics are served by one service or another and almost traditional format appears somewhere on the dial.


11219            Despite these findings, however, we saw there was a decline in tuning among women aged 35 to 64 whose tuning indexes only add 86 compared to fall, 2004 levels.

11220            Having seen similar trends in other markets we have researched, we felt it would be appropriate to test a Triple A format that skews female in its presentation but that would continue to be relevant to men in a broader 25 to 64 demographic.

11221            As we suspected, the same sort of complaints we heard about radio in those other markets were echoed here in Edmonton.  We heard several times that all radio stations sounded alike, that there's no variety in the music being played and that listeners are either flipping between stations or going to other media to find music they like.

11222            More than half, nearly 60 per cent of people we spoke to said they would listen to radio more if programming they liked were on the air.

11223            Emily Murphy was a trailblazer of her time in Alberta.  She was the first female police magistrate in Canada and a member of the Alberta Five, was instrumental for getting the vote for women in Canada.

11224            EMILY, like her namesake, will continue to be a trailblazer in bringing something truly new to the Edmonton market.


11225            MR. BARTON:  EMILY will be programming an adult album alternative, or Triple A format.  As a music format, Triple A traces its roots to underground and progressive music stations from the 60s.  That spirit continues in this format in that it references music charts lightly, instead playing a broader playlist including both uncharted artists and lesser known tracks from established artists in a variety of musical genres.

11226            Rather than duplicating mainstream formats, Triple A consists mainly of musical selections on the fringe of rock and pop, as well as other musical genres.  This format addresses the concern raised by over half of listeners; namely, there's not enough variety in current radio and there's too much repetition.

11227            To that end, EMILY will blend more genres of music, current, recurrent and gold selections and a wider spectrum of the artists' repertoires.

11228            Additionally, EMILY will be different than traditional services in the market as she will have more information programming that appeals to a female demographic. 


11229            Many female listeners in the market told us that current Edmonton radio was either too bland or too offensive, the result being they tuned away from radio all together.

11230            In order to bring women back to radio, EMILY is proposing more intelligent radio.  The focus will be on engaging the listener rather than talking at them or merely allowing them the opportunity to eavesdrop on the conversation.

11231            As an example, there will be no morning team but only a dedicated host and one news reader who will present current topics relevant to the audience.

11232            This structure will see less chatter about Hollywood gossip and more of an emphasis on lifestyle, health and general interest items.

11233            Although there will be more spoken word than traditional music stations in the marketplace, these topics will be interspersed between tracks and EMILY will be a primarily music station.

11234            Listeners in Edmonton find there's not enough variety in the music being played in the market.  Only 38 per cent of respondents surveyed said they were satisfied with the variety of music being played, and only 21 per cent of respondents said they were very satisfied with the number of times songs are repeated.


11235            The Triple A format proposed for EMILY by definition will fix that problem.  Whereas single format stations will often play music from one genre, EMILY will draw from a minimum of five.  In addition to alternative rock, pop and country, we'll play music from the folk and blues categories.

11236            Because the music universe covers a broad base of formats, EMILY will also have a broader range of artists to draw from.  Not only will there be more artists heard, but EMILY will go deeper into the repertoire of each one.

11237            It is through playing these lesser known non‑hit tracks that the Triple A format gets its alternative moniker.  Whereas the average station in Edmonton has a playlist of just under a thousand, EMILY's universe will consist of nearly twice that at over 1,800 individual tracks.

11238            EMILY will have fewer repeats on any single track.

11239            In Edmonton the average station's most played track represents 29 spins on an average week.  In the case of Edmonton's top 40 station, just under 60 spins per week on a single song.


11240            EMILY will not spin a single track more than 16 times per week, allowing for less repetition, a greater variety and exposure for a broader range of artists.

11241            MR. MOREMAN:  Listeners we spoke to told us gold‑based stations don't have enough current music and pop stations are far too repetitive.

11242            As a result, EMILY will provide more of a balance between newer and older eras of music.

11243            We will dedicate up to one half of our playlist to current selections with the balance being alternative and gold‑based cuts from before 2007.

11244            Studies conducted with people in major markets show that those who are most dissatisfied with radio are also the people who are the most passionate about music.

11245            EMILY will drive that passion by providing music with less commercial interruption than other stations in the market.  Not only will the breaks be less frequent, they will also be shorter, resulting in a lower commercial load overall.

11246            Much of our spoken word will be music related.  EMILY will provide background information on the artists being played in our feature programming, including our Maple Cuts feature.


11247            EMILY is also committed to Canadian talent and will play one of the highest levels of Canadian content and new and emerging talent in the market.

11248            If EMILY were licensed today, a single hour of music might include a track from the new Death Cab for Cutie album, followed by a duet featuring Bonnie Raitt and John Prine and then Cold Shoulder from the U.K. sensation Adele.

11249            Wrapping out the set you might hear Bedouin Sound Clash and then three in a row from K.D. Lang, starting with Constant Craving to orient the listener, followed by two new tracks, I Dream of Spring and Coming Home from her most recent album, Watershed.

11250            When we compare the proposed playlist of EMILY to what is currently heard in the market, we find that over 90 per cent is not heard.  With a very small proportion of the music proposed being duplicated on existing services, EMILY will provide a true music option for the disenfranchised music lover in Edmonton.

11251            MS JOSEPH:  Responding to another common complaint, EMILY will provide 25 hours and 38 minutes of spoken word per week of which almost half, 12 hours and 10 minutes, is dedicated to pure news with the rest dedicated to information programming, features and announcer talk.


11252            This represents almost 20 per cent of our program schedule dedicated to keeping Edmonton informed as well as entertained.

11253            EMILY's potential listeners found there was a trend toward shocking or mocking language on many stations that played music they like.  Although we acknowledge there is a place and an audience for that kind of programming, it does not hold universal appeal for all fans of today's music.

11254            EMILY will offer a more balanced, polite and thorough discussion of topics than is typically found on music radio.  EMILY will focus her spoken word on the topics that are of greatest interest to both men and women between the ages of 35 to 54.

11255            Background on the artists and insight into production are very important to a passionate music fan.  72 per cent of respondents expressed interest in hearing background on the music and careers of Canadian artists.

11256            However, there was an interest in other types of information as well.  Topics for discussion will include families and children, health and fitness, relationships and lifestyle, travel and shopping and first and secondary careers.


11257            EMILY's listeners want the best of both worlds.  They want to hear talk segments that are relevant to them and they want to hear music they are likely to buy.  They no longer want to scan the dial to piece together this type of listening experience from a variety of sources and, as a result, have tuned out completely.

11258            EMILY will marry the music with more general interest topics to create a hybrid that provides intelligent, relevant and local discussion.

11259            As a result, she will bring disenfranchised listeners back to radio.  We can provide useful information and background while engaging the audience with today's recording artists and a greater variety of music from established and new performers.

11260            EMILY is a local girl and coverage of the Edmonton market will be provided in a way that is unique to our service.  We will have a full complement of local Edmonton news staff and we have dedicated 80 per  cent of our news programming to be local.

11261            MR. BARTON:  While the headlines for the most part will be the same, EMILY will personalize the stories presented with a female perspective and not just localize them.  It is because of this approach to news that EMILY will pick up where other broadcasters leave off.


11262            For example, some broadcasters in the market may have reported a string of sexual assaults in the city last week focusing on the details of the crimes and police efforts to catch the attacker.  While those aspects of the story will also be presented by EMILY, we would go further and speak to representatives at the Sexual Assault Centre of Edmonton to discuss the impact of sexual violence on women and to provide information about where victims can get help when they need it.

11263            As well, the Yard Sale for the Cure will be taking place across the country.  This event will receive much attention on EMILY because a national garage sale to fight breast cancer is certainly a topic of interest to her listeners.  Not only would the details of the event be announced on air as other broadcasters might do, but EMILY would speak to local resident Kathy Calverly who has survived breast cancer twice about her experience fighting the disease and her involvement with the event.


11264            Lastly, when a story such as the earthquake in China arise, EMILY will not only report that a disaster has occurred and the number of estimated casualties, she'll delve further and speak to organizations such as the Assist Community Centre which aids newcomers to Canada to see how the local community is coping, what relief efforts are being mobilized and how anyone can get involved.

11265            Through its independent newsroom, EMILY will bring a fresh perspective to the news in Edmonton and a new editorial voice to the market.

11266            MR. MOREMAN:  EMILY's feature programming will put an emphasis on Canadian talent.  Maple Cuts is a series we have developed to combine information on Canadian artists with their music.  Listeners will be given a biography of the artist or some history on the recording of the album and then a track by that artist will be played.

11267            Although not exclusive to new and emerging talent, this feature will certainly give a boost to up and coming artists being heard by EMILY's audience who is very curious about the music.

11268            A second feature called Notes from Home will be aired for an hour twice a week.  This feature will profile Canadian talent and allow them to connect with the audience for the first time or to reconnect after some time away.


11269            Established acts, new and emerging artists and performers who have received limited air play will all be profiled and introduced to a broader audience.  Not only will listeners be able to hear the music of these artists, such as singer/songwriter Colleen Brown, but our goal is to invite the artist in studio for live interviews to tell the audience about their experiences and their current projects.

11270            A three‑hour segment has been set aside for our Focus feature.  Since EMILY's listeners are looking for a broad range of music, Focus will present more niche musical selections than are currently heard on radio.  Rather than be limited to one genre of music, Focus will alternate between themes such as Motown, reggae, world international music and '80s rock.

11271            Depending on audience response to any one of these genres during the feature, we may adjust our programming to play more or less of that sort of music to meet listener demand.

11272            MS MATHESON:  (Off microphone/Hors  microphone) ...as a result EMILY will offer a variety of services online above and beyond streaming the feed and hosting podcasts.  Sorry.


11273            As well EMILY will create a virtual marketplace where listeners can log on and grab more information about services or products they heard advertised on the station.  It is our goal to incorporate the Internet into the larger programming dynamic of the station in order to really deliver on consumer demands.

11274            EMILY will also promote Canadian talent as part of her larger Internet strategy.  We do not see the Internet as a competitor to commercial radio, but rather as a complement.

11275            Research in other markets tell us that listeners also want a source to reference books, authors, events and attractions coming to town.

11276            EMILY will deliver on all this as well.

11277            MS LAURIGNANO:  EMILY is also devoted to Canadian talent and will bring a local flair through her Canadian content development package.  Two‑thirds of all our CCD initiatives are based in Edmonton.  In addition to providing funds to the Alberta Recording Industry Association, the Aboriginal Media Education Fund, the Canadian Aboriginal Music Awards and the University of Lethbridge, EMILY has set aside $1.8 ‑million for local Edmonton events.


11278            As Cindy Keating will tell you in Phase III of this hearing, partnerships between EMILY and initiatives such as the Amber Affair are an essential way to give new and emerging artists exposure, not only to live audiences in a concert setting, but also broader exposure to local and Internet audiences.

11279            Building on a strong tradition in the east, ECI is proposing an annual summer concert in which local and emerging talent will have the opportunity to play along established Canadian acts such as Feist or Albertan Jan Arden.

11280            This event not only provides new and emerging talent with a venue to perform live before an audience, it also gives them the opportunity to meet other performers who have made it in the industry and to learn from them.

11281            MR. EVANOV:  The concept for EMILY has been put together to respond to each of these concerns.

11282            She will play more artists and more tracks than any other radio station in the market.  She will provide a feminine perspective on the news without alienating men and she will deliver a full‑service website that will allow listeners to stop in and gather what information they need whenever they want.


11283            The booming health of the Edmonton radio market also means that EMILY will complement existing stations in the market.  EMILY expects to attract listeners who are currently light users of radio, of those who have tuned out all together.  By repatriating these listeners, EMILY will further increase the health of the system.

11284            As well, by attracting a disenfranchised demographic to a single service, advertisers who felt it was inefficient to buy radio to reach that demographic will start to spend money in the medium.  The net result will be an increase in radio spending overall.

11285            The age demographic of EMILY falls within the large 25 to 64 age group and the segment of women we are aiming to attract is still a niche market.

11286            ECI has vast experience in providing successful radio services to similar under served and often neglected demographics and we look forward to establishing EMILY in Edmonton to meet all the needs we have identified.

11287            MS LAURIGNANO:  In summary, EMILY has listened to what the people of Edmonton have to say about radio.  She has heard that there's too much repetition of songs, that the DJ banter is crude, the information they are being given is irrelevant and that there is nowhere to go find out more about topics they want to explore.


11288            So, make room, Joe, Bob, Jack.  There's a new girl in town and her name is EMILY.  We will be pleased to answer any questions you might have.

11289            MR. EVANOV:  And could you direct the questions to Carmela, who will quarterback and Ky as well.

11290            THE CHAIRPERSON:  Thank you.

11291            Ms Laurignano, Commissioner Molnar will lead the questioning.

11292            Thank you.

11293            COMMISSIONER MOLNAR:  Thank you. Good afternoon.

11294            Just before I begin, I want to make sure that I'm saying your name right, would you ‑‑

11295            MS LAURIGNANO:  Sure.  It's my quick lesson.  If you can say onion, then the "gn" in my name is very easy because it's Laurignano and the first name is Carmela.

11296            COMMISSIONER MOLNAR:  Okay.  Commissioner Cugini would probably be much better placed to, you know, say that properly.

11297            MS LAURIGNANO:  I know, she got lucky on both first name and second name because it's pretty phonetic.  In my case it's a bit harder.

11298            COMMISSIONER MOLNAR:  So, say it for me one more time.


11299            MS LAURIGNANO:  It's Carmela and the last name is Laurignano, Lauri, gnano.

11300            COMMISSIONER MOLNAR:  Laurignano.

11301            MS LAURIGNANO:  Yeah, Laurignano.

11302            COMMISSIONER MOLNAR:  Laurignano.

11303            MS LAURIGNANO:  Right.  Okay.

11304            MR. EVANOV:  Molto bene.

11305            MS LAURIGNANO:  And we'll be keeping score, huh.

11306            COMMISSIONER MOLNAR:  I was going to say something to embarrass our Chair at this point, but I won't.

11307            THE CHAIRPERSON:  Everybody knew you were thinking it.

‑‑‑ Laughter / Rires

11308            COMMISSIONER MOLNAR:  Anyway, welcome this afternoon and let me just say before I begin, as you likely know, we heard about JENN just before lunch, and now we're hearing about EMILY and it is quite refreshing to hear about EMILY and JENN instead of Joe and Jack, so...

11309            MS LAURIGNANO:  We love sisters, so...


11310            COMMISSIONER MOLNAR:  One of the things that I couldn't help, because we just heard about JENN, I couldn't help but compare in some ways when we were talking about targeting the same female audience, or what appears to me to be the same female audience, so perhaps the first thing, if we could, is help me understand how the format and the audience that you're ‑‑ maybe first the audience and then the format, is different than the audience that the Harvard Group was looking to target, or is it the same?

11311            MS LAURIGNANO:  In broad terms, it's pretty much the same.  There is a bit of difference in terms of the gender split that each one of us proposes to attract.  We are saying that it's a 60/40 female/male.  I believe Harvard's representation was 30/70; am I correct?

11312            MR. BARTON:  That's correct, yeah.

11313            MS LAURIGNANO:  And in terms of the demographic, it's pretty much in there, in the wide demographic and in the narrow demographic, although I think we specifically say that ours is ‑‑

11314            MR. BARTON:  Our broad demographic, as we stated, is 25 to 64.  There is overlap in the core because we're both stating that as being 35 to 54, but in our demand study we actually found a broader appeal, that it actually went all the way up to 64 years old.


11315            So, in that way the demographic is slightly different for the two.

11316            MS LAURIGNANO:  But the mass of the demographic which is 35 to 54 is the same.

11317            COMMISSIONER MOLNAR:  And you say that it is a niche market.  So, could you help me understand what niche within that broad demographic you will focus upon.

11318            MS LAURIGNANO:  Yes.  Sean will add to what I have to say.  By that we mean there is a section within that demographic, specifically, female skewed that would be the niche.  So, traditionally a niche is you look at a universe and then you look at a little piece that constitutes a niche because it's different or it's not similar.

11319            So, we looked at women overall in the market and found that there is the niche is within that particular demographic, and Sean I think will add in terms of how it's identified because of the dissatisfaction and demand that they're asking for and how it can be served with specific programming.


11320            MR. MOREMAN:  Yes.  And the research showed that there is generally a trend in a decline in tuning among women a Carmela, or someone in our presentation in chief mentioned, they index at 8.  So, there has been a decline over the last number of years, but that's not to say that all women in the market are dissatisfied with radio 100 per cent.

11321            There are people who enjoy easy listening all the time, and some people who enjoy the mainstream AC all the time and some people who would even enjoy the rock station all the time.

11322            What this format does ‑‑ and this is why we're terming it as niche ‑‑ is it takes that tranche of women who are not satisfied with any one of those genres of music or any one of those stations all the time but want to hear segments of each of those formats.

11323            The research also indicates that those very same women identify with the statement, I find myself flipping between stations to find what I like.  So, again, that's not all women and it's not to suggest that this demo ‑‑ or this format will pick up all women either, but there is certainly out there, a segment a women within that age group who are surfing around right now and are generally dissatisfied with their options.


11324            So, to come back to your question, why do we term then a niche, because they're a segment of the larger female population who would fit into that age group.

11325            MS LAURIGNANO:  And also because the programming orientation would be niche, as we said, it is from a different perspective, it's different from the mainstream, so it almost, to put it in relative terms, it's like a cultural group all by itself, you know, where it has its own set of standards and expectations and things, such as like, you know, humour, you know.

11326            It's acknowledged that, for example, you know, men and women find different things funny, and that's fine, we're wired differently, and so that's another thing that will distinguish it as well as fill that niche that we're talking about.

11327            So, the niche was both in terms of the lack of satisfaction in the music as well as the spoken word, and the niche is for a specific sector of women within that age group, and men as well, because 40 per cent of them will also tune in.

11328            MR. BARTON:  Yes.  I think it's worth noting that EMILY's core music ‑‑ or core listener is not someone who is only looking for more relevant spoken word but also at heart a music fan and variety in the format was something that certainly we examined very closely.


11329            One thing that I think differentiates us a bit from Harvard's application, they also spoke to variety and talked about playing, I believe the figure was 1,450 cuts.

11330            When we took a look at what we wanted to be able to expose in the marketplace in terms of artists and in terms of selections from those artists, we actually went a step further and we're proposing 1,800 selections because we want to be able to give variety not only in artists heard, but also in the selection heard from those artists, so that it cuts down on that repetition that's a complaint and it cuts down on that sameness that we're hearing from people that they hear right now in radio.

11331            And with spoken word again, what differentiates us from Harvard is that we took it one step further.  Our news and information programming is easily the most aggressive on the table at 16 hours and 40 minutes, and the reason for that is in addition to presenting news that's going to reflect and be relevant to that demographic, we want to go one step further and provide them with the more information that they need.


11332            It was funny, I was flipping through the Edmonton Journal this morning and I found a couple of stories in here that were interesting to me and I thought, gosh, if EMILY was on the air today, could we ever go further on these.

11333            There's one in the B section called an Urban Rescue Team Being Sought and it talks about a Canadian task force being assembled as a rescue team.

11334            And what we would be able to do with EMILY, we would report on that story, but then we'd delve further.  Are they doing anything to actively recruit women?  Do they have an equity employment program?  After the recruiting's been finished, how many women did apply?  What was the course like?  So we'd be able to speak to them and see what this was actually like for them.

11335            Another one that caught my eye was actually on the same page, Nutritional Guidelines Desperately Needed, and this is something that's been happening across the country is public schools have been re‑examining what their nutrition programs are and it's been a bit of a hot button. 


11336            I know because in another market that we program, what we did in addition to reporting the fact that these healthier options were being made available at schools, we solicited the opinions of students because it was a youth format that we were airing it on, but we heard back from the parents as well and some of them were very emphatic about how they felt about these nutritional guidelines being put in the school without them being consulted.

11337            So, it's a way that we would be able to take EMILY and say, here is more information beyond what's just in the news.

11338            I think that's something else that sets us apart from the other Triple A applications.

11339            I'm sure that was the way too long  answer to your question.

11340            COMMISSIONER MOLNAR:  No, that's fair.  You know, there's many applications before us and there's many that appear to be quite similar, and so it's important that we do try and understand what really are the key differences.

11341            You spoke about Harvard.  How about the Pattison application?

11342            MR. BARTON:  In terms of the Pattison application, their demographic is slightly younger what they're targeting than ours, they're targeting a 35 to 44.


11343            Again, their news and spoken word commitment is smaller than ours because, again, we're taking the approach  that it's not just the headlines, it's not just reflecting that audience in the facts, it's taking it one step further and what can we do to inform as well as entertain. 

11344            MS LAURIGNANO:  We believe also that  the music duplication appeared to be a bit higher than what we are proposing in the market and those facts were also cited by Harvard earlier on today about having a higher duplication of music in the market.

11345            COMMISSIONER MOLNAR:  Thank you.

11346            And you may have covered this.  What percentage of your playlist is currently unplayed in Edmonton, your proposed playlist?

11347            MR. BARTON:  With our proposed playlist we found that only 6 1/2 per cent of it was actually duplicated in the market already.

11348            COMMISSIONER MOLNAR:  Okay.  So, for me to ask you the similarities and differences with some of the incumbents would not be a useful use of our time then.

11349            MR. BARTON:  Yeah, we're vastly different from the incumbents.

11350            COMMISSIONER MOLNAR:  Right.

11351            MR. BARTON:  Yeah.


11352            COMMISSIONER MOLNAR:  I'm going to move on and just speak specifically to your discussion of including jazz and blues, folk and world music within your genre, or the genres in your playlist.

11353            This, as you know, is subcategory 3 music.  Can you tell me in terms of hours and minutes just how much time would be devoted to Category 3?

11354            MR. BARTON:  Yes.  On average per week it would be 12 1/2 hours or 10 per cent of our  playlist.

11355            COMMISSIONER MOLNAR:  Would you be able to break that down between the different subcategories?

11356            MR. BARTON:  Sure.  Folk and blues combined would account for 6 per cent and jazz and world music would be about 2 per cent each.  That, however, is in a bit of flux.  One of the features that we have Focus, actually will bring in one hour of a specific type of music per week, again, based on audience demand.  So, one week it might be world music, another week it might be reggae, it might be Ska.

11357            So, because of that the amount of each of those genres could fluctuate from week to week.


11358            MS LAURIGNANO:  If I can just add.  With the exception of when one of those programs would feature a Category 3 music topic for a specific week, the Category 3 music is not ghettoized in any way, it's part of the regular program and it's blended throughout the day, throughout the full broadcast week.

11359            So, I think it's important to point that out.

11360            COMMISSIONER MOLNAR:  Thank you.  Actually that was going to be my next question.  But I'd just like to go back.

11361            You said that Category 3 would be 12 hours and in case ‑‑ no?

11362            MR. BARTON:  Per week.  It would be 10 per cent of the overall playlist.  So, based on a 126‑hour broadcast week.  Maybe my math is off, I thought it would be 12 1/2 hours.

11363            MS LAURIGNANO:  If you actually timed the songs and you took 126 hours for the week, then it would work out to that.  But there isn't any hours per se because it is blended.  I think that the percentage figure is probably more appropriate to describe how it's going to be played.

11364            MR. BARTON:  Correct.

11365            COMMISSIONER MOLNAR:  Okay.  I believe, and I may leave this to our staff to be clarifying, I believe they were looking for the hours and the minutes, the actual hours and minutes by subcategory.


11366            So, can we ‑‑ would we be able to get that instead of the percentages?

11367            MR. BARTON:  I can jot down some quick math for you before they ask the question.

11368            COMMISSIONER MOLNAR:  Okay.  Very good.  Thank you.

11369            I'm just going to move on to market share for a minute.  I note that by year three you're proposing 5.4 per cent audience share and growing to 7.2 per cent by year seven.

11370            You've looked at this assume.  Could you tell me, at 7.2 per cent where you would sit in the Edmonton market, assuming of course the existing incumbents?

11371            MR. MOREMAN:  If you refer to our consumer demand at page 27, assuming that nobody else changes, 7.2 would put us 7th on a 12 plus.

11372            COMMISSIONER MOLNAR:  Seventh.  Could  you tell me what you believe to be your greatest risk related to achieving that projected audience share?

11373            MS LAURIGNANO:  Well, we're not really perceiving any risk or threat towards that goal.


11374            Not to say that somebody else in the market couldn't come in and do a similar format or do something else or the conditions would change, but we're fairly confident that given the size of the market, given the growth of the market, given the demand for this particular service, given our experience, given the fact that this demographic is one that has the most critical mass, it's the most lucrative, it's the biggest one, that we would achieve it under any circumstance.

11375            MR. MOREMAN:  And from the research point of view as well, our starting point already takes into account the people who claim they would definitely or most probably listen to our service won't do as they say.

11376            So, our starting point is already discounted for that reality.  So, we believe that our estimate from a starting position is already conservative and that the growth we anticipate is also conservative.

11377            What we do for year one is we calculate the share, and I believe it's six on a pure research pure math basis, but recognizing that we do have start‑up and new entrant experiences that people may not latch onto right away, we further discount it.


11378            So, in our projections we're already at a position that we feel is quite conservative from the number of people who will tune in, so we don't think it's going to be that much of a challenge to achieve the numbers towards the end of our licence term.

11379            COMMISSIONER MOLNAR:  Okay.  Let me throw out a couple of things, I guess.  First of all, we know that there are some strong incumbents in the market.

11380            We also know that they will flip formats, not an issue of risk for you?

11381            MS LAURIGNANO:  Actually, it's ‑‑ seriously under no circumstance do I want to sound arrogant, but we've been there and done that, and we are in ‑‑ we're doing it right now as we speak.  We are a stand‑alone in Halifax.

11382            We have a format there which we pioneered called youth contemporary radio.  It's the No. 1 station between 12 to 34 year olds, and there are some pretty big giants out there.

11383            So, we've done that.

11384            In the Toronto market as well, with actually a partial signal, not even a signal that covers the whole CMA reliably, we're again doing it.  We're No. 1 ranked among the demo that we're serving.

11385            So, we're tough, we can take it, and we wouldn't be here if we didn't think we could.

11386            COMMISSIONER MOLNAR:  Mm‑hmm.


11387            MS LAURIGNANO:  But further to that, it's not just bravado or anything like that, we really have thought about it.  We have the financial resources as well that we can stay the course.

11388            One of the things that we've done is we've never abandoned format really.  You know, there were times when we were surrounded by people who wanted to, you know, bury is us in very quick order and we're still there and stronger than ever.

11389            So, it's not just by accident that we're there either.  We're a good company, we're well financed, we're well managed and if anything comes our way, we can stay the course because we can weather it, because we do have the resources in our back pocket and that's part of the plan that would apply to EMILY as well.

11390            COMMISSIONER MOLNAR:  Okay.  Just one more question on this and this relates to something Mr. Cowie said just before lunch.

11391            And, you know, not that this is a likely outcome, but he proposed that all new applicants could be licensed.

11392            So you're still confident even, if you would be competing directly against that very, very similar format?


11393            MS LAURIGNANO:  Yes, we are.  And I think the Commission thinks we probably could too, given the decision in Vancouver where the similar kind of formats were awarded.

11394            I think that, you know, with a market that is big, that is viable that, you know, where the frequencies are available and when you have the right broadcasters who have passion and a proper business plan, I'd say, you know, full steam ahead, because it does work and we've seen in those markets where, you know, more than one licence was granted where the markets were big that, you know, everybody thrived and radio revenues grew.

11395            And I think Edmonton is one of them.

11396            COMMISSIONER MOLNAR:  Okay.  Thank you.  I'm going to move on to questions regarding the spectrum, the technical issue of the third adjacent frequency.

11397            I assume you're aware of the potential issues that exist having selected a frequency that's sort of sandwiched between Rogers' two existing stations.


11398            I wondered if you have ‑‑ what work you have done and how you looked at that and how you are prepared should there be issues from that frequency?

11399            MR. MOREMAN:  From a pure policy standpoint, to answer your question on that, we are aware of the Industry Canada policies that require us to rectify any issues, if there are issues.

11400            From the more technical aspect of things, we'll have to see what those problems are, if and when they come up in the testing phase.

11401            So, have we considered that there might be problems?  Certainly, the policy requires us to do so.  But to go a little farther to answer your question, we've also in our deficiency identified  other frequencies that are available that do not impact on our business plan.

11402            So, if it comes to that, and we're not saying necessarily that it would need to, those are available to us.


11403            MS LAURIGNANO:  And we have been in consultation and we do have a broadcast engineer on retainer the whole time who's been advising us on the matter and others and, you know, he believes that it's workable and that, you know, the solution is there if the goodwill is there, and we're certainly prepared to do anything in our power to make sure that any issues are resolved to anybody's satisfaction so that it's good for the system in the long run.

11404            COMMISSIONER MOLNAR:  Okay.  Thank you.

11405            I was going to ask if you had incorporated these contingent costs into your business plan, but your contingency is to swap to a different frequency.  Is that what I heard you say?

11406            MS LAURIGNANO:  Yes, there is that possibility that we've thought of and, as I mentioned before, should there be any surprises, we can handle it, above and beyond this particular business plan.

11407            COMMISSIONER MOLNAR:  Okay.  Thank you.  I'm going to move to the issue of programming and spoken word.

11408            As you noted, you have provided by far the most amount of spoken word, 16 hours and 40 minutes of news per broadcast week.

11409            As I understand, 12 hours and 10 minutes would be devoted to pure news, that's correct.

11410            Maybe you could just provide for our record your rationale, given that you are in a predominantly music format, your rationale for having such a large commitment to programming in spoken word?


11411            MS LAURIGNANO:  Right.  The rationale is based on the fact that research and other factors,  including you know now a ‑‑ actually, a wealth of information that has accumulated not only through the efforts that we've undertaken, for example, and we were the first applicant to propose this format in another market, so there's been research there and there's a lot of other stuff in the public domain and, of course, some applicants in Vancouver and even here today, where there is irrefutable evidence that this particular demographic, and specifically the women, don't live by one music genre alone.  They don't live by one radio station alone right now, and they don't live by one spoken word source alone.

11412            So, that what they were looking for is really a whole package that is different.  And I know there's been talk about the music being from different genres and a blend, that they're looking for a bit of this and a bit of that, but they're also looking for the talk.

11413            I mean, there are talk stations in other markets, but the research also comes up the same way.  So, they're not looking for pure talk or pure news, they're not looking for pure one genre music, it's a whole package, and it's with that slant and it's with that sensitivity and with that orientation that we spoke about.


11414            And spoken word is a huge component of what would make EMILY attractive, both in terms of the content and in terms of the volume, so that the news stories, they're not looking for headlines.

11415            I mean, the news commitment is big.  We have ten‑minute newscasts and not just a headline, and in depth and then we have a good news programming at noon, you know, where it's a container and it sort of recaps and goes in depth and probes all other issues, as well as the banter on the air.

11416            So, it's really a response that ‑‑ it's a hybrid.  We called it a hybrid format.  So,  although primarily music driven, spoken word is extremely important, and rather than someone having to jump all over the place, they can find it just in one spot. 

11417            COMMISSIONER MOLNAR:  Thank you.

11418            Can you tell me how many people you have projected within your news department?

11419            MS LAURIGNANO:  Sure.  Dan will just go through the staffing there.


11420            MR. BARTON:  Yes.  In the news department we have six staffed in there because we understand it's a very heavy spoken word component, because a huge part of the news component is not only reflecting that audience but giving them a chance to speak as well, so that we can complete the news picture we know that we have to have the staff to go out there and get that.

11421            So, it's a full staff of six which would include a news direct and morning news reader.

11422            It would include two news reporters that work the afternoon, one of those would be doing the on‑air run in the afternoon and then three additional stringer reporters who would not only be gathering news for us through the week and preparing information for our features, for our half‑hour news programs, but also providing us with the news broadcasts on the weekend.

11423            MS LAURIGNANO:  And in addition to that, we also have a tradition of working together with colleges, universities and journalism and other institutions where we get students who come in for placement for co‑op and mentoring, and that will also supplement the newsroom to some degree, while at the same time providing them with the opportunity to get on‑the‑spot training.


11424            You will note in our projections that we're about $2‑million over the other applicants in our programming expenditures forecast, and that's because we really take that ‑‑ that I spoken about before, about the heavy spoken word commitment, making sure that it's delivered and it's staffed and it's, you know, done the right way for the market and for this group.

11425            COMMISSIONER MOLNAR:  Okay.  Thank you.  And just while we're on it, can you tell me the total anticipated staff you would have for this station?

11426            MR. MOREMAN:  We do have it if you'll give us a couple of moments to add it up.

11427            MS LAURIGNANO:  It's actually ‑‑ I have it.

11428            MR. MOREMAN:  You have it?

11429            MS LAURIGNANO:  Yeah.  It's going to be 27.

11430            COMMISSIONER MOLNAR:  Twenty‑seven staff?  So six are news.

11431            MS LAURIGNANO:  Six are news.

11432            COMMISSIONER MOLNAR:  How many are on air?


11433            MR. BARTON:  In terms of on air, we will have a morning show host, a mid‑day host, an afternoon noon show host and an evening host and then we'll also have two swing announcers who will help us complete our weekend programming.

11434            On top of that we will have two people in production, a creative director, a junior creative writer as well and, of course, a program director.

11435            COMMISSIONER MOLNAR:  Thank you.

11436            Could you tell me, as you mentioned, what's important about your format, it's not just the music but it's the spoken word, and that's where, you know, what will define you and set you apart.

11437            Can you tell me ‑‑ you know, we've had a couple other applicants, and I would say particularly the Jim Pattison application and the Harvard application that also speak of the importance of having quality spoken word.

11438            Can you tell me how your spoken word would be separate, different, or you know defining in some way?

11439            MS LAURIGNANO:  Well, I think that the volume itself is one distinction and with ‑‑ I can't really guess what they were going to do, although I'm sure that they will provide, you know, excellent programming, they're good broadcasters.


11440            But we've allocated more resources to it, as I said before, that we have an additional ‑‑ or we have $2‑million more than they do just in the programming area that will ensure that it's staffed, that we do get, you know, the research materials that we need, the third parties, you know, and that kind of thing.

11441            So, it's not going to be just talking heads, there will be content that will be a little ‑‑ well, in depth for us.

11442            MR. BARTON:  And further to what Carmela is saying, it's really for us about completing that picture on information.  She had mentioned the half‑hour news program.

11443            In reference to a story I mentioned earlier about school lunch programs.  A program like that enables us not only to report on the implementation of the school lunch programs and what some people in the community are saying, but during that half‑hour news program we could have the Home & School Association and actually talk about how that's affecting the school, what the parents' feedback is going to be.


11444            So, it offers a more complete picture in terms of something that's relevant to the target audience and, as Carmela said, rather than us just talking at them and saying, here are the facts, here's what's going on, we can offer a complete picture of how it affects our audience and what our audience feels about it.

11445            MS LAURIGNANO:  The other thing that we have that runs simultaneous with it is that our Internet strategy as well, which is also what we consider a blessing actually, because we use the Internet as an arm, both in terms of a marketing tool for the station as a vehicle to further promote and enhance our CCD initiatives, as well as provide interaction and information about the artists.

11446            And also use it for leverage, you know, in securing promotions and exciting things that, you know, can come along, for example, getting the presentation of a show featuring a key artist or something like that.


11447            So, again, we try to build our package so that it's very complete and it kind of is a resource really for those things that ‑‑ that the market wants, including information about, as we mentioned books, you know, what the latest release is and, you know, maybe there's something happening in the city that is of specific interest, we would provide, you know, hyper link to that particular organization so that people could just go past us and, you know, get into other areas of interest to them.

11448            COMMISSIONER MOLNAR:  Thank you.  And I assume that you'd be planning to have your new media platform up and running at the same time or before even that your station is launched?

11449            MS LAURIGNANO:  We would definitely get it going before.  We've found that that's actually a very good way of, you know, spreading the word, and it also provides feedback.

11450            People feel part of it, and that's been the reason for, you know, our success and it's part of our programming as well as sales philosophy that we ‑‑ we like to say that we work from the street up, because when you make contact with someone and someone feels that they're involved, then the loyalty factor is that much stronger, and then the ability for us to deliver what they want is that much greater, and we found that's been a great, great success for us.

11451            That we don't program from the top up, we say we do it from the bottom up.  We're sort of the Obamas of broadcasting in that sense.

11452            COMMISSIONER MOLNAR:  Okay.  Just one question on Canadian content just to clear the record.


11453            As you may ‑‑ and likely are already aware the Commercial Radio Policy of 2006 increased the level of Canadian content relating to subcategory 34 jazz and blues music from 10 per cent to 20 per cent.

11454            Yes.  Do you believe you would be able to abide by this new percentage?

11455            MS LAURIGNANO:  Yes.

11456            COMMISSIONER MOLNAR:  Yes.  And would you be willing to accept a condition of licence which required that at least 20 per cent of your subcategory 34 jazz and blues is made up of Canadian content?

11457            MS LAURIGNANO:  Yes.

11458            COMMISSIONER MOLNAR:  Thank you.  I just really have one more area that I'd like to discuss with you, and that's the issue of competitive balance.  And you've heard that discussed I'm sure through this hearing.  You know, we've said there is new entrants, there's regional entrants, there's national entrants.

11459            MS LAURIGNANO:  Mm‑hmm.

11460            COMMISSIONER MOLNAR:  And you're a little bit unique in that you obviously are an established radio player, but I believe this would be your first entry into this market.

11461            MS LAURIGNANO:  Yes, that's correct.  We currently operate in Halifax, Ottawa and Toronto CMA.  So, this would be not our first effort, but this would be our first entry for sure.


11462            COMMISSIONER MOLNAR:  In the west, right?

11463            MS LAURIGNANO:  In the west, yeah, anywhere west of Ontario.

11464            COMMISSIONER MOLNAR:  Right.  So, are there synergies that you can achieve with your other radio stations if you were to move into Edmonton?

11465            MS LAURIGNANO:  There are some synergies in terms of trying to garner those advertising dollars from the national type of advertisers that we spoke about before.

11466            There are some other synergies in terms of sharing things like music libraries, synergies in terms of sharing some information.

11467            But other than that, the radio station here would be 100 per cent local, we've planned for a full staff, all the management, all the news, everyone would be local here, because that's what we believe to be ‑‑ will bring us the best success.

11468            COMMISSIONER MOLNAR:  So even your general and administrative activities?


11469            MS LAURIGNANO:  Very ‑‑ no, little or negligible, and also because this format is different from the other formats that we do we couldn't, you know, share programming or anything like that even if we wanted to, which we normally don't want to.

11470            COMMISSIONER MOLNAR:  Okay.

11471            MS LAURIGNANO:  Sorry ‑‑

11472            MR. MOREMAN:  However, that said there are instances where our unique position comes in handy by way of programming synergies.

11473            Since we have a station in Halifax, we have a station in Ottawa, we have several stations in southern Ontario and if we picked up the Edmonton station, we would really have quite a string of stations across the country that regional broadcasters or truly independent local broadcasters don't have.

11474            If something happens in Halifax, for example, and we have a reporter from our Halifax station on scene to get a quote, get a clip from the news maker, that would be made available to people in Edmonton.

11475            A regional broadcaster won't be able to do that and is unlikely to fly a reporter out to Halifax to cover Maritime stories.

11476            So, that's something that we have in our column when it comes to the ‑‑ the broadcaster we aim to become through this application.


11477            That's in addition to, as Carmela pointed out, the music libraries that might be shared and that sort of thing.

11478            There's also features that we have on other stations that from a new and emerging artist point of view may be of relevance to the audience here in Edmonton.  One of the things we found through the research is that the listeners of EMILY are truly excited about hearing not only new music, but hearing about the artists who make that music and how it's made.  So, even though we have our own features on EMILY that are going to serve that very purpose, there are other similar features on our other stations that might be able to pick up an Ottawa artist, have that live interview in Ottawa that we can then ship off to Edmonton to be used here if the programmers here decide.

11479            So, I want to counteract that with the idea that we're going to dictate from Toronto who plays what and that sort of thing, that's not going to happen, that's why Carmela was saying it's completely local, but that possibility is there that does not exist, again, for a regional broadcaster or a truly local broadcaster, they're not going to be able to get those interviews across the country.


11480            MS LAURIGNANO:  And it's not the feature that's going to be shipped across, for example, if the Halifax station secured an interview with K.D. Lang on the new release of her album, then that particular portion of the content would be made available to the station.

11481            But as far as the feature's concerned, it would be produced locally at the radio station.

11482            MR. MOREMAN:  Carrying on on these programming synergies, we also have a summer concert that's part of our CCD package here in Edmonton, but we also host summer concerts in Toronto, Halifax, Ottawa as well.  So if, again, there's an artist, a new and emerging artist who is going to form part of those concerts in other cities that we feel would fit the line‑up in Edmonton we, again, could use that resource to do the ground work in those other markets, get the artist on board and have him or her perform here.

11483            So, there's a whole ‑‑ several layers of synergies, not just cost savings, but through what we're able to deliver on a national level through our national system that we're proposing.

11484            COMMISSIONER MOLNAR:  Thank you for that.


11485            I do just want to back up.  You suggested that one of the benefits of your national presence was national advertising, and yet we heard CHUM here this morning, who is obviously national in scope, you know, quite concerned about their ability to attract national advertising here in Edmonton, despite their national presence.

11486            Is that of concern to you at all?

11487            MS LAURIGNANO:  I'm going to ask Ms Joseph to speak to that.

11488            MS JOSEPH:  It's not a concern to us that we would not be able to attract national advertisers.

11489            As a matter of fact, as part of our revenue calculation, projected revenue calculations, one of the things we do is speak with national advertisers in the agencies, discuss with them our proposed format and find out based on the market that we're looking to propose a station into, if there is interest, and there was great interest from those national advertisers.


11490            But, more importantly, we feel that we need a station in the west in order to become "a national broadcaster".  And the reason for that is one of the things that we cannot do right now is, for example, you've heard many times critical mass, critical mass, what that means to us is that we will be able to ‑‑ you know, when there's a buy going down, for example, in a market and there are so many GRPs and the way that advertising agencies buy, GRPs don't grow, so, you know, they're shared.

11491            But what happens is when you have several stations across the country, you're able to go in at either the pre‑planning stage or certainly before the buy is executed as a national broadcaster and speak to all of your stations and perhaps come up with a strategy.

11492            We don't have that ability right now from a national standpoint.  We will have that ability if we were able to ‑‑ if we were licensed for EMILY in this market.

11493            COMMISSIONER MOLNAR:  Thank you very much.

11494            Those are my questions.

11495            THE CHAIRPERSON:  Don't be offended that Commissioner Cugini or I, neither of us have any questions.

11496            Legal.  Legal does.

11497            MS LEHOUX:  Thank you.


11498            In response to Commissioner Molnar's question, you stated that your level of Category 3 music offering would be of 10 per cent per broadcast week.

11499            MR. BARTON:  Correct.

11500            MS LEHOUX:  Could you confirm that you would accept this level by condition of licence?

11501            MS LAURIGNANO:  Yes, we would.

11502            MS LEHOUX:  You would.  And in relation to the Category 3 undertaking, I think you undertook to provide the number of hours by subcategories

11503            MR. BARTON:  Yes, and I thank you for the opportunity to recalculate because, again, I'm always amazed when a math question comes to me, such a good chance of getting it wrong.

‑‑‑ Laughter / Rires

11504            MR. BARTON:  I had forgotten to take out the spoken word content when I was calculating the hours.  So the number of hours per week on average that we would be airing folk and blues would be six; number of hours per week jazz two; number of hours per week world music two.

11505            MS LEMOUX:  Perfect.  Thank you very much.

11506            THE CHAIRPERSON:  Thank you.

11507            Ms Laurignano, this is your two minutes.


11508            MS LAURIGNANO:  Thank you, and I'm going to ask my partner, Ms Joseph, to start.

11509            MS JOSEPH:  Thank you.

11510            Madam Chair, Commissioners, it is our firm belief that Evanov Communications represents the best application before you today both in terms of who we are as broadcasters and in terms of the format we propose to offer radio listeners in Edmonton.

11511            ECI is a strong, extremely well‑financed broadcaster that is operated as a standalone in Canada's most competitive markets, especially the Toronto CMA.  Despite direct competition from the large five broadcasters we have survived and not only that we continue to thrive.

11512            The Broadcasting Act envisions a cohesive national broadcasting system.  We envision ourselves as a national broadcaster that can enhance the system by introducing a new voice and new ownership into markets dominated by large and regional entities.  We have the financial and managerial resources and the practical experience required to make EMILY a reality in Edmonton.


11513            MS LAURIGNANO:  In the Edmonton market the unique voice we will introduce has the ability to bring a fresh take on local, regional and national issues to the cities.  Not only will we be bringing a new editorial voice to Edmonton, we will bring diverse ownership of women such as Ky and myself and a fresh format that will fill a defined need for Edmonton listeners.  The Triple A format has been shown through research in the market to address the concern of listeners but there is too much repetition and too much sameness across all stations.

11514            Having pioneered the format in our Ottawa application in 2006 we are confident that by playing a larger variety of music on a less‑frequent basis the satisfied listeners will return to radio.

11515            THE CHAIRPERSON:  Thank you very much, Ms Laurignano, Mr. Evanov, and your team.  We appreciate that.

11516            We are going to take a 10‑minute break so we will reconvene ‑‑ my math is not great today either ‑‑ about 10 to 3:00, 5 to 3:00.  Thank you.

‑‑‑ Upon recessing at 1442 / Suspension à 1442

‑‑‑ Upon resuming at 1459 / Reprise à 1459

11517            THE CHAIRPERSON:  Good afternoon.  We are going to start.


11518            I just wanted to mention that if any of the parties are not intending to appear in Phase II, if they would touch base with the hearing secretary and let her know so we can make our plans.  And we also are going to end today at the end of the first four intervenors, those ones appearing in support for the Multicultural Broadcasting Corporation.

11519            Thank you.

11520            So you can begin your presentation.  Thanks.

11521            THE SECRETARY:  Before we begin, for the record, Multicultural Broadcasting Corporation Inc. has filed in response to undertakings their answer for a third adjacency interference and details of their CCD contributions.  These documents have been added to the public record and copies are available in the public examination room.

11522            We will now proceed with Item 26, which is an application by Rawlco Radio Limited for a licence to operate an English‑language FM commercial radio programming undertaking in Edmonton.

11523            The new station would operate on frequency 102.3 MHz (channel 272C1) with an average effective radiated power of 51,000 watts (maximum effective radiated power of 100,000 watts/antenna height of 240 metres).


11524            Appearing for the applicant is Pam Leyland.  Please introduce your colleagues.  You will then have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

11525            MS LEYLAND:  Good afternoon, Madam Chair, Commissioners Cugini and Molnar, Commission staff.

11526            My name is Pam Leyland and I'm President of Rawlco Radio.

11527            I bet you are glad to see us ‑‑

‑‑‑ Laughter / Rires

11528            MS LEYLAND:  ‑‑ but only because we are the last applicant.

11529            On my right is the CEO of Rawlco Radio, Gordon Rawlinson.  Gord is my biggest fan and my biggest challenge.  There are two things that I can say about Gordon that all of us at Rawlco would agree on.  First, he is not the easiest CEO in Canadian radio to work for and, second, he is the best.

11530            He isn't the easiest because he sets very high standards that he expects us to meet.  But he has a great strategic vision for our company and this makes it possible for us to accomplish goals that often even we don't think is possible.


11531            On my left is Kurt Leavins, the Vice President and General Manager of Rawlco's CHMC‑FM, better known as Magic 99 here in Edmonton.  I'm going to ask Kurt to introduce the rest of our panel.

11532            MR. LEAVINS:  Thank you, Pam.

11533            Pam has been a good friend and mentor almost since my first day at Rawlco.  She is a terrific president.  Her people skills are legendary.  She knows how to make good decisions and how to make things happen.  She knows when she should delegate and when she has to step in and do it herself.  We will all know shortly whether or not her decision to have me introduce the rest of the panel was one of her better delegating decisions.

11534            Since this is the first time I have had the opportunity of appearing before the Commission, let me take a moment to tell you a little bit about myself.  I was born on a farm in rural Saskatchewan and, as you can probably imagine, it was not the media centre of the world.  But the one thing we did have was radio.  The fascination with radio that began there on the farm has remained with me my entire life.


11535            When I graduated from high school I went off to university in the big city, Saskatoon.  While attending university I took a broadcasting course.  This led to my getting a part‑time job at CKOM, the Rawlco station in Saskatoon.  One thing led to another and radio became my career.

11536            Like many starting out in radio, I moved around a lot, gaining experience in places like Prince Albert, Regina and in lots of different positions like news and programming, but all of my 20 years in radio have been with Rawlco.  When the Edmonton licence was granted I was moved here to build and launch the new station.  If this application is approved I will also be responsible for building and launching this new music and emerging artist station.

11537            On Gordon's right is Kimberly Dickie, our senior advertising consultant here at Magic 99.  Although working for a standalone radio station in a city dominated by broadcasting groups with multiple stations, Kimberly has done an outstanding job of not only convincing clients of the benefits of advertising on Magic 99 but also of helping them achieve great results from their investment.  Kimberly has been with us since we signed on and she will be the sales director of the new station.

11538            On my left is Doug Pringle, the Director of Program Development for Rawlco Radio.  Doug is unbelievably knowledgeable about all kinds of music and an indispensable resource at our radio station.


11539            Behind me and on my right is Tammy Hofer.  Tammy Hofer is the Operations Manager at Magic 99.  In every business there is always one person that is absolutely essential to the functioning at the station and at Magic that person is Tammy.

11540            Beside Tammy is Neil MacDonald who will coordinate our two important Canadian Content Development programs, Project 10K20 and Showtime.  Neil is a talented performer in his own right and well known and liked by everybody in the Edmonton music scene.

11541            On Neil's left is Sheri Somerville.  Sheri is a professional singer here in Edmonton and she had produced an album through Project 10K20.  If I can direct your attention to the first graphic on my far right‑hand side it says "pre‑launch".  The CD with the blue front, the fourth one down on the left, that's Sheri's CD, Crazy Love.  It's great.

11542            These are all the CDs that we have produced in Edmonton so far.  We currently have about 18 additional projects underway in various stages of development.

11543            Madam Chair, members of the Commission; CRTC staff, Edmonton is a growing, prosperous and dynamic city.  Advertisers, particularly local radio advertisers, are very aware of just how prosperous the city Edmonton is today.


11544            Total revenues are well over $80 million a year.  Nevertheless, we have had to work hard, very hard, to get Magic 99 established under the challenging circumstances of being the only standalone station.

11545            MS DICKIE:  Kurt is right.  It is definitely a challenge.  There are five major players; Astral, Corus, Newcap, CTV and Rogers.  They all have two, three or four radio stations or have a local television station.  It's very difficult as a standalone radio station to compete.

11546            Owning multiple stations has many advantages.  They can cross promote their stations both on air and in their promotional campaigns.  They can combine commercials on multiple stations in ways that a standalone station has no chance of doing.  If one of their stations has poor ratings they can support that station by packaging it with a stronger station.  If one station has a younger audience they can partner it with another station which has an older audience.  A single station has none of this flexibility and is at a real competitive disadvantage.


11547            We have to work a lot harder.  Believe me, a lot harder, to convince clients to use our station.  We have to overcome traditional buying patterns and convince them that a standalone station can indeed produce results.

11548            The results we have had so far are an indication of the great effort we put into sales.

11549            The audience for our proposed station would be a perfect fit with our existing audience, a little younger but still adults.  Two stations would allow us to compete on an equal footing and provide competitive balance.  It would give us new ways to provide more value and promotional opportunities for our clients.

11550            MS HOFER:  Two stations operating together from one location would make for a much more efficient operation in accounting, traffic, production, promotion and especially sales.  It would allow our people to have more fulfilling jobs.

11551            In terms of community involvement a second station would make a huge difference.  Magic 99 currently supports many, many charities and community organizations.  Our two major projects involve raising funds for our internationally‑recognized Stollery Children's Hospital and supporting the Edmonton Christmas Bureau through at 12‑hour radiothon.


11552            We also organize a sold‑out charity concert featuring three 10K20 artists.  Two stations working together to support worthy causes would have a multiplier effect.  It would give us the ability to support many more organizations with much greater impact.

11553            MS LEYLAND:  Like many great ideas, our proposed format, the new music and emerging artist format, or more simply put new music for adults, once it is understood seems like an obvious choice.  For many we have talked to their first reaction was, "Surely that hole must already be filled".  In fact, not only has it not been filled, no existing stations and, I might add, no proposal by any of the other applicants even comes close.

11554            MR. PRINGLE:  If you look at Edmonton radio, new music versus old music, the young audience versus the adult audience, the first thing you notice is that the youth audience is targeted with new music and the adults are targeted with old music.  This leaves a huge hole in the middle for adults wanting new music.


11555            I think if I gave you an overall picture of the formats on Edmonton radio it will show clearly where new music for adults fits in.  The Bounce is the CHR or Top 40 station catering to youth.  So does SONiC, the X rock station and The Bear, Edmonton's hard rock station, and both have a male bias.  These three stations all attract a young audience.

11556            Then there is a huge gulf.  For the next station up the age ladder we have to go all the way up to JOE with its focus on music from the '80s and '90s.  After JOE there is K‑Rock, the classic rock station and no new music.  Next, we get to EZ Rock which is Edmonton's soft AC station.  Finally, at the top of the ladder is Capital FM with classic hits from the '70s and '80s and, again, no new music.

11557            So I think what this picture shows is that adults wanting new music have no home on Edmonton radio.  When I say adults I'm thinking of people in their mid to late twenties or in their thirties, up to perhaps their forties.  If they have outgrown the hip hop on CHR and rock music isn't their thing then their only choice is classic hits.  Much of this music was made before they were even born.


11558            Of course, the preponderance of Gold‑based formats in Edmonton presents an even greater problem for new emerging artists.  Gold stations don't play or promote new music.  Yet, it is adults, their listeners, who buy CDs.  In fact, adults now purchase over half of the CDs sold in stores.  In my opinion, the last thing Edmonton needs is another gold‑based radio station.

11559            An easy way to describe our new music for adults format is by showing how similar it is in terms of programming philosophy to one of the most successful radio formats in Canada today.  In fact, there is already a very successful radio station with this format in Edmonton right now.  It is the country music format.

11560            So what is the programming philosophy of country music stations and why are they so successful?

11561            First, they focus on the biggest stars of country music, artists like George Strait.  Now, George Strait has been putting out music since the cows first started coming home but country stations don't care about his old music.  They feature his latest songs, his new music.

11562            Second, a country music station would quickly become pretty boring if all they played were songs by the bigger stars.  So they have to search out and feature new artists.  They take emerging country artists and make them the stars of tomorrow.  To a large extent this same programming philosophy can be seen in youth‑oriented radio.  CHR and new rock stations play new music and introduce emerging artists.


11563            So young people can find new music on the radio but what happens after they grow up?  The current thinking on Edmonton radio today is that as soon as a young person outgrows CHR they want gold.  It's as if in one instant they go from young and vibrant to old and nostalgic.

11564            So I have to ask the question, is that really the way we age?  We don't think so.  And that is why we feel new music for adults will fill such a gaping hole in Edmonton.  Yes, young people do mature and they do outgrow Top 40 but they don't become old overnight.

11565            The graphic to my left shows this clearly.

11566            MS LEYLAND:  The graphic to my left shows what Doug has been talking about; at the top, adults; at the bottom, youth.  On the left is old music.  On the right is new music.

11567            Most of the stations in Edmonton are in the upper left, older music for adults.  Only our proposed station and CISN, the country station, play new music for adults; the blue box in the upper right.


11568            MR. PRINGLE:  So a funny thing has happened because of this format void.  Pop music's biggest stars, artists like Anne Murray and Bruce Springsteen can easily be heard on the radio but it's all of their old hits.  Nobody will play their new music.  Going back to the country music example, it's as if all you could hear were old George Strait songs.  For country music stations this would make no sense at all.

11569            So far I have described the new music part of our new music and emerging artists format.  The second part, emerging artists, is just as key to the success of the format.  CHR graduates are used to hearing new music by new artists.  They want the excitement of discovering something new that they really like.  This is exactly what the music by emerging artists will bring to the radio station.

11570            When introducing emerging artists there is a clear, defined road to success:

11571            First, when you play this new music you have to surround it with the music by artists they already know and love.

11572            Second, you have to play this new music often enough so the audience gets a chance to know it.


11573            Third, your announcers have to build a picture of these emerging artists and their music so that listeners can identify with and appreciate this music.

11574            Finally, you have a mix of the new music by both superstars and emerging artists.  This is the way you attract a large audience and a formula, I might add, that country radio has proven really works.

11575            MS LEYLAND:  It seems to me that in changing the name from Canadian Talent Development to Canadian Content Development the Commission was sending a message to broadcasters.  You want us to focus our energies and resources on finding ways to get more new Canadian music on the radio.  We have taken this message to heart.  All of our initiatives are aimed at accomplishing just this goal.

11576            The centerpiece of our CCD plan is Project 10K20.  10K20 provides 20 artists with $10,000 each year including the year before we sign on to make a top quality CD.

11577            Magic 99 has been operating this program for almost four years.  The impact on the jazz community here in Edmonton has been dramatic.


11578            MS SOMERVILLE:  Project 10K20 has been a godsend for all of us involved in jazz music in Edmonton.  It has allowed us to make CDs with a depth of creativity that was previously not possible.  The structure of the program is extremely efficient and creatively supportive.  It has allowed us to make a CD we could never have afforded.  It allows us to focus on the artistry of the music, not on the bills that keep flowing in.

11579            Magic 99 has been passionate about contributing to a thriving artistic community.  They actually want to see local talent succeed.  We love Magic because they then actually play our music on their radio station.

11580            Three of my songs have been aired regularly and you can hear them right there, side by side with big international stars.  Having a quality CD and regular airplay on a radio station opens so many doors.  I know from direct experience that it leads to more local performance opportunities.  There is an explosion of activity on your website and many more downloads of songs.  You sell more CDs, you notice a jump in attendance at your shows; industry professionals suddenly start taking an interest in your career.


11581            MR. MacDONALD:  Project 10K20 is an absolutely brilliant plan.  I was thrilled when Rawlco asked me to take on the role of 10K20 coordinator.  My role will be to help guide the artists through each of the steps in the recording process so that they end up with a great CD.  I will also be involved in arranging the monthly Showtime events.

11582            Dave Babcock, the coordinator for 10K20 on Magic 99 is a very good friend of mine.  I will try to do for a local pop/rock artist what Dave has done for the jazz community.

11583            MR. LEAVINS:  I have two duties at Magic 99 that absolutely make my day.  The first is I get to call new applicants and tell them that they have been accepted into the 10K20 program.  Just recently I made such a call to a female singer here in Edmonton.  She was utterly blown away to the point of tears.  She said that up until that point she had been having an absolutely rotten day.  Then the clouds parted and the sun shone in.

11584            The impact 10K20 has had on the careers of young artists has really been a magnificent thing for me to see and the appreciation that you see coming back from them has been nothing short of astounding.  It is helping to change lives, sometimes in a really significant way.


11585            Now, the second duty I have, which is always a joy, is whenever a song by a 10K20 artist is added I phone them.  I tell them the date and the time of day that their song will first be played on our station.  You can always tell that this is something really special, a coming of age moment in their lives.  So far we have played over 80 Edmonton artists on Magic 99.

11586            The local pop and rock scene is just as vibrant and brimming with talent as the jazz side.  These artists will now get their chance to make a professionally‑recorded album and have their songs aired on our new station.

11587            A minimum of 50 percent of our Canadian music will be by emerging artists.  The first place we will look for this music is that produced by our local 10K20 artists.  Right now we get far more positive feedback about the local artists we play than any other music on Magic.  Listeners just love hearing music from their hometown.  The new station will be able to take our support for local talent a number of steps further.

11588            While there are a number of clubs suitable for live music, they don't often book local original acts.  Showtime is an offer these clubs can't refuse.


11589            Every month we will select two local artists and pay them a performance fee of $2,000 to perform at a local club.  We will heavily promote the artist and the club on our station, virtually guaranteeing a full house.

11590            Showtime will provide great exposure for local talent; help to stimulate the whole local club scene.

11591            MS SOMERVILLE:  Something that I think is really important about this application is that Rawlco is prepared to spend real money on giving emerging artists high profile exposure in other media.  People are funny.  If you create an image that someone is a star the public think it must be true.

11592            We have some great talent here in Edmonton and the only thing lacking is that people don't recognize that it's true.  Giving new artists the visibility they deserve would be awesome.

11593            MR. PRINGLE:  The breakout artist of the year initiative is one that is close to my heart.  In past lives I have been a performer and managed talent so I know the challenge.

11594            On the jazz side we have been astounded by the quality of music we have found in Edmonton.  We knew there was talent here but we didn't realize just how deep it went.  In the much broader pop genre the possibilities are even greater.


11595            Breaking out means getting beyond Edmonton and onto the national scene.  There is no set formula for accomplishing this but one thing is absolutely necessary, they have to have one great radio‑friendly single on their CD.  If this song isn't on their original album we will do what it takes to find that song and add it to the album.

11596            The next step will likely be to try and get distribution to help the artists achieve airplay on radio and penetration in retail.  In parallel, we will work with the artists to raise their stage presence and performance to a professional level.  Press kits, websites and promotional materials will be enhanced and exposure through showcases, tours and festivals will all be pursued.

11597            The path to national success is never easy.  The most important component is natural talent.  This I know we are going to find in Edmonton.  If you have talent and desire anything is possible.

11598            MS LEYLAND:  Madam Chair, this is our team and these are our plans.

11599            New music for adults will fill a gaping hole.  It's music for adults 25 to 49 who have outgrown Top 40 radio but who still enjoy discovering new music.  New music for adults is almost totally unavailable in Edmonton today.


11600            Our proposed format is very different from the existing stations and all of the other applicants.  We will broadcast a minimum of 40 percent Canadian content both overall and between six a.m. to six p.m. Monday to Friday.  A minimum of 50 percent of our Canadian content will be by emerging Canadian artists.  This means one song out of every five will be by an up and coming Canadian artist.

11601            Further, we commit that by the end of our first year a minimum of 50 percent of the music that we play by emerging artists will be by local Edmonton artists.  I doubt there is a commercial radio station in the world where one song in 10 is by hometown talent.

11602            We will have a minimum of 17 hours of spoken word content, including comprehensive news and surveillance information during the important time periods, Monday to Sunday.

11603            We will have numerous features on the local music scene and all aspects of life in Edmonton.  To go with the new music our announcers will provide the needed background information on these artists and their music.


11604            Our Canadian Content Development plans are all geared to helping local Edmonton artists succeed.  Project 10K20, Showtime, emerging artists' promotion and breakout artists of the year are linked together.  Each focuses on a different challenge local artists face.  Each helps them climb another rung up the ladder towards having a successful career.

11605            Rawlco Radio is a different kind of radio company.  Radio is our only business.  While it's essential to our long term survival that each of our stations be profitable, quarterly profits don't drive our actions on a day‑to‑day basis.  We are in radio because we love radio.  We believe that the road to long term success is by better serving our communities.

11606            In our application we list the CAB gold medal nominations and awards we have received.  In the last eight years our relatively small number of radio stations in Saskatchewan and now Alberta have received 37 nominations.  We have been awarded gold medals 15 times including eight for community service.

11607            While we certainly appreciate the recognition, what this really shows is just how different Rawlco is from other radio companies in Canada.  It's local service that motivates me and my radio stations each and every day.


11608            Your approval of this application would be a major step toward creating better, competitive balance in Edmonton.  Magic 99 is a standalone radio station.  It's the only commercial radio station in Edmonton without either a radio or television partner.

11609            It's at a significant competitive disadvantage especially in sales as we work hard to achieve profitability.

11610            The new station with its younger but still adult audience would be a perfect fit beside our smooth jazz station.  It would mean that all stations in Edmonton would compete on a level playing field.

11611            And now, a final word from our local owner.

11612            MR. RAWLINSON:  Well, I am local.  I have lived in Alberta for 25 years and I have been in radio all my life.  My father started 61 years ago and I have been in radio station management for almost 40 years.  I'm in radio for the long term because I love it.

11613            I am really proud of Kurt and everyone at Magic 99, our station here in Edmonton.  It's a great station and will continue to be a great station regardless of the outcome of this hearing.


11614            So this completes our presentation, and Pam is going to quarterback our group.  We look forward to your questions.

11615            THE CHAIRPERSON:  Thank you very much for your presentation.  Commissioner Cugini will start the questioning.

11616            COMMISSIONER CUGINI:  Thank you, Madam Chair, and good afternoon.

11617            And Mr. Leavins, we hope to make this as pleasant as experience for you as possible.

11618            MR. LEAVINS:  Thank you very much.

‑‑‑ Laughter / Rires

11619            COMMISSIONER CUGINI:  I do appreciate in your oral presentation this afternoon a further examination of your format because I have to admit when I first read it I was a bit thrown off.  You know, new music and emerging artists, of course the first thing I do is I go to the sample playlist and I ‑‑ hang on a sec.  I know all these names ‑‑ not all of them.  I'm not that knowledgeable.

11620            And so my question was going to be just how knew is this new music, especially when I look at the list of ‑‑ you call it 20 regular Canadian and 60 international.  Most of them are recognizable names.


11621            So as I said, I do appreciate the further explanation that you gave in the oral presentation.  But the one question remains, because you say in your application:

"The internet is not the enemy but a friend."  (As read)

11622            COMMISSIONER CUGINI:  And that:

"What people are downloading will have much more impact on our music selection than billboard charts."  (As read)

11623            COMMISSIONER CUGINI:  So if you are monitoring downloads and you find that Amy Winehouse's Rehab or REM's Losing My Religion are the ones that are being the most downloaded, does that mean they will make it onto your playlist?

11624            MR. PRINGLE:  Well, two big questions there.  Can I step back and take the first one?

11625            COMMISSIONER CUGINI:  Absolutely.

11626            MR. PRINGLE:  Which is the biggest question, first of all.

11627            The tragedy of where radio is today is that you are absolutely right.  You look at that list of artists and you know them all.  But the problem is they can't get any of their new music played.  So when we say new we don't mean new artists.  We mean new music.


11628            The example I gave with George Strait on country radio, George Strait was around prior to new country.  This week, both he and Reba who was also prior to new country, both have big hits on country radio.  So it's not that they are new.  It's that the songs that are being played are new.

11629            So when you look at which artist could come to Edmonton, fill 18,000 seats, possibly even 50,000 seats and is any of their music getting played on Edmonton radio?  I would say 75 percent of the time it's "no".

11630            Neil Diamond this week has the number two selling CD in Edmonton.  He is also coming to town.  He sold 18,000 seats in less than 30 minutes.

11631            Most of today's new artists who are on CHR Radio certainly wouldn't even be attempting to play an 18,000 seater.  In fact they would be lucky if they filled a club here in town.  So what's gone wrong?  And there is something that is really wrong here.

11632            Well, what's gone wrong is there has been a seismic shift in new music.  And when I say seismic shift I mean a completely different kind of music has appeared on the scene.  Every now and then this happens.  If I can just step back one step here and take a look?


11633            The Big Band era ruled the thirties.  The Big Band era ruled the forties.  The Big Band era ruled the first half of the fifties.

11634            Then a seismic shift in musical tastes and music before musical tastes occurred.  The Big Band era rang headlong into rock and roll.  Now, this was catastrophic for a number of the superstar artists.  Frank Sinatra would tell everybody who would listen that the music is garbage; it was going to go away in no time flat.  If you talk to any of the early rock and rollers they will tell you the number on question they got asked on every TV show was, "What are you going to do when rock and roll dies?"  Well, as we know, rock and roll didn't die.  It ushered in the rock era which is still going on today, 50 years plus later.

11635            Now, when rock and roll hit it also dramatically changed radio in the way radio presented music.  I mean we all know that the Big Bands, Tommy Dorsey, the rest of them, they would play live on the radio.  They all had their radio shows, you know, "Brought to you by Lux", right?  There was a new format born called Top 40 radio which was all about playing nothing but new music.


11636            Now, as Top 40 radio started growing up, as the rock and roll era gave way to the British invasion ‑‑ and there is a theme here.  What we are seeing now is you are seeing the foundation of this entire 50 years being laid by these early pioneers, because what were the Beatles if not Everly Brother harmonies and Chuck Berry rhythms?

11637            So then we have the British invasion with the Beatles and the Rolling Stones and all those guys and then we move on further.  And then along comes the boss, Bruce Springsteen.  Well, what is Bruce really if not a synthesis of the Rolling Stones and Bob Dylan?

11638            So now you have CHR radio which has turned into an incredible vehicle for parents and kids to listen to the same radio station and love it.  It was the mass appeal station.  Everybody listened to CHR radio.  That's where we all heard the new Beatles singles, the new Stones singles; the new everything singles and it was incredible broad.  You would hear a new Rolling Stones single and you would hear the new Barbra Streisand.  On occasion you could even hear a new Led Zepplin single and a Kenny Rogers single and you had multiple generations ‑‑ as CHR moved along you have multiple generations listening to CHR radio.  The reason being is that it was all baby boomer music and the new guys coming out sonicly and stylistically were building on the past.  There was a common thread.


11639            And for those of us who over the years have programmed CHR radio ‑‑ which by the way if I can digress a little bit and tell you a personal story.

11640            When I first realized the power of CHR radio I was in at the very beginning of FM radio as we know it today.  When progressive rock radio was born in the late sixties I started CHOM in Montreal and we were a sensation when we started.  Everybody was talking about us and everything.  Then the ratings came out.  Our local AM Top 40 station, CKGM, they had four times as many people listening to us.

11641            This is when I first clicked that there was something about that format that was just huge.  Yes, we were appealing strongly to a small audience.  What CHR was doing was appealing in a broad way to a huge audience.

11642            So as CHR radio has progressed through the seventies and the eighties and the nineties, those of us programming CHR always knew that the secret of a success is ‑‑ we used to say it was the mother/daughter radio station.  Mums and daughters both listen to the same radio station; dads somewhat less so because progressive rock radio was born and men were off listening to progressive rock.


11643            So then radio started fragmenting into all different ‑‑ you know, there is probably about 16 different rock formats.  There is a ton of different pop genres.

11644            However, the one thing that remained constant, the big station in town was always the CHR station.  It switched from AM.  Like CHED was the AM station here.  It would switch from AM to FM.  All the legendary stations ‑‑ KISS‑FM in Los Angeles.  It was on FM but it was a legendary CHR station.

11645            But in the seventies and eighties the seeds of the seismic shift that we are seeing today in music happened.  Punk was born in the late seventies and rap came into being in the mid‑eighties.  Initially, they seemed to be just kind of underground music forums that were going to go away.  The baby boomers hoped, anyway, because we didn't like punk because it was extremely annoying and loud and they hated everything about the baby boomers.  And the problem with rap is they weren't even singing and certainly we had all been brought up to "You have got to sing if it's a song", right?


11646            So just when everybody thought all this was going away, hey, presto, in the 2000s rap makes a huge comeback to the point now where rap and hip hop in the entire 2000s have been infiltrating more and more and more to the point now where really it's the dominant sound on CHR radio.

11647            Now, what has happened because of that is CHR has gone younger or daughter, if you will.  The mums have been left without a radio station.  The adults have been left without a radio station.  There is no mainstream CHR format in existence anymore.  It doesn't exist.

11648            The closest you probably have is hot AC but there is no hot AC in this town, and the problem with hot AC is that it is ‑‑ it leans pretty heavily towards CHR.  There is a fair amount of rhythm, rap‑oriented stuff on hot AC.


11649            There is no new music format for adults.  There is certainly no new music format for all those artists whose names you recognized that don't get their new music played.  I mean it's absurd that someone like a Neil Diamond or a Bruce Springsteen or John Cougar Mellancamp can not get their new stuff played.  It's even more absurd when someone like Alanis Morissette as the CHUM guys were saying.  I mean it's outrageous that Alanis Morissette's new album is getting more play in America than in Canada.  And that is simply because there is no new music for adults format in existence.  And it's because of this ‑‑ we are in this kind of weird little space right now where the shift is on, so to speak, and there is this big gap.

11650            And people might say, "Well, what about AC radio?  They play some new music".  But they play so little of it.  I mean if you define new music as what has come out in the last five to six months, you know, as I was just looking on BDS, I think the AC station in town plays 1.5 percent of the songs they play are new and I think it's 5.5 percent are the spins.

11651            COMMISSIONER CUGINI:  Okay, Mr. Pringle.  We will get back to my original question.

‑‑‑ Laughter / Rires

11652            COMMISSIONER CUGINI:  Because your radio knowledge is vast and I'm not going there.  So I'm not going to challenge that.

11653            What is the risk of you becoming the "B" side radio station?


11654            MR. PRINGLE:  Well, I see us as being the real "A" side radio station.  I see us as playing the artists ‑‑ the new music from the artists that people in Edmonton really care about, not the trendy ‑‑ the trendy guys who are here today, gone tomorrow.  Most of today's new acts they have a life of a firefly.

11655            You know, we are talking about artists who have stood the test of time, who have a huge fan base and are making younger and new fans all the time.

11656            Like it's amazing when you go to some of the icons, the legends, if you ever go see them in concert, the Elton Johns ‑‑ you know, Elton would have a hard time getting his new album played.  Phil Collins would have a hard time getting his new album played.  But if you go to their concerts it's full of young people.

11657            I don't know if you went to the last Rolling Stones tour.  It's incredible how many under 25‑year olds there are.  I have got two young kids.  I have got a 21‑year old and I have got an 18‑year old.  They absolutely love the Rolling Stones.  But you know if the Rolling Stones will ‑‑ if ‑‑ when the Rolling Stones put a new album out it doesn't get played because mainstream rock radio is way too heavy in heart, X rock won't play it.  It's too rocky for adult radio.  It's right there in the middle.  Yet if they came to town tomorrow the only question would be, would they do two shows at Commonwealth of 55,000 people each or three.


11658            So you are right.  It's like when you look at that list and I think most of those guys, not all of them ‑‑ I mean some of those people do get played and there will be crossover and there will be artists that we play that do get play, but most of the adult artists today have a terrible time getting their new music played.

11659            It must be so depressing for someone who is a little older but still considers himself a vital artist and, yet, their new music when it comes out is just dismissed, except by the fans.  They buy it.  They come to see them play it live in concert.  But the media, not so much the press.  The press ‑‑ I mean I have seen some incredible reviews on the new Neil Diamond album but radio certainly dismisses all that stuff as old and I don't know what but they don't play it.  There is no format for it.

11660            COMMISSIONER CUGINI:  Let's move onto the internet strategy that you have proposed in this application.  And like I said, you do make the statement that what people are downloading will have much more impact on your music selection than billboard charts.

11661            Does this mean that you will be using this exclusively?


11662            MR. PRINGLE:  Oh, no.

11663            COMMISSIONER CUGINI:  In other words ‑‑

11664            MR. PRINGLE:  No.

11665            COMMISSIONER CUGINI:  ‑‑ are you abandoning the traditional methods?

11666            MR. PRINGLE:  No, no, no.  What it is, it's another tool.

11667            I mean, again, when you are talking about the new Stones or the new Joni Mitchell or the new Leonard Cohen there is going to be no charts you could even look at to see how they are doing because no one is playing them.  But with the internet now you can go online and you can see which tracks from the album their fans are downloading the heaviest.


11668            In other words they are making up their minds which songs they like the most and which ones they are downloading.  And that certainly will now play into our decision making in terms of which song we are going to go with because we are not a fringe format.  We will be playing the best songs from the album, not the album tracks from the album.  We will be quoting with the "singles" if you will, although very often there won't be a single on the charts.  We will be determining.  But one of the tools we will use will be what their fans are saying.  The people ‑‑

11669            COMMISSIONER CUGINI:  But Mr. Pringle, if you are playing the singles then why aren't you a CHR?

11670            MR. PRINGLE:  We are a CHR.  We are ‑‑

11671            COMMISSIONER CUGINI:  But exclusively new?

11672            MR. PRINGLE:  Well, because it's too ‑‑ CHR is too narrow.  Hot AC is too narrow.

11673            See, the problem with hot AC and CHR is none of them would play Joni Mitchell's new album.  They wouldn't play the new Neil Diamond.  No, they would be much younger and they would ignore the legends.  The problem with hot AC is although we might share say a 60 percent common base with hot AC they are much more into rapid hip hop.  We would not go in that area as well.

11674            In fact, hot AC in Canada over the last year or two has drifted much further towards that than, say, hot AC in America which has remained much purer to the genre.  Or even hot AC in America wouldn't be as broad.


11675            I'm talking about old style CHR where basically you play new music with a broad approach, not a narrow approach.

11676            I mean, part of the problem with, I think, radio today is ‑‑ and this is all because of America where they have got 40, 60 signals in the market, it's way too narrow.  We don't have to be that narrow in Canada.  We don't have 40 signals in Edmonton.

11677            You know, we can afford to play new music by a wider spectrum, particularly age.  I am so fed up with this ageist nonsense.  Every time the Stones tour 66 percent of the article are about their wrinkles.  What the heck does that have to do ‑‑ the fact is if you were a blues musician and you were the age of the Stones you would be considered better than you ever were, but if you are a rock or a pop musician, "Oh, my god.  They are so old.  What are they doing playing live, blah, blah, blah, they have got no right to be alive!"  I mean, what is that nonsense, you know?

‑‑‑ Laughter / Rires

11678            MR. PRINGLE:  And I'm fed up with it.

11679            You know, and those people have no radio home and to me they are the greatest artists in the world making music today.


11680            COMMISSIONER CUGINI:  Okay.  I fall within your target demo and I'm not going to say by how much or how little, but thank you.

‑‑‑ Laughter / Rires

11681            MS LEYLAND:  Commissioner Cugini, sometimes at announcer meetings we have to tell Doug that time is up.

11682            COMMISSIONER CUGINI:  Enough is enough?

11683            MS LEYLAND:  We have got to go onto the next thing.

‑‑‑ Laughter / Rires

11684            MR. PRINGLE:  I can go on and on.  I'm sorry.

11685            COMMISSIONER CUGINI:  It's obvious that he is passionate about it, he is knowledgeable about it and the more we can get on the record to differentiate the better.

11686            Did you want to say something, Mr. Rawlinson?

11687            MR. RAWLINSON:  Well, I was just going to say one simple thing.  What we are is Top 40 for adults.  So we are CHR for adults.  So we are going to be the station that is playing and making hits out of international stars, Canadian stars, other new music, Canadian emerging artists and local artists.  We are going to be doing all of that.


11688            But the consistent theme is that it's new music for adults.

11689            COMMISSIONER CUGINI:  And you are saying that that's all Mr. Pringle had to say?

‑‑‑ Laughter / Rires

11690            COMMISSIONER CUGINI:  Just one final question on this.

11691            MR. PRINGLE:  At your peril.

11692            COMMISSIONER CUGINI:  Yes, no kidding.

‑‑‑ Laughter / Rires

11693            COMMISSIONER CUGINI:  On this playlist where in brackets you have said "not played" do you mean not played in the Edmonton markets?

11694            MR. PRINGLE:  Yes, not played in the Edmonton market.

11695            COMMISSIONER CUGINI:  Okay, thank you.

11696            Now, that we got that under control.

11697            MR. PRINGLE:  That was pretty quick.

‑‑‑ Laughter / Rires


11698            COMMISSIONER CUGINI:  Now, in terms of your share projections you don't anticipate growing much over the course of seven years.  I think you start at 4.5 percent and you go to 5 percent in Year 7.  So I'm curious to know what factors went into that share projection and why you don't expect any growth.

11699            MS LEYLAND:  The share projection, obviously, is based on our research as you know.

11700            And Cameron Strategies did our research here in Edmonton and surveyed 500 people between the ages of 18 to 64, played them samples of our six‑song music list and then simply asked the question if you would listen to a radio station that plays that kind of music.  8.6 percent of the people responded that they would listen to a radio station playing that music very often and 17 percent fairly often.

11701            Cameron Research said based on their experience ‑‑ I found this interesting ‑‑ that in that kind of survey environment only two out of three people will actually do what they say they are going to do.  So you need to discount by a third.

11702            So to do that and to be conservative we projected our potential core from that 8.6 to 5.8.  Then we wanted to come up with a 12‑plus number so we reduced it further to 5 percent.


11703            And then because we know at launch as much as you try to get the word out ‑‑ and I mean we do.  We will launch this radio station big to Edmonton but Edmonton is a large city with a lot going on.  So we conservatively estimated 4.5 at launch and then because we will keep advertising and keep working hard, we projected it would go up to a 5.

11704            Based on our experience in other markets, we find that because we put so much effort into launch and then into advertising in the first year or so that our audience share tends to stay in the same range.  Now, book to book it will fluctuate a bit.  As we all know in the industry it goes up; it goes down.

11705            But you know our best experience shows us that a 5 percent share for this radio station for the first licence term would be conservative, but it would be realistic for us based on how we launch radio stations.

11706            COMMISSIONER CUGINI:  I mean you did mention that there is a lot going on in this market and there is a lot going on in terms of other radio stations, and I am going to say it.  There is a CHR station in this market.  There is a modern rock station in this market, modern rock by, you know, association, plays new music.

11707            How competitive to these radio stations will you be?


11708            MS LEYLAND:  Yes, I will ‑‑ okay, Doug will give you a brief add‑on to my answer.

11709            MR. PRINGLE:  Short, I'm sure.

11710            MS LEYLAND:  But you know, I don't see it as being competitive with them because when I think about this radio station it's a radio station for me, and I'm in the demo too, but just in the demo.  I'm an adult who loves new music but I'm not an adult that would find most of the music or the content or the presentation of a youth‑oriented new music station something that I would choose to listen to.

11711            MR. PRINGLE:  I think that both those two stations you mentioned they are young stations.  One is rap hip hop based, which is totally ‑‑ totally non‑musical for most people between the ages of 30 and 40, and the other is punk music based which is just way too hard and punky.  So although one is still called CHR there should really be another term for that because it isn't CHR in the way CHR has been for the last 30 or 40 or 50 years.

11712            COMMISSIONER CUGINI:  Okay.

11713            You know that we have been asking all applicants to compare their application to other similar applications before us.  You know, quite frankly, we do it in the hopes that you can help us out.


11714            So I am going to ask you, first of all do you think that any of the other applicants come close to meeting your criteria for a music format?

11715            MS LEYLAND:  No.  No, I think that we are very different because of our focus on new music and Triple A.

11716            Doug is the expert here but Triple A is, to me, first and foremost, variety.  I mean it plays a huge variety of different selections and we heard, I think, 1,450 selections in a week from one of the applicants.  So it is variety and it's gold‑based and we obviously as you have heard are going to be playing new music and we are going to be making hits out of those songs, which means that you need to play the songs enough to make them familiar to the audience.

11717            So we believe that we are distinctly different from the other Triple A applicants.

11718            MR. PRINGLE:  Yes, Triple A ‑‑ and it seems like most of the people here with the exception of Yerxa are some version thereof ‑‑ is essentially a gold‑based variety format.  A number of the applicants have traced its roots back directly, I think, to the old progressive rock radio that did play a wide variety of different artists and styles.


11719            I know that one of the questions that has been asked several times is do all these styles fit together.  Certainly, in the early progressive rock days that was one of the aspects.

11720            So if you trace their root back to progressive rock, our root goes back to the classic CHRs, broad CHRs, the mass appeal CHRs.  You know, we are pop/rock down the middle.  Yes, all the big superstars but the big songs from their album.  One of the applicants, I think ‑‑ I think it was CHUM actually, were saying, yes, we are going to make the fringe songs and album tracks.  We are not going to be playing fringe songs and album tracks.  We are going to be playing the best songs from their new releases.

11721            So philosophically the approaches are totally different.  I mean, will there be some new music Triple A?  Yes, there is.  Triple A is a gold‑based format.  There is some new music but it's on a pretty slow rotation and they don't play that much of it.


11722            Most Triple As play quite a lot of gold.  The Triple A that was licensed in Calgary is 100 percent gold.  They play no new music at all, you know, whereas we are going to be ‑‑ 70 percent of what we play is going to be from the last year.  And we are not going to play anything from pre‑2000, no '80s, no '90s.  They are all Triple As ‑‑ are saying they are going to play.

11723            You know, we are going to be incredibly ‑‑ we are going to be a new music station just like the great CHRs of the last 50 years were.

11724            COMMISSIONER CUGINI:  If we were to licence more than one would you object to us licensing any of the other applicants?  If we were to licence you is there somebody else in that group who you would say, "They come fairly close"?  There are none?

11725            MR. PRINGLE:  No.

11726            COMMISSIONER CUGINI:  You would be comfortable with us licensing any of the other applicants in addition to you?

11727            MR. RAWLINSON:  Yes, and this isn't the question about how many is it?

11728            COMMISSIONER CUGINI:  Now, it is.

‑‑‑ Laughter / Rires

11729            MR. RAWLINSON:  Oh, it is.

11730            We would be comfortable with any other applicant.  We think we are significantly different from every other applicant, and we could go through them one by one if you wanted.


11731            As far as the number of licences we thought about this a lot and my answer is this, "If you think we are the best applicant here you should licence one".  If you think that we are the second best you should licence two".

‑‑‑ Laughter / Rires

11732            MR. RAWLINSON:  I can keep going.

11733            COMMISSIONER CUGINI:  Yes, I can tell.  I can see where this is going.

‑‑‑ Laughter / Rires

11734            MR. RAWLINSON:  And if you don't think that we deserve a licence you shouldn't licence any.

‑‑‑ Laughter / Rires

11735            MR. RAWLINSON:  But I should add that we did our projections based on two mainstream commercial licences.  We can live with three but we were ‑‑ that was our assessment that that would be right, is two.

11736            And the only other thing I want to say is that the thought of two or three new licences in Edmonton and we are not one of them is a scary prospect for us, though.

11737            COMMISSIONER CUGINI:  What impact would have on your current station on Magic?


11738            MR. RAWLINSON:  Well, we are currently not profitable.  We are currently losing a significant amount of money still.  Two or three more stations would be very difficult.  We would have ‑‑ the more stations, the more salespeople are out there competing against you, the more your audience share tends to drop even if the formats are somewhat different.  So it would be very difficult.

11739            COMMISSIONER CUGINI:  And on the other side of that coin, I would also like ‑‑ I mean you did touch upon it in your oral presentation but I would like you to expand a little bit more on how adding the cost of launching the new station in this market could boost Magic 99.

11740            MR. RAWLINSON:  Well, the single biggest thing is in the sales area.  There are ‑‑ if you have two stations you have a much better chance of maximizing your sales than if you just have one.  First of all, you just have that many more salespeople.  Those people recommend each other.  They give leads to each other.  They support each other.  Sometimes they do joint pitches.


11741            And as you heard earlier this morning that some of these clusters, because they are so powerful get to have control of a local advertiser and they get to, you know, make the decisions and if you are a single station it's just that much ‑‑ that much more difficult.

11742            What happens is that when you are a small station and a single station you don't get added into the buys for the guys who want the mass appeal.  We have had some success in developing advertising for the narrow niche that our station appeals to, but anybody that is looking for a broad audience they tend to buy the big clusters.  If we had another station all of a sudden we have become a more significant player and ‑‑ could I ask Kimberly?  Maybe she has got a story that she ‑‑

11743            COMMISSIONER CUGINI:  Absolutely.

11744            MS DICKIE:  You know, whenever I deal with advertisers it's all about time and money nowadays, right, so when you are talking to a business owner they don't have any time.  And yes, they have some money but it's all about efficiencies.


11745            So when they are talking about time they can deal with one person and by a cluster more easily, and they can have an efficient budget overall in that station.  You know, it's easy to kick us out of a buy.  You know if you have got one strong station you can partner it with one that maybe is a little bit weaker, get a good presence and so you have done well for your budget and it's just one person that you are dealing with.

11746            So as much as maybe they love Magic 99 and they love seeing me around it's maybe easier for them to see one person and do a more efficient buy.  I see that a lot, which is why we don't do a of agency business.  You know, we can't get on those buys.  It's really tough.  It's a tough go.

11747            So I think if we had two stations it would definitely give us the opportunity to be, I guess, perceived as more of a major player in the city.

11748            COMMISSIONER CUGINI:  And you would anticipate that it would be easier to get a piece of those agency buys?

11749            MS DICKIE:  It would be, absolutely.

11750            MS LEYLAND:  Kimberly told us recently that two of the most common questions she is asked are, "Who is your sister station?" and "Which cluster are you with?"  So in Edmonton clients are just sort of accustomed to dealing with radio stations that aren't all on their own.

11751            COMMISSIONER CUGINI:  Thank you.


11752            I'm going to move on to your spoken word.  It's a substantial amount of spoken word, 16 hours and 58 minutes, and we have all the details as to how much is pure news and so on, so we don't need to go through that.  But in order to provide the spoken word your staffing plans include three fulltime and two part‑time people, if I have read your application correctly.

11753            MS LEYLAND:  I will ask Kurt to help me out with this but first of all, yes, in programming and news we will have 13 people overall so we have seven people on the programming staff, if you like, and I will leave it up to you.

11754            Kurt could run through responsibilities.

11755            COMMISSIONER CUGINI:  If you could.

11756            MS LEYLAND:  Yes, okay, excellent.

11757            COMMISSIONER CUGINI:  We have asked all the other applicants, and that way we have ‑‑

11758            MS LEYLAND:  Sure.  And in the newsroom there will be six additional people.

11759            So Kurt?

11760            MR. LEAVINS:  Yes, we have the six bodies, so one person would be the news director who would also pull an air shift, probably the daytime shift so they can monitor the flow of news through the day.  There would be another anchor who would pull the morning shift.  So that would be two.


11761            There would be two fulltime reporters who could cover the city and then there would be the two part timers who could cover your weekend anchoring and also supplement your beat reporting.  So that's how the complement of news would be made up from those six bodies.

11762            COMMISSIONER CUGINI:  And then the rest would be dedicated to the other programming elements?

11763            MR. LEAVINS:  Yes, the other seven are in programming.

11764            COMMISSIONER CUGINI:  Do you anticipate any synergies with Magic 99 in terms of programming and news?

11765            MS LEYLAND:  Our staffing.  Hello.

11766            COMMISSIONER CUGINI:  Welcome back.

‑‑‑ Laughter / Rires

11767            MS LEYLAND:  Our staffing is all incremental.  Kurt will speak to what else we will be able to do for Edmonton with our second radio station and with a much expanded newsroom.

11768            MR. LEAVINS:  I think we can achieve synergies in five different areas; actually, in Canadian Content Development, in community service, in operations, in sales and in news.


11769            In news, for example, if you have two stations, so one to complement Magic, if there is an event going on let's say at City Hall, well, we would be able to send one reporter down to City Hall to cover the same story.  Since we have independent news directors on both stations that reporter can bring that content back and the news directors can then decide the editorial patterns that they will take on their individual stations.

11770            But because we have only spent, if you will, the one reporter on that one story, that's freed everybody else up on our staff to cover more stories.  So instead of doubling the amount of coverage we could give the community of Edmonton with two stations.  In many cases you can triple it just by better use of your resources, and that's what I would see as a synergy.

11771            I think the best definition of a synergy is a way in which, sure, you can gain efficiencies in your system but then fold them back into your radio station and deliver a better, broader and more complete product to your audience.

11772            COMMISSIONER CUGINI:  So it's safe to assume the two stations will be housed in the same building?


11773            MS LEYLAND:  They would be housed in the same building.

11774            COMMISSIONER CUGINI:  Reasonable or unreasonable to assume that the newsrooms would be separate?

11775            MS LEYLAND:  Separate physically?

11776            COMMISSIONER CUGINI:  Yes.

11777            MS LEYLAND:  Unreasonable, you know.  I think ‑‑ I'm not aware of anybody that would do it that way.  You know, the newsroom would physically be larger than it is now.  I mean if we are fortunate enough to have a second radio station in Edmonton we get to move, which is lots of fun, and design a new radio station building.

11778            But on synergies, too, if you are interested, because we have thought about this quite a bit, certainly everybody speaks to synergies, you know, in the back end of the operation and so on.  But you know I really think that the smallest part of the synergies that are available to us ‑‑ and Kurt spoke about the newsroom.  I think Kimberly gave you a good idea of the synergies that would be available to us in sales.


11779            But I think, you know, the benefits to the public here in Edmonton of Rawlco having a second radio station are things like there is so much more that we can do for community groups in Edmonton if we have two radio stations.

11780            An example would be one of our largest community promotions right now is for the Christmas bureau and a concert that involves 10K20 performers.  Tammy, who is seated behind me, has been working on this program at Magic and we just know there is so much more we could do for the Christmas bureau for Edmonton for 10K20 artists if we had two radio stations.

11781            So I wouldn't mind asking Tammy just to speak about that for a minute to give you an example.

11782            MS HOFER:  With the Christmas bureau we had ‑‑ last year was our first concert that we did with the three 10K20 artists and we advertised that on Magic and we sold the tickets exclusively at Magic.  So listeners had to come to the radio station and buy their tickets.  We sold out that show.


11783            With a second station we would be able to advertise that concert onto a larger audience and presumably sell out a larger venue and involve more than just three 10K20 artists, give them so much more exposure.  And in doing so all of this just results in more money for the Christmas bureau, which is what the event is all about.

11784            COMMISSIONER CUGINI:  Thank you.

11785            MS LEYLAND:  Thank you, Tammy.

11786            COMMISSIONER CUGINI:  And I did hear you when you said that the staff would be all incremental to your current complement.

11787            MS LEYLAND:  Can I give you a couple more synergies?

11788            COMMISSIONER CUGINI:  Sure, sure.

11789            MS LEYLAND:  Because ‑‑

‑‑‑ Laughter / Rires

11790            MS LEYLAND:  Okay.  Thank you,